BLOCK FINANCIAL LLC (a Delaware limited liability company) $600,000,000 7.875% Notes due 2013 UNDERWRITING AGREEMENT
EXHIBIT 1.1
BLOCK FINANCIAL LLC
(a Delaware limited liability company)
$600,000,000
7.875% Notes due 2013
7.875% Notes due 2013
Dated: January 8, 2008
BLOCK FINANCIAL LLC
(a Delaware limited liability company)
January 8, 2008
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
New York, New York 10080
Incorporated
4 World Financial Center
New York, New York 10080
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
HSBC Securities (USA) Inc.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Block Financial LLC, a Delaware limited liability company (the “Company”), confirms its
agreement with the several Underwriters named in Schedule A hereto (collectively, the
“Underwriters,” which term shall also include any underwriter substituted as hereinafter provided
in Section 10 hereof), with respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal amounts set forth in
said Schedule A of $600,000,000 aggregate principal amount of the Company’s Notes due 2013 (the
“Securities”). The Securities are to be issued pursuant to an indenture (the “Indenture”) dated
October 20, 1997, among H&R Block, Inc., a Missouri corporation (the “Parent Guarantor”), the
Company and Bankers Trust Company, as trustee, as supplemented by the First Supplemental Indenture,
dated April 18, 2000, among the Company, the Parent Guarantor, Bankers Trust Company and The Bank
of New York, as separate trustee (as may be further supplemented, amended or modified). The term
“Indenture,” as used herein, includes the Officer’s Certificate (as defined in the Indenture)
establishing the form and terms of the Securities pursuant to Sections 2.01 and 2.03 of the
Indenture. The Securities will be fully and unconditionally guaranteed by the Parent Guarantor
pursuant to guarantees (the “Guarantee”) endorsed on the securities under the terms of the
Indenture.
The Company and the Parent Guarantor understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after this Agreement has been
executed and delivered.
The Company and the Parent Guarantor have filed with the Securities and Exchange Commission
(the “Commission”) a shelf registration statement on Form S-3 (No. 333-118020-01), including the
related preliminary prospectus or prospectuses, which registration statement has been declared
effective by the Commission pursuant to the rules and regulations (the “1933 Act Regulations”)
under the Securities Act of 1933, as amended (the “1933 Act”). Such registration statement covers
the registration of the Securities under the 1933 Act. Promptly after execution and delivery of
this Agreement, the Company and the Parent Guarantor will prepare and file a prospectus in
accordance with the provisions of Rule 430B (“Rule 430B”) of the 1933 Act Regulations and paragraph
(b) of Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations.
Any information included in such prospectus that was omitted from such registration statement
at the time it became effective but that is deemed to be part of and included in such registration
statement pursuant to Rule 430B is referred to as “Rule 430B Information.” Each prospectus used in
connection with the offering of the Securities that omitted Rule 430B Information is herein called
a “preliminary prospectus.” Such registration statement, at any given time, including the
amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at such time
and the documents otherwise deemed to be a part thereof or included therein by 1933 Act
Regulations, is herein called the “Registration Statement.” The Registration Statement at the time
it originally became effective is herein called the “Original Registration Statement.” The final
prospectus in the form first furnished to the Underwriters for use in connection with the offering
of the Securities, including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act at the time of the execution of this Agreement and any preliminary
prospectuses that form a part thereof, is herein called the “Prospectus.” For purposes of this
Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system
(“XXXXX”).
All references in this Agreement to financial statements and schedules and other information
which is “contained,” “included” or “stated” in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which is incorporated by
reference in or otherwise deemed by 1933 Act Regulations to be a part of or included in the
Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934 (the “1934 Act”) which is incorporated by
reference in or otherwise deemed by 1933 Act Regulations to be a part of or included in the
Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(i) Form S-3. (A) At the time of the filing of the Original Registration
Statement, (B) at the time the most recent amendment thereto for the purposes of complying
with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Section 13 and 15(d) of the 1934 Act or
form of prospectus), (C) at the time the Company and the Parent Guarantor or any person
acting on their behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933
Act Regulation) made any offer relating to the Securities in reliance on the exemption of
Rule 163 of the 1933 Act Regulation and (D) at the date hereof, the Company and the Parent
Guarantor meet the requirements for use of Form S-3 under the 1933 Act. Each of the Company
and the Parent Guarantor was and is, as of the times specified in Clauses B, C and D of the
preceding sentence, a “well-known seasoned issuer” as defined in Rule 405 of the 1933 Act
Regulations (“Rule 405”), including not having been and not being an “ineligible issuer” as
defined in Rule 405.
(ii) Registration Statement, Prospectus and Disclosure at Time of Sale. The
Original Registration Statement has been declared effective by the Commission, and any
post-effective amendment thereto also became effective. No stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have
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been instituted or are pending or, to the knowledge of the Company and the Parent
Guarantor, are contemplated by the Commission, and any request on the part of the Commission
for additional information has been complied with.
