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EXHIBIT 1.1
AFFILIATED COMPUTER SERVICES, INC.
3.50% CONVERTIBLE SUBORDINATED NOTES DUE FEBRUARY 15, 2006
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PURCHASE AGREEMENT
February 15, 2001
Xxxxxxx, Xxxxx & Co.,
As representative of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Affiliated Computer Services, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Purchasers named in Schedule I hereto (the "Purchasers")
an aggregate of $300,000,000 principal amount of the Convertible Subordinated
Notes due February 15, 2006 (the "Notes"), convertible into Class A common
stock, par value $0.01 per share ("Stock"), of the Company (the "Firm
Securities") and, at the election of the Purchasers, up to an aggregate of
$50,000,000 additional aggregate principal amount of the Notes (the "Optional
Securities"). The Firm Securities and the Optional Securities which the
Purchasers elect to purchase pursuant to Section 2 hereof are herein
collectively referred to as the "Securities."
The Purchasers and other holders (including subsequent transferees) of
the Securities will be entitled to the benefits of the registration rights
agreement, to be dated the First Time of Delivery (as defined below) (the
"Registration Rights Agreement") among the Company and the Purchasers. Pursuant
to the Registration Rights Agreement, the Company will agree to file with the
United States Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein a shelf registration statement pursuant to Rule
415 under the Securities Act of 1933, as amended (the "Securities Act"),
relating to the resale of (I) Securities and (ii) the shares of Stock initially
issuable upon conversion of the Securities by the holders thereof, and to use
reasonable efforts to cause such registration statement to be declared
effective.
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1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) An offering circular, dated February 15, 2001 (the "Offering
Circular"), including the Company's Annual Report on Form 10-K (the "Form 10-K")
for the fiscal year ended June 30, 2000, excerpts from the Company's 2000 Annual
Report to Shareholders and the Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 2000, each of which are attached to and made a part
of the Offering Circular, has been prepared in connection with the offering of
the Securities and shares of the Stock issuable upon conversion thereof. Any
reference to the Offering Circular shall be deemed to refer to and include the
Form 10-K and all subsequent documents filed with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of
1934, as amended (the "Exchange Act") on or prior to the date of the Offering
Circular and any reference to the Offering Circular, as amended or supplemented,
as of any specified date, shall be deemed to include (i) any documents filed
with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange
Act after the date of the Offering Circular, and prior to such specified date
and (ii) any Additional Issuer Information (as defined in Section 5(f))
furnished by the Company prior to the completion of the distribution of the
Securities; and all documents filed under the Exchange Act and so deemed to be
included in the Offering Circular or any amendment or supplement thereto are
hereinafter called the "Exchange Act Reports". The Exchange Act Reports, when
they were or are filed with the Commission, conformed or will conform in all
material respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder. The Offering
Circular and any amendments or supplements thereto and the Exchange Act Reports
did not and will not, as of their respective dates, contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by a Purchaser
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(b) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the Offering
Circular any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular; and, since the
respective dates as of which information is given in the Offering Circular,
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries except for changes, if any, in the ordinary
course of business, in amounts outstanding under the Credit Agreement dated May
12, 2000 between the Company and Xxxxx Fargo Bank Texas, N.A., as agent for the
lenders thereunder (the "Credit Facility"), not exceeding $25 million in the
aggregate) or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Offering Circular;
(c) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Offering Circular or such as do
not materially affect the value of such property and do not interfere with the
use made and
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proposed to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries;
(d) Each of the Company and each of its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described in the
Offering Circular, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction;
and each subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation; each of the Company and each of its subsidiaries has all
requisite power and authority, and possesses and is in compliance with all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses, franchises and permits of and from all public,
