1
EXHIBIT 1.1
AFFILIATED COMPUTER SERVICES, INC.
4,025,000 SHARES OF CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
February __, 1999
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
PRUDENTIAL SECURITIES INCORPORATED,
As Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Affiliated Computer Services, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation,
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC and Prudential Securities Incorporated are acting as
representatives (the "Representatives"), 3,500,000 newly issued shares (the
"Firm Shares") of Class A Common Stock, par value $.01 per share, of the Company
(the "Common Stock"). In addition, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, ▇▇▇▇▇▇ ▇▇▇▇▇▇ or
an entity owned or controlled by ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Selling Stockholder"),
proposes to issue and sell to the Underwriters, at the option of the
Underwriters, up to an additional 525,000 shares of Common Stock, which 525,000
additional shares of Common Stock to be purchased at the option of the
Underwriters are referred to herein as the "Additional Shares." The Firm Shares
and any Additional Shares purchased by the Underwriters are herein referred to
as the "Shares." References herein to the "Stock" mean the Common Stock and the
Company's Class B Common Stock, par value $.01 per share. The Shares are more
fully described in the Registration Statement and the Prospectus hereinafter
mentioned.
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1. Representations and Warranties of the Company and the
Selling Stockholder.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-3 (No. 333-______),
for the registration of the Shares under the Securities Act of 1933, as
amended (the "Act"). Such registration statement, including all
documents incorporated by reference therein, the prospectus, financial
statements and schedules, exhibits and all other documents filed as a
part thereof, as amended at the time of effectiveness of the
registration statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of
Rule 430A or Rule 434 of the Rules and Regulations of the Commission
under the Act (the "Regulations"), and any registration statement filed
pursuant to Rule 462(b) of the Regulations with respect to the Shares
is herein called the "Registration Statement," and the prospectus
(including any prospectus subject to completion meeting the
requirements of Rule 434(b) of the Regulations provided by the Company
with any term sheet meeting the requirements of such Rule 434(b) as the
prospectus provided to meet the requirements of Section 10(a) of the
Act), including all documents incorporated by reference therein, in the
form first filed with the Commission pursuant to Rule 424(b) of the
Regulations or filed as part of the Registration Statement at the time
of effectiveness if no such Rule 424(b) filing is required, is herein
called the "Prospectus." The term "preliminary prospectus" as used
herein means each preliminary prospectus included in the above
referenced Registration Statement before it is declared effective as
described in Rule 430 of the Regulations. Any reference in this
Agreement to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be, and any reference to
any amendment or supplement to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended, and the applicable published rules
and regulations of the Commission thereunder (collectively, the
"Exchange Act") which, upon filing, are incorporated by reference
therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents or
portions thereof which at the time are incorporated by reference in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendment or supplement thereof. The Registration Statement is
effective under the Act, and no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof
has been issued and no proceedings therefor have been initiated or, to
the best knowledge of the Company, threatened by the Commission.
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(ii) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the
Commission and at the Closing Date, and the Additional Closing Date, if
any (as hereinafter respectively defined), the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto
complied or will comply in all material respects with the applicable
provisions of the Act and the Regulations and do not or will not
contain an untrue statement of a material fact and do not or will not
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein (i) in the case of
the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in the light of the circumstances under which they were
made, not misleading. When any related preliminary prospectus was first
filed with the Commission (whether filed as part of the Registration
Statement for the registration of the Shares or any amendment thereto
or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus and any amendments thereof and supplements
thereto complied in all material respects with the applicable
provisions of the Act and the Regulations and did not contain an untrue
statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. No representation and warranty is made in
this subsection (a), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or any
related preliminary prospectus or any amendment thereof or 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 expressly for use in connection with the
preparation thereof. Any term sheet and prospectus subject to
completion provided by the Company to the Underwriters for use in
connection with the offering and sale of the Shares pursuant to Rule
434 of the Regulations together are not materially different from the
last preliminary prospectus included in the Registration Statement at
the time of its effectiveness (exclusive of any information deemed to
be a part thereof by virtue of Rule 434(d) of the Regulations).
The Incorporated Documents heretofore filed with the
Commission, when they were filed (or, if any amendment with respect to
any such document was filed, when such amendment was filed), complied
in all material respects with the applicable provisions of the Exchange
Act, and any further Incorporated Documents so filed will, when they
are filed, comply in all material respects with the applicable
provisions of the Exchange Act; no such document when it was filed (or,
if an amendment with respect to any such document was filed, when such
amendment was filed) contained an untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and
no such further document, when it is filed, will contain an 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.
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(iii) Pricewaterhouse Coopers LLP, who has certified certain
financial statements and supporting schedules of the Company and its
subsidiaries, and Ernst & Young LLP, who has certified certain
financial statements and supporting schedules of ACS Government
Solutions Group, Inc., formerly known as Computer Data Systems, Inc.,
are and were each independent public accountants as required by the Act
and the Regulations. All references to "subsidiaries" in this Agreement
shall include, without limitation, BRC Holdings, Inc.
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has been no material adverse change or any development involving
a prospective material adverse change in the business, prospects,
properties, operations, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of
business, and since the date of the latest balance sheet presented in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company
and its subsidiaries taken as a whole, except for liabilities or
obligations which are reflected in the Registration Statement and the
Prospectus, and except for changes in amounts outstanding under
revolving or other credit agreements to which the Company or any
subsidiary thereof is a party and which agreements are disclosed in the
Prospectus.
(v) This Agreement and the transactions contemplated herein
have been duly and validly authorized, executed and delivered by the
Company, and constitute legal, valid and binding agreements of the
Company enforceable in accordance with their respective terms except to
the extent that (a) the enforceability hereof may be subject to
applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent
transfer, reorganization, moratorium, liquidation, conservatorship and
other laws affecting creditors' rights generally, (b) equitable
principles may limit the availability of equitable relief in the case
of a breach hereof (regardless of whether such remedies are sought in a
proceeding at law or in equity), and (c) federal securities laws may
limit the enforceability of the indemnification provisions hereof.
(vi) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not (a) conflict with or result in a breach of any of
the terms and provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any agreement, contract, lease,
instrument, franchise, license, arrangement, authority or permit to
which the Company or any of its subsidiaries is a party or by which any
of such corporations or their respective properties or assets may be
bound or (b) violate or conflict with any provision of the certificate
of incorporation or bylaws of the Company or any of its subsidiaries,
or any judgment, decree or order of any court or any public,
governmental or regulatory agency or body having jurisdiction over, or
any federal, state or local statutory, regulatory or common
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law applicable to, the Company or any of its subsidiaries or any of
their respective properties or assets, except where such violation or
conflict would not have a material adverse effect on the Company and
its subsidiaries taken as a whole. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or
with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their respective properties or assets or with any other third party
is required for the execution, delivery and performance of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered by the Company
hereunder, except the registration under the Act of the Shares and such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(vii) All of the issued and outstanding shares of the
Company's capital stock of any class, series or rank (including,
without limitation, those Shares being sold by the Selling Stockholder
hereunder, if any) are duly and validly authorized and issued, fully
paid and nonassessable and were not issued and are not now in violation
of or subject to any preemptive rights. The unissued Shares being sold
by the Company hereunder, when issued, delivered and sold in accordance
with this Agreement, will be duly and validly issued and outstanding,
fully paid and nonassessable, and will not have been issued in
violation of or be subject to any preemptive rights. The Company has an
authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. The capital stock of the
Company, including the Stock, the Firm Shares and the Additional
Shares, conforms to the description thereof contained in the
Registration Statement and the Prospectus. All of the issued and
outstanding shares of capital stock of any class, series or rank of
each subsidiary of the Company have been duly and validly authorized
and issued and are fully paid and nonassessable and were not issued in
violation of preemptive rights and (except for directors' qualifying
shares and as otherwise disclosed in the Registration Statement and the
Prospectus) 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. The Shares, if any, to be sold by the Selling
Stockholder are included and duly admitted to trading are the New York
Stock Exchange, and prior to the Closing Date, the Shares to be issued
and sold by the Company will be authorized for listing by the New York
Stock Exchange upon official notice of issuance.
(viii) Each of the Company and its subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation. Each of the
Company and its subsidiaries is duly qualified and in good standing as
a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which will not in
the aggregate have a material adverse effect on the Company and its
subsidiaries
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taken as a whole. Each of the Company and 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 now being
conducted and as described in the Registration Statement and the
Prospectus, 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 Registration Statement and
the Prospectus.
