<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 9, 1996
REGISTRATION NO. 333-15861
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
FIRST USA PAYMENTECH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7389 75-2634185
(PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
(STATE OR OTHER CLASSIFICATION CODE NUMBER)
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
1601 ELM STREET
SUITE 800
DALLAS, TEXAS 75201
(214) 849-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID W. TRUETZEL
CHIEF FINANCIAL OFFICER
FIRST USA PAYMENTECH, INC.
1601 ELM STREET, SUITE 800
DALLAS, TEXAS 75201
(214) 849-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
RANDALL H. DOUD, ESQ. NORMAN D. SLONAKER, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM BROWN & WOOD LLP
LLP ONE WORLD TRADE CENTER
919 THIRD AVENUE NEW YORK, NEW YORK 10048
NEW YORK, NEW YORK 10022 (212) 839-5300
(212) 735-3000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement on Form S-1 (File No.
333-15861) of First USA Paymentech, Inc. (the "Registration Statement"),
initially filed with the Securities and Exchange Commission on November 8,
1996, is being filed solely to include additional exhibits as part of the
Registration Statement.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses are estimated.
<TABLE>
<S> <C>
Registration fee................................................ $ 99,099
NASD fee........................................................ 30,000
Transfer agents' fees........................................... 10,000
Printing and engraving expenses................................. 300,000
Legal fees and expenses......................................... 150,000
Accounting fees and expenses.................................... 30,000
Miscellaneous................................................... 130,901
--------
Total......................................................... $750,000
========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 145 of the General Corporation Law of the State of
Delaware (the "Delaware Corporation Law"), each director and officer of the
Company may be indemnified by the Company against expenses (including
attorneys' fees, judgments, fines and amounts paid in settlement) actually and
reasonably incurred in connection with the defense or settlement of any
threatened, pending or completed legal proceedings in which he is involved by
reason of the fact that he is or was a director or officer of the Company if
he acted in good faith and in a manner that he reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, if he had no reasonable cause to believe that
his conduct was unlawful. If the legal proceeding, however, is by or in the
right of the Company, the director or officer may not be indemnified in
respect of any claim, issue or matter as to which he shall have been adjudged
to be liable for negligence or misconduct in the performance of his duty to
the Company unless a court determines otherwise.
In addition, the Company has directors' and officers' liability coverage
pursuant to a policy maintained by First USA.
Article Eighth of the Certificate of Incorporation of the Company, a copy of
which is filed as Exhibit 3.1 to this Registration Statement, provides that,
to the fullest extent permitted by law, directors of the Company will not be
liable for monetary damages to the Company or its stockholders for breaches of
their fiduciary duties.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
In January 1996, in connection with the formation of the Company, the
Company issued 24,411,081 shares of Common Stock to First USA Financial. The
foregoing transaction was exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
1.1* Form of U.S. Purchase Agreement dated , 1996 among the
Company, the Selling Stockholder and the U.S. Underwriters.
1.2* Form of International Purchase Agreement dated , 1996
among the Company, the Selling Stockholder and the
International Managers.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
2 Agreement and Plan of Merger, dated as of July 19, 1996, by
and among First USA, the Company, First USA Management
Resources, Inc., First USA Opportunity III, Inc., GENSAR and
Golder Thoma Cressey Fund III Limited Partnership and the
other stockholders of GENSAR, filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed September 3, 1996
and incorporated by reference herein.
3.1 Certificate of Incorporation of the Company, as amended,
filed as Exhibit 3.1 to the Company's Registration Statement
on Form S-1 (No. 333-262) (the "Registration Statement") and
incorporated by reference herein.
3.2 By-Laws of the Company, filed as Exhibit 3.2 to the
Registration Statement and incorporated by reference herein.
5* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding
the validity of the Common Stock
10.1 Intercompany Services Agreement between the Company and First
USA Management, Inc., filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1996 and incorporated herein by reference.
10.2 Registration Rights Agreement between the Company and First
USA, filed as Exhibit 10.2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996 and
incorporated herein by reference.
10.3 Tax Sharing Agreement between the Company and First USA,
filed as Exhibit 10.3 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996 and
incorporated herein by reference.
10.4 1996 Stock Option Plan of the Company, filed as Exhibit 10.4
to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 and incorporated herein by
reference.
10.5+ Amendment No. 1 to 1996 Stock Option Plan of the Company.
10.6 1996 Restricted Stock Plan of the Company, filed as Exhibit
10.5 to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 and incorporated herein by
reference.
10.7 Revolving Credit Agreement dated February 21, 1996 among the
Company, the lenders listed therein and NationsBank of Texas
N.A., as Agent, including the notes and guaranty related
thereto, filed as Exhibit 10.6 to the Registration Statement
and incorporated by reference herein.
10.8+ Form of Amendment No. 1 to Revolving Credit Agreement dated
October 30, 1996 among the Company, the lenders listed
therein and Nations Bank of Texas, N.A., as Agent.
10.9 Deferred Compensation Plan of First USA, filed as Exhibit 4.3
to the Company's Registration Statement on Form S-8 (No. 333-
06979) and incorporated by reference herein.
10.10 Employee Stock Purchase Plan of the Company, filed as Exhibit
10.8 to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1996, and incorporated by
reference herein.
10.11 First USA Paymentech Retirement Savings Plan, filed as
Exhibit 99.1 to the Company's Registration Statement on Form
S-8 (No. 333-11249) and incorporated by reference herein.
10.12 First USA Paymentech Supplemental Executive Retirement Plan
filed as Exhibit 10.10 to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1996, and
incorporated by reference herein.
10.13 First USA Paymentech Savings Restoration Plan filed as
Exhibit 10.11 to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1996, and incorporated by
reference herein.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
11* Computation of Net Income Per Share.
21* Subsidiaries of the Company.
23.1* Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included
in Exhibit 5).
23.2+ Consent of Ernst & Young LLP.
23.3+ Consent of Deloitte & Touche LLP.
24+ Powers of Attorney.
</TABLE>
- --------
* Filed herewith.
+ Previously filed.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes to provide to the underwriters at the
closing specified in the underwriting agreements certificates for Common Stock
in such denominations and registered in such names as required by the
underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against the public policy as expressed in the Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The Registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
2. For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new Registration Statement relating to the
Securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF DALLAS, STATE OF TEXAS,
ON DECEMBER 9, 1996.
First USA Paymentech, Inc.
/s/ Philip E. Taken
By: _________________________________
PHILIP E. TAKEN
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED
ON DECEMBER 9, 1996.
SIGNATURE
*
-------------------------------------
JOHN C. TOLLESON
CHAIRMAN OF THE BOARD
*
-------------------------------------
PAMELA H. PATSLEY
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
*
-------------------------------------
DAVID W. TRUETZEL
CHIEF FINANCIAL OFFICER AND
SECRETARY
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
*
-------------------------------------
RICHARD W. VAGUE
DIRECTOR
*
-------------------------------------
GENE H. BISHOP
DIRECTOR
*
-------------------------------------
RUPINDER S. SIDHU
DIRECTOR
/s/ Philip E. Taken
*By: ________________________________
PHILIP E. TAKEN
* ATTORNEY-IN-FACT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
1.1* Form of U.S. Purchase Agreement dated , 1996 among the
Company, the Selling Stockholder and the U.S. Underwriters.
1.2* Form of International Purchase Agreement dated , 1996
among the Company, the Selling Stockholder and the
International Managers.
2 Agreement and Plan of Merger, dated as of July 19, 1996, by and
among First USA, the Company, First USA Management Resources,
Inc., First USA Opportunity III, Inc., GENSAR and Golder Thoma
Cressey Fund III Limited Partnership and the other stockholders
of GENSAR, filed as Exhibit 2.1 to the Company's Current Report
on Form 8-K filed September 3, 1996 and incorporated by
reference herein.
3.1 Certificate of Incorporation of the Company, as amended, filed
as Exhibit 3.1 to the Company's Registration Statement on Form
S-1 (No. 333-262) (the "Registration Statement") and
incorporated by reference herein.
3.2 By-Laws of the Company, filed as Exhibit 3.2 to the
Registration Statement and incorporated by reference herein.
5* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding
the validity of the Common Stock
10.1 Intercompany Services Agreement between the Company and First
USA Management, Inc., filed as Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1996 and incorporated herein by reference.
10.2 Registration Rights Agreement between the Company and First
USA, filed as Exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996 and incorporated
herein by reference.
10.3 Tax Sharing Agreement between the Company and First USA, filed
as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 and incorporated herein by
reference.
10.4 1996 Stock Option Plan of the Company, filed as Exhibit 10.4 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 and incorporated herein by reference.
10.5+ Amendment No. 1 to 1996 Stock Option Plan of the Company.
10.6 1996 Restricted Stock Plan of the Company, filed as Exhibit
10.5 to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 and incorporated herein by
reference.
10.7 Revolving Credit Agreement dated February 21, 1996 among the
Company, the lenders listed therein and NationsBank of Texas
N.A., as Agent, including the notes and guaranty related
thereto, filed as Exhibit 10.6 to the Registration Statement
and incorporated by reference herein.
10.8+ Form of Amendment No. 1 to Revolving Credit Agreement dated
October 30, 1996 among the Company, the lenders listed therein
and Nations Bank of Texas, N.A., as Agent.
10.9 Deferred Compensation Plan of First USA, filed as Exhibit 4.3
to the Company's Registration Statement on Form S-8 (No. 333-
06979) and incorporated by reference herein.
10.10 Employee Stock Purchase Plan of the Company, filed as Exhibit
10.8 to the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996, and incorporated by reference herein.
10.11 First USA Paymentech Retirement Savings Plan, filed as Exhibit
99.1 to the Company's Registration Statement on Form S-8 (No.
333-11249) and incorporated by reference herein.
10.12 First USA Paymentech Supplemental Executive Retirement Plan
filed as Exhibit 10.10 to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1996, and incorporated
by reference herein.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
10.13 First USA Paymentech Savings Restoration Plan filed as Exhibit
10.11 to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1996, and incorporated by reference
herein.
11* Computation of Net Income Per Share.
21* Subsidiaries of the Company.
23.1* Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included
in Exhibit 5).
23.2+ Consent of Ernst & Young LLP.
23.3+ Consent of Deloitte & Touche LLP.
24+ Powers of Attorney.
</TABLE>
- --------
* Filed herewith.
+ Previously filed.
<PAGE>
EXHIBIT 1.1
===============================================================================
FIRST USA PAYMENTECH, INC.
(a Delaware corporation)
5,440,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
-----------------------
Dated: [_________], 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
U.S. PURCHASE AGREEMENT................................................................. 1
SECTION 1. Representations and Warranties...................................... 3
------------------------------
(a) Representations and Warranties by the Company....................... 3
(i) Compliance with Registration Requirements.................. 3
(ii) Independent Accountants.................................... 4
(iii) Financial Statements....................................... 4
(iv) No Material Adverse Change in Business..................... 5
(v) Good Standing of the Company............................... 5
(vi) Good Standing of Subsidiaries.............................. 5
(vii) Financial Services......................................... 6
(viii) Capitalization............................................. 6
(ix) Authorization of Agreement................................. 6
(x) Authorization and Description of Securities................ 6
(xi) Absence of Defaults and Conflicts.......................... 6
(xii) Absence of Proceedings..................................... 7
(xiii) Accuracy of Exhibits....................................... 7
(xiv) Possession of Intellectual Property........................ 8
(xv) Absence of Further Requirements............................ 8
(xvi) Possession of Licenses and Permits......................... 8
(xvii) Investment Company Act..................................... 8
(xviii) Business Relationships; Related Party Transactions......... 9
(xix) Registration Rights........................................ 9
(b) Representations, Warranties and Agreements of the Selling
Stockholder........................................................ 9
(i) Accurate Disclosure........................................ 9
(ii) Authorization of Agreements................................ 9
(iii) Rights in Securities....................................... 10
(iv) Absence of Manipulation.................................... 10
(v) Absence of Further Requirements............................ 10
(vi) Restriction on Sale of Securities.......................... 10
(vii) No Association with NASD................................... 10
(c) Officer's Certificates.............................................. 11
SECTION 2. Sale and Delivery to Underwriters; Closing.......................... 11
------------------------------------------
(a) Initial Securities.................................................. 11
(b) Option Securities................................................... 11
(c) Payment............................................................. 12
(d) Denominations; Registration......................................... 12
SECTION 3. Covenants of the Company............................................ 12
------------------------
(a) Compliance with Securities Regulations and Commission
Requests........................................................... 13
(b) Filing of Amendments................................................ 13
(c) Delivery of Registration Statements................................. 13
(d) Delivery of Prospectuses............................................ 13
(e) Continued Compliance with Securities Laws........................... 14
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(f) Rule 158............................................................ 14
(g) Use of Proceeds..................................................... 14
(h) Listing............................................................. 14
(i) Restriction on Sale of Securities................................... 14
(j) Reporting Requirements.............................................. 15
SECTION 4. Payment of Expenses................................................. 15
-------------------
(a) Expenses............................................................ 15
(b) Expenses of the Selling Stockholder................................. 15
(c) Termination of Agreement............................................ 16
(d) Allocation of Expenses.............................................. 16
SECTION 5. Conditions of Underwriters' Obligations............................. 16
---------------------------------------
(a) Effectiveness of Registration Statement............................. 16
(b) Opinions of Counsel for Company and the Selling Stockholder......... 16
(c) Opinion of Counsel for U.S. Underwriters............................ 16
(d) Officers' Certificate............................................... 17
(e) Officer's Certificate of Selling Stockholder........................ 17
(f) Accountant's Comfort Letter......................................... 17
(g) Bring-down Comfort Letter........................................... 17
(h) No Objection........................................................ 18
(i) Lock-up Agreements.................................................. 18
(j) Purchase of Initial International Securities........................ 18
(k) Conditions to Purchase of U.S. Option Securities.................... 18
(l) Additional Documents................................................ 19
(m) Termination of Agreement............................................ 19
SECTION 6. Indemnification..................................................... 19
---------------
(a) Indemnification of U.S. Underwriters................................ 19
(b) Indemnification of Company, Directors and Officers and the
Selling Stockholder................................................ 20
(c) Actions against Parties; Notification............................... 20
(d) Other Agreements with Respect to Indemnification.................... 21
SECTION 7. Contribution........................................................ 21
------------
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery...................................................................... 23
--------
SECTION 9. Termination of Agreement............................................ 23
------------------------
(a) Termination; General................................................ 23
(b) Liabilities......................................................... 23
SECTION 10. Default by One or More of the U.S. Underwriters..................... 23
-----------------------------------------------
SECTION 11. Default by the Selling Stockholder or the Company................... 24
-------------------------------------------------
SECTION 12. Notices............................................................. 25
-------
SECTION 13. Parties............................................................. 25
-------
SECTION 14. GOVERNING LAW AND TIME.............................................. 25
----------------------
SECTION 15. Effect of Headings.................................................. 25
-----------------
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SCHEDULES
Schedule A - List of U.S. Underwriters............................................. Sch A-1
Schedule B - List of Selling Stockholders.......................................... Sch B-1
Schedule C - Pricing Information................................................... Sch C-1
Schedule D - List of Persons Subject to Lock-up.................................... Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel
Pursuant to Section 5(b)(i)................................................... A-1
Exhibit B - Form of Opinion of Company's Counsel
Pursuant to Section 5(b)(ii).................................................. B-1
Exhibit C - Form of Lock-up Letter................................................. C-1
</TABLE>
iii
<PAGE>
FIRST USA PAYMENTECH, INC.
