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AGREEMENT AND PLAN OF MERGER
Among
FISERV, INC.,
FISERV MERGER SUB, INC.,
And
AVIDYN, INC.
Dated as of November 2, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE I MERGER.................................................................................................2
SECTION 1.01 The Merger.......................................................................................2
SECTION 1.02 Certificate of Merger............................................................................2
SECTION 1.03 Effective Time of the Merger.....................................................................3
ARTICLE II DIRECTORS AND OFFICERS................................................................................3
SECTION 2.01 Directors........................................................................................3
SECTION 2.02 Officers.........................................................................................3
ARTICLE III CONVERSION OF SHARES.................................................................................3
SECTION 3.01 Conversion of Shares.............................................................................3
SECTION 3.02 Stock Options and Warrants.......................................................................4
SECTION 3.03 Exchange of Company Common Stock.................................................................4
SECTION 3.04 Exchange of Fiserv Sub Common Stock..............................................................6
SECTION 3.05 Dissenting Shares................................................................................7
SECTION 3.06 Closing..........................................................................................7
SECTION 3.07 Tax Free Exchange................................................................................7
ARTICLE IV CERTAIN EFFECTS OF THE MERGER.........................................................................8
SECTION 4.01 Effect of the Merger.............................................................................8
SECTION 4.02 Further Assurances...............................................................................8
ARTICLE V REPRESENTATIONS AND WARRANTIES.........................................................................8
SECTION 5.01 Representations and Warranties of the Company....................................................8
SECTION 5.02 Representations and Warranties of Fiserv, Fiserv Solutions and Fiserv Sub.......................32
ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS..................................................................37
SECTION 6.01 Conduct of Business.............................................................................37
SECTION 6.02 Access to Information by Fiserv, Fiserv Solutions and Fiserv Sub................................37
SECTION 6.03 Consents and Authorizations.....................................................................37
SECTION 6.04 Non-Assignable Licenses, Leases and Contracts...................................................38
SECTION 6.05 Employee Matters................................................................................38
SECTION 6.06 Taxes...........................................................................................38
SECTION 6.07 Solicitation of Alternative Transaction.........................................................38
SECTION 6.08 Proxy Material; Registration Statement..........................................................40
SECTION 6.09 Stockholders' Meetings..........................................................................42
SECTION 6.10 State Takeover Statutes.........................................................................42
SECTION 6.11 Affiliates......................................................................................43
SECTION 6.12 Stockholder Litigation..........................................................................43
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Table of Contents
(continued)
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SECTION 6.13 Nasdaq Listing. Fiserv shall prepare and submit to Nasdaq a listing
application for the Fiserv Common Stock to be issued in the Merger pursuant to
Article III of this Agreement.............................................................................43
SECTION 6.14 Confidentiality.................................................................................43
SECTION 6.15 Further Actions.................................................................................43
SECTION 6.16 Officers' and Directors' Indemnification........................................................43
SECTION 6.17 Notification of Certain Matters.................................................................44
SECTION 6.18 Public Announcements............................................................................44
SECTION 6.19 Voting of Shares................................................................................44
ARTICLE VII CONDITIONS PRECEDENT................................................................................44
SECTION 7.01 Conditions to Obligations of Fiserv, Fiserv Solutions, Fiserv Sub, and the Company..............44
SECTION 7.02 Conditions Precedent to the Obligations of Fiserv, Fiserv Solutions and Fiserv Sub..............45
SECTION 7.03 Conditions Precedent to the Obligations of the Company..........................................47
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER.....................................................................48
SECTION 8.01 Termination.....................................................................................48
SECTION 8.02 Effect of Termination...........................................................................50
SECTION 8.03 Amendment.......................................................................................51
SECTION 8.04 Extension; Waiver...............................................................................51
ARTICLE IX MISCELLANEOUS........................................................................................51
SECTION 9.01 Expenses, Etc...................................................................................51
SECTION 9.02 Execution in Counterparts.......................................................................51
SECTION 9.03 Notices.........................................................................................51
SECTION 9.04 Entire Agreement................................................................................53
SECTION 9.05 Applicable Law..................................................................................53
SECTION 9.06 Binding Effect; Benefits........................................................................53
SECTION 9.07 Investigation; Survival of Representations and Warranties.......................................53
SECTION 9.08 Specific Performance............................................................................53
SECTION 9.09 Assignability...................................................................................54
SECTION 9.10 Prevailing Party................................................................................54
SECTION 9.11 Invalid Provisions..............................................................................54
SECTION 9.12 Interpretation..................................................................................54
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Table of Contents
(continued)
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INDEX TO EXHIBITS
Exhibit Description
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A Certificate of Merger
B Form of FIRPTA Affidavit of the Company
C Form of Agreement to Facilitate Merger
D Form of Opinion of Counsel to the Company
E Required Consents
F Form of Indemnity Agreement
G Form of Opinion of Counsel to Fiserv and Fiserv Sub
INDEX TO SCHEDULES
Schedule Description
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I Disclosure Schedule
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AGREEMENT AND PLAN OF
MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 2, 2002,
among FISERV, INC., a Wisconsin corporation ("Fiserv"), FISERV MERGER SUB, INC.,
a
Delaware corporation ("Fiserv Sub") and a wholly-owned subsidiary of Fiserv,
and AVIDYN, INC., a
Delaware corporation (the "Company").
WITNESSETH:
WHEREAS, Fiserv and Fiserv Sub desire that Fiserv Sub merge
with and into the Company and, to realize the benefits thereof, the Company also
desires that Fiserv Sub merge with and into the Company, upon the terms and
subject to the conditions set forth herein and in accordance with the Business
Corporation Law of the state of
Delaware ("
Delaware Law"), and that the
outstanding shares of Common Stock, par value $.01 per share, of the Company
("Company Common Stock"), excluding any such shares held in the treasury of the
Company, be converted upon such merger (the "Merger") into the right to shares
of Common Stock, $.01 par value, of Fiserv ("Fiserv Common Stock") as is
provided herein (Fiserv Sub and the Company being hereinafter sometimes referred
to as the "Constituent Corporations" and the Company, after the Merger as the
surviving entity, being hereinafter sometimes referred to as the "Surviving
Corporation");
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants, agreements and conditions contained
herein, and in order to set forth the terms and conditions of the Merger and the
mode of carrying the same into effect, the parties hereby agree as follows:
ARTICLE I
MERGER
SECTION 1.01 The Merger. At the Effective Time (as hereinafter
defined), Fiserv Sub shall be merged with and into the Company on the terms and
conditions hereinafter set forth as permitted by and in accordance with
Delaware
Law. Thereupon, the separate existence of Fiserv Sub shall cease, and the
Company, as the Surviving Corporation, shall continue to exist under and be
governed by
Delaware Law and its Certificate of Incorporation and By-laws as in
effect at the Effective Time shall remain unchanged until further amended in
accordance with the provisions thereof and applicable law.
SECTION 1.02 Certificate of Merger. As soon as practicable following
fulfillment or waiver of the conditions specified in Article VII hereof, and
provided that this Agreement has not been terminated and abandoned pursuant to
Article VIII hereof, the Company and Fiserv Sub will cause the Certificate of
Merger in substantially the form of Exhibit A attached hereto (the "Certificate
of Merger") to be executed and filed with the Secretary of State of the State of
Delaware as provided in
Delaware Law. The purpose of the Surviving Corporation
shall be to engage in any and all business activities in which a corporation is
permitted to engage in accordance with
Delaware Law.
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SECTION 1.03 Effective Time of the Merger. The Merger shall become
effective at 11:59 p.m. on the day of the filing of the Certificate of Merger
with the Secretary of State of the State of
Delaware or at such other date or
time thereafter as the parties may agree. The date and time of such
effectiveness is herein sometimes referred to as the "Effective Time".
ARTICLE II
DIRECTORS AND OFFICERS
SECTION 2.01 Directors. From and after the Effective Time, the members
of the Board of Directors of the Surviving Corporation shall consist of the
members of the Board of Directors of Fiserv Sub (as constituted immediately
prior to the Effective Time) until changed in accordance with its Certificate of
Incorporation and By-laws and applicable law.
SECTION 2.02 Officers. From and after the Effective Time, the officers
of the Surviving Corporation shall consist of the officers of the Company (as
constituted immediately prior to the Effective Time) until changed in accordance
with its Certificate of Incorporation and By-laws and applicable law.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.01 Conversion of Shares.
(a) Upon the Effective Time, each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time
(other than any shares of Company Common Stock to be canceled pursuant
to Section 3.01(b) and any Dissenting Shares (as hereinafter defined))
shall, without any further action on the part of Fiserv or Fiserv Sub,
on the one hand, or the Company or its stockholders, on the other hand,
be converted into the right to receive such number of shares of Fiserv
Common Stock as shall equal the quotient of (A) (I) the Target Value
(as hereinafter defined) divided by (II) the number of shares of
Company Common Stock outstanding immediately before the Effective Time
divided by (B) a number which is equal to the average closing price per
share for Fiserv Common Stock as reported on the National Market System
by the National Association of Securities Dealers, Inc. Automated
Quotations (as reported in The Wall Street Journal) for the twenty
business days ending two business days prior to the Effective Time
(such shares of Fiserv Common Stock together with any cash payable
pursuant to Section 3.03(f) the "Merger Consideration"). "Target Value"
means the amount of Ten Million Five Hundred Thousand and No/100
Dollars ($10,500,000.00) increased or decreased by the amount, if any,
between i) the total assets of the Company as of the Effective Time
less the total liabilities of the Company as of the Effective Time, as
determined by reference to the Effective Time Balance Sheet, and ii)
Six Million Eight Hundred Thousand Dollars ($6,800,000); provided,
however that no such adjustment shall be made if the adjustment would
result in increasing or decreasing the Target Value by less then
$25,000. "Effective Time Balance Sheet" means a balance sheet of the
Company as of the Effective Time prepared in accordance with GAAP
consistently applied in accordance with past practices, which balance
sheet shall include,
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to the extent unpaid as of the Effective Time, an accrual for all
Company Merger Costs, it being understood that the Effective Time
Balance Sheet will be prepared prior to the Effective Time and may
therefore may be based, to the extent required, on good faith estimates
by Fiserv, Trewit Inc., a wholly owned subsidiary of Fiserv ("Trewit")
and the Company. "Company Merger Costs" shall mean the aggregate of all
accounting (which shall not include regular audit fees), legal,
printing, filing, financial advisory (including finders' or investment
banking fees), costs of preparing, filing and distributing the Proxy
Statement (as hereinafter defined) and conducting the Company Special
Meeting (as hereinafter defined) and other fees and expenses of the
Company and Taxes (as hereinafter defined) of the Company, in each case
incurred or anticipated to be incurred in connection with the
transactions contemplated hereby. Such Company Merger Costs shall only
include those costs incurred by the Company directly, or to the extent
they involve the printing and mailing of materials to shareholders on
behalf of both the Company and Fiserv, a prorata share of such costs as
the Parties shall agree at Closing.
(b) All shares of Company Common Stock owned by the Company or
any direct or indirect wholly-owned subsidiary of the Company or Fiserv
or Fiserv Sub or any other subsidiary of Fiserv immediately prior to
the Effective Time shall be cancelled and extinguished without any
conversion thereof.
(c) Each share of common stock of Fiserv Sub, par value $.01
per share ("Fiserv Sub Common Stock"), issued and outstanding
immediately prior to the Effective Time shall be converted into one
share of the common stock of the Surviving Corporation, par value $.01
per share ("Surviving Corporation Common Stock").
(d) Each share of any other class of capital stock of the
Company (other than Company Common Stock) shall be canceled without
payment of any consideration therefor and without any conversion
thereof.
SECTION 3.02 Intentionally Omitted.
SECTION 3.03 Exchange of Company Common Stock.
(a) Promptly after the Effective Time, Fiserv shall cause
Fiserv's stock transfer agent or such other person as Fiserv may
appoint to act as exchange agent (the "Exchange Agent") to mail to each
holder of record (other than Fiserv, Fiserv Sub or any other subsidiary
of Fiserv or the Company) of a certificate or certificates that
immediately prior to the Effective Time represented outstanding shares
of Company Common Stock ("Company Certificates") (i) a form letter of
transmittal (which shall specify that delivery shall be effective, and
risk of loss and title to the Company Certificate(s) shall pass, only
upon delivery of the Company Certificate(s) to the Exchange Agent) and
(ii) instructions for such holder's use in effecting the surrender of
the Company Certificates in exchange for certificates representing
shares of Fiserv Common Stock.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall distribute to holders of shares of Company Common
Stock, upon surrender to the
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Exchange Agent of one or more Company Certificates for cancellation,
together with a duly-executed letter of transmittal, (i) one or more
Fiserv certificates representing the number of whole shares of Fiserv
Common Stock into which the shares represented by the Company
Certificate(s) shall have been converted pursuant to Section 3.01, and
(ii) a bank check in the amount of cash into which the shares
represented by the Company Certificate(s) shall have been converted
pursuant to Section 3.03(f) (relating to fractional shares), and the
Company Certificate(s) so surrendered shall be canceled. In the event
of a transfer of ownership of Company Common Stock that is not
registered in the transfer records of the Company, it shall be a
condition to the issuance of shares of Fiserv Common Stock that the
Company Certificate(s) so surrendered shall be properly endorsed or be
otherwise in proper form for transfer and that such transferee shall
(i) pay to the Exchange Agent any transfer or other taxes required, or
(ii) establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable.
(c) Holders of Company Common Stock will be entitled to any
dividends or other distributions pertaining to the Fiserv Common Stock
received in exchange therefor that become payable to persons who are
holders of record of Fiserv Common Stock as of a record date on the
same date as or after the Effective Time, but only after they have
surrendered their Company Certificates for exchange. Subject to the
effect, if any, of applicable law, the Exchange Agent shall receive,
hold, and remit any such dividends or other distributions to each such
record holder entitled thereto, without interest, at the time that such
Company Certificates are surrendered to the Exchange Agent for
exchange. Holders of Company Common Stock will not be entitled,
however, to dividends or other distributions that become payable before
or after the Effective Time to persons who were holders of record of
Fiserv Common Stock as of a record date that is prior to the Effective
Time.
