Exhibit 6
Global Payments Inc.
6,927,755 Shares(1)
Common Stock
(no par value)
Underwriting Agreement
New York, New York
May 11, 2004
Citigroup Global Markets Inc.
CIBC World Markets Corp.
as Representatives
of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Citibank, N.A.
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Selling Stockholder named in Schedule I hereto (the "Selling
Stockholder") intends to enter into option transactions with Citibank, N.A.
relating to 6,000,000 shares of common stock, no par value ("Common Stock"),
of Global Payments Inc., a corporation organized under the laws of Georgia
(the "Company"), and intends to sell to the several underwriters named in
Schedule II hereto (the "Underwriters) 1,327,755 shares of Common Stock held
by the Selling Stockholder. The shares of Common Stock also evidence rights
(the "Rights") to purchase Series A Junior Participating Preferred Stock, no
par value, of the Company to the extent provided in the
_______________
(1) Plus an option to purchase from the Selling Stockholder up to 1,000,000
additional shares of common stock to cover over-allotments.
This agreement also relates to 400,000 additional shares of common stock to be
borrowed and sold by Citibank, N.A. in connection with hedging its exposure
under option transactions with the Selling Stockholder; the 400,000 additional
shares will not be included in the underwritten offering contemplated by this
agreement, but will be included in the prospectus to be used in connection
with the underwritten offering.
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Shareholder Protection Rights Agreement dated January 26, 2001 between the
Company and Suntrust Bank, Atlanta, as rights agent.
The Selling Stockholder and Citibank, N.A. have executed an
agreement entitled "Master Terms and Conditions for Collar Transactions
between Citibank, N.A. and CIBC Investments Ltd." dated May 11, 2004 (the
"Collar Agreement") relating to option transactions (the "Collar
Transactions") covering 6,000,000 shares of Common Stock. In connection with
hedging its exposure under the Collar Transactions, Citibank, N.A. proposes to
borrow and to sell to the several underwriters for whom Citigroup Global
Markets Inc. and CIBC World Markets Corp. are acting as representatives (the
"Representatives"), 5,600,000 shares of Common Stock (said shares to be
borrowed and sold by Citibank, N.A. being hereinafter called the "Underwritten
Hedge Securities"). The Selling Stockholder also proposes to sell to the
several Underwriters 1,327,755 shares of Common Stock (the "Underwritten
Stockholder Securities"). The Selling Stockholder also proposes to grant to
the Underwriters an option to purchase up to 1,000,000 additional shares of
Common Stock to cover over-allotments (the "Option Securities"). For purposes
of this Agreement, the term "Underwritten Securities" means the Underwritten
Hedge Securities and the Underwritten Stockholder Securities; and the term
"Securities" means the Underwritten Securities and the Option Securities.
Citibank, N.A. or its affiliates will also borrow from time to time
an additional 400,000 shares of Common Stock (the "Additional Hedge
Securities"), which Citibank, N.A. or its affiliates will sell under the
Registration Statement in connection with the Collar Transactions. The
Additional Hedge Securities will not be included in the offering of the
Securities to be underwritten by the Underwriters, and Citibank, N.A. will not
sell any Additional Hedge Securities through the underwriting syndicate formed
by the Underwriters to offer the Securities.
To the extent there are no additional Underwriters listed on
Schedule II other than Citigroup Global Markets Inc. and CIBC World Markets
Corp., the term Representatives as used herein shall mean Citigroup Global
Markets Inc. and CIBC World Markets Corp., as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as
the context requires. The use of the neuter in this Agreement shall include
the feminine and masculine wherever appropriate. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement or the issue date of the Basic Prospectus,
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any Preliminary Final Prospectus or the Final Prospectus, as the case may be,
deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 17 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
Underwriter and Citibank, N.A. as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333-113696) on Form S-3, as
amended by Post Effective Amendment No. 1, including a related basic
prospectus, for registration under the Act of the offering and sale
of the Securities and the Additional Hedge Securities. The Company
will next file with the Commission one of the following: (1) after
the Effective Date of such registration statement, a final
prospectus supplement relating to the Securities in accordance with
Rules 430A and 424(b), (2) prior to the Effective Date of such
registration statement, an amendment to such registration statement
(including the form of final prospectus supplement) or (3) a final
prospectus in accordance with Rules 415 and 424(b). In the case of
clause (1), the Company has included in such registration statement,
as amended at the Effective Date, all information (other than Rule
430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Final Prospectus. As
filed, such final prospectus supplement or such amendment and form
of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, and,
except to the extent the Representatives and Citibank, N.A. shall
agree in writing to a modification, shall be in all substantive
respects in the form furnished to the Representatives and Citibank,
N.A. prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company has
advised the Representatives and Citibank, N.A., prior to the
Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth
in Rule 415(a)(1)(i).
(b) (1) On the Effective Date, the Registration Statement
did or will, and when the Final Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date (as
defined herein) and on any date on which Option Securities are
purchased, if such date is not the Closing Date (a "settlement
date") and on any date on which a prospectus relating to the
Additional Hedge Securities is required to be delivered or a sale of
any Additional Hedge Securities is settled, if such date is not the
Closing Date (a "Hedge Prospectus Date"), the Final Prospectus (and
any supplement thereto) will,
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comply in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder;
(2) on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and (3) on the Effective Date,
the Final Prospectus, if not filed pursuant to Rule 424(b), will
not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date and any Hedge Prospectus
Date, the Final Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Final Prospectus (or
any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of
any Underwriter through the Representatives or by or on behalf of
Citibank, N.A. or by or on behalf of the Selling Stockholder,
specifically for inclusion in the Registration Statement or the
Final Prospectus (or any supplement thereto).
(c) Each of the Company and its subsidiaries has been duly
incorporated or organized and is validly existing as a corporation,
limited liability company, partnership or similar entity, as
applicable. Each of the Company and its subsidiaries is in good
standing under the laws of the jurisdiction in which it is chartered
or organized with full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its
business as described in the Final Prospectus, and is duly qualified
to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification in
each case except to the extent as would not have, or be reasonably
likely to have, a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business (a
"Material Adverse Effect") and except as set forth in or contemplated
in the Final Prospectus.
(d) All the outstanding shares of capital stock of each
subsidiary that is wholly-owned, either directly or indirectly, have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Prospectus or any supplement thereto, all outstanding shares of
capital stock of the subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest or any other security interests, claims,
liens or encumbrances in each case except to the
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extent as would not have, or be reasonably likely to have, a
Material Adverse Effect.
(e) The Company's authorized equity capitalization is as set
forth in the Final Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Final Prospectus; the outstanding shares of Common
Stock (including the Securities and Additional Hedge Securities being
sold hereunder by the Selling Stockholder and Citibank, N.A.) have
been duly and validly authorized and issued and are fully paid and
nonassessable; the Rights evidenced by the Securities and the
Additional Hedge Securities have been duly and validly authorized and
issued; the Securities, the Additional Hedge Securities and related
Rights are duly listed, and admitted and authorized for trading, on
the New York Stock Exchange, the certificates for the Securities and
the Additional Hedge Securities are in valid and sufficient form; the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Securities or the Additional Hedge Securities; and, except as set
forth in the Final Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are
outstanding.
(f) There is no contract or other document of a character
required to be described in the Registration Statement, Basic
Prospectus, Preliminary Final Prospectus, Final Prospectus or any
supplements thereto, or to be filed as an exhibit thereto, which is
not described or filed as required.
(g) The statements incorporated by reference in the Final
Prospectus under the headings "Business--Banking Regulations", "Legal
Proceedings" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Forward-Looking Results of
Operations--Airlines" from the Company's Annual Report on Form 10-K
for the year ended May 31, 2003 as modified or superceded by the
Company's subsequently filed Quarterly Reports on Form 10-Q and other
filings under the Exchange Act and the description of the Company's
Common Stock and its rights to purchase shares of Common Stock or
Series A Junior Participating Preferred Stock incorporated by
reference in the Final Prospectus from the Company's amended
Registration Statement on Form 10 insofar as such statements
summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries of such legal
matters, agreements, documents or proceedings.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
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(i) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" as defined in the Investment Company Act of 1940, as
amended.
(j) No consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Final Prospectus.
(k) Neither the consummation of any of the transactions
herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or any of its subsidiaries, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its subsidiaries or any of its or their properties, except,
with regard to (ii) and (iii) only, as would not have a material
adverse effect on the ability of the Company to satisfy its
obligations under this Agreement.
(l) No holders of securities of the Company have rights to
the registration of such securities under the Registration Statement,
except for such rights of the Selling Stockholder as have been
effectively waived or satisfied.
(m) (1) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included
in the Final Prospectus or any supplements thereto and the
Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Summary Consolidated Financial
Information" in the Preliminary Final Prospectus, Final Prospectus
and Registration Statement fairly present in all material respects,
on the basis stated in the Preliminary Final Prospectus, Final
Prospectus and the Registration Statement, the information included
therein.
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(2) The combined historical financial statements and
schedules of Certain Operations of Latin America Money Services, LLC
("LAMS") included in the Final Prospectus or any supplements thereto
and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash
flows of LAMS as of the dates and for the periods indicated, comply
as to form with the applicable accounting requirements of the Act and
have been prepared in conformity with generally accepted accounting
principles (except as otherwise noted therein).