(a Delaware corporation)
5,440,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
-----------------------
[_________], 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Montgomery Securities
Smith Barney Inc.,
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
First USA Paymentech, Inc., a Delaware corporation (the "Company"), and
First USA Financial, Inc., a Delaware corporation (the "Selling Stockholder"),
confirm their respective agreements with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Montgomery Securities,
Smith Barney Inc. and each of the other U.S. Underwriters named in Schedule A
hereto (collectively, the "U.S. Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
Merrill Lynch, Montgomery Securities and Smith Barney Inc. are acting as
representatives (in such capacity, the "U.S. Representatives"), with respect to
(i) the sale by the Company and the Selling Stockholder, acting severally and
not jointly, and the purchase by the U.S. Underwriters, acting severally and not
jointly, of the respective numbers of shares of Common Stock, par value $.01 per
share, of the Company ("Common Stock") set forth in Schedules A and B hereto,
and (ii) the grant by the Company and the Selling Stockholder, acting severally
and not jointly, to the U.S. Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
816,000 additional shares of Common Stock to cover over-allotments, if any. The
5,440,000 shares of Common Stock (the "Initial U.S. Securities") to be purchased
by the U.S. Underwriters pursuant to this Agreement and all or any part of the
1
<PAGE>
816,000 shares of Common Stock subject to the option described in Section 2(b)
hereof (the "U.S. Option Securities") are hereinafter called, collectively, the
"U.S. Securities".
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering by the Company
and the Selling Stockholder of an aggregate of 1,360,000 shares of Common Stock
(the "Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada (the "International Managers")
for which Merrill Lynch International, Montgomery Securities and Smith Barney
Inc. are acting as lead managers (the "Lead Managers") and the grant by the
Company and the Selling Stockholder, acting severally and not jointly, to the
International Managers, acting severally and not jointly, of an option to
purchase all or any part of the International Managers' pro rata portion of up
to 204,000 additional shares of Common Stock solely to cover overallotments, if
any (the "International Option Securities" and, together with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Company and the Selling Stockholder are
not obligated to sell, and the U.S. Underwriters are not obligated to purchase,
any Initial U.S. Securities unless all of the Initial International Securities
are contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Stockholder understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-15861) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
Two forms of prospectus are to be used in connection with the offering and sale
of the Securities to the Underwriters: one relating to the U.S. Securities (the
"Form of U.S. Prospectus") and one relating to the International Securities (the
"Form of
2
<PAGE>
International Prospectus"). The Form of International Prospectus is identical
to the Form of U.S. Prospectus, except for the front cover and back cover pages
and the information under the caption "Underwriting". The information included
in any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
any schedules, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated November 18, 1996 and preliminary
International Prospectus dated November 18, 1996, respectively, each together
with the applicable Term Sheet and all references in this Agreement to the date
of such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the U.S. Prospectus, the International Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy (if any) filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each U.S. Underwriter,
as follows:
(i) Compliance with Registration Requirements. Each of the
-----------------------------------------
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing
3
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Time (and, if any U.S. Option Securities are purchased, at the Date of
Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. Neither of the Prospectuses nor any amendments or supplements
thereto, at the time the Prospectuses or any such amendment or supplement
was issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement and any
amendments and supplements thereto or the Prospectuses and any amendments
and supplements thereto made in reliance upon and in conformity with
information furnished to the Company in writing by any U.S. Underwriter
through the U.S. Representatives expressly for use in the Registration
Statement or the Prospectuses.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectuses delivered to
the Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements of the Company and its subsidiaries, and of GENSAR
Holdings Inc. ("GENSAR") and its subsidiaries, included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements of the Company
--------------------
and its consolidated subsidiaries included in the Registration Statement
and the Prospectuses, together with the related notes, present fairly, in
all material respects, the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
income, changes in stockholder's equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto). The
selected financial data and the summary financial information included in
the Prospectuses present fairly, in all material respects, the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement. To the best of the
Company's knowledge, the financial statements of GENSAR and its
consolidated subsidiaries included in the Registration Statement and the
4
<PAGE>
Prospectuses, together with the related notes, present fairly, in all
material respects, the financial position of GENSAR and its consolidated
subsidiaries at the dates indicated and the statement of operations,
shareholders' equity (deficiency) and cash flows of GENSAR and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto). The pro forma financial statements and
the related notes thereto included in the Registration Statement and the
Prospectuses present fairly, in all material respects, the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(iv) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement and the International Purchase Agreement; the Company
is not required to register as a bank holding company under the Bank
Holding Company Act of 1956, as amended; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant subsidiary"
-----------------------------
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the
5
<PAGE>
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; and, except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. The only
subsidiaries of the Company are the subsidiaries listed on Exhibit 21 to
the Registration Statement.
(vii) Financial Services. First USA Financial Services, Inc.
------------------
("Financial Services") is an indirect wholly-owned subsidiary of the
Company and has been duly organized as an industrial loan corporation under
the laws of the State of Utah and is not a "bank" within the meaning of 12
U.S.C. (S)1841(c).
(viii) Capitalization. The authorized, issued and outstanding
--------------
capital stock of the Company, including the U.S. Securities to be purchased
by the U.S. Underwriters from the Selling Stockholder, as of September 30,
1996 is as set forth in the Prospectuses under the caption "Capitalization"
and there have not been any subsequent issuances of capital stock of the
Company, except for subsequent issuances, if any, pursuant to employee
benefit plans referred to in the Prospectuses or pursuant to the exercise
of options referred to in the Prospectuses.
(ix) Authorization of Agreements. This Agreement and the
---------------------------
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(x) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the U.S. Underwriters and the International Managers from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and to the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and in the International Purchase Agreement,
respectively, will be validly issued and fully paid and non-assessable; the
Common Stock conforms in all material respects to all statements relating
thereto contained in the Prospectuses and such description conforms in all
material respects to the rights set forth in the instruments defining the
same; no holder of the Securities will be subject to personal liability by
reason of being such a holder; the issuance of the Securities is not
subject to preemptive or other similar rights arising by operation of law,
under the charter and by-laws of the Company, or under any agreement to
which the Company or any of its subsidiaries is a party; and the
outstanding stock options relating to the Common Stock have been duly
authorized and validly issued and the description thereof contained in the
Prospectuses is true and accurate in all material respects.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract,
6
<PAGE>
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its
subsidiaries is subject (collectively, "Agreements and Instruments") except
for such defaults that would not result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated herein, therein and in the Registration Statement (including
the issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectuses under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries or violation by the Company of any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, known
to the Company, including, without limitation, the Federal Deposit
Insurance Corporation and the Utah Department of Financial Institutions.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which in the reasonable
judgment of the Company might result in a Material Adverse Effect, or which
in the reasonable judgment of the Company might materially and adversely
affect the properties or assets thereof or the consummation of this
Agreement or the International Purchase Agreement or the performance by the
Company of its obligations hereunder or thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, are, in the reasonable judgment of the Company, not likely to
result in a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
7
<PAGE>
(xiv) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") presently employed by them in
connection with the business now operated by them or reasonably necessary
in order to conduct such business, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
in the reasonable judgment of the Company is likely to result in a Material
Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required to be obtained by the Company in connection with
the offering, issuance or sale of the Securities hereunder or under the
International Purchase Agreement or in connection with the consummation of
the transactions contemplated by this Agreement or the International
Purchase Agreement, except such as have been already made or obtained or as
may be required under the 1933 Act or the 1933 Act Regulations and foreign
or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. Except as otherwise stated
----------------------------------
in the Prospectuses, the Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, in the
reasonable judgment of the Company, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, in the
reasonable judgment of the Company, have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, in the reasonable
judgement of the Company, is likely to result in a Material Adverse Effect.
(xvii) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as contemplated herein and in the
International Purchase Agreement and the application of the net proceeds
from the sale of the Securities as described in the Prospectuses will not
be, an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended (the "1940 Act").
8
<PAGE>
(xviii) Business Relationships; Related Party Transactions. There
--------------------------------------------------
are no business relationships or related-party transactions of the nature
described in Item 404 of Regulation S-K involving the Company and any other
persons referred to in said Item 404 that are required to be disclosed in
the Prospectuses and which have not been so disclosed.
(xix) Registration Rights. Except as otherwise described in the
-------------------
Prospectuses, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise by the Company under the 1933 Act.
(b) Representations, Warranties and Agreements of the Selling Stockholder.
The Selling Stockholder represents and warrants to each U.S. Underwriter as of
the date hereof, as of the Closing Time, and as of each Date of Delivery (if
any), and agrees with each U.S. Underwriter, as follows:
(i) Accurate Disclosure. To the best knowledge of the Selling
-------------------
Stockholder, the representations and warranties of the Company contained in
Section 1(a) hereof are true and correct; the Selling Stockholder has
reviewed and is familiar with the Registration Statement and the
Prospectuses and, to the best knowledge of the Selling Stockholder, neither
the Prospectuses nor any amendments or supplements thereto include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the Selling
Stockholder is not prompted to sell the Securities to be sold by the
Selling Stockholder hereunder by any material information concerning the
Company or any subsidiary of the Company which is not set forth in the
Prospectuses.
(ii) Authorization of Agreements. The Selling Stockholder has
---------------------------
corporate power and authority to enter into and perform its obligations
under this Agreement and the International Purchase Agreement. The
execution and delivery of this Agreement and the International Purchase
Agreement and the sale and delivery of the Securities to be sold by the
Selling Stockholder hereunder and thereunder and the consummation of the
transactions contemplated herein and therein and compliance by the Selling
Stockholder with its obligations hereunder and thereunder have been duly
authorized by the Selling Stockholder by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under, any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Selling Stockholder or any of its subsidiaries is a party or by
which it or any of them may be bound which, in the event of any such
conflict, breach or default, could materially and adversely affect the
performance by the Selling Stockholder of its obligations under this
Agreement or the International Purchase Agreement or the consummation of
the transactions contemplated herein or therein (including the issuance,
sale and delivery of the Securities), nor will such action result in any
violation of the provisions of the charter or by-laws of the Selling
Stockholder or any of its subsidiaries or any violation by the Selling
Stockholder of any applicable law, statute, rule, regulation, judgment,
order, writ
9
<PAGE>
or decree of any government, government instrumentality or court, domestic
or foreign, known to the Selling Stockholder.
(iii) Rights in Securities. The Selling Stockholder has and, at the
--------------------
Closing Time (and, if any U.S. Option Securities are purchased, at the Date
of Delivery), will have, all rights in and to the Securities to be sold by
the Selling Stockholder hereunder and under the International Purchase
Agreement, free and clear of any "adverse claims" within the meaning of
Section 8-302 of the New York Uniform Commercial Code; and upon delivery of
such Securities and payment of the purchase price therefor as contemplated
herein and in the International Purchase Agreement, assuming each of the
Underwriters is a "bona fide purchaser" (as defined under Section 8-302 of
the New York Uniform Commercial Code), each of the Underwriters will
acquire all rights in and to the Securities purchased by it from the
Selling Stockholder, free and clear of any "adverse claims" within the
meaning of Section 8-302 of the New York Uniform Commercial Code. The sale
and delivery of the Securities to the Underwriters as contemplated herein
and in the International Purchase Agreement is not subject to any right of
first refusal or similar rights of any person pursuant to any contract to
which the Selling Stockholder or any of its subsidiaries is a party or by
which any of them is bound.
(iv) Absence of Manipulation. 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 Securities.
(v) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required to be obtained by the Selling Stockholder in
connection with the sale and delivery of the Securities hereunder or under
the International Purchase Agreement or the consummation of the
transactions contemplated by this Agreement or the International Purchase
Agreement, except such as have been already made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the regulations
promulgated thereunder and foreign or state securities or blue sky laws.
(vi) Restriction on Sale of Securities. During a period of 120 days
---------------------------------
from the date of the Prospectuses, except as provided in the Prospectuses,
the Selling Stockholder will not, without the prior written consent of
Merrill Lynch, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock. The
foregoing sentence shall not apply to the Securities to be sold hereunder
or under the International Purchase Agreement.
