Exhibit 1.1
Concord EFS, Inc.
[ ] Shares/a/
Common Stock
($0.33 1/3 par value)
Underwriting Agreement
New York, New York
[ ], 2001
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx & Company, L.L.C.
Banc of America Securities LLC
Bear Xxxxxxx & Co. Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxx & Company, Inc.,
As Representatives of the several
Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Concord EFS, Inc., a corporation organized under the laws of Delaware (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, 2,000,000 shares of Common Stock, $0.33 1/3 par value
("Common Stock") of the Company, and each of the Selling Stockholders named in
Schedule II hereto proposes to sell to the several Underwriters the number of
shares of Common Stock set forth opposite its name on Schedule II, aggregating
[ ] shares of Common Stock (said shares to be issued and sold by the
Company and shares to be sold by the Selling Stockholders collectively being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase up to [ ] additional shares
of Common Stock to cover over-allotments (the "Option Securities" and together
with the Underwritten Securities, the "Securities"). The use of the neuter in
this Underwriting Agreement shall include the feminine and masculine wherever
appropriate. Any reference herein to the Registration Statement, the Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference
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/a/ Plus an option to purchase from the Company up to [ ] additional
Securities to cover over-allotments.
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the issue date
of such Preliminary Prospectus or 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 the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement, or the
issue date of any Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be incorporated therein by reference. Certain terms used in this
Underwriting Agreement are defined in Section 18 hereof.
1. Representations and Warranties.
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(i) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(file number 333-61084) on Form S-3, including a related preliminary
prospectus, for registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto,
including a related preliminary prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission
either (1) prior to the Effective Date of such registration statement, a
further amendment to such registration statement (including the form of
final prospectus) or (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b). In
the case of clause (2), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed, such
amendment and form of final Prospectus, or such final Prospectus, shall
contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act
and the Exchange Act and the respective rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date and any
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settlement date, the Prospectus (together with any supplement thereto) will
not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
as to the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of (i) any Selling Stockholder, (ii) any Underwriter through
the Representatives or (iii) with respect to the information described in
the last sentence of Section 8(c) hereof, by or on behalf of Xxxxxxx Xxxxx
& Co. L.L.C., in each case specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated or organized, as the case may be, and is validly existing as a
corporation or, with respect to EFS National Bank and EFS Federal Savings
Bank, a national banking association and federally chartered savings bank,
respectively, in good standing under the laws of the jurisdiction in which
it is chartered or under which it is organized with full corporate or
organizational power, as the case may be, and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole;
(d) All the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus and
except for all of the shares of preferred stock of Electronic Payment
Services, Inc., all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest or any other
security interests, claims, liens or encumbrances;
(e) the Company's authorized shares of capital stock is as set forth
in the Prospectus; the Securities conform in all material respects to the
description thereof contained in the Prospectus; the outstanding shares of
Common Stock (including the Securities being sold under this Underwriting
Agreement by the Selling Stockholders) have been duly and validly
authorized and issued and are fully paid and nonassessable; the Securities
being sold under this Underwriting Agreement by the Company have been duly
and validly authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Underwriting Agreement, will be fully
paid and nonassessable; the Securities being sold by the Selling
Stockholders are duly quoted, and admitted and authorized for trading on
the Nasdaq National Market and the Securities being sold hereunder by the
Company are duly quoted, and admitted and authorized for trading, subject
to official notice of issuance, on the Nasdaq National Market; the
certificates for the Securities are in valid and sufficient form; the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to
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subscribe for the Securities; and, except as set forth in the Prospectus
and except for any other options issued or exercised pursuant to option
plans in existence on the date hereof and mentioned in the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or exchange
any securities for, shares of capital stock of or ownership interests in
the Company are outstanding;
(f) There is no contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to be filed as
an exhibit thereto, which is not described or filed as required; and the
statements in the Prospectus under the headings "United States Federal Tax
Consequences to Non-United States Holders" and "Business - Supervision and
Regulation" fairly summarize in all material respects the matters therein
described.
(g) This Underwriting Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and binding obligation
of the Company, enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the offering and
sale of the Securities 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, as amended.
(i) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
consummation by the Company of the transactions contemplated herein, except
such as have been obtained under the Act and such as may be required under
the securities or blue sky laws of any jurisdiction.
(j) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which the Company or any of its subsidiaries is a party or bound or to
which its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of
its subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or any of its subsidiaries or any of its or their properties,
except, with respect to clause (ii) or (iii) above, such as would not,
individually or in the aggregate, have a material adverse effect on (A) the
performance of this Underwriting Agreement or the consummation of any of
the transactions contemplated hereby or (B) the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole.
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(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement, except
for the registration rights of the Selling Stockholders and such other
rights as have been heretofore waived.
(l) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "Selected
Consolidated Financial Data" in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the Registration
Statement, the information included therein.
(m) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Underwriting Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course
of business.
(o) Each of the Company and each of its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations in
all material respects as presently conducted.
(p) Neither the Company nor any subsidiary is in violation or default
of (i) any provision of its charter or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument
to which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except, in the case of
clause (ii) or (iii) above, such as would not, individually or in the
aggregate, have a material adverse effect on the condition
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(financial or otherwise), prospects, earnings, business or properties of
the Company and its subsidiaries, taken as a whole.
