DEALER MANAGER AGREEMENT

EXHIBIT 1.1

 

 

ELECTRONIC DATA SYSTEMS CORPORATION

 

Dealer Manager Agreement

 

March 31, 2004

 

MERRILL LYNCH & CO.

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

CITIGROUP GLOBAL MARKETS INC.

CREDIT SUISSE FIRST BOSTON LLC

DEUTSCHE BANK SECURITIES INC.

J. P. MORGAN SECURITIES INC.

SG COWEN SECURITIES CORPORATION

 

c/o Merrill Lynch & Co.,

      Merrill Lynch, Pierce, Fenner & Smith

Incorporated

      Four World Financial Center

      New York, New York 10080

 

c/o Citigroup Global Markets Inc.

      388 Greenwich Street

      New York, New York 10013

 

Ladies and Gentlemen:

 

1. General. Electronic Data Systems Corporation, a Delaware corporation (the “Company”), plans to make a tender offer to exchange (the “Offer”) up to an aggregate of 32,100,000 of the Company’s outstanding FELINE PRIDES in the form of Income PRIDES (the “Securities”) for a combination of cash and shares of the Company’s common stock (“Company Shares”) on the terms and subject to the conditions set forth in the Preliminary Prospectus dated the date hereof and attached hereto as Exhibit A (and as amended or supplemented from time to time prior to effectiveness of the Registration Statement (as defined below), the “Preliminary Prospectus”), and the related Letter of Transmittal (the “Letter of Transmittal”) dated the date hereof and attached hereto as Exhibit B.

 

The following materials to be used by the Company in connection with the Offer, as any of them may be amended, modified or supplemented from time to time, are collectively referred to herein as the “Offer Material”:

 

(a) The Company’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission (the “Commission”) on March 31, 2004, in accordance with the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “1933 Act”) relating to the Offer and the issuance of the Company Shares in connection therewith. As used in this agreement (the “Dealer Manager Agreement” or this “Agreement”), the term “Registration Statement” means such registration statement, including all exhibits, financial statements, schedules or other information included or incorporated by reference therein, when it becomes effective under the 1933 Act, and as amended or supplemented from time to time.

 

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(b) The Company’s Prospectus relating to the Offer and the Company Shares to be issued in connection therewith. As used in this Agreement, the term “Prospectus” means (i) any prospectus, as amended or supplemented on or prior to the Acceptance Date (including, but not limited to, the Preliminary Prospectus) that the Company uses, prepares, files, distributes or approves in writing which is used to solicit tenders of Securities in the Offer, or (ii) after the effectiveness of the Registration Statement, the prospectus, if any, filed with the Commission pursuant to Rule 424(b) under the 1933 Act, in the form it was first filed, provided that such prospectus was used to solicit tenders of Securities in the Offer on or prior to the Acceptance Date. All references in this Agreement to financial statements and schedules and other information which is “contained”, “included” or “stated” in the Registration Statement, any preliminary prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated, or deemed to be incorporated, by reference in the Registration Statement, any preliminary prospectus or the Prospectus, as the case may be. Any reference herein to the Registration Statement or the Prospectus shall be deemed to refer to and include any documents, financial statements and schedules incorporated, or deemed to be incorporated, by reference therein pursuant to Form S-4 under the 1933 Act, as of the effective date of the Registration Statement or the date of the Prospectus, as the case may be, and any reference to any amendment or supplement to the Registration Statement or the Prospectus shall be deemed to refer to and include any documents, financial statements and schedules filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “1934Act”) and so incorporated, or deemed to be incorporated, by reference (such incorporated documents, financial statements and schedules being herein called the “IncorporatedDocuments”). For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

 

(c) The Tender Offer Statement on Schedule TO (the “Schedule TO”) filed or to be filed by the Company with the Commission pursuant to Rule 13e-4 under the 1934 Act and all amendments to the Schedule TO (each an “amendment” and, collectively, the “Amendments”) and the Letter of Transmittal.

 

(d) The Guidelines for Certification of Taxpayer Identification Number relating to the Offer.

 

(e) The form of letter to Registered Holders and The Depository Trust Company Participants relating to the Offer, and the form of letter to Clients of Registered Holders and The Depository Trust Company Participants relating to the Offer.

 

(f) The form of letter to Holders of Electronic Data Systems Corporation’s FELINE PRIDES relating to the Offer.

 

(g) Any other documents or materials whatsoever (including newspaper announcements and press releases) relating to the Offer that are distributed or made available to the public or the holders of the Securities by or at the direction of the Company in connection with the Offer.