(vii) No Association with NASD. Neither the Selling Stockholder nor
------------------------
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is
10
<PAGE>
controlled by, or is under common control with, or has any other
association with (within the meaning of subparagraph (q) of Article I of
the By-laws of the National Association of Securities Dealers, Inc.), any
member firm of the National Association of Securities Dealers, Inc., other
than First USA Capital Markets, Inc. and its officers and employees.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby; and any certificate signed by any officer of the
Selling Stockholder delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Selling Stockholder to the U.S. Underwriters
as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and the Selling Stockholder, severally and not jointly, agree to sell to
each U.S. Underwriter, severally and not jointly, and each U.S. Underwriter,
severally and not jointly, agrees to purchase from the Company and the Selling
Stockholder, at the price per share set forth in Schedule C, that proportion of
the number of Initial U.S. Securities set forth in Schedule B opposite the name
of the Company or the Selling Stockholder, as the case may be, which the number
of Initial U.S. Securities set forth in Schedule A opposite the name of such
U.S. Underwriter, plus any additional number of Initial U.S. Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial U.S. Securities,
subject, in each case, to such adjustments among the U.S. Underwriters as the
Global Coordinator in its sole discretion shall make to eliminate any sales or
purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company and the Selling Stockholder, severally and not jointly,
hereby grant an option to the U.S. Underwriters, severally and not jointly, to
purchase up to an additional 816,000 shares of Common Stock, as set forth in
Schedule B, at the price per share set forth in Schedule C. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial U.S. Securities upon notice by the Global Coordinator to the Company and
the Selling Stockholder setting forth the number of U.S. Option Securities as to
which the several U.S. Underwriters are then exercising the option and the time
and date of payment and delivery for such U.S. Option Securities. Any such time
and date of delivery for the U.S. Option Securities (a "Date of Delivery") shall
be determined by the Global Coordinator, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the U.S. Option Securities, each of the U.S. Underwriters, acting
severally and not jointly, will purchase from the Company and the Selling
Stockholder, pro rata, that proportion of the total number of U.S. Option
Securities then being purchased which the number of Initial
11
<PAGE>
U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the Global Coordinator in its discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of Brown &
Wood LLP, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by the Global Coordinator, the Company and the
Selling Stockholder, at 9:00 A.M. (Eastern Time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern Time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Stockholder (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator, the Company and the Selling Stockholder, on each Date of
Delivery as specified in the notice from the Global Coordinator to the Company
and the Selling Stockholder. Payment shall be made to the Company and the
Selling Stockholder by wire transfer of immediately available funds payable to
the order of the Company and the Selling Stockholder, as the case may be,
against delivery to the U.S. Representatives for the respective accounts of the
U.S. Underwriters of certificates for the Initial U.S. Securities and the U.S.
Option Securities to be purchased by them. It is understood that each U.S.
Underwriter has authorized the U.S. Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial U.S. Securities and the U.S. Option Securities, if any, which it has
agreed to purchase. Merrill Lynch, individually and not as representative of
the U.S. Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial U.S. Securities or the U.S. Option Securities, if
any, to be purchased by any U.S. Underwriter whose funds have not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such U.S. Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern Time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
U.S. Underwriter as follows:
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(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the U.S. Underwriters shall reasonably
object in writing.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the U.S. Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the U.S.
Underwriters. If applicable, the copies of the Registration Statement and
each amendment thereto furnished to the U.S. Underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to
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be delivered under the 1933 Act or the 1934 Act, such number of copies of
the U.S. Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. If applicable, the U.S. Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the U.S. Underwriters
to which opinion counsel for the Company shall not reasonably object, to
amend the Registration Statement or amend or supplement any Prospectus in
order that the Prospectuses will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of counsel for the U.S. Underwriters to which
opinion counsel for the Company shall not reasonably object, at any such
time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the
Company will furnish to the U.S. Underwriters such number of copies of such
amendment or supplement as the U.S. Underwriters may reasonably request.
(f) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds".
(h) Listing. The Company will use every reasonable effort to effect
the listing of the Securities on the New York Stock Exchange.
(i) Restriction on Sale of Securities. During a period of 120 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of Merrill Lynch, (i) issue, offer, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer
or dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock. The
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foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the International Purchase Agreement, (B) any shares of
Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in the Prospectuses, (C) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to the Company's existing employee benefit plans and (D) shares of
Common Stock issued in connection with one or more acquisitions of
companies, businesses or assets, provided that the value of the shares so
--------
issued does not exceed, in the aggregate, $100 million (such value to be
based upon the closing price of the Common Stock on the New York Stock
Exchange on the date any such shares are issued or, if there is no such
closing price on such date, on the most recent day prior to such issuance
on which there is a closing price) and each person or entity that receives
any of the shares so issued delivers to the U.S. Representatives at or
prior to the date of issuance an agreement substantially in the form of
Exhibit C hereto.
(j) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
-------------------
Selling Stockholder will pay or cause to be paid all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the U.S. Securities to the U.S. Underwriters, including any stock or other
transfer taxes and any stamp or other duties payable upon the sale, issuance or
delivery of the U.S. Securities to the U.S. Underwriters and the transfer of the
U.S. Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the printing and delivery to the U.S. Underwriters of copies of
each preliminary prospectus, any Term Sheets and of the U.S. Prospectus and any
amendments or supplements thereto, (vi) the preparation, printing and delivery
to the U.S. Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (vii) the fees and expenses of any transfer agent or registrar for the
Securities, (viii) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the U.S. Underwriters in connection with, the review
by the National Association of Securities Dealers, Inc. (the "NASD") of the
terms of the sale of the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange.
(b) Expenses of the Selling Stockholder. The Selling Stockholder will pay
all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the U.S. Underwriters, and their transfer between
the U.S. Underwriters pursuant to an agreement between such U.S. Underwriters,
(ii)
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the fees and disbursements of its counsel and accountants, and (iii) any
underwriting discount attributable to any of the U.S. Securities being sold by
the Selling Stockholder.
(c) Termination of Agreement. If this Agreement is terminated by the
Global Coordinator in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the U.S. Underwriters
for all of their reasonable out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the U.S. Underwriters.
(d) Allocation of Expenses. The provisions of this Section 4 shall not
affect any agreement that the Company and the Selling Stockholder may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any of its subsidiaries or on behalf of the Selling Stockholder delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective on the date hereof and at Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the U.S. Underwriters. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements
of Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term
Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinions of Counsel for Company and the Selling Stockholder. At
Closing Time the U.S. Representatives shall have received (i) the favorable
opinion, dated as of Closing Time, of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel for the Company and the Selling Stockholder, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters, to the effect set forth in Exhibit A hereto and (ii) the
favorable opinion, dated as of Closing Time, of Philip E. Taken, Esq.,
Senior Vice President and General Counsel of the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters, to the effect set forth in Exhibit B hereto.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of
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Brown & Wood LLP, counsel for the U.S. Underwriters, together with signed
or reproduced copies of such letter for each of the other U.S. Underwriters
with respect to the matters set forth in (i), (v), and (viii) to (xi),
inclusive, and the last paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) Officers' Certificate. At Closing Time there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the U.S. Representatives shall have received a certificate of the President
or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated by the
Commission.
(e) Officer's Certificate of Selling Stockholder. At Closing Time,
the U.S. Representatives shall have received a certificate of the President
or a Vice President of the Selling Stockholder, dated as of Closing Time,
to the effect that (i) the representations and warranties of the Selling
Stockholder contained in Section 1(b) hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time
and (ii) the Selling Stockholder has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time.
(f) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from each of
Ernst & Young LLP and Deloitte & Touche LLP a letter dated such date, in
form and substance satisfactory to the U.S. Representatives, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(g) Bring-down Comfort Letter. At Closing Time the U.S.
Representatives shall have received from Ernst & Young LLP a letter, dated
as of Closing Time, to the
17
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effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (f) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(h) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule D hereto.
(j) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities under the International Purchase
Agreement.
(k) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company and the Selling Stockholder
contained herein and the statements in any certificates furnished by the
Company and the Selling Stockholder hereunder shall be true and correct as
of each Date of Delivery and, at the relevant Date of Delivery, the U.S.
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Certificate of Selling Stockholder. A certificate, dated such
----------------------------------
Date of Delivery, of the President or a Vice President of the Selling
Stockholder confirming that the certificate delivered at the Closing
Time pursuant to Section 5(e) hereof remains true and correct as of
such Date of Delivery.
(iii) Opinions of Counsel for Company and the Selling Stockholder.
-----------------------------------------------------------
The favorable opinions of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Company and the Selling Stockholder, and Philip E.
Taken, Esq., Senior Vice President and General Counsel of the Company,
each in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S. Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinions required by Section 5(b) hereof.
(iv) Opinion of Counsel for Underwriters. The favorable opinion of
-----------------------------------
Brown & Wood LLP, counsel for the U.S. Underwriters, dated such Date
of Delivery,
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<PAGE>
relating to the U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(v) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in
-------------------------
form and substance satisfactory to the U.S. Representatives and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the U.S. Representatives pursuant to Section
5(g) hereof, except that any "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than three days
prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Stockholder in connection with the issuance
and sale of the Securities as herein contemplated shall be satisfactory in form
and substance to the U.S. Representatives and counsel for the U.S. Underwriters.
(m) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after Closing Time, the obligations of
the several U.S. Underwriters to purchase the relevant U.S. Option Securities,
may be terminated by the U.S. Representatives by notice to the Company at any
time at or prior to Closing Time or such Date of Delivery, as the case may be,
and such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 6 and 7 shall survive
any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company and the Selling
Stockholder jointly and severally agree to indemnify and hold harmless each U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
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(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and the Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c), the fees and disbursements of one counsel chosen
by Merrill Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto). Any
amounts advanced by the Company or the Selling Stockholder to an indemnified
party pursuant to this Section 6(a) in respect of any loss, liability, claim,
damage or expense shall be returned to the Company or the Selling Stockholder,
as the case may be, if it shall be finally determined by a court in a judgment
not subject to appeal or final review that such indemnified party was not
entitled to indemnification pursuant to this Section 6(a).
The foregoing indemnification with respect to any preliminary prospectus
shall not inure to the benefit of any U.S. Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased Securities,
or any person controlling such U.S. Underwriter, if a copy of the U.S.
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such U.S. Underwriter to such person, if such is required by law, at or prior to
the written confirmation of the sale of such shares to such person and if the
U.S. Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
(b) Indemnification of Company, Directors and Officers and the Selling
Stockholder. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, the Selling Stockholder and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule
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430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto). Any
amounts advanced by a U.S. Underwriter to an indemnified party pursuant to this
Section 6(b) in respect of any loss, liability, claim, damage or expense shall
be returned to such U.S. Underwriter if it shall be finally determined by a
court in a judgment not subject to appeal or final review that such indemnified
party was not entitled to indemnification pursuant to this Section 6(b).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. The Selling Stockholder shall not be
responsible for the payment of an amount pursuant to this Section 6 which
exceeds the net proceeds received by the Selling Stockholder from the sale of
the U.S. Securities by the Selling Stockholder hereunder.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying
21
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party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement; provided, that an indemnifying
--------
party shall not be liable for any such settlement effected without its consent
if such indemnifying party (1) reimburses such indemnified party in accordance
with such request to the extent it considers such request to be reasonable and
(2) provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section 6 shall not affect any agreement between the Company and the
Selling Stockholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholder on the one hand and the U.S. Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholder on the one hand and of the U.S. Underwriters
on the other hand in connection with the statements or omission which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholder
on the one hand and the Underwriters on the other hand in connection with the
offering of the U.S. Securities pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the U.S. Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the Selling Stockholder and the total underwriting
discount received by the U.S. Underwriters, in each case as set forth on the
cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet, bear to the aggregate initial public offering price
of the U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on the one
hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling Stockholder
or by the U.S. 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 U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages
and
22
<PAGE>
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company or the Selling Stockholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company or the Selling Stockholder, as the case may be. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement between the
Company and the Selling Stockholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in
- --------
this Agreement or in certificates of officers of the Company or the Selling
Stockholder submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Stockholder, and shall survive delivery of the Securities to the U.S.
Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company and the Selling Stockholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the U.S. Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or
23
<PAGE>
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the U.S. Representatives, impracticable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) if a banking moratorium has been declared by either Federal, New York or
Delaware authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
-----------------------------------------------
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation
of the U.S. Underwriters to purchase and of the Company to sell the U.S.
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting U.S.
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the
24
<PAGE>
relevant U.S. Option Securities, as the case may be, either the U.S.
Representatives or the Company and the Selling Stockholder shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectuses or in any other documents or
arrangements. As used herein, the term "U.S. Underwriter" includes any person
substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Default by the Selling Stockholder or the Company. If the
-------------------------------------------------
Selling Stockholder shall fail at Closing Time or at a Date of Delivery to sell
and deliver the number of Securities which the Selling Stockholder is obligated
to sell hereunder, then the U.S. Underwriters may, at option of the U.S.
Representatives, by notice from the U.S. Representatives to the Company, either
(a) terminate this Agreement without any liability on the part of any non-
defaulting party except that the provisions of Sections 4, 6 and 7 shall remain
in full force and effect or (b) elect to purchase the Securities which the
Company has agreed to sell hereunder. No action taken pursuant to this Section
11 shall relieve the Selling Stockholder from liability, if any, in respect of
such default.
In the event of a default by the Selling Stockholder as referred to in this
Section 11, each of the U.S. Representatives and the Company shall have the
right to postpone Closing Time or a Date of Delivery for a period not exceeding
seven days in order to effect any required change in the Registration Statement
or Prospectuses or in any other documents or arrangements.
If the Company shall fail at Closing Time or at a Date of Delivery to sell
the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting
party; provided, however, that the provisions of Sections 4, 6 and 7 shall
remain in full force and effect. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Michael M. Geitz;
notices to the Company shall be directed to it at 1601 Elm Street, 47th Floor,
Dallas, Texas 75201, attention of General Counsel; and notices to the Selling
Stockholder should be directed to it at 1601 Elm Street, 47th Floor, Dallas,
Texas 75201, attention of General Counsel.
