EXHIBIT 1.1
8,000,000 Shares of Class A Common Stock
AFFILIATED COMPUTER SERVICES, INC.
UNDERWRITING AGREEMENT
October 3, 2001
BEAR, XXXXXXX & CO. INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies/Gentlemen:
Affiliated Computer Services, Inc., a corporation organized
and existing under the laws of Delaware (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
8,000,000 shares (the "Firm Shares") of its Class A common stock, par value
$0.01 per share (the "Common Stock") and, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at the option of
the Underwriters, up to an additional 1,200,000 shares (the "Additional Shares")
of Common Stock. The Firm Shares and any Additional Shares purchased by the
Underwriters are referred to herein as the "Shares". The Shares are more fully
described in the Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-68656), and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of shares of common stock, which registration statement, as so amended,
has been declared effective by the Commission and copies of which have
heretofore been delivered to the Underwriters. The registration statement, as
amended at the time it became effective, including the exhibits and information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act, is hereinafter
referred to as the "Registration Statement." If the Company has
filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional shares of
Common Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement. Other than a Rule
462(b) Registration Statement, which became effective upon filing, no other
document with respect to the Registration Statement has heretofore been filed
with the Commission. No stop order suspending the effectiveness of either the
Registration Statement or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission. The Company, if required by
the rules and regulations of the Commission (the "Rules and Regulations"),
proposes to file the Prospectus with the Commission pursuant to Rule 424(b) of
the Rules and Regulations. The Prospectus, in the form in which it is to be
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations,
or, if the Prospectus is not to be filed with the Commission pursuant to Rule
424(b), the Prospectus in the form included as part of the Registration
Statement at the time the Registration Statement became effective, is
hereinafter referred to as the "Prospectus," except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriters by the
Company for use in connection with the offering and sale of the Shares (the
"Offering") which differs from the Prospectus (whether or not such revised
prospectus or prospectus supplement is required to be filed by the Company
pursuant to Rule 424(b) of the Rules and Regulations), the term "Prospectus"
shall refer to such revised prospectus or prospectus supplement, as the case may
be, from and after the time it is first provided to the Underwriters for such
use. Any preliminary prospectus or prospectus subject to completion included in
the Registration Statement or filed with the Commission pursuant to Rule 424
under the Securities Act is hereafter called a "Preliminary Prospectus." Any
reference herein to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
on or before the effective date of the Registration Statement, the date of such
preliminary prospectus or the date of the Prospectus, as the case may be, and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, which is incorporated therein by reference and
(ii) any such document so filed. All references in this Agreement to the
Registration Statement, the Rule 462(b) Registration Statement, a Preliminary
Prospectus and the Prospectus, or any amendments or supplements to any of the
foregoing, shall be deemed to include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX").
(b) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Regulations, when any supplement to or amendment
of the Prospectus is filed with the Commission, when any document filed under
the Exchange Act is filed and at the Closing Date and the Additional Closing
Date, if any, (as hereinafter respectively defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Act and the Rules and
Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not and will not contain an untrue statement of a material
fact and did not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of the
Prospectus or any related Preliminary Prospectus in light of the circumstances
under which they were made, not misleading. When any related preliminary
prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Rules and Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Rules and Regulations and the Exchange Act and the respective rules and
regulations thereunder and did not contain an untrue statement of a material
fact and did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No representation and
warranty is made in this subsection (b), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related Preliminary Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through you
specifically for use therein ("Underwriters' Information"). The parties
acknowledge and agree that the Underwriters Information consists solely of the
material included in the fifth paragraph on the cover page of the Prospectus and
in paragraphs 4, 8 (limited to the last sentence of such paragraph), 10, 11 and
12 under the caption "Underwriting" in the Prospectus.
(c) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act, and, when read together with the other information in
the Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, and Ernst & Young LLP, who have
certified certain financial statements of Lockheed Xxxxxx IMS Corporation
("IMS"), are independent public accountants as required by the Act and the Rules
and Regulations.
(e) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries except for changes, if any, in the ordinary course of business, in
amounts outstanding under the Credit Agreement dated May
12, 2000, as amended to date, between the Company and Xxxxx Fargo Bank Texas,
N.A., as agent for the lenders thereunder, as amended ("Credit Facility"), and
the Credit Agreement dated August 24, 2001 between the Company and Bear Xxxxxxx
Corporate Lending, Inc., as administrative agent for the lenders thereunder
("Interim Facility") or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus.