(3) The pro forma financial statements included in the Final
Prospectus or any supplements thereto and the Registration Statement
include assumptions that provide a reasonable basis for presenting
the significant effects directly attributable to the transactions and
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma financial
statements included in the Final Prospectus or any supplements
thereto and the Registration Statement. The pro forma financial
statements included in the Final Prospectus or any supplements
thereto and the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of
Regulation S-X under the Act and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of
those statements.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property is
pending or, to the knowledge of the Company, threatened that (i)
could reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
to have a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(o) The Company and each of its subsidiaries has good and
marketable title in fee simple to all real property, and good and
marketable title to all other property owned by it, in each case free
and clear of all liens, encumbrances, claims, security interests and
defects, except such as do not and would not reasonably be expected
to have a Material Adverse Effect and except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto). All property held under lease by the Company and its
subsidiaries is held by them under valid, existing and enforceable
leases, free and clear of all liens, encumbrances, claims, security
interests and defects, except such as do not and would not reasonably
be expected to have a Material Adverse Effect and except as set forth
in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
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(p) Neither the Company nor any subsidiary is in violation
or default of (i) any provision of its charter or bylaws, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or
to which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or such subsidiary or
any of its properties, as applicable except, with regard to (ii) and
(iii) only, as would not have a Material Adverse Effect or as
disclosed in the Final Prospectus (exclusive of any amendment
thereto).
(q) (1) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(2) KPMG LLP, who have certified certain combined financial
statements of LAMS and delivered their report with respect to the
audited combined financial statements and schedules included in the
Prospectus, are independent public accountants with respect to LAMS
within the meaning of the Act and the applicable published rules and
regulations thereunder.
(r) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect and except as set forth
in or contemplated in the Final Prospectus (exclusive of any
supplement thereto)) and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in
good faith or as would not have a Material Adverse Effect and except
as set forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto).
(s) No labor proceeding, strike, or work stoppage by the
employees of the Company or any of its subsidiaries against the
Company or any of its subsidiaries exists, and, to the knowledge of
the Company, no labor problem or dispute involving the employees of
the Company or any of its subsidiaries is threatened or imminent, and
the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers, in each case that
could have a Material Adverse Effect, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement
thereto).
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(t) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged.
(u) No subsidiary of the Company that is wholly-owned,
either directly or indirectly, is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying
to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except
as described in or contemplated by the Final Prospectus (exclusive of
any supplement thereto).
(v) The Company and its subsidiaries possess all material
licenses, certificates, permits and other authorizations issued by
the appropriate federal, state or foreign governmental and regulatory
authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any notice
of proceedings relating to the revocation or modification of any such
license, certificate, permit or authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect, except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto).
(w) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(x) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities or
the Additional Hedge Securities.
(y) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii)
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have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) have not received
notice of any actual or potential liability under any environmental
law, in each case except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, and except as set forth
in or contemplated in the Final Prospectus (exclusive of any
supplement thereto). Except as set forth in the Final Prospectus
(exclusive of any supplement thereto), neither the Company nor any
of the subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
(z) The minimum funding standard under Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has
been satisfied by each "pension plan" (as defined in Section 3(2) of
ERISA) which has been established or maintained by the Company and/or
one or more of its subsidiaries, and the trust forming part of each
such plan which is intended to be qualified under Section 401 of the
Code is so qualified; each of the Company and its subsidiaries has
fulfilled its obligations, if any, under Section 515 of ERISA;
neither the Company nor any of its subsidiaries maintains or is
required to contribute to a "welfare plan" (as defined in Section
3(1) of ERISA) which provides retiree or other post-employment
welfare benefits or insurance coverage (other than "continuation
coverage" (as defined in Section 602 of ERISA)); each pension plan
and welfare plan established or maintained by the Company and/or one
or more of its subsidiaries is in compliance in all material respects
with the currently applicable provisions of ERISA; and neither the
Company nor any of its subsidiaries has incurred or could reasonably
be expected to incur any withdrawal liability under Section 4201 of
ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or
any other liability under Title IV of ERISA.
(aa) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply with any applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated
in connection therewith (the "Sarbanes Oxley Act"), including Section
402 related to loans and Sections 302 and 906 related to
certifications.
(bb) Neither the Company nor any of its subsidiaries has
taken, nor, to the knowledge of the Company, has any director,
officer, agent, employee or affiliate of the Company or any of its
subsidiaries taken any action, directly or indirectly, that would
result in a violation by such persons of the FCPA, including, without
limitation, making use of the mails or any means or instrumentality
of interstate
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commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property,
gift, promise to give, or authorization of the giving of anything of
value to any "foreign official" (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA
and the Company, its subsidiaries and, to the knowledge of the
Company, its affiliates have conducted their businesses in
compliance with the FCPA.
"FCPA" means Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
(cc) The operations of the Company are and have been, and
the operations of its subsidiaries are and to the knowledge of the
Company, have been, conducted at all times in material compliance
with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the "Money Laundering Laws") and
no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or
any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.
(dd) Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee
or affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department ("OFAC").
(ee) Except to the extent as would not reasonably be
expected to have a Material Adverse Effect and except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto), the Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Final Prospectus to be conducted. Except to the extent as would not
reasonably be expected to have a Material Adverse Effect and except
as set forth in the Final Prospectus, (a) to the Company's knowledge,
there are no rights of third parties to any such Intellectual
Property; (b) to the Company's knowledge, there is no material
infringement by third parties of any such Intellectual Property; (c)
there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the
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Company's rights in or to any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim; (d) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property,
and the Company is unaware of any facts which would form a
reasonable basis for any such claim; (e) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact which
would form a reasonable basis for any such claim; (f) to the
Company's knowledge, there is no U.S. patent or published U.S.
patent application which contains claims that dominate or may
dominate any Intellectual Property described in the Final Prospectus
or any supplements thereto as being owned by or licensed to the
Company or that interferes with the issued or pending claims of any
such Intellectual Property; and (g) there is no prior art of which
the Company is aware that may render any U.S. patent held by the
Company invalid or any U.S. patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office.
(ff) The Company's only significant subsidiaries (as defined
in Rule 1-02(w) of Regulation S-X) as of the date hereof are Global
Payments Direct, Inc., Global Payment Systems LLC and DolEx Dollar
Express, Inc. and each is wholly-owned by the Company, either
directly or indirectly.
(gg) The agreements and other documents filed as exhibits to
the Company's Annual Report on Form 10-K for the year ended May 31,
2003 or filed as an exhibit to any subsequent filing under the
Exchange Act constitute all of the outstanding material contracts of
the Company and its subsidiaries taken as a whole required to be
filed as exhibits under Item 601 of Regulation S-K.
Any certificate signed by any officer of the Company and delivered
to the Representatives, Citibank, N.A., counsel for the Underwriters or
counsel for Citibank, N.A. in connection with the offering of the Securities
or the Additional Hedge Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter
and Citibank, N.A.
(ii) The Selling Stockholder represents and warrants to, and agrees
with, each Underwriter that:
(a) The Selling Stockholder is the record and beneficial
owner of the Underwritten Stockholder Securities and the Option
Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and, assuming that each
Underwriter acquires its interest in the Underwritten Stockholder
Securities and any Option Securities it has purchased from the
Selling Stockholder without notice of any adverse claim (within the
meaning of
13
Section 8-105 of the New York Uniform Commercial Code ("UCC")), each
Underwriter that has purchased such Underwritten Stockholder
Securities or such Option Securities delivered on the Closing Date
or a settlement date, as the case may be, to The Depository Trust
Company or other securities intermediary by making payment therefor
as provided herein, and that has had such Underwritten Stockholder
Securities or such Option Securities, as the case may be, credited
to the securities account or accounts of such Underwriters
maintained with The Depository Trust Company or such other
securities intermediary will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC) to such
Underwritten Stockholder Securities or such Option Securities
purchased by such Underwriter.
(b) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(c) The Selling Stockholder has not taken, directly or
indirectly, any action designed to or that would constitute or that
would be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities to
be sold by the Selling Stockholder.
(d) No consent, approval, authorization or order of any
court or governmental agency or body is required for the sale of the
Underwritten Stockholder Securities and the Option Securities by the
Selling Stockholder hereunder and the compliance by the Selling
Stockholder with the provisions of this Agreement, except (i) such as
may have been obtained under the Act, (ii) such as may be required
under the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Underwritten Stockholder Securities
and the Option Securities by the Underwriters, (iii) such as may
relate to the review of the transaction by the National Association
of Securities Dealers, Inc. (the "NASD"), (iv) such other approvals
as have been obtained or (v) such consent, approval, authorization or
order where the failure to obtain such consent, approval,
authorization or order would not have a material adverse effect on
the ability of the Selling Stockholder to sell the Underwriter
Stockholder Securities and Option Securities pursuant to or otherwise
satisfy its obligations under this Agreement.
(e) Neither the sale of the Underwritten Stockholder
Securities or the Option Securities by the Selling Stockholder
hereunder nor the compliance by the Selling Stockholder with the
provisions of this Agreement will conflict with, result in a breach
or violation of, or constitute a default under any law to which the
Selling Stockholder is subject or the charter or by-laws of the
Selling Stockholder or the terms of any indenture or other agreement
or instrument to
14
which the Selling Stockholder or any of its subsidiaries is a party
or bound, or any judgment, order or decree applicable to the Selling
Stockholder or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Stockholder or any of its
subsidiaries, except for any such conflict, breach or violation that
would not have a material adverse effect on the ability of the
Selling Stockholder to sell the Underwritten Stockholder Securities
and the Option Securities pursuant to or otherwise satisfy its
obligations under this Agreement.