regulatory or governmental agencies and bodies to own, lease and operate its
properties and conduct its business as presently conducted and as described in
the Offering Circular, with such exceptions as are not material, and no such
consent, approval, authorization, order, registration, qualification, license,
franchise or permit contains a materially burdensome restriction not adequately
disclosed in the Offering Circular;
(e) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; the shares of Stock initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Securities
and the Indenture referred to below, will be duly and validly issued, fully paid
and non-assessable and will conform to the description of the Stock contained in
the Offering Circular; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
indenture to be dated as of February 21, 2001 (the "Indenture") between the
Company and U.S. Trust Company of Texas, N.A., as Trustee (the "Trustee"), under
which they are to be issued, which will be substantially in the form previously
delivered to you; the Indenture has been duly authorized and, when executed and
delivered by the Company and the Trustee, the Indenture will constitute a valid
and legally binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles; and the Securities and the Indenture will conform to
the descriptions thereof in the Offering Circular and will be in substantially
the form previously delivered to you;
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(g) None of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation, Regulations G,
T, U, and X of the Board of Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has constituted or
which might have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in connection with the
offering of the Securities;
(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated by this
Agreement, the Registration Rights Agreement or the Indenture, except such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Purchasers;
(j) Neither the Company nor any of its subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound;
(k) The statements set forth in the Offering Circular under the
captions "Description of Notes", and "Description of Capital Stock", insofar as
they purport to constitute a summary of the terms of the Securities and the
Stock, under the caption "Summary of Certain United States Federal Income Tax
Considerations", and under the caption "Underwriting", insofar as they purport
to describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(l) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a whole;
and, to the best of the Company's knowledge, no
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such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning of
Rule 144A under the Securities Act) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system;
(n) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(o) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be an "investment company", as such term is
defined in the United States Investment Company Act of 1940, as amended (the
"Investment Company Act");
(p) Neither the Company, nor any person acting on its or their behalf
has offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities Act
or, with respect to Securities sold outside the United States to non-U.S.
persons (as defined in Rule 902 under the Securities Act), by means of any
directed selling efforts within the meaning of Rule 902 under the Securities Act
and the Company, any affiliate of the Company and any person acting on its or
their behalf has complied with and will implement the "offering restriction"
within the meaning of such Rule 902;
(q) Within the preceding six months, neither the Company nor any other
person acting on behalf of the Company has offered or sold to any person any
Securities, or any securities of the same or a similar class as the Securities,
other than Securities offered or sold to the Purchasers hereunder. The Company
will take reasonable precautions designed to insure that any offer or sale,
direct or indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Securities Act) of any Securities or any substantially
similar security issued by the Company, within six months subsequent to the date
on which the distribution of the Securities has been completed (as notified to
the Company by Xxxxxxx, Xxxxx & Co.), is made under restrictions and other
circumstances reasonably designed not to affect the status of the offer and sale
of the Securities in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the
Securities Act;
(r) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
(s) PricewaterhouseCoopers, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations of
the Commission thereunder;
(t) It is not necessary in connection with the offer, sale and delivery
of the Securities to the Purchasers, or in connection with the initial resale of
the Securities by the purchasers in accordance with this agreement, to register
the Securities under the Securities Act or to qualify an indenture under the
Trust Indenture Act of 1939, as amended;