(ix) Except as described in the Prospectus, there is no
litigation or governmental proceeding to which the Company or any of
its subsidiaries is a party or to which any property of the Company or
any of its subsidiaries is subject or which is pending or, to the
knowledge of the Company, contemplated against the Company or any of
its subsidiaries which might result in any material adverse change or
any development involving a material adverse change in the business,
prospects, properties, operations, condition (financial or other) or
results of operations of the Company and its subsidiaries taken as a
whole or which is required to be disclosed in the Registration
Statement and the Prospectus.
(x) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(xi) The financial statements, including the notes thereto,
and supporting schedules relating to the Company and included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of
the dates indicated and the results of operations and cash flows for
the periods specified. The financial statements, including the notes
thereto, and supporting schedules relating to BRC Holdings, Inc. and
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly in all material respects the financial
position of BRC Holdings, Inc. as of the dates indicated and the
results of operations and cash flows for the periods specified. The pro
forma financial statements and the related notes thereto included or
incorporated by reference in the Registration Statement and the
Prospectus have been prepared in all material respects in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been, in all material respects, properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable. Except as otherwise stated in
the Registration Statement, the Prospectus or the applicable
Incorporated Document, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved, and the supporting
schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information required to be stated therein.
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(xii) Except as described in the Prospectus, no holder of
securities of the Company has any rights to the registration of
securities of the Company because of the filing of the Registration
Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(xiii) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, required to register as
an "investment company" under the Investment Company Act of 1940, as
amended.
(xiv) Except as otherwise disclosed in the Registration
Statement and the Prospectus, the Company and its subsidiaries have
good and marketable title to all real property and 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 Prospectus
or such as do not materially affect the value of such property and do
not interfere in any material respect with the use made and proposed to
be made of such property by the Company and its subsidiaries; and any
real property, buildings and personal property 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 thereof made and proposed to be made by the
Company and its subsidiaries.
(xv) 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 all electronic data processing, electronic fund
transfer and other contracts, agreements, leases and arrangements
necessary or material to carrying on their business as presently
conducted or proposed to be conducted and as described in the
Registration Statement and the Prospectus, except where the 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 other) or results of
operations of the Company and its subsidiaries, taken as a whole; and
except as otherwise described in the Registration Statement and the
Prospectus, neither the Company nor any such subsidiary 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 other) or results of operations of the Company
and its subsidiaries taken as a whole or which is required to be
disclosed in the Registration Statement and the Prospectus.
(xvi) The Company has (a) initiated a review and assessment of
all areas within its and each of its subsidiaries' business and
operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the "Year 2000 Problem"
(that is, the risk that computer applications used by the Company or
any of its subsidiaries (or suppliers, vendors and customers) may be
unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999),
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(b) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis and (c) to date, has implemented that plan in
accordance with that timetable. Based on the foregoing, the Company
believes that all computer applications (including those of the
Company's suppliers, vendors and customers) that are material to its or
any of its subsidiaries' business and operations are reasonably
expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant"), except to the extent that a
failure to do so would not reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(xvii) Neither the Company nor any of its subsidiaries is in
default (nor has any event occurred which, with notice or lapse of time
or both, would constitute a default) under any provisions of any
agreement, contract, lease, indenture, instrument, license or
arrangement to which the Company or any of its subsidiaries is a party
or by which it is bound, where such default could have a material
adverse effect on the business, prospects, properties, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole.
(xviii) The Company has received and has delivered to the
Representatives executed undertakings, substantially in the form
attached hereto as Annex I, of each of the directors and executive
officers of the Company, with respect to his disposition of any Stock
or any securities substantially similar to the Stock or any securities
exchangeable for, convertible into or exercisable for Stock or
securities substantially similar to the Stock (any such securities
herein called the "Covered Securities") owned of record or beneficially
by him until after ______________, 1999.
(xix) The Company is eligible to utilize Form S-3 registration
statements under the Act and the Regulations with respect to sales of
its securities, including without limitation, the sale of the Shares
contemplated hereby.
(xx) The Company, through its wholly-owned subsidiary ACS
Acquisition Corporation, a Delaware corporation ("Purchaser"),
completed the purchase of 8,704,283 shares of common stock, par value
$.10 per share (the "BRC Stock"), of BRC Holdings, Inc. ("BRC")
pursuant to a tender offer by Purchaser to purchase 8,704,283 shares of
BRC Stock at a purchase price of $19.00 per share upon the terms and
subject to the Tender Offer Statement on Schedule 14D-1 filed with the
Commission on October 23, 1998, as subsequently amended. The Purchaser
purchased the 8,704,283 shares of BRC Stock in connection with that
certain Agreement and Plan of Merger, dated as of October 19, 1998
among the Company, the Purchaser and BRC (together with all of the
ancillary documents referred to therein, the "Merger Agreement"),
pursuant to which the Purchaser will be merged with and into BRC. The
execution, delivery and performance by the Company of the Merger
Agreement, and the consummation by the Company of the transactions
contemplated thereby, was duly authorized by all necessary corporate
action on the part of
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the Company. To the knowledge of the Company, the execution, delivery
and performance by BRC of the Merger Agreement, and the consummation by
BRC of the transactions contemplated thereby, was duly authorized by
all necessary corporate action on the part of BRC. Neither the Company
nor the Purchaser is in breach of or in default under, and no event has
occurred which (with or without the giving of notice or the passage of
time or both) would constitute a default by the Company or the
Purchaser under, the Merger Agreement to the extent that such default
would result in the material impairment of any rights of the Company or
the Purchaser under the Merger Agreement, and neither the Company nor
the Purchaser has received any notice from, or given any notice to, any
other party indicating that the Company or the Purchaser, on the one
hand, or such other party, on the other hand, is in breach of or in
default under the Merger Agreement.
(xxi) The assets and liabilities of BRC are substantially as
reflected in the condensed interim financial statements for the
nine-months ended September 30, 1998 incorporated by reference in the
Registration Statement and Prospectus.
(xxii) The statistical and market-related data included in the
Prospectus are based on or derived from sources from which the Company
believes to be reliable and accurate in all material respects.
(xxiii) Except as otherwise disclosed in the Registration
Statement and the Prospectus, no relationships, direct or indirect,
exists between or among the Company or any of its subsidiaries on the
one hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any of its subsidiaries on the other hand,
which would be required by the Act to be described in the Prospectus.
(b) The Selling Stockholder represents and warrants
to, and agrees with, the several Underwriters that:
(i) Certificates in negotiable form for the Shares
(if any) to be sold by the Selling Stockholder have been
placed in custody under a Custody Agreement (the "Custody
Agreement") for delivery under this Agreement with the
Company, as Custodian (the "Custodian"). The Selling
Stockholder specifically agrees that the Shares represented by
the certificates so held in custody for the Selling
Stockholder are subject to the interests of the several
Underwriters and the Company, that the arrangements made by
the Selling Stockholder for such custody, including the Power
of Attorney (the "Power of Attorney") provided for in such
Custody Agreement, are to that extent irrevocable, and that
the obligations of the Selling Stockholder shall not be
terminated by any act of the Selling Stockholder (or by
operation of law, whether by the death or incapacity of the
Selling Stockholder or, in the case the Selling Shareholder is
not a natural person, the dissolution or liquidation of the
Selling Stockholder) or the occurrence of any other event; if
any such death, incapacity, dissolution, liquidation or other
such event should occur before the delivery of such
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Shares hereunder, certificates for such Shares shall be
delivered by the Custodian in accordance with the terms and
conditions of this Agreement as if such death, incapacity,
dissolution, liquidation or other event had not occurred,
regardless of whether the Custodian shall have received notice
of such death, incapacity, dissolution, liquidation or other
event.
(ii) The execution, delivery and performance of this
Agreement and the Custody Agreement (including the Power of
Attorney included therein) by the Selling Stockholder and the
consummation of the transactions contemplated hereby and
thereby will not (a) conflict with or result in the breach of
any of the terms and provisions of, or constitute a default
(or an event which with notice or lapse of time, or both,
would constitute a default) or require consent under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling
Stockholder pursuant to the terms of any agreement,
instrument, franchise, license or permit to which the Selling
Stockholder is a party or by which the Selling Stockholder or
any of the Selling Stockholder's property or assets may be
bound or (b) violate or conflict with any judgment, decree,
order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction
over the Selling Stockholder or such Selling Stockholder's
properties or assets.