(f) In respect of any statements in or omissions from the
Registration Statement, or the Final Prospectus or any supplements
thereto made in reliance upon and in conformity with information
furnished in writing to the Company by the Selling Stockholder
specifically for use in connection with the preparation thereof
(which includes only the statements set forth under the section
"Selling Shareholder" in the prospectus supplement forming part of
the Final Prospectus except for (i) the fourth sentence of the first
paragraph and (ii) the second paragraph of that section), the Selling
Stockholder hereby makes the same representations and warranties to
each Underwriter as the Company makes to such Underwriter under
paragraphs (i)(b)(2) and (i)(b)(3) of this Section.
Any certificate signed by any officer of the Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Selling Stockholder, as to matters covered thereby, to each
Underwriter.
(iii) The Selling Stockholder represents and warrants to, and agrees
with Citibank, N.A. that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(b) The Selling Stockholder has not taken, directly or
indirectly, any action designed to or that would constitute or that
would be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities to be sold by the Selling Stockholder.
(c) No consent, approval, authorization or order of any
court or governmental agency or body is required to be obtained by
or on behalf of the Selling Stockholder for consummation by the
Selling Stockholder of its agreements with Citibank, N.A.
contemplated herein or for the sale by Citibank, N.A. of the
Underwritten Hedge Securities or the Additional Hedge Securities
contemplated hereby, except (i) such as may have been obtained under
the Act, (ii) such as may be required under the blue sky laws of any
jurisdiction in
15
connection with the purchase and distribution of the Underwritten
Hedge Securities by the Underwriters and the distribution of the
Additional Hedge Securities by Citibank, N.A., (iii) such as relate
to the review of the transaction by the NASD, (iv) such other
approvals as have been obtained or (v) such consent, approval,
authorization or order where the failure to obtain such consent,
approval, authorization or order would not have a material adverse
effect on the ability of Citibank, N.A. to sell the Underwritten
Hedge Securities and Additional Hedge Securities as contemplated
hereby.
(d) Neither the sale of the Underwritten Hedge Securities or
Additional Hedge Securities contemplated hereby nor the compliance by
the Selling Stockholder with the provisions of this Agreement or the
fulfillment of the terms hereof by the Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law to which the Selling Stockholder is subject or
the charter or by-laws of the Selling Stockholder or the terms of any
indenture or other agreement or instrument to which the Selling
Stockholder or any of its subsidiaries is a party or bound, or any
judgment, order or decree applicable to the Selling Stockholder or
any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Selling Stockholder or any of its subsidiaries, except for any such
conflict, breach or violation that would not have a material adverse
effect on the ability of Citibank, N.A. to sell the Underwritten
Hedge Securities and the Additional Hedge Securities as contemplated
hereby; it being understood that the Selling Stockholder makes no
representation or warranty as to whether such sale of the
Underwritten Hedge Securities or Additional Hedge Securities
conflicts with any law to which Citibank, N.A. is subject.
(e) In respect of any statements in or omissions from the
Registration Statement, or the Final Prospectus or any supplements
thereto made in reliance upon and in conformity with information
furnished in writing to the Company by the Selling Stockholder
specifically for use in connection with the preparation thereof
(which includes only the statements set forth under the section
"Selling Shareholder" in the prospectus supplement forming part of
the Final Prospectus except for (i) the fourth sentence of the first
paragraph and (ii) the second paragraph of that section), the Selling
Stockholder hereby makes the same representations and warranties to
Citibank, N.A. as the Company makes to the Underwriters under
paragraphs (i)(b)(2) and (i)(b)(3) of this Section.
Any certificate signed by any officer of the Selling Stockholder and
delivered to Citibank, N.A. or counsel for Citibank, N.A. in connection with
the offering of the Securities shall be deemed a representation and warranty
by the Selling Stockholder, as to matters covered thereby, to Citibank, N.A.
16
(iv) Citibank, N.A. represents and warrants to, and agrees with,
each Underwriter that:
(a) Assuming that each Underwriter acquires its interest in the
Underwritten Hedge Securities it has purchased from Citibank, N.A. without
notice of any adverse claim (within the meaning of Section 8-105 of the New
York Uniform Commercial Code ("UCC")), each Underwriter that has purchased the
Underwritten Hedge Securities delivered on the Closing Date to The Depository
Trust Company or other securities intermediary by making payment therefor as
provided herein, and that has had such Underwritten Hedge Securities credited
to the securities account or accounts of such Underwriters maintained with The
Depository Trust Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of Section 8-102(a)(17) of
the UCC) to such Underwritten Hedge Securities purchased by such Underwriter,
and no action based on an adverse claim (within the meaning of Section 8-102
of the UCC) may be asserted against such Underwriter with respect to such
Underwritten Hedge Securities.
(b) This Agreement has been duly authorized, executed and delivered
by or on behalf of Citibank, N.A.
(c) Citibank, N.A. has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Underwritten Hedge Securities.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by Citibank, N.A.
of the transactions contemplated herein, except (i) such as may have been
obtained under the Act, (ii) such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters, (iii) such as may relate to the review of the
transaction by the NASD, (iv) such other approvals as have been obtained or
(v) such consent, approval, authorization or order where the failure to obtain
such consent, approval, authorization or order would not have a material
adverse effect on the ability of Citibank, N.A. to sell the Underwritten Hedge
Securities or otherwise satisfy its obligations under this Agreement.
(e) Neither the sale of the Underwritten Hedge Securities by nor the
consummation of any other of the transactions herein contemplated by Citibank,
N.A. or the fulfillment of the terms hereof by Citibank, N.A. will conflict
with, result in a breach or violation of, or constitute a default under any
law to which Citibank, N.A. is subject or the charter or by-laws of Citibank,
N.A. or the terms of any indenture or other agreement or instrument to which
Citibank, N.A. or any of its subsidiaries is a party or bound, or any
judgment, order or decree applicable to Citibank, N.A. or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator
17
having jurisdiction over Citibank, N.A. or any of its subsidiaries, except for
any such conflict, breach or violation that would not have a material adverse
effect on the ability of Citibank, N.A. to sell the Underwritten Hedge
Securities under this Agreement.
(f) In respect of any statements in or omissions from the
Registration Statement, or the Final Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in writing
to the Company by Citibank, N.A. specifically for use in connection with the
preparation thereof (which includes only (i) the last paragraph on the cover
page regarding the Additional Hedge Securities, (ii) the fourth sentence of
the first paragraph and the second paragraph set forth under the section
"Selling Shareholder" and (iii) the first two paragraphs under "Offering by
Citigroup Global Markets Inc." set forth under the section "Plan of
Distribution" in each case in the prospectus supplement forming part of the
Preliminary Final Prospectus and the Final Prospectus), Citibank, N.A. hereby
makes the same representations and warranties to each Underwriter and the
Company as the Company makes to such Underwriter and Citibank, N.A. under
paragraphs (i)(b)(2) and (i)(b)(3) of this Section.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Selling
Stockholder agrees to sell to the Underwriters, and the Underwriters agree,
severally and not jointly, to purchase from the Selling Stockholder, at a
purchase price of $42.48 per share, the aggregate number of Underwritten
Stockholder Securities set forth opposite the Selling Stockholder's name in
Schedule II hereto. The Underwriters shall purchase the total number of
Underwritten Shares to be sold by the Selling Stockholder severally and not
jointly, ratably in proportion to the number of Underwritten Securities set
forth opposite the names of the Underwriters in Schedule II hereto, subject to
such adjustments as the Representatives in their absolute discretion shall
make to eliminate any fractional shares.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, Citibank, N.A. agrees to sell
to the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from Citibank, N.A., at a purchase price of $42.48 per share, the
Underwritten Hedge Securities. The Underwriters shall purchase the
Underwritten Hedge Securities, severally and not jointly, ratably in
proportion to the number of Underwritten Securities set forth opposite the
names of the Underwriters in Schedule II hereto, subject to such adjustments
as the Representatives in their absolute discretion shall make to eliminate
any fractional shares.
(c) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholder
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to 1,000,000 shares of Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten Securities.
Said option may be exercised only to cover over-allotments in the sale of the
Underwritten Securities by the Underwriters. Said option
18
may be exercised in whole or in part at any time on or before the 30th day
after the date of the Prospectus upon written or telegraphic notice by the
Representatives to the Selling Stockholder setting forth the number of shares
of the Option Securities as to which the several Underwriters are exercising
the option and the settlement date. The maximum number of Option Securities
which the Selling Stockholder agrees to sell is set forth in Schedule I
hereto. The number of Option Securities to be purchased by each Underwriter
from the Selling Stockholder on any settlement date shall be, calculated
ratably in proportion to the number of Underwritten Securities set forth
opposite the names of the Underwriters in Schedule II hereto, subject to such
adjustments as the Representatives in their absolute discretion shall make to
eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for
in Section 2(c) hereof shall have been exercised on or before the third
Business Day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on May 17, 2004, or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement among the
Representatives, the Selling Stockholder (in the case of Underwritten
Stockholder Securities or Option Securities) and Citibank, N.A. (in the case
of Underwritten Hedge Securities) or as provided in Section 10 hereof (such
date and time of delivery and payment for the Purchased Securities being
herein called the "Closing Date"). Delivery of the Underwritten Securities
shall be made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the
Representatives of the respective aggregate purchase prices of the
Underwritten Securities being sold by the Selling Stockholder and Citibank,
N.A., to or upon the order of the Selling Stockholder and Citibank, N.A. by
wire transfer payable in same-day funds to the accounts specified by the
Selling Stockholder and Citibank, N.A. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
The Selling Stockholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from the Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved
in further transfers. The Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters
of the Underwritten Hedge Securities from Citibank, N.A. and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(c) hereof is exercised after
the third Business Day prior to the Closing Date, the Selling Stockholder will
deliver the Option Securities (at the expense of the Selling Stockholder) to
the Representatives, at 388
00
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Selling Stockholder by wire
transfer payable in same-day funds to the accounts specified by the Selling
Stockholder. If settlement for the Option Securities occurs after the Closing
Date, the Selling Stockholder will deliver to the Representatives on the
settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon
receipt of, supplemental opinions, certificates and letters confirming as of
such date the opinions, certificates and letters delivered on the Closing Date
pursuant to Section 6 hereof.
