EXHIBIT 1.1
November __, 1996
Xxxxxx Xxxxxxx & Co.
Incorporated
Xxxxxx Brothers Inc.
Xxxxxxxxxx Securities
Xxxxx Xxxxxx Inc.
c/x Xxxxxx Xxxxxxx & Co.
Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxx Brothers International (Europe)
Xxxxxxxxxx Securities
Xxxxx Xxxxxx Inc.
c/x Xxxxxx Xxxxxxx & Co. International
Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Xxxxxxx
Dear Sirs:
Integrated Payment Systems Inc., a Delaware corporation (the "Selling
Stockholder"), proposes to sell to the several Underwriters (as defined
below)16,625,000 shares of common stock, par value $.01 per share (the "Firm
Shares") of MoneyGram Payment Systems, Inc., a Delaware corporation (the
"Company").
It is understood that, subject to the conditions hereinafter stated,
11,571,000 Firm Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and 2,892,750 Firm Shares (the "International Shares") will be sold to the
several International Underwriters named in Schedule II hereto (the
"International Underwriters") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other
than United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated,
Xxxxxxxxxx Securities, Xxxxxx Brothers Inc., and Xxxxx Xxxxxx Inc. shall act as
representatives (the "U.S. Representatives") of the several U.S. Underwriters,
and Xxxxxx Xxxxxxx & Co. International Limited, Xxxxxxxxxx Securities, Xxxxxx
Brothers International (Europe) and Xxxxx Xxxxxx Inc. shall act as
representatives (the "International Representatives") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "Underwriters".
The Selling Stockholder also proposes to sell to the several U.S.
Underwriters not more than an additional 2,161,250 shares of its common stock,
par value $.01 per share (the "Additional Shares") if and to the extent that the
U.S. Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of common stock granted to the
U.S. Underwriters in Article II hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the Shares. The shares of
common stock, par value $.01 per share, of the Company are hereinafter referred
to as the Common Stock.
It is further understood that after the execution of this Agreement, and
prior to the sale of the Firm Shares to the Underwriters, the Selling
Stockholder will transfer to the Company certain assets and liabilities of its
consumer money wire transfer service marketed under the name "MoneyGram" (the
"Business") (such transfer of assets and liabilities being referred to herein as
the "Transition"). Pursuant to the Transition, the Company will, after the
execution of this Agreement, enter into a Contribution Agreement to be dated as
of the date hereof among the Company, First Data Corporation, a Delaware
corporation and the sole stockholder of the Selling Stockholder ("First Data"),
and the Selling Stockholder, an Operations Agreement to be dated as of the date
hereof among the Company, First Data Technologies Inc., a Delaware corporation
and a wholly owned subsidiary of First Data, and the Selling Stockholder, a
Software License Agreement to be dated as of the date hereof between the Company
and the Selling Stockholder, a Short-Term Working Capital Facility to be dated
as of the date hereof between the Selling Stockholder and the Company, a Service
Mark License Agreement to be dated as of the date hereof among the Company, the
Selling Stockholder and Western Union Financial Services, Inc., a Human
Resources Agreement to be dated the date hereof among the Company, the Selling
Stockholder, and First Data Corporation, a Telecommunications Services Sharing
Agreement to be dated
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the date hereof between the Company and First Data Corporation, and a
Registration Rights Agreement dated the date hereof between the Company and the
Selling Stockholder (collectively, the "Transition Agreements").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A, under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the Registration Statement; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the Prospectus. If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
I.
1. Each of the Company and the Selling Stockholder represents and warrants
to each of the Underwriters that:
(a) The Registration Statement has become effective or will become
effective not later than 9:30 a.m. on the next business day following the date
hereof (the "Effective Time")/1/; no stop order suspending the
---------------------
/1/ This assumes the Underwriting Agreement is signed after the close of
business on the date hereof, and a pre-effective pricing amendment is filed.