At the respective times the Original Registration Statement and each amendment thereto
became effective, at each deemed effective date with respect to the Underwriters pursuant to
Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration
Statement complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the “1939 Act Regulations”), and did not and will not contain
an untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will 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.
Each preliminary prospectus (including the prospectus or prospectuses filed as part of
the Original Registration Statement or any amendment thereto) complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
As of the Applicable Time, neither (x) the Issuer General Use Free Writing Prospectus
(as defined below) issued at or prior to the Applicable Time (as defined below) and the
Statutory Prospectus (as defined below), all considered together (collectively, the “General
Disclosure Package”), nor (y) any individual Issuer Limited Use Free Writing Prospectus,
when considered together with the General Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
As of the time of the filing of the Final Term Sheet, the General Disclosure Package,
when considered together with the Final Term Sheet (as defined in Section 3(b)), will not
include any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 4:45 pm (Eastern time) on January 8, 2008 or such other time as
agreed by the Company and Xxxxxxx Xxxxx.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities that (i) is
required to be filed with the Commission by the Company or the Parent Guarantor, (ii) is a
“road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether
or not required to be filed with the Commission or (iii) is exempt from filing pursuant to
Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering
that does not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the
Company’s or the Parent Guarantor’s records pursuant to Rule 433(g).
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“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including any
document incorporated by reference therein and any preliminary or other prospectus deemed to
be a part thereof.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the issuer notified or notifies Xxxxxxx Xxxxx as described in Section 3(e), did
not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.
The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx Xxxxx expressly for use therein.
(iii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”), and, when read together with the other
information in the Prospectus, (a) at the time the Original Registration Statement became
effective, (b) at the earlier of time the Prospectus was first used and the date and time of
the first contract of sale of Securities in this offering and (c) at the Closing Time, did
not and will not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading.
(iv) Independent Accountants. Deloitte and Touche LLP is (and KPMG LLP, who
certified the financial statements and supporting schedules included in the Registration
Statement was, when serving as the Parent Guarantor’s and its subsidiaries’ independent
auditors) independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(v) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus, together with the
related schedules and notes, present fairly in all material respects the financial position
of the Parent Guarantor and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders’ equity and cash flows of the Parent Guarantor and its
consolidated subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved. The supporting schedules, if any, present
fairly in all material respects in accordance with GAAP the information required to be
stated therein. The selected financial data included in the Prospectus present fairly in
all material respects the information shown therein and have been compiled on a basis
consistent with that of the financial statements incorporated by reference into the
Registration Statement. All disclosures contained in the Registration Statement, the
General Disclosure Package or the
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Prospectus regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G under the 1934 Act and
Item 10 of Regulation S-K of the 1933 Act Regulations, to the extent applicable.
(vi) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Registration Statement, the General Disclosure Package or
the Prospectus, except as otherwise stated therein, (A) there has been no material adverse
change or prospective material adverse change in the financial condition, the earnings or
the business affairs of the Company, the Parent Guarantor and their subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of business (a “Material
Adverse Effect”), (B) there have been no transactions entered into by the Company, the
Parent Guarantor or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company, the Parent Guarantor and its
subsidiaries considered as one enterprise, and (C) there has been no dividend or
distribution of any kind declared, paid or made by the Company or the Parent Guarantor on
any class of their capital stock or other equity securities.
(vii) Good Standing of the Company and the Parent Guarantor. The Company has
been duly organized and is validly existing as a limited liability company in good standing
under the laws of the state of Delaware and the Parent Guarantor has been duly organized and
is validly existing as a corporation in good standing under the laws of the state of
Missouri and each of them has the limited liability company or corporate power and
authority, as applicable, to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its obligations under
this Agreement.
(viii) Good Standing of Subsidiaries. Each “significant subsidiary” of the
Company and the Parent Guarantor (as such term is defined in Rule 1-02 of Regulation S-X)
(each a “Subsidiary” and, collectively, the “Subsidiaries”) has been duly organized and is
validly existing as a limited liability company, corporation, or federal savings bank, as
applicable, in good standing under the laws of the jurisdiction of its organization, has
limited liability company or corporate power and authority, as applicable, to own, lease and
operate its properties and to conduct its business as described in the Prospectus; except as
otherwise disclosed in the Registration Statement, all of the issued and outstanding capital
stock or limited liability company interests, as applicable, of each such Subsidiary has
been duly authorized and validly issued, is fully paid and non-assessable, as applicable,
and is owned by the Parent Guarantor, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock or limited liability company interests, as applicable,
of any Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the Parent Guarantor and the
Company are the subsidiaries listed on Schedule B hereto.
(ix) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and the Parent Guarantor.