(d) All shares of Fiserv Common Stock issued upon the
surrender for exchange of Company Common Stock in accordance with the
terms hereof (including any cash paid for fractional shares pursuant to
Section 3.03(f) hereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common
Stock.
(e) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Company Certificates representing such shares are presented to the
Surviving Corporation, they shall be canceled and exchanged as provided
in this Article III. As of the Effective Time, the holders of Company
Certificates representing shares of Company Common Stock shall cease to
have any rights as stockholders of the Company, except such rights, if
any, as they may have pursuant to Delaware Law. Except as provided
above, until such Company Certificates are surrendered for exchange,
each such Company Certificate shall, after the Effective Time,
represent for all purposes only the right to receive the number of
whole shares of Fiserv Common Stock into which the shares of Company
Common Stock shall have been converted pursuant to the Merger as
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provided in Section 3.01 hereof and the right to receive the cash value
of any fraction of a share of Fiserv Common Stock as provided in
Section 3.03(f) hereof.
(f) No fractional shares of Fiserv Common Stock and no
certificates or scrip therefor, or other evidence of ownership thereof,
shall be issued upon the surrender for exchange of Company
Certificates, no dividend or other distribution of Fiserv shall relate
to any fractional share, and such fractional share interests shall not
entitle the owner thereof to vote or to any rights of a stockholder of
Fiserv. All fractional shares of Fiserv Common Stock to which a holder
of Company Common Stock immediately prior to the Effective Time would
otherwise be entitled, at the Effective Time, shall be aggregated if
and to the extent multiple Company Certificates of such holder are
submitted together to the Exchange Agent. If a fractional share results
from such aggregation, then (in lieu of such fractional share) the
Exchange Agent shall pay to each holder of shares of Company Common
Stock who otherwise would be entitled to receive such fractional share
of Fiserv Common Stock an amount of cash (without interest) determined
by multiplying (i) the fractional share of Fiserv Common Stock to which
such holder would otherwise be entitled, by (ii) the amount which is
equal to the average closing price per share for Fiserv Common Stock as
reported on the National Market System by the National Association of
Securities Dealers, Inc. Automated Quotations (as reported in The Wall
Street Journal) for the twenty business days ending two business days
prior to the Effective Time. Fiserv will make available to the Exchange
Agent any cash necessary for this purpose.
(g) In the event any Company Certificate shall have been lost,
stolen, or destroyed, the Exchange Agent shall issue in exchange for
such lost, stolen, or destroyed Company Certificate, upon the making of
an affidavit of that fact by the holder thereof, such shares of Fiserv
Common Stock and cash for fractional shares, if any, as may be required
pursuant to Section 3.01 and 3.03(f); provided, however, that Fiserv
may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed Company
Certificates to deliver a bond in such sum as Fiserv may direct as
indemnity against any claim that may be made against Fiserv or the
Exchange Agent with respect to such Company Certificates alleged to
have been lost, stolen, or destroyed.
(h) Notwithstanding anything to the contrary in this Section
3.03, none of Fiserv or the Surviving Corporation shall be liable to a
holder of shares of Company Common Stock for any amount properly paid
to a public official pursuant to any applicable abandoned property,
escheat or similar law.
SECTION 3.04 Exchange of Fiserv Sub Common Stock. From and after the
Effective Time, each outstanding certificate previously representing shares of
Fiserv Sub Common Stock shall be deemed for all purposes to evidence ownership
of and to represent the number of shares of Surviving Corporation Common Stock
into which such shares of Fiserv Sub Common Stock shall have been converted.
Promptly after the Effective Time, the Surviving Corporation shall issue to
Fiserv a stock certificate or certificates representing such shares of Surviving
Corporation Common Stock in exchange for the certificate or certificates that
formerly represented shares of Fiserv Sub Common Stock, which shall be canceled.
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SECTION 3.05 Dissenting Shares.
(a) No Conversion. Notwithstanding any provision of this
Agreement to the contrary, any shares of Company Common Stock held by a
stockholder who has demanded and perfected appraisal rights for such
shares in accordance with Delaware Law, including Section 262 of the
Delaware Law, and who has not effectively withdrawn or lost such
appraisal rights ("Dissenting Shares") shall not be converted into or
represent a right to receive the Merger Consideration pursuant to
Section 3.01(a) and 3.03(f), but the holder thereof shall only be
entitled to such rights as are granted by Delaware Law.
(b) Withdrawal or Loss of Dissenters' Rights. Notwithstanding
the provisions of subsection (a), if any holder of shares of Company
Common Stock who is otherwise entitled to exercise appraisal rights
under Delaware Law shall effectively withdraw or lose (through failure
to perfect or otherwise) such appraisal rights, then, as of the later
of the Effective Time and the occurrence of such event, such
stockholder's shares shall automatically be converted into and
represent only the right to receive the Merger Consideration, without
interest thereon, upon surrender of the certificate representing such
shares.
(c) Notice, etc. The Company shall give Fiserv and Trewit (i)
prompt notice of any written demands for the exercise of appraisal
rights in respect of any shares of Company Common Stock, withdrawals of
such demands, and any other instruments served pursuant to Delaware Law
(including instruments concerning appraisal or dissenters' rights) and
received by the Company and (ii) the opportunity to participate in all
negotiations and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of Fiserv and Trewit,
voluntarily make any payment with respect to any demands for the
exercise of appraisal rights in respect of any shares of Company Common
Stock or offer to settle or settle any such demands.
SECTION 3.06 Closing. Evidence of the fulfillment or waiver of the
conditions set forth in Article VII hereof (the "Closing") shall be provided by
the parties hereto to each other (a) at the offices of AVIDYN, Inc. located at
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ at 10 a.m., local time, on the
business day on which the last of the conditions set forth in Article VII hereof
is fulfilled or waived or (b) at such other time and place as the parties hereto
may agree.
SECTION 3.07 Tax Free Exchange. The parties intend that the Merger
qualifies as a "reorganization" within the meaning of Sections 368(a)(1)(A) and
(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code").
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ARTICLE IV
CERTAIN EFFECTS OF THE MERGER
SECTION 4.01 Effect of the Merger. Upon and after the Effective Time:
(a) Fiserv Sub shall merge with and into the Surviving Corporation; (b) the
separate existence of Fiserv Sub shall cease; (c) the shares of capital stock of
the Company shall be converted as provided in this Agreement; (d) the former
holders of such shares are entitled only to the rights provided in this
Agreement and under Delaware Law and (e) the Merger shall otherwise have the
effect provided under the applicable laws of the State of Delaware.
SECTION 4.02 Further Assurances. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or any other acts are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, the title to any property or right of the Constituent
Corporations acquired or to be acquired by reason of, or as a result of, the
Merger, or (b) otherwise to carry out the purposes of this Agreement, the
Constituent Corporations agree that the Surviving Corporation and its proper
officers and directors shall and will execute and deliver all such property,
deeds, assignments and assurances in law and do all acts necessary, desirable or
proper to vest, perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purposes of this Agreement,
and that the proper officers and directors of the Constituent Corporations and
the proper officers and directors of the Surviving Corporation are fully
authorized in the name of the Constituent Corporations or otherwise to take any
and all such action.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 Representations and Warranties of the Company. Except as
otherwise set forth in the Disclosure Schedule (the "Disclosure Schedule")
annexed hereto as Schedule I, the Company represents and warrants to, and agrees
with, Fiserv and Fiserv Sub as follows:
(a) Organization and Qualification, etc. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, has corporate power and authority to
own all of its properties and assets and to carry on its business as it
is now being conducted, and is duly qualified to do business and is in
good standing in each other jurisdiction as set forth in the Disclosure
Schedule where the failure to so qualify would have a Material Adverse
Effect (as hereinafter defined). The copies of the Company's
Certificate of Incorporation and By-laws, as amended to date, which
have been delivered to Fiserv and Trewit, are complete and correct, and
such instruments, as so amended, are in full force and effect at the
date hereof.
"Material Adverse Effect" for purposes of this Agreement when
used with respect to any party means any change in, or effect on, or
series of related changes in, or related effects on, the business of
such party as currently conducted by such party and its subsidiaries,
taken as a whole, that would have an adverse impact on the results of
its operations or financial or other condition of an amount in excess
of $175,000 other than
8
such changes or effects generally affecting the industry of such party
and its subsidiaries or the economy of the United States.
(b) Capital Stock.
(i) The authorized capital stock of the Company
consists of 8,000,000 shares of Company Common Stock and
4,000,000 shares of preferred stock, par value $0.10 per share
(the "Preferred Stock"), of which as of the date hereof
3,620,092 shares of Company Common Stock and no shares of
Preferred Stock are validly issued and outstanding, fully paid
and nonassessable, and no shares of Company Common Stock or
Preferred Stock are held in the treasury.
(ii) There are no options, warrants, calls, rights,
commitments or agreements of any character, written or oral,
to which the Company is a party or by which it is bound
obligating the Company to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or
redeemed any shares of the capital stock of the Company or
obligating the Company to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into
any such option, warrant, call, right, commitment or
agreement. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation or other
similar rights with respect to the Company. There are no
voting trusts, proxies or other agreements or understandings
with respect to the capital stock of the Company.
(c) Subsidiaries. Except as set forth in Section 5.01(c) of
the Disclosure Schedule, the Company does not own of record or
beneficially, directly or indirectly, (i) any shares of outstanding
capital stock or securities convertible into capital stock of any other
corporation or (ii) any participating interest in any general or
limited partnership, limited liability partnership, limited liability
company, joint venture or other non-corporate business enterprise.
Except as listed in Section 5.01(c) of the Disclosure Schedule, the
Company owns directly all the outstanding capital stock of the
subsidiaries listed in the Disclosure Schedule (the "Subsidiaries")
(except for directors' qualifying shares, if any), free and clear of
all encumbrances other than Permitted Exceptions (as hereinafter
defined). The capital stock of each Subsidiary is duly authorized and
validly issued and outstanding, fully paid and nonassessable. No
Subsidiary has issued or sold any shares of its capital stock or any
securities or obligations convertible into or exchangeable for, or
given any person any right to acquire from such Subsidiary, any shares
of its capital stock, and no such securities or obligations are
outstanding. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has the corporate power and authority to own and hold
its properties and to carry on its business as currently conducted. The
copies of the articles or certificates of incorporation and by-laws
(or, where applicable, other such similar governance documents) of each
Subsidiary, as amended to date, which have been delivered to Fiserv
were complete and correct, and such instruments, as so amended, are in
full force and effect at the date hereof. For purposes of this Section
5.01, the term "Company" shall be deemed to include the Subsidiaries
except in Section
9
5.01(a) through Section 5.01(g) (inclusive) and Section 5.01(y) and
except where otherwise noted.
(d) Authority Relative to Agreement. The Company has the
corporate power and authority to execute and deliver this Agreement and
the FIRPTA Affidavit in the form annexed hereto as Exhibit B (the
"FIRPTA Affidavit") and to consummate the transactions contemplated on
the part of the Company hereby. The execution and delivery by the
Company of this Agreement and the FIRPTA Affidavit and the consummation
by the Company of the transactions contemplated on its part hereby have
been duly authorized by its Board of Directors. No other corporate
proceedings on the part of the Company (other than stockholder
approval) or any Subsidiary are necessary to authorize the execution
and delivery of this Agreement by the Company, or, subject to obtaining
the Company Stockholders Approval, the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization,
execution and delivery at the Effective Time of the Agreement by Fiserv
and Fiserv Sub, is its valid and binding agreement, enforceable against
the Company in accordance with its terms, except as such enforcement is
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting creditors'
rights generally and (ii) general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing
and other similar doctrines affecting the enforceability of agreements
generally (regardless of whether considered in a proceeding in equity
or at law). The Company's Board of Directors has approved this
Agreement and the transactions contemplated hereby and such approvals
are sufficient so that neither the restrictions on "business
combinations" set forth in Section 203(a) of Delaware Law nor the
provisions of any other "fair price," "moratorium," "control share
acquisition," or other similar anti-takeover statute or regulation nor
the provisions of any applicable anti-takeover provisions in the
Certificate of Incorporation or Bylaws of the Company will apply to
this Agreement or any of the transactions contemplated by this
Agreement. Under applicable law, the current Certificate of
Incorporation of the Company and Nasdaq rules, the affirmative vote of
the holders of a majority of the outstanding shares of Company Common
Stock is the vote required for the stockholders of the Company to
approve the Merger (the "Company Stockholder Approval").
(e) Non-Contravention. The execution and delivery of this
Agreement and the FIRPTA Affidavit by the Company do not and the
consummation by the Company of the transactions contemplated hereby
will not (i) violate any provision of the Certificate of Incorporation
or By-laws of the Company or the Certificate of Incorporation or
By-laws of any of its Subsidiaries, as the case may be, and (ii)
violate, or result, with the giving of notice or the lapse of time or
both, in a violation of, any provision of, or result in the
acceleration of or entitle any party to accelerate (whether after the
giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any material lien, charge,
pledge, security interest or other encumbrance upon any of the property
of the Company or any of its Subsidiaries pursuant to any provision of
any mortgage or lien or material lease, agreement, license or
instrument or any order, arbitration award, judgment or decree to which
the Company or any of its Subsidiaries is
10
a party or by which any of its assets is bound, and do not and will not
violate or conflict with any other material restriction of any kind or
character to which the Company or any of its Subsidiaries is subject or
by which any of its assets may be bound, and the same does not and will
not constitute an event permitting termination of any such mortgage or
lien or material lease, agreement, license or instrument to which the
Company or any of its Subsidiaries is a party or (iii) violate in any
material respect any law, ordinance or regulation to which the Company
or any of its Subsidiaries is subject, including the applicable
requirements of the Securities Act, the Exchange Act, state takeover or
securities laws, the rules of Nasdaq, except, in each case or cases,
for any such violation, acceleration, imposition, conflict or
termination which would not, individually or in the aggregate, result
in a Material Adverse Effect.
(f) Government Approvals. Except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware, no consent, authorization, order or approval of, or filing or
registration with, any governmental commission, board or other
regulatory body is required for the execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, except (x) as may be necessary as a
result of any facts or circumstances relating solely to Fiserv or
Fiserv Sub or (y) where the failure to obtain such consents,
authorizations or approvals or to make such filings or registrations
would not prevent the consummation of the transactions contemplated
hereby.
