1
Exhibit 1.1
DRAFT OF OCTOBER 16, 1996 6:09 AM
CONCORD EFS, INC.
3,000,000 Shares Common Stock*
UNDERWRITING AGREEMENT
October ___, 1996
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXXX SECURITIES
XXXXXX XXXXXX & COMPANY, INC.
XXXXX, XXXXXXXX & XXXX, INC.
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introductory. Concord EFS, Inc. ("Company"), a Delaware
corporation, has an authorized capital stock consisting of 80,000,000 shares,
$0.33 1/3 par value, of Common Stock ("Common Stock"), of which ____________
shares will be outstanding as of the closing of the transaction contemplated by
this Agreement. The Company proposes to issue and sell 3,000,000 shares of its
authorized but unissued Common Stock ("Firm Shares") to you (the
"Underwriters"), each of which are acting severally and not jointly. In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to 450,000 additional shares of Common Stock ("Option Shares") as
provided in Section 4 hereof. The Firm Shares and, to the extent such option is
exercised, the Option Shares, are hereinafter collectively referred to as the
"Shares."
You have advised the Company that you propose to make a public offering of
each of your respective portions of the Shares as soon as you deem advisable
after the registration statement hereinafter referred to becomes effective, if
it has not yet become effective, and the Pricing Agreement hereinafter defined
has been executed and delivered.
Prior to the purchase and public offering of the Shares by you, the Company
and each of you shall enter into an agreement substantially in the form of
Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Underwriters and shall specify such applicable information
as is indicated in Exhibit A hereto. The offering of the Shares will be governed
by this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement
shall be deemed to incorporate the Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
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* Plus an option to acquire up to 450,000 additional shares to cover
overallotments
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(a) A registration statement on Form S-3 (File No. 333-13309)
and a related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" all references herein
to specific rules are rules promulgated under the 0000 Xxx); and the
Company has so prepared and has filed such amendments thereto, if any, and
such amended preliminary prospectuses as may have been required to the date
hereof. If the Company has elected not to rely upon Rule 430A, the Company
has prepared and will promptly file an amendment to the registration
statement and an amended prospectus. If the Company has elected to rely
upon Rule 430A, it will prepare and file a prospectus pursuant to Rule
424(b) that discloses the information previously omitted from the
prospectus in reliance upon Rule 430A. There have been or will promptly be
delivered to you three signed copies of such registration statement and
amendments, together with three copies of all documents incorporated by
reference therein, three copies of each exhibit filed therewith, and
conformed copies of such registration statement and amendments (but without
exhibits) and of the related preliminary prospectus or prospectuses and
final forms of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430(b) and/or Rule 434 and the information incorporated therein by
reference), as from time to time amended or supplemented, are hereinafter
referred to as the "Registration Statement," and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to
the Underwriters by the Company for use in connection with the offering of
the Shares which differs from the Prospectus on file at the Commission at
the time the Registration Statement became or becomes effective (whether or
not such revised prospectus is required to be filed by the Company pursuant
to Rule 424(b)), the term Prospectus shall refer to such revised prospectus
from and after the time it was provided to the Underwriters for such use.
If the Company elects to rely on Rule 434 of the 1933 Act, all references
to "Prospectus" shall be deemed to include, without limitation, the form of
prospectus and the term sheet, taken together, provided to the Underwriters
by the Company in accordance with Rule 434 of the 1933 Act "Rule 434
Prospectus"). Any registration statement (including any amendment or
supplement thereto or information which is deemed part thereof) filed by
the Company under Rule 462(b) ("Rule 462(b) Registration Statement") shall
be deemed to be part of the "Registration Statement" as defined herein, and
any prospectus (including any amendment or supplement thereto or
information which is deemed part thereof) included in such registration
statement shall be deemed to be part of the "Prospectus", as defined
herein, as appropriate. The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the "Exchange Act." Any reference herein to any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Form
S-3 under the 1933 Act ("Incorporated Documents"), as of the date of such
preliminary prospectus or Prospectus, as the case may be. Any document
filed by the Company under the Exchange Act after the effective date of the
Registration Statement or the date of the Prospectus and incorporated by
reference in the Prospectus shall be deemed to be included in the
Registration Statement and the Prospectus as of the date of such filing.
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The Incorporated Documents, when they were or are filed with the
Commission, conformed or will conform in all material respects to the
requirements of the Exchange Act and none of such documents contained or
will contain an untrue statement of a material fact or omitted or will omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(b) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus, and each preliminary
prospectus has conformed in all material respects with the requirements of
the 1933 Act and, as of its date, has not included any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements therein not misleading; and when the Registration Statement
became or becomes effective, and at all times subsequent thereto, up to the
First Closing Date or the Second Closing Date hereinafter defined, as the
case may be, the Registration Statement, including the information deemed
to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b), if applicable, and the Prospectus and any
amendments or supplements thereto, contained or will contain all statements
that are required to be stated therein in accordance with the 1933 Act and
in all material respects conformed or will in all material respects conform
to the requirements of the 1933 Act, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement thereto, included or
will include any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that the
Company makes no representation or warranty as to information contained in
or omitted from any preliminary prospectus, the Registration Statement, the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter specifically for use in the preparation thereof.