4. Offering. It is understood that the several Underwriters propose
to offer the Securities, and that Citibank, N.A. and its affiliates propose to
offer the Additional Hedge Securities, for sale to the public as set forth in
the Preliminary Final Prospectus and Final Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters and Citibank,
N.A. that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination
of the offering of the Securities and the Additional Hedge
Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus
or any Preliminary Final Prospectus) to the Basic Prospectus or any
Rule 462(b) Registration Statement unless the Company has furnished
you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Final Prospectus is otherwise required under Rule
424(b), the Company will cause the Final Prospectus, properly
completed, and any supplement thereto to be filed in a form
reasonably approved by the Representatives and Citibank, N.A. with
the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives and Citibank, N.A. of such
timely filing. The Company will promptly advise the Representatives
and Citibank, N.A. (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2)
when the Final Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule 424(b)
or when any Rule 462(b) Registration Statement shall
20
have been filed with the Commission, (3) when, prior to termination
of the offering of the Securities or the Additional Hedge
Securities, any amendment to the Registration Statement shall have
been filed or become effective, (4) of any request by the Commission
or its staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to the
Final Prospectus or for any additional information, (5) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities or the Additional Hedge Securities is required to be
delivered under the Act, any event occurs as a result of which the
Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1)
notify the Representatives and Citibank, N.A. of such event, (2)
prepare and file with the Commission, subject to the second sentence
of paragraph (i)(a) of this Section 5, an amendment or supplement
which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Final Prospectus to you
in such quantities as you may reasonably request; provided, however,
that the Final Prospectus shall not be available for delivery to
purchasers of the Securities or the Additional Hedge Securities from
and after May 28, 2004 until the Company has publicly announced its
earnings for the fiscal year ended May 31, 2004 and thereafter
during any period beginning two weeks before the end of each fiscal
quarter of the Company and ending on the second business day
following the Company's earnings release for the applicable quarter.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives and Citibank, N.A. an earnings statement or
statements of the Company and its subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) The Company will furnish to the Representatives,
Citibank, N.A., counsel for the Underwriters and counsel for
Citibank, N.A., without charge,
21
signed copies of the Registration Statement (including exhibits
thereto) and to each other Underwriter copies of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter, dealer or Citibank, N.A. may be
required by the Act, as many copies of each Preliminary Final
Prospectus and the Final Prospectus and any supplement thereto as
the Representatives or Citibank, N.A. may reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities and the Additional Hedge Securities
for sale under the laws of such jurisdictions as the Representatives
or Citibank, N.A. may designate, and will maintain such
qualifications in effect so long as required for the distribution of
the Securities and the Additional Hedge Securities; provided that in
no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to
sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise)
by the Company or by any affiliate of the Company or by any person
in privity with the Company or any affiliate of the Company)
directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Exchange Act, any other shares of Common Stock
or any securities convertible into, or exercisable, or exchangeable
for, shares of Common Stock; or publicly announce an intention to
effect any such transaction, for a period of 60 days after the date
of the Underwriting Agreement, provided, however, that (1) the
Company may issue and sell Common Stock pursuant to any long-term
incentive plan, 401(k) plan, employee stock option plan, or stock
ownership plan of the Company in effect at the Execution Time or
pursuant to any dividend reinvestment plan of the Company in effect
at the Execution Time or subsequently adopted, (2) the Company may
issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time and (3) the
Company may issue and sell Common Stock as consideration in
connection with a bona fide acquisition or acquisitions by the
Company (whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise) involving a third party that is not
affiliated with the Company, provided that, prior to any such
issuance(s) under clause (3) above, (i) the Company shall have
provided the Underwriters with written notice of such
22
issuance(s) and (ii) the recipients of Common Stock in such
issuance(s) agree in writing to be bound by the restrictions set
forth in this paragraph for the remainder of such 60-day period.
(g) The Company will comply with all applicable securities
and other applicable laws, rules and regulations, including, without
limitation, the Sarbanes Oxley Act, and use its commercially
reasonable efforts to cause the Company's directors and officers, in
their capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of the
Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or the Additional Hedge Securities.
(i) The Company agrees to cause the chief financial
officer and the general counsel of the Company to participate in
weekly telephonic due diligence sessions with representatives of
Citibank, N.A. and their counsel until the last Hedge Prospectus
Date.
(j) The Company agrees that so long as a prospectus
relating to the Additional Hedge Securities is required to be
delivered by Citibank, N.A., on each date after the Closing Date on
which the Registration Statement or Final Prospectus is amended or
supplemented and at least quarterly after the Closing Date at least
once during each of the Company's fiscal quarters ending August 31,
2004 and November 30, 2004, to deliver, or cause to be delivered, to
Citibank, N.A., supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters
delivered on the Closing Date pursuant to Section 6 hereof of Xxxxxx
& Bird, Deloitte & Touche LLP and officers of the Company; provided
that no supplemental opinions, certificates and letters shall be
required from and after May 28, 2004 until the Company has publicly
announced its earnings for the fiscal year ended May 31, 2004 and
thereafter during any period beginning two weeks before the end of
each fiscal quarter of the Company and ending on the second business
day following the Company's earnings release for the applicable
quarter.
(k) The Company agrees to pay the costs and expenses
relating to the following matters: (i) the preparation and filing
(other than the filing fee) with the Commission of the Registration
Statement (including the financial statements and exhibits thereto)
and any amendments thereto, each Preliminary Final Prospectus, the
Final Prospectus and each amendment or supplement to any of them,
(ii) the
23
fees and expenses of the Company's accountants, (iii) the fees and
expenses of the accountants for LAMS and (iv) the fees and expenses
of counsel (including local and special counsel) for the Company.
(ii) The Selling Stockholder agrees with the several Underwriters
and Citibank, N.A. that:
(a) The Selling Stockholder will not, without the prior
written consent of Citigroup Global Markets Inc., offer, sell,
contract to sell, pledge or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise)
by the Selling Stockholder or any affiliate of the Selling
Stockholder directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act, any shares of Common
Stock or any securities convertible into, or exercisable or
exchangeable for, shares of Common Stock, or publicly announce an
intention to effect any such transaction, for a period of 60 days
after the date of this Agreement, other than (1) sales of Securities
under this Agreement, (2) the Collar Transactions, (3) shares of
Common Stock disposed of as bona fide gifts approved by Citigroup
Global Markets Inc., and (4) brokerage, trading, market making,
investment management, fiduciary or other banking activities of the
Selling Stockholder and its affiliates in the ordinary course for
their own accounts or the accounts of their customers.
(b) The Selling Stockholder will not take, directly or
indirectly, any action designed to or that would constitute or that
would be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities or
the Additional Hedge Securities.
(c) The Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities or the Additional
Hedge Securities is required under the Act, of any material change in
information in the Registration Statement or the Final Prospectus
relating to the Selling Stockholder.
(d) The Selling Stockholder agrees that so long as a
prospectus relating to the Additional Hedge Securities is required to
be delivered by Citibank, N.A., on each date after the Closing Date
on which the Registration Statement or Final Prospectus is amended or
supplemented (other than by the filing with the Commission of a
document which is incorporated by reference therein) after the
24
Closing Date and at least once during each of the Company's fiscal
quarters ending August 31, 2004 and November 30, 2004, to deliver, or
cause to be delivered, to Citibank, N.A., supplemental opinions,
certificates and letters confirming as of such date the opinions,
certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof of Xxxxx Xxxxxx (except that Xx. Xxxxxx shall not be
required to confirm the opinions set forth in Section 6(e)(i),
Section 6(e)(ii) or Section 6(e)(iii)), Xxxxxxx Xxxxxxx & Xxxxxxxx
LLP (except that Xxxxxxx Xxxxxxx & Xxxxxxxx LLP shall not be required
to confirm the opinion set forth in Section 6(d)(i) or 6(d)(ii)) and
officers of the Selling Stockholder; provided that no supplemental
opinions, certificates and letters shall be required from and after
May 28, 2004 until the Company has publicly announced its earnings
for the fiscal year ended May 31, 2004 and thereafter during any
period beginning two weeks before the end of each fiscal quarter of
the Company and ending on the second business day following the
Company's earnings release for the applicable quarter.
(e) The Selling Stockholder agrees to pay the costs and
expenses relating to the fees and expenses of counsel (including
local and special counsel) for the Selling Stockholders.
(iii) Citibank, N.A. agrees with the several Underwriters that it
will advise the Representatives promptly, and if requested by the
Representatives, will confirm such advice in writing, so long as delivery of a
prospectus relating to the Securities or the Additional Hedge Securities is
required under the Act, of any material change in information in the
Registration Statement or the Final Prospectus relating to Citibank, N.A.
(iv) The Underwriters agree to pay the costs and expenses relating
to the following matters:
(a) the filing fee payable to the Commission in connection
with the filing of the Registration Statement; (b) the printing (or
reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the
Registration Statement, each Preliminary Final Prospectus, the Final
Prospectus, and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; and (c) any filings
required to be made with the National Association of Securities
Dealers, Inc. (including reimbursement of filing fees previously
paid by a designated affiliate of the Selling Stockholder in
connection with the transaction contemplated hereby and payment of
the reasonable fees and expenses of counsel for the Underwriters and
counsel for Citibank, N.A. relating to such filings).