(iii) The Selling Stockholder has, and at the time of
delivery of the Shares to be sold by the Selling Stockholder
the Selling Stockholder will have, the requisite legal right,
power, authority and capacity, and, except as required under
the Act and state securities and Blue Sky laws, all necessary
consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits of and from all
public, regulatory or governmental agencies and bodies as are
required for the execution, delivery and performance of this
Agreement and the Custody Agreement (including the Power of
Attorney therein) and the consummation of the transactions
contemplated hereby and thereby, including the sale,
assignment, transfer and delivery of the Shares to be sold,
assigned, transferred and delivered by the Selling Stockholder
hereunder.
(iv) Each of this Agreement and the Custody Agreement
(including the Power of Attorney therein) has been duly and
validly authorized, executed and delivered by the Selling
Stockholder and each of this Agreement and the Custody
Agreement is a valid and binding obligation of the Selling
Stockholder, enforceable against the Selling Stockholder in
accordance with its terms, except to the extent that (a) the
enforceability hereof may be subject to applicable bankruptcy,
insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, moratorium, liquidation, conservatorship and
other laws affecting creditors' rights generally, (b)
equitable principles may limit the availability of equitable
relief in the case of a breach hereof (regardless of whether
such remedies are sought in a proceeding at law or in equity),
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and (c) federal securities laws may limit the enforceability
of the indemnification provisions hereof.
(v) The Selling Stockholder has good, valid and
marketable title to the Shares to be sold by the Selling
Stockholder pursuant to this Agreement, free and clear of all
liens, encumbrances, claims, security interests, restrictions
on transfer (other than any restrictions on transfer imposed
by the Act and by the securities or Blue Sky laws of certain
jurisdictions), shareholders' agreements, voting trusts and
other defects in title whatsoever, with full power to deliver
such Shares hereunder, and, upon the delivery of and payment
for such Shares as herein contemplated, each of the
Underwriters will receive good, valid and marketable title to
the shares purchased by it from the Selling Stockholder, free
and clear of all liens, encumbrances, claims, security
interests, restrictions on transfer, shareholders' agreements,
voting trusts and other defects in title whatsoever to each of
the Underwriters who have purchased such Shares in good faith
and without notice of any such liens, encumbrances, claims,
security interests, restrictions on transfer, shareholders'
agreements, voting trusts and other defects in title.
(vi) The Selling Stockholder has not taken and will
not take, directly or indirectly, any action which has
constituted or which was designed to constitute or which might
be reasonably expected to cause or result in stabilization or
manipulation of the price of the shares of Common Stock.
(vii) When the Registration Statement became or
becomes effective, when any post-effective amendment to the
Registration Statement becomes effective, when the Prospectus
is first filed with the Commission pursuant to Rule 424(b) of
the Regulations, when any amendment of or supplement to the
Prospectus is filed with the Commission and at the Closing
Date and the Additional Closing Date, if any, such parts of
the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto as relate to the
Selling Stockholder and are based upon information furnished
in writing to the Company by or on behalf of the Selling
Stockholder expressly for use therein did not and will not
contain an untrue statement of a material fact and did not and
will not omit to state any material fact required to be stated
therein or necessary in order to make the statements therein
not misleading; and when any related preliminary prospectus
was first filed with the Commission (whether filed as part of
the Registration Statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the
Regulations) and when any amendment thereof or supplement
thereto was first filed with the Commission, such parts of
such preliminary prospectus and any amendments thereof and
supplements thereto as relate to the Selling Stockholder and
are based on information furnished in writing to the Company
by or on behalf of the Selling Stockholder expressly for use
therein did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be
stated therein or necessary in
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12
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to each of the
Underwriters and each of the Underwriters, severally and not jointly,
agrees to purchase from the Company, at a purchase price per share of
$_____, the number of Firm Shares (to be adjusted by the
Representatives so as to eliminate fractional shares) determined by
multiplying the aggregate number of Firm Shares by a fraction, the
numerator of which is the aggregate number of Firm Shares to be
purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto (plus any additional number of Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof), and the denominator of which is the
aggregate number of Firm Shares to be purchased by all the
Underwriters.
(b) Payment of the purchase price for, and delivery
of certificates for, the Firm Shares shall be made at the office of
Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M., Dallas Time, on the
third or fourth (if the transactions contemplated hereby were priced
after the close of the market) business day (unless postponed in
accordance with the provisions of Section 9 hereof) following the date
of this Agreement, or such other time not later than seven full
business days after such date as shall be agreed upon in writing by the
Representatives and the Company(such time and date of payment and
delivery being herein called the "Closing Date"). Payment shall be made
to the Company by wire transfer on the federal wire system to accounts
in the United States designated in writing by the Company not later
than three (3) business days prior to the Closing Date, against
delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Firm Shares to be purchased by
them. Certificates for the Firm Shares shall be registered in such name
or names and in such authorized denominations as the Representatives
may request in writing at least one full business days prior to the
Closing Date. Such certificates will be made available to the
Representatives at the offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, for checking and packaging for
delivery at least one full business day prior to the Closing Date.
(c) In addition, in the event and to the extent that
the Underwriters shall exercise the option to purchase Additional
Shares as provided below, the Selling Stockholder agrees to sell to
each of the Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase from the Selling Stockholder, at the
purchase price per share set forth in subsection (a) of this Section 2,
that portion of the number of Additional Shares as to which such option
shall have been exercised (to be adjusted by the Representatives so as
to eliminate fractional shares) determined by multiplying such number
of Additional Shares
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T & K DRAFT 02/04/99
13
by a fraction, the numerator of which is the maximum number of
Additional Shares that such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and
the denominator of which is the aggregate number of Additional Shares
which all of the Underwriters are entitled to purchase hereunder.
The Selling Stockholder hereby grants to the Underwriters the
option to purchase at their option up to 525,000 Additional Shares, at
the purchase price per Share set forth in subsection (a) of this
Section 2, for the sole purpose of covering any over-allotments in the
sale of the Firm Shares. Any such election to purchase Additional
Shares may be exercised by written notice from the Representatives to
the Custodian, given within a period of 30 calendar days after the date
of this Agreement and setting forth the aggregate number of Additional
Shares to be purchased and the date and time when such Additional
Shares are to be delivered, as reasonably determined by the
Representatives (such date and time being herein sometimes referred to
as the "Additional Closing Date"); provided, however, that the
Additional Closing Date shall not be earlier than the Closing Date or
earlier than the second full business day after the date on which the
option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been
exercised (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Certificates for Additional Shares
shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least
one full business day prior to the Additional Closing Date. Such
certificates will be made available to the Representatives at the
offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, for checking and packaging for delivery at least one full
business day prior to the Additional Closing Date.
Payment for the Additional Shares shall be made by
wire transfer on the federal wire system to account(s) in the United
States designated in writing by the Custodian not later than three (3)
business days prior to the Additional Closing Date, upon delivery of
the certificates for the Additional Shares to the Representatives for
the respective accounts of the Underwriters.
3. Offering. Upon the Representatives' authorization
of the release of the Firm Shares, the Underwriters propose to offer
the Shares for sale to the public upon the terms set forth in the
Prospectus.
4. Covenants of the Company and the Selling
Stockholder.
(a) The Company covenants and agrees with the Underwriters that:
(i) If the Registration Statement has not yet been
declared effective, the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective
as promptly as possible, and if Rule 430A of the Regulations is used or
the filing of the Prospectus is otherwise required under Rule 424(b) of
the
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T & K DRAFT 02/04/99
14
Regulations, the Company will file the Prospectus (properly completed
if such Rule 430A has been used) pursuant to such Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to
the Representatives of such timely filing. The Company will notify the
Representatives immediately (and, if requested by the Representatives,
will confirm such notice in writing) (A) when the Registration
Statement and any amendments thereto become effective, (B) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional
information, (C) of the mailing or the delivery to the Commission for
filing of any amendment of or supplement to the Registration Statement
or the Prospectus, (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, (E) of the receipt of any
comments from the Commission, and (F) of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Commission shall
propose or enter a stop order at any time, the Company will make every
reasonable effort to prevent the issuance of any such stop order and,
if issued, to obtain the lifting of such order as soon as possible. The
Company will not file any amendment to the Registration Statement or
any amendment of or supplement to the Prospectus (including any
prospectus required to be filed pursuant to such Rule 424(b) and
including the issuance or filing of any term sheet within the meaning
of Rule 434 of the Regulations) that differs from the preliminary
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration
Statement to which the Representatives shall reasonably object in
writing after being timely furnished in advance a copy thereof.