(q) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(r) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except (i) for any such tax, assessment, fine or penalty that is currently
being contested in good faith or (ii) as would not have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(s) No labor problem or dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries' principal suppliers,
contractors or customers, that (in each case) could reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(t) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus.
(u) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct the
respective businesses now conducted by them, except where the failure to
possess such licenses, certificates, permits or other authorizations would
not, individually or in the aggregate, have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions
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in the ordinary course of business, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(v) The Company has not taken, 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 Securities.
(w) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive or be in
compliance with required permits, licenses or other approvals, or liability
would not, individually or in the aggregate, have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto). Neither the Company nor any of the subsidiaries has
been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(x) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974 ("ERISA")
and the regulations and published interpretations thereunder with respect
to each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company and its
subsidiaries are eligible to participate, except such as would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, and each
such plan is in compliance with the presently applicable provisions of
ERISA and such regulations and published interpretations except where the
failure so to comply would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole. The Company and its subsidiaries have not
incurred any unpaid liability to the Pension
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Benefit Guaranty Corporation (other than for the payment of premiums in the
ordinary course) or to any such plan under Title IV of ERISA, except such
as would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken as a
whole.
(y) The subsidiaries listed on Annex A attached hereto are the only
significant subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X (the "Subsidiaries").
(z) The Company and its subsidiaries own, possess, license or have
other rights to use all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property") necessary
for the conduct of the Company's business as now conducted or as proposed
in the Prospectus to be conducted, and to the Company's knowledge, (a) with
respect to any Intellectual Property owned or exclusively licensed by the
Company and its subsidiaries, there are no rights of third parties to any
such Intellectual Property; (b) with respect to any Intellectual Property
owned or exclusively licensed by the Company and its subsidiaries, there is
no material infringement by third parties of any such Intellectual
Property; (c) there is no pending or threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (d) there is no pending or
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such
claim; (e) there is no pending or threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
others; (f) there is no U.S. patent or published U.S. patent application
which contains claims that dominate or may dominate any Intellectual
Property described in the Prospectus as being owned by or licensed to the
Company or that interferes with the issued or pending claims of any such
Intellectual Property; and (g) there is no prior act of which the Company
is aware that may render any U.S. patent held by the Company invalid or any
U.S. patent application held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office, except, in the case of
each of (a) through (g) above, such as would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder, severally and not jointly, represents and
warrants to, and agrees with, each Underwriter and the Company as follows;
provided, that all such
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representations and warranties with respect to [________ Foundation] are made by
it and [bank], jointly and severally:
(a) Such Selling Stockholder is the record and beneficial owner
(subject to the proviso contained in this paragraph) of the Underwritten
Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has duly indorsed such Securities in
blank, and, assuming that each Underwriter acquires its interest in the
Underwritten Securities it has purchased from such Selling Stockholder
without notice of any adverse claim (within the meaning of Section 8-105 of
the New York Uniform Commercial Code ("UCC")), each Underwriter that has
purchased such Securities delivered on the Closing Date to The Depository
Trust Company or other securities intermediary by making payment therefor
as provided herein, and that has had such Securities credited to the
securities account or accounts of such Underwriters maintained with The
Depository Trust Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of Section 8-102(a)(17)
of the UCC) to such Securities purchased by such Underwriter, and no action
based on an adverse claim (within the meaning of Section 8-105 of the UCC)
may be asserted against such Underwriter with respect to such Securities;
provided, that to the extent such Selling Stockholder is [__________
Foundation], the Underwritten Securities to be sold by it hereunder are
owned beneficially by it and of record by [bank].
(b) Such Selling Stockholder has not taken, 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 Underwritten Securities; provided,
however, that the foregoing representation and warranty shall not apply to
any affiliate of a Selling Stockholder who is an Underwriter, but only to
the extent that such affiliate is acting in such capacity.
(c) Certificates in negotiable form for such Selling Stockholder's
Securities have been placed in custody, for delivery pursuant to the terms
of this Underwriting Agreement, under a Custody Agreement and Power of
Attorney duly authorized, executed and delivered by such Selling
Stockholder, in the form heretofore furnished to you (the "Custody
Agreement") with EquiServe Trust Company, N.A., as Custodian (the
"Custodian"); the Securities represented by the certificates so held in
custody for each Selling Stockholder are subject to the interests hereunder
of the Underwriters; the arrangements for custody and delivery of such
certificates, made by such Selling Stockholder hereunder and under the
Custody Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, except as otherwise provided
with respect to the powers and authorities of the Pricing Committee (as
defined in the Custody Agreement), as described in the Custody Agreement.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated in this Underwriting
Agreement, except such as may have been obtained under the Act and such as
may be required under the securities or blue sky laws of any jurisdiction
in connection with the purchase and distribution of the Underwritten
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Securities by the Underwriters in the manner contemplated herein and in the
Prospectus and such other approvals as have been obtained.
(e) Neither the sale of the Underwritten Securities being sold by
such Selling Stockholder nor the consummation of any other of the
transactions in this Underwriting Agreement contemplated by such Selling
Stockholder or the fulfillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach or violation of, or
constitute a default under (i) any law or the charter or by-laws of such
Selling Stockholder, (ii) the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or any of its subsidiaries is
a party or bound, or (iii) any judgment, order or decree applicable to such
Selling Stockholder or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder or any of its subsidiaries,
except, with respect to clause (ii) or (iii) above, such as would not,
individually or in the aggregate, have a material adverse effect on the
performance of this Underwriting Agreement or the consummation of any of
the transactions contemplated hereby.