(g) Company SEC Reports. The Company has filed with the
Securities and Exchange Commission (the "SEC"), at or prior to the time
due, and has made available to Fiserv true and complete copies of all
forms, reports, schedules, registration statements and definitive proxy
statements (together with all information incorporated therein by
reference, the "Company SEC Reports") required to be filed by it with
the SEC since January 1, 2000. As of their respective dates, the
Company SEC Reports complied as to form in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or the Securities Act of 1933, as amended (the
"Securities Act"), as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Company SEC Reports. As of their
respective dates and as of the date any information from such Company
SEC Reports has been incorporated by reference, the Company SEC Reports
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(h) Financial Statements. Each of the financial statements of
the Company (including the related notes) included or incorporated by
reference in the Company SEC Reports (including any similar documents
filed after the date of this Agreement) comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-QSB of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
11
financial position of the Company and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
Except for liabilities and obligations incurred in the ordinary course
of business consistent with past practice and which could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, since the date of the most recent audited
consolidated balance sheet included in the Company SEC Reports, neither
the Company nor any of its Subsidiaries has incurred any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by GAAP to be set forth on a consolidated balance
sheet of the Company and its consolidated subsidiaries or in the notes
thereto.
(i) Absence of Certain Changes or Events. Since December 31,
2001, the Company has not:
(i) incurred any obligation or liability (fixed or
contingent), except normal trade or business obligations
incurred in the ordinary course of business and consistent
with past practice;
(ii) discharged or satisfied any lien, security
interest or encumbrance or paid any obligation or liability
(fixed or contingent), other than in the ordinary course of
business and consistent with past practice;
(iii) mortgaged, pledged or subjected to any lien,
security interest or other encumbrance any of its assets or
properties (other than Permitted Exceptions (as hereinafter
defined)), other than in the ordinary course of business and
consistent with past practice;
(iv) transferred, leased or otherwise disposed of any
of its assets or properties or acquired any assets or
properties, other than in any case in the ordinary course of
business and consistent with past practice;
(v) cancelled or compromised any debt or claim, other
than in the ordinary course of business and consistent with
past practice;
(vi) waived or released, under any contract, rights
of the Company having value to the Company, other than in any
case in the ordinary course of business and consistent with
past practice;
(vii) transferred or granted any rights under any
concessions, leases, licenses, agreements or Intellectual
Property (as hereinafter defined), other than in the ordinary
course of business and consistent with past practice;
(viii) other than in the ordinary course of business
and consistent with past practice, made or granted any wage or
salary increase applicable to any group or classification of
employees generally, paid any bonuses, entered into any
employment contract with any officer or employee or made any
loan to, or entered
12
into any transaction of any other nature with, any officer or
employee of the Company;
(ix) entered into any transaction, contract or
commitment, except (A) those listed, or which pursuant to the
terms hereof are not required to be listed, on the Disclosure
Schedule, (B) this Agreement and the transactions contemplated
hereby, and (C) those entered into in the ordinary course of
business and consistent with past practice;
(x) declared, paid or made any provision for payment
of any dividends or other distribution in respect of shares of
Company Common Stock, or directly or indirectly, acquired,
purchased, redeemed or made any provision for acquiring,
purchasing or redeeming any shares of Company Common Stock;
(xi) suffered any casualty loss or damage (whether or
not such loss or damage shall have been covered by insurance)
which affects in any material respect its ability to conduct
its business;
(xii) amended or changed the Certificate of
Incorporation or By-laws of the Company;
(xiii) suffered any labor trouble or claim of
wrongful discharge, discrimination or other unlawful labor
practice or action;
(xiv) changed any accounting method or practice
(including any change in depreciation or amortization policies
or rates);
(xv) commenced or threatened to commence any lawsuit
or proceeding against a third party;
(xvi) received any notice of any claim of ownership
by a third party of the Company's Intellectual Property or of
infringement by the Company of any third party's Intellectual
Property rights;
(xvii) agreed to do any of the things described in
the preceding clauses (i) through (xvi) (other than
negotiations with Fiserv, Trewit, Fiserv Sub and their
representatives regarding the transactions contemplated by
this Agreement); or
(xviii) suffered any Material Adverse Effect.
"Permitted Exceptions" shall mean (i) mechanic's,
materialman's, warehouseman's and carrier's liens and purchase money
security interests arising in the ordinary course of business; (ii)
liens for Taxes and assessments not yet payable; (iii) liens for Taxes,
assessments and charges and other claims, the validity of which the
Company is contesting in good faith; (iv) zoning, entitlement, building
and other land use regulations; (v) covenants, conditions,
restrictions, easements and other similar matters of record; (vi )
liens for workers compensation, unemployment insurance and other
benefits
13
incurred in the ordinary course of business; and (vi) imperfections of
title, liens, security interests, claims and other charges and
encumbrances the existence of which would not have individually or in
the aggregate a Material Adverse Effect.
(j) Title to Properties; Absence of Liens and Encumbrances,
etc. The Company has good and marketable title to all of the real,
tangible, personal and mixed properties and assets owned by it and used
in its business, free and clear of any liens, charges, pledges,
security interests or other encumbrances (other than Permitted
Exceptions), except as reflected in the Company Financial Statements.
The Company's intangible properties and assets (excluding leasehold
interests and other any intangible properties and assets described in
Section 5.01(k), which section contains the Company's representations
and warranties with respect to such intangible properties and assets)
are free and clear of any liens, charges, pledges, security interests
or other encumbrances (other than Permitted Exceptions), except as
reflected in the Company Financial Statements.
(k) Intellectual Property.
(i) Definitions. For all purposes of this Agreement,
the following terms shall have the following respective
meanings:
(A) "Technology" means any or all of the
following: (I) works of authorship including computer
programs, algorithms, routines, source code and
executable code, whether embodied in software or
otherwise, documentation, designs, files, records and
data; (II) inventions (whether or not patentable),
improvements and technology; (III) proprietary and
confidential information, including technical data
and customer and supplier lists, trade secrets, show
how, know how and techniques; (IV) databases, data
compilations and collections and technical data; (V)
processes, tools, devices, methods, prototypes,
schematics, bread boards, net lists, mask works, test
methodologies and hardware development tools; and all
instantiations of the foregoing in any form and
embodied in any media.
(B) "Intellectual Property Rights" means any
or all of the following and all rights in, arising
out of, or associated therewith: (I) all United
States and foreign patents and utility models and
applications therefore and all reissues, divisions,
re-examinations, renewals, extensions, provisionals,
continuations and continuations-in-part thereof, and
equivalent or similar rights anywhere in the world in
inventions and discoveries including without
limitation invention disclosures ("Patents"); (II)
all trade secrets and other rights in the know-how
and confidential or proprietary information ("Trade
Secrets"); (III) all copyrights, copyrights
registrations and applications therefor and all other
rights corresponding thereto throughout the world
("Copyrights"); (IV) all industrial designs and any
registrations and applications therefor throughout
the world; (V)
14
mask works, mask work registrations and applications
therefor, and all other rights corresponding thereto
throughout the world ("Mask Works"); (VI) all rights
in World Wide Web addresses and domain names and
applications and registrations therefor, all trade
names, trade dress, logos, common law trademarks and
service marks, trademark and service ▇▇▇▇
registrations and applications therefor and all
goodwill associated therewith throughout the world
("Trademarks"); and (VII) any similar, corresponding
or equivalent rights to any of the foregoing anywhere
in the world.
(C) "Company Intellectual Property" means
any Technology and Intellectual Property Rights
including the Company's Registered Intellectual
Property Rights (as hereinafter defined) that are
owned by, or exclusively licensed to, the Company.
(D) "Registered Intellectual Property
Rights" means all United States, international and
foreign: (I) Patents, including applications
therefor; (II) registered Trademarks, applications to
register Trademarks, including intent-to-use
applications, or other registrations or applications
related to Trademarks; (III) Copyrights registrations
and applications to register Copyrights; (IV)
registered Mask Works and applications to register
Mask Works; and (V) any other Technology that is the
subject of an application, certificate, filing,
registration or other document issued by, filed with,
or recorded by, any state, government or other public
legal authority at any time.
(E) "Governmental Entity" means any
national, federal, state, municipal or local or other
government, governmental, regulatory or
administrative authority, agency or commission or any
court, tribunal or judicial or arbitral body.
(ii) Company Products. Section 5.01(k)(ii) of the
Disclosure Schedule contains a complete and accurate list (by
name and version number) of all products, software or service
offerings of the Company (collectively, the "Company
Products") that have been sold, distributed or otherwise
disposed of in the two (2) year period preceding the date
hereof or which the Company currently intends to sell,
distribute or otherwise dispose of in the future, including
any products, Software or service offerings under development.
(iii) Registered Intellectual Property Rights.
Section 5.01(k)(iii) of the Disclosure Schedule lists all
Registered Intellectual Property Rights owned by, filed in the
name of or applied for by the Company as of the date of this
Agreement (the "Company Registered Intellectual Property
Rights") and lists any proceedings or actions before any
court, tribunal, including the United States Patent and
Trademark Office (the "PTO"), related to any of the Company
Intellectual Property Rights or Company Intellectual Property.
All necessary
15
documents and certificates in connection with such Company
Registered Intellectual Property Rights have been filed with
the PTO or the United States Copyright Office, as the case may
be, for the purposes of maintaining the Registered
Intellectual Property Rights embodied in any Company
Intellectual Property in the United States. Except as set
forth in Section 5.01(k)(iii) of the Disclosure Schedule, as
of the Effective Time, there are no actions that must be taken
by the Company within 120 days of the Effective Time in order
to obtain, perfect, preserve, renew or maintain the Registered
Intellectual Property, including the payment of any
registration, maintenance or renewal fees or the filing of any
responses to PTO office actions, documents, applications or
certificates. The Company has not claimed any status in the
application for or registration of any Company Intellectual
Property, including "small business status", that would not be
applicable to it following the Merger.
(iv) Valid Assignment. In each case in which the
Company has acquired any Company Intellectual Property from
any person, the Company has obtained a valid and enforceable
assignment sufficient to irrevocably transfer all rights in
such Company Intellectual Property (including the right to
seek past and future damages with respect thereto) to the
Company. To the maximum extent provided for by, and in
accordance with, applicable laws and regulations, the Company
has recorded each such assignment of a Registered Intellectual
Property Right assigned to the Company with the PTO or the
United States Copyright Office.
(v) No Invalidity, Etc. The Company has no knowledge
of any facts or circumstances that would render any Company
Intellectual Property invalid or unenforceable. To the
Company's knowledge, no person is infringing or
misappropriating any Company Intellectual Property. The
Company has not received notice from any person claiming that
such operation or any act, product, technology or service
(including products, technology or services currently under
development) of the Company infringes or misappropriates any
Intellectual Property Right of any person or constitutes
unfair competition or trade practices under the laws of any
jurisdiction (nor does the Company have knowledge of any basis
therefore). The Company does not operate interactive voice
response units on behalf of clients in a service bureau
environment.
(vi) Confidentiality. The Company has taken all steps
that reasonably are required to protect the Company's rights
in confidential information and Trade Secrets of the Company
or provided by any other person to the Company. Without
limiting the foregoing, the Company has and enforces a policy
requiring each employee, consultant and contractor to execute
proprietary information, confidentiality and assignment
agreements, and all current and former employees, consultants
and contractors of the Company have executed such an
agreement. Each of the employees of ppoONE, Inc. listed on
Section 5.01(k)(vi) of the Disclosure Schedule have signed the
form of confidentiality agreement attached to Section
5.01(k)(vi) of the Disclosure Schedule. The Company has in
place project
16
management policies that require back-up procedures to be
followed, including daily storage to a back-up server and at
least weekly transmission to an off-site storage facility,
that are reasonable in the circumstances. The Company does not
permit employees, consultants or contractors to work from
sites other than Company-approved sites, and procedures are in
place to assure that the Company maintains adequate possession
and control of all Company Intellectual Property that may be
being worked on by employees, consultants or contractors
off-site.
(vii) Transferability. All Company Intellectual
Property will be fully transferable, alienable or licensable
by the Surviving Corporation and/or Fiserv without restriction
and without payment of any kind to any third party.
(viii) No Liens. Each item of Company Intellectual
Property is free and clear of any liens except for
non-exclusive licenses granted to end-user customers in the
ordinary course of business. The Company is the exclusive
owner or exclusive licensee of all Company Intellectual
Property.
(ix) No Transfer of Rights. The Company has not
transferred ownership of, or granted any exclusive license of
or right to use, or authorized the retention of any exclusive
rights to use or joint ownership of, any Technology or
Intellectual Property Right that is Company Intellectual
Property, to any other person.
(x) Exclusive Rights. Except as set forth in Section
5.01(k)(x) of the Disclosure Schedule, all Technology, other
than "shrink wrap" and other commercially available end user
software, used in or necessary to the conduct of the Company's
business as presently conducted or currently contemplated to
be conducted by the Company was written and created solely by
employees of the Company acting within the scope of their
employment, and no person owns or has any rights to any of the
Company Intellectual Property.
(xi) All Necessary Rights. Except as set forth in
Section 5.01(k)(xi) of the Disclosure Schedule, the Company
Intellectual Property constitutes all the Technology,
Intellectual Property Rights and Company Registered
Intellectual Property Rights used in and/or necessary to the
conduct of the business of the Company as it currently is
conducted on the date of this Agreement, and as it is
currently planned or contemplated to be conducted by the
Company, including the design, development, manufacture, use,
import and sale of Company Products.
(xii) No Infringement. The operation of the business
of the Company as it is currently conducted, or is presently
proposed to be conducted, by the Company, including but not
limited to the design, development, use, import, branding,
advertising, promotion, marketing, manufacture and sale of
Company Products does not and will not when conducted by
Fiserv or the Surviving Corporation in substantially the same
manner following the Closing, infringe or misappropriate any
Intellectual Property Right of any person, violate any right
of
17
any person (including any right to privacy or publicity), or
constitute unfair competition or trade practices under the
laws of any jurisdiction.