(ii) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or 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 at
any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, the Company will
notify the Representatives promptly and prepare and file with the
Commission an appropriate amendment or supplement (in form and
substance reasonably satisfactory to the Representatives) which will
correct such statement or omission or which will effect such compliance
and will use all reasonable efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(iii) The Company will promptly deliver to the
Representatives four signed copies of the Registration Statement,
including exhibits and all amendments thereto, and the Company will
promptly deliver to each of the Underwriters such number of copies of
any preliminary prospectus, the Prospectus, the Registration Statement,
and all amendments of and supplements to such documents, if any, as the
Representatives may reasonably request.
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T & K DRAFT 02/04/99
15
(iv) The Company will cooperate with the Representatives,
at or prior to the time of effectiveness of the Registration Statement,
in connection with the qualification of the offering or sale of the
Shares under the state securities or blue sky laws of such
jurisdictions as the Representatives may designate and the maintenance
of such qualification in effect for so long as required to complete the
offer and sale of the Shares, except that in no event shall the Company
be obligated in connection therewith to qualify as a foreign
corporation or as a broker or a dealer in any jurisdiction in which it
is not so qualified or to execute a general consent to service of
process.
(v) The Company will make generally available (within the
meaning of Section 11(a) of the Act) to its security holders and to the
Representatives as soon as practicable, but not later than 45 days
after the end of its fiscal quarter in which the first anniversary date
of the effective date of the Registration Statement occurs, an earnings
statement (in form complying with the provisions of Rule 158 of the
Regulations) covering a period of at least twelve consecutive months
beginning after the effective date of the Registration Statement.
(vi) During the period of 90 days from the date of the
Prospectus, the Company will not, without the prior written consent of
Bear, ▇▇▇▇▇▇▇ & Co. Inc., issue, sell, offer or agree to sell, grant
any option for the sale of, or otherwise dispose of, directly or
indirectly, any Covered 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 or pursuant to obligations existing on the date of this
Agreement to issue Covered Securities in connection with prior
acquisitions made by the Company), otherwise than hereunder or upon the
exercise of presently outstanding stock options; provided, however,
that during such period the Company may issue up to 1,000,000 shares
of unregistered Common Stock in connection with the consummation of
acquisitions provided that it gives prior written notice of any such
issuances to Bear, ▇▇▇▇▇▇▇ & Co. Inc. and provided further that each
recipient of any such Covered Securities so issued in connection with
any such acquisition shall agree in writing for the benefit of the
Underwriters, in form and substance reasonably satisfactory to Bear,
▇▇▇▇▇▇▇ & Co. Inc., that all such Covered Securities shall remain
subject to restrictions identical to those contained in this subsection
(vi).
(vii) During a period of three years from the effective
date of the Registration Statement, the Company will furnish to the
Representatives copies of (A) all reports to its stockholders; and (B)
all reports, financial statements and proxy or information statements
filed by the Company with the Commission, any national securities
exchange or automated quotation system.
(viii) The Company will apply the net proceeds from the sale
of the Shares by it hereunder as set forth in "Use of Proceeds" in the
Prospectus.
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T & K DRAFT 02/04/99
16
(ix) The Company will cause the Shares to be sold by it
hereunder to be approved, upon official notice of issuance, for listing
on the New York Stock Exchange.
(b) The Selling Stockholder covenants and agrees with the
several Underwriters that the Selling Stockholder has not taken and
will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause
or result in stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares.
5. Payment of Expenses. Whether or not the
transactions contemplated in this Agreement are consummated or this
Agreement is terminated, the Company hereby agrees to pay or cause to
be paid all costs and expenses, except as set forth below, incident to
the performance of the obligations of the Company and the Selling
Stockholder hereunder, including those in connection with (i)
preparing, printing, duplicating, filing and distributing the
Registration Statement, as originally prepared and all amendments
thereof (including all exhibits thereto), any preliminary prospectus,
the Prospectus and any amendments or supplements thereto (including,
without limitation, fees and expenses of the Company's accountants and
counsel), the underwriting documents (including this Agreement, the
related agreement among underwriters and any selected dealers
agreement, other than fees and expenses of Underwriters' counsel) and
all other documents related to the public offering of the Shares
(including those supplied to the Underwriters in quantities as
hereinabove stated), (ii) the issuance and delivery of the Shares by
the Company to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the qualification of the Shares under state or
foreign securities or blue sky laws, including the costs of printing
and mailing a preliminary and final "blue sky memorandum" and the fees
of counsel for the Underwriters and such counsel's disbursements in
relation thereto, (iv) inclusion of the Shares to be sold by the
Company hereunder on the New York Stock Exchange, (v) the filing fees
of the Commission and the National Association of Securities Dealers,
Inc., (vi) the cost of printing certificates representing the Shares,
(vii) the cost and charges of any transfer agent or registrar and
(viii) the Company's (but not the Underwriters') "road show" and
similar marketing expenses. Notwithstanding the foregoing, the Selling
Stockholder shall pay all the Underwriters discounts and commissions in
respect of the Additional Shares. In addition, any transfer or other
taxes imposed on the sale or delivery of the Additional Shares by the
Selling Stockholder to the several Underwriters will be paid by the
Selling Stockholder.
6. Conditions of Underwriters' Obligations. The
obligations of the Underwriters to purchase and pay for the Firm Shares
and the Additional Shares, as provided herein, shall be subject to the
accuracy of the representations and warranties of the Company and the
Selling Stockholder herein contained, as of the date hereof and as of
the Closing Date (for purposes of this Section 6 "Closing Date" shall
refer to the Closing Date for the Firm Shares and any Additional
Closing Date, if different, for the Additional Shares), to the absence
from any certificates, opinions, written statements or letters
furnished by the
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T & K DRAFT 02/04/99
17
Company or the Selling Stockholder pursuant to this Section 6 of any
misstatement or omission, to the performance by the Company and the
Selling Stockholder of their respective obligations hereunder, and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York time, on the date of this Agreement, or
at such later time and date as shall have been consented to in writing
by the Representatives; if the Company shall have elected to rely upon
Rule 430A of the Regulations, the Prospectus shall have been filed with
the Commission in a timely fashion in accordance with Section 4(a)
hereof; and at or prior to the Closing Date no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereof shall have been issued and no proceedings therefor
shall have been initiated or threatened by the Commission.
(b) At the Closing Date the Representatives shall have
received the opinion of ▇▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel for the Company,
dated the Closing Date and addressed to the Underwriters and in form
and substance satisfactory to the Representatives, to the effect that:
(i) Each of the Company and Dataplex Corporation,
ACS Government Services, Inc., The Genix Group, Inc.,
Technical Directions, Inc., ACS Government Solutions Group,
Inc. and BRC (the "Significant Subsidiaries") is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation.
(ii) The Company has an authorized capitalization
as set forth in the Registration Statement and the Prospectus.
The capital stock of the Company of any class, series or rank,
including the Stock, the Firm Shares and the Additional
Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and the
Prospectus. The Shares to be issued by the Company and
delivered on the Closing Date have been duly and validly
authorized and, when delivered by the Company in accordance
with this Agreement, will be duly and validly issued, fully
paid and nonassessable and will not have been issued in
violation of or subject to any preemptive rights. The
Additional Shares (if any) to be delivered on the Additional
Closing Date by the Selling Stockholder are duly and validly
authorized and issued, fully paid and nonassessable and were
not issued in violation or subject to any preemptive rights.
(iii) This Agreement and the transactions
contemplated herein have been duly and validly authorized,
executed and delivered by the Company, and constitute legal,
valid and binding agreements of the Company enforceable in
accordance with their respective terms except to the extent
that (a) the enforceability hereof and thereof may be subject
to applicable bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium,
liquidation,
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T & K DRAFT 02/04/99
18
conservatorship and other laws affecting creditors' rights
generally, (b) equitable principles may limit the availability
of equitable relief in the case of a breach hereof or thereof
(regardless of whether such remedies are sought in a
proceeding at law or in equity), and (c) federal securities
laws may limit the enforceability of the indemnification
provisions hereunder.
(iv) The execution, delivery, and performance of
this Agreement and the consummation of the transactions
contemplated hereby by the Company do not and will not (a)
conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any material
agreement, contract, lease, arrangement, instrument,
franchise, license or permit known to such counsel after
reasonable inquiry to which the Company or any of its
subsidiaries is a party or by which any of such corporations
or their respective properties or assets may be bound or (b)
violate or conflict with any provision of the certificate of
incorporation or bylaws of the Company or any of its
subsidiaries, any federal, state or local statutory,
regulatory or common law known to such counsel after
reasonable inquiry or, to the best knowledge of such counsel
after reasonable inquiry, any judgment, decree, order, rule or
regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective
properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit
of or with any court or any public, governmental, or
regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their respective
properties or assets is required for the execution, delivery
and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (a) such as may
be required under state securities or blue sky laws in
connection with the purchase and distribution of the Shares by
the Underwriters (as to which such counsel need express no
opinion) and (b) such as have been made under the Act.