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the U.S. Underwriters, the Company and the Selling
Stockholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters and the Company and the Selling
Stockholder and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Company and the Selling
25
<PAGE>
Stockholder and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any U.S. Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
26
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Stockholder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the U.S. Underwriters, the Company and the Selling
Stockholder in accordance with its terms.
Very truly yours,
FIRST USA PAYMENTECH, INC.
By______________________________________
Title:
FIRST USA FINANCIAL, INC.
By_______________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MONTGOMERY SECURITIES
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ______________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
27
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Initial U.S.
Name of U.S. Underwriter Securities
- ------------------------ ------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................
Montgomery Securities....................................
Smith Barney Inc.........................................
Total............................................... 5,440,000
=========
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Number of Initial Maximum Number of
U.S. Securities U.S. Option
to Be Sold Securities to Be Sold
----------------- ---------------------
<S> <C> <C>
FIRST USA PAYMENTECH, INC. 2,240,000 336,000
FIRST USA FINANCIAL, INC. 3,200,000 480,000
--------- -------
Total........................ 5,440,000 816,000
========= =======
</TABLE>
Sch B-1
<PAGE>
SCHEDULE C
FIRST USA PAYMENTECH, INC.
5,440,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several U.S. Underwriters shall be $[ ], being an amount equal to the
initial public offering price set forth above less $[ ] per share;
provided that the purchase price per share for any U.S. Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends
or distributions declared by the Company and payable on the Initial U.S.
Securities but not payable on the U.S. Option Securities.
Sch C-1
<PAGE>
SCHEDULE D
[List of persons and entities
subject to lock-up]
Gene H. Bishop
Pamela H. Patsley
Rupinder S. Sidhu
John C. Tolleson
Richard W. Vague
Michael P. Duffy
Susan H. Cerpanya
Raymond J. McArdle
Elena R. Anderson
Sch D-1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware. In rendering the opinion set forth
in this paragraph (i), counsel may rely solely on a review of a certificate
from the Secretary of State of the State of Delaware.
(ii) The Company has the corporate power and corporate authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and to enter into and perform its obligations under the
U.S. Purchase Agreement and the International Purchase Agreement.
(iii) The Company is not required to register as a bank holding company
under the Bank Holding Company Act of 1956, as amended, as a result of its
ownership of Financial Services and Financial Services is not a "bank" within
the meaning of 12 U.S.C. (S)1841(c). In rendering the opinion set forth in this
paragraph (iii), counsel may assume the accuracy and completeness of statements
made in a certificate of an officer of the Company.
(iv) The number of authorized, issued and outstanding shares of capital
stock of the Company as of September 30, 1996 was as set forth in the
Prospectuses under the caption "Capitalization" and such counsel is not aware of
any subsequent issuances of capital stock, except for subsequent issuances, if
any, pursuant to employee benefit plans or the exercise of options referred to
in the Prospectuses; and the shares of issued and outstanding capital stock of
the Company, including the Securities to be purchased by the U.S. Underwriters
and the International Managers from the Selling Stockholder pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement (the "Secondary
Securities"), have been duly authorized and validly issued and are fully paid
and non-assessable. In rendering the opinion set forth in this paragraph (iv) as
to issued and outstanding shares, such counsel may rely on a review of the
Certificate of Incorporation and By-laws of the Company, minutes of the
Company's Board of Directors, an officer's certificate regarding the outstanding
Common Stock and a certificate of the transfer agent for the Common Stock.
(v) The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company (the "Primary Securities") have been
duly authorized for issuance and sale to the U.S. Underwriters pursuant to the
U.S. Purchase Agreement and to the International Managers pursuant to the
International Purchase Agreement, respectively, and, when issued and delivered
by the Company in accordance with the U.S. Purchase Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth in the U.S. Purchase Agreement and the International
Purchase Agreement, respectively, will be validly issued and fully paid and non-
assessable. In rendering the opinions set forth in this paragraph (v), counsel
may
A-1
<PAGE>
assume that the certificates representing the Common Stock to be purchased by
the U.S. Underwriters and the International Managers will be duly countersigned
by the transfer agent for the Primary Securities and will conform to the
specimen certificate examined by such counsel.
(vi) The Selling Stockholder has the corporate power and corporate
authority to enter into and perform its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement and, assuming that Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as the agent for the Underwriters
(the "Agent"), acquired its interest in the Secondary Securities in good faith
and without notice of any adverse claims, upon delivery to the Agent in the
State of New York of the Secondary Securities registered to it, indorsed to it
or in blank, as the case may be, the Agent will acquire all of the Selling
Stockholder's rights in the Secondary Securities free of any adverse claims
(within the meaning of Section 8-302 of the Uniform Commercial Code as in effect
on the date hereof in the State of New York).
(vii) The issuance of the Primary Securities by the Company is not subject
to preemptive rights arising by operation of the Delaware General Corporation
Law or preemptive or other similar rights under the charter or by-laws of the
Company.
(viii) The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by each of the
Company and the Selling Stockholder.
(ix) Such counsel has been informed by the Commission that the
Registration Statement, including any Rule 462(b) Registration Statement, has
been declared effective under the 1933 Act; any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); and, to the best of such counsel's
knowledge and information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses, and each amendment or supplement to the
Registration Statement and the Prospectuses, as of their respective effective or
issue dates (other than the financial statements and supporting schedules and
other financial and statistical information included therein or excluded
therefrom or in exhibits to or excluded from the Registration Statement, as to
which no opinion need be rendered) appeared on their face to be responsive in
all material respects to the requirements of the 1933 Act and the 1933 Act
Regulations, except that such counsel need not express any opinion as to the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, any Rule 462(b) Registration Statement, the Rule 430A
Information and the Rule 434 Information, the Prospectuses and each amendment or
supplement to the Registration Statement and the Prospectuses except to the
extent set forth in paragraph (xiii) below.
(xi) The form of certificate used to evidence the Common Stock is in due
and proper form and complies with all applicable requirements under the Delaware
General Corporation Law and with any applicable requirements of the charter and
by-laws of the Company. In rendering the opinion set forth in this paragraph
(xi), such counsel may assume that the certificates
A-2
<PAGE>
representing the Common Stock will conform to the specimen certificate examined
by such counsel.
(xii) To the best of such counsel's knowledge and information, based
solely upon inquiries of responsible officers of the Company and such counsel's
review of attorney's letters to the accountants for the Company sent in
connection with the preparation of the Registration Statement, there is not
pending or threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, which is required to be disclosed in the
Registration Statement, other than those disclosed therein. In rendering the
opinion set forth in this paragraph (xii), such counsel may state that it has
made no other inquiries and no search of the public docket records of any court,
governmental agency or body or administrative agency.
(xiii) The information in the Prospectuses under "Description of Capital
Stock", "Business--Regulation of Financial Services" and "Certain United States
Federal Tax Consequences to Non-U.S. Holders", to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and bylaws or
legal proceedings, or legal conclusions, has been reviewed by them and is
correct in all material respects.
(xiv) To the best of such counsel's knowledge and information, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments or agreements required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto, other than those
described or referred to therein or filed as exhibits thereto, and the
descriptions thereof or references thereto in the Prospectuses and the
Registration Statement are correct in all material respects. In rendering the
opinion set forth in this paragraph (xiv), such counsel may rely on its review
of those documents referred to in a certificate of an officer of the Company
(the "Officer's Certificate").
(xv) No filing with, or authorization, approval, consent or order of, any
court or governmental authority or agency under any Applicable Law (as defined
below) (other than under the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the rules and regulations promulgated thereunder, which have been made or
obtained, or as may be required under the securities or blue sky laws of the
various states, as to which such counsel need express no opinion) is required to
be obtained by the Company or its subsidiaries in connection with the offering,
issuance or sale of the Primary Securities to the U.S. Underwriters pursuant to
the U.S. Purchase Agreement or to the International Managers pursuant to the
International Purchase Agreement.
(xvi) No filing with, or authorization, approval, consent or order of,
any court or governmental authority or agency under any Applicable Law (other
than under the 1933 Act, the 1933 Act Regulations, the 1934 Act and the rules
and regulations promulgated thereunder, which have been made or obtained, or as
may be required under the securities or blue sky laws of the various states, as
to which such counsel need express no opinion) is required to be obtained by the
Selling Stockholder in connection with the offer, sale or delivery of the
Secondary Securities to the U.S. Underwriters pursuant to the U.S. Purchase
Agreement or to the International Managers pursuant to the International
Purchase Agreement.
A-3
<PAGE>
(xvii) To the best of such counsel's knowledge and information, the
execution, delivery and performance of the U.S. Purchase Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated therein and in the Registration Statement (including the issuance
and sale of the Primary Securities by the Company, and the use of the proceeds
from the sale of such Primary Securities as described in the Prospectuses under
the caption "Use of Proceeds") and compliance by the Company with its
obligations under the U.S. Purchase Agreement and the International Purchase
Agreement will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 1(a)(xi) of the Purchase Agreements) under or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument which has been identified to such counsel in the
Officer's Certificate as containing provisions which, in the event of any such
conflict, breach, default or imposition of lien, charge or encumbrance, could
have a Material Adverse Effect (the "Applicable Contracts"), nor will such
action result in any violation of (a) the General Corporation Law of the State
of Delaware, the laws, rules or regulations of the State of New York or the
laws, rules or regulations of the United States, in each case, that in the
opinion of such counsel, based upon such counsel's experience, are normally
applicable to transactions of the type provided for by the U.S Purchase
Agreement or the International Purchase Agreement (other than the securities or
blue sky laws of the various states and the rules and regulations of the
National Association of Securities Dealers, Inc., as to which such counsel need
not express any opinion) ("Applicable Law"), except that such counsel need not
express any opinion as to the Federal securities laws, (b) the provisions of the
Company's Certificate of Incorporation or By-laws, or (c) any order of any
governmental agency or body or any administrative or court decree identified to
such counsel in the Officer's Certificate. In rendering the opinion set forth in
this paragraph (xvii) with respect to conflicts with, breaches of or defaults
under, or the imposition of liens, charges or encumbrances pursuant to,
Applicable Contracts, such counsel may rely solely on a certificate of a
responsible officer of the Company regarding compliance with any covenant,
restriction or provision of any Applicable Contract that requires satisfaction
of a financial ratio or test or any aspect of the financial condition or results
of operations of the Company or any of its subsidiaries.
(xviii) To the best of such counsel's knowledge and information, the
execution, delivery and performance of the U.S. Purchase Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated therein and in the Registration Statement and compliance by the
Selling Stockholder with its obligations under the U.S. Purchase Agreement and
the International Purchase Agreement will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a breach
of, or default under, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument which has
been identified to such counsel in a certificate of an officer of the Selling
Stockholder as containing provisions which, in the event of any such conflict,
breach or default, could materially and adversely affect the performance by the
Selling Stockholder of its obligations under the U.S. Purchase Agreement or the
International Purchase Agreement (including the sale and delivery of the
Secondary Securities pursuant thereto) (the "Applicable Stockholder Contracts"),
nor will such action result in any violation of (a) any Applicable Law, except
that such counsel need not express any opinion as to the Federal securities
laws, (b) the provisions of
A-4
<PAGE>
the Selling Stockholder's Certificate of Incorporation or By-laws, or (c) any
order of any governmental agency or body or any administrative or court decree
identified to such counsel in a certificate of an officer of the Selling
Stockholder. In rendering the opinion set forth in this paragraph (xviii) with
respect to conflicts with, breaches of or defaults under Applicable Stockholder
Contracts, such counsel may rely on a certificate of a responsible officer of
the Selling Stockholder regarding compliance with any covenant, restriction or
provision of any Applicable Stockholder Contract that requires satisfaction of a
financial ratio or test or any aspect of the financial condition or results of
operations of the Selling Stockholder or any of its subsidiaries.
No facts have come to such counsel's attention that would lead them to
believe that the Registration Statement, including the Rule 430A Information
Rule 434 Information (if applicable), (except for financial statements and
schedules and other financial information included therein or excluded therefrom
or in exhibits to or excluded from the Registration Statement, as to which such
counsel need make no statement), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectuses or any amendment or supplement thereto (except for
financial statements and schedules and other financial information included
therein or excluded therefrom, as to which such counsel need make no statement),
at the time the Prospectuses were issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or includes
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
A-5
<PAGE>
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(ii)
(i) Each Subsidiary is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement; and all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except as described in the
Prospectuses, is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or, to
the best of such counsel's knowledge and information, any pending or threatened
claim.
(ii) To the best of such counsel's knowledge and information, the Company
and each Subsidiary is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iii) All pending actions, suits, proceedings, inquiries or investigations
to which the Company or any subsidiary is a party, or to which the property of
the Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, which are not described in the Registration
Statement, including ordinary routine litigation incidental to their business,
are, considered in the aggregate, not material.
(iv) To the best of such counsel's knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed as an exhibit to the Registration Statement, which default
or defaults, singly or in the aggregate, are material to the Company and its
subsidiaries considered as one enterprise.
(v) To the best of such counsel's knowledge and information, the
issuance of the Securities by the Company and the sale of the Securities by the
Selling Stockholder is not subject to preemptive or other similar rights under
any agreement to which the Company, the Selling Stockholder or any of their
respective subsidiaries is a party.