(c) The Company and its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective places of incorporation, with corporate
power and authority to own their properties and conduct their business as
described in the Prospectus; each of the Company and its subsidiaries is
duly qualified to do business as a foreign corporation under the
corporation law of, and is in good standing as such in, each jurisdiction
in which it owns or leases substantial properties, has an office, or in
which substantial business is conducted and such qualification is required
except in any such case where the failure to so qualify or be in good
standing would not have a material adverse effect upon the Company and its
subsidiaries taken as a whole; and no proceeding of which the Company has
knowledge has been instituted and continues in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification.
(d) Except for Network EFT, Inc. (of which the Company
owns 99.2% of the outstanding capital stock), the Company owns directly or
indirectly 100 percent of the issued and outstanding capital stock of each
of its subsidiaries, free and clear of any claims, liens, encumbrances or
security interests and all of such capital stock has been duly authorized
and validly issued and is fully paid and nonassessable.
(e) The issued and outstanding shares of capital stock of the
Company as set forth in the Prospectus have been duly authorized and
validly issued, are fully paid and nonassessable, and conform to the
description thereof contained in the Prospectus.
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(f) The Shares have been duly authorized and when issued,
delivered and paid for pursuant to this Agreement, will be validly issued,
fully paid and nonassessable, and will conform to the description thereof
contained in the Prospectus.
(g) The making and performance by the Company of this Agreement
and the Pricing Agreement have been duly authorized by all necessary
corporate action and will not violate any provision of the Company's
charter or bylaws and will not result in the breach, or be in
contravention, of any provision of any agreement, franchise, license,
indenture, mortgage, deed of trust, or other instrument to which the
Company or any subsidiary is a party or by which the Company, any
subsidiary or the property of any of them may be bound or affected, or any
order, rule or regulation applicable to the Company or any subsidiary of
any court or regulatory body, administrative agency or other governmental
body having jurisdiction over the Company or any subsidiary or any of their
respective properties, or any order of any court or governmental agency or
authority entered in any proceeding to which the Company or any subsidiary
was or is now a party or by which it is bound. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the execution and
delivery of this Agreement or the Pricing Agreement or the consummation of
the transactions contemplated herein or therein, except for compliance with
the 1933 Act and blue sky laws applicable to the public offering of the
Shares by the several Underwriters and clearance of such offering with the
National Association of Securities Dealers, Inc. ("NASD"). This Agreement
has been duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with
respect to certain of the financial statements included or incorporated by
reference in the Registration Statement are independent accountants as
required by the 1933 Act.
(i) The consolidated financial statements of the Company
included or incorporated by reference in the Registration Statement present
fairly the consolidated financial position of the Company as of the
respective dates of such financial statements, and the consolidated results
of operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed in the Prospectus. The financial information set forth in the
Prospectus under "Selected Financial Data" presents fairly on the basis
stated in the Prospectus, the information set forth therein.
The pro forma financial statements and other pro forma
information included in the Prospectus present fairly the information shown
therein, have been prepared in accordance with generally accepted
accounting principles and the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma information,
have been properly compiled on the pro forma basis described therein, and,
in the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
under the circumstances.
(j) Neither the Company nor any subsidiary is in violation of
its charter or bylaws or is in default under any consent decree or order of
any court or administrative body, or is in default with respect to any
material provision of any lease, loan agreement, franchise, license, permit
or other contract obligation to which it is a party; and there does not
exist any
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state of facts which constitutes an event of default as defined in such
documents or which, with notice or lapse of time or both, would constitute
such an event of default, in each case, except for defaults which neither
singly nor in the aggregate are material to the Company and its
subsidiaries taken as a whole.
(k) There are no material legal or governmental proceedings
pending, or to the Company's knowledge, threatened to which the Company or
any subsidiary is or may be a party or of which material property owned or
leased by the Company or any subsidiary is or may be the subject, or
related to environmental or discrimination matters which are not disclosed
in the Prospectus, or which question the validity of this Agreement or the
Pricing Agreement or any action taken or to be taken pursuant hereto or
thereto.
(l) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to purchase Common
Stock except as disclosed in the Prospectus. Holders of registration rights
have waived such rights with respect to the offering being made by the
Prospectus.
(m) The Company and each of its subsidiaries have good and
marketable title to all the properties and assets reflected as owned in the
financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or encumbrance of
any kind except those, if any, reflected in such financial statements (or
elsewhere in the Prospectus) or which are not material to the Company and
its subsidiaries taken as a whole. The Company and each of its subsidiaries
hold their respective leased properties which are material to the Company
and its subsidiaries taken as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
contemplated by the Prospectus, the Company and its subsidiaries, taken as
a whole, have not incurred any material liabilities or obligations, direct
or contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material adverse
change in their condition (financial or otherwise) or results of operations
nor any material change in their capital stock, short-term debt or
long-term debt.