(x) Authorization of the Indenture. The Indenture has been duly authorized by
the Company and the Parent Guarantor and duly qualified under the 1939 Act and, when duly
executed and delivered by the Company, the Parent Guarantor and the Trustee, will constitute
a valid and binding agreement of the Company and the Parent Guarantor, enforceable against
the Company and the Parent Guarantor in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
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(xi) Authorization of the Securities. (A) The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at law), and
will be in the form contemplated by, and entitled to the benefits of, the Indenture; (B) The
Guarantees have been duly authorized and, at the Closing Time, will have been duly executed
by the Parent Guarantor and, when authenticated, issued and delivered in the manner provided
for in the Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the Parent
Guarantor, enforceable against the Parent Guarantor in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors’ rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form contemplated by,
and entitled to the benefits of, the Indenture.
(xii) Description of the Securities and the Indenture. The Securities and the
Indenture will conform in all material respects to the respective statements relating
thereto contained in the Prospectus and will be in substantially the respective forms filed
or incorporated by reference, as the case may be, as exhibits to the Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company, the Parent
Guarantor nor any of their subsidiaries is in violation of its operating agreement, charter
or by-laws, as applicable, or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to which the
Company, the Parent Guarantor or any of their subsidiaries is a party or by which they or
any of them may be bound, or to which any of the property or assets of the Company, the
Parent Guarantor or any subsidiary is subject (collectively, “Agreements and Instruments”)
except for such defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the Indenture and the Securities and
the consummation of the transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the proceeds from the sale
of the Securities as described in the Prospectus under the caption “Use of Proceeds”) and
compliance by the Company and the Parent Guarantor with their respective obligations
hereunder and under the Indenture and the Securities have been duly authorized by all
necessary corporate or limited liability company action, as applicable, and do not and will
not, whether with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance upon any property or assets
of the Company, the Parent Guarantor or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of (i) the operating agreement, charter or
by-laws, as applicable, of the Company, the Parent Guarantor or any subsidiary or (ii) any
applicable law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having jurisdiction
over the Company, the Parent Guarantor or any subsidiary or any of their assets, properties
or operations, except, with respect to section (ii) above, for such violations that would
not result in a Material Adverse Effect. As used
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herein, a “Repayment Event” means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company, the Parent Guarantor or any subsidiary.
(xiv) Legal Proceedings. Except as described in the Registration Statement,
the General Disclosure Package and the Prospectus, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which the Parent
Guarantor or any of its subsidiaries is or may be a party or to which any property of the
Parent Guarantor or any of its subsidiaries is or may be the subject as to which there is a
reasonable possibility of an adverse determination and that if determined adversely to the
Parent Guarantor or any of its subsidiaries, would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect; except as described in the Registration
Statement, the General Disclosure Package and the Prospectus, to the knowledge of the
Company and the Parent Guarantor, no such investigations, actions, suits or proceedings are
threatened or contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or regulatory actions,
suits or proceedings that are required under the Securities Act to be described in the
Prospectus that are not so described and (ii) there are no contracts or other documents that
are required under the Securities Act to be filed as exhibits to the Registration Statement
or described in the Registration Statement, the General Disclosure Package or the Prospectus
that are not so filed or described, except for those documents relating to the issuance of a
particular series of Securities, which will be filed on Form 8-K in connection with the
closing of the issuance of such Securities.
(xv) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by the Company
or the Parent Guarantor of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement or for the due execution, delivery or performance of the
Indenture by the Company or the Parent Guarantor, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or state securities
laws and except for the qualification of the Indenture under the 1939 Act.
(xvi) Licenses and Permits. Except as described in the Registration Statement,
the General Disclosure Package and the Prospectus, the Parent Guarantor and its subsidiaries
possess all licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or lease of
their respective properties or the conduct of their respective businesses as described in
the Registration Statement, the General Disclosure Package and the Prospectus, except where
the failure to possess or make the same would not, individually or in the aggregate, result
in a Material Adverse Effect.
(xvii) Investment Company Act. Neither the Company nor the Parent Guarantor is
required, and upon the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus will not be
required, to register as, an “investment company” under the Investment Company Act of 1940,
as amended (the “1940 Act”).
(xviii) Accounting Controls and Disclosure Controls. The Parent Guarantor
maintains a system of internal accounting controls sufficient to provide reasonable
assurances that (1) transactions are executed in accordance with management’s general or
specific authorization; (2) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for assets; (3)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (4) the recorded accountability
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for assets is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. As disclosed in the quarterly reports on
Form 10-Q for the quarters ended July 31, 2007 and October 31, 2007 as filed by the Parent
Guarantor and incorporated by reference in the Prospectus, since the end of the Parent
Guarantor’s most recent audited fiscal year there has been (I) no material weakness in the
Parent Guarantor’s internal control over financial reporting (whether or not remediated)
except that, with respect to the period since October 31, 2007, the representation contained
in this section (xviii)(I) is limited to the knowledge of the Company and (II) no change in
the Parent Guarantor’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Parent Guarantor’s internal
control over financial reporting.