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(u) The Company has all corporate power to enter into this Agreement
and the Registration Rights Agreement. This Agreement has been, and as of the
First Time of Delivery, the Registration Rights Agreement will have been, duly
authorized, executed and delivered by the Company; and upon such execution by
the Company (assuming the due authorization, execution and delivery of such
agreements by the other parties thereto), this Agreement and the Registration
Rights Agreement will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms;
(v) There are no persons with registration rights or other similar
rights to have any securities of the Company (other than the Securities and the
shares of Stock issuable upon conversion thereof) registered under the
Securities Act;
(w) None of the holders of outstanding shares of capital stock of the
Company and no other person has or will have any preemptive or other rights to
purchase, subscribe for or otherwise acquire (i) the shares of Stock to be
issued upon conversion of the Securities or any rights to such shares or (ii) as
a result of or in connection with the transactions contemplated by the
Indenture, this Agreement or the Registration Rights Agreement, any other
capital stock of the Company or rights thereto;
(x) Each of the Company and each of its subsidiaries possess and is in
compliance with all patents, trademarks, franchises, permits, licenses
(including without limitation all software licenses) and similar items as well
as all electronic data processing, electronic funds transfer and other
contracts, agreements, leases and arrangements necessary or material to the
conduct of its business as presently conducted or proposed to be conducted and
as described in the Offering Circular, except where failure to possess any of
the foregoing would not, singly or in the aggregate, have a material adverse
effect upon the business, prospects, properties, operations, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole; the Company has not received any notice of
infringement of or conflict with (and knows of no such infringement of or
conflict with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which could
result in any material adverse effect on the Company and its subsidiaries taken
as a whole; and except as otherwise described in the Offering Circular, neither
the Company nor any of its subsidiaries has received any notice of cancellation
of the same or any notice of proceedings relating to the revocation, suspension
or modification of any of the foregoing which, singly or in the aggregate, would
result in a material adverse change in the business, prospects, properties,
operations, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries taken as a whole, or which is required to be
disclosed in the Offering Circular;
(y) The Company and its subsidiaries have obtained any permits,
consents and authorizations required to be obtained by them under laws or
regulations relating to the protection of the environment or concerning the
handling, storage, disposal or discharge of toxic materials (collectively
"Environmental Laws"), and any such permits, consents and authorizations remain
in full force and effect. The Company and its subsidiaries are in compliance
with the Environmental Laws in all material respects, and there is no pending
or, to the Company's knowledge, threatened, action or proceeding against the
Company or its subsidiaries alleging violations of the Environmental Laws; and
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(z) The Company has received all necessary consents for the issue and
sale of the Securities as may be required under the Credit Agreement dated May
12, 2000 between the Company and Xxxxx Fargo Bank Texas, N.A., as agent for the
lenders thereunder.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Purchasers, and each of the
Purchasers agrees, severally and not jointly, to purchase from the Company, at a
purchase price of 97.5% of the principal amount thereof, plus accrued interest,
if any, from February 21, 2001 to the Time of Delivery (as defined below)
hereunder, the principal amount of Securities set forth opposite the name of
such Purchaser in Schedule I hereto, and (b) in the event and to the extent that
the Purchasers shall exercise the election to purchase Optional Securities as
provided below, the Company agrees to issue and sell to each of the Purchasers,
and each of the Purchasers agrees, severally and not jointly, to purchase from
the Company, at the same purchase price set forth in clause (a) of this Section
2, that portion of the aggregate principal amount of the Optional Securities as
to which such election shall have been exercised (to be adjusted by you so as to
eliminate denominations of less than U.S. $1,000) determined by multiplying such
aggregate principal amount of Optional Securities by a fraction, the numerator
of which is the maximum aggregate principal amount of Optional Securities which
such Purchaser is entitled to purchase as set forth opposite the name of such
Purchaser in Schedule I hereto and the denominator of which is the maximum
aggregate principal amount of Optional Securities which all of the Purchasers
are entitled to purchase hereunder.