 

2. Engagement as Dealer Managers. (a) The Company hereby retains each of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Credit Suisse First Boston LLC, Deutsche Bank Securities Inc., J. P. Morgan Securities Inc. and SG Cowen Securities Corporation to act as the exclusive dealer managers with respect to the Offer (each a “Dealer Manager” and together, the “Dealer Managers”). On the basis of the representations and warranties and agreements of the Company herein contained and subject to and in accordance with the terms and conditions hereof and of the Offer Material, you hereby agree to act as Dealer Managers in connection with the Offer and in connection therewith, you shall act in accordance with your customary practices and shall perform those services in connection with the Offer that are customarily performed by investment banking firms in connection with acting as a dealer manager of exchange offers of a like nature, including, but not limited to, soliciting tenders pursuant to the Offer and communicating generally regarding the Offer with brokers, dealers, commercial banks and trust companies and other persons, including the holders of the Securities.

 

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(b) The Company acknowledges and agrees that each of the Dealer Managers have been retained hereunder to act solely as a Dealer Manager. In such capacity, each of the Dealer Managers shall act hereunder as an independent contractor and shall not be deemed the agent or fiduciary of the Company or any of its affiliates, equity holders or creditors or of any other person, and any of the duties of the Dealer Managers arising out of the Dealer Managers’ engagement pursuant to this Agreement shall be owed solely to the Company. None of the Dealer Managers shall be liable to the Company, its affiliates, equity holders or creditors or to any other person for any act or omission on the part of, and shall not be deemed to be the agent or fiduciary of, any broker or dealer (except that Merrill Lynch & Co. and Merrill Lynch, Pierce Fenner & Smith Incorporated may be deemed the agent or fiduciary of Merrill Lynch, Pierce, Fenner & Smith Incorporated in its capacity as broker or dealer), commercial bank or trust company and no such broker or dealer, commercial bank or trust company shall be deemed to be acting as the agent or fiduciary any of the Dealer Managers. Nothing contained in this Agreement shall constitute any of the Dealer Managers a partner of or joint venturer with the Company.

 

3. Solicitation Material, Withdrawal. The Company agrees to furnish you with as many copies as you may reasonably request of any Offer Material. The Company agrees that, within a reasonable time prior to using any Offer Material, it will submit copies of such material to you and your counsel and will not use or publish any such material to which you reasonably object. The Company shall inform you promptly after it receives notice or becomes aware of the happening of any event, or the discovery of any fact, that would require the making of any change in any Offer Material then being used or that would affect the accuracy or completeness of any representation or warranty contained in this Agreement if such representation or warranty were being made immediately after the happening of such event or the discovery of such fact.

 

In the event that (i) the Company uses or permits the use of any Offer Material (a) that has not been submitted to you and your counsel for comment or (b) that has been so submitted and with respect to which you or your counsel have made comments, but which comments have not resulted in a response reasonably satisfactory to you to reflect such comments, (ii) the Company shall have breached any of its representations, warranties, agreements, obligations or covenants contained herein, (iii) there shall have occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”), that, in your judgment, makes it impracticable or inadvisable to carry out the Offer, the exchange of Securities pursuant thereto or the performance of this Agreement, (iv) the Offer is terminated or withdrawn for any reason or (v) any stop order, restraining order, injunction or denial of an application for approval has been issued in connection with the Offer and not thereafter stayed or vacated or any proceeding, litigation or investigation in connection with the Offer has been initiated, that, in either case in your judgment, makes it impracticable or inadvisable to carry out the Offer, the exchange of Securities pursuant thereto or the performance of this Agreement, then in any such case you shall be entitled to withdraw as a Dealer Manager, by providing written notice of such withdrawal to the Company, without any liability or penalty to you or any other Indemnified Party (as defined in Section 10) and without loss of any right to the payment of all expenses payable in accordance with Section 5 hereunder which have been incurred by you to the date of such withdrawal. If you withdraw as a Dealer Manager in accordance with the foregoing provision, the reimbursement for your expenses through the date of such withdrawal shall be paid to you promptly after such date. Notwithstanding anything contained in this Agreement to the contrary, the Company may, in its discretion, carry out the Offer after your withdrawal as Dealer Manager, provided that the Company (y) amends or supplements the Offer Material to disclose that you have withdrawn as Dealer Manager and (z) utilizes a means reasonably calculated to reach holders of the Securities to inform them of such withdrawal.

 

4. Compensation. The Company agrees that it will pay all of the compensation due to you for your services as Dealer Managers hereunder and agrees that such compensation will be as set forth in Schedule I hereto and that such compensation will be paid in cash immediately upon the completion of the Offer.