The Parent Guarantor and its consolidated subsidiaries employ disclosure controls and
procedures that are designed to ensure that information required to be disclosed by the
Parent Guarantor in the reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s
rules and forms, and is accumulated and communicated to the Parent Guarantor’s management,
including its principal executive officer or officers and principal financial officer or
officers, as appropriate, to allow timely decisions regarding disclosure.
(xix) Compliance with the Xxxxxxxx-Xxxxx Act. The Parent Guarantor or any of
the Parent Guarantor’s directors or officers, in their capacities as such, are in compliance
in all material respects with the applicable provision of the Xxxxxxxx-Xxxxx Act of 2002 and
the rules and regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”),
including Section 402 related to loans and Sections 302 and 906 related to certifications.
SECTION 2. Sale and Delivery to Underwriters; Closing.
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to the Underwriters for the respective accounts
of the Underwriters of certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Underwriters, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the Securities which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment
8
of the purchase price for the Securities to be purchased by any Underwriter whose funds have
not been received by the Closing Time, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities shall be in such
denominations ($2,000 or integral multiples thereof) and registered in such names as the
Underwriters may request in writing at least one full business day before the Closing Time. The
Securities, which may be in temporary form, will be made available for examination and packaging by
the Underwriters in The City of New York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time.
SECTION 3. Covenants of the Company and Parent Guarantor. The Company and, to the
extent expressly referred to in the paragraphs below, the Parent Guarantor jointly and severally
covenant with each Underwriter as follows:
9
the Securities, in form and substance satisfactory to the Underwriters, and shall file such
Final Term Sheet as an “issuer free writing prospectus” pursuant to Rule 433 prior to the close of
business two business days after the date hereof; provided that the Company shall furnish the
Underwriters with copies of any such Final Term Sheet a reasonable amount of time prior to such
proposed filing and will not use or file any such document to which the Underwriters or counsel to
the Underwriters shall object.
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jurisdiction in which it is not otherwise so subject. The Company and the Parent Guarantor
will also supply the Underwriters with such information as is necessary for the determination of
the legality of the Securities for investment under the laws of such jurisdictions as the
Underwriters may reasonably request.
(f) Rule 158. The Parent Guarantor will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
SECTION 4. Payment of Expenses.
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preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (ix)
the costs and expenses of the Company and the Parent Guarantor relating to investor presentations
on any “road show” undertaken in connection with the marketing of the Securities, including without
limitation, expenses associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show presentations, travel and
lodging expenses of the representatives and officers of the Company and the Parent Guarantor and
any such consultants, and the cost of aircraft and other transportation chartered in connection
with the road show and (x) any fees payable in connection with the rating of the Securities, and
(xi) the costs and expenses (including without limitation any damages or other amounts payable in
connection with legal or contractual liability) associated with the reforming of any contracts for
sale of the Securities made by the Underwriters caused by a breach of the representation contained
in the fifth paragraph of Section 1(a)(ii).
SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company and the Parent Guarantor contained in Section 1 hereof or in certificates of any officer of
the Company and the Parent Guarantor or any subsidiary of the Company and the Parent Guarantor
delivered pursuant to the provisions hereof, to the performance by the Company and the Parent
Guarantor of its covenants and other obligations hereunder, and to the following further
conditions:
(c) Opinion of Counsel for Underwriters. At Closing Time, the Underwriters shall have
received the favorable opinion, dated as of Closing Time, of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, in form and substance satisfactory to the Underwriters together with
signed or reproduced copies of such letter for each of the other Underwriters with respect to
matters as the Underwriters may request and such counsel shall have received such documents and
information as they may reasonably request to enable them to pass upon such matters. In giving
such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United States and the Delaware
Limited Liability Company Act, upon the opinions of counsel satisfactory to the Underwriters. Such
counsel may also state that, insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the Company, the Parent Guarantor and
its subsidiaries and certificates of public officials.
12
13
SECTION 6. Indemnification.
(i) against any and all loss, liability, claim and damage whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), including the Rule 430B
Information, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim and damage whatsoever, as incurred, to
the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company and the Parent Guarantor;
(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel to the extent provided in Section 6(c)), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx Xxxxx expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430B Information or any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or
supplement thereto).