The Company hereby grants to the Purchasers the right to purchase at
their election up to $50,000,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of securities in
excess of the aggregate principal amount of Firm Securities. Any such election
to purchase Optional Securities may be exercised by written notice from you to
the Company, given within a period of 30 calendar days from the date of this
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A;
(b) It is an institutional Accredited Investor within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act; and
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(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by the Company to
Xxxxxxx, Sachs & Co. at least forty-eight hours in advance, by causing DTC to
credit the Securities to the account of Xxxxxxx, Xxxxx & Co. at DTC. The Company
will cause the certificates representing the Securities to be made available to
Xxxxxxx, Sachs & Co. for checking at least twenty-four hours prior to the Time
of Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Securities, 9:30 a.m., New York City time, on
February 21, 2001 or such other time and date as Xxxxxxx, Xxxxx & Co. and the
Company may agree upon in writing, and, with respect to the Optional Securities,
9:30 a.m., New York City time, on the date specified by Xxxxxxx, Sachs & Co. in
the written notice given by Xxxxxxx, Xxxxx & Co. of the Underwriters' election
to purchase such Optional Securities, or such other time and date as Xxxxxxx,
Sachs & Co. and the Company may agree upon in writing. Such time and date for
delivery of the Firm Securities is herein called the "First Time of Delivery",
such time and date for delivery of the Optional Securities, if not the First
Time of Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7 hereof, will be delivered at such time and date
at the offices of Xxxxxxxx & Xxxxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, XX 00000 (the "Closing Location"), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery. A meeting will
be held at the Closing Location at 3:00 p.m., New York City time, on the New
York Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities and the shares of Stock issuable
upon conversion of the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
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to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Purchasers with three copies of the Offering
Circular and each amendment or supplement thereto signed by an authorized
officer of the Company with the independent accountants' report(s) in the
Offering Circular, and any amendment or supplement containing amendments to the
financial statements covered by such report(s), signed by the accountants, and
additional written and electronic copies thereof in such quantities as you may
from time to time reasonably request, and if, at any time prior to the
expiration of nine months after the date of the Offering Circular, any event
shall have occurred as a result of which the Offering Circular as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Offering
Circular is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement the
Offering Circular, to notify you and upon your request to prepare and furnish
without charge to each Purchaser and to any dealer in securities as many written
and electronic copies as you may from time to time reasonably request of an
amended Offering Circular or a supplement to the Offering Circular which will
correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date ninety days after the date hereof, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder any securities of
the Company that are substantially similar to the Securities, the Stock or the
Class B common stock, par value $0.01 per share, of the Company ("Class B
Stock"), including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Securities, Stock,
Class B Stock or any such substantially similar securities (other than pursuant
to employee stock option plans existing on, or upon the conversion or exchange
of convertible or exchangeable securities outstanding as of, the date of this
Agreement), without the prior written consent of Xxxxxxx, Sachs & Co; provided,
however, that the Company may issue up to 3,000,000 shares of Stock in
consideration for acquisitions of businesses occurring after the date hereof,
provided that each recipient of any such shares of Stock so issued in connection
with any such acquisition shall agree in writing for the benefit of the
Purchasers, in form and substance reasonably satisfactory to Xxxxxxx, Xxxxx &
Co., that all such shares of Stock shall remain subject to restrictions
identical to those contained in the paragraph 5(d).
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Securities Act;
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(g) If requested by you, to use its best efforts to cause such
Designated Securities to be eligible for the PORTAL trading system of the
National Association of Securities Dealers, Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), to make available to its stockholders consolidated summary
financial information of the Company and its subsidiaries for such quarter in
reasonable detail;
(i) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any securities exchange
on which the Securities or any class of securities of the Company is listed; and
(ii) such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(j) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds";
(l) To reserve and keep available at all times, free of preemptive
rights, shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities;
(m) To use its best efforts to list, subject to notice of issuance, the
shares of Stock issuable upon conversion of the Securities on the New York Stock
Exchange;
(n) Until such time as any Restricted Security (as defined in the
Indenture) or any Stock issuable upon conversion thereof is registered under the
Securities Act pursuant to the Registration Rights Agreement and transferred
pursuant to such registration, to include a legend on the Securities and the
Stock issuable upon conversion thereof to the effect set forth in the Offering
Circular under the caption "Notice to Investors"; and
(o) To give you prior notice of any transactions of a type that would
be subject to the restrictions set forth in Annex I-B, by any directors or
executive officers of the Company listed on Annex I-A, with respect to the Stock
or any other securities convertible or exchangeable or exercisable for the Stock
during the period commencing on the date hereof and ending 90 days after the
date hereof, as set forth in Annex I-B.