 

5. Expenses. You agree that you will pay all of the fees and expenses of your advisors, including but not limited to the fees and expenses of Shearman & Sterling LLP, incurred in connection with your service as Dealer

 

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Managers. The Company agrees that it will pay all of the following expenses related to the Offer: (i) all fees and expenses relating to the preparation, printing, mailing and publishing of the Offer Material, including the cost of preparation and filing of the Registration Statement and any amendment thereto and Schedule TO and any Amendments thereto, (ii) all fees and expenses of the Company’s counsel and accountants and of the Exchange Agent and Information Agent (each as defined in Section 6), (iii) all advertising charges, (iv) all fees and expenses of any depositary, transfer agent or other person rendering services in connection with the Offer, (v) mailing and handling expenses incurred by brokers and dealers (including you), commercial banks, trust companies and other nominees in forwarding the Offer Material to their customers, (vi) the cost of the preparation, issuance and delivery of the Company Shares, including any and all transfer and other taxes payable thereon, except as otherwise stated in the Letter of Transmittal, (vii) all expenses in connection with the qualification of the Company Shares for offer and delivery, (viii) all costs and expenses incident to the additional listing of the Company Shares on the New York Stock Exchange and the London Stock Exchange and (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. All payments to be made by the Company pursuant to this Section 5 shall be made promptly after the expiration or termination of the Offer or withdrawal by you from acting as Dealer Managers in accordance with Section 3 or, if later, promptly after the related fees or expenses accrue and are invoiced. The Company shall perform its obligations set forth in this Section 5 whether or not the Offer is commenced or the Company acquires any Securities pursuant to the Offer or otherwise.

 

6. Exchange Agent and Information Agent. (a) The Company will arrange for JPMorgan Chase Bank, a New York state banking organization, to serve as exchange agent (the “Exchange Agent”) in connection with the Offer and, as such, to advise you at least daily as to such matters relating to the Offer as you may request. The Company shall provide you or cause The Depository Trust Company (“DTC”) to provide you with copies of the records or other lists showing the names and addresses of, and number of Securities held by, the holders of Securities as of a recent date and shall, from and after such date, use its commercially reasonable efforts to cause you to be advised from day to day during the pendency of the Offer of all transfers of Securities, such notification consisting of the name and address of the transferor and transferee of any Securities and the date of such transfer. The Company will arrange for Mellon Investor Services LLC to serve as information agent (“Information Agent”) in connection with the Offer and, as such, to advise you as to such matters relating to the Offer as you may reasonably request and to furnish you with any written reports concerning any such information as you may reasonably request.

 

(b) The Company authorizes you to communicate with the Exchange Agent, the Information Agent and with DTC in its capacity as depositary, with respect to matters relating to the Offer.

 

7. Representations, Warranties and Certain Agreements of the Company. The Company represents and warrants to each of the Dealer Managers, and agrees with each of the Dealer Managers, as of the date hereof, as of the date of commencement of the Offer pursuant to Section 13(e) of the 1934 Act (if different than the date hereof) (the “Commencement Date”) and as of the date on which the Securities are accepted by the Company pursuant to the Offer (the “Acceptance Date”) (unless another date is specifically referenced in which case the representation and warranty shall speak as of such date):

 

(a) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-4 under the 1933 Act and, on or prior to the Commencement Date, has filed with the Commission the Registration Statement and paid the applicable filing fees. As of the Acceptance Date, the Registration Statement and any post-effective amendment thereto have become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement and any post-effective amendment thereto 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 and any post-effective amendments thereto become effective and at the Acceptance Date, the Registration Statement and any amendments thereto will comply in all

 

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material respects with the requirements of the 1933 Act 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 the Prospectus nor any amendments and supplements thereto 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, except that the foregoing does not apply to statements in or omissions from any of such documents based upon written information furnished to the Company by you or on your behalf specifically for use therein.

 

Each preliminary prospectus and prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, complied when so filed in all material respects with the 1933 Act and each preliminary prospectus and the Prospectus prepared for use in connection with the Offer will, at the time of such delivery, be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(b) Offer Material. A complete and correct copy of the Offer Material has been furnished to you and your counsel or will be furnished no later than the Commencement Date. The Offer Material, as then amended or supplemented (other than the Prospectus and the Registration Statement, and any amendments and supplements thereto, which are covered in subsection (a) above), complied and will comply in all material respects with the requirements of the 1933 Act and the 1934 Act, as applicable, 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 the Offer Material nor any amendments or supplements thereto (other than the Prospectus and the Registration Statement, and any amendments and supplements thereto, which are covered in subsection (a) above) 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.

 

(c) Incorporated Documents. The Incorporated Documents, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act, and, when read together with the other information in the Prospectus, at the date of the Prospectus and at the Acceptance Date, did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(d) Financial Statements. The consolidated historical financial statements and schedules of the Company and its consolidated subsidiaries included in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly in all material respects the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the 1933 Act and have been prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved (except as otherwise noted therein); the selected historical financial data set forth under the caption “Selected Historical Consolidated Financial Data” in the Prospectus fairly present in all material respects, on the basis stated in the Prospectus, the information included therein.