14
indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is not materially
prejudiced as a result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In case any such action is brought
against any indemnified party, the indemnifying party may assume the defense of any litigation or
proceeding in respect of which indemnity may be sought hereunder, including the employment of
counsel. In any such litigation or proceeding the defense of which the indemnifying party shall
have so assumed, any indemnified party shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and such indemnified party
shall have mutually agreed in writing to the retention of such counsel or experts, (ii) the use of
counsel chosen by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest ; (iii) the indemnifying party shall have failed in a timely
manner to assume the defense and employ counsel reasonably satisfactory to the indemnified party in
such litigation or proceeding, or (iv) the named parties to any such litigation or proceeding
(including any impleaded parties) include the indemnifying party and such indemnified party and
representation of the indemnifying party and any indemnified party by the same counsel would, in
the reasonable opinion of the indemnified party, be inappropriate due to actual or potential
differing interests between the indemnifying party and any such indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Parent Guarantor on the one hand
and the Underwriters on the other hand from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in
15
clause (i) above but also the relative fault of the Company and the Parent Guarantor on the
one hand and of the Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Parent Guarantor on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Parent Guarantor and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus bear to the aggregate
initial public offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company and the Parent Guarantor on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company and the Parent Guarantor or by the
Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the Parent Guarantor and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to above in this
Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by
an indemnified party and referred to above in this Section 7 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s
Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and
each director of the Company or the Parent Guarantor, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the Parent Guarantor
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company and the Parent Guarantor. The Underwriters’ respective
obligations to contribute pursuant to this Section 7 are several in proportion to the principal
amount of Securities set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company and the Parent Guarantor or any of their subsidiaries submitted pursuant
hereto, shall remain operative and in full
16
force and effect regardless of (i) any investigation made by or on behalf of any Underwriter
or its Affiliates or selling agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company or the Parent Guarantor, and (ii) delivery of and
payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto) or the General Disclosure Package, any material adverse
change or prospective material adverse change in the financial condition, the earnings or business
affairs of the Company, the Parent Guarantor and their subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriters, impracticable or inadvisable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any securities of the Company or
the Parent Guarantor has been suspended or materially limited by the Commission or the New York
Stock Exchange, or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any
of said exchanges or by such system or by order of the Commission, the Financial Institutions
Regulatory Authority or any other governmental authority, or a material disruption has occurred in
commercial banking or securities settlement, or (iv) a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United States or with
respect to Clearstream or Euroclear systems in Europe, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the “Defaulted Securities”), the Underwriters shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Underwriters shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal
amount of the Securities to be purchased hereunder, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the
Securities to be purchased hereunder, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
17
In the event of any such default which does not result in a termination of this Agreement,
either the Underwriters or the Company shall have the right to postpone Closing Time for a period
not exceeding seven days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter”
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company and the Parent Guarantor (and each employee, representative or other agent of the
Company and the Parent Guarantor) may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are provided to the
Company and the Parent Guarantor relating to such tax treatment and tax structure. For purposes of
the foregoing, the term “tax treatment” is the purported or claimed federal income tax treatment of
the transactions contemplated hereby, and the term “tax structure” includes any fact that may be
relevant to understanding the purported or claimed federal income tax treatment of the transactions
contemplated hereby.
SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to an Underwriter shall be directed to such Underwriter at c/x
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 4 World Financial Center, New York, New York
10080, attention of Transaction Management Group (fax: (000) 000-0000); X.X. Xxxxxx Securities
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Investment Grade Syndicate Desk (fax:
(000) 000-0000); or HSBC Securities (USA) Inc., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, attention of Xxxxx X. Xxxxx (fax: (000) 000-0000) (with a copy to Xxxxxxx Xxxxxxx &
Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxx X. Xxxxxx).
Notices to the Company or the Parent Guarantor shall be directed to it at H&R Block World
Headquarters, Xxx X&X Xxxxx Xxx, Xxxxxx Xxxx, Xxxxxxxx 00000, (fax: (000) 000-0000, attention of
HRB Treasury, with a copy to the HRB General Counsel (with a copy to Xxxxxxx Xxxxxxxx Xxxxxx LLP,
0000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, attention of Xxxxxxx X. Xxxxxxxxxx).
SECTION 13. No Advisory or Fiduciary Relationship. The Company and the Parent
Guarantor acknowledge and agree that (a) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the public offering price of the Securities and any
related discounts and commissions, is an arm’s-length commercial transaction between the Company
and the Parent Guarantor, on the one hand, and the several Underwriters, on the other hand, (b) in
connection with the offering contemplated hereby and the process leading to such transaction each
Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the
Company, the Parent Guarantor or any of their respective stockholders, creditors, employees or any
other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility
in favor of the Company or the Parent Guarantor with respect to the offering contemplated hereby or
the process leading thereto (irrespective of whether such Underwriter has advised or is currently
advising the Company or the Parent Guarantor on other matters) and no Underwriter has any
obligation to the Company or the Parent Guarantor with respect to the offering contemplated hereby
except the obligations expressly set forth in this Agreement, (d) the Underwriters and their
respective affiliates may be engaged in a broad range of transactions that involve interests that
differ from those of the Company and the Parent Guarantor, and (e) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company and the Parent Guarantor have consulted their own legal, accounting,
regulatory and tax advisors to the extent they deemed appropriate.