No facts have come to such counsel's attention that would lead him to
believe that the Registration Statement, including the Rule 430A Information and
Rule 434 Information (if applicable), (except for financial statements and
schedules and other financial and statistical
B-1
<PAGE>
information included therein or in exhibits to or excluded from the Registration
Statement, as to which such counsel need make no statement), at the time it
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses or any amendment or
supplement thereto (except for financial statements and schedules and other
financial and statistical information included therein, as to which such counsel
need make no statement), at the time the Prospectuses were issued, at the time
any such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
B-2
<PAGE>
Exhibit C
__________, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Montgomery Securities
Smith Barney Inc.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering of First USA Paymentech, Inc. Common Stock
-------------------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of First USA
Paymentech, Inc., a Delaware corporation (the "Company"), First USA, Inc. or one
of their subsidiaries, understands that Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Montgomery Securities and
Smith Barney Inc. propose to enter into a U.S. Purchase Agreement (the "U.S.
Purchase Agreement") with the Company and First USA Financial, Inc. providing
for the public offering of shares (the "Securities") of the Company's common
stock, par value $.01 per share (the "Common Stock"). In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
and an officer and/or director of the Company, First USA, Inc. or one of their
subsidiaries, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the U.S. Purchase Agreement that, during a period of
120 days from the date of the U.S. Purchase Agreement, the undersigned will not,
without the prior written consent of Merrill Lynch, directly or indirectly,
offer, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant for the sale
of, or otherwise dispose of or transfer any shares of the Company's Common Stock
or any securities convertible into or exchangeable or exercisable for Common
Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned
C-1
<PAGE>
has or hereafter acquires the power of disposition; provided that nothing
contained in this letter agreement shall be deemed to prohibit the exercise of
options to purchase Common Stock granted pursuant to the existing employee
benefit plans of the Company or the bona fide pledge of shares of Common Stock
---- ----
or such other securities.
Very truly yours,
Signature:______________________________
Print Name:_____________________________
C-2
<PAGE>
EXHIBIT 1.2
______________________________________________________________________________
______________________________________________________________________________
FIRST USA PAYMENTECH, INC.
(a Delaware corporation)
1,360,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
Dated: [__________], 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTERNATIONAL PURCHASE AGREEMENT.............................................. 1
SECTION 1. Representations and Warranties............................... 3
------------------------------
(a) Representations and Warranties by the Company................ 3
(i) Compliance with Registration Requirements............... 3
-----------------------------------------
(ii) Independent Accountants................................ 4
-----------------------
(iii) Financial Statements.................................. 4
--------------------
(iv) No Material Adverse Change in Business................. 5
--------------------------------------
(v) Good Standing of the Company............................ 5
----------------------------
(vi) Good Standing of Subsidiaries.......................... 5
-----------------------------
(vii) Financial Services.................................... 6
------------------
(viii) Capitalization....................................... 6
--------------
(ix) Authorization of Agreement............................. 6
--------------------------
(x) Authorization and Description of Securities............. 6
-------------------------------------------
(xi) Absence of Defaults and Conflicts...................... 6
---------------------------------
(xii) Absence of Proceedings................................ 7
----------------------
(xiii) Accuracy of Exhibits................................. 7
--------------------
(xiv) Possession of Intellectual Property................... 7
-----------------------------------
(xv) Absence of Further Requirements........................ 8
-------------------------------
(xvi) Possession of Licenses and Permits.................... 8
----------------------------------
(xvii) Investment Company Act............................... 8
----------------------
(xviii) Business Relationships; Related Party Transactions.. 8
--------------------------------------------------
(xix) Registration Rights................................... 9
-------------------
(b) Representations, Warranties and Agreements of the Selling
Stockholder.................................................. 9
(i) Accurate Disclosure..................................... 9
-------------------
(ii) Authorization of Agreements............................ 9
---------------------------
(iii) Rights in Securities.................................. 10
--------------------
(iv) Absence of Manipulation................................ 10
-----------------------
(v) Absence of Further Requirements......................... 10
-------------------------------
(vi) Restriction on Sale of Securities...................... 10
---------------------------------
(vii) No Association with NASD.............................. 10
------------------------
(c) Officer's Certificates....................................... 11
SECTION 2. Sale and Delivery to Underwriters; Closing................... 11
------------------------------------------
(a) Initial Securities........................................... 11
(b) Option Securities............................................ 11
(c) Payment...................................................... 12
(d) Denominations; Registration.................................. 12
SECTION 3. Covenants of the Company..................................... 12
------------------------
(a) Compliance with Securities Regulations and Commission
Requests..................................................... 13
(b) Filing of Amendments......................................... 13
(c) Delivery of Registration Statements.......................... 13
(d) Delivery of Prospectuses..................................... 13
(e) Continued Compliance with Securities Laws.................... 14
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(f) Rule 158..................................................... 14
(g) Use of Proceeds.............................................. 14
(h) Listing...................................................... 14
(i) Restriction on Sale of Securities............................ 14
(j) Reporting Requirements....................................... 15
SECTION 4. Payment of Expenses.......................................... 15
-------------------
(a) Expenses....................................................... 15
(b) Expenses of the Selling Stockholder............................ 15
(c) Termination of Agreement....................................... 16
(d) Allocation of Expenses......................................... 16
SECTION 5. Conditions of Underwriters' Obligations...................... 16
---------------------------------------
(a) Effectiveness of Registration Statement...................... 16
(b) Opinions of Counsel for Company and the Selling Stockholder.. 16
(c) Opinion of Counsel for International Managers................ 16
(d) Officers' Certificate........................................ 17
(e) Officer's Certificate of Selling Stockholder................. 17
(f) Accountant's Comfort Letter.................................. 17
(g) Bring-down Comfort Letter.................................... 17
(h) ............................................................. 18
No Objection........................................................ 18
(i) Lock-up Agreements........................................... 18
(j) Purchase of Initial U.S. Securities.......................... 18
(k) ............................................................. 18
Conditions to Purchase of International Option Securities........... 18
(l) Additional Documents......................................... 19
(m) Termination of Agreement....................................... 19
SECTION 6. Indemnification.............................................. 19
---------------
(a) Indemnification of International Managers.................... 19
(b) Indemnification of Company, Directors and Officers........... 20
(c) Actions against Parties; Notification........................ 21
(d) Other Agreements with Respect to Indemnification............. 21
SECTION 7. Contribution................................................. 21
------------
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery............................................................ 23
--------
SECTION 9. Termination of Agreement..................................... 23
------------------------
(a) Termination; General......................................... 23
(b) Liabilities.................................................. 23
SECTION 10. Default by One or More of the International Managers......... 24
----------------------------------------------------
SECTION 11. Default by the Selling Stockholder or the Company............ 24
-------------------------------------------------
SECTION 12. Notices...................................................... 25
-------
SECTION 13. Parties...................................................... 25
-------
SECTION 14. GOVERNING LAW AND TIME....................................... 25
----------------------
SECTION 15. Effect of Headings........................................... 25
------------------
</TABLE>
ii
<PAGE>
FIRST USA PAYMENTECH, INC.
(a Delaware corporation)
1,360,000 Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
[__________], 1996
MERRILL LYNCH INTERNATIONAL
MONTGOMERY SECURITIES
SMITH BARNEY INC.
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
First USA Paymentech, Inc., a Delaware corporation (the "Company"), and
First USA Financial, Inc., a Delaware corporation (the "Selling Stockholder"),
confirm their respective agreements with Merrill Lynch International ("Merrill
Lynch"), Montgomery Securities, Smith Barney Inc. and each of the other
International Managers named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, Montgomery Securities and Smith Barney Inc. are acting as representatives
(in such capacity, the "Lead Managers"), with respect to (i) the sale by the
Company and the Selling Stockholder, acting severally and not jointly, and the
purchase by the International Managers, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto, and (ii) the
grant by the Company and the Selling Stockholder, acting severally and not
jointly, to the International Managers, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 204,000
additional shares of Common Stock to cover over-allotments, if any. The
1,360,000 shares of Common Stock (the "Initial International Securities") to be
purchased by the International Managers pursuant to this Agreement and all or
any part of the 204,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "International Option Securities") are hereinafter
called, collectively, the "International Securities".
1
<PAGE>
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Company and the Selling
Stockholder of an aggregate of 5,440,000 shares of Common Stock (the "Initial
U.S. Securities") through arrangements with certain underwriters in the United
States and Canada (the "U.S. Underwriters") for which Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Montgomery Securities and Smith Barney Inc. are
acting as representatives (the "U.S. Representatives") and the grant by the
Company and the Selling Stockholder, acting severally and not jointly, to the
U.S. Underwriters, acting severally and not jointly, of an option to purchase
all or any part of the U.S. Underwriters' pro rata portion of up to 816,000
additional shares of Common Stock solely to cover overallotments, if any (the
"U.S. Option Securities" and, together with the International Option Securities,
the "Option Securities"). The Initial U.S. Securities and the U.S. Option
Securities are hereinafter called the "U.S. Securities". It is understood that
the Company and the Selling Stockholder are not obligated to sell, and the
International Managers are not obligated to purchase, any Initial International
Securities unless all of the Initial U.S. Securities are contemporaneously
purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Stockholder understand that the International
Managers propose to make an offering of the International Securities as soon as
the Lead Managers deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-15861) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
Two forms of prospectus are to be used in connection with the offering and sale
of the Securities to the Underwriters: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the U.S.
Securities (the "Form of U.S. Prospectus"). The Form of International
Prospectus is identical to the Form of U.S. Prospectus, except for the front
cover and back cover pages and the information under the caption "Underwriting".
The information included in any such prospectus or in any such Term Sheet, as
the case may be, that was omitted from such registration statement at the time
it became
2
<PAGE>
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each Form of International Prospectus
and Form of U.S. Prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and any schedules, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final Form
of International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated November 18, 1996 and
preliminary U.S. Prospectus dated November 18, 1996, respectively, each together
with the applicable Term Sheet and all references in this Agreement to the date
of such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy (if any) filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each International Manager as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each International
Manager, as follows:
(i) Compliance with Registration Requirements. Each of the
-----------------------------------------
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not
3
<PAGE>
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any such amendment or
supplement was issued and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of Rule
434. The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement and any
amendments and supplements thereto or the Prospectuses and any amendments
and supplements thereto made in reliance upon and in conformity with
information furnished to the Company in writing by any International
Manager through the Lead Managers expressly for use in the Registration
Statement or the Prospectuses.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectuses delivered to
the Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements of the Company and its subsidiaries, and of GENSAR
Holdings Inc. ("GENSAR") and its subsidiaries, included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements of the Company
--------------------
and its consolidated subsidiaries included in the Registration Statement
and the Prospectuses, together with the related notes, present fairly, in
all material respects, the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
income, changes in stockholder's equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto). The
selected financial data and the summary financial information included in
the Prospectuses present fairly, in all material respects, the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement. To the best of the
Company's knowledge, the financial statements of GENSAR and its
consolidated subsidiaries included in the Registration Statement and the
Prospectuses, together with the related notes, present fairly, in all
material respects, the financial position of GENSAR and its consolidated
subsidiaries at the dates indicated and the statement of operations,
shareholders' equity (deficiency) and cash flows of GENSAR and its
consolidated subsidiaries for the periods specified; said financial
statements have
4
<PAGE>
been prepared in conformity with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto). The pro forma financial statements and the related notes thereto
included in the Registration Statement and the Prospectuses present fairly,
in all material respects, the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; the Company is not required to register as a bank
holding company under the Bank Holding Company Act of 1956, as amended; and
the Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant subsidiary" of
-----------------------------
the Company (as such term is defined in Rule 1-02 of Regulation S-X) (each
a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; and, except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable
5
<PAGE>
and is owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity. The only subsidiaries of the Company are the subsidiaries
listed on Exhibit 21 to the Registration Statement.
(vii) Financial Services. First USA Financial Services, Inc.
------------------
("Financial Services") is an indirect wholly-owned subsidiary of the
Company and has been duly organized as an industrial loan corporation under
the laws of the State of Utah and is not a "bank" within the meaning of 12
U.S.C. (S)1841(c).
(viii) Capitalization. The authorized, issued and outstanding
--------------
capital stock of the Company, including the International Securities to be
purchased by the International Managers from the Selling Stockholder, as of
September 30, 1996 is as set forth in the Prospectuses under the caption
"Capitalization" and there have not been any subsequent issuances of
capital stock of the Company, except for subsequent issuances, if any,
pursuant to employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of options referred to in the Prospectuses.
(ix) Authorization of Agreements. This Agreement and the U.S.
---------------------------
Purchase Agreement have been duly authorized, executed and delivered by the
Company.
(x) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the International Managers and the U.S. Underwriters from
the Company have been duly authorized for issuance and sale to the
International Managers pursuant to this Agreement and to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement, respectively, and,
when issued and delivered by the Company pursuant to this Agreement and the
U.S. Purchase Agreement, respectively, against payment of the consideration
set forth herein and in the U.S. Purchase Agreement, respectively, will be
validly issued and fully paid and non-assessable; the Common Stock conforms
in all material respects to all statements relating thereto contained in
the Prospectuses and such description conforms in all material respects to
the rights set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; the issuance of the Securities is not subject to preemptive or
other similar rights arising by operation of law, under the charter and by-
laws of the Company, or under any agreement to which the Company or any of
its subsidiaries is a party; and the outstanding stock options relating to
the Common Stock have been duly authorized and validly issued and the
description thereof contained in the Prospectuses is true and accurate in
all material respects.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively, "Agreements
and Instruments")
6
<PAGE>
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement and
the U.S. Purchase Agreement and the consummation of the transactions
contemplated herein, therein and in the Registration Statement (including
the issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectuses under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries or violation by the Company of any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, known
to the Company, including, without limitation, the Federal Deposit
Insurance Corporation and the Utah Department of Financial Institutions.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which in the reasonable
judgment of the Company might result in a Material Adverse Effect, or which
in the reasonable judgment of the Company might materially and adversely
affect the properties or assets thereof or the consummation of this
Agreement or the U.S. Purchase Agreement or the performance by the Company
of its obligations hereunder or thereunder; the aggregate of all pending
legal or governmental proceedings to which the Company or any subsidiary is
a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are, in the
reasonable judgment of the Company, not likely to result in a Material
Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks,
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service marks, trade names or other intellectual property (collectively,
"Intellectual Property") presently employed by them in connection with the
business now operated by them or reasonably necessary in order to conduct
such business, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, in the reasonable
judgment of the Company is likely to result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required to be obtained by the Company in connection with
the offering, issuance or sale of the Securities hereunder or under the
U.S. Purchase Agreement or in connection with the consummation of the
transactions contemplated by this Agreement or the U.S. Purchase Agreement,
except such as have been already made or obtained or as may be required
under the 1933 Act or the 1933 Act Regulations and foreign or state
securities or blue sky laws.