(p) The Company agrees not to sell, contract to sell or
otherwise dispose of any Common Stock or securities convertible into Common
Stock (except Common Stock issued pursuant to currently outstanding
options, warrants or convertible securities) for a period of 90 days after
this Agreement becomes effective without the prior written consent of the
Underwriters.
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required.
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(r) The Company together with its subsidiaries owns and
possesses all right, title and interest in and to, or has duly licensed
from third parties, all patents, patent rights, trade secrets, inventories,
know-how, trademarks, trade names, copyrights, service marks and other
proprietary rights ("Trade Rights") material to the business of the Company
and each of its subsidiaries taken as a whole. Neither the Company nor any
of its subsidiaries has received any notice of infringement,
misappropriation or conflict from any third party as to such material Trade
Rights which has not been resolved or disposed of and neither the Company
nor any of its subsidiaries has infringed, misappropriated or otherwise
conflicted with material Trade Rights of any third parties, which
infringement, misappropriation or conflict would have a material adverse
effect upon the condition (financial or otherwise) or results of operations
of the Company and its subsidiaries taken as a whole.
(s) The conduct of the business of the Company and each of its
subsidiaries is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations, except where the failure to
be in compliance would not have a material adverse effect upon the
condition (financial or otherwise) or results of operations of the Company
and its subsidiaries taken as a whole.
(t) The Company has filed all necessary federal and state
income and franchise tax returns and has paid all taxes shown as due
thereon, and there is no tax deficiency that has been, or to the knowledge
of the Company might be, asserted against the Company or any of its
properties or assets that would or could be expected to have a material
adverse affect upon the condition (financial or otherwise) or results of
operations of the Company and its subsidiaries taken as a whole.
(u) A registration statement relating to the Common Stock has
been declared effective by the Commission pursuant to the Exchange Act and
the Common Stock is duly registered thereunder. The Shares have been listed
on the Nasdaq National Market, subject to notice of issuance or sale of the
Shares, as the case may be.
(v) The Company is not, and does not intend to conduct its
business in a manner in which it would become, an "investment company" as
defined in Section 3(a) of the Investment Company Act of 1940, as amended
("Investment Company Act").
(w) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported in
the Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way, the
Company will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
SECTION 3. Representations and Warranties of the Underwriters. The
Underwriters represent and warrant to the Company that the information set forth
(a) on the cover page of the
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Prospectus with respect to price, underwriting discount and terms of the
offering and (b) under "Underwriting" in the Prospectus was furnished to the
Company by and on behalf of the Underwriters for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties 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 agree, severally and not jointly, to purchase
the Firm Shares from the Company at the price per share set forth in the Pricing
Agreement. The obligation of each Underwriter to the Company shall be to
purchase from the Company that number of full shares which (as nearly as
practicable, as determined by you) bears to 3,000,000, the same proportion as
the number of Shares set forth opposite the name of such Underwriter in Schedule
A hereto bears to the total number of Firm Shares to be purchased by all
Underwriters under this Agreement. The initial public offering price and the
purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M. Chicago Time on the fourth business day, if permitted
under Rule 15c6-1 under the Exchange Act, (or the third business day if required
under Rule 15c6-1 under the Exchange Act or unless postponed in accordance with
the provisions of Section 12) following the date the Registration Statement
becomes effective (or, if the Company has elected to rely upon Rule 430A, the
fourth business day, if permitted under Rule 15c6-1 under the Exchange Act, (or
the third business day if required under Rule 15c6-1 under the Exchange Act)
after execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Underwriters and
the Company, the Company will deliver to you at the offices of Xxxxxxx, Carton &
Xxxxxxx or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares
to be sold by it against payment of the purchase price therefor by delivery of
federal or other immediately available funds, by wire transfer or otherwise, to
the Company. Such time of delivery and payment is herein referred to as the
"First Closing Date." The certificates for the Firm Shares so to be delivered
will be in such denominations and registered in such names as you request by
notice to the Company and the Custodian prior to 10:00 A.M., Chicago Time, on
the third full business day preceding the First Closing Date, and will be made
available at the Company's expense for checking and packaging by the
Underwriters at 10:00 A.M., Chicago Time, on the first full business day
preceding the First Closing Date. Payment for the Firm Shares so to be delivered
shall be made at the time and in the manner described above at the offices of
counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of 450,000 Option Shares, at the
same purchase price per share to be paid for the Firm Shares, for use solely in
covering any overallotments made by the Underwriters in the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised
at any time (but not more than once) within 30 days after the date of the
initial public offering upon notice by you to the Company setting forth the
aggregate number of Option Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date, shall not be earlier than three nor later than 10 full business days after
delivery of such notice of exercise. The number of Option Shares to be purchased
by each Underwriter shall be determined by multiplying the number of Option
Shares to be sold by a fraction, the
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numerator of which is the number of Firm Shares to be purchased by such
Underwriter as set forth opposite its name in Schedule A and the denominator of
which is the total number of Firm Shares (subject to such adjustments to
eliminate any fractional share purchases as you in your absolute discretion may
make). Certificates for the Option Shares will be made available at the
Company's expense for checking and packaging at 10:00 A.M., Chicago Time, on the
first full business day preceding the Second Closing Date. The manner of payment
for and delivery of the Option Shares shall be the same as for the Firm Shares
as specified in the preceding paragraph.