SECTION 14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) among the Company, the Parent Guarantor and the
Underwriters, or any of them, with respect to the subject matter hereof.
18
SECTION 15. Parties. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters, the Company, the Parent Guarantor and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters, the Company, the Parent Guarantor and their respective
successors and the controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters,
the Company, the Parent Guarantor and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
SECTION 19. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
19
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement among the Underwriters, the Company and the Parent Guarantor in
accordance with its terms.
Very truly yours, BLOCK FINANCIAL LLC |
||||
By | /s/ Xxxxx X. Xxxxxxx | |||
Name: | Xxxxx X. Xxxxxxx | |||
Title: | Senior Vice President and Treasurer | |||
H&R BLOCK, INC. |
||||
By | /s/ Xxxxx X. Xxxxxxx | |||
Name: | Xxxxx X. Xxxxxxx | |||
Title: | Senior Vice President, Treasurer and Interim Chief Financial Officer | |||
CONFIRMED AND ACCEPTED, as of the date first above written: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX INCORPORATED By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX INCORPORATED |
||||
By | /s/ Xxxxxxx X’Xxxxx | |||
Authorized Signatory | ||||
X.X. XXXXXX SECURITIES INC. By: X.X. XXXXXX SECURITIES INC. |
||||
By | /s/ Xxxxxxx X. Xxxxxxx | |||
Authorized Signatory | ||||
HSBC SECURITIES (USA) INC. By: HSBC SECURITIES (USA) INC. |
||||
By | /s/ Xxxx Xxxxxx | |||
Authorized Signatory | ||||
SCHEDULE A
Principal | ||||||||
Amount of | ||||||||
Name of Underwriter | Securities | Purchase Price | ||||||
Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated |
$ | 200,000,000 | $ | 198,592,000 | ||||
HSBC Securities (USA) Inc. |
$ | 200,000,000 | $ | 198,592,000 | ||||
X.X. Xxxxxx Securities Inc. |
$ | 200,000,000 | $ | 198,592,000 | ||||
Total |
$ | 600,000,000 | $ | 595,776,000 | ||||
Sch A-1
SCHEDULE B
Subsidiaries
0000 X. Xxxxx Oaks, Inc.
Aculink Mortgage Solutions, LLC
AcuLink of Alabama, LLC
BFC Transactions, Inc.
Birchtree Financial Services, Inc.
Birchtree Insurance Agency, Inc.
Block Financial LLC
Xxxx Oak Technical Solutions, Inc.
CFS-McGladrey, LLC
Cfstaffing, Ltd.
Companion Insurance, Ltd.
Companion Mortgage Corporation
Creative Financial Staffing of Western Washington, LLC
EquiCo Europe Limited
Equico, Inc.
Express Tax Service, Inc.
Financial Marketing Services, Inc.
Financial Stop Inc.
First Option Asset Management Services, Inc.
First Option Asset Management Services, LLC
FM Business Services, Inc.
Franchise Partner, Inc.
H&R Block (India) Private Limited
H&R Block (Nova Scotia), Incorporated
H&R Block Bank
H&R Block Canada Financial Services, Inc.
H&R Block Canada, Inc.
H&R Block Eastern Enterprises, Inc.
H&R Block Enterprises, Inc.
H&R Block Financial Advisors, Inc.
H&R Block Global Solutions (Hong Kong) Limited
H&R Block Group, Inc.
H&R Block Insurance Agency of Massachusetts, Inc.
H&R Block Insurance Agency, Inc.
H&R Block Limited
H&R Block Management, LLC
H&R Block Services, Inc.
H&R Block Tax and Business Services, Inc.
H&R Block Tax and Financial Services Limited
H&R Block Tax Institute, LLC
H&R Block Tax Services, Inc.
HRB Advance LLC
Aculink Mortgage Solutions, LLC
AcuLink of Alabama, LLC
BFC Transactions, Inc.
Birchtree Financial Services, Inc.
Birchtree Insurance Agency, Inc.
Block Financial LLC
Xxxx Oak Technical Solutions, Inc.
CFS-McGladrey, LLC
Cfstaffing, Ltd.
Companion Insurance, Ltd.
Companion Mortgage Corporation
Creative Financial Staffing of Western Washington, LLC
EquiCo Europe Limited
Equico, Inc.
Express Tax Service, Inc.
Financial Marketing Services, Inc.
Financial Stop Inc.
First Option Asset Management Services, Inc.
First Option Asset Management Services, LLC
FM Business Services, Inc.
Franchise Partner, Inc.
H&R Block (India) Private Limited
H&R Block (Nova Scotia), Incorporated
H&R Block Bank
H&R Block Canada Financial Services, Inc.
H&R Block Canada, Inc.
H&R Block Eastern Enterprises, Inc.
H&R Block Enterprises, Inc.
H&R Block Financial Advisors, Inc.