(v) The Company is not, and upon consummation of
the transactions contemplated hereby will not be, required to
register as an "investment company" under the Investment
Company Act of 1940, as amended.
(vi) The Registration Statement and the
Prospectus and any amendments thereof or supplements thereto
(other than the financial statements, financial statement
notes, financial statement schedules and other financial,
accounting or statistical data included or incorporated by
reference therein, as to which no opinion need be rendered)
comply as to form in all material respects with the
requirements of the Act and the Regulations.
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T & K DRAFT 02/04/99
19
(vii) The Registration Statement is effective
under the Act, and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof has been
issued and no proceedings therefor have been initiated or
threatened by the Commission and all filings required by Rule
424(b) of the Regulations have been timely made.
(viii) The statements made in the Prospectus, as
amended or supplemented, insofar as they purport to constitute
summaries or to describe the provisions of the documents,
transactions or legal matters therein described, in summary
form, are fair and accurate summaries in all material
respects.
In addition, such counsel shall also state that such
counsel has participated in conferences with officers and
representatives of the Company, representatives of the
independent public accountants for the Company and the
Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon, and
does not assume responsibility for and has not independently
verified, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus, on the basis of the foregoing, no facts have come
to the attention of such counsel which would lead such counsel
to believe that either the Registration Statement at the time
it became effective (including the information deemed to be
part of the Registration Statement at the time of
effectiveness pursuant to Rule 424, Rule 430A or Rule 434 of
the Regulations, if applicable), or any amendment thereof made
prior to the Closing Date as of the date of such amendment,
contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus as of its date (or any amendment thereof
or supplement thereto made prior to the Closing Date as of the
date of such amendment or supplement) and as of the Closing
Date contained or contains an untrue statement of a material
fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the
financial statements, financial statement notes, financial
statement schedules and other financial, accounting or
statistical data included therein).
In rendering such opinion, such counsel may rely (a)
as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to
the Representatives) of other counsel reasonably acceptable to
the Representatives, familiar with the applicable laws; and
(b) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and
certificates or other written statements of officers of
departments
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T & K DRAFT 02/04/99
20
of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the
Company and its subsidiaries, provided that copies of any such
statements or certificates shall be delivered to the
Representatives. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel is in
form satisfactory to such counsel and, in their opinion, the
Representatives and they are justified in relying thereon.
Furthermore, in rendering such opinion, to the extent that the
matters discussed in clause (iii) above involve or may be
governed by or construed under the laws of the State of New
York, such counsel may assume that the laws of New York are
the same as the laws of the State of Texas.
(c) At the Closing Date the Representatives shall have
received the opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President and
General Counsel of the Company, dated the Closing Date and addressed to
the Underwriters and in form and substance satisfactory to the
Representatives, to the effect that:
(i) All of the issued and outstanding shares
of the Company's capital stock of any class, series or rank,
including the Shares to be delivered and sold by the Company
and the Selling Stockholder in accordance with this Agreement,
are duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of or subject
to any preemptive rights. All of the issued and outstanding
shares of the capital stock of any class, series or rank of
each subsidiary of the Company have been duly and validly
issued and are fully paid and nonassessable and were not
issued in violation of preemptive rights and (except for
directors' qualifying shares and as set forth in the
Prospectus) 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.
(ii) Each subsidiary of the Company (other than
the Significant Subsidiaries) has been duly organized and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation. Each of the
Company and its subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in
which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures
to be so qualified or in good standing which will not in the
aggregate have a material adverse effect on the Company and
its subsidiaries taken as a whole. Each of the Company and 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 now
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T & K DRAFT 02/04/99
21
being conducted and as described in the Registration Statement
and the Prospectus, with such exceptions as are not material.
(iii) To the best of such counsel's knowledge and
except as described in the Prospectus, there is no litigation
or governmental or other action, suit, proceeding or
investigation before any court or before or by any public,
regulatory or governmental agency or body pending or, to the
best of such counsel's knowledge after reasonable inquiry,
threatened against, or involving the properties or business
of, the Company or any of its subsidiaries, which might result
in any material adverse change in the business, prospects,
properties, operations, financial condition or results of
operations of the Company and its subsidiaries taken as a
whole, or which is of a character required to be disclosed in
the Prospectus.
(iv) The Company and its subsidiaries have good
and marketable title to all real property and to all personal
property owned by them, in each case free and clear of all
liens, encumbrances and defects with such exceptions as are
described in the Prospectus or are not material and do not
interfere with the use made or proposed to be made of such
property by the Company and its subsidiaries; and any real
property, buildings and personal property 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 thereof made
and proposed to be made by the Company and its subsidiaries,
except to the extent that (a) the enforceability thereof may
be subject to applicable bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, reorganization, moratorium,
liquidation, conservatorship and other laws affecting
creditors' rights generally, and (b) equitable principles may
limit the availability of equitable relief in the case of a
breach thereof (regardless of whether such remedies are sought
in a proceeding at law or in equity). (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 he is relying upon a general review of the titles of
the Company and its subsidiaries and abstracts, reports and
policies of title companies rendered or issued at or
subsequent to the time of the acquisition of such property by
the Company or its subsidiaries provided that such counsel
shall state that they believe that both the Underwriters and
he are justified in relying upon such opinion, abstracts,
reports and policies.)
(v) 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 all
electronic data processing, electronic fund transfer and other
contracts, agreements, leases and arrangements necessary or
material to carrying on their business as presently conducted
or proposed to be conducted and as described in the
Prospectus, except where the failure to possess any of the
foregoing would not, singly or in the
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22
aggregate, have a material adverse effect upon the business,
prospects, properties, operations, condition (financial or
other) or results of operations of the Company and its
subsidiaries, taken as a whole; and except as otherwise
described in the Prospectus, neither the Company nor any such
subsidiary has received any notice of cancellation 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 other) or results of operations of the Company
and its subsidiaries taken as a whole or which is required to
be disclosed in the Prospectus.
(vi) Each of the Incorporated Documents (other
than the financial statements, financial statement notes,
financial statement schedules and other financial, accounting
or statistical data included or incorporated by reference
therein, as to which no opinion need be rendered) complies as
to form in all material respects with the requirements of the
Exchange Act at such time as the Incorporated Document was
filed with the Commission.
(vii) The statements made in the Prospectus,
as amended or supplemented, insofar as they purport to
constitute summaries of or to describe the provisions of the
documents, transactions or legal matters therein described, in
summary form, are fair and accurate summaries in all material
respects.
In addition, such counsel shall also state that such
counsel has participated in conferences with other officers
and representatives of the Company, representatives of the
independent public accountants and counsel for the Company and
the Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were
discussed (including review and discussion of the contents of
all Incorporated Documents) and, although such counsel is not
passing upon, and does not assume responsibility for and has
not independently verified, the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, on the basis of the foregoing, no
facts have come to the attention of such counsel which would
lead such counsel to believe that either the Registration
Statement at the time it became effective (including the
Incorporated Documents and the information deemed to be part
of the Registration Statement at the time of effectiveness
pursuant to Rule 424, Rule 430A or Rule 434 of the
Regulations, if applicable), or any amendment thereof made
prior to the Closing Date as of the date of such amendment,
contained an untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or
that the Prospectus as of its date (or any
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23
amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement)
and as of the Closing Date contained or contains an untrue
statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being
understood that such counsel need express no belief or opinion
with respect to the financial statements, financial statement
notes, financial statement schedules and other financial,
accounting or statistical data included therein).
In rendering such opinion, such counsel may rely (a)
as to matters involving the application of laws other than the
laws of the United States and jurisdictions in which he is
admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to
the Representatives) of other counsel reasonably acceptable to
the Representatives, familiar with the applicable laws; and
(b) as to matters of fact, to the extent he deems proper, on
certificates of responsible officers of the Company and
certificates or other written statements of officers of
departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing
of the Company and its subsidiaries, provided that copies of
any such statements or certificates shall be delivered to the
Representatives. The opinion of such counsel for the Company
shall state that the opinion of any such other counsel is in
form satisfactory to such counsel and, in his opinion, the
Representatives and he are justified in relying thereon.