(f) The sale of Securities by such Selling Stockholder pursuant
hereto is not prompted by any material fact, condition or other information
concerning the Company or any of its subsidiaries which is not set forth in
the Prospectus or any supplement thereto.
(g) Solely in respect of any statements in or omissions from the
Registration Statement or the Prospectus or any supplements thereto made in
reliance upon and in conformity with information furnished in writing to
the Company by any Selling Stockholder specifically for use in connection
with the preparation thereof, such Selling Stockholder hereby makes the
same representations and warranties to each Underwriter as the Company
makes to such Underwriter under paragraph (i)(b) of this Section.
(h) Such Selling Stockholder agrees that it furnished in writing to
the Company the information relating to it under the heading "Principal and
Selling Stockholders" contained in the Preliminary Prospectus, the
Prospectus and the Registration Statement specifically for inclusion
therein.
Any certificate signed by any officer of any Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Underwritten Securities shall be deemed a
representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
------------------
reliance upon the representations and warranties set forth in this Underwriting
Agreement, the Company and each Selling Stockholder agrees, severally and not
jointly, to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company and the Selling Stockholders, at a
purchase price of [$] per share, the amount of the Underwritten Securities set
forth opposite such Underwriter's name in Schedule I to this Underwriting
Agreement, provided, that no Selling Stockholder shall have an obligation to
sell more than the number of shares of Common Stock set forth opposite its name
on Schedule II hereto.
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(b) Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Underwriting Agreement, the
Company hereby grants an option to the several Underwriters to purchase up to
[ ] Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on [ ,
2001], or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives and the Company shall agree,
which date and time may be postponed by agreement among the Representatives, the
Selling Stockholders and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being called in this
Underwriting Agreement the "Closing Date"). Delivery of the Securities shall be
made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of the Securities
being sold by the Company and each of the Selling Stockholders to or upon the
order of the Company and the Selling Stockholders by wire transfer payable in
same-day funds to the accounts specified by the Company and the Selling
Stockholders. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes, if
any, involved in the transfer to the several Underwriters of the Underwritten
Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to the accounts specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of
11
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
-------------------------
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
-----------
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities (which termination shall be notified to the Company by the
Representatives), the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the Representatives
(1) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (2) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (3) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request by
the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement
to the Prospectus or for any additional information, (5) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (6) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact 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 to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the rules thereunder, the Company promptly will (1) notify the
Representatives of any such event;
12
(2) prepare and file with the Commission, subject to the second sentence of
paragraph (i)(a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance; and (3)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) The Company will timely file such report pursuant to the 1934 Act
as is necessary in order to make generally available to its security
holders and to the Representatives an earnings statement or statements of
the Company and its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably request.
(e) The Company will use its reasonable best efforts, in cooperation
with the Underwriters, for the qualification of the Securities for sale
under the laws of such jurisdictions as the Representatives may designate
and to maintain, in cooperation with the Underwriters, such qualifications
in effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified, to subject
itself to taxation in respect of doing business in any jurisdiction or to
take any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc. and Xxxxxxx, Sachs & Co., offer, sell, contract
to sell, pledge, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company), directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common Stock
or any securities convertible into, or exercisable, or exchangeable for,
shares of Common Stock, or publicly announce an intention to effect any
such transaction, for a period of 90 days after the date of this
Underwriting Agreement; provided, however, that the Company may issue and
sell Common Stock and may issue options to purchase Common Stock (i) in
connection with acquisition transactions, (ii) pursuant to any employee
stock option plan, stock ownership plan or dividend reinvestment plan of
the Company in effect at the Execution Time, or (iii) issuable upon the
conversion of securities or the exercise of warrants or options outstanding
at the Execution Time; provided, further, that nothing in this paragraph
(f) shall apply to transactions involving (A) the Company's directors,
executive officers or
13
shareholders, whose ability to dispose of Common Stock is subject to
restrictions as set forth in separate agreements in the form of Exhibits A
and B hereto, or (B) other employees of the Company and its subsidiaries.
(g) Until the earlier of the termination of the offering of the
Securities (which termination shall be notified to the Company by the
Representatives) and 45 days from the date hereof, the Company 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 Securities.
(h) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Preliminary Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, the Preliminary Prospectus, the Prospectus, and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Underwriting Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) the registration of the Securities under
the Exchange Act and the listing of the Securities on the Nasdaq National
Market; (vi) any registration or qualification of the Securities for offer
and sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel for
the Underwriters relating to such registration and qualification); (vii)
any filings required to be made with the National Association of Securities
Dealers, Inc. (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers
of the Securities; (ix) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel)
for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations under this Underwriting
Agreement; provided, that the Company shall not be obligated to pay any
underwriting discounts or commissions, selling or placement agent or broker
fees or commissions, fees and expenses of counsel (except for the
reasonable fees and expenses of one legal counsel for all of the Selling
Stockholders as provided in the Registration Rights Agreement between the
Company and the investors named therein, dated as of February 1, 2001 (the
"STAR Registration Rights Agreement"), and the Registration Rights
Agreement among the Company, Bank One, N.A. and American National Bank and
Trust Company, dated as of May 16, 2001 (the "Bank One Registration Rights
Agreement")) or transfer taxes, if any, in connection with the sale of any
Securities by the Selling Stockholders, all of which
14
shall be paid by the Selling Stockholders with respect to the Securities
sold pursuant hereto.