H&R Block Global Solutions (Hong Kong) Limited
H&R Block Group, Inc.
H&R Block Insurance Agency of Massachusetts, Inc.
H&R Block Insurance Agency, Inc.
H&R Block Limited
H&R Block Management, LLC
H&R Block Services, Inc.
H&R Block Tax and Business Services, Inc.
H&R Block Tax and Financial Services Limited
H&R Block Tax Institute, LLC
H&R Block Tax Services, Inc.
HRB Advance LLC
Sch B-1
HRB Center LLC
HRB Concepts LLC
HRB Corporate Enterprises LLC
HRB Corporate Services LLC
HRB Digital LLC
HRB Digital Technology Resources LLC
HRB Expertise LLC
HRB Financial Corporation
HRB Innovations, Inc.
HRB International LLC
HRB Products LLC
HRB Professional LLC
HRB Progression LLC
HRB Property Corporation
HRB Realty Corporation
HRB Support Services LLC
HRB Tax & Technology Leadership LLC
HRB Tax & Technology Software LLC
HRB Technology Holding LLC
HRB Texas Enterprises, Inc.
OLDE Discount of Canada
OOMC Holdings LLC
OOMC Residual Corporation
Option One Advance Corporation
Option One Insurance Agency, Inc.
Option One Loan Warehouse LLC
Option One Mortgage Acceptance Corporation
Option One Mortgage Capital Corporation
Option One Mortgage Corporation
Option One Mortgage Corporation (India) Private Limited
Option One Mortgage Securities Corp.
Option One Mortgage Securities II Corp.
Option One Mortgage Securities III Corp.
Option One Mortgage Securities IV LLC
Option One Mortgage Services, Inc.
X’Xxxxxx Career Connections, LLC
PDI Global, Inc.
Pension Resources, Inc.
Premier Mortgage Services of Washington, Inc.
Premier Property Tax Services, LLC
Premier Trust Deed Services, Inc.
RedGear Technologies, Inc.
RSM (Bahamas) Global, Ltd.
RSM Employer Services Agency of Florida, Inc.
RSM Employer Services Agency, Inc.
RSM Equico Canada, Inc.
HRB Concepts LLC
HRB Corporate Enterprises LLC
HRB Corporate Services LLC
HRB Digital LLC
HRB Digital Technology Resources LLC
HRB Expertise LLC
HRB Financial Corporation
HRB Innovations, Inc.
HRB International LLC
HRB Products LLC
HRB Professional LLC
HRB Progression LLC
HRB Property Corporation
HRB Realty Corporation
HRB Support Services LLC
HRB Tax & Technology Leadership LLC
HRB Tax & Technology Software LLC
HRB Technology Holding LLC
HRB Texas Enterprises, Inc.
OLDE Discount of Canada
OOMC Holdings LLC
OOMC Residual Corporation
Option One Advance Corporation
Option One Insurance Agency, Inc.
Option One Loan Warehouse LLC
Option One Mortgage Acceptance Corporation
Option One Mortgage Capital Corporation
Option One Mortgage Corporation
Option One Mortgage Corporation (India) Private Limited
Option One Mortgage Securities Corp.
Option One Mortgage Securities II Corp.
Option One Mortgage Securities III Corp.
Option One Mortgage Securities IV LLC
Option One Mortgage Services, Inc.
X’Xxxxxx Career Connections, LLC
PDI Global, Inc.
Pension Resources, Inc.
Premier Mortgage Services of Washington, Inc.
Premier Property Tax Services, LLC
Premier Trust Deed Services, Inc.
RedGear Technologies, Inc.
RSM (Bahamas) Global, Ltd.
RSM Employer Services Agency of Florida, Inc.
RSM Employer Services Agency, Inc.
RSM Equico Canada, Inc.
Sch B-2
RSM Equico Capital Markets, LLC
RSM Equico, Inc.
RSM McGladrey Business Services, Inc.
RSM McGladrey Business Solutions, Inc.
RSM McGladrey Employer Services, Inc.
RSM McGladrey Financial Process Outsourcing India Pvt. Ltd.
RSM McGladrey Financial Process Outsourcing, LLC
RSM McGladrey Insurance Services, Inc.
RSM McGladrey TBS, LLC
RSM McGladrey, Inc.
ServiceWorks, Inc.
TaxNet Inc.
TaxWorks, Inc.
The Tax Man, Inc.
West Estate Investors, LLC
Woodbridge Mortgage Acceptance Corporation
RSM Equico, Inc.
RSM McGladrey Business Services, Inc.
RSM McGladrey Business Solutions, Inc.
RSM McGladrey Employer Services, Inc.
RSM McGladrey Financial Process Outsourcing India Pvt. Ltd.
RSM McGladrey Financial Process Outsourcing, LLC
RSM McGladrey Insurance Services, Inc.
RSM McGladrey TBS, LLC
RSM McGladrey, Inc.