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effectiveness of the Registration Statement is or will be, as of the Effective
Time, in effect, and no proceedings for such purpose are or will be, as of the
Effective Time, pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part became or
becomes effective, did not or will not contain and each such part, as amended or
supplemented, if applicable, 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, (ii) on and after the Effective
Time, the Registration Statement and the Prospectus will comply and, as amended
or supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) on and after the Effective Time, the Prospectus will not
include and, as amended or supplemented, if applicable, will not include an
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, except that the representations and
warranties set forth in this paragraph 1(b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company or the Selling Stockholder
in writing by any U.S. Representative, International Representative or
Underwriter expressly for use therein.
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware; the
Company has the requisite corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company or the
Business, as the case may be.
(d) As of the date hereof and as of the Closing Date, the Company does
not, and will not, have any subsidiaries.
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(e) The authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock."
(f) The Shares have been duly authorized and are validly issued, fully
paid and non-assessable.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the Company or the
Business that is material to the Company or the Business, or any judgment, order
or decree of any governmental body, agency or court having jurisdiction over the
Company or the Business including, without limitation, the U.S. Federal Trade
Commission, and no consent, approval, authorization or order of or qualification
with, any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be required
by the securities or Blue Sky laws of the various states or foreign securities
laws or regulations in connection with the offer and sale of the Shares.
(i) The consummation of the Transition and the execution and delivery by
the Company of, and the performance by the Company of its obligations under, the
Transition Agreements will not result in a violation of the provisions of the
certificate of incorporation or by-laws of the Company or any statute, rule or
regulation or any judgment, or decree of any governmental body, agency or court,
including, without limitation, the U.S. Federal Trade Commission, having
jurisdiction over the Company or the Business, or conflict with or result in a
breach or the violation of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument binding upon the Company or the
Business (except for such conflicts, breaches, violations and defaults that,
individually or in the aggregate, would not have a material adverse effect on
the Company or the Business) and no consent, approval, authorization or order of
or qualification with any governmental body or agency is required for the
performance by the Company of its obligations under the Transition Agreements or
pursuant
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to the Transition (except for such consents, authorizations, orders or
qualifications that, individually or in the aggregate, would not have a material
adverse effect on the Company or the consummation of the Transition).
(j) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company or the
Business, from that set forth or contemplated in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Selling Stockholder or the Company, threatened to which the
Company or the Business is a party or to which any of the properties of the
Company or the Business is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) Except as described in the Prospectus, the Company has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the Prospectus,
except to the extent that the failure to so have, obtain or file would not have
a material adverse effect on the Company or the Business.
(m) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder.
(n) The Company is not and, after the consummation of the Transition, will
not be, an
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"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
(o) The financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or included in the
Prospectus present fairly in all material respects the financial condition and
results of operations of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as otherwise stated therein.
(p) Except as disclosed in the Prospectus, the Company possesses the
rights described in the Prospectus to use the Licensed Marks (as defined in the
Prospectus), and the Company owns or possesses adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights and licenses
(other than the Licensed Marks) necessary for the conduct of its business in the
manner described in the Prospectus and the Company has no reason to believe that
the conduct of its business will conflict with any such rights of others, and
neither the Business nor the Company has received any notice of any claims of
conflict with any such rights of others, which claims, if determined adversely
to the Business or the Company, would or could reasonably be expected to have a
material adverse effect on the Business or the Company.
(q) No material labor dispute with the employees of the Company exists,
except as described in or contemplated by the Prospectus, or, to the knowledge
of the Company, is imminent.
(r) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company or any of its affiliates and
any person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
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(s) The Company has complied with or is exempt from all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
2. The Selling Stockholder represents and warrants to and agrees with each
of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or
on behalf of the Selling Stockholder.
(b) The execution and delivery by the Selling Stockholder of, and the
performance by such Selling Stockholder of its obligations under, this
Agreement, will not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of the Selling Stockholder, or any
material agreement or other instrument binding upon the Selling Stockholder or
any of the Selling Stockholder's subsidiaries or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the Selling
Stockholder or any of the Selling Stockholder's subsidiaries, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Selling Stockholder of its
obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states or foreign securities laws or
regulations in connection with the offer and sale of the Shares.