(ii) Each Selling Stockholder agrees with the several Underwriters
that:
(a) Until the earlier of the termination of the offering of the
Securities (which termination shall be notified to the Selling
Stockholders by the Representatives) and 45 days from the date hereof,
such Selling Stockholder will not take 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 Securities; provided, however, that the
foregoing representation and warranty shall not apply to any affiliate
of a Selling Stockholder who is an Underwriter, but only to the extent
that such affiliate is acting in such capacity.
(b) Such Selling Stockholder will advise the Underwriters
promptly, and if requested by the Underwriters, will confirm such
advice in writing, so long as delivery of a prospectus relating to the
Securities by an underwriter or dealer may be required under the Act,
of any material change in the information in the Registration
Statement or the Prospectus relating to such Selling Stockholder.
(c) Except for the reasonable fees and expenses of one legal
counsel for all of the Selling Stockholders as provided in the STAR
Registration Rights Agreement or the Bank One Registration Rights
Agreement, as the case may be, such Selling Stockholder agrees to pay
the fees and expenses of counsel (including local and special counsel)
for such Selling Stockholder.
(d) With respect to the sale by such Selling Stockholder of
Underwritten Securities hereunder, such Selling Stockholder hereby
acknowledges that the Underwriters shall be deemed to be third party
beneficiaries of Section 2.9 of the STAR Registration Rights Agreement
or Section 2.7 of the Bank One Registration Rights Agreement, as the
case may be, and, with respect to such sales pursuant to this
Underwriting Agreement, the provisions of such Section 2.9 or Section
2.7, as the case may be, may not be modified or waived by the parties
to the STAR Registration Rights Agreement or the Bank One Registration
Rights Agreement without the prior written consent of the
Underwriters, which consent may be withheld in the Underwriters' sole
discretion.
6. Conditions to the Obligations of the Underwriters. The obligations of
--------------------------------------------------
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and each of the
Selling Stockholders contained in this Underwriting Agreement as of the
Execution Time, the Closing Date and any settlement date pursuant to Section 3
hereof, to the accuracy of the statements of the Company and each of the Selling
Stockholders made in any certificates pursuant to the provisions hereof, to the
performance by the Company and each of the Selling Stockholders of their
respective obligations under this Underwriting Agreement and to the following
additional conditions:
15
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and 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 threatened.
(b) The Company shall have requested and caused Sidley Xxxxxx Xxxxx &
Wood, counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the Representatives,
to the effect that:
(i) each of the Company and EFS National Bank, EFS Federal
Savings Bank, Concord Computing Corporation, Digital Merchants Systems
of Illinois, Inc., Electronic Payment Services, Inc. and STAR Systems,
Inc. (individually a "Material Subsidiary" and collectively the
"Material Subsidiaries") has been duly incorporated or organized, as
the case may be, and is validly existing as a corporation, national
banking association or federal savings bank, as the case may be, in
good standing under the laws of the jurisdiction in which it is
chartered or under which it is organized, with full corporate or
organizational power, as the case may be, and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus, and the Company is duly
registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended;
(ii) all the outstanding shares of capital stock of each
Material Subsidiary have been duly and validly authorized and issued
and are fully paid and nonassessable, and, except as otherwise set
forth in the Prospectus and except for all of the shares of preferred
stock of Electronic Payment Services, Inc., all outstanding shares of
capital stock of the Material Subsidiaries are, to the knowledge of
such counsel, owned by the Company either directly or through wholly
owned subsidiaries free and clear of any security interest, claim,
lien or encumbrance;
(iii) the Company's authorized capital stock is as set forth in
the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus; the Securities being sold under the Underwriting Agreement
by the Selling Stockholders have been duly and validly authorized and
are fully paid and nonassessable, and the Securities being sold under
the Underwriting Agreement by the Company have been duly and validly
authorized and, when issued and delivered to and paid for by the
Underwriters pursuant to this Underwriting Agreement, such Securities
being sold by the Company will be fully paid and nonassessable; the
Securities being sold by the Selling Stockholders are duly quoted, and
admitted and authorized for trading, on the Nasdaq National Market and
the Securities being sold hereunder by the Company are duly quoted,
and admitted and authorized for trading, subject to official notice of
16
issuance, on the Nasdaq National Market; the certificates for the
Securities are in due and proper form; and the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive
or other rights to subscribe for the Securities being sold by the
Company under the Company's charter or bylaws or applicable law;
(iv) to the knowledge of such counsel, (i) there is no material
pending or threatened action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries or its or their
property of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and
(ii) there is no contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to be
filed as an exhibit thereto, which is not described or filed as
required; the information contained in the Prospectus under the
headings "United States Federal Tax Consequences to Non-United States
Holders" and "Business Supervision and Regulation", to the extent it
constitutes matters of law or legal conclusion, is correct in all
material respects;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement as of the Effective Date and the Prospectus (other than the