(xiii) No Proceedings. No Company Intellectual
Property or service of the Company is subject to any
proceeding or outstanding decree, order, judgment or
settlement agreement or stipulation that restricts in any
manner the use, transfer or licensing thereof by the Company
or may affect the validity, use or enforceability of such
Company Intellectual Property.
(xiv) IP Contracts. Other than "shrink wrap" and
other commercially available end user software, having an
initial purchase price of $5,000 or less, Section 5.01(k)(xiv)
of the Disclosure Schedule lists all contracts, licenses and
agreements to which the Company is a party with respect to any
Technology or Intellectual Property Rights (the "IP
Contracts"). The Company is not in breach of nor has the
Company failed to perform under any of the IP Contracts and,
to the Company's knowledge: (A) no other party to any such IP
Contract is in breach thereof or has failed to perform
thereunder, and (B) there are no disputes regarding the scope
of or performance under such IP Contracts, including with
respect to any payments to be made or received by the Company
thereunder.
(xv) Obligation to Warrant. Section 5.01(k)(xv) of
the Disclosure Schedule lists all IP Contracts in which the
Company has agreed to, or has assumed, any obligation or duty
to warrant, indemnify, reimburse, hold harmless, guarantee or
otherwise assume or incur any obligation or liability or
provide a right of rescission with respect to the infringement
or misappropriation by the Company or such other person of the
Intellectual Property Rights of any person other than the
Company.
(xvi) No Grants, Assignments. Neither this Agreement
nor the transactions contemplated by this Agreement, including
the assignment of any contracts or agreements to which the
Company is a party to Fiserv, Fiserv Sub or the Surviving
Corporation, by operation of law or otherwise, will result in
(A) either Fiserv's, Fiserv Sub's or the Surviving
Corporation's granting to any person any right or license to
any Technology or Intellectual Property Right owned by, or
licensed to, any of them; (B) either Fiserv's, Fiserv Sub's or
the Surviving Corporation's being bound by, or subject to, any
non-compete or other restriction on the operation or scope of
their respective businesses; or (C) either Fiserv's, Fiserv
Sub's or the Surviving Corporation's being obligated to pay
any royalties or other amounts to any person in excess of
those payable by Fiserv, Fiserv Sub or the Surviving
Corporation, respectively.
(l) List of Properties, Contracts and Other Data. Section
5.01(l) of the Disclosure Schedule contains a list setting forth with
respect to the Company as of the date hereof the following:
(i) all real properties owned in fee simple by the
Company;
18
(ii) all leases of real or personal property to which
the Company is a party, either as lessee or lessor with a
brief description of the property to which each such lease
relates, except such leases of personal property as require
payment during their remaining life aggregating less than
$20,000;
(iii) all collective bargaining agreements, all
agreements or arrangements that contain any severance pay or
post-employment liabilities or obligations, all bonus,
deferred compensation, pension, profit sharing or retirement
plans or any other employee benefit plans or arrangements, all
employment or consulting agreements or contracts with an
employee or individual consultant or salesperson or consulting
or sales agreements or contracts, under which a firm or other
organization provides services to the Company pursuant to
which the Company is obligated to make payments in excess of
$24,000 per year and all agreements or plans, including all
stock option plans, stock appreciation rights plans or stock
purchase plans, any of the benefits of which will be increased
or the vesting of benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions
contemplated by this Agreement;
(iv) all contracts and commitments (including
mortgages, indentures and loan or credit agreements, security
agreements or other agreements or instruments relating to the
borrowing of money or extension of credit, including
guaranties; fidelity or surety bonds or completion bonds;
agreements of indemnification or guaranty; agreements,
contracts or commitments containing any covenant limiting the
freedom of the Company to engage in any line of business or to
compete with any person; agreements, contracts or commitments
relating to capital expenditures and involving future payments
in excess of $20,000; agreements, contracts or commitments
relating to the disposition or acquisition of assets or any
interest in any business enterprise outside the ordinary
course of business; agreements, contracts or commitments
containing performance or revenue standards or purchase or
revenue minimums, which, if not met, have payment,
reimbursement or forfeiture provisions; purchase orders or
contracts; construction contracts; material distribution,
joint marketing or development agreements; or any agreement,
contract or commitment pursuant to which the Company has
granted or may grant in the future to any party a source-code
license or option or other right to use or acquire
source-code) to which the Company is a party, or to which it
or any of its assets or properties are subject and which are
not specifically referred to in the preceding clauses (i),
(ii) or (iii) above; provided that there need not be listed in
the Disclosure Schedule (unless required pursuant to the
preceding clauses (i), (ii) or (iii) above) any contract or
commitment incurred in the ordinary course of business and
consistent with past practice which requires payments to or by
the Company during its remaining life aggregating less than
$50,000; and
19
(v) the current annual compensation of all employees
of the Company (by position or by department) as of a recent
date (a copy of which has been submitted to Fiserv but is not
included in the Disclosure Schedule).
True and complete copies of all documents and descriptions complete in
all material respects of all oral agreements or commitments (if any)
referred to in (i) through (iv) above (other than insurance plans which
have been summarized) have been provided and made available to Fiserv
or its counsel. The Company has not been notified in writing of any
claim that any contract listed in the Disclosure Schedule for this
subsection (l) is not valid and enforceable in accordance with its
terms for the periods stated therein, or that there is under any such
contract any existing default or event of default or event which with
notice or lapse of time or both would constitute such a default, except
for any such claim which would have, individually or when taken
together with all such other claims referred to in this Section
5.01(l), a Material Adverse Effect.
Section 5.01(l) of the Disclosure Schedule sets forth a list of the
Company's top 10 clients according to revenue for the year ended
December 31, 2001, and each client with which the Company currently has
an agreement that the Company in good faith expects to be one of the
Company's top 10 clients for the year ending December 31, 2002, and a
list of all effective agreements between such client and the Company.
(m) Litigation. There are no actions, suits or proceedings
with respect to the business of the Company pending against the Company
of which the Company is aware at law or in equity, or before or by any
federal, state, municipal, foreign or other governmental department,
commission, board, bureau, agency or instrumentality (individually, a
"Governmental Entity"), nor, to the knowledge of the Company, has the
Company received any notice or threat of any such actions, suits or
proceedings with respect to the business of the Company except as would
not have a Material Adverse Effect. There is no investigation pending
or threatened against the Company, its properties or any of its
officers or directors by or before a Governmental Entity, except as
would not have a Material Adverse Effect. The Disclosure Schedule sets
forth, with respect to any such pending or threatened action, suit,
proceeding or investigation that the Company believes could have a
Material Adverse Effect, the forum, the parties thereto, the subject
matter thereof and the amount of damages claimed or other remedy
requested. No Governmental Entity has at any time challenged or
questioned the legal right of the Company to manufacture, offer or sell
any of its products or services in the present manner or style thereof.
(n) Labor Controversies. Except as would not reasonably be
expected to have in the aggregate a Material Adverse Effect:
(i) there are no controversies known to the Company
between the Company and any employees or any unresolved labor
union grievances or unfair labor practice or labor arbitration
proceedings pending or, to the knowledge of the Company,
threatened, related to the Company and, to the knowledge of
the Company, there are not and during the last two years prior
to the date hereof
20
there have not been any formal or informal organizing efforts
by a labor organization and/or group of Company employees and
the Company is not presently, nor has it been in the past, a
party to, or bound by, any collective bargaining agreement or
union contract with respect to employees and no collective
bargaining agreement is being negotiated by the Company;
(ii) the Company is in compliance, and has not
received notice of, nor, to the knowledge of the Company, has
there been threatened any claim that the Company has not
complied, with all laws relating to the employment of labor,
including provisions thereof relating to wages, hours,
collective bargaining, the payment of social security and
similar Taxes, equal employment opportunity, employment
discrimination and employment safety nor has the Company
received notice of or, to the knowledge of the Company, has
there been threatened any claim that it is liable for any
arrears of wages or any Taxes or penalties for failure to
comply with any of the foregoing; and the Company is not
liable for any payment to any trust or other fund governed by
or maintained by or on behalf of any governmental authority
with respect to unemployment compensation benefits, social
security or other benefits or obligations for employees (other
than routine payments to be made in the ordinary course of
business and consistent with past practice) and there are no
pending, threatened or reasonably anticipated claims or
actions against the Company under any worker's compensation
policy or long-term disability policy; and
(iii) the Company does not now, nor has it ever had
the obligation to, maintain, establish, sponsor, participate
in or contribute to any international or foreign employee
benefit plan.
(o) Use of Real Property. The Company has not received any
notice of violation of any applicable zoning or building regulation,
ordinance or other law, order, regulation or requirement relating to
the Company (representations and warranties with respect to
environmental matters being set forth in Section 5.01(p) hereof) or any
notice of default under any lease, contract, commitment, license or
permit, relating to the use and operation of the owned or leased real
property listed in the Disclosure Schedule, in either case which could
reasonably be expected to have in the aggregate a Material Adverse
Effect and, to the knowledge of the Company, there is no such violation
or default which would have in the aggregate a Material Adverse Effect.
The Company has not received any notice that any plant or other
building that is owned or covered by a lease set forth in the
Disclosure Schedule hereto does not substantially conform with all
applicable ordinances, codes, regulations and requirements, and the
Company has not received any notice that any law or regulation
presently in effect or condition precludes or restricts continuation of
the present use of such properties by the Company.
(p) Environmental Matters.
(i) Hazardous Materials. The Company has not: (A)
operated any underground storage tanks at any property that
the Company has at any time
21
owned, operated, occupied or leased; or (B) illegally released
in violation of applicable law any material amount of any
substance that has been designated by any Governmental Entity
or by applicable federal, state or local law to the be
radioactive, toxic, hazardous or otherwise a danger to health
or the environment, including PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous
substances pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended,
or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws, (a
"Hazardous Material"), but excluding office and janitorial
supplies properly and safely maintained. No Hazardous
Materials have been released in violation of any applicable
law, as a result of the actions of the Company, or, to the
Company's knowledge, as a result of any actions of any third
party or otherwise, in, on or under any property, including
the land and the improvements, ground water and surface water
thereof, that the Company has at any time owned, operated,
occupied or leased.
(ii) Hazardous Materials Activities. The Company has
not transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous
Materials in violation of any law in effect on or before the
Effective Time, nor has the Company disposed of, transported,
sold or manufactured any product containing a Hazardous
Material (any or all of the foregoing being collectively
referred to as "Hazardous Materials Activities") in violation
of any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date
hereof to prohibit, regulate or control Hazardous Materials or
any Hazardous Material Activity.
(iii) Permits. The Company currently holds all
environmental approvals, permits, licenses, clearances and
consents (the "Environmental Permits") necessary for the
conduct of the Company's Hazardous Material Activities and
other businesses of the Company as such activities and
businesses are currently being conducted.
(iv) Environmental Liabilities. No action,
proceeding, revocation proceeding, amendment procedure, writ,
injunction or claim is pending, or, to the Company's
knowledge, threatened concerning any Environmental Permit,
Hazardous Material or any Hazardous Materials Activity of the
Company. The Company is not aware of any fact or circumstance
that could involve the Company in any environmental litigation
or impose upon the Company any environmental liability.
(q) Additional Accounting Disclosure Matters.
(i) Accounts Receivable. The accounts receivable
reflected on the balance sheet of the Company as of December
31, 2001 and all accounts receivable arising between December
31, 2001 and the date hereof, arose from
22
bona fide transactions in the ordinary course of business.
Except for amounts also recorded as deferred revenue, these
transactions have been recorded in accordance with GAAP
meeting the following criteria: persuasive evidence of an
arrangement exists, delivery has occurred or services have
been rendered, the sales price is fixed or determinable and no
further deliveries or services are required to be provided in
order to entitle the Company or its assignees to collect the
accounts receivable in full. No such account has been assigned
or pledged to any other person, firm or corporation.
(ii) No Undisclosed Liabilities. The Company does not
have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether
accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in the Company
Financial Statements), that in the aggregate exceed $50,000,
and which (A) has not been reflected (which such term
"reflected" does not include any such liability, indebtedness,
etc. that is mentioned only in the footnotes to the Company
Financial Statements) or reserved against in the most recent
Company Financial Statements or (B) has arisen other than in
the ordinary course of the Company's business and consistent
with past practices since the date of the latest balance sheet
included in the Company Financial Statements. The Company does
not have any outstanding payables, whether reflected on the
Company Financial Statements or not, which (C) exceed $50,000
or (D) are more than 30 days past due.
(r) Compliance with Law; Restrictions on Business Activities.
(i) No Defaults. The Company is not in default with
respect to any order of any court, governmental authority or
arbitration board or tribunal to which it is a party or, to
the knowledge of the Company, to which the Company is subject
and which applies to its business, and, to the knowledge of
the Company, the Company has not been notified that it is in
violation of any laws, ordinances, governmental rules or
regulations to which it is subject or that it has failed to
obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its assets and
properties or to the conduct of its business.
(ii) Immigration Matters. The Company has on file a
valid Form I-9 for each employee hired by the Company on or
after November 7, 1986 and continuously employed after
November 6, 1986 or the applicable date of hire. To the
knowledge of the Company, all employees of the Company are (A)
United States citizens, or lawful permanent residents of the
United States, (B) aliens whose right to work in the United
States is unrestricted, (C) aliens who have valid, unexpired
work authorizations issued by the Attorney General of the
United States (Immigration and Naturalization Service) or (D)
aliens who have been continually employed by the Company since
November 6, 1986 or the applicable date of hire. The Company
has not been the subject of an immigration
23
compliance or employment visit from, nor has the Company been
assessed any fine or penalty by, or been the subject of any
order or directive of, the United States Department of Labor
or the Attorney General of the United States (Immigration and
Naturalization Service).
(iii) Restrictions on Business Activities. There is
no agreement (noncompete or otherwise), commitment, judgment,
injunction, order or decree to which the Company is a party or
otherwise binding upon the Company which has or reasonably
would be expected to have the effect of prohibiting or
impairing any business practice (including the licensing of
any product) of the Company, any acquisition of property
(tangible or intangible) by the Company or the conduct of
business by the Company. Without limiting the foregoing, the
Company has not entered into any agreement under which the
Company is restricted from selling, licensing or otherwise
distributing any of its products to any class of customers, in
any geographic area, during any period of time or in any
segment of the market.