(f) The Company has all corporate power to enter into this
Agreement, and this Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and this Agreement has been duly and
validly executed and delivered by the Company; and upon such execution by the
Company (assuming the due authorization, execution and delivery of this
Agreement by the other parties hereto), this Agreement will constitute the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms.
(g) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement, instrument, franchise, license
or permit to which the Company or any of its subsidiaries is a party or by which
the Company or any of it subsidiaries or their respective properties or assets
may be bound or (ii) violate or conflict with any provision of the certificate
of incorporation or by-laws of the Company or any of its subsidiaries or any
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets. No
consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their respective properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby by the Registration Statement and by
Prospectus, including the issuance, sale and delivery of the Shares to be
issued, sold and delivered by the Company hereunder, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(h) The Company has the authorized capitalization as set forth in
the Prospectus and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and were not issued in violation of or subject to any preemptive or similar
rights that entitle or will entitle any person to acquire any Shares from the
Company upon issuance thereof by the Company, except for such rights as may have
been fully satisfied or waived prior to the effectiveness of the Registration
Statement; the Shares to be delivered on the Closing Date and the Additional
Closing Date, if any, (as hereinafter respectively defined) have been duly and
validly authorized and, when delivered by
the Company in accordance with this Agreement, will be validly issued, fully
paid and non-assessable and will not have been issued in violation of or subject
to any preemptive or similar rights that entitle or will entitle any person to
acquire any Shares from the Company upon issuance thereof by the Company; and
all of the issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable and (except for directors' qualifying shares) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims; the Common Stock, the Firm Shares and the Additional Shares
conform to the descriptions thereof contained in the Registration Statement and
the Prospectus.
(i) Each of the Company and each of its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus. Each of the Company and its subsidiaries is duly qualified for the
transaction of business and is in good standing as a foreign corporation under
the laws of each jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any such
jurisdiction; each of the Company and each of its subsidiaries possesses and is
in compliance with all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses, franchises and permits of and from all
public, regulatory or governmental agencies and bodies to own, lease and operate
its properties and conduct its business as presently conducted and as described
in the Prospectus, with such exceptions as are not material, and no such
consent, approval, authorization, order, registration, qualification, license,
franchise or permit contains a materially burdensome restriction not adequately
disclosed in the Prospectus.
(j) Except as described in the Prospectus, there are no legal or
governmental proceedings to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries is the
subject which, individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, would have a material adverse effect on the
current or future financial position, stockholders' equity or results of
operations, of the Company and its subsidiaries, taken as a whole; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(k) Neither the Company nor any of its affiliates have taken and nor
will take, directly or indirectly, any action designed to cause or result in, or
which constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(l) The consolidated financial statements of the Company, including
the notes thereto, and supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present fairly the
financial position of the Company and its consolidated subsidiaries as of the
dates indicated and their results of operations and cash flows for the periods
specified, to the best of the Company's knowledge, the consolidated financial
statements of IMS included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of IMS as of
the dates shown and its
results of operations and cash flows for the periods specified; and all such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis throughout the periods involved.
(m) To the best of the Company's knowledge, the assumptions used in
preparing the pro forma financial statements included in the Registration
Statement and the Prospectus provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
(n) Except for the registration rights granted in connection with
the offering of the Company's 3.5% Convertible Subordinated Notes due 2006 and
the Company's 4% Convertible Subordinated Notes due 2005, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act.
(o) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be subject to registration as an "investment company"
under the Investment Company Act of 1940, as amended.
(p) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(q) The Company and each of its subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by it and has paid or made provision for the payment of all
taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company and each of
its subsidiaries is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax
returns (whether or not such amounts are shown as due on any tax return), except
(in all cases) to the extent that such failure would not cause a material
adverse effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and its subsidiaries taken as a
whole. No deficiency assessment with respect to a proposed adjustment of the
Company's or any of its subsidiaries' Federal, state, or other taxes is pending
or, to the best of the Company's
knowledge, threatened, except for deficiencies contested in good faith by the
Company. There is no material tax lien, whether imposed by any federal, state,
or other taxing authority, outstanding against the assets, properties or
business of the Company or any of its subsidiaries.
(r) The Shares are registered pursuant to Section 12(b) of the
Exchange Act and are listed on the New York Stock Exchange ("NYSE), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Shares under the Exchange Act or de-listing
the Shares from the NYSE, nor has the Company received any notification that the
Commission or the NYSE is contemplating terminating such registration or
listing.
(s) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(t) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations and which have
not been so described or filed.
(u) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default (and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) is in violation in
any respect of any statute or any judgment, decree, order, rule or regulation of
any court or governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or assets,
except (in all cases) any violation or default that would not have a material
adverse effect on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and its subsidiaries taken as a
whole.