SECTION 5. Covenants of the Company. The Company covenants and agrees that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose, and will also advise you promptly of any
request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for
additional information.
(b) The Company will give you notice of its intention to file
or prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection with
the offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement became or becomes
effective, whether or not such revised prospectus is required to be filed
pursuant to Rule 424(b) and any term sheet as contemplated by Rule 434) and
will furnish you with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file any such amendment or supplement or use any such
prospectus to which you or counsel for the Underwriters shall reasonably
object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act,
the Company will prepare a term sheet that complies with the requirements
of Rule 434. If the Company elects not to rely on Rule 434, the Company
will provide the Underwriters with copies of the form of prospectus, in
such numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a result of
which the Prospectus, including any amendments or supplements, would
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 is necessary at any time to amend the
Prospectus, including any amendments or supplements thereto and including
any revised prospectus which the Company proposes for use by the
Underwriters in
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connection with the offering of the Shares which differs from the
prospectus on file with the Commission at the time of effectiveness of the
Registration Statement, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) to comply with the 1933 Act, the
Company promptly will advise you thereof and will promptly prepare and file
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such compliance;
and, in case any Underwriter is required to deliver a prospectus nine
months or more after the effective date of the Registration Statement, the
Company upon request, but at the expense of such Underwriter, will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the 1933 Act.
(e) Neither the Company nor any of its subsidiaries will,
prior to the earlier of the Second Closing Date or termination or
expiration of the related option, incur any liability or obligation, direct
or contingent, or enter into any material transaction, other than in the
ordinary course of business, except as contemplated by the Prospectus.
(f) Neither the Company nor any of its subsidiaries will
acquire any capital stock of the Company prior to the earlier of the Second
Closing Date or termination or expiration of the related option nor will
the Company declare or pay any dividend or make any other distribution upon
the Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case as contemplated by the Prospectus.
(g) Not later than March 31, 1998 the Company will make
generally available to its security holders an earnings statement (which
need not be audited) covering a period of at least 12 months beginning
after the effective date of the Registration Statement, which will satisfy
the provisions of the last paragraph of Section 11(a) of the 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, copies of the
Registration Statement, the Prospectus, each preliminary prospectus, the
Incorporated Documents and all amendments and supplements to any such
documents in each case as soon as available and in such quantities as you
may reasonably request, for the purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in
qualifying or registering the Shares for sale under the blue sky laws of
such jurisdictions as you designate, and will continue such qualifications
in effect so long as reasonably required for the distribution of the
Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any such
jurisdiction where it is not currently qualified or where it would be
subject to taxation as a foreign corporation.
(j) During the period of five years hereafter, the Company will
furnish you with a copy (i) as soon as practicable after the filing
thereof, of each report filed by the Company with the Commission, any
securities exchange or the NASD; (ii) as soon as practicable after the
release thereof, of each material press release in respect of the Company;
and (iii) as soon as available, of each report of the Company mailed to
stockholders.
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(k) The Company will use the net proceeds received by it from
the sale of the Shares being sold by it in the manner specified in the
Prospectus.
(l) If, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in reliance
upon Rule 430A and/or Rule 434, then immediately following the execution
and delivery of the Pricing Agreement, the Company will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A, Rule 424(b) and/or Rule 434, copies of an amended Prospectus, or, if
required by such Rule 430A and/or Rule 434, a post-effective amendment to
the Registration Statement (including an amended Prospectus), containing
all information so omitted. If required, the Company will prepare and file,
or transmit for filing, a Rule 462(b) Registration Statement not later than
the date of the execution of the Pricing Agreement. If a Rule 462(b)
Registration Statement is filed, the Company shall make payment of, or
arrange for payment of, the additional registration fee owing to the
Commission required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and the Nasdaq National Market.