(c) The consummation of the Transition and the execution and delivery by
the Selling Stockholder of, and the performance by the Selling Stockholder of
its obligations under, the Transition Agreements will not result in a violation
of the provisions of the certificate of incorporation or by-laws of the Selling
Stockholder, or any statute, rule or regulation or any judgment or decree of any
governmental body, agency or court, including, without limitation, the U.S.
Federal Trade Commission, having jurisdiction over the Selling Stockholder or
any of the Selling Stockholder's subsidiaries, or conflict with or result in a
breach or the violation of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument binding upon the Selling
Stockholder or any of the Selling Stockholder's subsidiaries (except for such
conflicts, breaches, violations and defaults that, individually or in the
aggregate, would not have a material adverse effect on the Selling Stockholder
and its subsidiaries taken as a whole) and no consent,
8
approval, authorization or order of or qualification with any governmental body
or agency is required for the performance by the Selling Stockholder of its
obligations under the Transition Agreements or pursuant to the Transition
(except for such consents, authorizations, orders or qualifications that,
individually or in the aggregate, would not have a material adverse effect on
the Selling Stockholder, the Business or the consummation of the Transition).
(d) On the Closing Date, the Selling Stockholder will have valid title to
the Shares to be sold by such Selling Stockholder and the legal right and power,
and all authorization and approval required by law, to enter into this Agreement
and to sell, transfer and deliver the Shares to be sold by the Selling
Stockholder to the Underwriters pursuant to this Agreement.
(e) Title to the Shares to be sold by the Selling Stockholder pursuant to
this Agreement will, upon delivery of such Shares and payment therefor as
provided herein, pass to the Underwriters free and clear of any security
interests, claims, liens, equities and other encumbrances.
(f) The Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
II.
The Selling Stockholder hereby agrees to sell to the several Underwriters,
and the Underwriters, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agree,
severally and not jointly, to purchase from the Selling Stockholder the
respective numbers of Firm Shares set forth in Schedules I and II hereto
opposite their names at $_____ a share -- the purchase price.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Stockholder
agrees to sell to the U.S. Underwriters the Additional Shares, and the U.S.
9
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 2,161,250 Additional Shares at the purchase price. Additional Shares may
be purchased as provided in Article IV hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares. The Additional Shares to be purchased by the U.S.
Underwriters hereunder and the U.S. Firm Shares are hereinafter collectively
referred to as the U.S. Shares.
The Company and the Selling Stockholder hereby agree that, without the
prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, each will not, during the period ending 180 days after the date of
the Prospectus, in the case of the Company, and, during the period ending on
December 31, 1996, in the case of the Selling Stockholder, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, file a registration
statement (in the case of the Company) or make any demand for or exercise any
right with respect to (in the case of the Selling Stockholder and the Trustee)
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (whether such shares or any such securities are
then owned by such person or are thereafter acquired directly from the Company)
or (ii) enter into any swap or similar agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) of this paragraph is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) any grant of stock options which vest subsequent to the period
ending 180 days after the date of the Prospectus, (C) one or more registration
statements relating to the Company's 1996 Stock Option Plan, the 1996 Broad-
Based Stock Option Plan or the MoneyGram Agent Stock Option Plan or the
Company's obligations under the Registration Rights Agreement or (D) the
deposit, if any, of any Shares with Wachovia Bank of North Carolina, N.A., as
10
trustee (the "Trustee") pursuant to the Irrevocable Trust Agreement among First
Data, the Selling Stockholder and the Trustee.
III.
The Company and the Selling Stockholder are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company and the Selling
Stockholder are further advised by you that the Shares are to be offered to the
public initially at U.S.$_____ a share (the public offering price) and to
certain dealers selected by you at a price that represents a concession not in
excess of U.S.$____ a share under the public offering price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of U.S.$____ a share, to any Underwriter or to certain other dealers.