(v) Each of the Company and each of its subsidiaries possess and is
in compliance with all patents, trademarks, franchises, permits, licenses
(including without limitation all software licenses) and similar items as well
as all electronic data processing, electronic funds transfer and other
contracts, agreements, leases and arrangements necessary or material to the
conduct of its business as presently conducted or proposed to be conducted and
as described in the Prospectus, except where failure to possess any of the
foregoing would not, singly or in the aggregate, have a material adverse effect
upon the business, prospects, properties, operations, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries taken as
a whole; the Company has not received any notice of infringement of or conflict
with (and knows of no such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how which could result in any material adverse effect on the
Company and its subsidiaries taken as a whole; and except as otherwise described
in the Prospectus, neither the Company nor any of its subsidiaries has received
any notice of cancellation of the same or any notice of proceedings relating to
the revocation, suspension or modification of any of the foregoing which, singly
or in the aggregate, would result in a material adverse change in the business,
prospects, properties,
operations, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries taken as a whole, or which is required to be
disclosed in the Prospectus.
(w) The Company and its subsidiaries have obtained any permits,
consents and authorizations required to be obtained by them under laws or
regulations relating to the protection of the environment or concerning the
handling, storage, disposal or discharge of toxic materials (collectively
"Environmental Laws"), and any such permits, consents and authorizations remain
in full force and effect. The Company and its subsidiaries are in compliance
with the Environmental Laws in all material respects, and there is no pending
or, to the Company's knowledge, threatened, action or proceeding against the
Company or its subsidiaries alleging violations of the Environmental Laws.
(x) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes.
(y) The Company is subject to Section 13 or 15(d) of the Exchange
Act.
(z) The statements set forth in the Prospectus (including those
incorporated by reference therein), insofar as they purport to constitute a
summary of the terms of the Shares, and under the caption "Underwriting" and
"Certain United States Federal Income Tax Considerations for Non-United States
Holders," insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair.
(aa) The Company has received any and all necessary consents for the
issue and sale of the Shares as may be required under the Credit Facility and
the Interim Facility.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $77.76, the number of Firm Shares set forth opposite the
respective names of the Underwriters on Schedule I hereto plus any additional
number of Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Xxxxx Xxxxx L.L.P., or at such
other place as shall be agreed upon by you and the Company, at 10:00 A.M., New
York City time, on the third or fourth business day (as permitted under Rule
15c6-1 under the Exchange Act) (unless postponed in accordance with the
provisions of Section 9 hereof) following the date after the determination of
the initial public offering price of the Shares, or such other time not later
than ten business days after such date as shall be agreed upon by you and the
Company (such time and date of payment and delivery being herein called the
"Closing Date").
Payment for the Shares shall be made to or upon the order of the
Company of the purchase price by wire transfer in Federal (same day) funds to
the Company or as directed by the Company upon delivery of one or more
definitive global certificates for the Shares which will be deposited by or on
behalf of the Company with the Depository Trust Company or its designated
custodian for the respective accounts of the several Underwriters against
receipt therefor signed by you and registered in such name or names and shall be
in such denominations as you may request at least one business day before the
Closing Date.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to 1,200,000 Additional Shares at the same purchase price
per share to be paid by the Underwriters to the Company for the Firm Shares as
set forth in this Section 2, for the sole purpose of covering over-allotments in
the sale of Firm Shares by the Underwriters. This option may be exercised at any
time and from time to time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in such authorized denominations as you may request in
writing at least two full business days prior to the Additional Closing Date.
The Company will permit you to examine and package such certificates for
delivery at least one full business day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to the total number of Firm Shares being purchased
from the Company, subject, however, to such adjustments to eliminate any
fractional shares as Bear Xxxxxxx & Co. Inc. in its sole discretion shall make.
Payment for the Additional Shares shall be made to or upon the order of
the Company of the purchase price by wire transfer in Federal (same day) funds
to the Company or as directed by the Company at the offices of Xxxxx Xxxxx
L.L.P., or such other location as may be mutually acceptable, upon delivery of
the certificates for the Additional Shares to you for the respective accounts of
the Underwriters.
3. Offering.
(a) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
4. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) The Company will file the Prospectus pursuant to Rule 424(b)
within the prescribed time period and will provide evidence satisfactory to you
of such timely filing.