 

(e) Independent Public Accountants. KPMG LLP, who have certified certain financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements included in the Prospectus, are independent public accountants with respect to the Company within the meaning of the 1933 Act.

 

(f) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (i) there has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries

 

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taken as a whole, (ii) there have been no transactions entered into by the Company or any of its subsidiaries, other than those arising in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise and (iii) except for regular dividends on the Company’s common stock or preferred stock, in amounts per share that are consistent with past practice or the applicable charter document or supplement thereto, respectively, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(g) Good Standing of the Company and its Subsidiaries. The Company and each “significant subsidiary” of the Company, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act (each, a “Significant Subsidiary”), have been duly incorporated or organized, are validly existing as corporations or limited liability companies, as the case may be, in good standing under the laws of the jurisdictions of their incorporation or organization, have the corporate or limited liability company power and authority to own or lease their respective properties and to conduct their respective businesses as currently conducted and are duly qualified to transact business and are in good standing in each jurisdiction in which the conduct of their respective businesses or their ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

 

(h) Capital Stock. The Company’s authorized equity capitalization is as set forth in the Prospectus; the capital stock of the Company conforms in all material respects to the description thereof contained in the Prospectus and Offer Material; the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable; no holder thereof is or will be subject to personal liability by reason of being such a holder; and none of such shares of capital stock was issued in violation of preemptive or other similar rights of any securityholder of the Company. The outstanding shares of capital stock or other interests of the Significant Subsidiaries held by the Company, directly or indirectly through other subsidiaries, have been duly and validly authorized and issued and, if applicable, are fully paid and non-assessable, and are owned of record by the Company or a subsidiary free and clear of any security interest, claim, lien or encumbrance.

 

(i) Authorization of this Agreement. This Agreement has been duly authorized, executed and delivered by the Company.

 

(j) Authorization of Company Shares. The Company has duly authorized for issuance a number of Company Shares sufficient to consummate the Offer pursuant to its terms and, when any Company Shares are issued and delivered by the Company as provided in the Offer Material, such Company Shares will be validly issued and fully paid and non-assessable; the Company Shares conform in all material respects to the respective statements relating thereto contained in the Prospectus and Offer Material and no holder of such Company Shares will be subject to personal liability by reason of being such a holder; and the issuance of the Company Shares by the Company is not subject to any preemptive or other similar rights of any security holder of the Company.

 

(k) Absence of Defaults and Conflicts. (i) The execution, delivery and performance by the Company of this Agreement, (ii) the making and consummation of the Offer by the Company (including but not limited to the issuance and delivery of Company Shares thereunder), (iii) the obtaining and use by the Company of funds required in connection with the Offer, (iv) the use of the Offer Material and the filing of the Registration Statement, the Prospectus and the Schedule TO, and any amendments or supplements thereto and (v) the consummation by the Company of the transactions contemplated by this Agreement and in the Offer Material, in each case, do not and will not (y) 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 assets, properties or operations of the Company or any of its subsidiaries pursuant to, any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any subsidiary is a party or is bound or to which their property is subject (except for such conflicts, breaches, defaults, or Repayment Events or liens, charges, or encumbrances that would not, individually or in the

 

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aggregate, reasonably be expected to have a Material Adverse Effect); or (z) violate (a) the provisions of the charter or by-laws (or other similar document) of the Company or any of its subsidiaries or (b) any law, statute, rule, regulation, judgment, order, writ or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets, properties or operations, except in the case of clause (b), for such violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 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) (other than the Company’s Senior Notes due August 17, 2006 that are subject to this Offer as components of the Securities) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.

 

(l) Absence of Proceedings. No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened that is required to be disclosed in the Registration Statement and the Prospectus (other than as stated therein either directly or by incorporation by reference) or which might reasonably be expected to materially and adversely affect the consummation of the Offer or the performance by the Company of its obligations thereunder, including, without limitation, its obligations under this Agreement.

 

(m) Absence of Further Requirements. The execution, delivery and performance by the Company of this Agreement or the consummation of the Offer or the other transactions described in the Offer Material by the Company, including but not limited to the issuance and delivery of the Company Shares, does not and will not require any consent, qualification or decree of, approval of, waiver by, license or authorization from, or permit of, or other action by or filing or registration with or notification to, any court or governmental or regulatory authority or agency other than (i) such as have been already obtained or as may be required under the 1933 Act or the 1934 Act or state or foreign securities laws and (ii) the approval for listing of the Company Shares upon official notice of issuance from the New York Stock Exchange and the London Stock Exchange.

 

(n) Sufficient Funds. The funds to be made available by the Company for consummation of the Offer as described in the Offer Material are available or will be available to the Company by the Acceptance Date and the Company will have sufficient authority under applicable law to use such funds as described to enable the Company promptly to pay the cash consideration for the Securities pursuant to the Offer as descr