financial statements and other financial information and statistical
data contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; and nothing has come to the attention of
such counsel to cause it to believe that on the Effective Date or at
the Execution Time the Registration Statement 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 thereof
and on the Closing Date included or includes any untrue statement of a
material fact or omitted or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading (in each case, other than
the financial statements and other financial information and
statistical data contained therein, as to which such counsel need
express no opinion);
(vi) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities 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,
as amended;
(viii) no consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the consummation by the
17
Company of the transactions contemplated in the Underwriting
Agreement, except such as have been obtained under the Act and such as
may be required under the securities or blue sky laws of any
jurisdiction and such other approvals (specified in such opinion) as
have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated in the
Underwriting Agreement nor the fulfillment of the terms of the
Underwriting Agreement will result in a breach or violation of or
result in the imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its Material Subsidiaries
pursuant to, (i) the charter or by-laws of the Company or its Material
Subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument known to such
counsel to which the Company or its Material Subsidiaries is a party
or bound or to which its or their property is subject, or (iii) any
(A) statute, law, rule or regulation or (B) judgment, order or decree
known to such counsel, in each case applicable to the Company or its
Material Subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or its Material Subsidiaries or any of
its or their properties, except, with respect to clause (ii) or (iii)
above, such as would not, individually or in the aggregate, have a
material adverse effect on (A) the performance of this Underwriting
Agreement or the consummation of any of the transactions contemplated
hereby or (B) the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries,
taken as a whole; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement
pursuant to any of the registration rights agreements identified on
Exhibit A to such opinion, except for such rights of the Selling
Stockholders and such other rights as have been theretofore waived.
In rendering such opinion, such counsel (A) may limit their opinion to the
laws of the State of Illinois, the Federal laws of the United States and
the General Corporation Law of the State of Delaware and (B) may rely, as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Reference to the
Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date.
(c) Each Selling Stockholder shall have requested and caused its
counsel (who may be an in-house counsel) to have furnished to the
Representatives their opinion dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Underwriting Agreement has been duly authorized,
executed and delivered by such Selling Stockholder, and such Selling
Stockholder has full legal right and authority to sell, transfer and
deliver in the manner provided in this Underwriting Agreement the
Underwritten Securities being sold by such Selling Stockholder under
this Underwriting Agreement;
(ii) assuming that each Underwriter acquires its interest in the
Underwritten Securities it has purchased from such Selling Stockholder
without notice of any adverse
18
claim (within the meaning of Section 8-105 of the UCC), each
Underwriter that has purchased such Securities delivered on the
Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that
has had such Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust Company or
such other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to
such Securities purchased by such Underwriter, and no action based on
an adverse claim (within the meaning of Section 8-105 of the UCC) may
be asserted against such Underwriter with respect to such Securities;
(iii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
such Selling Stockholder of the transactions contemplated in this
Underwriting Agreement, except such as may have been obtained under
the Act and such as may be required under the securities or blue sky
laws of any jurisdiction and the securities laws of any jurisdiction
outside the United States in connection with the purchase and
distribution of the Underwritten Securities by the Underwriters in the
manner contemplated herein and in the Prospectus and such other
approvals (specified in such opinion) as have been obtained; and
(iv) neither the sale of the Underwritten Securities being sold
by such Selling Stockholder nor the consummation of any other of the
transactions contemplated in the Underwriting Agreement by such
Selling Stockholder or the fulfillment of the terms hereof by such
Selling Stockholder will conflict with, result in a breach or
violation of, or constitute a default under (A) any law or the charter
or by-laws of the Selling Stockholder, (B) the terms of any indenture
or other agreement or instrument known to such counsel and to which
such Selling Stockholder or any of its subsidiaries is a party or
bound, except such as would not, individually or in the aggregate,
have a material adverse effect on the performance of this Underwriting
Agreement or the consummation of any of the transactions contemplated
hereby, or (C) any judgment, order or decree known to such counsel to
be applicable to such Selling Stockholder or any of its subsidiaries
of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over such Selling Stockholder
or any of its subsidiaries, except, with respect to clause (B) or (C)
above, such as would not, individually or in the aggregate, have a
material adverse effect on the performance of this Underwriting
Agreement or the consummation of any of the transactions contemplated
hereby.
In rendering such opinion, such counsel may (A) limit their opinion to the
laws of the state of the Selling Stockholder's organization and the Federal laws
of the United States and (B) rely as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of such Selling Stockholder and
public officials.