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6. The Company covenants and agrees with the several Purchasers that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and the shares of Stock issuable
upon conversion of the Securities and all other expenses in connection with the
preparation, printing and filing of the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any Agreement
among Purchasers, this Agreement, the Registration Rights Agreement, the
Indenture, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the cost of preparing the Securities; (vi) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities; (vii) any
cost incurred in connection with the designation of the Securities for trading
in PORTAL and the listing of the shares of Stock issuable upon conversion of the
Securities; and (viii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Purchasers will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(b) Xxxxx Xxxxx LLP, counsel for the Company, shall have furnished to
you their written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Offering Circular;
(ii) Each of ACS Enterprise Solutions, Inc. and ACS Data
Entry, Inc. have been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
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(iii) The Company has an authorized capitalization as set forth
in the Offering Circular. The shares of Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with
the provisions of the Securities and the Indenture, will be duly and
validly issued and fully paid and non-assessable, and will conform to
the description of the Stock contained in the Offering Circular;
(iv) Each of this Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by the
Company; the Registration Rights Agreement is a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights (including applicable
fraudulent transfer laws) and to general equity principles, regardless
of whether enforceability is considered in a proceeding in equity or at
law, and the discretion of the court before which any proceeding
therefor may be brought;
(v) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights (including applicable fraudulent transfer
laws) and to general equity principles, regardless of whether
enforceability is considered in a proceeding in equity or at law, and
the discretion of the court before which any proceeding therefor may be
brought; and the Securities and the Indenture conform to the
descriptions thereof in the Offering Circular;
(vi) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights (including applicable fraudulent transfer laws) and to general
equity principles, regardless of whether enforceability is considered
in a proceeding in equity or at law, and the discretion of the court
before which any proceeding therefor may be brought;
(vii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Registration Rights Agreement, the Indenture and this Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument listed in a schedule to such counsel's opinion, nor will
such actions result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries
listed in Schedule II hereto or any of their properties;
(viii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the
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Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Registration Rights Agreement or
the Indenture, except, such as may be required under the Securities Act
in connection with the shares of Stock issuable upon conversion of the
Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(ix) The statements set forth in the Offering Circular under the
captions "Description of Notes", and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, under the caption "Summary of Certain United
States Federal Income Tax Considerations", and under the caption
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(x) No registration of the Securities under the Securities Act,
and no qualification of an indenture under the United States Trust
Indenture Act of 1939 with respect thereto, is required for the offer,
sale and initial resale of the Securities by the Purchasers in the
manner contemplated by this Agreement;
(xi) Such counsel have no reason to believe that the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and other financial data therein, as to which such counsel
need express no opinion) contained as of its date or contains as of the
Time of Delivery an untrue statement of a material fact or omitted or
omits, as the case may be, to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and
(xii) The Company is not an "investment company", as such term
is defined in the Investment Company Act.
(c) Xxxxxxx X. Xxxxxxxxx, Xx., Executive Vice President and General
Counsel of the Company, shall have furnished to you his written opinion, dated
such Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) All of the issued and outstanding shares of the capital
stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and were not issued in violation
of or subject to any preemptive rights;
(ii) Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; and all of the issued and
outstanding shares of capital stock of each such subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and were not issued in violation of or subject
to any preemptive rights and (except for directors' qualifying shares
and except as otherwise set forth in the Offering Circular) are owned
directly or indirectly by the Company, free and clear of any lien,
encumbrance, claim, security interest, restriction on transfer,
shareholders' agreement, voting trust or other defect of title
whatsoever (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of
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local counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iii) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(iv) Each of the Company and each of its subsidiaries has been
duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each jurisdiction in which it
owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(v) The Company and its subsidiaries have title in fee simple to
all real property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Offering Circular or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries (in giving the opinion in
this clause, such counsel may state that no examination of record
titles for the purpose of such opinion has been made, and that they are
relying upon a general review of the titles of the Company and its
subsidiaries, upon opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or subsequent to the
time of acquisition of such property by the Company or its
subsidiaries, upon opinions of counsel to the lessors of such property
and, in respect of matters of fact, upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying upon
such opinions, abstracts, reports, policies and certificates);
(vi) To the best of such counsel's knowledge and other than as
set forth in the Offering Circular, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
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(vii) The Company and its subsidiaries possess and are in
compliance with all patents, trademarks, franchises, permits, licenses
(including without limitation all software licenses) and similar items
as well as electronic data processing, electronic funds transfer and
other contracts, agreements, leases and arrangements necessary or
material to the conduct of its business as presently conducted or
proposed to be conducted and as described in the Offering Circular,
except where failure to possess any of the foregoing would not, single
or in the aggregate, have a material adverse effect upon the business,
prospects, properties, operations, condition (financial or otherwise)
or results of operations of the Company and its subsidiaries taken as a
whole; the Company has not received any notice of infringement of or
conflict with (and knows of no such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks,
service marks, trade names, copyrights or know-how which could result
in any material adverse effect on the Company and its subsidiaries
taken as a whole; and except as otherwise described in the Offering
Circular, neither the Company nor any of its subsidiaries has received
any notice of cancellation of the same or any notice of proceedings
relating to the revocation, suspension or modification of any of the
foregoing which, singly or in the aggregate, would result in a material
adverse change in the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the
Company and its subsidiaries taken as a whole, or which is required to
be disclosed in the Offering Circular.