The Company will notify you (and, if requested by you, will confirm
such notice in writing) (i) when the Registration Statement and any amendments
thereto become effective, (ii) of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement or
file any document under the Exchange Act if such document would be deemed to be
incorporated by reference into the Prospectus to which you shall reasonably
object in writing after being timely furnished in advance a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would, in the reasonable
judgment of the Underwriters or the Company include an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Act or the Rules and Regulations, or to file under the Exchange Act so
as to comply therewith any document incorporated by reference in the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare and file
with the Commission an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the Underwriters
and Underwriters' Counsel a signed copy of the Registration Statement, including
all consents and exhibits filed therewith and all documents incorporated by
reference therein and all amendments thereto, and the Company will promptly
deliver to each of the Underwriters such
number of copies of any preliminary prospectus, the Prospectus, the Registration
Statement, all amendments of and supplements to such documents, if any, and all
documents incorporated by reference in the Registration Statement and Prospectus
or any amendment thereof or supplement thereto, as you may reasonably request.
Prior to 10:00 A.M., New York time, on the business day next succeeding the date
of this Agreement and from time to time thereafter the Company will furnish the
Underwriters with copies of the Prospectus in such quantities as you may
reasonably request. The Company will pay the expenses of printing and
distributing to the Underwriters of all such documents.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process.
(e) As soon as practicable, the Company will make generally
available to its security holders and to the Underwriters an earnings statement
of the Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the Rules and Regulations (including, at the option
of the Company, Rule 158).
(f) During the period of 90 days from the date of the Prospectus,
the Company will not, directly or indirectly, without your prior written
consent, directly or indirectly, announce or disclose any intention to issue,
sell, offer or agree to sell, grant any option for the sale of, pledge, make any
short sale or maintain any short position, establish or maintain a "put
equivalent position" (within the meaning of Rule 16-a-1(h) under the Securities
Exchange Act of 1934, as amended), enter into any swap, derivative transaction
or other arrangement that, in any manner, transfers to another, in whole or in
part, any of the economic consequences associated with the ownership of the
Common Stock (whether any such transaction is to be settled by delivery of
Common Stock, other securities, cash or other consideration) or otherwise
dispose of any Common Stock (or any securities convertible into, exercisable for
or exchangeable for Common Stock) or interest therein of the Company or of any
of its subsidiaries, and the Company will obtain the undertaking of each of its
executive officers and directors listed in Annex I-A hereto not to engage in any
of the aforementioned transactions on their own behalf (subject to the
exceptions set forth in the form of Lock-Up Agreement attached hereto as Annex
I-B), other than in the case of the Company, (i) the Company's sale of the
Shares hereunder, (ii) the Company's issuance of Common Stock upon (a) the
conversion or exchange of outstanding convertible or exchangeable securities,
(b) the exercise of existing stock option and stock purchase plans or (c)
pursuant to existing earn-out obligations arising out of prior acquisitions; and
(iii) the Company's issuance of up to 3,000,000 shares of Common Stock in
consideration for acquisitions of businesses occurring after the date of the
Prospectus, provided that each recipient of any such Common Stock in any such
acquisition agrees in writing for the benefit of the Underwriters that all such
shares shall remain subject to the aforementioned restrictions.
(g) During the period of five years from the effective date of
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to security holders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company listed; and
(ii) such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
security holders generally or to the Commission).
(h) The Company will apply the proceeds from the sale of the Shares
as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to list, subject to notice
of issuance, the Shares on the New York Stock Exchange.
(j) The Company, during the period when the Prospectus is required
to be delivered under the Act or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act and the rules
and regulations thereunder.
5. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memoranda closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 4(d) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on the New York Stock Exchange;
(v) all travel expenses of the Company's officers and employees and any other
expense of the Company incurred in connection with attending or hosting meetings
with prospective purchasers of the Shares and (vi) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares. The Company also will pay
or cause to be paid: (i) the cost of preparing stock certificates; (ii) the cost
and charges of any transfer agent or registrar; and (iii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 5. It is understood,
however, that except as provided in this Section, and Sections 7 and 11 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees
of their counsel, stock transfer taxes on resale of any of the Shares by them,
and any advertising expenses connected with any offers they may make.
6. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Underwriters' Counsel
pursuant to this Section 6 of any misstatement or omission, to the performance
by the Company of its obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof; and, at or prior to the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the written opinion
of Xxxxx Xxxxx L.L.P., counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) Each of the Company's subsidiaries listed on Schedule II hereto
have been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(iii) The Company has an authorized capitalization as set forth in
the Prospectus. The Shares have been duly authorized and validly issued,
are fully paid and nonassessable and conform to the description thereof
contained or incorporated by reference in the Prospectus;
(iv) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940;
(v) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company, except
such as have been obtained and made under the Act and such as may be
required under state Blue Sky securities laws;
(vi) The execution, delivery and performance of this Agreement and
the issuance and sale of the Shares will not conflict with or result in a
breach or violation of (i) any of the terms or provisions of, or
constitute a default under, any agreement or instrument listed on a
schedule to such counsel's opinion, (ii) the certificate of incorporation
or by-laws of the Company or (iii) any Applicable Law (as defined below);
(vii) The Registration Statement has become effective under the Act,
the Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) specified in such opinion on the date specified therein,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and the
registration statement relating to the Registered Securities, as of its
effective date, the Registration Statement and the Prospectus, as of the
date of the Terms Agreement, and any amendment or supplement thereto, as
of its date, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; such counsel have
no reason to believe that such registration statement, as of its effective
date, the Registration Statement, as of the date of this Agreement or as
of the Closing Date, or any amendment thereto, as of its date or as of the
Closing Date, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as of
the date of this Agreement or as of such Closing Date, or any amendment or
supplement thereto, as of its date or as of the Closing Date, contained
any untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration Statement
or the Prospectus;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company; and
(ix) The statements set forth in the Prospectus (including those
incorporated by reference), insofar as they purport to constitute a
summary of the terms of the Shares and under the captions "Underwriting"
and "Certain United States Federal Income Tax Considerations for
Non-United States Holders," insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair.
The term "Applicable Laws" means the laws of the State of Texas, the laws of the
State of New York, the General Corporation Law of the State of Delaware and the
laws of the United States of America that, in such counsel's experience, are
normally applicable to transactions of the type contemplated by this Agreement
without such counsel having made any special investigation as to the
applicability of any specific law, rule or regulation, and which are not the
subject of a specific opinion in such counsel's opinion referring expressly to a
particular law or laws.
(c) At the Closing Date you shall have received the written opinion
of Xxxxxxx X. Xxxxxxxxx, Xx., Executive Vice President and General Counsel of
the Company, to the effect that:
(i) All of the issued and outstanding shares of the capital stock of
the Company have been duly and validly authorized and issued and are fully
paid and non-assessable and were not issued in violation of or subject to
any preemptive rights;
(ii) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation; and all of the issued and outstanding
shares of capital stock of each such subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable
and were not issued in violation of or subject to any preemptive rights
and (except for directors' qualifying shares and except as otherwise set
forth in the Prospectus) are owned directly or indirectly by the Company,
free and clear of any lien, encumbrance, claim, security interest,
restriction on transfer, shareholders' agreement, voting trust or other
defect of title whatsoever (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such opinions and
certificates);
(iii) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default in
the performance or observance of any material obligation, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound;
(iv) Each of the Company and each of its subsidiaries has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel shall
state that they believe that both you and they are justified in relying
upon such opinions and certificates);
(v) The Company and its subsidiaries have title in fee simple to all
real property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries;
and any real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries (in giving the opinion in this clause, such
counsel may state that no examination of record titles for the purpose of
such opinion has been made, and that they are relying upon a general
review of the titles of the Company and its subsidiaries, upon opinions of
local counsel and abstracts, reports and policies of title companies
rendered or issued at or subsequent to the time of acquisition of such
property by the Company or its subsidiaries, upon opinions of counsel to
the lessors of such property and, in respect of matters of fact, upon
certificates of officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions, abstracts, reports, policies, and
certificates);
(vi) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vii) The Company and its subsidiaries possess and are in compliance
with all patents, trademarks, franchises, permits, licenses (including
without limitation all software licenses) and similar items as well as
electronic data processing, electronic funds transfer and other contracts,
agreements, leases and arrangements necessary or material to the conduct
of its business as presently conducted or proposed to be conducted and as
described in the Prospectus, except where failure to possess any of the
foregoing would not, single or in the aggregate, have a material adverse
effect upon the business, prospects, properties, operations, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole; the Company has not received any notice of
infringement of or conflict with (and knows of no such infringement of or
conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which could
result in any material adverse effect on the Company and its subsidiaries
taken as a whole; and except as otherwise described in the Prospectus,
neither the Company nor any of its subsidiaries has received any notice of
cancellation of the same or any notice of proceedings relating to the
revocation, suspension or modification of any of the foregoing which,
singly or in the aggregate, would result in a material adverse change in
the business, prospects, properties, operations, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries
taken as a whole, or which is required to be disclosed in the Prospectus;
(viii) Except for the registration rights granted in connection with
the offering of the Company's 3.5% Convertible Subordinated Notes due 2006
and the Company's 4% Convertible Subordinated Notes due 2005, there are no
contracts, agreements or understandings known to such counsel between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by the
Company under the Act; and
(ix) The Exchange Act Reports (other than the financial statements,
other financial data and related schedules therein, as to which such
counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act, and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that any
of such documents, when they were so filed, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made when such documents were so filed, not misleading;
(d) At the Closing Date, you shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the incorporation of the
Company, the validity of the Shares, the Registration Statement, the Prospectus
and other related matters as the Representatives may require, and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a certificate of the
President or any Vice President and a principal financial or accounting officer
of the Company, dated the Closing Date to the effect that (i) the condition set
forth in subsection (a) of this Section 6 has been satisfied, (ii) as of the
date hereof and as of the Closing Date, the representations and warranties of
the Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date, the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed and (iv) subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
the Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a material
adverse change, in the business prospects, properties, operations, condition
(financial or otherwise), or results of operations of the Company and its
subsidiaries taken as a whole, except in each case as described in or
contemplated by the Prospectus.