(xvi) Possession of Licenses and Permits. Except as otherwise stated
----------------------------------
in the Prospectuses, the Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, in the
reasonable judgment of the Company, have a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect, except
when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, in the
reasonable judgment of the Company, have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, in the reasonable
judgement of the Company, is likely to result in a Material Adverse Effect.
(xvii) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as contemplated herein and in the U.S.
Purchase Agreement and the application of the net proceeds from the sale of
the Securities as described in the Prospectuses will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xviii) Business Relationships; Related Party Transactions. There
--------------------------------------------------
are no business relationships or related-party transactions of the nature
described in Item 404 of
8
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Regulation S-K involving the Company and any other persons referred to in
said Item 404 that are required to be disclosed in the Prospectuses and
which have not been so disclosed.
(xix) Registration Rights. Except as otherwise described in the
-------------------
Prospectuses, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise by the Company under the 1933 Act.
(b) Representations, Warranties and Agreements of the Selling Stockholder.
The Selling Stockholder represents and warrants to each International Manager as
of the date hereof, as of the Closing Time, and as of each Date of Delivery (if
any), and agrees with each International Manager, as follows:
(i) Accurate Disclosure. To the best knowledge of the Selling
-------------------
Stockholder, the representations and warranties of the Company contained in
Section 1(a) hereof are true and correct; the Selling Stockholder has
reviewed and is familiar with the Registration Statement and the
Prospectuses and, to the best knowledge of the Selling Stockholder, neither
the Prospectuses nor any amendments or supplements thereto include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the Selling
Stockholder is not prompted to sell the Securities to be sold by the
Selling Stockholder hereunder by any material information concerning the
Company or any subsidiary of the Company which is not set forth in the
Prospectuses.
(ii) Authorization of Agreements. The Selling Stockholder has
---------------------------
corporate power and authority to enter into and perform its obligations
under this Agreement and the U.S. Purchase Agreement. The execution and
delivery of this Agreement and the U.S. Purchase Agreement and the sale and
delivery of the Securities to be sold by the Selling Stockholder hereunder
and thereunder and the consummation of the transactions contemplated herein
and therein and compliance by the Selling Stockholder with its obligations
hereunder and thereunder have been duly authorized by the Selling
Stockholder by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, any material
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Selling
Stockholder or any of its subsidiaries is a party or by which it or any of
them may be bound, which, in the event of any such conflict, breach or
default, could materially and adversely affect the performance by the
Selling Stockholder of its obligations under this Agreement or the U.S.
Purchase Agreement or the consummation of the transactions contemplated
herein or therein (including the issuance, sale and delivery of the
Securities), nor will such action result in any violation of the provisions
of the charter or by-laws of the Selling Stockholder or any of its
subsidiaries or any violation by the Selling Stockholder of any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, known
to the Selling Stockholder.
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(iii) Rights in Securities. The Selling Stockholder has and, at the
--------------------
Closing Time (and, if any International Option Securities are purchased, at
the Date of Delivery), will have, all rights in and to the Securities to be
sold by the Selling Stockholder hereunder and under the U.S. Purchase
Agreement, free and clear of any "adverse claims" within the meaning of
Section 8-302 of the New York Uniform Commercial Code; and upon delivery of
such Securities and payment of the purchase price therefor as contemplated
herein and in the U.S. Purchase Agreement, assuming each of the
Underwriters is a "bona fide purchaser" (as defined under Section 8-302 of
the New York Uniform Commercial Code), each of the Underwriters will
acquire all rights in and to the Securities purchased by it from the
Selling Stockholder, free and clear of any "adverse claims" within the
meaning of Section 8-302 of the New York Uniform Commercial Code. The sale
and delivery of the Securities to the Underwriters as contemplated herein
and in the U.S. Purchase Agreement is not subject to any right of first
refusal or similar rights of any person pursuant to any contract to which
the Selling Stockholder or any of its subsidiaries is a party or by which
any of them is bound.
(iv) Absence of Manipulation. 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 Securities.
(v) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required to be obtained by the Selling Stockholder in
connection with the sale and delivery of the Securities hereunder or under
the U.S. Purchase Agreement or the consummation of the transactions
contemplated by this Agreement or the U.S. Purchase Agreement, except such
as have been already made or obtained or as may be required under the 1933
Act or the 1933 Act Regulations, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and the regulations promulgated thereunder and
foreign or state securities or blue sky laws.
(vi) Restriction on Sale of Securities. During a period of 120 days
---------------------------------
from the date of the Prospectuses, except as provided in the Prospectuses,
the Selling Stockholder will not, without the prior written consent of
Merrill Lynch, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock. The
foregoing sentence shall not apply to the Securities to be sold hereunder
or under the U.S. Purchase Agreement.
(vii) No Association with NASD. Neither the Selling Stockholder nor
------------------------
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of subparagraph
(q) of Article I of the By-laws of the National Association
10
<PAGE>
of Securities Dealers, Inc.), any member firm of the National Association
of Securities Dealers, Inc., other than First USA Capital Markets, Inc. and
its officers and employees.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby; and any certificate signed by any officer of the
Selling Stockholder delivered to the Global Coordinator, the Lead Managers or to
counsel for the International Managers shall be deemed a representation and
warranty by the Selling Stockholder to the International Managers as to the
matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Selling Stockholder, severally and not jointly, agree
to sell to each International Manager, severally and not jointly, and each
International Manager, severally and not jointly, agrees to purchase from the
Company and the Selling Stockholder, at the price per share set forth in
Schedule C, that proportion of the number of Initial International Securities
set forth in Schedule B opposite the name of the Company or the Selling
Stockholder, as the case may be, which the number of Initial International
Securities set forth in Schedule A opposite the name of such International
Manager, plus any additional number of Initial International Securities which
such International Manager may become obligated to purchase pursuant to the
provisions of Section 10 hereof, bears to the total number of Initial
International Securities, subject, in each case, to such adjustments among the
International Managers as the Global Coordinator in its sole discretion shall
make to eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company and the Selling Stockholder, severally and not jointly,
hereby grant an option to the International Managers, severally and not jointly,
to purchase up to an additional 204,000 shares of Common Stock, as set forth in
Schedule B, at the price per share set forth in Schedule C. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial International Securities upon notice by the Global Coordinator to the
Company and the Selling Stockholder setting forth the number of International
Option Securities as to which the several International Managers are then
exercising the option and the time and date of payment and delivery for such
International Option Securities. Any such time and date of delivery for the
International Option Securities (a "Date of Delivery") shall be determined by
the Global Coordinator, but shall not be later than seven full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase from the Company and the Selling
Stockholder, pro rata, that proportion of the total number of International
Option Securities then being purchased which the number of Initial International
Securities set forth in Schedule A opposite the name of such International
Manager bears to the
11
<PAGE>
total number of Initial International Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of Brown &
Wood LLP, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by the Global Coordinator, the Company and the
Selling Stockholder, at 9:00 A.M. (Eastern Time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern Time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Stockholder (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator, the Company and the Selling
Stockholder, on each Date of Delivery as specified in the notice from the Global
Coordinator to the Company and the Selling Stockholder. Payment shall be made
to the Company and the Selling Stockholder by wire transfer of immediately
available funds payable to the order of the Company and the Selling Stockholder,
as the case may be, against delivery to the Lead Managers for the respective
accounts of the International Managers of certificates for the Initial
International Securities and the International Option Securities to be purchased
by them. It is understood that each International Manager has authorized the
Lead Managers, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial International Securities and the
International Option Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the International
Managers, may (but shall not be obligated to) make payment of the purchase price
for the Initial International Securities or the International Option Securities,
if any, to be purchased by any International Manager whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such International Manager from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern Time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
International Manager as follows:
12
<PAGE>
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Global
Coordinator immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Global Coordinator with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Global Coordinator or counsel for the International Managers shall
reasonably object in writing.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Lead Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith) and signed copies of all consents and certificates of experts,
and will also deliver to the Lead Managers, without charge, a conformed
copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the International
Managers. If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the International Managers will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International
13
<PAGE>
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the International Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. If applicable,
the International Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the International
Managers to which opinion counsel for the Company shall not reasonably
object, to amend the Registration Statement or amend or supplement any
Prospectus in order that the Prospectuses will not include any untrue
statements of a material fact or omit to state a material fact necessary in
order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of counsel for the International
Managers to which opinion counsel for the Company shall not reasonably
object, at any such time to amend the Registration Statement or amend or
supplement any Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the International Managers
such number of copies of such amendment or supplement as the International
Managers may reasonably request.
(f) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
security holders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectuses under "Use of Proceeds".
(h) Listing. The Company will use every reasonable effort to effect
the listing of the Securities on the New York Stock Exchange.
(i) Restriction on Sale of Securities. During a period of 120 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, (i)
issue, offer, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any share of Common Stock or any securities convertible into or
exercisable
14
<PAGE>
or exchangeable for Common Stock. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder or under the U.S. Purchase
Agreement, (B) any shares of Common Stock issued by the Company upon the
exercise of an option outstanding on the date hereof and referred to in the
Prospectuses, (C) any shares of Common Stock issued or options to purchase
Common Stock granted pursuant to the Company's existing employee benefit
plans and (D) shares of Common Stock issued in connection with one or more
acquisitions of companies, businesses or assets, provided that the value of
the shares so issued does not exceed, in the aggregate, $100 million (such
value to be based upon the closing price of the Common Stock on the New
York Stock Exchange on the date any such shares are issued or, if there is
no such closing price on such date, on the most recent day prior to such
issuance on which there is a closing price) and each person or entity that
receives any of the shares so issued delivers to the Lead Managers at or
prior to the date of issuance an agreement substantially in the form of
Exhibit C hereto.
(j) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
-------------------
Selling Stockholder will pay or cause to be paid all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the International Securities to the International Managers, including any stock
or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the International Securities to the International
Managers and the transfer of the International Securities between the
International Managers and the U.S. Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
printing and delivery to the International Managers of copies of each
preliminary prospectus, any Term Sheets and of the International Prospectus and
any amendments or supplements thereto, (vi) the preparation, printing and
delivery to the International Managers of copies of the Blue Sky Survey and any
supplement thereto, (vii) the fees and expenses of any transfer agent or
registrar for the Securities, (viii) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the International Managers in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (ix) the fees
and expenses incurred in connection with the listing of the Securities on the
New York Stock Exchange.
(b) Expenses of the Selling Stockholder. The Selling Stockholder will pay
all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement, including (i)
any stamp duties, capital duties and stock transfer taxes, if any, payable upon
the sale of the Securities to the International Managers, and their
15
<PAGE>
transfer between the International Managers pursuant to an agreement between
such International Managers, (ii) the fees and disbursements of its counsel and
accountants, and (iii) any underwriting discount attributable to any of the
International Securities being sold by the Selling Stockholder.
(c) Termination of Agreement. If this Agreement is terminated by the
Global Coordinator in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the International
Managers for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
(d) Allocation of Expenses. The provisions of this Section 4 shall not
affect any agreement that the Company and the Selling Stockholder may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several International Managers hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholder
contained in Section 1 hereof or in certificates of any officer of the Company
or any of its subsidiaries or on behalf of the Selling Stockholder delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective on the date hereof and at Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the International Managers. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinions of Counsel for Company and the Selling Stockholder. At
Closing Time the Lead Managers shall have received (i) the favorable
opinion, dated as of Closing Time, of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel for the Company and the Selling Stockholder, in form and
substance satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the other
International Managers, to the effect set forth in Exhibit A hereto and
(ii) the favorable opinion, dated as of Closing Time, of Philip E. Taken,
Esq., Senior Vice President and General Counsel of the Company, in form and
substance satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the other
International Managers, to the effect set forth in Exhibit B hereto.
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(c) Opinion of Counsel for International Managers. At Closing Time
the Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Brown & Wood LLP, counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers with respect to the matters set forth in (i),
(v), and (viii) to (xi), inclusive, and the last paragraph of Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Lead Managers. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and
its subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Lead Managers shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated by the
Commission.
(e) Officer's Certificate of Selling Stockholder. At Closing Time,
the International Managers shall have received a certificate of the
President or a Vice President of the Selling Stockholder, dated as of
Closing Time, to the effect that (i) the representations and warranties of
the Selling Stockholder contained in Section 1(b) hereof are true and
correct with the same force and effect as though expressly made at and as
of Closing Time and (ii) the Selling Stockholder has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time.
(f) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Lead Managers shall have received from each of Ernst &
Young LLP and Deloitte & Touche LLP a letter dated such date, in form and
substance satisfactory to the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
17
<PAGE>
(g) Bring-down Comfort Letter. At Closing Time the Lead Managers
shall have received from Ernst & Young LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished by them pursuant to subsection (f) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(h) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule D hereto.
(j) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(k) Conditions to Purchase of International Option Securities. In
the event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company and
the Selling Stockholder contained herein and the statements in any
certificates furnished by the Company and the Selling Stockholder hereunder
shall be true and correct as of each Date of Delivery and, at the relevant
Date of Delivery, the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Certificate of Selling Stockholder. A certificate, dated such
----------------------------------
Date of Delivery, of the President or a Vice President of the Selling
Stockholder confirming that the certificate delivered at the Closing
Time pursuant to Section 5(e) hereof remains true and correct as of
such Date of Delivery.