(viii) The Exchange Act Reports (other than the financial
statements, other financial data and related schedules therein, as to
which such counsel need express no opinion), when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Exchange Act, and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that
any of such documents, when they were so filed, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading;
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at the Time of Delivery, PricewaterhouseCoopers LLP shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or
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contemplated in the Offering Circular, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities on the terms and in the
manner contemplated in this Agreement and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Offering
Circular;
(h) The Securities have been designated for trading on PORTAL;
(i) The shares of Stock issuable upon conversion of the Securities
shall have been duly listed, subject to notice of issuance, on the Exchange; and
(j) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall 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 an untrue statement or alleged untrue statement or omission or
alleged omission made in the Offering Circular or any such amendment or
supplement in reliance upon and in conformity with
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written information furnished to the Company by any Purchaser through Xxxxxxx,
Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Offering Circular, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Offering Circular or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Purchaser
through Xxxxxxx, Sachs & Co. expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Purchasers on
the other from the offering of the Securities. If, however, the allocation
provided by the immediately
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preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Purchasers on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Purchasers, in each case
as set forth in the Offering Circular. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of
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not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Offering Circular, or in any other documents or
arrangements, and the Company agrees to prepare promptly any amendments to the
Offering Circular which in your opinion may thereby be made necessary. The term
"Purchaser" as used in this Agreement shall include any person substituted under
this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
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12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives at 00 Xxx Xxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Offering Circular, Attention:
Secretary; provided, however, that any notice to a Purchaser pursuant to Section
8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission
to such Purchaser at its address set forth in its Purchasers' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
from any Purchaser shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
17. The Company is authorized, subject to applicable law, to disclose
any and all aspects of this potential transaction that are necessary to support
any U.S. federal income tax benefits expected to be claimed with respect to such
transaction, without the Purchasers imposing any limitation of any kind.
20
21
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Affiliated Computer Services, Inc.
By: /s/ XXXXXXX X. XXXXXXXXX, XX.
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: Executive Vice President, Secretary
and General Counsel
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
By: /s/ XXXXXXX, SACHS & CO.
------------------------
(Xxxxxxx, Xxxxx & Co.)
21
22
SCHEDULE I
PRINCIPAL
AMOUNT OF
SECURITIES
TO BE
PURCHASER PURCHASED
--------- ------------
Xxxxxxx, Sachs & Co. ...................................... $240,000,000
Bear, Xxxxxxx & Co. ....................................... 60,000,000
------------
Total ............................................. $300,000,000
============
22
23
SCHEDULE II
ACS GOVERNMENT SOLUTIONS GROUP, INC.
ACS ENTERPRISE SOLUTIONS, INC.
ACS IMAGE SOLUTIONS, INC.
ACS OUTSOURCING SOLUTIONS, INC.
ACS DATA ENTRY, INC.
ACS DEFENSE INC.