(f) At the time this Agreement is executed, you shall have received
a letter, dated the date of delivery thereof, of PricewaterhouseCoopers LLP
confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to the effect
that:
(i) they are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published Rules and Regulations thereunder;
(ii) in their opinion the financial statements and any schedules
examined by them and included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations;
(iii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No.
71, Interim Financial Information, on any unaudited financial statements
included in the Registration Statement;
(iv) on the basis of the review referred to in clause (iii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements and summary of earnings for them to
be in conformity with generally accepted accounting principles;
(B) if any unaudited "capsule" information is contained in the
Prospectus, the unaudited consolidated net sales, net operating
income, net income and net income per share amounts or other amounts
constituting such "capsule" information and described in such letter
do not agree with the corresponding amounts set forth in the
unaudited consolidated financial statements or were not determined
on a basis substantially consistent with that of the corresponding
amounts in the audited statements of income;
(C) at a specified date not more than three business days
prior to the date of letter, there was any change in the capital
stock or any increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or, at such date,
there was any decrease in consolidated net current assets or net
assets, as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to a specific date not more
than three business days prior to the date of such letter, there
were any decreases, as compared with the corresponding period of the
previous year, in consolidated net sales, net operating income, in
the total or per share amounts of consolidated income before
extraordinary items or net income;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter;
(v) although they are unable to and do not express any opinion on
the unaudited pro forma combined financial statements included or
incorporated by reference in the Prospectus or on the pro forma
adjustments applied to the historical amounts included in the pro forma
financial statements, they have:
(A) read the unaudited pro forma combined financial
statements;
(B) performed a review in accordance with SAS 71 of the
financial statements to which the pro forma adjustments were
applied;
(C) made inquiries of certain officials of the Company who
have responsibility for financial and accounting matters about the
basis for their determination of the pro forma adjustments and
whether the unaudited pro forma financial statements comply as to
form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the unaudited pro
forma financial statements; and
on the basis of such procedures and such other inquiries and procedures
specified above, nothing came to their attention that caused them to
believe that the unaudited pro forma financial statements included or
incorporated by reference in the Prospectus do not comply as to form in
all material respects with the applicable requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;
and
(vi) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to
the internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for
purposes of this subsection.
(g) At the time this Agreement is executed, you shall have received
a letter, dated the date of delivery thereof, of Ernst & Young LLP confirming
that they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating to the
effect that:
(i) they are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published Rules and Regulations thereunder;
(ii) in their opinion the financial statements and any schedules
examined by them and included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations;
(iii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No.
71, Interim Financial Information, on any unaudited financial statements
included in the Registration Statement;
(iv) on the basis of the review referred to in clause (iii) above, a
reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements and summary of earnings for them to
be in conformity with generally accepted accounting principles;
(B) if any unaudited "capsule" information is contained in the
Prospectus, the unaudited consolidated net sales, net operating
income, net income and net income per share amounts or other amounts
constituting such "capsule" information and described in such letter
do not agree with the corresponding amounts set forth in the
unaudited consolidated financial statements or were not determined
on a basis substantially consistent with that of the corresponding
amounts in the audited statements of income;
(C) at the date of the latest available balance sheet read by
such accountants, or at a subsequent specified date not more than
three business days prior to the date of the such letter, there was
any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet
read by such accountants, there was any decrease in consolidated net
current assets or net assets, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the
latest available income statement read by such accountants there
were any decreases, as compared with the corresponding period of the
previous year, in consolidated net sales, net operating income, in
the total or per share amounts of consolidated income before
extraordinary items or net income;
except in all cases set forth in clauses (C) and (D) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(v) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to
the internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus for
purposes of this subsection.