Each U.S. Underwriter hereby makes to and with each of the Company and the
Selling Stockholder the representations and agreements of such U.S. Underwriter
contained in the fifth and sixth paragraphs of Article III of the Agreement
Between U.S. and International Underwriters of even date herewith. Each
International Underwriter hereby makes to and with each of the Company and the
Selling Stockholder the representations and agreements of such International
Underwriter contained in the seventh, eighth, ninth and tenth paragraphs of
Article III of such Agreement.
IV.
Payment for the Firm Shares shall be made by wire transfer of federal funds
or other immediately available funds payable to the order of the Selling
Stockholder. The Closing shall be held at the office of Xxxxx Xxxx & Xxxxxxxx,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., local time, on
____________, 1996, or at such other time on the same or such other date, not
later than _________, 1996, as shall be agreed to by the Selling Stockholder and
you. The time and date of such payment are hereinafter referred to as the
Closing Date.
Payment for any Additional Shares shall be made by wire transfer of federal
funds or other immediately available funds payable to the order of the Selling
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Stockholder. The Closing of any sale of Additional Shares shall be held at the
office of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at
10:00 A.M., local time, on such date (which may be the same as the Closing Date
but shall in no event be earlier than the Closing Date nor earlier than the
second business day after the giving of the notice hereinafter referred to nor
later than ten business days after the giving of the notice hereinafter referred
to) as shall be designated in a written notice from the U.S. Representatives to
the Selling Stockholder of their determination, on behalf of the U.S.
Underwriters, to purchase a number, specified in said notice, of Additional
Shares, or on such other date, in any event not later than _______, 199_, as
shall be designated in writing by the U.S. Representatives. The time and date
of such payment are hereinafter referred to as the Option Closing Date. The
notice of the determination to exercise the option to purchase Additional Shares
and of the Option Closing Date may be given at any time within 30 days after the
date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the purchase price therefor.
V.
The obligations of the Company, the Selling Stockholder and the several
obligations of the Underwriters hereunder are subject to the condition that the
Registration Statement shall have become effective not later than the Effective
Time.
The several obligations of the Underwriters hereunder are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition,
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financial or otherwise, or in the earnings, business or operations, of the
Company, from that set forth or contemplated in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
that is material and adverse and that makes it, in your reasonable judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct (x) insofar as they relate to
the Business, as if made immediately prior to the consummation of the Transition
and (y) insofar as they relate to the Company, as if made on and as of such
Closing Date after the consummation of the Transition and that the Company has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied hereunder on or before the Closing Date.
(c) The Underwriters shall have received a certificate, dated the Closing
Date, of an executive officer of the Selling Stockholder to the effect that the
representations and warranties of the Selling Stockholder contained in this
Agreement are true and correct (x) insofar as they relate to the Business, as if
made immediately prior to the consummation of the Transition and (y) insofar as
they relate to the Company, as if made on and as of such Closing Date after the
consummation of the Transition and that the Selling Stockholder has complied
with all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his knowledge as to proceedings threatened.