(d) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related matters
as the Representatives may reasonably require, and the Company and each
Selling
19
Stockholder shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Underwriting Agreement and that:
(i) the representations and warranties of the Company in the
Underwriting Agreement are true and correct in all material respects
on and as of the Closing Date with the same effect as if made on the
Closing Date 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 the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(f) The Company shall have requested and caused Ernst & Young LLP to
have furnished to the Representatives letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the applicable rules and
regulations adopted by the Commission thereunder and that they have
performed a review of the unaudited interim financial information of the
Company for the three-month period ended March 31, 2001 and as at March 31,
2001, in accordance with Statement on Auditing Standards No. 71, and
stating in effect that:
(i) in their opinion the audited financial statements included
and incorporated by reference in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act and
the Exchange Act and the related rules and regulations adopted by the
Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited interim
financial information for the three-month period ended March 31, 2001,
and as at March 31, 2001; carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily
20
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors, board of directors' audit committee and
compensation committee of the Company and the Subsidiaries; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to December 31,
2000, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with
applicable accounting requirements of the Act and with the
related rules and regulations adopted by the Commission with
respect to financial statements included or incorporated by
reference in quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to March 31,
2001, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the long-term debt
of the Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity of the Company
or decreases in working capital of the Company and its
subsidiaries as compared with the amounts shown on the March 31,
2001 consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Prospectus, or
for the period from April 1, 2001 to such specified date there
were any decreases, as compared with the corresponding period in
the preceding quarter, in revenue, operating income or income
before taxes or in total or per share amounts of net income of
the Company and its subsidiaries except in all instances for
changes or decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the Company as
to the significance thereof unless said explanation is not deemed
necessary by the Representatives;
(3) the information included or incorporated by reference
in the Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information) and Item 402 (Executive
Compensation) is not in conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus, including the
information set forth under the captions "Capitalization", "Selected
Consolidated Financial Data", "Management's Discussion and Analysis of
Financial Condition and Results of Operation" and
21
"Business" in the Prospectus, the information included or incorporated
by reference in Items 1, 2, 6, 7 and 11 of the Company's Annual Report
on Form 10-K, incorporated by reference in the Registration Statement
and the Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included in the Company's Quarterly Report on Form 10-Q,
incorporated by reference in the Registration Statement and the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time 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 (i) any change or decrease specified in
the letter or letters referred to in paragraph (f) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(h) Prior to the Closing Date, the Company and each of the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may
reasonably request.
(i) The Securities shall have been listed and admitted and authorized
for trading on the Nasdaq National Market, and satisfactory evidence of
such actions shall have been provided to the Representatives.
(j) At or prior to the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of
Exhibit A hereto from each executive officer and director of the Company,
which persons are listed on Schedule III hereto, and a letter substantially
in the form of Exhibit B hereto from certain stockholders of the Company
that received shares in connection with the Company's acquisition of STAR
Systems, Inc. but are not Selling Stockholders pursuant to this
Underwriting Agreement, which persons are listed on Schedule IV hereto, all
addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Underwriting
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Underwriting Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Underwriting Agreement and all obligations of the
Underwriters under this Underwriting Agreement may be canceled at, or at any
time prior to, the
22
Closing Date by the Representatives. Notice of such cancellation shall be given
to the Company and each Selling Stockholder in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered
at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the
Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the Securities
----------------------------------------
provided for in this Underwriting Agreement is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6 hereof
is not satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Company or any
Selling Stockholders to perform any agreement in this Underwriting Agreement or
comply with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally through
Xxxxxxx Xxxxx Barney Inc. on demand for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities. If the Company is required to make any payments to the Underwriters
under this Section 7 because of any Selling Stockholder's refusal, inability or
failure to satisfy any condition to the obligations of the Underwriters set
forth in Section 6, such Selling Stockholder shall reimburse the Company on
demand for all amounts so paid.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
---------------------------------
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, 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 a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or in 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, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them 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 any such loss,
claim, damage or liability 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 (i) by any Selling Stockholder, (ii) by or on behalf of any
Underwriter through the Representatives or (iii) with respect to the information
described in the last sentence of paragraph (c) of this Section 8, by or on
behalf of Banc of America Securities LLC or Xxxxxxx Xxxxx & Co. L.L.C., in each
case specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless the Company, each Underwriter, the directors, officers, employees and
agents of the Company and
23
each Underwriter and each person who controls the Company or any Underwriter
within the meaning of either the Act or the Exchange Act and each other Selling
Stockholder, if any, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to written information
furnished to the Company by or on behalf of such Selling Stockholder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Selling Stockholder may otherwise have; provided, that the agreements of
[_________ Foundation] contained in this paragraph 8(b) are made jointly and
severally by [_________ Foundation] and [bank]. The Company and the Underwriters
acknowledge that the statements set forth under the caption "Principal and
Selling Stockholders" with respect to the Selling Stockholders in any
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Selling Stockholders for
inclusion in any Preliminary Prospectus or the Prospectus.
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder and
each person who controls each Selling Stockholder within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity to
each Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Company and each
Selling Stockholder acknowledge that the statements set forth in any Preliminary
Prospectus and the Prospectus in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting", (i) the
sentences related to concessions and reallowances, (ii) the four paragraphs
related to stabilization, syndicate covering transactions and penalty bids and
(iii) the lead-in phrase prior to the colon in the fourteenth paragraph
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus. In addition, solely (x) Banc of America Securities LLC hereby agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each Selling
Stockholder and each person who controls each Selling Stockholder, and each
other Underwriter and each person who controls each other Underwriter, to the
same extent as the foregoing indemnity by each Underwriter, with respect to the
information, furnished in writing by or on behalf of Banc of America Securities
LLC for inclusion in any Preliminary Prospectus or the Prospectus, concerning
Banc of America Securities LLC contained in clause (1) of the fourteenth
paragraph under the heading "Underwriting" in any Preliminary Prospectus and the
Prospectus, and (y) Xxxxxxx Xxxxx & Company, L.L.C. hereby agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each Selling
Stockholder and each person who controls each Selling Stockholder, and each
other Underwriter and each person who controls each other Underwriter, to the
same extent as the foregoing indemnity by each Underwriter, with respect to the
information, furnished in writing by or on behalf of Xxxxxxx Xxxxx & Company,
L.L.C. for inclusion in any Preliminary Prospectus or the
24
Prospectus, concerning Xxxxxxx Xxxxx & Company, L.L.C. contained in clause (2)
of the fourteenth paragraph under the heading "Underwriting" in any Preliminary
Prospectus and the Prospectus; each such indemnity will be in addition to any
liability that Banc of America Securities LLC and Xxxxxxx Xxxxx & Company,
L.L.C. may otherwise have, including, without limitation, any liability each may
have in its capacity as a Underwriter pursuant to the indemnity agreement in the
first two sentences of this paragraph.