ServiceWorks, Inc.
TaxNet Inc.
TaxWorks, Inc.
The Tax Man, Inc.
West Estate Investors, LLC
Woodbridge Mortgage Acceptance Corporation
Sch B-3
SCHEDULE C
$600,000,000
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Block Financial LLC
7.875% Notes due 2013
Fully and Unconditionally Guaranteed by
H&R Block, Inc.
H&R Block, Inc.
Issuer: | Block Financial LLC, a Delaware limited liability company |
|
Guarantor: | H&R Block, Inc., a Missouri corporation |
|
Type: | SEC Registered |
|
Ratings: | Baa1/BBB-/BBB (NegWatch/NegOutlook/NegWatch) (Xxxxx’x/S&P/Fitch) |
|
Size: | US$600,000,000 |
|
Trade Date: | January 8, 2008 |
|
Settlement Date: | January 11, 2008 (T+3 days) |
|
Maturity: | January 15, 2013 |
|
Interest Rate Per Annum: | 7.875% |
|
Interest Payment Dates: | Semi-annually on the 15th of each July and January |
|
First Interest Payment Date: | July 15, 2008 |
|
Public Offering Price: | 99.896% |
|
Treasury Benchmark: | 3.625% due 12/12 |
|
Treasury Price: | $102-15 3/4 |
|
Treasury Yield: | 3.081% |
|
Re-offer Spread vs. Treasury | +481.9 bps |
|
Yield to Maturity: | 7.900% |
|
Net Proceeds: | $595,776,000 |
|
Interest Rate Adjustment: | The interest rate payable on the notes will be subject to
adjustment from time to time if either Xxxxx’x or S&P
downgrades (or subsequently upgrades) the debt rating assigned
to the notes as described under “Description of Notes –
Interest Rate Adjustment” in the preliminary prospectus
supplement. |
|
Optional Redemption: | At any time, in whole or in part, at a redemption price equal
to the greater of: i) 100% of the principal amount of the notes
to be redeemed, plus accrued interest to the redemption date,
or ii) the sum of the present values of the remaining principal
amount and scheduled payments of interest on the notes to be
redeemed (not including any portion of payments of interest
accrued as a of the redemption date) discounted to the
redemption date on a semi-annual basis at the Treasury Rate
plus 70 basis points plus accrued interest to the redemption
date. |
Sch C-1
Mandatory Offer to Repurchase Notes: | In the event of a “Change of Control Triggering Event” as
defined in the preliminary prospectus supplement at 101% of
their principal amount, plus accrued and unpaid interest. |
|
Day Count: | 30/360 |
|
Minimum Denomination / Multiples: | $2,000 / $1,000 |
|
Joint Bookrunners: | Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated X.X. Xxxxxx Securities Inc. HSBC Securities (USA) Inc. |
|
CUSIP / ISIN: | 093662 AD6 / US093662AD66 |
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Additional Information: | As of October 31, 2007, as adjusted to give effect to the sale
of the notes and the application of the net proceeds as
described in the preliminary prospectus supplement, cash and
cash equivalents would have been $510.9 million, short-term
debt would have been $39.6 million, long-term debt would have
been $2.7 billion, total debt $2.8 billion and total
capitalization would have been $3.3 billion.
In addition, on a pro forma basis giving effect to this
offering and the application of the net proceeds there from, as
of October 31, 2007, Block Financial LLC would have had
approximately $2.7 billion of indebtedness ranking pari passu
with the notes. |
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On January 2, 2008, the Mississippi Attorney General filed an
action concerning the Express IRA product in the Chancery Court
of Xxxxx County, Mississippi, First Judicial District (Case No.
G-2008-6) entitled Xxx Xxxx, Attorney General for the State of
Mississippi, ex rel. the State of Mississippi v. H&R Block,
Inc., et al. This action asserts claims concerning the Express
IRA product similar to those claims asserted in lawsuits
previously disclosed by H&R Block, Inc. in its Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q. We intend to
defend this case vigorously, but there are no assurances as to
its outcome. |
The issuer has filed a registration statement (including a prospectus) with the Securities and
Exchange Commission, or SEC, for the offering to which this communication relates. Before you
invest, you should read the preliminary prospectus supplement, the accompanying prospectus and the
other documents the company has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting XXXXX on the SEC web site at
xxx.xxx.xxx. Alternatively, the company, any underwriter or any dealer participating in the
offering will arrange to send you these documents if you request them by contacting Xxxxxxx Lynch,
Xxxxxx, Xxxxxx & Xxxxx Incorporated at 0-000-000-0000, X.X. Xxxxxx Securities Inc. at 000-000-0000,
or HSBC at 0-000-000-0000.
This communication should be read in conjunction with the preliminary prospectus supplement dated
January 8, 2008 and the accompanying prospectus dated October 21, 2004.
Sch C-2