(h) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
(i) You shall have also received a lock-up agreement from each
person who is a director or executive officer of the Company substantially in
the form attached hereto as Annex I.
(j) At the Closing Date, the Shares shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(k) The Company shall have complied with the provisions of Section
4(c) hereof with respect to the furnishing of prospectuses on the next business
day succeeding the date of this Agreement.
(l) The Representatives shall have received a letter, dated the
Closing Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (f) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection.
(m) The Representatives shall have received a letter, dated the
Closing Date, of Ernst & Young LLP which meets the requirements of subsection
(g) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to the Closing Date for
the purposes of this subsection.
(n) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such further information, certificates, opinions or
other documents as they may have reasonably requested to evidence compliance
with the conditions set forth in this Section 6.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone. Any such telephone notice shall be confirmed promptly thereafter in
writing.
7. Indemnification .
(a) The Company shall indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange, against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation) to which they or any of
them may become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the
Shares, as originally filed or any amendment thereof, or any related preliminary
prospectus or the Prospectus, or in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company will not
be liable in any such case to the extent but only to the extent that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein; and provided further, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus (as then
amended or supplemented, provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages
and liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured, as determined by a court of competent jurisdiction in a
decision not subject to further appeal, in such Prospectus and such Prospectus
was required by law to be delivered at or prior to the written confirmation of
sale to such person. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation) to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. This indemnity
will be in addition to any liability which any Underwriter may otherwise have
including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of any claims or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure so to notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 7). In case any such
claim or action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or reasonably could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
and unconditional release of the indemnified party from all liability on claims
that are or reasonably could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of the indemnified party.
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company any contribution received by
the Company from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Underwriters from the offering of the Shares or,
if such allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the
relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and (y) the underwriting discount received by the
Underwriters, respectively, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and of the
Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the shares are
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within in
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 8. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 8 or otherwise. The obligations of the
Underwriters to contribute pursuant to this Section 8 are several in proportion
to the respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective
names in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) and 8 hereof) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be for a period, not exceeding seven business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares .
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters and the Company
contained in this Agreement, including the agreements contained in Section 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when
(i) you and the Company shall have received notification of the effectiveness of
the Registration Statement or (ii) the execution of this Agreement. If either
the initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York City time, on the fifth full business
day after the Registration Statement shall have become effective, this
Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by you notifying the Company. Notwithstanding the foregoing, the provisions of
this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times be in
full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if: (A) trading in the Company's securities on The New York Stock
Exchange has been suspended or made subject to material limitations; (B) if
trading on the New York Stock Exchange shall have been suspended or been made
subject to material limitations, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange or by order of the Commission or any
other governmental authority having jurisdiction; (C) if a banking moratorium
has been declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm Shares or the
Additional Shares, as the case may be, shall have become effective; (D) if any
downgrading has occurred in the rating of the Company's debt securities by any
"nationally recognized statistical rating-organization" (as defined for purposes
of Rule 436(g) under the Act;) or (E) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United States
or there is a declaration of a national emergency or war by the United States
such that the effect of any such event in your sole judgment makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be
in writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel),
incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed
and confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets, with a
copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxx;
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to the Company and its counsel at the addresses set forth
in the Registration Statement, Attention: X. Xxxx Lemon, III;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof.
13. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
17. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature page follows]
If the foregoing correctly sets forth the understanding
between you and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us. It is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Affiliated Computer Services, Inc.
By:/s/ XXXX X. XXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By:/s/ XXXXXXX PARISH
---------------------------------------
Name: Xxxxxxx Parish
Title: Senior Managing Director
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
SCHEDULE I
Number of Additional
Total Number of Firm Shares to be Purchased
Shares to be if Maximum
Name of Underwriter Purchased Option Exercised
------------------- -------------------- ----------------------
Bear, Xxxxxxx & Co. Inc. 5,065,937 759,891
Xxxxxx Brothers Inc. 1,397,500 209,625
Xxxxx Fargo Xxx Xxxxxx, LLC 524,063 78,609
X.X. Xxxxxxx & Sons, Inc. 225,000 33,750
Xxxxxxxxx Xxxxxxxx, Inc. 225,000 33,750
XX Xxxxx Securities Corporation 225,000 33,750
Xxxxxx X. Xxxxx & Co. Incorporated 112,500 16,875
BB&T Capital Markets, a Division of Xxxxx &
Xxxxxxxxxxxx 112,500 16,875
First Southwest Company 112,500 16,875
Total.................................................. 8,000,000 1,200,000
==================== ======================
SCHEDULE II
ACS Government Solutions Group, Inc.