(d) You shall have received on the Closing Date, after the consummation of
the Transition, an opinion of Xxxxxx & Xxxxxx, special counsel for the Company,
dated the Closing Date, to the effect that
(i) the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware,
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and has all requisite corporate power and authority to own its property and to
conduct its business as described in the Prospectus;
(ii) the authorized capital stock of the Company conforms as to legal
matters in all material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock";
(iii) the Shares have been duly authorized and validly issued, and are fully
paid and non-assessable;
(iv) this Agreement has been duly authorized, executed and delivered by the
Company;
(v) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not result in a
violation of any provision of Federal or New York law or the General Corporation
Law of Delaware or the certificate of incorporation or by-laws of the Company
or, to such counsel's knowledge, result in a breach or violation of any term or
provision of, or constitute a default under, any agreement or other instrument
binding upon the Company that is material to the Company, or, to such counsel's
knowledge, result in a violation of any judgment, or decree of any governmental
body, agency or court, including, without limitation, the U.S. Federal Trade
Commission, having jurisdiction over the Company, and no consent, approval,
authorization or order of or qualification with any governmental body or agency
is required for the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue Sky laws of
the various states or foreign securities laws or regulations in connection with
the offer and sale of the Shares by the U.S. Underwriters;
(vi) the statements contained in the Prospectus under the captions
"Description of Capital Stock", "Shares Eligible for Future Sale" and "Certain
U.S. Federal Income Tax Considerations for Non-U.S. Holders of Common Stock," to
the extent that they constitute descriptions of statutes, rules and regulations,
have been reviewed by such counsel and constitute
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fair summaries of the provisions of the statutes, rules and regulations
purported to be summarized, and the provisions of the contracts, agreements and
instruments summarized under such captions and under the captions "The
Transition and Ongoing Relationship with First Data" and "Certain Relationships
and Related Transactions" conform in all material respects to the descriptions
thereof in the Prospectus; and
(vii) the Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
In addition, such counsel shall state that in the course of the preparation
of the Registration Statement and the Prospectus, such counsel has considered
the information set forth therein in light of the matters required to be set
forth therein and that such counsel has participated in conferences with
officers and representatives of the Selling Stockholder and the Company,
including the Company's independent public accountants, and representatives of
and counsel for the U.S. Underwriters and International Underwriters, during the
course of which the contents of the Registration Statement and the Prospectus
and related matters were discussed and, although such counsel shall not have
independently checked the accuracy or completeness of, or otherwise verified,
and accordingly are not passing upon, and shall not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as set forth in subparagraph
(vi) above), and that such counsel has relied as to materiality, to a large
extent, upon the judgement of officers and representatives of the Company, as a
result of such consideration and participation, nothing has come to the
attention of such counsel which causes such counsel to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of the date of such opinion, includes an untrue
statement of a material fact or omits 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 (except in each case such counsel need
express no comment with respect to
15
the financial statements, financial data, statistical data and supporting
schedules included in the Registration Statement or the Prospectus or statements
made in the exhibits to the Registration Statement).
In rendering such opinion, such counsel may (i) state that their opinion is
limited to the Federal laws of the United States of America, the laws of the
State of New York and the General Corporation Law of the State of Delaware, and
(ii) rely as to matters of fact upon the representations contained in this
Agreement and certificates of officers of the Company and of public officials;
provided that such counsel shall furnish copies of any such certificates to the
Representatives.
(e) You shall have received, on the Closing Date, after the consummation of
the Transition, an opinion of Xxxxxx Xxxxxx, General Counsel of the Company, to
the effect that:
(i) the Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company;
(ii) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company is a party or
to which any of the properties of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required;
(iii) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement will not result in a
violation of any provision of applicable law;
(iv) except as described in the Prospectus, to such counsel's knowledge,
there are no
16
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act;
(v) there are no preemptive or other rights to subscribe for or to
purchase, nor any restriction upon the voting or transfer of, any of the Shares
pursuant to the Company's certificate of incorporation or by-laws, and there are
no such other rights or restrictions in any agreement or other instrument to
which the Company is a party or by which the Company is bound and which is known
to such counsel;
(vi) the statements contained in the Prospectus under the caption
"Business-Regulation and Licensing", to the extent that they constitute
descriptions of statutes, rules and regulations, have been reviewed by such
counsel and constitute fair summaries of the provisions of the statutes, rules
and regulations purported to be summarized;
(vii) except as described in the Prospectus, the Company possesses all
certificates, authorizations, permits and licenses issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its
business, and, to such counsel's knowledge, the Company has not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization of 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 Company, except as described in or contemplated by the
Prospectus;
(viii) the consummation of the Transition and the execution and delivery by
the Company of, and the performance by the Company of its obligations under, the
Transition Agreements will not result in a violation of the provisions of the
certificate of incorporation or by-laws of the
17
Company or any statute, rule or regulation or any judgment, or decree of any
governmental body, agency or court, including, without limitation, the U.S.