SECTION 6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as to
all of its provisions or is terminated, the Company agrees to pay (i) all costs,
fees and expenses (except legal fees and disbursements of counsel for the
Underwriters and the expenses incurred by the Underwriters other than those
contemplated by clause (ii) below) incurred in connection with the performance
of the Company's obligations hereunder, including without limiting the
generality of the foregoing, all fees and expenses of legal counsel for the
Company and of the Company's independent accountants, all costs and expenses
incurred in connection with the preparation, printing, filing and distribution
of the Registration Statement, each preliminary prospectus and the Prospectus
(including all Incorporated Documents, exhibits and financial statements) and
all amendments and supplements provided for herein, this Agreement, the Pricing
Agreement and the Blue Sky Memorandum, (ii) all costs, fees and expenses
(including legal fees not to exceed $7,500 and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with qualifying or
registering all or any part of the Shares for offer and sale under blue sky
laws, including the preparation of a blue sky memorandum relating to the Shares
and clearance of such offering with the NASD; and (iii) all fees and expenses of
the Company's transfer agent, printing of the certificates for the Shares and
all transfer taxes, if any, with respect to the sale and delivery of the Shares
to the several Underwriters.
SECTION 7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date shall
be subject to the accuracy of the representations and warranties on the part of
the Company herein set forth as of the date hereof and as of the First Closing
Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of their respective obligations hereunder, and to
the following additional conditions:
(a) The Registration Statement shall have become effective
either prior to the execution of this Agreement or not later than 1:00
P.M., Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to
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by you but in no event later than 1:00 P.M., Chicago Time, on the third
full business day following the date hereof; and prior to the First Closing
Date or the Second Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
shall be pending or, to the knowledge of the Company, shall be contemplated
by the Commission. If the Company has elected to rely upon Rule 430A and/or
Rule 434A, the information concerning the initial public offering price of
the Shares and price-related information shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed period
and the Company will provide evidence satisfactory to the Underwriters of
such timely filing (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been
transmitted to the Commission for filing and become effective within the
prescribed time period and, prior to the First Closing date, the Company
shall have provided evidence of such filing and effectiveness in accordance
with Rule 462(b).
(b) The Shares shall have been qualified for sale under the
blue sky laws of such states as shall have been specified by the
Underwriters.
(c) The legality and sufficiency of the authorization, issuance
and sale or transfer and sale of the Shares hereunder, the validity and
form of the certificates representing the Shares, the execution and
delivery of this Agreement and the Pricing Agreement, and all corporate
proceedings and other legal matters incident thereto, and the form of the
Registration Statement and the Prospectus (except financial statements)
shall have been approved by counsel for the Underwriters exercising
reasonable judgment.
(d) You shall not have advised the Company that the
Registration Statement or the Prospectus or any amendment or supplement
thereto, contains an untrue statement of fact, which, in the opinion of
counsel for the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties
of the Company or its subsidiaries, whether or not arising in the ordinary
course of business, which, in the judgment of the Underwriters, makes it
impractical or inadvisable to proceed with the public offering or purchase
of the Shares as contemplated hereby.
(f) There shall have been furnished to you, on the First
Closing Date or the Second Closing Date, as the case may be, except as
otherwise expressly provided below:
(i) An opinion of Xxxxxxx, Xxxx & Xxxxx LLP, counsel for
the Company, addressed to the Underwriters and dated the First Closing
Date or the Second Closing Date, as the case may be, to the effect
that:
(1) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
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laws of the State of Delaware with corporate power and authority
to own its properties and conduct its business as described in
the Prospectus; and the Company has been duly qualified to do
business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction where the
ownership or leasing of real property requires such qualification
except where the failure so to qualify would not have a material
adverse effect upon the condition (financial or otherwise) or
results of operations of the Company and its subsidiaries taken
as a whole;
(2) an opinion to the same general effect as clause
(1) of this subparagraph (i) in respect of each subsidiary of the
Company;
(3) except as disclosed in the Registration
Statement, the Company owns of record directly or indirectly 100
percent of the outstanding capital stock of each subsidiary, and
to the best knowledge of such counsel, such stock is owned free
and clear of any claims, liens, encumbrances or security
interests;
(4) the authorized capital stock of the Company, of
which there is outstanding the amount set forth in the
Registration Statement and Prospectus (except for subsequent
issuances, if any, pursuant to stock options or other rights
referred to in the Prospectus), conforms as to legal matters in
all material respects to the description thereof in the
Registration Statement and Prospectus;
(5) the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is fully
paid and nonassessable;
(6) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly countersigned
by the Company's transfer agent and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement and the Pricing
Agreement, the Shares represented thereby will be duly authorized
and validly issued, fully paid and nonassessable;
(7) the Registration Statement has become effective
under the 1933 Act, and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
1933 Act, and the Registration Statement (including the
information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A(b) and/or Rule
434, if applicable), the Prospectus and each amendment or
supplement thereto (except for the financial statements and other
statistical or financial data included therein as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act; and the
statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations are