(d) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (c) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, 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, (iii) 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 the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or (c)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, each indemnifying party agrees to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which such indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company and by the Selling Stockholders on the one hand and by the
Underwriters on the other from the offering
25
of the Securities; provided, however, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Securities purchased by
such Underwriter under this Underwriting Agreement. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, each
indemnifying party shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company, of the Selling Stockholders and of the Underwriters in connection with
the statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. For purposes of this paragraph (e) only,
benefits received by the Company and by the Selling Stockholders shall be deemed
to be equal to the total net proceeds from the offering (before deducting
expenses) received by each of them, and benefits received by the Underwriters
shall be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Prospectus. Relative fault
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the
Company, the Selling Stockholders on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (e), no person guilty of fraudulent misrepresentation (within 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 who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or 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 the
applicable terms and conditions of this paragraph (e).
(f) Notwithstanding anything to the contrary contained herein, the
liability of each Selling Stockholder under such Selling Stockholder's
representations and warranties contained in Section 1 hereof and under the
indemnity and contribution agreements contained in this Section 8 shall be
limited to, and in no event shall exceed, an amount equal to the initial public
offering price of the Underwritten Securities sold by such Selling Stockholder
to the Underwriters but before deducting underwriting discounts, commissions or
other expenses. The Company and the Selling Stockholders may agree, as among
themselves and without limiting the rights of the Underwriters under this
Underwriting Agreement, as to the respective amounts of such liability for which
they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall fail
--------------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters under this Underwriting Agreement and such failure
to purchase shall constitute a default in the performance of its or their
obligations under this Underwriting Agreement, the remaining Underwriters shall
be obligated severally to take up and pay for (in the respective
26
proportions which the amount of Securities set forth opposite their names in
Schedule I hereto bears to the aggregate amount of Securities set forth opposite
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Underwriting Agreement
will terminate without liability to any nondefaulting Underwriter, the Selling
Stockholders or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Underwriting Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default under this
Underwriting Agreement.
10. Termination. This Underwriting Agreement shall be subject to
------------
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on either of such Exchange or the Nasdaq National Market, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
-------------------------------------------
representations, warranties, indemnities and other statements of the Company or
its officers, of each Selling Stockholder and of the Underwriters set forth in
or made pursuant to this Underwriting Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 and the last sentence of Section 9 hereof shall survive the
termination or cancellation of this Underwriting Agreement.
12. Notices. All communications under this Underwriting Agreement will be
--------
in writing and effective only on receipt, and, if sent to the Representatives,
will be mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to such General Counsel at
Xxxxxxx Xxxxx Barney Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
Attention: General Counsel; or, if sent to the Company,
27
will be mailed, delivered or telefaxed to 0000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxx 00000 (fax no.: (000) 000-0000) and confirmed to it at (901)
371-8004, attention of Xxx X. Xxxxxx, Chief Executive Officer; or if sent to any
Selling Stockholder, will be mailed, delivered or telefaxed and confirmed to it
at the address set forth in Schedule II hereto.
13. Successors. This Underwriting Agreement will inure to the benefit of
-----------
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation under
this Underwriting Agreement.
14. Applicable Law. This Underwriting Agreement will be governed by and
---------------
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Underwriting Agreement may be signed in one or more
-------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Other Agreement. The STAR Registration Rights Agreement, including
----------------
without limitation, Sections 2.8 and 2.9 thereof, and the Bank One Registration
Rights Agreement, including without limitation, Sections 2.6 and 2.7 thereof,
shall remain in full force and effect after the date hereof and shall survive
any termination of this Underwriting Agreement or the consummation of the
transactions contemplated hereby.
17. Headings. The section headings used in this Underwriting Agreement are
---------
for convenience only and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this Underwriting
------------
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Underwriting
Agreement is executed and delivered by the parties hereto.
28
"Preliminary Prospectus" shall mean any preliminary prospectus with
respect to the offering of the Securities referred to in Section 1(i)(a)
above and any preliminary prospectus with respect to the offering of the
Securities included in the Registration Statement at the Effective Date
that omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in Section 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the
Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a)(i) hereof.
"Securities" shall mean the Underwritten Securities and the Option
Securities.
"Selling Stockholders" shall mean the persons named on Schedule II to
this Underwriting Agreement.
"Underwriters" shall mean the several underwriters named in Schedule I
herein.
"Underwriting Agreement" shall mean this agreement relating to the
sale of the Securities by the Company and the Selling Stockholders to the
Underwriters.