(iii) Opinions of Counsel for Company and the Selling Stockholder.
-----------------------------------------------------------
The favorable opinions of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Company and the Selling Stockholder, and Philip E.
Taken, Esq., Senior Vice President and General Counsel of the Company,
each in form and substance satisfactory to counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinions required by
Section 5(b) hereof.
18
<PAGE>
(iv) Opinion of Counsel for Underwriters. The favorable opinion of
-----------------------------------
Brown & Wood LLP, counsel for the International Managers, dated such
Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(c) hereof.
(v) Bring-down Comfort Letter. A letter from Ernst & Young LLP in
-------------------------
form and substance satisfactory to the Lead Managers and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Lead Managers pursuant to Section 5(g) hereof,
except that any "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than three days prior to such
Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the International Managers shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and
the Selling Stockholder in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Lead Managers and counsel for the International Managers.
(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after
Closing Time, the obligations of the several International Managers to
purchase the relevant International Option Securities, may be terminated by
the Lead Managers by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 6 and 7 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of International Managers. The Company and the
Selling Stockholder jointly and severally agree to indemnify and hold harmless
each International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or
19
<PAGE>
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and the Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c), the fees and disbursements of one counsel chosen
by Merrill Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto). Any
amounts advanced by the Company or the Selling Stockholder to an indemnified
party pursuant to this Section 6(a) in respect of any loss, liability, claim,
damage or expense shall be returned to the Company or the Selling Stockholder,
as the case may be, if it shall be finally determined by a court in a judgment
not subject to appeal or final review that such indemnified party was not
entitled to indemnification pursuant to this Section 6(a).
The foregoing indemnification with respect to any preliminary prospectus
shall not inure to the benefit of any International Manager from whom the person
asserting any such losses, claims, damages or liabilities purchased Securities,
or any person controlling such International Manager, if a copy of the
International Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such International Manager to such person, if such is required
by law, at or prior to the written confirmation of the sale of such shares to
such person and if the International Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage or
liability.
(b) Indemnification of Company, Directors and Officers and the Selling
Stockholder. Each International Manager severally agrees to indemnify and hold
harmless the Company, its
20
<PAGE>
directors, each of its officers who signed the Registration Statement, the
Selling Stockholder, and each person, if any, who controls the Company or the
Selling Stockholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such International Manager
through the Lead Managers expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectuses (or
any amendment or supplement thereto). Any amounts advanced by an International
Manager to an indemnified party pursuant to this Section 6(b) in respect of any
loss, liability, claim, damage or expense shall be returned to such
International Manager if it shall be finally determined by a court in a judgment
not subject to appeal or final review that such indemnified party was not
entitled to indemnification pursuant to this Section 6(b).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party. The Selling Stockholder shall not be
responsible for the payment of an amount pursuant to this Section 6 which
exceeds the net proceeds received by the Selling Stockholder from the sale of
the International Securities by the Selling Stockholder hereunder.
21
<PAGE>
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement; provided, that an indemnifying party shall not be liable for any
--------
such settlement effected without its consent if such indemnifying party (1)
reimburses such indemnified party in accordance with such request to the extent
it considers such request to be reasonable and (2) provides written notice to
the indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section 6 shall not affect any agreement between the Company and the
Selling Stockholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the International Managers on the other
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholder on the one hand and of the International Managers on the
other hand in connection with the statements or omission which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Stockholder
on the one hand and the International Managers on the other hand in connection
with the offering of the International Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Stockholder and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on the one
hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling
22
<PAGE>
Stockholder or by the International Managers 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 International Managers agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the International Managers
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 7. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company or the Selling Stockholder, as the case may be. The
International Managers' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement between the
Company and the Selling Stockholder with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Selling Stockholder submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company or the Selling
Stockholder, and shall survive delivery of the Securities to the International
Managers.
23
<PAGE>
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Lead Managers may terminate this Agreement,
by notice to the Company and the Selling Stockholder, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
International Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Lead Managers, impracticable to market the Securities or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission or the
New York Stock Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nadsaq National Market has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, New York or Delaware
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the International Managers. If one
----------------------------------------------------
or more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-
defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation
of the International
24
<PAGE>
Managers to purchase and of the Company to sell the International Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting International
Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company and the Selling Stockholder shall have the right to postpone Closing
Time or the relevant Date of Delivery, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectuses or in any other documents or arrangements. As used
herein, the term "International Manager" includes any person substituted for an
International Manager under this Section 10.
SECTION 11. Default by the Selling Stockholder or the Company. If the
-------------------------------------------------
Selling Stockholder shall fail at Closing Time or at a Date of Delivery to sell
and deliver the number of Securities which the Selling Stockholder is obligated
to sell hereunder, then the International Managers may, at option of the Lead
Managers, by notice from the Lead Managers to the Company, either (a) terminate
this Agreement without any liability on the part of any non-defaulting party
except that the provisions of Sections 4, 6 and 7 shall remain in full force and
effect or (b) elect to purchase the Securities which the Company has agreed to
sell hereunder. No action taken pursuant to this Section 11 shall relieve the
Selling Stockholder from liability, if any, in respect of such default.
In the event of a default by the Selling Stockholder as referred to in this
Section 11, each of the Lead Managers and the Company shall have the right to
postpone Closing Time or a Date of Delivery for a period not exceeding seven
days in order to effect any required change in the Registration Statement or
Prospectuses or in any other documents or arrangements.
If the Company shall fail at Closing Time or at a Date of Delivery to sell
the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting
party; provided, however, that the provisions of Sections 4, 6 and 7 shall
remain in full force and effect. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at Ropemaker
Place, 25 Ropemaker Street, London EC2Y 9LY, attention of Equity Capital
Markets; notices to the Company shall be directed to it at 1601 Elm Street, 47th
Floor, Dallas, Texas 75201, attention of General Counsel; and notices to the
Selling Stockholder should be directed to it at 1601 Elm Street, 47th Floor,
Dallas, Texas 75201, attention of General Counsel.
25
<PAGE>
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the International Managers, the Company and the Selling
Stockholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company and the Selling
Stockholder and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Company and the Selling
Stockholder and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any International Manager shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
26
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Selling Stockholder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the International Managers, the Company and the Selling
Stockholder in accordance with its terms.
Very truly yours,
FIRST USA PAYMENTECH, INC.
By ______________________________
Title:
CONFIRMED AND ACCEPTED, FIRST USA FINANCIAL, INC.
as of the date first above written:
MERRILL LYNCH INTERNATIONAL By ______________________________
MONTGOMERY SECURITIES Title:
SMITH BARNEY INC.
By: MERRILL LYNCH INTERNATIONAL
By _______________________________________________
Authorized Signatory
For themselves and as Lead Managers of the other
International Managers named in Schedule A hereto.
27
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Name of International Manager Number of
----------------------------- Initial
International
Securities
-------------
<S> <C>
Merrill Lynch International................................
Montgomery Securities......................................
Smith Barney Inc...........................................
---------
Total................................................. 1,360,000
=========
</TABLE>
Sch A-1
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Number of Initial Maximum Number of
International Securities International Option
to Be Sold Securities to Be Sold
------------------------ ---------------------
<S> <C> <C>
FIRST USA PAYMENTECH, INC. 600,000 84,000
FIRST USA FINANCIAL, INC. 760,000 120,000
--------- -------
Total........................ 1,360,000 204,000
========= =======
</TABLE>
Sch B-1
<PAGE>
SCHEDULE C
FIRST USA PAYMENTECH, INC.
1,360,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several International Managers shall be $[ ], being an amount equal to the
initial public offering price set forth above less $[ ] per share; provided
that the purchase price per share for any International Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends
or distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities.
Sch C-1
<PAGE>
SCHEDULE D
[List of persons and entities
subject to lock-up]
Gene H. Bishop
Pamela H. Patsley
Rupinder S. Sidhu
John C. Tolleson
Richard W. Vague
Michael P. Duffy
Susan H. Cerpanya
Raymond J. McArdle
Elena R. Anderson
Sch D-1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware. In rendering the opinion set forth
in this paragraph (i), counsel may rely solely on a review of a certificate
from the Secretary of State of the State of Delaware.
(ii) The Company has the corporate power and corporate authority to own,
lease and operate its properties and to conduct its business as described in
the Registration Statement and to enter into and perform its obligations under
the International Purchase Agreement and the U.S. Purchase Agreement.
(iii) The Company is not required to register as a bank holding company
under the Bank Holding Company Act of 1956, as amended, as a result of its
ownership of Financial Services and Financial Services is not a "bank" within
the meaning of 12 U.S.C. (S)1841(c). In rendering the opinion set forth in
this paragraph (iii), counsel may assume the accuracy and completeness of
statements made in a certificate of an officer of the Company.
(iv) The number of authorized, issued and outstanding shares of capital
stock of the Company as of September 30, 1996 was as set forth in the
Prospectuses under the caption "Capitalization" and such counsel is not aware
of any subsequent issuances of capital stock, except for subsequent issuances,
if any, pursuant to employee benefit plans or the exercise of options referred
to in the Prospectuses; and the shares of issued and outstanding capital stock
of the Company, including the Securities to be purchased by the International
Managers and the U.S. Underwriters from the Selling Stockholder pursuant to
the International Purchase Agreement and the U.S. Purchase Agreement (the
"Secondary Securities") have been duly authorized and validly issued and are
fully paid and non-assessable. In rendering the opinion set forth in this
paragraph (iv) as to issued and outstanding shares, such counsel may rely on a
review of the Certificate of Incorporation and By-laws of the Company, minutes
of the Company's Board of Directors, an officer's certificate regarding the
outstanding Common Stock and a certificate of the transfer agent for the
Common Stock.
(v) The Securities to be purchased by the International Managers and the
U.S. Underwriters from the Company (the "Primary Securities") have been duly
authorized for issuance and sale to the International Managers pursuant to the
International Purchase Agreement and to the U.S. Underwriters pursuant to the
U.S. Purchase Agreement, respectively, and, when issued and delivered by the
Company in accordance with the International Purchase Agreement and the U.S.
Purchase Agreement, respectively, against payment of the consideration set forth
in the International Purchase Agreement and the U.S. Purchase Agreement,
respectively, will be validly issued and fully paid and non-assessable. In
rendering the opinions set forth in this paragraph (v),
A-1
<PAGE>
counsel may assume that the certificates representing the Primary Securities to
be purchased by the International Managers and the U.S. Underwriters will be
duly countersigned by the transfer agent for the Common Stock and will conform
to the specimen certificate examined by such counsel.
(vi) The Selling Stockholder has the corporate power and corporate
authority to enter into and perform its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement and, assuming that Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as the agent for the Underwriters
(the "Agent"), acquired its interest in the Secondary Securities in good faith
and without notice of any adverse claims, upon delivery to the Agent in the
State of New York of the Secondary Securities registered to it, indorsed to it
or in blank, as the case may be, the Agent will acquire all of the Selling
Stockholder's rights in the Secondary Securities free of any adverse claims
(within the meaning of Section 8-302 of the Uniform Commercial Code as in
effect on the date hereof in the State of New York).
(vii) The issuance of the Primary Securities by the Company is not subject
to preemptive rights arising by operation of the Delaware General Corporation
Law or preemptive or other similar rights under the charter or by-laws of the
Company.
(viii) The International Purchase Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by each of the
Company and the Selling Stockholder.
(ix) Such counsel has been informed by the Commission that the
Registration Statement, including any Rule 462(b) Registration Statement, has
been declared effective under the 1933 Act; any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of such counsel's
knowledge and information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses, and each amendment or supplement to the
Registration Statement and the Prospectuses, as of their respective effective
or issue dates (other than the financial statements and supporting schedules
and other financial and statistical information included therein or excluded
therefrom or in exhibits to or excluded from the Registration Statement, as to
which no opinion need be rendered) appeared on their face to be responsive in
all material respects to the requirements of the 1933 Act and the 1933 Act
Regulations, except that such counsel need not express any opinion as to the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, any Rule 462(b) Registration Statement, the Rule 430A
Information and the Rule 434 Information, the Prospectuses and each amendment
or supplement to the Registration Statement and the Prospectuses except to the
extent set forth in paragraph (xiii) below.
(xi) The form of certificate used to evidence the Common Stock is in due
and proper form and complies with all applicable requirements under the
Delaware General Corporation Law and with any applicable requirements of the
charter and by-laws of the Company. In rendering the opinion set forth in
this paragraph (xi), such counsel may assume that the certificates
A-2
<PAGE>
representing the Common Stock will conform to the specimen certificate
examined by such counsel.
(xii) To the best of such counsel's knowledge and information, based
solely upon inquiries of responsible officers of the Company and such
counsel's review of attorney's letters to the accountants for the Company sent
in connection with the preparation of the Registration Statement, there is not
pending or threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any subsidiary is a party, or to which the property of
the Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, which is required to be disclosed in the
Registration Statement, other than those disclosed therein. In rendering the
opinion set forth in this paragraph (xii), such counsel may state that it has
made no other inquiries and no search of the public docket records of any
court, governmental agency or body or administrative agency.
(xiii) The information in the Prospectuses under "Description of Capital
Stock", "Business--Regulation of Financial Services" and "Certain United
States Federal Tax Consequences to Non-U.S. Holders", to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by
them and is correct in all material respects.
(xiv) To the best of such counsel's knowledge and information, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments or agreements required to be described or referred
to in the Registration Statement or to be filed as exhibits thereto, other
than those described or referred to therein or filed as exhibits thereto, and
the descriptions thereof or references thereto in the Prospectuses and the
Registration Statement are correct in all material respects. In rendering the
opinion set forth in this paragraph (xiv), such counsel may rely on its review
of those documents referred to in a certificate of an officer of the Company
(the "Officer's Certificate").