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accurate in summary form and fairly present the information
required to be presented by the 1933 Act or the rules and
regulations thereunder, in all material respects and such counsel
does not know of any statutes, rules and regulations required to
be described or referred to in the Registration Statement or the
Prospectus that are not described or referred to therein as
required;
(8) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been duly
authorized by all necessary corporate action and this Agreement
and the Pricing Agreement have been duly executed and delivered
by and on behalf of the Company, and are legal, valid and binding
agreements of the Company, except as enforceability of the same
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights and
by the exercise of judicial discretion in accordance with general
principles applicable to equitable and similar remedies and
except as to those provisions relating to indemnities or
contribution for liabilities arising under the 1933 Act or other
federal or state securities laws as to which no opinion need be
expressed; and no approval, authorization or consent of any
public board, agency, or instrumentality of the United States or
of any state or other jurisdiction is necessary in connection
with the issue or sale of the Shares by the Company pursuant to
this Agreement (other than under the 1933 Act, applicable blue
sky laws and the rules of the NASD) or the consummation by the
Company of any other transactions contemplated hereby;
(9) the execution and performance of this Agreement
will not contravene any of the provisions of, or result in a
default under, any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument known to such
counsel, of the Company or any of its subsidiaries or by which
the property of any of them is bound and which contravention or
default would be material to the Company and its subsidiaries
taken as a whole; or violate any of the provisions of the charter
or bylaws of the Company or any of its subsidiaries or, so far as
is known to such counsel, violate any statute, order, rule or
regulation of any regulatory or governmental body having
jurisdiction over the Company or any of its subsidiaries;
(10) the Company is not an "investment company" or
a person "controlled by" an "investment company" within the
meaning of the Investment Company Act.
In addition, such counsel shall state that, in the
course of their representation of the Company in connection with the
Registration Statement, no facts have come to their attention that
have caused them to believe that either the Registration Statement
(including the information deemed to be part of the Registration
Statement at the time of effectiveness pursuant to Rule 430A(b) and/or
Rule 434, if applicable) or the Prospectus, or the Registration
Statement or the Prospectus as amended or supplemented (except as
aforesaid), as of their respective effective or issue dates, contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus
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as amended or supplemented, if applicable, as of the First Closing
Date or the Second Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state any material
fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made; and such counsel does
not know of any legal or governmental proceedings pending or
threatened required to be described in the Prospectus which are not
described as required, nor of any contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed, as required.
In rendering such opinion, such counsel may state that
they are relying upon the certificate of State Street Bank & Trust
Company, the transfer agent for the Common Stock, as to the number of
shares of Common Stock at any time or times outstanding, and that
insofar as their opinion relates to the accuracy and completeness of
factual matters contained in the Prospectus and Registration
Statement, it is based upon a general review with the Company's
representatives and independent accountants of the information
contained therein, without independent verification by such counsel of
the accuracy or completeness of such information. Such counsel may
also rely upon the opinions of other competent counsel and, as to
factual matters, on certificates of officers of the Company and of
state officials, in which case their opinion is to state that they are
so doing and copies of said opinions or certificates are to be
attached to the opinion unless said opinions or certificates (or, in
the case of certificates, the information therein) have been furnished
to the Underwriters in other form.
(ii) Such opinion or opinions of Xxxxxxx, Carton &
Xxxxxxx, counsel for the Underwriters, dated the First Closing Date or
the Second Closing Date, as the case may be, with respect to the
incorporation of the Company, the validity of the Shares to be sold by
the Company, the Registration Statement and the Prospectus and other
related matters as you may reasonably require, and the Company shall
have furnished to such counsel such documents and shall have exhibited
to them such papers and records as they request for the purpose of
enabling them to pass upon such matters.
(iii) A certificate of the Chairman and the President
of the Company, dated the First Closing Date or the Second Closing
Date, as the case may be, to the effect that:
(1) the representations and warranties of the
Company set forth in Section 2 of this Agreement are true and
correct as of the date of this Agreement and as of the First
Closing Date or the Second Closing Date, as the case may be, and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to such Closing Date; and
(2) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
preliminary prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending the
effectiveness of the Registration Statement has been issued;
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and to the best knowledge of the respective signers, no
proceedings for that purpose have been instituted or are pending
or contemplated under the 1933 Act.
The delivery of the certificate provided for in
this subparagraph shall be and constitute a representation and
warranty of the Company as to the facts required in the immediately
foregoing clauses (1) and (2) of this subparagraph to be set forth in
said certificate.
(iv) At the time the Pricing Agreement is executed
and also on the First Closing Date or the Second Closing Date, as the
case may be, there shall be delivered to you a letter addressed to
you, as the Underwriters, from Ernst & Young L.L.P., independent
accountants, the first one to be dated the date of the Pricing
Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a second closing) to be dated the Second
Closing Date, to the effect set forth in Schedule B. There shall not
have been any change or decrease specified in the letters referred to
in this subparagraph which makes it impractical or inadvisable in the
judgment of the Underwriters to proceed with the public offering or
purchase of the Shares as contemplated hereby.