29
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders, and the several Underwriters.
Very truly yours,
Concord EFS, Inc.
By:
-------------------------------------------
Name:
Title:
The Selling Stockholders listed on Schedule II
hereto
By:
-------------------------------------------
Name:
Title: Attorney-in-Fact
30
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXXX XXXXX BARNEY INC.
XXXXXXX, XXXXX & CO.
XXXXXXX XXXXX & COMPANY, L.L.C.
BANC OF AMERICA SECURITIES LLC
BEAR XXXXXXX & CO. INC.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXX XXXXXX & COMPANY, INC.
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By:
----------------------------------
Name:
Title:
By: Xxxxxxx, Sachs & Co.
By:
----------------------------------
(Xxxxxxx, Xxxxx & Co.)
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
----------------------------------
Name:
Title:
For themselves and the other several Underwriters named in Schedule I to the
foregoing Agreement.
31
SCHEDULE I
----------
Number of Underwritten
Securities to be
Underwriters Purchased
------------ ---------------------
Xxxxxxx Xxxxx Xxxxxx Inc..............................
Xxxxxxx, Sachs & Co...................................
Xxxxxxx Xxxxx & Company, L.L.C........................
Banc of America Securities LLC........................
Bear Xxxxxxx & Co. Inc................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.................................
Xxxxxx Xxxxxx & Company, Inc..........................
----------
Total.......................................
SCHEDULE II
-----------
Number of Underwritten
Selling Stockholders: Securities to be Sold
--------------------- ----------------------
[List Selling Stockholders, including foundations,
with address/contact info]
-------------
Total.................................................
SCHEDULE III
------------
List of Executive Officers and Directors
----------------------------------------
Xxx X. Xxxxxx
Xxxxxx X. Xxxxx III
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxxxxxx
SCHEDULE IV
-----------
Number of Shares of
Common Stock to be Held
Non-participating Stockholders: Following the Offering
------------------------------- -----------------------
[List non-participating stockholders]
------------
Total.................................................
EXHIBIT A
[Form of Lock-Up Agreement]
[Letterhead of executive officer or director]
Concord EFS, Inc.
-----------------
Concord EFS, Inc.
Public Offering of Common Stock
-------------------------------
, 2001
Xxxxxxx Xxxxx Barney Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx & Company, L.L.C.
Banc of America Securities LLC
Bear Xxxxxxx & Co. Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxx & Company, Inc.,
As Representatives of the several
Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Concord EFS, Inc.,
a Delaware corporation (the "Company"), each of the Selling Stockholders named
therein and each of you as representatives of a group of Underwriters named
therein, relating to an underwritten public offering of Common Stock, $0.33 1/3
par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Barney Inc. and Xxxxxxx, Xxxxx & Co., offer, sell,
contract to sell, pledge or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the Company),
directly or indirectly, including the filing (or participation in the filing of)
a registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company owned by me or any securities convertible
into, or exercisable or exchangeable for such capital stock, or publicly
announce an intention to effect any such transaction, for a period of 90 days
A-1
after the date of the Underwriting Agreement, other than shares of Common Stock
disposed of as bona fide gifts approved by Xxxxxxx Xxxxx Barney Inc. and
Xxxxxxx, Xxxxx & Co.
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
[Signature of executive officer or director]
[Name and address of executive officer or
director]
A-2
EXHIBIT B
[Form of Lock-Up Agreement]
[Letterhead of non-participating stockholder]
Concord EFS, Inc.
-----------------
Concord EFS, Inc.
Public Offering of Common Stock
-------------------------------
, 2001
Xxxxxxx Xxxxx Barney Inc.
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxx & Company, L.L.C.
Banc of America Securities LLC
Bear Xxxxxxx & Co. Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxx & Company, Inc.,
As Representatives of the several
Underwriters
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among Concord EFS, Inc.,
a Delaware corporation (the "Company"), each of the Selling Stockholders named
therein and each of you as representatives of a group of Underwriters named
therein, relating to an underwritten public offering of Common Stock, $0.33 1/3
par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Barney Inc. and Xxxxxxx, Xxxxx & Co., offer, sell,
contract to sell, pledge or otherwise dispose of or reduce its risk with respect
to (or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
undersigned or any affiliate of the undersigned or any person in privity with
the undersigned or any affiliate of the undersigned), directly or indirectly,
including the filing (or participation in the filing of) a registration
statement with the Securities and Exchange Commission or a sale pursuant to Rule
144 under the Securities Act of 1933, as amended, in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder with respect to, any shares of capital stock
of the Company owned by me or any securities convertible into, or exercisable or
B-1
exchangeable for such capital stock, or publicly announce an intention to effect
any such transaction, during the seven days prior to, and for a period of 90
days beginning on, the date of the Underwriting Agreement, other than shares of
Common Stock disposed of as bona fide gifts approved by Xxxxxxx Xxxxx Barney
Inc. and Xxxxxxx, Xxxxx & Co.
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated.
Yours very truly,
[Signature of non-participating stockholder]
[Name and address of non-participating
stockholder]
B-2
Annex A
Significant Subsidiaries
EFS National Bank
EFS Federal Savings Bank
Electronic Payment Services, Inc.
STAR Systems, Inc.