(d) At the Closing Date the Representatives shall have
received the favorable opinion of counsel for the Selling Stockholder
dated the Closing Date, addressed to the Underwriters and in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each of this Agreement and the Custody
Agreement (including the Power of Attorney therein) has been
duly and validly authorized, executed and delivered by or on
behalf of the Selling Stockholder and each of this Agreement
and the Custody Agreement (including the Power of Attorney
therein) is a valid and binding obligation of the Selling
Stockholder, enforceable against the Selling Stockholder in
accordance with its terms, except to the extent that (a) the
enforceability hereof and thereof may be subject to applicable
bankruptcy, insolvency, fraudulent transfer, fraudulent
conveyance, reorganization, moratorium, liquidation,
conservatorship and other laws affecting creditors' rights
generally, (b) equitable principles may limit the availability
of equitable relief in the case of a breach hereof or thereof
(regardless of whether such remedies are sought in a
proceeding at law or in equity), and (c) federal securities
laws may limit the enforceability of the indemnification
provisions hereunder.
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24
(ii) The Selling Stockholder has all requisite
power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, filings,
qualifications, licenses and permits of and from all courts
and all public, governmental or regulatory agencies and bodies
as are required for the execution, delivery and performance of
this Agreement, the Custody Agreement (including the Power of
Attorney therein) and the consummation of the transactions
contemplated hereby and thereby except for (1) such as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no
opinion) and (2) such as have been made or obtained under the
Act.
(iii) Upon the delivery of and payment for the
Shares to be sold by the Selling Stockholder pursuant to this
Agreement as herein contemplated, each of the Underwriters who
is not aware of any adverse claim with respect thereto will
receive good, valid and marketable title to the Shares
purchased by it from the Selling Stockholder, free and clear
of all liens, encumbrances, claims, security interests,
restrictions on transfer, shareholders' agreements, voting
trusts and other defects in title whatsoever.
(iv) The execution, delivery and performance
of this Agreement and the Custody Agreement (including the
Power or Attorney therein) by or on behalf of the Selling
Stockholder and the consummation of the transactions
contemplated hereby and thereby will not violate or conflict
with any agreement, contract, lease, arrangement, instrument,
franchise, license or permit known to such counsel after
reasonable inquiry to which the Selling Stockholder is a party
or any statute or, to the best knowledge of such counsel after
reasonable inquiry, any judgment, decree, order, rule or
regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Selling
Stockholder or any of his properties or assets.
(v) The Statements in the Prospectus under
the caption "Selling Stockholder if Underwriter's
Over-Allotment Option is Exercised", insofar as such
statements constitute a summary of the matters referred to
therein, fairly present the information called for with
respect to such matters.
In rendering such opinion, such counsel may rely (A)
as to matters involving the application of laws other than the
laws of the United States and the jurisdiction in which they
are admitted, to the extent such counsel deems proper and to
the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably
satisfactory to the Representatives) of other counsel
reasonably acceptable to the Representatives, familiar with
the applicable laws; and (B) as to matters of fact, to the
extent they deem proper, on certificates of the Selling
Stockholder, provided that copies of any such statements or
certificates shall be
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25
delivered to the Representatives. The opinions of such counsel
for the Selling Stockholder shall state that the opinion of
any such other counsel is in form satisfactory to such counsel
and, in their opinion, the Representatives and they are
justified in relying thereon.
(e) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to the Representatives, and the
Underwriters shall have received from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel
for the Underwriters, a favorable opinion, dated as of the Closing
Date, with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(f) At the Closing Date the Representatives shall have
received a certificate of the Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer of the Company, dated the Closing
Date, to the effect that (i) the condition set forth in subsection (a)
of this Section 6 has been satisfied, (ii) as of the date hereof and as
of the Closing Date the representations and warranties of the Company
set forth in Section 1(a) hereof are accurate, (iii) as of the Closing
Date the obligations of the Company to be performed hereunder on or
prior thereto have been duly performed and (iv) subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company and its subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any legal or governmental proceeding, and there has not been
any material adverse change, or any development involving 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, except in each case as
described in or contemplated by the Prospectus.
(g) At the Closing Date, the Representatives shall have
received a certificate executed by an Attorney-in-Fact on behalf of the
Selling Stockholder, dated the Closing Date, to the effect that the
representations and warranties of the Selling Stockholder set forth in
Section 1(b) hereof are accurate, and that as of the Closing Date, the
obligations of such Selling Stockholder to be performed hereunder on or
prior thereto have been duly performed.
(h) At the time this Agreement is executed and at the Closing
Date, the Representatives shall have received a letter from
Pricewaterhouse Coopers LLP, independent public accountants for the
Company, dated, respectively, as of the date of this Agreement and as
of the Closing Date, addressed to the Underwriters and in form and
substance satisfactory to the Representatives, to the effect that: (i)
they are independent certified public accountants with respect to the
Company within the meaning of the Act and stating that no response to
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26
Item 10 of Form S-3 is required with respect to them; (ii) in their
opinion, the financial statements and schedules of the Company included
or incorporated by reference in the Registration Statement and the
Prospectus and covered by their opinion therein (of which the
Representatives shall have been provided with a manually signed copy)
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act; (iii) they
consent to the use of their report concerning the Company's
consolidated financial statements in the Prospectus and to all
references to such accountants therein, including their designation as
experts under the caption "Experts" therein; (iv) on the basis of
certain specified procedures performed on the unaudited condensed
consolidated balance sheet as of December 31, 1998 and the unaudited
condensed consolidated statements of operations and of cash flows for
the six-month periods ended December 31, 1998 and 1997 included or
incorporated by reference in the Registration Statement and inquiries
of officers and other employees of the Company and its subsidiaries who
have responsibility for financial and accounting matters of the
Company, nothing has come to their attention that would cause them to
believe that (A) such unaudited consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Regulations or (B) any
material modifications should be made to such unaudited consolidated
financial statements for them to be in conformity with generally
accepted accounting principles; (v) on the basis of procedures (but not
an examination made in accordance with generally accepted auditing
standards) consisting of a reading of the latest available unaudited
interim consolidated financial statements of the Company and its
subsidiaries, a reading of the minutes of meetings and consents of the
shareholders and boards of directors of the Company and its
subsidiaries and the committees of such boards subsequent to December
31, 1998, inquiries of officers and other employees of the Company and
its subsidiaries who have responsibility for financial and accounting
matters of the Company and its subsidiaries with respect to
transactions and events subsequent to December 31, 1998 and other
specified procedures and inquiries to a date not more than two days
prior to the date of such letter, nothing has come to their attention
that would cause them to believe that: (A) with respect to the period
subsequent to December 31, 1998 there were, as of the date of the most
recent available monthly consolidated financial statements of the
Company and its subsidiaries, if any, and as of a specified date not
more than two days prior to the date of such letter, any changes in the
capital stock or increases in long-term indebtedness of the Company or
any decrease in the net current assets or shareholders' equity of the
Company, in each case as compared with the amounts shown in the most
recent balance sheet of the Company presented in the Prospectus, except
for changes or decreases which the Prospectus discloses have occurred
or may occur or which are set forth in such letter; (B) that during the
period from December 31, 1998 to the date of the most recent available
monthly consolidated financial statements of the Company and its
subsidiaries, if any, and to a specified date not more than two days
prior to the date of such letter, there was any decrease, as compared
with the corresponding period in the prior fiscal year, in total
revenues, operating income from continuing operations or total or per
share net income, except for decreases which the Prospectus disclose
have occurred or may occur or which are set forth in such letter; and
(C) they have compared specific dollar amounts, numbers of
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27
shares, percentages of revenues and earnings, and other financial
information pertaining to the Company and its subsidiaries set forth in
the Prospectus, which have been specified by the Representatives prior
to the date of this Agreement, to the extent that such amounts,
numbers, percentages, and information may be derived from the general
accounting and financial records of the Company and its subsidiaries or
from schedules furnished by the Company, and excluding any questions
requiring an interpretation by legal counsel, with the results obtained
from the application of specified readings, inquiries, and other
appropriate procedures (but not an examination made in accordance with
generally accepted auditing standards) specified by the Representatives
and set forth in such letter, and found them to be in agreement; and
(vi) on the basis of procedures consisting of a reading of the
unaudited pro forma condensed consolidated statements of operations for
the year ended June 30, 1998 and the six-months ended December 31, 1998
and related notes, included in the Registration Statement, inquiries of
officers and other employees of the Company and its subsidiaries who
have responsibility for financial and accounting matters of the Company
and its subsidiaries and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in
such unaudited pro forma condensed consolidated financial statements,
nothing has come to their attention that would cause them to believe
that (A) the unaudited pro forma condensed consolidated financial
statements included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the Regulations or (B) the pro forma
adjustments have not been properly applied to the historical amounts in
the compilation of those statements.