(iv) Employees. To the knowledge of the Company, no
employee of the Company (A) is in violation of any term of any
employment contract, patent disclosure agreement,
non-competition agreement or any restrictive covenant to a
former employer relating to the right of any such employee to
be employed by the Company because of the nature of the
business conducted or presently proposed to be conducted by
the Company or to the use of trade secrets or proprietary
information of others or (B) has given notice to the Company,
nor is the Company otherwise aware that any employee intends
to terminate his or her employment with the Company.
(v) Governmental Authorization. The Company possesses
all material consents, licenses, permits, grants or other
authorizations issued to the Company by a Governmental Entity
(A) pursuant to which the Company currently operates or holds
any interest in any of its properties or (B) which is required
for the operation of its business or the holding of any such
interest, other than such consents, licenses, permits, grants
or authorizations the failure to obtain which would not,
either individually or in the aggregate, have a Material
Adverse Effect ("Company Authorizations"), which Company
Authorizations are in full force and effect and constitute all
Company Authorizations required to permit the Company to
operate or conduct its business or hold any interest in its
properties or assets and each such Company Authorization is
listed on Section 5.01(r)(v) of the Disclosure Schedule.
(s) Employee Benefits.
(i) Employee Plans. Section 5.01(s)(i) of the
Disclosure Schedule sets forth a list identifying each
"employee pension benefit plan" as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including any "multiemployer plan", as
defined in Section 3(37) of ERISA, (the "Pension Plans") and a
list identifying each "employee welfare
24
benefit plan", as defined in Section 3(1) of ERISA, (the
"Welfare Plans") that, in either case, are maintained,
administered or contributed to by the Company, or which cover
any employee or former employee of the Company. Collectively,
the Pension Plans and Welfare Plans are hereinafter referred
to as the "Employee Plans". Except as otherwise identified in
Section 5.01(s)(i) of the Disclosure Schedule, (A) no Employee
Plan is maintained, administered or contributed to by any
entity other than the Company, and (B) no Employee Plan is
maintained under any trust arrangement which covers any
employee benefit arrangement which is not an Employee Plan.
(ii) Delivery of Copies of Plans, Documents, etc. The
Company has delivered or has caused to be delivered to Fiserv
and Trewit true and complete copies of (A) the Employee Plans
(including related trust agreements, custodial agreements,
insurance contracts, investment contracts and other funding
arrangements, if any, and adoption agreements, if any), (B)
any amendments to Employee Plans, (C) written interpretations
of the Employee Plans, (D) material employee communications by
the plan administrator of any Employee Plan (including, but
not limited to, summary plan descriptions and summaries of
material modifications, as defined under ERISA), (E) the three
most recent annual reports (e.g., the complete Form 5500
series) prepared in connection with each Employee Plan (if
such report was required), including all attachments
(including the audited financial statements, if any) and (F)
the three most recent actuarial valuation reports prepared in
connection with each Employee Plan (if any such report was
required).
(iii) No Change in Benefits. There has been no
amendment to, written interpretation or announcement (whether
or not written) by the Company relating to, or change in
employee participation or coverage under any Employee Plan
that would increase materially the expense of maintaining such
Employee Plan above the level of expense incurred in respect
of such Employee Plan for the most recent plan year with
respect to Employee Plans. The execution of this Agreement and
the consummation of the transactions contemplated hereby do
not and will not constitute an event under any Employee Plan,
which either alone or upon the occurrence of a subsequent
event will or may result in any payment, acceleration, vesting
or increase in benefits to any employee, former employee or
director of the Company.
(iv) Compliance. Each Employee Plan has been
maintained in compliance with its terms and the requirements
prescribed by any and all statutes, orders, rules and
regulations, including but not limited to, ERISA and the Code,
which are applicable to such Employee Plan.
(v) Qualification, etc. Each Pension Plan is
"qualified" within the meaning of Section 401(a) of the Code,
and has been qualified during the period from the date of its
adoption to the date of this Agreement, and each trust created
thereunder is tax-exempt under Section 501(a) of the Code. The
Company has
25
delivered or caused to be delivered to Fiserv the latest
determination letters of the Internal Revenue Service relating
to each Pension Plan. Such determination letters have not been
revoked. Furthermore, there are no pending proceedings or, to
the knowledge of the Company, threatened proceedings in which
the "qualified" status of any Pension Plan is at issue and in
which revocation of the determination letter has been
threatened. Each such Pension Plan has not been amended or
operated, since the receipt of the most recent determination
letter, in a manner that would adversely affect the
"qualified" status of the Plan. No distributions have been
made from any of the Pension Plans that would violate in any
respect the restrictions under Treasury Regulation Section
1.401(a)(4)-5(b), and none will have been made by the
Effective Time.
(vi) No Claims. There are no pending or, to the
knowledge of the Company, threatened (A) claims, suits or
other proceedings by any employees, former employees or plan
participants or the beneficiaries, spouses or representatives
of any of them, other than ordinary and usual claims for
benefits by participants or beneficiaries, or (B) suits,
investigations or other proceedings by any federal, state,
local or other governmental agency or authority, of or against
any Employee Plan, the assets held thereunder, the trustee of
any such assets or the Company relating to any of the Employee
Plans. If any of the actions described in this subsection are
initiated prior to the Effective Time, the Company shall
notify Fiserv of such action prior to the Effective Time.
(vii) No Prohibited Transactions. The Company has not
engaged (A) in any transaction or acted or failed to act in a
manner that violates the fiduciary requirements of Section 404
of ERISA, or (B) in any "prohibited transaction" within the
meaning of Section 406(a) or 406(b) of ERISA, or of Section
4975(c) of the Code, with respect to any Employee Plans, and
will not so engage, act or fail to act prior to the Effective
Time. Furthermore, to the knowledge of the Company, no other
"party in interest", as defined in Section 3(14) of ERISA, or
"disqualified person", as defined in Section 4975(e)(2) of the
Code, has engaged in any such "prohibited transaction".
(viii) No Liability. No liability has been incurred
by the Company or by a trade or business, whether or not
incorporated, which is deemed to be under common control or
affiliated with the Company within the meaning of Section 4001
of ERISA or Section 414(b), (c), (m) or (o) of the Code (an
"ERISA Affiliate") for any Tax, penalty or other liability
with respect to any Employee Plan and, to the knowledge of the
Company, such Plans do not expect to incur any such liability
prior to the Effective Time.
(ix) Required Contributions. The Company has made all
required contributions under each Pension Plan on a timely
basis or, if not yet due, adequate accruals therefore have
been provided for in the financial statements. No Pension Plan
has incurred any "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or Section 412 of the Code and
no Pension
26
Plan has applied for or received a waiver of the maximum
funding standards imposed by Section 412 of the Code.
(x) PBGC. Except for required premium payments, no
liability to the Pension Benefit Guaranty Corporation (the
"PBGC") has been incurred by the Company with respect to any
Pension Plan that has not been satisfied in full, and no event
has occurred and there exists no condition or set of
circumstances that could result in the imposition of any such
liability. The Company has complied, or will comply, with all
requirements for premium payments, including any interest and
penalty charges for late payment, due to PBGC on or before the
Effective Time with respect to each Pension Plan for which any
premiums are required. No proceedings to terminate, pursuant
to Section 4042 of ERISA, have been instituted or, to the
knowledge of the Company, are threatened by the PBGC with
respect to any Pension Plan (or any Pension Plan maintained by
an ERISA Affiliate). There has been no termination or partial
termination, as defined in Section 411(d) of the Code and the
regulations thereunder, of any Pension Plan. No reportable
event, within the meaning of Section 4043 of ERISA, has
occurred with respect to any Pension Plan.
(xi) Benefit Obligations. As of the date of this
Agreement, with respect to each Pension Plan which is covered
by Title IV of ERISA and which is not a multiemployer plan,
the current value of the accumulated benefit obligations
(based on the actuarial assumptions that would be utilized
upon termination of such Pension Plan) do not exceed the
current fair value of the assets of such Pension Plan. Except
as listed in Section 5.01(s)(xi) of the Disclosure Schedule,
there has been (A) no material adverse change in the financial
condition of any such Pension Plan, and (B) no change in
actuarial assumptions with respect to such Pension Plan as a
result of plan amendment, written interpretations,
announcements, change in applicable law or otherwise which,
individually or in the aggregate, would result in the value of
any such Pension Plan's accrued benefits exceeding the current
value of such Pension Plan's assets.
(xii) No Multiemployer Plan. Neither the Company nor
any ERISA Affiliate has ever maintained, adopted or
established, contributed or been required to contribute to, or
otherwise participated or been required to participate in, nor
will they become obligated to do so through the Effective
Time, any "multiemployer plan" (as defined in Section 3(37) of
ERISA). No amount is due from, or owed by, the Company or any
ERISA Affiliate on account of a "multiemployer plan" (as
defined in Section 3(37) of ERISA) or on account of any
withdrawal therefrom.
(xiii) No Post-Retirement Benefits. No Employee Plan
provides benefits, including any severance or other
post-employment benefit, salary continuation, termination,
death, disability or health or medical benefits (whether or
not insured), life insurance or similar benefit with respect
to current or former employees (or their spouses or
dependents) of the Company beyond their
27
retirement or other termination of service other than (A)
coverage mandated by applicable law, (B) death, disability or
retirement benefits under any Pension Plan, (C) deferred
compensation benefits accrued as liabilities on the Company
Financial Statements, (D) benefits, the full cost of which is
borne by the current or former employee (or his or her
beneficiary) or (E) as expressly contemplated by this
Agreement.
(xiv) COBRA. The Company has complied with, and
satisfied, the requirements of Part 6 of Subtitle B of Title I
of ERISA and Section 4980(B) of the Code, and all regulations
thereunder ("COBRA") with respect to each Employee Plan that
is subject to the requirements of COBRA. Each Employee Plan
that is a group health plan, within the meaning of Section
9805(a) of the Code, has complied with and satisfied the
applicable requirements of Sections 9801 and 9802 of the Code.
(t) Insurance. The Disclosure Schedule summarizes the amount
and kinds of insurance as to which the Company has insurance policies,
contracts or fidelity bonds relating to the business or operations of
the Company. All such insurance policies, contracts and bonds are in
full force and effect. All such insurance policies, contracts and bonds
covering the assets, business, equipment, properties, operations,
employees, officers and directors of the Company contain provisions
which are reasonable and customary in the Company's industry, and there
is no claim by the Company pending under any of such policies or bonds
as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums due and payable
under all such policies, contracts and bonds have been paid and the
Company is otherwise in compliance in all material respects with the
terms of such policies, contracts and bonds (or other policies,
contracts and bonds providing substantially similar insurance
coverage). No notice of cancellation or termination of any such
insurance policies, contracts or bonds has been given to the Company by
the carrier of any such policy, contract or policy.
(u) Bank Accounts. Section 5.01(u) of the Disclosure Schedule
lists all bank, money market, savings and similar accounts and safe
deposit boxes of the Company, specifying the account numbers and the
authorized signatories of persons having access to them.
(v) Minute Books. The minute books and stock books or share
ledgers, as the case may be, of the Company made available to Fiserv
and Trewit are the only minute books and stock books or share ledgers,
as the case may be, of the Company and contain a reasonably accurate
summary of all meetings of directors (including committees thereof) and
shareholders or actions by written consent and of all transactions in
the capital stock of the Company since the time of incorporation of the
Company.
(w) Taxes.
28
(i) Compliance Generally. The Company (A) has duly
and timely filed or caused to be filed with the appropriate
authorities all Tax Returns of, related to or including the
Company, including its income, assets, payroll or operations,
and properly included the items related thereto in such Tax
Returns, which Tax Returns are true, correct and complete in
all material respects, and (B) has duly and timely paid or
caused to be paid to the appropriate authorities all Taxes
that are due and payable on or before the Effective Time, and
has properly accrued on its books and records in accordance
with GAAP any Tax not then due. The Company has complied with
all applicable laws, rules and regulations relating to the
reporting, payment, collection and withholding of Taxes and
has duly and timely collected or withheld and paid over to the
appropriate authorities all amounts required to be so
collected or withheld and paid over under all applicable laws.
Except as set forth in Section 5.01(w)(i) of the Disclosure
Schedule, all Taxable years or periods for the assessment of
Taxes are closed either by agreement with the applicable
Taxing authority or by operation of the normal statute of
limitations or, if not yet closed, will close by operation of
the normal statute of limitations for such Tax Returns
(without extension). Section 5.01(w)(i) of the Disclosure
Schedule sets forth a list of each jurisdiction where the
Company files a Tax Return and the type of Tax Returns filed
during the past five years. The Company has made available for
review by Fiserv and Trewit true, correct and complete copies
of all Tax Returns filed by or with respect to the Company
during the past five years and of all correspondence to or
from a Taxing authority relating thereto and with respect to
any Proceeding (as hereinafter defined).
(ii) No Adjustments. Except as set forth in Section
5.01(w)(ii) of the Disclosure Schedule, no Taxing authority
has asserted any adjustment that would result in an additional
Tax for which the Company is or may be liable or with respect
to which a lien may be imposed on any asset or property of the
Company which has not been fully paid or which adjustment, if
asserted, would apply to any other period. No such adjustment
is pending or, to the knowledge of the Company, being
considered and there is no basis for any such adjustment.
There is no pending audit, examination, investigation,
dispute, proceeding or claim (collectively, a "Proceeding")
relating to any Tax for which the Company is or may be liable
or which could result in a lien on any of the Company's assets
or property, and, to the knowledge of the Company, no Taxing
authority is contemplating such a Proceeding and there is no
basis for any such Proceeding.
(iii) No Other Arrangements. The Company is not a
party to any agreement, contract or arrangement for services
that would result, individually or in the aggregate, in the
payment of any amount that would not be deductible by reason
of Section 162, 280G or 404 of the Code. The Company is not a
"consenting corporation" within the meaning of Section 341(f)
of the Code. The Company does not have any "tax-exempt bond
financed property" or "tax-exempt use property" within the
meaning of Section 168(g) or (h), respectively, of the Code.