25
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities shall
be subject to the accuracy of the representations and warranties on the part
of the Company, the Selling Stockholder and Citibank, N.A. contained herein as
of the Execution Time and the Closing Date, to the accuracy of the statements
of the Company, the Selling Stockholder and Citibank, N.A. made in any
certificates pursuant to the provisions hereof, to the performance by the
Company, the Selling Stockholder and Citibank, N.A. of their respective
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date
of determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or
(ii) 9:30 AM on the Business Day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 PM New York City time on such date; if filing of the
Final Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Final Prospectus, and any such supplement, will be
filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Xxxxxx &
Bird LLP, counsel for the Company, to have furnished to the
Representatives and Citibank, N.A. their opinion, dated the Closing
Date and addressed to the Representatives and Citibank, N.A., to the
effect that:
(i) the Company has been duly incorporated and
has full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct
its business as described in the Final Prospectus; each of
the Company and Global Payments Direct, Inc., Global
Payment Systems LLC and DolEx Dollar Express, Inc.
(individually a "Subsidiary" and collectively the
"Subsidiaries") is validly existing as a corporation or
limited liability company in good standing under the laws
of the jurisdiction in which it is chartered or organized
and is duly qualified to do business as a foreign
corporation or limited liability company and is in good
standing under the laws of each jurisdiction which
requires such qualification;
(ii) the Company's authorized equity
capitalization and the capital stock of the Company
conforms in all material respects to the description
thereof contained in the Final Prospectus; the
Underwritten Stockholder
26
Securities, the Option Securities and the other
outstanding shares of Common Stock issued to the Selling
Stockholder have been duly and validly authorized and
issued and are fully paid and nonassessable; the Rights
evidenced by the Securities and the Additional Hedge
Securities have been duly and validly authorized and
issued; the Securities, the Additional Hedge Securities
and related Rights are duly listed, and admitted and
authorized for trading, on the New York Stock Exchange;
and the holders of outstanding shares of capital stock of
the Company are not entitled to preemptive or other rights
to subscribe for the Securities or the Additional Hedge
Securities;
(iii) to the knowledge of such counsel, there is
no pending or threatened action, suit or proceeding by or
before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its
subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement
which is not adequately disclosed in the Final Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as
required;
(iv) the description of the Company's Common
Stock and its rights to purchase shares of Common Stock or
Series A Junior Participating Preferred Stock as contained
in the Company's amended Registration Statement on Form 10
insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein,
are accurate and fair summaries of such legal matters,
agreements, documents or proceedings;
(v) the Registration Statement has become
effective under the Act; any required filing of the Basic
Prospectus, any Preliminary Final Prospectus and the Final
Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened and the
Registration Statement and the Final Prospectus (other
than the financial statements and other financial and
statistical information contained therein, as to which
such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules
thereunder;
27
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
(vii) the Company is not an "investment company"
as defined in the Investment Company Act of 1940, as
amended;
(viii) no consent, approval, authorization,
filing with or order of any court or governmental agency
or body is required by the Company in connection with the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters and the distribution of the Additional Hedge
Securities by Citibank, N.A. in the manner contemplated in
this Agreement and in the Final Prospectus and such other
approvals (specified in such opinion) as have been
obtained;
(ix) neither the consummation of any of the
transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or
violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or
its subsidiaries pursuant to, (i) the charter or by-laws
of the Company or the Subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or
its subsidiaries is a party or bound or to which its or
their property is subject, that has been filed or
incorporated by reference as an exhibit to the Company's
Annual Report on Form 10-K for the year ended May 31, 2003
or any subsequent filing under the Exchange Act, in each
case that is material to the Company and its subsidiaries,
taken as a whole, or (iii) any statute, law, rule,
regulation, judgment, order or decree, which, to the
knowledge of such counsel, is applicable to the Company or
its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or
its subsidiaries or any of its or their properties; and
(x) no holders of securities of the Company,
other than the Selling Stockholder, have rights to the
registration of such securities under the Registration
Statement.
In addition, such counsel shall confirm that it has no reason to
believe that on the Effective Date or the date the Registration
Statement was last deemed amended or at the Execution Time, the
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein
28
or necessary to make the statements therein not misleading or that
the Final Prospectus as of its date or on the Closing Date included
or includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (in each case, other than the financial
statements and other financial and statistical information contained
therein, as to which such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
States of Georgia or New York or the Federal laws of the United
States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for
the Underwriters and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company
and public officials. References to the Final Prospectus in this
paragraph (b) shall also include any supplements thereto at the
Closing Date.
(c) The Company shall have requested and caused Xxxxxxx
Xxxxxx, General Counsel of the Company, to have furnished to the
Representatives and Citibank, N.A. her opinion, dated the Closing
Date and addressed to the Representatives and Citibank, N.A., to the
effect that:
(i) the statements incorporated by reference in
the Final Prospectus under the headings "Legal
Proceedings" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -
Forward-Looking Results of Operations - Airlines", from
the Company's Form 10-K for the fiscal year ended May 31,
2003 as modified or superceded by the Company's
subsequently filed Quarterly Reports on Form 10-Q and
other filings under the Exchange Act, insofar as such
statements summarize legal matters or proceedings
discussed therein, are accurate and fair summaries of such
legal matters or proceedings; and
(ii) except as set forth in the Final
Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Georgia or the Federal laws of the United States, to the
extent she deems proper and specified in such opinion, upon the
opinion of other counsel of good standing whom she
29
believes to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent she deems
proper, on certificates of responsible officers of the Company and
public officials. References to the Final Prospectus in this
paragraph (b) shall also include any supplements thereto at the
Closing Date.
(d) The Selling Stockholder shall have requested and
caused Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, U.S. counsel for the Selling
Stockholder, to have furnished to the Representatives and Citibank,
N.A. their opinion dated the Closing Date and addressed to the
Representatives and Citibank, N.A., to the effect that (except for
the opinion furnished to the Representatives, which need not address
opinion (iii) below):
(i) assuming that (A) the Depository Trust
Company ("DTC") is a "securities intermediary" as defined
in Section 8-102 of the Uniform Commercial Code of New
York (the "New York UCC"), and the State of New York is
the "securities intermediary's jurisdiction" of DTC for
purposes of Section 8-110 of the New York UCC, (B) the
Underwritten Stockholder Securities and the Option
Securities are registered in the name of DTC or its
nominee, (C) DTC indicates by book entries on its books
that security entitlements with respect to the
Underwritten Stockholder Securities and the Option
Securities have been credited to the Underwriters'
securities accounts, (D) the Selling Stockholder has full
power, right and authority to sell the Underwritten
Stockholder Securities and the Option Securities to be
sold by the Selling Stockholder, and (E) each Underwriter
acquires its interest in the Underwritten Stockholder
Securities or Option Securities without notice of any
adverse claim (within the meaning of Section 8-502 of the
New York UCC), upon the payment and transfer contemplated
by this Agreement each Underwriter will have acquired a
security entitlement (within the meaning of Section
8-102(a)(17) of the UCC) to such Securities purchased by
such Underwriter, and no action based on an adverse claim
(within the meaning of Section 8-105 of the UCC) may be
asserted against such Underwriter with respect to such
Securities;
(ii) no consent, approval, authorization or
order of any federal or New York governmental agency or
body, or, to such counsel's knowledge, any Federal or New
York court is required to be obtained by or on behalf of
the Selling Stockholder for the sale of the Underwritten
Stockholder Securities and the Option Securities by the
Selling Stockholder to the Underwriters pursuant to this
Agreement and the compliance by the Selling Stockholder
with all of the provisions of this Agreement, except (v)
such as may have been obtained under the Act, (w) such as
may be
30
required under the blue sky laws of any jurisdiction in
connection with the purchase and/or distribution of the
Underwritten Stockholder Securities and the Option
Securities by the Underwriters, (x) such as may relate to
the review of the transaction by the NASD, (y) such other
approvals as have been obtained and (z) such consent,
approval, authorization or order where the failure to
obtain such consent, approval, authorization or order
would not have a material adverse effect on the ability of
the Selling Stockholder to sell the Underwritten
Stockholder Securities and the Option Securities pursuant
to or otherwise satisfy its obligations under this
Agreement; and
(iii) no consent, approval, authorization or
order of any federal or New York governmental agency or
body, or to such counsel's knowledge, any Federal or New
York court is required to be obtained by or on behalf of
the Selling Stockholder for the compliance by the Selling
Stockholder with its agreements with Citibank, N.A.
contemplated herein or for the sale by Citibank, N.A. of
the Underwritten Hedge Securities or the Additional Hedge
Securities contemplated hereby, except (v) such as may
have been obtained under the Act, (w) such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the
Underwritten Hedge Securities by the Underwriters and the
distribution of the Additional Hedge Securities by
Citibank, N.A., (x) such as relate to the review of the
transaction by the NASD, (y) such other approvals as have
been obtained or (z) such conflict, breach or violation
that would not have a material adverse effect on the
ability of Citibank, N.A. to sell the Underwritten Hedge
Securities and Additional Hedge Securities as contemplated
hereby.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of New York or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters,
and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Selling Stockholder and
public officials.