23
24
ANNEX I-A
LIST OF DIRECTORS AND EXECUTIVE OFFICERS
Xxxxxx Xxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxx
Xxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxx, Xx.
Xxxxx X. Xxxxx
Xxxxxx X. X'Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxx
25
ANNEX I-B
AFFILIATED COMPUTER SERVICES, INC.
LOCK-UP AGREEMENT
FEBRUARY 15 2001
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Affiliated Computer Services, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Xxxxxxx, Sachs & Co., as
representative of the initial purchasers (the "Purchasers"), proposes to enter
into a Purchase Agreement with Affiliated Computer Services, Inc., a Delaware
corporation (the "Company"), providing for the private offering of up to
$350,000,000 (including the exercise of the Purchaser's over-allotment option)
aggregate principal amount of the Company's Convertible Subordinated Notes due
February 15, 2006 (the "Securities"), convertible into shares of Class A common
stock, par value $0.01 per share, of the Company (the "Class A Shares"),
pursuant to the Offering Circular (as defined in the Purchase Agreement).
In consideration of the agreement by the Purchasers to offer and sell
the Securities, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that, during
the period beginning from the date hereof and continuing to and including the
date 90 days after the date hereof, the undersigned will not offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any Class A Shares, any shares of Class B common stock, par
value $0.01 per share, of the Company (the "Class B Shares"), any securities
substantially similar to the Securities, the Class A Shares or the Class B
Shares, or any other securities convertible or exchangeable or exercisable for
the Class A Shares or the Class B
26
Shares, whether now owned or hereinafter acquired, owned directly by the
undersigned or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission
(collectively the "Undersigned's Shares" or "Shares"); provided, however, that
if the undersigned has completed Schedule 1 to this Lock-Up Agreement, setting
forth the undersigned's aggregate individual holdings of Class A Shares and
Class B Shares as of the date of this Lock-Up Agreement (consisting of those
Class A Shares and Class B Shares owned directly by the undersigned), then
during the period beginning on the 61st day after the date of the Offering
Circular and continuing to and including the 90th day after such date, the
undersigned may offer, sell, contract to sell or otherwise dispose of up to an
aggregate of 12.5% of his or her individual holdings of Class A Shares or Class
B Shares to the extent such Class A Shares and Class B Shares are listed in
Schedule 1 hereto.
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, or (iii) with the prior written consent of Xxxxxxx, Xxxxx & Co. For
purposes of this Lock-Up Agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
In addition, notwithstanding the foregoing, if the undersigned is a corporation,
the corporation may transfer the capital stock of the Company to any
wholly-owned subsidiary of such corporation; provided, however, that in any such
case, it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding such capital
stock subject to the provisions of this Agreement and there shall be no further
transfer of such capital stock except in accordance with this Agreement, and
provided further that, any such transfer shall not involve a disposition for
value. The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.
27
The undersigned understands that the Company and the Purchaser are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
---------------------------
Exact Name of Officer
---------------------------
Authorized Signature
---------------------------
Title
--------------------------------------------------------------------------------
SCHEDULE 1 TO THE LOCK-UP AGREEMENT
Aggregate individual holdings of Class A Shares as of the date hereof:
------------------------------------
Aggregate individual holdings of Class B Shares as of the date hereof:
------------------------------------
28
ANNEX II
Pursuant to Section 7(d) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years;
(iv) On the basis of limited procedures not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular are not in
conformity with generally accepted accounting principles
applied on the basis substantially consistent with the basis
for the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived
any unaudited condensed financial statements referred to in
clause (A) and any unaudited income statement data and balance
sheet items included in the Offering Circular and referred to
in clause (B) were not
29
determined on a basis substantially consistent with the basis
for the audited consolidated financial statements included in
the Offering Circular;
(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering Circular do not
comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior
to the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance
sheet included in the Offering Circular except in each case
for changes, increases or decreases which the Offering
Circular discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Representatives, except in each case for decreases or
increases which the Offering Circular discloses have occurred
or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