The Company has not entered into any sale-leaseback or
leveraged lease
29
transaction. None of the assets of the Company is required to
be treated as being owned by any other person pursuant to the
"safe harbor" leasing provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as in effect prior to the
repeal of said leasing provisions. The Company has never made
or been required to make an election under Section 338 of the
Code. The Company has never been included in a consolidated,
combined or unitary Tax Return. The Company is not and has
never been a party to any Tax sharing or Tax allocation
agreement, arrangement or understanding. No Tax authority has
ever asserted that the Company should file a Tax Return in a
jurisdiction where it does not file. The Company does not have
outstanding any power of attorney or ruling request, request
to consent to change a method of accounting, subpoena or
request for information with or by any Taxing authority in
connection with any Tax matter. There is no outstanding power
of attorney authorizing anyone to act on behalf of the Company
in connection with any Tax, Tax Return or Proceeding relating
to any Tax. The Company is not required to include any
adjustment under Section 481 of the Code (or any similar
provision of applicable law) in income for any period (or
portion of a period) beginning after the Closing Date. During
the last two years, the Company has not engaged in any
exchange with a related person (within the meaning of Code
Section 1031(f)) under which gain realized was not recognized
under Section 1031 of the Code.
(iv) Taxes Defined. For purposes of this Agreement,
"Taxes" means all federal, state, local and foreign taxes,
charges, fees, levies, deficiencies or other assessments of
whatever kind or nature (including all net income, gross
income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, built-in gains, license, withholding,
payroll, employment, unemployment, excise, estimated,
severance, stamp, occupation, real property, personal
property, intangible property, occupancy, recording, minimum,
environmental, windfall profits or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever),
including any liability therefor as a transferee (including
under Section 6901 of the Code), as a result of Treasury
Regulation Section 1.1502-6, or in each case, any similar
provision under applicable law, or as a result of any Tax
sharing or similar agreement, together with any interest,
penalties, additions to tax or additional amounts imposed by
any Taxing authority (domestic or foreign).
(v) Tax Return Defined. As used herein, "Tax Return"
includes any return, declaration, report, claim for refund or
credit, information return or statement, and any amendment to
any of the foregoing, including any consolidated, combined or
unitary return or other document (including any related or
supporting information or schedule), filed or required to be
filed with any federal, state, local or foreign governmental
entity or agency in connection with the determination,
assessment, collection or payment of Taxes or the
administration of any laws, regulations or administrative
requirements relating to Taxes or ERISA.
30
(vi) Following the transaction contemplated by this
Agreement, the Surviving Corporation will hold at least 90% of
the fair market value of the net assets, and at least 70% of
the fair market value of the gross assets, of the Company
immediately prior to the transaction. For purposes of this
representation, amounts paid by the Company to any of the
stockholders of the Company, amounts used by the Company to
pay reorganization expenses and all redemptions and
distributions made by the Company (except for regular, normal
dividends) will be included as assets of the Company
immediately prior to the transaction.
(vii) Prior to the effectiveness and at the
time of the Merger, the Company has no plan or intention to
issue additional shares of its stock that would result in
Fiserv losing control of the Surviving Corporation within the
meaning of Section 368(c) of the Code.
(viii) Prior to the effectiveness and at the
time of the Merger, the Company is engaged in a historic
business or uses a significant portion of its historic
business assets in a business, within the meaning of Treasury
Regulation section 1.368-1(d), which will be owned by the
Surviving Corporation following the Merger.
(ix) At the time of the Merger, the Company will not
have outstanding any warrants, options, convertible
securities, or any other type of right pursuant to which any
person could acquire stock in the Company or in the Surviving
Corporation (a) that, if exercised, would affect Fiserv's
control of the Surviving Corporation within the meaning of
Section 368(c) of the Code, or (b) that, whether exercised or
not, would adversely affect Fiserv's ability to include the
Surviving Corporation in its consolidated, combined or unitary
tax returns for federal, state or local tax purposes.
(x) The Company is not an investment company
as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(xi) The Company is not under the jurisdiction
of a court in a title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Code.
(xii) Fiserv will pay or assume only those
expenses of the Company that are solely and directly related
to the Merger in accordance with the guidelines established in
Rev. Rul. 73-54, 1973-1 C.B. 187.
(x) Related Party Transactions. Since January 1, 2000, except
as described in the Company SEC Reports: (a) no event has occurred that
would be required to be reported by the Company pursuant to Item 404 of
Regulation S-K promulgated by the SEC; and (b) there are no existing
contracts, agreements, business dealings, arrangements
31
or other understandings between the Company and any Related Party.
There are no assets of any Related Party that are used in or necessary
to the conduct of the business of the Company. "Related Party" means,
with respect to any party, any officer, director or beneficial owner of
more than 5% of the outstanding voting securities of such party (or any
entity of which such person is an officer, director or beneficial owner
of more than 5% of such entity's outstanding voting securities).
(y) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the
Company directly with Fiserv, Trewit and Fiserv Sub, without the
intervention of any other person on behalf of the Company in such
manner as to give rise to any valid claim by any other person against
the Company or Fiserv or Fiserv Sub for a finder's fee, brokerage
commission or similar payment.
(z) Proxy Statement; Registration Statement; Other
Information. The information, taken as a whole, with respect to the
Company to be included in the Proxy Statement (as defined herein) or,
to the extent provided by the Company in writing for inclusion therein,
the Registration Statement (as defined herein) will not, in the case of
the Proxy Statement or any amendments thereof or supplements thereto,
at the time of the mailing of the Proxy Statement or any amendments or
supplements thereto, and at the time of the Company Special Meeting (as
defined herein) or, in the case of the Registration Statement, at the
time it becomes effective or at the effective time of any
post-effective amendment, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
no representation is made by the Company with respect to information
supplied in writing by Fiserv, Fiserv Sub or any "affiliate" of Fiserv
specifically for inclusion in the Proxy Statement. The Proxy Statement
(as it relates to the Company) will comply as to form in all material
respects with the provisions of the Exchange Act.
(aa) Voting Requirements. The Company Stockholder Approval is
the only vote of the holders of the Company's capital stock necessary
to approve and adopt this Agreement and the transactions contemplated
hereby.
(bb) Representations Complete. None of the representations or
warranties made by the Company (as modified by the Disclosure
Schedule), nor any statement made in the Disclosure Schedule or
certificate furnished by the Company pursuant to this Agreement, or
furnished in or in connection with documents mailed or delivered to the
Company in connection with soliciting their consent to this Agreement
and the Merger, contains any untrue statement of a material fact, or
omits to state any material fact necessary in order to the make the
statements contained herein or therein, in the light of the
circumstances under which made, not misleading, except as would not
result, individually or in the aggregate, in a Material Adverse Effect.
SECTION 5.02 Representations and Warranties of Fiserv and Fiserv Sub.
Fiserv and Fiserv Sub each represent and warrant to, and agree with, the Company
as follows:
32
(a) Organization and Qualification, etc. Each of Fiserv and
Fiserv Sub are corporations duly organized, validly existing and in
good standing under the laws of the State of Wisconsin, and the State
of Delaware, respectively, and each has corporate power and authority
to own its properties and assets and to carry on its business as it is
now being conducted. Each of Fiserv and Fiserv Sub is duly qualified to
do business and is in good standing in each jurisdiction where the
failure to be so qualified would have a Material Adverse Effect.
(b) Authority Relative to Agreement. Each of Fiserv and Fiserv
Sub has the corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated on its part
hereby. The execution and delivery by Fiserv and Fiserv Sub of this
Agreement and the consummation by each of them of the transactions
contemplated on its part hereby have been duly authorized by their
respective Board of Directors and, in the case of Fiserv Sub, its sole
stockholder. No other corporate proceedings on the part of Fiserv or
Fiserv Sub are necessary to authorize the execution and delivery of
this Agreement by Fiserv or Fiserv Sub or the consummation by Fiserv or
Fiserv Sub of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Fiserv and Fiserv Sub,
and, assuming the due authorization, execution and delivery at the
Effective Time of this Agreement by the Company, is their valid and
binding agreement, enforceable against Fiserv and Fiserv Sub, as
applicable, in accordance with its terms, except as such enforcement is
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting creditors'
rights generally and (ii) general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing
and other similar doctrines affecting the enforceability of agreements
generally (regardless of whether considered in a proceeding in equity
or at law).
(c) Non-Contravention. The execution and delivery of this
Agreement by Fiserv and Fiserv Sub do not and the consummation by
Fiserv and Fiserv Sub of the transactions contemplated hereby will not
(i) violate any provision of the Articles or Certificate of
Incorporation or By-laws of Fiserv or Fiserv Sub, as the case may be,
or (ii) violate, or result, with the giving of notice or the lapse of
time or both, in a violation of, any provision of, or result in the
acceleration of or entitle any party to accelerate (whether after the
giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any material lien, charge,
pledge, security interest or other encumbrance upon any of the property
of Fiserv or Fiserv Sub pursuant to any provision of any mortgage or
lien or material lease, agreement, license or instrument or any order,
arbitration award, judgment or decree to which Fiserv or Fiserv Sub is
a party or by which any of their respective assets is bound and do not
and will not violate or conflict with any other material restriction of
any kind or character to which Fiserv or Fiserv Sub is subject or by
which any of its assets may be bound, and the same does not and will
not constitute an event permitting termination of any such mortgage or
lien or material lease, agreement, license or instrument to which
Fiserv or Fiserv Sub is a party or (iii) violate in any material
respect any law, ordinance or regulation to which Fiserv or Fiserv Sub
is subject, except, in each case or cases, for any such violation,
acceleration, creation, imposition,
33
conflict or termination which would not prevent the consummation of the
transactions contemplated hereby by Fiserv or Fiserv Sub.
(d) Government Approvals. Except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware and (ii) applicable requirements of the Securities Act, the
Exchange Act, state takeover or securities laws, the rules of Nasdaq,
no consent, authorization, order or approval of, or filing or
registration with, any governmental commission, board or other
regulatory body is required for or in connection with the execution and
delivery of this Agreement by Fiserv and Fiserv Sub and the
consummation by Fiserv and Fiserv Sub of the transactions contemplated
hereby, except (x) as may be necessary as a result of any facts or
circumstances relating solely to the Company or (y) where the failure
to obtain such consents, authorizations or approvals or to make such
filings or registrations would not prevent the consummation of the
transactions contemplated hereby.
(e) Fiserv SEC Reports. Fiserv has filed with the SEC, at or
prior to the time due, and has made available to the Company true and
complete copies of all forms, reports, schedules, registration
statements and definitive proxy statements (together with all
information incorporated therein by reference, the "Fiserv SEC
Reports") required to be filed by it with the SEC since January 1,
2000. As of their respective dates, the Fiserv SEC Reports complied as
to form in all material respects with the requirements of the Exchange
Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Fiserv SEC
Reports. As of their respective dates and as of the date any
information from such Fiserv SEC Reports has been incorporated by
reference, the Fiserv SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) Fiserv Financial Statements. Each of the financial
statements of Fiserv (including the related notes) included or
incorporated by reference in the Fiserv SEC Reports (including any
similar documents filed after the date of this Agreement) comply as to
form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Fiserv and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any unaudited interim
financial statements). Except for liabilities and obligations incurred
in the ordinary course of business consistent with past practice and
which could not reasonably be expected to have, individually or in the
aggregate, a Fiserv Material Adverse Effect (as defined herein), since
the date of the most recent audited consolidated balance sheet included
in the Fiserv SEC Reports, neither the Fiserv nor any of the Fiserv
Subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by
34
GAAP to be set forth on a consolidated balance sheet of the Fiserv and
its consolidated subsidiaries or in the notes thereto.
(g) Proxy Statement; Registration Statement; Other
Information. The information, taken as a whole, with respect to Fiserv
or its subsidiaries to be included in the Proxy Statement or the
Registration Statement will not, in the case of the Proxy Statement or
any amendments thereof or supplements thereto, at the time of the
mailing of the Proxy Statement or any amendments or supplements
thereto, and at the time of the Company Special Meeting, or, in the
case of the Registration Statement, at the time it becomes effective or
at the effective time of any post-effective amendment, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Fiserv
or Fiserv Sub with respect to information supplied in writing by the
Company or any affiliate of the Company specifically for inclusion in
the Proxy Statement or the Registration Statement. Each of the Proxy
Statement and Registration Statement (as it relates to Fiserv and its
subsidiaries) will comply as to form in all material respects with the
provisions of the Exchange Act and the Securities Act, as applicable.
(h) Capitalization of Fiserv Sub. The authorized capital stock
of Fiserv Sub consists of 1,000 shares of common stock, $.01 par value,
of which 100 shares are validly issued and outstanding, fully paid and
nonassessable and all of which are owned by Fiserv.
(i) Capitalization of Fiserv. The authorized capital stock of
Fiserv consists of 300,000,000 shares of Fiserv Common Stock and
25,000,000 shares of Preferred Stock, no par value ("Preferred Stock"),
of which, as of the date hereof, no shares of Preferred Stock and
approximately 190,000,000 shares of Fiserv Common Stock are validly
issued and outstanding, fully paid and nonassessable. Except for
approximately 10,500,000 shares of Fiserv Common Stock reserved for
issuance as of the date hereof under the various Fiserv stock option
plans, as of the date hereof, Fiserv has no commitments to issue or
sell any of its capital stock or any securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire from Fiserv, any shares of its capital stock
and no securities or obligations evidencing such rights are
outstanding.
(j) Tax Representations.
(i) Fiserv Sub is a newly organized corporation that
was formed solely to engage in the Merger.
(ii) Prior to the effectiveness and at the time of
the Merger, Fiserv will be in control of Fiserv Sub within the
meaning of Section 368(c) of the Code.
(iii) Prior to the effectiveness and at the time of
the Merger, Fiserv has no plan or intention to: (A) liquidate
the Surviving Corporation, (B) merge the
35
Surviving Corporation with or into another corporation or (C)
sell or otherwise dispose of the stock of the Surviving
Corporation; except for transfers of stock or assets described
in Section 368(a)(2)(C) of the Code or Treasury Regulation
section 1.368-2(k)(2).