(e) The Selling Stockholder shall have requested and
caused Xxxxx Xxxxxx, the Assistant General Counsel of the Canadian
Imperial Bank of Commerce, to have furnished to the Representatives
and Citibank, N.A. his opinion dated the Closing Date and addressed
to the Representatives and Citibank, N.A., to the effect that
(except for the opinion furnished to the Representatives, which need
not address opinions (iv) and (v) below):
31
(i) this Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling
Stockholder and the Selling Stockholder has full legal
right and authority to sell, transfer and deliver in the
manner provided in this Agreement the Securities being
sold by the Selling Stockholder to the Underwriters
pursuant to this Agreement;
(ii) no consent, approval, authorization or
order of any Canadian governmental agency or body, or, to
our knowledge, any Canadian court is required to be
obtained by or on behalf of the Selling Stockholder for
the sale of the Underwritten Stockholder Securities and
the Option Securities by the Selling Stockholder to the
Underwriters pursuant to this Agreement and the compliance
by the Selling Stockholder with all of the provisions of
this Agreement, except (i) such as may have been obtained
under the Act, (ii) such as may be required under the blue
sky laws of any jurisdiction in connection with the
purchase and distribution of the Underwritten Stockholder
Securities and the Option Securities by the Underwriters,
(iii) such as may relate to the review of the transaction
by the National Association of Securities Dealers, Inc.
(the "NASD"), (iv) such other approvals as have been
obtained or (v) such consent, approval, authorization or
order where the failure to obtain such consent, approval,
authorization or order would not have a material adverse
effect on the ability of the Selling Stockholder to sell
the Underwriter Stockholder Securities and Option
Securities pursuant to or otherwise satisfy its
obligations under this Agreement;
(iii) neither the sale of the Securities being
sold by the Selling Stockholder hereunder nor the
compliance by the Selling Stockholder with the provisions
of this Agreement will conflict with, result in a breach
or violation of, or constitute a default under any
Canadian federal law or law of the Province of Ontario to
which the Selling Stockholder is subject or the charter or
By-laws of the Selling Stockholder or the terms of any
indenture or other agreement or instrument known to such
counsel and to which the Selling Stockholder is a party or
bound, or any judgment, order or decree known to such
counsel to be applicable to the Selling Stockholder of any
court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over
the Selling Stockholder, except for any such conflict,
breach or violation that would not have a material adverse
effect on the ability of the Selling Stockholder to sell
the Securities pursuant to or otherwise satisfy its
obligations under this Agreement;
(iv) no consent, approval, authorization or
order of any Canadian governmental agency or body, or to
my knowledge, any Canadian court is
32
required to be obtained by or on behalf of the Selling
Stockholder for consummation by the Selling Stockholder of
its agreements with Citibank, N.A. contemplated herein or
for the sale by Citibank, N.A. of the Underwritten Hedge
Securities or the Additional Hedge Securities contemplated
hereby, except (i) such as may have been obtained under
the Act, (ii) such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase
and distribution of the Underwritten Hedge Securities by
the Underwriters and the distribution of the Additional
Hedge Securities by Citibank, N.A., (iii) such as relate
to the review of the transaction by the NASD, (iv) such
other approvals as have been obtained or (v) such consent,
approval, authorization or order where the failure to
obtain such consent, approval, authorization or order
would not have a material adverse effect on the ability of
Citibank, N.A. to sell the Underwritten Hedge Securities
and Additional Hedge Securities as contemplated hereby;
and
(v) neither the sale of the Underwritten Hedge
Securities or Additional Hedge Securities contemplated
hereby nor the compliance by the Selling Stockholder with
the provisions of this Agreement or the fulfillment of the
terms hereof by the Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a
default under any Canadian federal law or law of the
Province of Ontario to which the Selling Stockholder is
subject or the charter or by-laws of the Selling
Stockholder or the terms of any indenture or other
agreement or instrument known to such counsel to which the
Selling Stockholder is a party or bound, or any judgment,
order or decree applicable known to such counsel to be
applicable to the Selling Stockholder of any court,
regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Selling
Stockholder, except such conflict, breach or violation
that would not have a material adverse effect on the
ability of Citibank, N.A. to sell the Underwritten Hedge
Securities and Additional Hedge Securities as contemplated
hereby; it being understood that the Selling Stockholder
makes no representation or warranty as to whether such
sale of the Underwritten Hedge Securities or Additional
Hedge Securities conflicts with any law to which Citibank,
N.A. is subject.
(f) Citibank, N.A. shall have requested and caused Xxxxxx
Xxxxxxxxxxx, Managing Director and Legal Counsel of Citibank, N.A.,
to have furnished to the Representatives such counsel's opinion
dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) this Agreement has been duly authorized,
executed and delivered by Citibank, N.A. and Citibank,
N.A. has full legal right and
33
authority to sell, transfer and deliver in the manner
provided in this Agreement the Securities being sold by
Citibank, N.A. hereunder;
(ii) assuming that each Underwriter acquires its
interest in the Underwritten Hedge Securities it has
purchased from Citibank, N.A. without notice of any
adverse claim (within the meaning of Section 8-105 of the
UCC), each Underwriter that has purchased such
Underwritten Hedge Securities delivered on the Closing
Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided
herein, and that has had such Underwritten Hedge
Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust
Company or such other securities intermediary, will have
acquired a security entitlement (within the meaning of
Section 8-102(a)(17) of the UCC) to such Underwritten
Hedge Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of
Section 8-102 of the UCC) may be asserted against such
Underwriter with respect to such Underwritten Hedge
Securities;
(iii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation by Citibank, N.A. of the
transactions contemplated herein, except (i) such as may
have been obtained under the Act, (ii) such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and/or distribution of the
Underwritten Hedge Securities by the Underwriters and the
distribution of the Additional Hedge Securities, (iii)
such as may relate to the review of the transaction by the
NASD, or (iv) such consent, approval, authorization or
order where the failure to obtain such consent, approval,
authorization or order would not have a material adverse
effect on the ability of Citibank, N.A. to sell the
Underwritten Hedge Securities or otherwise satisfy its
obligations under this Agreement; and
(iv) neither the sale of the Underwritten Hedge
Securities being sold by Citibank, N.A. nor the
consummation of any other of the transactions herein
contemplated by Citibank, N.A. or the fulfillment of the
terms hereof by Citibank, N.A. will conflict with, result
in a breach or violation of, or constitute a default under
any law to which Citibank, N.A. is subject or the charter
or By-laws of Citibank, N.A. or the terms of any indenture
or other agreement or instrument known to such counsel and
to which Citibank, N.A. is a party or bound, or any
judgment, order or decree known to such counsel to be
applicable to Citibank, N.A. of any court, regulatory
body, administrative agency, governmental body or
34
arbitrator having jurisdiction over Citibank, N.A., except
for any such conflict, breach or violation that would not
have a material adverse effect on the ability of Citibank,
N.A. to sell the Underwritten Hedge Securities under this
Agreement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of New York or the Federal laws of the United States, to the
extent he deems proper and specified in such opinion, upon the
opinion of other counsel of good standing whom he believes to be
reliable and who are satisfactory to counsel for the Underwriters,
and (B) as to matters of fact, to the extent he deems proper, on
certificates of responsible officers of Citibank, N.A. and public
officials.
(g) The Representatives and Citibank, N.A. shall have
received from Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters
and Citibank, N.A., such opinion or opinions, dated the Closing Date
and addressed to the Representatives and Citibank, N.A., with
respect to the Registration Statement, the Final Prospectus
(together with any supplement thereto) and other related matters as
the Representatives and Citibank, N.A. may reasonably require, and
the Company, the Selling Stockholder and Citibank, N.A. shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(h) The Company shall have furnished to the
Representatives and Citibank, N.A. a certificate of the Company,
signed by the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final
Prospectus, any supplements to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct on and as
of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
(iii) since the date of the most recent
financial statements included or incorporated by reference
in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse effect on the
35
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(i) The Selling Stockholder shall have furnished to the
Representatives and Citibank, N.A. a certificate, signed by an
authorized officer of the Selling Stockholder, dated the Closing
Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement only with respect to
information relating to the Selling Stockholder and that the
representations and warranties of the Selling Stockholder in this
Agreement are true and correct in all material respects on and as of
the Closing Date to the same effect as if made on the Closing Date.
(j) Citibank, N.A. shall have furnished to the
Representatives a certificate, signed by an authorized officer of
Citibank, N.A., dated the Closing Date, to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Prospectus, any supplement to the Prospectus and this
Agreement only with respect to information relating to Citibank,
N.A. and that the representations and warranties of Citibank, N.A.
in this Agreement are true and correct in all material respects on
and as of the Closing Date to the same effect as if made on the
Closing Date.