Federal Trade Commission, having jurisdiction over the Company, or conflict with
or result in a breach or the violation of any of the terms or provisions of, or
constitute a default under, any agreement or other instrument binding upon the
Company (except for such conflicts, breaches, violations and defaults that,
individually or in the aggregate, would not have a material adverse effect on
the Company) and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under the Transition Agreements or
pursuant to the Transition (except for such consents, authorizations, orders or
qualifications that, individually or in the aggregate, would not have a material
adverse effect on the Company or the consummation of the Transition).
(ix) such counsel (1) believes that (except for financial statements,
financial data, statistical data and supporting schedules as to which such
counsel need not express any belief) the Registration Statement and the
Prospectus included therein at the time the Registration Statement became
effective did not contain any 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 and (2) believes that (except for financial
statements, financial data, statistical data and supporting schedules as to
which such counsel need not express any belief) the Prospectus does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(f) You shall have received on the Closing Date, after the consummation of
the Transition, an opinion of Xxxxxx & Xxxxxx, counsel for the Selling
Stockholder, dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and delivered by or
on behalf of the Selling Stockholder;
18
(ii) the execution and delivery by the Selling Stockholder of, and
the performance by the Selling Stockholder of its obligations under, this
Agreement will not result in a violation of any provision of Federal or New York
law, or the General Corporation Law of Delaware, or the certificate of
incorporation or by-laws of the Selling Stockholder;
(iii) Immediately prior to the consummation of the sale of the Shares
pursuant to this Agreement, (i) the Shares were owned of record by the Selling
Stockholder and (ii) such counsel has no reason to believe that the Shares were
not owned beneficially by the Selling Stockholder free and clear of any security
interests, claims, liens, equities or other encumbrances (other than those
arising under this Agreement). The Selling Stockholder has all requisite
corporate power and authority to enter into this Agreement and to sell, transfer
and deliver the Shares as contemplated by this Agreement and this Agreement has
been duly and validly executed and delivered by the Selling Stockholder; and
(iv) Upon registration of the Shares in the names of the applicable
Underwriters in the stock records of the Company, such Underwriters will,
assuming that such Underwriters are purchasing the Shares in good faith and
without notice of any adverse claim within the meaning of the Uniform Commercial
Code, as currently in effect under the laws of the State of Delaware, have
acquired all rights of the Selling Stockholder in the Shares free and clear of
any such adverse claim.
(g) You shall have received on the Closing Date, after the consummation of
the Transition, an opinion of Xxxx Xxxxxxxxx, counsel for the Selling
Shareholder, dated the Closing Date, to the effect that:
(i) the execution and delivery by the Selling Stockholder of, and the
performance by the Selling Stockholder of its obligations under, this Agreement
will not result in a violation of any agreement or other instrument binding upon
the Selling Stockholder or any of its subsidiaries, that is individually or in
the aggregate material to the Selling Stockholder or any of its subsidiaries or,
to such counsel's knowledge, any
19
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Selling Stockholder, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Selling Stockholder of its
obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states or foreign securities laws or
regulations in connection with offer and sale of the Shares;
(ii) the consummation of the Transition and the execution and delivery by
the Selling Stockholder of, and the performance by the Selling Stockholder of
its obligations under, the Transition Agreements will not result in a violation
of the provisions of the certificate of incorporation or by-laws of the Selling
Stockholder or any statute, rule or regulation or any judgment, or decree of any
governmental body, agency or court, including, without limitation, the U.S.