(iv) Assuming the veracity of the Company's
representations in Sections 5.01(w)(vii) and (ix), for at
least two years following the Effective Date, the Surviving
Corporation will not issue additional shares of stock that
would result in Fiserv losing control of the Surviving
Corporation within the meaning of Section 368(c) of the Code.
(v) Assuming the veracity of the Company's
representation in Section 5.01(w)(viii), following the
transaction, the Surviving Corporation will, and Fiserv will
cause the Surviving Corporation to, continue the historic
business of the Company or continue to use a significant
portion of the Company's historic business assets in a
business, within the meaning of Treasury Regulation section
1.368-1(d).
(vi) Fiserv Sub has no liabilities that will be assumed
by the Surviving Corporation in the Merger or to which assets
transferred to the Surviving Corporation in the Merger will be
subject.
(vii) Immediately prior to the effectiveness of the
Merger, Fiserv is not an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(viii) Prior to the effectiveness and at the time of
the Merger, Fiserv has no plan or intention in connection with
the Merger to directly or indirectly reacquire any of its
shares of Fiserv Common Stock issued in the transaction
(except for fractional share interests deemed issued and
redeemed). Prior to the effectiveness and at the time of the
Merger, no person related to Fiserv (within the meaning of
Treasury Regulation section 1.368-1(e)(3)) and no person
acting as an intermediary for Fiserv or such related person
has a plan or intention in connection with the Merger to
acquire any of the Fiserv Common Stock issued in the
transaction.
(k) Fiserv Common Stock Issued to Stockholders. The shares of
Fiserv Common Stock to be issued to the stockholders of the Company as
Merger Consideration in accordance with Section 3.01(a) hereof shall,
upon consummation of the Merger, be validly issued and outstanding,
fully paid and nonassessable shares of Fiserv Common Stock.
(l) Absence of Material Adverse Effect. Since December 31,
2001, Fiserv has not experienced any change that could have a Fiserv
Material Adverse Effect. "Fiserv Material Adverse Effect" means any
change in, or effect on, or series of related changes
36
in, or related effects on, the business of Fiserv as currently
conducted by Fiserv and its subsidiaries, taken as a whole, that is
materially adverse to the results of its operations or financial or
other condition before giving effect to the transactions contemplated
by this Agreement and other than such changes or effects generally
affecting the industry of Fiserv and its subsidiaries or the economy of
the United States.
(m) Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Fiserv,
Trewit and Fiserv Sub directly with the Company, without the
intervention of any person on behalf of Fiserv or Fiserv Sub in such
manner as to give rise to any valid claim by any person against the
Company or Fiserv or Fiserv Sub for a finder's fee, brokerage
commission or similar payment.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 6.01 Conduct of Business. During the period from the date
hereof to the Effective Time, except as otherwise contemplated by this
Agreement, the Company shall conduct its operations according to its ordinary
and usual course of business and the Company shall use its commercially
reasonable efforts to preserve substantially intact its business organization,
keep available the services of its officers and employees and maintain its
present relationships with licensors, suppliers, distributors, customers and
others having significant business relationships with it. The Company shall
cause representatives of the Company to confer with representatives of Fiserv,
Trewit and Fiserv Sub to keep them informed with respect to the general status
of the on-going operations of the business of the Company. For purposes of this
Article VI, the term "Company" shall be deemed to include the Subsidiaries where
relevant or appropriate.
SECTION 6.02 Access to Information by Fiserv, Trewit and Fiserv Sub.
Fiserv, Trewit and Fiserv Sub shall prior to the Effective Time have access to
the business and properties of the Company and information concerning its
financial and legal condition as Fiserv, Trewit and Fiserv Sub deem reasonably
necessary or advisable in connection with the consummation of the transactions
contemplated hereby, provided that such access shall be during normal business
hours and shall not interfere with normal operations of the Company. The Company
agrees to permit Fiserv, Trewit and Fiserv Sub and their authorized
representatives, including Deloitte & Touche LLP, subject only to their
agreement to maintain the confidentiality of any Company information, to have or
cause them to be permitted to have, after the date hereof and until the
Effective Time, full access to the premises, books and records of the Company
during normal business hours, and the officers of the Company will furnish
Fiserv, Trewit and Fiserv Sub with such financial and operating data and other
information with respect to the business and properties of the Company as
Fiserv, Trewit and Fiserv Sub shall from time to time reasonably request.
SECTION 6.03 Consents and Authorizations. As soon as practicable, each
of the parties hereto will commence to take all reasonable action to obtain all
authorizations, consents, orders and approvals of all third parties and of all
federal, state and local regulatory bodies and officials which may be or become
necessary for its execution and delivery of, and the performance of its
37
obligations pursuant to, this Agreement and will cooperate fully with the other
parties in promptly seeking to obtain all such authorizations, consents, orders
and approvals.
SECTION 6.04 Non-Assignable Licenses, Leases and Contracts. The Company
shall use its commercially reasonable efforts to obtain and deliver to Fiserv or
Fiserv Sub, as the case may be, at or prior to the Effective Time such consents
or waivers as are required in order that any contract listed or required to be
listed on the Disclosure Schedule which would be breached or violated, or would
give any other party the right to cancel the same, as a result of the occurrence
of the Merger hereunder, shall not be so breached or violated or result in such
right of cancellation. The Company shall use its commercially reasonable efforts
to obtain and deliver to Fiserv or Fiserv Sub, as the case may be, at or prior
to the Effective Time such consents or waivers as shall be reasonably requested
by Fiserv or Fiserv Sub, as the case may be, for any contracts not required to
be listed on the Disclosure Schedule which, as a result of the occurrence of the
Merger hereunder, would be breached or violated or would give any other party
the right to cancel the same, in order that such contracts shall not be so
breached or violated or result in such right of cancellation.
SECTION 6.05 Employee Matters. The employees of the Company shall
become employees of the Surviving Corporation following the Merger, such
employment to be employment at will. Thereafter, for so long as they are
employed by the Surviving Corporation, they shall be paid, depending on their
duties and responsibilities, in accordance with Fiserv's compensation policies
with respect to its employees generally. In addition, the Company's employee
benefit plans shall be terminated as soon as practicable after the Effective
Time and the employees of the Company shall be entitled to participate in the
benefit plans that Fiserv maintains for its employees, generally on the same
terms and conditions as other employees of Fiserv (except with respect to
Fiserv's sabbatical policy and quarter century retirement stock plan). For this
purpose, each "year of service" with the Company shall be treated as a "year of
service" with Fiserv (except for Fiserv's sabbatical policy and quarter century
retirement stock plan).
SECTION 6.06 Taxes. The Company will duly and timely file all Tax
Returns required to be filed on or prior to the Effective Time, duly and timely
pay all Taxes required to be paid on or prior to the Effective Time and accrue
on the Company's books and records in accordance with GAAP any Tax of or
relating to the Company, its income, assets, payroll or operations which is not
then due. Such Tax Returns shall be true, correct and complete, shall be
prepared on a basis consistent with prior Tax Returns of the Company and shall
not make, amend or terminate any election or change any accounting method,
practice or procedure without Fiserv's prior written consent. The Company shall
give Fiserv a copy of each such Tax Return for its review and comments prior to
filing. The Company shall duly and timely withhold or collect and pay over to
the proper governmental authority any Taxes required to be withheld or collected
by the Company on or before the Effective Time under all applicable laws.
SECTION 6.07 Solicitation of Alternative Transaction.
(a) The Company will not, and will cause its Subsidiaries and
its and their officers, directors, employees, financial advisors,
counsel, representatives and agents
38
(collectively, "Representatives") not to, (i) directly or indirectly,
solicit, initiate, encourage or otherwise facilitate the making of an
Acquisition Proposal; (ii) participate or engage in or encourage in any
way negotiations or discussions concerning, or provide any non-public
information to, any person or entity relating to an Acquisition
Proposal, or which may reasonably be expected to lead to an Acquisition
Proposal; or (iii) agree to or endorse any Acquisition Proposal;
provided, however, that nothing contained in this Section 6.07 or in
any other provision of this Agreement will prohibit the Company or the
Company's Board of Directors from taking and disclosing to the
Company's stockholders a position contemplated by Rule 14e-2
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders that in the good faith judgment of the Company's
Board of Directors is required by its fiduciary duties to its
stockholders or otherwise under applicable law.
(b) Notwithstanding the provisions of Section 6.07(a), this
Agreement will not prohibit the Company's Board of Directors from,
prior to obtaining the Company Stockholder Approval, furnishing
nonpublic information to or entering into discussions or negotiations
with, any person or entity that makes an unsolicited Superior Proposal,
if, and only to the extent that, (i) in the good faith judgment of the
Company's Board of Directors, the Board is required by its fiduciary
duties to its stockholders or otherwise under applicable law to provide
such information or enter into such discussions or negotiations with
the party making such unsolicited Superior Proposal; (ii) prior to
first furnishing nonpublic information to, or first entering into
substantive discussions and negotiations with, such person or entity
after the date hereof, (A) provide prior written notice to Fiserv to
the effect that it intends to furnish information to, or enter into
discussions or negotiations with a person or entity making an
Acquisition Proposal, and (B) receive from such person or entity an
executed confidentiality agreement with terms no less favorable to the
Company than the Confidentiality Agreement between the Company and
Trewit dated May 22, 2002 (the "Confidentiality Agreement"); and (iii)
concurrently provide Fiserv with all material non-public information
regarding the Company that is to be provided to such person or entity
and that Fiserv has not previously received from the Company, and the
Company provides Fiserv and Trewit with an outline of the material
terms of the Superior Proposal and keeps Fiserv and Trewit informed as
to any changes or modifications to such material terms. For purposes of
this Section 6.07 and all other provisions of this Agreement,
information provided to officers of Trewit Inc. shall be deemed
provided to Fiserv.
"Acquisition Proposal" shall mean any offer or proposal for (i) a
transaction or series of related transactions pursuant to which (A) any
person or entity who does not currently own 15% or more of the
outstanding shares of Company Common Stock (a "Non-Affiliated Person")
acquires 15% or more of the outstanding shares of Company Common Stock,
including without limitation a tender offer or an exchange offer which,
if consummated, would result in any Non-Affiliated Person acquiring 15%
or more of the outstanding shares of Company Common Stock or (B) any
person or entity who currently owns more than 15% of the outstanding
shares of Company Common Stock (a "Current Affiliated Person") acquires
50% or more of the outstanding shares of Company Common Stock,
including without limitation a tender offer or an exchange offer which,
if
39
consummated, would result in any Current Affiliated Person acquiring
50% or more of the outstanding shares of Company Common Stock, (ii) a
merger or other business combination involving the Company pursuant to
which any Non-Affiliated Person acquires securities representing 15% or
more, or an Current Affiliated Person acquires securities representing
50% or more, of the aggregate voting power of all outstanding
securities of the company surviving the merger or business combination,
or (iii) any other transaction pursuant to which any person or entity
acquires control of assets (including for this purpose the outstanding
equity securities of any Company Subsidiary) of the Company having a
fair market value equal to 15% or more of the fair value of all of the
assets of the Company immediately prior to such a transaction.
"Superior Proposal" shall mean a bona fide Acquisition Proposal that
the Board of Directors of the Company has in good faith determined
after consultation with its financial advisors and outside counsel, to
be more favorable to the Company's stockholders than the Merger.
(c) The Company agrees that it will notify Fiserv within two
(2) business days if it or any of its Representatives receives an
Acquisition Proposal or if any discussions or negotiations are sought
to be initiated or continued with the Company or its Representatives
concerning an Acquisition Proposal.
(d) Upon execution of this Agreement, the Company will
immediately terminate all discussions with any person or entity (other
than Fiserv and its subsidiaries) concerning any Acquisition Proposal,
and will request that such person or entities promptly return any
confidential information furnished by the Company in connection with
any Acquisition Proposal. The Company will not waive any provision of
any confidentiality, standstill or similar agreement entered into with
any person or entity regarding any Acquisition Proposal, and prior to
the Closing will enforce all such agreements in accordance with their
terms.
(e) Nothing contained in this Section 6.07 shall (i) permit
the Company to terminate this Agreement (except as specifically
provided in Article VIII hereof), or (ii) permit the Company to enter
into any agreement providing for an Acquisition Proposal (other than
the confidentiality agreement as provided, and in the circumstances and
under the conditions set forth, above) for as long as this Agreement
remains in effect.
SECTION 6.08 Proxy Material; Registration Statement.
(a) As promptly as practicable after the execution of this
Agreement, the Company shall prepare and file with the SEC a proxy
statement relating to the meeting of the Company's stockholders to be
held in connection with the Merger (together with any amendments
thereof or supplements thereto, in each case in the form or forms
mailed to the Company's stockholders and Fiserv's stockholders, the
"Proxy Statement") and Fiserv shall prepare and file with the SEC a
registration statement on Form S-4 (together with all amendments
thereto, the "Registration Statement") in which the Proxy Statement
shall be included as a prospectus, in connection with the registration
under the Securities Act of
40
the shares of Fiserv Common Stock to be issued pursuant to the Merger.
Each of Fiserv and the Company will use all reasonable efforts to cause
the Registration Statement to become effective as promptly as
practicable, and, prior to the effective date of the Registration
Statement, Fiserv shall take all or any action required under any
applicable federal or state securities laws in connection with the
issuance of shares of Fiserv Common Stock in the Merger. Each of Fiserv
and the Company shall furnish all information concerning it and the
holders of its capital stock as the other may reasonably request in
connection with such actions and the preparation of the Registration
Statement and Proxy Statement. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall
mail the Proxy Statement to its stockholders. No amendment or
supplement to the Proxy Statement or the Registration Statement will be
made by Fiserv or the Company without the approval of the other party
(which approval shall not be unreasonably withheld or delayed). Fiserv
and the Company each will advise the other, promptly after it receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the
issuance of any stop order, the suspension of the qualification of the
Fiserv Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or any request by the SEC for amendment of
the Proxy Statement or the Registration Statement or comments thereon
and responses thereto or requests by the SEC for additional
information.
(b) The information supplied by Fiserv for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) the time
the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to the stockholders of the Company, (iii) the time of the
Company Special Meeting, and (iv) the Effective Time, contain (as to
Fiserv and its subsidiaries) any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at
any time prior to the Effective Time any event or circumstance relating
to Fiserv or any of its subsidiaries, or their respective officers or
directors, should be discovered by Fiserv which should be set forth in
an amendment or a supplement to the Registration Statement or Proxy
Statement, Fiserv shall promptly inform the Company. All documents that
Fiserv is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form and substance
in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable.