(v) Such further certificates and documents as you
may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Xxxxxxx, Carton & Xxxxxxx, counsel for the Underwriters, which approval shall
not be unreasonably withheld. The Company shall furnish you with such manually
signed or conformed copies of such opinions, certificates, letters and documents
as you request.
If any condition to the Underwriters' obligations hereunder to be satisfied
prior to or at the First Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 6 and 8 hereof and except
to the extent provided in Section 10 hereof.
SECTION 8. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless such
failure to satisfy such condition or to comply with any provision hereof is due
to the default or omission of any Underwriter, the Company agrees to reimburse
you upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by you in
connection with the proposed purchase and the sale of the Shares. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section, Section 7 and Section 11 shall at all times
be effective and shall apply.
SECTION 9. Effectiveness of Registration Statement. You and the Company
will use your, its and their best efforts to cause the Registration Statement to
become effective, if it has not yet become
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effective, and to prevent the issuance of any stop order suspending the
effectiveness of the Registration Statement and, if such stop order be issued,
to obtain as soon as possible the lifting thereof.
SECTION 10. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, including the information deemed
to be part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A and/or Rule 434, if applicable, any preliminary prospectus, the
Prospectus, or any amendment 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;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that (i) any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter, specifically for
use therein; or (ii) if such statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus and (1) any such loss,
claim, damage or liability suffered or incurred by any Underwriter (or any
person who controls any Underwriter) resulted from an action, claim or suit by
any person who purchased Shares which are the subject thereof from such
Underwriter in the offering and (2) such Underwriter failed to deliver or
provide a copy of the Prospectus to such person at or prior to the confirmation
of the sale of such Shares in any case where such delivery is required by the
1933 Act. In addition to their other obligations under this Section 10(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 10(a), it will reimburse the Underwriters on a monthly basis for
all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the
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Prospectus, or any amendment 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 such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with Section
3 of this Agreement or any other written information furnished to the Company by
such Underwriter specifically for use in the preparation thereof; and will
reimburse any legal or other expenses reasonably incurred by the Company, or any
such director, officer or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action. In addition to
their other obligations under this Section 11(b), the Underwriters agree that,
as an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 11(b),
they will reimburse the Company on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Underwriters' obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such 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 in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Underwriters in the case of paragraph (a)
representing all indemnified parties not having different or additional defenses
or potential conflicting interest among themselves who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying
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party. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section is unavailable
to an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
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 or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion in the case of the
Company as the total price paid to the Company for the Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and 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 to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, no Underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Shares 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 the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section are several in proportion to their respective underwriting commitments
and not joint.
(e) The provisions of this Section shall survive any termination of this
Agreement.
Section 11. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Underwriters of all such Shares in accordance with
the terms hereof. If any Underwriter or
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Underwriters default in their obligations to purchase Shares hereunder on the
First Closing Date and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10
percent of the total number of Shares which the Underwriters are obligated to
purchase on the First Closing Date, the Underwriters may make arrangements
satisfactory to the Company for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
date the nondefaulting Underwriters shall be obligated severally, in proportion
to their respective commitments hereunder, to purchase the Shares which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default and the aggregate number of Shares with
respect to which such default or defaults occur is more than the above
percentage and arrangements satisfactory to the Underwriters and the Company for
the purchase of such Shares by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company, except for the expenses to be paid by
the Company pursuant to Section 6 hereof and except to the extent provided in
Section 10 hereof.
In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Underwriters or the Company shall have the right to postpone the First Closing
Date for not more than seven business days in order that the necessary changes
in the Registration Statement, Prospectus and any other documents, as well as
any other arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
SECTION 12. Effective Date. This Agreement shall become effective
immediately as to Sections 7, 9, 10 and 13 and as to all other provisions at
10:00 A.M., Chicago Time, on the day following the date upon which the Pricing
Agreement is executed and delivered, unless such a day is a Saturday, Sunday or
holiday (and in that event this Agreement shall become effective at such hour on
the business day next succeeding such Saturday, Sunday or holiday); but this
Agreement shall nevertheless become effective at such earlier time after the
Pricing Agreement is executed and delivered as you may determine on and by
notice to the Company or by release of any Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams (i) advising
Underwriters that the Shares are released for public offering, or (ii) offering
the Shares for sale to securities dealers, whichever may occur first.