Federal Trade Commission, having jurisdiction over the Selling Stockholder or
any subsidiary of the Selling Stockholder, or conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument binding upon the Selling
Stockholder of any of its subsidiaries (except for such conflicts, breaches,
violations and defaults that, individually or in the aggregate, would not have a
material adverse effect on the Selling Stockholder or any of its subsidiaries)
and no consent, approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the Selling
Stockholder of its obligations under the Transition Agreements or pursuant to
the Transition (except for such consents, authorizations, orders or
qualifications that, individually or in the aggregate, would not have a material
adverse effect on the Selling Stockholder or the consummation of the Transition;
and
(iii) such counsel (1) believes that (except for financial statements,
financial data, statistical data and supporting schedules as to which such
counsel need not express any belief) the Registration Statement and the
Prospectus included therein at the time the Registration
20
Statement became effective did not contain any 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 and (2) believes that (except for
financial statements, financial data, statistical data and supporting schedules
as to which such counsel need not express any belief) the Prospectus does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(h) You shall have received on the Closing Date an opinion of Xxxxx Xxxx &
Xxxxxxxx, special counsel for the Underwriters, dated the Closing Date, in
substantially the form attached hereto.
With respect to subparagraph (ix) of paragraph (e) above, Xxxxxx
Xxxxxx may state, and with respect to subparagraph (iii) of paragraph (g) above,
Xxxx Xxxxxxxxx may state, that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification, except as
specified and accordingly such counsel are not passing upon, and shall not
assume responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus except as
set forth in subparagraph (vi) with respect to the opinion of Xxxxxx Xxxxxx.
The opinions of Xxxxxx & Xxxxxx described in paragraph (d) and (f)
above shall be rendered to you at the request of the Company and the Selling
Stockholder, and shall so state therein.
(i) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Ernst & Young, LLP, independent
public accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter delivered on
the Closing Date shall use a "cut-off date" not earlier than the date hereof.
21
(j) The Transition (as defined and described in the Prospectus) shall have
been consummated in accordance with all applicable law.
(k) The Registration Statement shall have become effective not later than
9:30 a.m. on the next business day following the date hereof.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters related to
the issuance of the Additional Shares.
VI.
1. In further consideration of the agreements of the Underwriters
herein contained, the Company covenants as follows:
(a) To furnish to you, without charge, 2 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and to file no such proposed amendment or supplement to which you
reasonably object, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering of
the Shares as in the reasonable opinion of your counsel the Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in
22
order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the reasonable
opinion of your counsel, it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service or
process in any jurisdiction or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
(e) To make generally available to the Company's security holders and to
you as soon as practicable an earning statement covering the twelve-month period
ending December 31, 1997 that satisfies the provisions of Section 11(a) of the
Securities Act and the rules and regulations of the Commission thereunder.
(f) For a period of five years following the Closing Date, to furnish to
you copies of all materials furnished by the Company to its shareholders and all
public reports and all reports and financial statements furnished by the Company
to the NYSE or the principal national securities exchange upon which the Common
Stock may be listed pursuant to requirements of or agreements with such exchange
or to the Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder.
(g) To use its best efforts to accomplish the listing of the Common Stock
on the New York Stock Exchange.
2. Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is
23
terminated, the Selling Stockholder agrees to pay or cause to be paid all
expenses incident to the performance of the obligations of the Company and the
Selling Stockholder under this Agreement, including: (i) the fees,
disbursements and expenses of the counsel and the accountants for the Company
and the Selling Stockholder in connection with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale of the Shares
under state securities laws and all reasonable expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section VI 1(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of the
Offering by the National Association of Securities Dealers, Inc., (v) all fees
and expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the NYSE, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the Offering, 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 with the prior approval of the Company, travel and lodging expense
of the representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and (ix)
all other costs and expenses incident to the perfor xxxxx of the obligations of
the Company and the Selling Stockholder hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section VII, and the third paragraph of Section IX
below, the Underwriters will
24
pay all of their costs and expenses, including fees and disbursements of their
counsel, stock transfer taxes payable on resale of any of the Shares by them,
any advertising expenses connected with any offers they may make and their costs
and expenses with respect to the "road show."
VII.