(k) The Company shall have requested and caused Deloitte &
Touche LLP to have furnished to the Representatives and Citibank,
N.A., at the Execution Time and on the Closing Date, letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives and Citibank,
N.A., confirming that they are independent accountants within the
meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission
thereunder and that they have performed a review of the unaudited
interim financial information of the Company for the three-month
periods ended August 31, 2002 and 2003, November 30, 2002 and 2003
and February 29, 2003 and 2004 and the six-month periods ended
November 30, 2002 and 2003 and the nine-month periods ended February
29, 2003 and 2004 and as at August 31, 2003, November 30, 2003 and
February 29, 2004, in accordance with Statement on Auditing
Standards No. 100, and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement
and the Final Prospectus and reported on by them
36
comply as to form in all material respects with the
applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted
by the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its subsidiaries; their limited review, in
accordance with standards established under Statement on
Auditing Standards No. 100, of the unaudited interim
financial information for the three-month periods ended
August 31, 2002 and 2003, November 30, 2002 and 2003 and
February 29, 2003 and 2004, and the six-month periods
ended November 30, 2002 and 2003 and the nine-month
periods ended February 29, 2003 and 2004 and as at August
31, 2003, November 30, 2003 and February 29, 2004,
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings of
the shareholders, directors and audit committee of the
Company; and inquiries of certain officials of the Company
who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to
transactions and events subsequent to May 31, 2003,
nothing came to their attention which caused them to
believe that:
(1) any unaudited financial statements
included or incorporated by reference (other
than pro forma financial statements which need
not be addressed) in the Registration Statement
and the Final Prospectus do not comply as to
form in all material respects with applicable
accounting requirements of the Exchange Act and
with the related rules and regulations adopted
by the Commission with respect to financial
statements included or incorporated by reference
in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or
incorporated by reference in the Registration
Statement and the Final Prospectus;
(2) with respect to the period
subsequent to February 29, 2004, there were any
changes, at a specified date not more than three
days prior to the date of the letter, in the
long-term liabilities of the Company and its
subsidiaries or capital stock of the Company as
compared with the amounts shown on the February
29, 2004, consolidated balance sheet included or
incorporated by
37
reference in the Registration Statement and the
Final Prospectus, or for the period from
February 29, 2004 to such specified date there
were any decreases, as compared with the
corresponding period in the preceding year in
revenues of the Company and its subsidiaries,
except in all instances for changes or decreases
set forth in such letter, in which case the
letter shall be accompanied by an explanation by
the Company as to the significance thereof
unless said explanation is not deemed necessary
by the Representatives;
(3) the information included or
incorporated by reference in the Registration
Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial
Data) and Item 302 (Supplementary Financial
Information) is not in conformity with the
applicable disclosure requirements of Regulation
S-K; and
(iii) they have performed certain other
specified procedures as a result of which they determined
that certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and
the Final Prospectus and in Exhibit 12 to the Registration
Statement, including the information set forth under the
caption "Summary Consolidated Financial Information" in
the Final Prospectus, the information included or
incorporated by reference in Items 1, 2, 6, 7 and 11 of
the Company's Annual Report on Form 10-K, incorporated by
reference in the Registration Statement and the Final
Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q, incorporated by reference in the
Registration Statement and the Final Prospectus, any
Current Reports on Form 8-K or Form 8-K/A incorporated by
reference in the Registration Statement and the Final
Prospectus agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this
paragraph (k) include any supplement thereto at the date
of the letter.
(l) The Company shall have requested and caused KPMG LLP
to have furnished to the Representatives and Citibank, N.A., at the
Execution Time and on the Closing Date, letters, dated respectively
as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representatives and
38
Citibank, N.A., confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the
respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of LAMS for the nine-month
period ended September 30, 2003 and as at September 30, 2003, in
accordance with Statement on Auditing Standards No. 100, and stating
in effect that:
(i) in their opinion the audited combined
financial statements and financial statement schedules
included or incorporated by reference in the Registration
Statement and the Final Prospectus and reported on by them
comply as to form in all material respects with the
applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted
by the Commission; and
(ii) on the basis of a reading of the latest
unaudited financial statements made available by LAMS and
its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing
Standards No. 100, of the unaudited interim financial
information for the nine-month periods ended September 30,
2003 and 2002, and as at September 30, 2003, carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the stockholders
and directors of LAMS and certain of its subsidiaries; and
inquiries of certain officials of LAMS who have
responsibility for financial and accounting matters of the
LAMS and its subsidiaries as to transactions and events
subsequent to December 31, 2002, nothing came to their
attention which caused them to believe that (a) any
unaudited financial statements included or incorporated by
reference in the Registration Statement and the Final
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the
Act and the Exchange Act and the related rules and
regulations adopted by the Commission as they apply to
Form 8-K; and (b) said unaudited financial statements are
not in conformity with generally accepted accounting
principles with that of the audited financial statements
included or incorporated by reference in the Registration
Statement and the Final Prospectus.
References to the Final Prospectus in this paragraph (l)
include any supplement thereto at the date of the letter.
39
(m) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred
to in paragraph (k) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto) the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives or Citibank, N.A., so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Final Prospectus (exclusive of any supplement thereto).
(n) Prior to the Closing Date, the Company, the Selling
Stockholder and Citibank, N.A. shall have furnished to the
Representatives and Citibank, N.A. such further information,
certificates and documents as the Representatives or Citibank, N.A.
may reasonably request.
(o) At the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form
of Exhibit A hereto from each Section 16 reporting officer and
director of the Company addressed to the Representatives and
Citibank, N.A.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives,
Citibank, N.A., counsel for the Underwriters and counsel for Citibank, N.A.,
this Agreement and all obligations of the Underwriters hereunder may be
canceled at, or at any time prior to, the Closing Date by the Representatives
and Citibank, N.A. Notice of such cancelation shall be given to the Company
and the Selling Stockholder in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters
and Citibank, N.A., at 000 Xxxxxxxxx Xxx., Xxx Xxxx, XX 00000, on the Closing
Date.
40
The obligations of the Underwriters to purchase the Option
Securities shall be subject to the delivery to the Representatives on any
settlement date pursuant to Section 3 hereof of such documents as the
Representatives may reasonably request with respect to the good standing of
the Company and other matters related to the transfer of the Option Securities
to the Underwriters.
7. Conditions to the Obligations of Citibank, N.A. and the Selling
Stockholder. (a) The obligations of Citibank, N.A. to sell the Underwritten
Hedge Securities to the Underwriters shall be subject to the condition that
the Collar Transactions have not been terminated prior to the Closing Date.
(b) The obligations of (i) Citibank, N.A. to sell the Underwritten
Hedge Securities to the Underwriters and (ii) the Selling Shareholder to sell
the Underwritten Stockholder Securities to the Underwriters, are mutually
conditioned upon the sale by the other seller of the respective Securities to
the Underwriters.
If any of the conditions specified in this Section 7 shall not have
been fulfilled, this Agreement and all obligations of Citibank, N.A. and the
Selling Stockholder hereunder to sell the Securities may be cancelled at, or
any time prior to, the Closing Date by Citibank, N.A. or the Selling
Stockholder. Notice of such cancellation shall be given to the Company and the
Underwriters in writing or by telephone or facsimile confirmed in writing.
8. Reimbursement of Underwriters' and Citibank, N.A.'s Expenses. (a)
If the sale of the Securities provided for herein is not consummated because
any condition to the obligations of the Underwriters set forth in Sections
6(a), (b), (c), (h), (k), (l), (m)(i), (n) (as it relates to the Company only)
or (o) hereof is not satisfied or because of any refusal, inability or failure
on the part of the Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Selling
Stockholder, the Underwriters or Citibank, N.A., the Company will reimburse
the Underwriters severally through Citigroup Global Markets Inc. on demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Underwitten Stockholder Securities.
If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Sections 6(d), (e), (i) or (n) (as it relates to the Selling Stockholder only)
hereof is not satisfied, because of any termination pursuant to Section 11
hereof, or because of any refusal, inability or failure on the part of the
Selling Stockholder to perform any agreement herein or comply with any
provision hereof other than by reason of a default by any of the Company, the
Underwriters or Citibank N.A., the Selling Stockholder will reimburse the
Underwriters severally through Citigroup Global Markets Inc. on demand for all
out-of-pocket
41
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale
of the Underwritten Stockholder Securities.
If the sale of the Securities provided for herein is not consummated
because the condition to the obligations of the Underwriters set forth in
Section 6(m)(ii) is not satisfied because of events occurring (i) on or before
May 17, 2004, the Company will reimburse the Underwriters severally through
Citigroup Global Markets Inc. on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Underwritten Stockholder Securities, or (ii) after May 17, 2004, the Selling
Stockholder will reimburse the Underwriters severally through Citigroup Global
Markets Inc. on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Underwritten Stockholder
Securities.
If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Sections 6(f) or (j) hereof is not satisfied, or because of any refusal,
inability or failure on the part of Citibank, N.A. to perform any agreement
herein or comply with any provision hereof other than by reason of a default
by any of the Underwriters, the Company or the Selling Stockholder, Citibank,
N.A. will reimburse the Underwriters severally through Citigroup Global
Markets Inc. on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Underwritten Stockholder
Securities.
Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company and the Selling
Stockholder agree to pay or cause to be paid all costs and expenses allocated
to them in Section 5 hereof.
(b) If the sale of the Underwritten Hedge Securities provided for
herein is not consummated because any condition to the obligations of
Citibank, N.A. set forth in Section 7 hereof is not satisfied (as such
conditions relate to the Selling Stockholder), because of any termination
pursuant to Section 11 hereof or because of any refusal, inability or failure
on the part of the Selling Stockholder to perform any agreement herein or
comply with any provision hereof other than by reason of a default by any of
the Underwriters or Citibank, N.A., the Selling Stockholder will reimburse
Citibank, N.A. on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the Collar Transactions and the proposed purchase and sale of
the Underwritten Hedge Securities.