(i) At the time this Agreement is executed and at the Closing
Date, the Representatives shall have received a letter from
Pricewaterhouse Coopers LLP, independent public accountants for BRC
Holdings, Inc., dated, respectively, as of the date of this Agreement
and as of the Closing Date, addressed to the Underwriters and in form
and substance satisfactory to the Representatives, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial and statistical information
regarding BRC Holdings, Inc. contained or incorporated by reference in
the Registration Statement and the Prospectus.
[(j) Ernst & Young comfort letter]
(k) Prior to the Closing Date the Company shall have furnished
to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(l) At the Closing Date, the Shares to be sold hereunder shall
have been approved for listing on the New York Stock Exchange.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any
of the certificates, opinions, written statements
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28
or letters furnished to the Representatives or to Underwriters' counsel
pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives,
all obligations of the Underwriters hereunder may be cancelled by the
Representatives at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may
be cancelled by the Representatives at, or at any time prior to, the
Additional Closing Date. Notice of such cancellation shall be given to
the Company in writing, or by telephone, telex or telegraph, confirmed
in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all losses, liabilities, claims, damages
and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or
expenses (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
Shares, as originally filed or any amendment thereof, or any related
preliminary prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, 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, in light of the
circumstances under which such statements are made, not misleading;
provided, however, that the Company will not be liable in any such case
to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense 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 expressly for use therein; and provided
further, however, that the Company will not be liable to any
Underwriter under the indemnity agreement contained herein with respect
to any preliminary prospectus to the extent that any such loss,
liability, claim, damage or expense of such Underwriter results from
the fact that such Underwriter sold Shares to a person to whom there
was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus as then amended or supplemented if the
Company has previously furnished copies thereof to such Underwriter.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly,
agrees to indemnify and hold harmless the Company, the Selling
Stockholder, each of the directors of the Company, each of the officers
of the Company who shall have signed the Registration Statement, and
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29
each other person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees, and any and
all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (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 Shares, as originally filed or
any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any supplement thereto or amendment thereof, 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, in each case to the extent,
but only to the extent, that any such loss, liability, claim, damage or
expense 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 expressly for use therein. This indemnity will be in
addition to any liability which any Underwriter may otherwise have
including under this Agreement. The Company and the Selling Stockholder
acknowledges that the statements set forth in the last paragraph of the
cover page, and in the second and sixth paragraphs under the table of
Underwriters under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of
any Underwriter expressly for use in the Registration Statement for the
registration of the Shares, as originally filed or in any amendment
thereof or supplement thereto, any related preliminary prospectus or
the Prospectus or in any amendment thereof or supplement thereto, as
the case may be.
(c) The Selling Stockholder agrees to indemnify and
hold harmless each Underwriter, the Company, each of the directors of
the Company, each of the officers of the Company who shall have signed
the Registration Statement, and each other person, if any, who controls
the Company or any Underwriter within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses whatsoever (including but not
limited to reasonable attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation),
joint or several, to which they or any of them may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (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 Shares, as originally filed or
any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or
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30
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense 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 relating to the Selling Stockholder furnished to
the Company by the Selling Stockholder expressly for use therein. This
indemnity will be in addition to any liability which the Selling
Stockholder may otherwise have including under this Agreement.
(d) Promptly after receipt by an indemnified party
under subsection (a), (b) or (c) 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 each party against whom indemnification is to be sought in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may
have under this Section 7 except to the extent that it has been
prejudiced in any material respect by such failure or from any
liability which it may have otherwise than under this Section 7). In
case any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent it may elect, by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of which
counsel shall be at the expense of such indemnified party or parties
unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the
defense of such action in which case such indemnifying party or parties
shall be responsible for such fees and expenses, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense
of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have been
notified in writing by counsel that there may be defenses available to
it or them which are different from or additional to those available to
one or all of the indemnifying parties (in which case the indemnifying
parties shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim
or action effected without its written consent; provided, however, that
such consent was not unreasonably withheld.
8. Contribution. In order to provide for contribution
in circumstances in which the indemnification provided for in Section 7
hereof is for any reason held to be unavailable or is insufficient to
hold harmless a party indemnified thereunder, the Company, the Selling
Stockholder, and the Underwriters, severally and not jointly, shall
contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated
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by such indemnification provisions (including any investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted,
but after deducting in the case of losses, claims, damages, liabilities
and expenses suffered by the Company or the Selling Stockholder any
contribution received by the Company or the Selling Stockholder, as the
case may be, from persons, other than the Underwriters, who may also be
liable for contribution, including persons who control the Company
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) to which the Company, the
Selling Stockholder and one or more of the Underwriters may be subject,
in such proportions as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other hand from the offering of the Shares or,
if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 7 hereof, in such
proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company, the
Selling Stockholder and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other
hand shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the Selling
Stockholder, and the discounts and commissions received by the
Underwriters, respectively, bear to the total price of the Shares to
investors, in each case as set forth on the cover page of the
Prospectus. The relative fault of the Company, the Selling Stockholder
and of the Underwriters 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, the Selling
Stockholder or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Selling Stockholder and
the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, (i) in no case shall
any Underwriter be liable or responsible for any amount in excess of
the discount applicable to the Shares purchased by such Underwriter
hereunder, (ii) in no case shall the Selling Stockholder be liable or
responsible for any amount that exceeds the proceeds from the sale in
the offering at the initial price to public (as set forth in the table
on the cover page of the Prospectus) of the Shares sold by the Selling
Stockholder pursuant to this Agreement and (iii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the
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meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as such Underwriter, each
person, if any, who controls a Selling Stockholder within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Selling Stockholder, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement
and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i), (ii)
and (iii) of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this
Section 8, notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise.
No party shall be liable for contribution with respect to any action or
claim settled without its consent; provided, however, that such consent
was not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default
in its or their obligation to purchase Firm Shares or Additional Shares
hereunder, and if the Firm Shares or Additional Shares with respect to
which such default relates do not (after giving effect to arrangements,
if any, made by the Representatives pursuant to subsection (b) below)
exceed in the aggregate 10% of the aggregate principal amount of Firm
Shares or Additional Shares, as the case may be, which all Underwriters
have agreed to purchase hereunder, then such Firm Shares or Additional
Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions
which the amount of Firm Shares set forth opposite their respective
names in Schedule I hereto bear to the aggregate amount of Firm Shares
set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more
than 10% of the Firm Shares or Additional Shares, as the case may be,
the Representatives may in their discretion arrange for themselves or
for another party or parties (including any non-defaulting Underwriter
or Underwriters who so agree) to purchase such Firm Shares or
Additional Shares, as the case may be, to which such default relates on
the terms contained herein. In the event that within five business days
after such a default the Representatives do not arrange for the
purchase of the Firm Shares or Additional Shares, as the case may be,
to which such default relates as provided in this Section 9, this
Agreement or, in the case of a default with respect to the Additional
Shares, the obligations of the Underwriters to purchase and of the
Company to sell the Additional Shares shall thereupon terminate,
without liability on the part of the Company or the Selling Stockholder
with respect thereto (except in each case as provided in Sections 5,
7(a) and (c) and 8 hereof) or the several Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters
of its or
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33
their liability, if any, to the other several Underwriters and the
Company for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the
non-defaulting Underwriters, or are to be purchased by another party or
parties as aforesaid, the Representatives or the Company shall have the
right to postpone the Closing Date or Additional Closing Date, as the
case may be, for a period not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus, as then
amended or supplemented, which in the Representatives' opinion may
thereby be made necessary or advisable. The term Underwriter as used in
this Agreement shall include any party substituted under this Section 9
with like effect as if it had originally been a party to this Agreement
with respect to such Firm Shares and Additional Shares.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the
Underwriters, the Selling Stockholder and the Company contained in this
Agreement, including, without limitation, the agreements contained in
Section 5 hereof, the indemnity agreements contained in Section 7
hereof and the contribution agreements contained in Section 8 hereof,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any Selling
Stockholder or any controlling person thereof or by or on behalf of the
Company or any of its officers and directors or any controlling person
thereof, and shall survive delivery of and payment for the Shares to
and by the several Underwriters. The representations contained in
Section 1 hereof and the agreements contained in Sections 5, 7, 8 and
11(d) hereof shall survive the termination of this Agreement,
including, without limitation, pursuant to Sections 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective after the
occurrence of both of, and upon the later of, (i) when the
Representatives and the Company shall have received notification of the
effectiveness of the Registration Statement and (ii) the execution of
this Agreement. If either the initial public offering price or the
purchase price per Share has not been agreed upon prior to 5:00 P.M.,
New York time, on the fifth full business day after the Registration
Statement shall have become effective, this Agreement shall thereupon
terminate without liability to the Company, the Selling Stockholder or
the Underwriters except as herein expressly provided. Until this
Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying the Representatives or by the Representatives
notifying the Company. Notwithstanding the foregoing, the provisions of
this Section 11 and of Sections 1, 5, 7 and 8 hereof shall at all times
be in full force and effect.