The Company and the Selling Stockholder, jointly and severally agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, to the extent hereinafter provided, any legal or other
expenses reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by any U.S. Representative, International Representative or Underwriter through
you expressly for use therein; provided, however, that the foregoing indemnity
-------- -------
agreement with respect to any preliminary prospectus or supplement thereto shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities.
25
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Stockholder, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or the Selling Stockholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, and
liabilities (including, to the extent hereinafter provided, any legal or other
expenses reasonably incurred by the Company, the Selling Stockholder, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company or the Selling
Stockholder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act in connection with defending or investigating any such
claim) arising out of or based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendment or supplement
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, if such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by any U.S. Representative, International Representative or Underwriter
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendments or supplements thereto and (ii) the failure of
such Underwriter to deliver a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) to any person to whom a copy of any preliminary prospectus (or any
supplement thereto) shall have been delivered by or on behalf of such
Underwriter and to whom Shares shall have been sold by such Underwriter, if
required by law to have been so delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have fully cured the defect giving rise to
such loss, claim, damage or liability.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to any of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the
26
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right 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 the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the reasonable fees and expenses of more than one separate
firm (other than local counsel which shall be engaged only for purposes of
appearing with such firm in such jurisdictions in which such firm is not
licensed to practice) for all Underwriters and all persons, if any, who control
any Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, (b) the reasonable fees and expenses of more
than one separate firm (other than local counsel which shall be engaged only for
purposes of appearing with such firm in such jurisdictions in which such firm is
not licensed to practice) for the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either such Section and (c) the reasonable fees and
expenses of more than one separate firm (other than local counsel which shall be
engaged only for purposes of appearing with such firm in such jurisdictions in
which such firm is not licensed to practice) for all Selling Stockholder and all
persons, if any, who control any Selling Stockholder within the meaning of
either such Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters
and such control persons of Underwriters, such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any such separate
firm for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the case
of any such separate firm for the Selling Stockholder and such controlling
persons of the Selling Stockholder, such firm shall be designated in writing by
the Selling Stockholder. The indemnifying party shall not be liable for
27
any settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first two paragraphs of
this Article VII is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholder on the one hand and the Underwriters on the
other hand in connection with the offering of the Shares shall be deemed to be
in the same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Selling Stockholder and the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Shares. The relative fault of the
Company and the Selling Stockholder on the one hand and the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to
28
information supplied by the Company and the Selling Stockholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Article VII
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
The Company, the Selling Stockholder and the Underwriters agree that
it would not be just or equitable if contribution pursuant to this Article VII
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 that does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Article VII, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Article VII are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Article
VII and the representations and warranties of the Company and the Selling
Stockholder contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Selling Stockholder or any person controlling the Selling
Stockholder, or the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
29
VIII.
This Agreement shall be subject to termination by notice given by you
to the Company, if (a) after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event singly or together with any other such
event makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
IX.
This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Article II be increased
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pursuant to this Article IX by an amount in excess of one-ninth of such number
of Shares without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Shares to be purchased on such
date, and arrangements satisfactory to you and the Company for the purchase of
such Shares are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Selling Stockholder. In any such case either you or the
Selling Stockholder shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of either the Company or the
Selling Stockholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason either the Company or the Selling
Stockholder shall be unable to perform its obligations under this Agreement, the
Company and the Selling Stockholder will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Very truly yours,
MONEYGRAM PAYMENT SYSTEMS, INC.
By_____________________________
INTEGRATED PAYMENT SYSTEMS INC.
By_____________________________
Accepted, ____________, 1996
XXXXXX XXXXXXX & CO.
INCORPORATED
XXXXXX BROTHERS INC.
XXXXXXXXXX SECURITIES
XXXXX XXXXXX INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By Xxxxxx Xxxxxxx & Co.
Incorporated
By______________________________________
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XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
XXXXXXXXXX SECURITIES
XXXXX XXXXXX INC.
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By Xxxxxx Xxxxxxx & Co. International Limited
By __________________________________________
33