42
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the Selling Stockholder and
Citibank, N.A., the directors, officers, employees and agents of each
Underwriter, the Selling Stockholder and Citibank, N.A. and each person who
controls any Underwriter, the Selling Stockholder or Citibank, N.A. within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities and Additional Hedge Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives, by the
Selling Stockholder or by Citibank, N.A. specifically for inclusion therein,
as specified in clauses (b), (c) and (d) below. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) The Selling Stockholder agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter, Citibank, N.A., the directors,
officers, employees and agents of each Underwriter and Citibank, N.A. and each
person who controls the Company, any Underwriter or Citibank, N.A. within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, the Selling
Stockholder and Citibank, N.A., but only with reference to written information
relating to the Selling Stockholder furnished to the Company by or on behalf
of the Selling Stockholder specifically for inclusion in the documents
referred to in the foregoing indemnity, subject to clause (g) below. Each of
the Underwriters, Citibank, N.A. and the Company acknowledge that the
statements set forth under the section "Selling Shareholder" in the prospectus
supplement forming part of the Preliminary Final Prospectus and the Final
Prospectus except for (i) the fourth sentence of the first paragraph and (ii)
the second paragraph of that section constitute the only information furnished
in writing by or on behalf of the Selling Stockholder for inclusion in the
43
Preliminary Final Prospectus or Final Prospectus. This indemnity agreement
will be in addition to any liability which the Selling Stockholder may
otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors and officers who signs
the Registration Statement, Citibank, N.A., the Selling Stockholder, the
directors, officers, employees and agents of Citibank, N.A. and the Selling
Stockholder and each person who controls the Company, Citibank, N.A. or the
Selling Stockholder within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, the Selling Stockholder and Citibank, N.A., but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company, Citibank, N.A. and the
Selling Stockholder acknowledge that the statements set forth in (i) the
second sentence of the penultimate paragraph of the cover page regarding
delivery of the Securities and (ii) under the heading "Plan of Distribution",
(1) the sentences related to concessions and reallowances and (2) the
paragraph related to stabilization, syndicate covering transactions and
penalty bids in each case in the prospectus supplement forming part of the
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for inclusion in any Preliminary Final Prospectus or the Final Prospectus.
(d) Citibank, N.A. agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter, the Selling Stockholder, the
directors, officers, employees and agents of each Underwriter and of the
Selling Stockholder and each person who controls the Company, the Selling
Stockholder or any Underwriter within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company
to each Underwriter, the Selling Stockholder and Citibank, N.A., but only with
reference to written information relating to Citibank, N.A. furnished to the
Company by Citibank, N.A. specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability which Citibank, N.A. may otherwise have. The Company, the
Underwriters and the Selling Stockholder acknowledge that (i) the last
paragraph on the cover page regarding the Additional Hedge Securities, (ii)
the fourth sentence of the first paragraph and the second paragraph set forth
under "Selling Shareholder" and (iii) the first two paragraphs under "Offering
by Citigroup Global Markets Inc." set forth under the caption "Plan of
Distribution" in each case in the prospectus supplement forming part of any
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by Citibank, N.A. for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
44
(e) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b), (c) or (d) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a), (b), (c) or (d) above.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent
the indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall
be satisfactory to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified party in an
action, the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(f) In the event that the indemnity provided in paragraph (a), (b),
(c) or (d) of this Section 9 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company, the Selling
Stockholder, the Underwriters and Citibank, N.A. agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company, the Selling Stockholder,
45
one or more of the Underwriters and Citibank, N.A. may be subject in such
proportion as is appropriate to reflect the relative faults of the
indemnifying person, on the one hand, and the indemnified person or persons,
on the other hand, in connection with the matter giving rise to such Losses.
Relative fault shall be determined by reference to, among other things,
whether any untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company, the Selling Stockholder, the Underwriters or
Citibank, N.A., the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Selling Stockholder, the Underwriters and Citibank,
N.A. agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (f), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person who
controls an Underwriter within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of an Underwriter shall
have the same rights to contribution as such Underwriter, each person who
controls Citibank, N.A. within the meaning of either the Act or the Exchange
Act and each director, officer, employee and agent of Citibank, N.A. shall
have the same rights to contribution as Citibank, N.A., each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement
and each director, officer, employee and agent of the Company shall have the
same rights to contribution as the Company, and each person who controls the
Selling Stockholder within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of the Selling Stockholder
shall have the same rights to contribution as the Selling Stockholder, subject
in each case to the applicable terms and conditions of this paragraph (f).
(g) The liability of the Selling Stockholder under the Selling
Stockholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 9
shall be limited to an amount equal to the net proceeds received from the
Selling Stockholder from the Securities sold by the Selling Stockholder to the
Underwriters and the Underwritten Hedge Securities sold by Citibank, N.A. to
the Underwriters to hedge the Collar Transactions. The Company and the Selling
Stockholder may agree, as between themselves and without limiting the rights
of the Underwriters under this Agreement, as to the respective amounts of such
liability for which they each shall be responsible.
10. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters
46
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of Securities set forth opposite their names in
Schedule II hereto bears to the aggregate amount of the Underwritten
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the aggregate amount of
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of the Securities
set forth in Schedule II hereto, the remaining Underwriters shall have the
right to purchase all, but shall not be under any obligation to purchase any,
of the Securities and if such nondefaulting Underwriters do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter, Citibank, N.A., the Selling Stockholder or the
Company. In the event of a default by any Underwriter as set forth in this
Section 10, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any,
to the Company, the Selling Stockholder and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives or Citibank, N.A., by notice
given to the Company prior to delivery of and payment for the Securities, if
at any time prior to such time (i) trading in the Company's Common Stock shall
have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities or (iii) there shall have occurred any outbreak
or escalation of hostilities, declaration by the United States of a national
emergency or war, or other calamity or crisis the effect of which on financial
markets is such as to make it, in the sole judgment of the Representatives or
Citibank, N.A., impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Prospectus (exclusive
of any supplement thereto).
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers, of the Selling Stockholder and of the
Underwriters and of Citibank, N.A. set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, Citibank, N.A., the
Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 9 hereof, and
will survive delivery of and payment for the Securities, the Settlement Date
or Cash Settlement Payment Date, as the case may be, as defined in the Collar
Agreement, and the delivery
47
of and payment for any Additional Hedge Securities. The provisions of Sections
8 and 9 hereof shall survive the termination or cancelation of this Agreement.
13. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: General Counsel; or, if sent to Citibank, N.A., will be
mailed, delivered or telefaxed to Citibank, N.A., c/o Citigroup Global Markets
Inc. General Counsel (fax no.: (000) 000-0000)) and confirmed to the General
Counsel, Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attention: General Counsel); or, if sent to the Company, will be
mailed, delivered or telefaxed to Global Payments, Inc. and confirmed to it at
00 Xxxxxxxx Xxxxxxx, Xxxxx Xxxxx, Xxxxxxx, XX 00000, attention of the Legal
Department; or if sent to the Selling Stockholder, will be mailed, delivered
or telefaxed and confirmed to it at the address set forth in Schedule I
hereto.
14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 9 hereof, and no other person will have any right or obligation
hereunder.
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
16. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated
thereunder.
"Basic Prospectus" shall mean the prospectus referred to
in paragraph 1(a) above contained in the Registration Statement at
the Effective Date including any Preliminary Final Prospectus.
48
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New
York City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that was first filed pursuant to Rule
424(b) after the Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of
the Final Prospectus, together with the Basic Prospectus.
"Registration Statement" shall mean the registration
statement referred to in paragraph 1(i)(a) above, including exhibits
and financial statements, as amended at the Execution Time (or, if
not effective at the Execution Time, in the form in which it shall
become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement,
as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer
to such rules under the Act.
"Rule 430A Information" shall mean information with
respect to the Securities and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A.
49
"Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the registration
statement referred to in Section 1(a) hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholder, the several Underwriters and
Citibank, N.A.
Very truly yours,
Global Payments Inc.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman, President, CEO
CIBC Investments Limited
By: /s/ Xxxxx Xxx
------------------------------
Name: Xxxxx Xxx
Title: President
2
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
CIBC World Markets Corp.
By: Citigroup Global Markets Inc.
By: /s/ Xxxxxx X. Xxxx Xx.
---------------------------
Name: Xxxxxx X. Xxxx Xx.
Title: Managing Director
For themselves and the other
several Underwriters named in
Schedule II to the foregoing
Agreement.
Citibank, N.A.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Authorized Representative
SCHEDULE I
Number of Underwritten Maximum Number of Option
Selling Stockholders: Securities to be Sold Securities to be Sold
-------------------- ---------------------- -------------------------
CIBC Investments Limited 1,327,755 1,000,000
c/o CIBC Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
fax: (000) 000 0000..............
SCHEDULE II
Number of
Underwritten
Securities to be
Underwriters Purchased
------------ ---------
Citigroup Global Markets Inc............................... 2,424,715
CIBC World Markets Corp. .................................. 2,424,714
Credit Suisse First Boston LLC............................. 554,220
Xxxxxx Xxxxxxx & Co. Incorporated.......................... 554,220
UBS Securities LLC......................................... 554,220
SunTrust Capital Markets, Inc.............................. 207,833
Xxxxxx Xxxxxx Partners LLC................................. 207,833
----------
Total 6,927,755
[Form of Lock-Up Agreement] EXHIBIT A
[Letterhead of officer or director of Global Payments Inc.]
Global Payments Inc.
Public Offering of Common Stock
, 2004
Citigroup Global Markets Inc.
CIBC World Markets Corp.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among Global
Payments Inc., a Georgia corporation (the "Company"), each of Citigroup Global
Markets Inc. and CIBC World Markets Corp. as representatives (the
"Representatives") of a group of Underwriters named therein and Citibank,
N.A., relating to an underwritten public offering of Common Stock, no par
value (the "Common Stock"), of the Company.
In order to induce the Representatives, the other Underwriters and
Citibank, N.A. to enter into the Underwriting Agreement, the undersigned will
not, without the prior written consent of Citigroup Global Markets Inc.,
offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into
any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or any
affiliate of the undersigned or any person in privity with the undersigned or
any affiliate of the undersigned), directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the
Securities and Exchange Commission in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder with respect to, any shares of
capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 60 days after the
date of the Underwriting Agreement, other than (i) shares of Common Stock
disposed of as bona fide gifts approved by Citigroup Global Markets Inc. or
(ii) sales made with the prior written consent of Citigroup Global Markets
Inc.
2
If for any reason the Underwriting Agreement shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of officer or director]
[Name and address of officer or director]