ACS Enterprise Solutions, Inc.
ACS Outsourcing Solutions, Inc.
Lockheed Xxxxxx IMS Corporation
ANNEX I-A
LIST OF DIRECTORS AND EXECUTIVE OFFICERS
Xxxxxx Xxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxx
Xxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxx, Xx.
Xxxxx X. Xxxxx
Xxxxxx X. X'Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxx X. Xxxxxx
ANNEX I-B
FORM OF LOCK-UP AGREEMENT
BEAR, XXXXXXX & CO. INC.
as Representative of the several Underwriters
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Affiliated Computer Services, Inc.
Ladies and Gentlemen:
In consideration of the agreement of the several Underwriters, for
which Bear, Xxxxxxx & Co. Inc. intends to act as Representative, to underwrite a
proposed public offering (the "Offering") of shares of Class A common stock (the
"Common Stock") of Affiliated Computer Services, Inc., a corporation organized
under the laws of the State of Delaware (the "Company"), as contemplated by a
prospectus supplement to be filed with the Securities and Exchange Commission
pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the
"Prospectus"), and to induce the Underwriters to continue their efforts in
connection with the Offering, the undersigned hereby:
(i) agrees that, without the prior written consent of Bear,
Xxxxxxx & Co. Inc., during the period commencing on the date hereof and
ending ninety (90) days after the date of the Prospectus for the
Offering (the "Lock-Up Period"), the undersigned will not, and will not
announce or disclose any intention to (except as may be disclosed in
the Prospectus), issue, sell, offer or agree to sell, grant any option
for the sale of, pledge, make any short sale or maintain any short
position, establish or maintain a "put equivalent position" (within the
meaning of Rule 16-a-1(h) under the Securities Exchange Act of 1934, as
amended), enter into any swap, derivative transaction or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock (whether any
such transaction is to be settled by delivery of Common Stock, other
securities, cash or other consideration) or otherwise dispose of,
directly or indirectly, any Common Stock (or any securities convertible
into, exercisable for or exchangeable for Common Stock) or interest
therein of the Company or of any of its subsidiaries including, without
limitation, shares of Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock) which may be deemed
to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission,
provided, however, that the undersigned may offer, sell, contract to
sell or otherwise dispose of Common Stock pursuant to existing 10b-5-1
sales plans and during the period beginning on the 61st day after the
date of the Prospectus and continuing to and including the 90th day
after such date, the undersigned may offer, sell, contract to sell or
otherwise
dispose of up to an aggregate of 12.5% of the undersigned's holdings of
Common Stock and Class B Common Stock; and
(ii) authorizes the Company during the Lock-Up Period to cause
the transfer agent to decline to transfer and/or to note stop transfer
restrictions on the transfer books and records of the Company with
respect to any shares of Common Stock and any securities convertible
into, exercisable for or exchangeable for Common Stock for which the
undersigned is the record holder and, in the case of any such share or
securities for which the undersigned is the beneficial but not the
record holder, agrees to cause the record holder to cause the transfer
agent to decline to transfer and/or to note stop transfer restrictions
on such books and records with respect to such shares or securities.
The undersigned further agrees, from the date hereof until the end of
the Lock-Up Period, that the undersigned will not exercise and will waive his,
her or its rights, if any, to require the Company to register its Common Stock
or any securities convertible into, exercisable for or exchangeable for Common
Stock and to receive notice thereof.
Without limitation, any securities received upon exercise of options
granted to the undersigned will also be subject to this agreement.
Notwithstanding the foregoing, the undersigned may transfer the
undersigned's Common Stock or Class B Common Stock (i) as a bona fide gift or
gifts or (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that any such transfer
shall not involve a disposition for value; provided, however, that the donee or
donees or the trustee of the trust, as applicable, shall execute and deliver to
Bear, Xxxxxxx & Co. Inc. an agreement (A) stating that the securities
transferred remain subject to the provisions of this Agreement and (B)
certifying that since the date of this Agreement, such donee or donees or
trustee, as applicable, has or have been in compliance with the terms of this
Agreement as if it had been an original party hereto. For purposes of this
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into the agreements set forth herein, and
that, upon request, the undersigned will execute any additional documents
necessary in connection with enforcement hereof. All authority herein conferred
or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned.
Very truly yours,
--------------------------
Name:
Title:
Dated: October , 2001