(xv) No filing with, or authorization, approval, consent or order of, any
court or governmental authority or agency under any Applicable Law (as defined
below) (other than under the 1933 Act, the 1933 Act Regulations, the 1934 Act
and the rules and regulations promulgated thereunder, which have been made or
obtained, or as may be required under the securities or blue sky laws of the
various states, as to which such counsel need express no opinion) is required
to be obtained by the Company or its subsidiaries in connection with the
offering, issuance or sale of the Primary Securities to the International
Managers pursuant to the International Purchase Agreement or to the U.S.
Underwriters pursuant to the U.S. Purchase Agreement.
(xvi) No filing with, or authorization, approval, consent or order of,
any court or governmental authority or agency under any Applicable Law (other
than under the 1933 Act, the 1933 Act Regulations, the 1934 Act and the rules
and regulations promulgated thereunder, which have been made or obtained, or
as may be required under the securities or blue sky laws of the various
states, as to which such counsel need express no opinion) is required to be
obtained by the Selling Stockholder in connection with the offer, sale or
delivery of the Secondary Securities to the International Managers pursuant to
the International Purchase Agreement or to the U.S. Underwriters pursuant to
the U.S. Purchase Agreement.
A-3
<PAGE>
(xvii) To the best of such counsel's knowledge and information, the
execution, delivery and performance of the International Purchase Agreement and
the U.S. Purchase Agreement and the consummation of the transactions
contemplated therein and in the Registration Statement (including the issuance
and sale of the Primary Securities by the Company, and the use of the proceeds
from the sale of such Primary Securities as described in the Prospectuses under
the caption "Use of Proceeds") and compliance by the Company with its
obligations under the International Purchase Agreement and the U.S. Purchase
Agreement will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 1(a)(xi) of the Purchase Agreements) under or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument which has been identified to such counsel in the
Officer's Certificate as containing provisions which, in the event of any such
conflict, breach, default or imposition of lien, charge or encumbrance, could
have a Material Adverse Effect (the "Applicable Contracts"), nor will such
action result in any violation of (a) the General Corporation Law of the State
of Delaware, the laws, rules or regulations of the State of New York or the
laws, rules or regulations of the United States, in each case, that in the
opinion of such counsel, based upon such counsel's experience, are normally
applicable to transactions of the type provided for by the International
Purchase Agreement or the U.S. Purchase Agreement (other than the securities or
blue sky laws of the various states and the rules and regulations of the
National Association of Securities Dealers, Inc., as to which such counsel need
not express any opinion) ("Applicable Law"), except that such counsel need not
express any opinion as to the Federal securities laws, (b) the provisions of the
Company's Certificate of Incorporation or By-laws, or (c) any order of any
governmental agency or body or any administrative or court decree identified to
such counsel in the Officer's Certificate. In rendering the opinion set forth in
this paragraph (xvii) with respect to conflicts with, breaches of or defaults
under, or the imposition of liens, charges or encumbrances pursuant to,
Applicable Contracts, such counsel may rely solely on a certificate of a
responsible officer of the Company regarding compliance with any covenant,
restriction or provision of any Applicable Contract that requires satisfaction
of a financial ratio or test or any aspect of the financial condition or results
of operations of the Company or any of its subsidiaries.
(xviii) To the best of such counsel's knowledge and information, the
execution, delivery and performance of the International Purchase Agreement
and the U.S. Purchase Agreement and the consummation of the transactions
contemplated therein and in the Registration Statement and compliance by the
Selling Stockholder with its obligations under the International Purchase
Agreement and the U.S. Purchase Agreement will not, whether with or without
the giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default under, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument
which has been identified to such counsel in a certificate of an officer of
the Selling Stockholder as containing provisions which, in the event of any
such conflict, breach or default, could materially and adversely affect the
performance by the Selling Stockholder of its obligations under the
International Purchase Agreement or the U.S. Purchase Agreement (including the
sale and delivery of the Secondary Securities pursuant thereto) (the
"Applicable Stockholder Contracts"), nor will such action result in any
violation of (a) any Applicable Law, except that such counsel need not express
any opinion as to the Federal securities
A-4
<PAGE>
laws, (b) the provisions of the Selling Stockholder's Certificate of
Incorporation or By-laws, or (c) any order of any governmental agency or body
or any administrative or court decree identified to such counsel in a
certificate of an officer of the Selling Stockholder. In rendering the
opinion set forth in this paragraph (xviii) with respect to conflicts with,
breaches of or defaults under Applicable Stockholder Contracts, such counsel
may rely on a certificate of a responsible officer of the Selling Stockholder
regarding compliance with any covenant, restriction or provision of any
Applicable Stockholder Contract that requires satisfaction of a financial
ratio or test or any aspect of the financial condition or results of
operations of the Selling Stockholder or any of its subsidiaries.
No facts have come to such counsel's attention that would lead them to
believe that the Registration Statement, including the Rule 430A Information
and Rule 434 Information (if applicable), (except for financial statements and
schedules and other financial information included therein or excluded
therefrom or in exhibits to or excluded from the Registration Statement, as to
which such counsel need make no statement), at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses or any amendment or
supplement thereto (except for financial statements and schedules and other
financial information included therein or excluded therefrom, as to which such
counsel need make no statement), at the time the Prospectuses were issued, at
the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A-5
<PAGE>
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(ii)
(i) Each Subsidiary is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement; and all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except as described in
the Prospectuses, is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance
or, to the best of such counsel's knowledge and information, any pending or
threatened claim.
(ii) To the best of such counsel's knowledge and information, the Company
and each Subsidiary is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iii) All pending actions, suits, proceedings, inquiries or
investigations to which the Company or any subsidiary is a party, or to which
the property of the Company or any subsidiary is subject, before or brought by
any court or governmental agency or body, which are not described in the
Registration Statement, including ordinary routine litigation incidental to
their business, are, considered in the aggregate, not material.
(iv) To the best of such counsel's knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or
the Prospectus or filed as an exhibit to the Registration Statement, which
default or defaults, singly or in the aggregate, are material to the Company
and its subsidiaries considered as one enterprise.
(v) To the best of such counsel's knowledge and information, the issuance
of the Securities by the Company and the sale of the Securities by the Selling
Stockholder is not subject to preemptive or other similar rights under any
agreement to which the Company, the Selling Stockholder or any of their
respective subsidiaries is a party.
No facts have come to such counsel's attention that would lead him to
believe that the Registration Statement, including the Rule 430A Information
and Rule 434 Information (if applicable), (except for financial statements and
schedules and other financial and statistical
B-1
<PAGE>
information included therein or in exhibits to or excluded from the
Registration Statement, as to which such counsel need make no statement), at
the time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectuses or any
amendment or supplement thereto (except for financial statements and schedules
and other financial and statistical information included therein, as to which
such counsel need make no statement), at the time the Prospectuses were
issued, at the time any such amended or supplemented prospectus was issued or
at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
B-2
<PAGE>
Exhibit C
__________, 1996
MERRILL LYNCH INTERNATIONAL
MONTGOMERY SECURITIES
SMITH BARNEY INC.
as Lead Managers of the several
International Managers to be named
in the within-mentioned International
Purchase Agreement
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Re: Proposed Public Offering of First USA Paymentech, Inc. Common Stock
-------------------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of First USA
Paymentech, Inc., a Delaware corporation (the "Company"), First USA, Inc. or one
of their subsidiaries understands that Merrill Lynch International, Montgomery
Securities and Smith Barney Inc. propose to enter into an International Purchase
Agreement (the "International Purchase Agreement") with the Company and First
USA Financial, Inc. providing for the public offering of shares (the
"Securities") of the Company's common stock, par value $.01 per share (the
"Common Stock"). In recognition of the benefit that such an offering will
confer upon the undersigned as a stockholder and an officer and/or director of
the Company, First USA, Inc. or one of their subsidiaries, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
International Purchase Agreement that, during a period of 120 days from the date
of the International Purchase Agreement, the undersigned will not, without the
prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated,
directly or indirectly, offer, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition; provided that nothing contained in this letter
agreement shall be
C-1
<PAGE>
deemed to prohibit the exercise of options to purchase Common Stock granted
pursuant to the existing employee benefit plans of the Company or the bona fide
---- ----
pledge of shares of Common Stock or such other securities.
Very truly yours,
Signature:
Print Name:
C-2
<PAGE>
EXHIBIT 5.1
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
December 9, 1996
First USA Paymentech, Inc.
1601 Elm Street
Dallas, Texas 75201
Re: First USA Paymentech, Inc.
Registration Statement on Form S-1
----------------------------------
Ladies and Gentlemen:
We are acting as special counsel to First USA Paymentech, Inc., a
Delaware corporation (the "Company"), in connection with (i) the offering by the
Company of an aggregate of up to 3,220,000 shares (the "Primary Shares") of the
Company's common stock, par value $.01 per share (the "Common Stock"),
(including shares subject to an over-allotment option) to the public through
syndicates of underwriters in firm commitment public offerings and (ii) the
offering by First USA, Inc. (the "Selling Stockholder") of an aggregate of up to
4,600,000 shares of Common Stock (the "Secondary Shares") (including shares
subject to an over-allotment option) to the public through a syndicate of
underwriters in firm commitment public offerings, in each case pursuant to (a)
the U.S. Purchase Agreement (the "U.S. Purchase Agreement") to be entered into
among the Company, the Selling Stockholder and Merrill Lynch, Pierce Fenner &
Smith Incorporated, Montgomery Securities and Smith Barney Inc., as U.S.
representatives of the several underwriters named on Schedule A thereto (the
"U.S. Underwriters"), and (b) the International Purchase Agreement (the
"International Purchase Agreement" and, together with the U.S. Purchase
Agreement, the "Purchase Agreements") to be entered into among the Company, the
Selling Stockholder, and Merrill Lynch International, Montgomery Securities and
Smith Barney Inc., as lead managers of the several International
<PAGE>
Managers named on Schedule A thereto (the "International Managers" and,
together with the U.S. Underwriters, the "Underwriters"). The Primary Shares
and the Secondary Shares are collectively referred to herein as the "Shares."
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the
"Act").
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of the
following: (a) the Registration Statement on Form S-1 (File No. 333-15861) as
filed with the Securities and Exchange Commission (the "Commission") on November
8, 1996 under the Act, Amendment No. 1 thereto filed with the Commission on
November 18, 1996 and Amendment No. 2 thereto filed with the Commission on
December 9, 1996, (such Registration Statement, as so amended, being hereafter
referred to as the "Registration Statement"); (b) the forms of the Purchase
Agreements; (c) a specimen certificate representing the Common Stock; (d) the
Certificate of Incorporation of the Company, as presently in effect; (e) the By-
Laws of the Company, as presently in effect; and (f) certain resolutions of the
Board of Directors of the Company relating to the issuance of the Primary Shares
and the Secondary Shares. We have also examined originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Company and
such agreements, certificates of public officials, certificates of officers or
other representatives of the Company and others, and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies, and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company and the
Selling Stockholder, we have assumed that such
<PAGE>
parties had the power, corporate and other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate and other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof. As to
any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon oral or written
statements and representations of officers and other representatives of the
Company, the Selling Stockholder and others.
Members of our firm are admitted to the bar in the State of New York,
and we do not express any opinion as to the laws of any other jurisdiction,
other than the General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that:
(a) When (i) the Registration Statement becomes effective; (ii) the
pricing committee of the Company's Board of Directors adopts resolutions fixing
the price per share at which the Primary Shares are to be sold to the
Underwriters pursuant to the Purchase Agreements and such price is at least
equal to the par value of the Common Stock; (iii) the Purchase Agreements have
been duly executed and delivered; and (iv) certificates representing the
Primary Shares in the form of the specimen certificate examined by us have been
manually signed by an authorized officer of the transfer agent and registrar for
the Common Stock and registered by such transfer agent and registrar and
delivered to and paid for by the Underwriters at a price per share not less than
the per share par value of the Common Stock as contemplated by the Purchase
Agreements, the Primary Shares will have been duly authorized, and the Primary
Shares will be validly issued, fully paid and nonassessable.
(b) The Secondary Shares have been duly authorized and validly
issued, and are fully paid and nonassessable.
<PAGE>
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
--------------------------------------------
<PAGE>
EXHIBIT 11
FIRST USA PAYMENTECH, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
Three Months Ended September 30, 1996
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Primary
- -------
Net income....................................... $ (3,284) $ 689
----------- -----------
Weighted average common and common
equivalent shares outstanding
Average common share outstanding............. 31,703,181 24,411,081
Common stock equivalents--stock options...... 420,578 --
Weighted average common and common
equivalent shares.......................... 32,123,759 24,411,081
=========== ===========
Net income per share............................. $ (0.10) $ 0.03
=========== ===========
Fully diluted
- -------------
Net income....................................... $ (3,284) $ 689
----------- -----------
Weighted average common and common
equivalent shares outstanding
Average common share outstanding............. 31,703,181 24,411,081
Common stock equivalents--stock options...... 455,745 --
----------- -----------
Weighted average common and common
equivalent shares.......................... 32,158,926 24,411,081
=========== ===========
Net income per share assuming full dilution.. $ (0.10) $ 0.03
=========== ===========
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
NAME OF ENTITY STATE OF INCORPORATION
- -------------- ----------------------
<S> <C>
First USA Management Resources, Inc. Delaware
First USA Financial Services, Inc. Utah
Gensar Holdings, Inc. Delaware
Paymentech New Hampshire Delaware
MAGroup, Inc. Arizona
First USA Merchant Services, Inc. Nevada
First USA Direct Marketing, Inc. Delaware
NationalCard Processing System, Inc. Delaware
First USA Technology, Inc. Delaware
Mokarow & Associates, Inc. Texas
Paymentech Fleet Services, Inc. Delaware
Gensar Merchant Processing, Inc. Delaware
Gensar Technologies, Inc. Delaware
</TABLE>