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to you or by you by notice to the Company at any time prior to the time
this Agreement shall become effective as to all its provisions, and any
such termination shall be without liability on the part of the Company to
any Underwriter (except for the expenses to be paid or reimbursed pursuant
to Section 6 hereof and except to the extent provided in Section 10 hereof)
or of any Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the
First Closing Date, and the option referred to in Section 4, if exercised,
may be cancelled at any time prior to the Second Closing Date, if (i)
trading in securities on the New York Stock Exchange shall have
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been suspended or minimum prices shall have been established on such
exchange, or (ii) a banking moratorium shall have been declared by
Illinois, New York, or United States authorities, or (iii) there shall have
been any change in financial markets or in political, economic or financial
conditions which, in the opinions of the Underwriters, either renders it
impracticable or inadvisable to proceed with the offering and sale of the
Shares on the terms set forth in the Prospectus or materially and adversely
affects the market for the Shares, or (iv) there shall have been an
outbreak of major armed hostilities between the United States and any
foreign power which in the opinion of the Underwriters makes it impractical
or inadvisable to offer or sell the Shares. Any termination pursuant to
this paragraph (b) shall be without liability on the part of any
Underwriter to the Company or on the part of the Company to any Underwriter
(except for expenses to be paid or reimbursed pursuant to Section 6 hereof
and except to the extent provided in Section 10 hereof).
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Shares sold hereunder.
SECTION 15. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o Xxxxxxx Xxxxx & Company, L.L.C., 000 X. Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, with a copy to Xxxxxxx, Carton & Xxxxxxx, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000 (Attention: Xxxxx X.
Xxxx); and if sent to the Company will be mailed, delivered or telegraphed and
confirmed to the Company at its corporate headquarters with a copy to Xxxxxxx,
Xxxx & Xxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000 (Attention: Xxxxxxx X.
Xxxxxx).
SECTION 16. Successors. This Agreement and the Pricing Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective
successors, personal representatives and assigns, and to the benefit of the
officers and directors and controlling persons referred to in Section 10, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 17. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 18. Applicable Law. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the laws of the State of
Illinois.
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters
including you, all in accordance with its terms.
Very truly yours,
CONCORD EFS, INC.
By:_______________________________
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXXX SECURITIES
XXXXXX XXXXXX & COMPANY, INC.
XXXXX, XXXXXXXX & XXXX, INC.
By: XXXXXXX XXXXX & COMPANY, L.L.C.
By__________________________________
Principal
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22
SCHEDULE A
Number of Firm
Shares to be
Underwriter Purchased
----------- ---------
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxxx Securities
Xxxxxx, Xxxxxx & Company, Inc.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
---------
TOTAL 3,000,000
=========
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SCHEDULE B
Comfort Letter of Ernst & Young LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement and the consolidated financial statements of the Company
from which the information presented under the caption "Selected Consolidated
Financial Data" has been derived which are stated therein to have been examined
by them comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the Exchange Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1995, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since December 31, 1995, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries (with an indication of the date thereof) and other procedures
as specified in such letter, nothing came to their attention which caused them
to believe that (i) the unaudited consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the Exchange Act or
that such unaudited financial statements are not fairly presented in accordance
with generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement, and (ii) at a specified date not more than five days
prior to the date thereof in the case of the first letter and not more than two
business days prior to the date thereof in the case of the second and third
letters, there was any change in the capital stock or long-term debt or
short-term debt (other than normal payments) of the Company and its subsidiaries
on a consolidated basis or any decrease in consolidated net current assets or
consolidated stockholders' equity as compared with amounts shown on the latest
unaudited balance sheet of the Company included in the Registration Statement or
for the period from the date of such balance sheet to a date not more than five
days prior to the date thereof in the case of the first letter and not more than
two business days prior to the date thereof in the case of the second and third
letters, there were any decreases, as compared with the corresponding period of
the prior year, in consolidated net sales, consolidated income before income
taxes or in the total or per share amounts of consolidated net income except, in
all instances, for changes or decreases which the Prospectus discloses have
occurred or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been agreed
to by the Underwriters, with respect to certain information in the Prospectus
specified by the Underwriters, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and its subsidiaries.
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EXHIBIT A
CONCORD EFS, INC.
3,000,000 Shares Common Stock*
PRICING AGREEMENT
______________, 1996
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXXX SECURITIES
XXXXXX XXXXXX & COMPANY, INC.
XXXXX, XXXXXXXX & XXXX, INC.
c/o Xxxxxxx Xxxxx & Company
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ___________,
1996 (the "Underwriting Agreement") relating to the sale by the Company and the
purchase by the Underwriters of the above Shares. All terms herein shall have
the definitions contained in the Underwriting Agreement except as otherwise
defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company
agrees with the Underwriters as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the
several Underwriters shall be $_____________, being an amount equal to the
initial public offering price set forth above less $____________ per share.
Schedule A is amended as follows:
--------
* Plus an option to acquire up to 450,000 additional shares to cover
overallotments
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If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed duplicates hereof, whereupon it will
become a binding agreement among the Company and the several Underwriters,
including you, all in accordance with its terms.
Very truly yours,
CONCORD EFS, INC.
By________________________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXXX SECURITIES
XXXXXX XXXXXX & COMPANY, INC.
XXXXX, XXXXXXXX & XXXX, INC.
By: XXXXXXX XXXXX & COMPANY, L.L.C.
By ________________________________
Principal
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