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(b) The Representatives shall have the right to
terminate this Agreement at any time prior to the Closing Date or the
obligations of the Underwriters to purchase the Additional Shares at
any time prior to the Additional Closing Date, as the case may be, if
(A) any domestic or international event or act or occurrence has
materially disrupted, or in the Representatives opinion will in the
immediate future materially disrupt, securities markets; or (B) trading
in any of the Company's securities has been suspended by the Commission
or the New York Stock Exchange or trading on the Nasdaq National Market
or American Stock Exchange shall have been suspended, or minimum or
maximum prices for trading shall have been fixed, or maximum ranges for
prices for securities shall have been required, on the New York or
American Stock Exchange by the New York or American Stock Exchange or
by order of the Commission or any other governmental authority having
jurisdiction; or (C) a banking moratorium has been declared by a state
or federal authority; or (D) a moratorium in foreign exchange trading
by major international banks or persons has been declared; or (E) any
new restriction materially adversely affecting the distribution of the
Firm Shares or the Additional Shares, as the case may be, shall have
become effective; or (F)(i) the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the
United States or there is a declaration of a national emergency or war
by the United States or (ii) there shall have been a change in
political, financial or economic conditions, if the effect of any such
event in (i) or (ii) in the Representatives reasonable judgment makes
it inadvisable to proceed with the offering, sale and delivery of the
Firm Shares or the Additional Shares, as the case may be, on the terms
contemplated by the Prospectus, as then amended or supplemented.
(c) Any notice of termination pursuant to this
Section 11 shall be by telephone, telex, or telegraph, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to
any of the provisions hereof (otherwise than pursuant to Sections 9(b)
or 11(b) hereof), or if the sale of the Shares provided for herein is
not consummated because any condition to the obligations of the several
Underwriters set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company or the Selling
Stockholder to perform any agreement herein or comply with any
provision hereof, the Company and the Selling Stockholder agrees,
subject to written demand by the Representatives, to reimburse the
Underwriters for all reasonable out-of-pocket expenses (including the
reasonable fees and expenses of their counsel), incurred by the several
Underwriters in connection herewith.
12. Notice. All communications hereunder, except as
may be otherwise specifically provided herein, shall be in writing and,
if sent to any Underwriter, shall be mailed, delivered, or telexed or
telegraphed and confirmed in writing, to such Underwriter, c/o Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Finance; and if sent to the Company or the Selling
Stockholder, shall be mailed, delivered, or telegraphed and confirmed
in writing in either case to the address of the Company set forth in
the Registration Statement, Attention: Secretary.
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13. Parties. The Representatives represent that they
are authorized to act on behalf of the several Underwriters named in
Schedule I hereto, and the Company shall be entitled to act and rely on
any request, notice, consent, waiver or agreement purportedly given on
behalf of the Underwriters when the same shall have been given by the
Representatives on such behalf. This Agreement shall inure solely to
the benefit of, and shall be binding upon, the several Underwriters,
the Selling Stockholder and the Company and the controlling persons,
directors, officers, employees and agents referred to in Sections 7 and
8, and their respective successors and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The term "successors and assigns" shall not
include a purchaser, in its capacity as such, of Shares from any of the
Underwriters.
14. Governing Law. This Agreement shall be governed
by construed in accordance with the laws of the State of New York,
United States of America, but without regard to principles of conflicts
of law.
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If the foregoing correctly sets forth the understanding among
the Representatives, on behalf of the Underwriters, and the Company, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among us.
Very truly yours,
AFFILIATED COMPUTER SERVICES, INC.
By:
--------------------------------------------
Name:
Title:
SELLING STOCKHOLDER
By:
--------------------------------------------
Name:
As Attorney in Fact on behalf of the Selling
Stockholder
Accepted as of the date first above written.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
PRUDENTIAL SECURITIES INCORPORATED
By: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
----------------------------------------
Name:
Title:
On behalf of themselves and the other several Underwriters named in Schedule I
hereto.
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SCHEDULE I
Underwriters
Total
Number Number of
of Firm Additional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ----------
Bear, ▇▇▇▇▇▇▇ & Co. Inc......................
▇▇▇▇▇▇▇, Sachs & Co..........................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation.....................
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC........................
Prudential Securities Incorporated...........
Total................................... --------- ----------
3,500,000 525,000
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38
ANNEX I
LOCK-UP AGREEMENT
[Date]
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
PRUDENTIAL SECURITIES INCORPORATED,
As Representatives of the
several Underwriters named in
Schedule I to the Underwriting Agreement
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with the offering (the "Offering") of shares of Class A
Common Stock, par value $.01 per share ("Class A Common Stock"), of Affiliated
Computer Services, Inc., a Delaware corporation (the "Company"), pursuant to the
terms of the Underwriting Agreement (the "Underwriting Agreement") to be entered
into by and among the Company, the underwriters named therein (the
"Underwriters") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ or an entity owned or controlled by ▇▇▇▇▇▇
▇▇▇▇▇▇, and as described in the Company's Form S-3 Registration Statement filed
with the Securities and Exchange Commission on or about ___________, 1999, and
to induce you to purchase the shares of Class A Common Stock offered by the
Company, the undersigned, a stockholder of the Company, hereby irrevocably
confirms and agrees for your benefit as follows:
(i) During the period beginning on and including the date
hereof and continuing to and including _________________, 1999, the
undersigned will not, without your prior written consent, offer, sell,
offer to agree to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any Covered Securities (defined
below), except that during the period beginning on ________, 1999 and
continuing to and including _________, 1999 the undersigned may offer,
sell, offer to agree to sell, grant any option for the sale of, or
otherwise dispose of up to an aggregate of ____% of any Covered
Securities, and except that
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the undersigned may transfer Covered Securities to a Family Member
(defined below), a trust solely for the benefit of the undersigned
and/or Family Members, a corporation wholly owned by the undersigned
and/or Family Members or a partnership, all interests in which are
owned solely by the undersigned and/or Family Members, provided that
prior to any such transfer the transferee will have executed and
delivered to the Company and Bear, ▇▇▇▇▇▇▇ & Co. Inc., on behalf of the
Underwriters, a lock-up agreement substantially in the form of this
agreement. "Covered Securities" means any Stock (as defined in the
Underwriting Agreement) or other securities which are substantially
similar to the Stock (or any securities convertible or exchangeable
into or exercisable for Stock or other securities which are
substantially similar to the Stock), which Stock and other securities
are, on the date hereof, or become, at any time hereafter, registered
in the name of, or beneficially owned or controlled by, the
undersigned. "Family Members" means the spouse, parents, siblings and
lineal descendants of the undersigned or of any such person.
(ii) The undersigned hereby waives all preemptive rights,
rights of first refusal and other similar rights under any agreement or
arrangement with respect to the offering and sale of the Shares in the
Offering and agrees not to include any Stock or other securities in the
Offering, except as contemplated in the Underwriting Agreement, and,
during the period specified in clause (i) above, not to request or
otherwise require under any agreement or arrangement that any Stock or
other Covered Securities be registered under the Securities Act of
1933, either in connection with the Offering or otherwise.
(iii) The undersigned has not taken and will not take,
directly or indirectly, any action which constitutes, or is intended or
might reasonably be expected to result in, stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares, or which constitutes a bid for or
purchase, of, or an attempt to induce any person to purchase, the
Shares or any related securities that is prohibited by Regulation M
under the Securities Exchange Act of 1934, as amended.
The agreements set forth herein will terminate on ______________, 1999,
unless the Underwriting Agreement has been executed and delivered by the parties
thereto and the closings for any purchases of Shares by the Underwriters
pursuant thereto have occurred prior to such date. Neither the Company nor any
Underwriter makes any representations as to whether the Offering will be
completed.
Very truly yours,
[For Individuals]
-------------------------------------
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(Signature)
(Printed Name)
[For Corporations, Trusts and Other Entities]
--------------------------------------------
(Printed Name of Entity)
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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