(c) The information supplied by the Company for inclusion in
the Registration Statement and the Proxy Statement shall not, at (i)
the time the Registration Statement is declared effective, (ii) the
time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the stockholders of the Company, (iii) the
time of the Company Special Meeting, and (iv) the Effective Time,
contain (as to the Company and each of its Subsidiaries) any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. If at any time prior to the
Effective Time any event or circumstance relating to the Company or any
of its Subsidiaries, or their respective
41
officers or directors, should be discovered by the Company which should
be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, the Company shall promptly inform Fiserv.
All documents that the Company is responsible for filing with the SEC
in connection with the transactions contemplated herein will comply as
to form and substance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable.
SECTION 6.09 Stockholders' Meetings.
(a) The Company shall, in accordance with applicable law and
its Certificate of Incorporation and By-laws, duly call, give notice
of, convene and hold a special meeting (which, as may be duly
adjourned, the "Company Special Meeting") of its stockholders for the
purpose of approving and adopting the agreement of merger (as such term
is used in Section 251 of Delaware Law) set forth in this Agreement and
approving the Merger by the Company Stockholder Approval. The Company
agrees to use its reasonable efforts to cause the Company Special
Meeting to occur as soon as practicable after the date hereof, but not
earlier than 20 business days after the date the Proxy Statement is
first mailed to its stockholders. The Board of Directors of the Company
will, subject to Section 6.09(b), recommend the adoption and approval
by the Company's stockholders of this Agreement and the approval by the
Company's stockholders of the Merger.
(b) The Board of Directors of the Company must not withdraw,
or modify in a manner adverse to Fiserv or Fiserv Sub, its
recommendation to its stockholders referred to in subsection (a) above
unless (i) the Company has complied with the terms of Section 6.07 in
all material respects, including, without limitation, the requirement
in Section 6.07 that it notify Fiserv after its receipt of any
Acquisition Proposal and (ii) such withdrawal or modification is
required under applicable law in order for the Board of Directors of
the Company to comply with its fiduciary duties to its stockholders.
Unless this Agreement is previously terminated in accordance with
Article VIII, the Company will submit this Agreement to its
stockholders at the Company Stockholders' Meeting even if the Board of
Directors of the Company determines at any time after the date hereof
that it is no longer advisable or recommends that the Company
stockholders reject it (and not postpone or adjourn such meeting or the
vote by the Company's stockholders upon this Agreement and the Merger
to another date without Fiserv's approval).
SECTION 6.10 State Takeover Statutes. The Company and its Board of
Directors shall (a) take all reasonable actions necessary to ensure that no
"Fair Price", "Control Share Acquisition", "Moratorium" or other anti-takeover
statute, or similar statute or regulation, is or becomes applicable to this
Agreement or the Stockholder Agreements, the Merger or any of the other
transactions contemplated hereby or thereby and (b) if any "Fair Price",
"Control Share Acquisition", "Moratorium" or other anti-takeover statute, or
similar statute or regulation, becomes applicable to this Agreement or the
Stockholder Agreements, the Merger or any other transaction contemplated hereby
or thereby, take all action necessary to ensure that the Merger and the other
transactions contemplated hereby and thereby, may be consummated as promptly as
42
practicable on the terms contemplated hereby and otherwise to minimize the
effect of such statute or regulation on the Merger and the other transactions
contemplated hereby and thereby.
SECTION 6.11 Affiliates. Within 10 days after the date of this
Agreement, the Company shall deliver to Fiserv a letter identifying all persons
who are "affiliates" of the Company for purposes of Rule 145 under the
Securities Act. The Company shall use reasonable efforts to cause each such
person to deliver to Fiserv at least five business days prior to the Company
Special Meeting, a written agreement covering Rule 145 matters in customary form
and reasonably acceptable to Fiserv and the Company from each such person.
SECTION 6.12 Stockholder Litigation. The parties shall cooperate and
consult with one another, to the fullest extent possible, in connection with any
stockholder litigation against any of them or any of their respective directors
or officers with respect to the transactions contemplated by this Agreement. In
furtherance of and without in any way limiting the foregoing, each of the
parties shall use its respective reasonable best efforts to prevail in such
litigation so as to permit the consummation of the transactions contemplated by
this Agreement in the manner contemplated by this Agreement. Notwithstanding the
foregoing, the Company shall not compromise or settle any litigation commenced
against it or its directors or officers relating to this Agreement or the
transactions contemplated hereby (including the Merger) without Fiserv's prior
written consent.
SECTION 6.13 Nasdaq Listing. Fiserv shall prepare and submit to Nasdaq
a listing application for the Fiserv Common Stock to be issued in the Merger
pursuant to Article III of this Agreement. The Company shall cooperate with
Fiserv in such listing application.
SECTION 6.14 Confidentiality. Fiserv and its subsidiaries on the one
hand and the Company on the other hand will comply with, and will cause their
respective representatives to comply with, in all respects, all of their
respective obligations under the Confidentiality Agreement, and in no event,
will the negotiation, entering into or termination of this Agreement be deemed
to waive or otherwise adversely affect the rights and obligations of the parties
under the Confidentiality Agreement, which rights and obligations will continue
in full force and effect in accordance with their terms.
SECTION 6.15 Further Actions. Subject to the terms and conditions
herein provided and without being required to waive any conditions herein
(whether absolute, discretionary, or otherwise), each of the parties hereto
agrees to use all commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper, or
advisable to consummate and make effective the transactions contemplated by this
Agreement. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement will take all such
necessary action.
SECTION 6.16 Officers' and Directors' Indemnification. Fiserv and the Surviving
Corporation will provide to the directors and officers of the Company
indemnification to the fullest extent provided by the Company's Certificate of
Incorporation and Bylaws, as in effect as of the date of this Agreement, with
respect to matters occurring prior to the Effective Time, including without
43
limitation the authorization of this Agreement and the transactions contemplated
hereby until the six year anniversary date of the Effective Time (or, in case of
matters occurring prior to the Effective Time giving rise to claims that are
made prior to but which have not been resolved by the sixth anniversary of the
Effective Time, until such matters are finally resolved).
SECTION 6.17 Notification of Certain Matters. The Company will give
prompt written notice to Fiserv, and Fiserv will give prompt written notice to
the Company, of (a) the occurrence, or nonoccurrence, of any event the
occurrence, or nonoccurrence, of which would be likely to cause any
representation or warranty contained herein to be untrue or inaccurate in any
material respect at or prior to the Effective Date and (b) any material failure
of the Company or Fiserv, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.15 will not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
SECTION 6.18 Public Announcements. Fiserv and Fiserv Sub, on the one
hand, and the Company, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, court process or by Nasdaq rules. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement will be in the form previously agreed to by the
parties.
SECTION 6.19 Voting of Shares. To induce Fiserv to execute this
Agreement, certain officers, directors and stockholders of the Company have
executed and delivered as of the date hereof Agreements to Facilitate Merger in
the form attached hereto as Exhibit C, pursuant to which each such person has
agreed to vote his or her shares of Company Common Stock in favor of the Merger
at the Company Special Meeting. At the request of Fiserv, after the execution of
this Agreement the Company will use all reasonable efforts to have other
officers and directors of the Company also execute Agreements to Facilitate
Merger.
SECTION 6.20 Effective Time Balance Sheet. At least ten (10) calendar
days prior to the date on which the parties hereto anticipate that the Effective
Time will fall, the Company will deliver to Fiserv and Trewit what it believes
to be the Effective Time Balance Sheet. Fiserv, Trewit and the Company will
thereafter proceed in good faith to finalize, and agree upon, such Effective
Time Balance Sheet, as soon as practicable.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 Conditions to Obligations of Fiserv, Fiserv Sub, and the
Company. The respective obligations of each party to consummate the Merger shall
be subject to the fulfillment at or prior to the Closing of the following
conditions:
44
(a) No Injunction. None of Fiserv, Fiserv Sub, or the Company
shall be subject to any final order, decree, or injunction of a court
of competent jurisdiction within the United States that (i) prevents or
materially delays the consummation of the Merger, or (ii) would impose
any material limitation on the ability of Fiserv to effectively to
exercise full rights of ownership of the Company or the assets or
business of the Company.
(b) Stockholder Approval. The approval of the stockholders of
the Company hereof shall have been obtained, in accordance with
Delaware Law and the Company's Certificate of Incorporation and Bylaws.
(c) Registration Statement. The Registration Statement (as
amended or supplemented) shall have become effective under the 1933 Act
and shall not be subject to any "stop order," and no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness or
qualification thereof shall have been initiated and be continuing or
have been threatened and be unresolved. Fiserv shall also have received
all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated hereby.
(d) Nasdaq Listing. The shares of Fiserv Common Stock to be
delivered pursuant to the Merger shall have been duly listed on the
Nasdaq, subject to official notice of issuance.
(e) Effective Time Balance Sheet. Fiserv, Trewit and the
Company shall have agreed upon the Effective Time Balance Sheet.
SECTION 7.02 Conditions Precedent to the Obligations of Fiserv and
Fiserv Sub. The obligations of Fiserv and Fiserv Sub to consummate the Merger
under this Agreement are subject to the satisfaction or waiver by Fiserv and
Fiserv Sub prior to or at the Effective Time of each of the following
conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of the Company contained in this
Agreement, as modified by the Disclosure Schedule, which for purposes
of this Section 7.02(a) shall be read as though none of them contained
any materiality qualifications, shall be true and correct at and as of
the Effective Time as though made at and as of that time other than
such representations and warranties as are specifically made as of
another date, except where the failure of such representations and
warranties to be true and correct in all respects, individually or in
the aggregate, have not had and would not reasonably be expected to
have a Material Adverse Effect, and the Company shall have delivered to
Fiserv and Fiserv Sub a certificate to that effect.
(b) Compliance with Covenants. The Company shall have
performed and complied in all material respects with all covenants of
this Agreement to be performed or complied with by it at or prior to
the Effective Time, and the Company shall have delivered to Fiserv and
Fiserv Sub a certificate to that effect.
45
(c) All Proceedings to be Satisfactory. Fiserv and Fiserv Sub
and their counsel shall have received certified or other copies of all
documents relating to the Company incident to the transactions
contemplated hereby as Fiserv, Fiserv Sub or said counsel may
reasonably request and such documents shall be reasonably satisfactory
in form and substance to Fiserv Fiserv Sub and said counsel.
(d) Opinion of Counsel for the Company Fiserv and Fiserv Sub
shall have received the favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.,
counsel to the Company, dated the Effective Time, substantially in the
form and to the effect set forth in Exhibit D annexed hereto.
(e) Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted after the date hereof against the
Company or against Fiserv or Fiserv Sub, arising by reason of the
Merger pursuant to this Agreement, which is reasonably likely to have a
Material Adverse Effect.
(f) Tax Matters. The Company shall have delivered to Fiserv
and Fiserv Sub a FIRPTA Affidavit in the form of Exhibit B annexed
hereto with respect to the Company, signed by the Company under
penalties of perjury.
(g) Consents. On or prior to the Effective Time, the Company
shall obtained the consents or waivers to the Merger set forth in
Exhibit E annexed hereto.
(h) Employment Agreements. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall have each
executed and delivered an employment agreement with the Company in form
and substance mutually satisfactory to Fiserv and such employee.
(i) Indemnity Agreement. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ shall have executed a
delivered the Indemnity Agreement in the form attached hereto as
Exhibit F.
(j) Affiliates' Letters. Fiserv shall have received a letter
from each of the Company's "affiliates" pursuant to Section 6.11
hereof.
(k) Supporting Documents. On or prior to the Effective Time,
Fiserv, Fiserv Sub and their counsel shall have received copies of the
following supporting documents:
(i) (A) copies of the Certificate of Incorporation of
the Company and all amendments thereto, certified as of a
recent date by the Secretary of State of the State of Delaware
and (B) a certificate of said Secretary dated as of a recent
date as to the due incorporation and good standing of the
Company and listing all documents of the Company on file with
said Secretary; and
(ii) certificates of the Secretary or an Assistant
Secretary of the Company, dated the Effective Time, and
certifying substantially to the effect (A) that attached
thereto is a true and complete copy of the By-laws of the
Company as in effect on the date of such certification and at
all times since January 1, 2001;
46
(B) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors and minutes of
the Company Special Meeting authorizing the execution,
delivery and performance of this Agreement and that all such
resolutions and minutes are still in full force and effect and
are all the resolutions and minutes adopted in connection with
the transactions contemplated by this Agreement; (C) that the
Certificate of Incorporation of the Company have not been
amended since the date of the last amendment referred to in
the certificate delivered pursuant to clause (i)(A) above; and
(D) as to the incumbency and specimen signature of each
officer of the Company executing this Agreement and any
certificate or instrument furnished pursuant hereto, and a
certificate by another officer of the Company as to the
incumbency and signature of the officer signing the
certificate referred to in this paragraph (ii).
All such documents shall be reasonably satisfactory in form
and substance to Fiserv, Fiserv Sub and their counsel.
SECTION 7.03 Conditions Precedent to the Obligations of the Company.
The obligations of the Company to consummate the Merger under this Agreement are
subject to the satisfaction or waiver by the Company prior to or at the
Effective Time of each of the following conditions:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Fiserv and Fiserv Sub contained in
this Agreement or in any closing certificate or document delivered to
the Company pursuant hereto shall be true and correct on and as of the
Effective Time as though made at and as of that date, other such
representations and warranties as are specifically made as of another
date, and Fiserv and Fiserv Sub shall each have delivered to the
Company a certificate to that effect.
(b) Compliance with Covenants. Each of Fiserv and Fiserv Sub
shall have performed and complied in all material respects with all
covenants of this Agreement to be performed or complied with by Fiserv
and/or Fiserv Sub on or prior to the Effective Time, and Fiserv and
Fiserv Sub shall each have delivered to the Company and the
Shareholders a certificate to such effect.
(c) All Proceedings to be Satisfactory. The Company and the
Shareholders and their counsel shall have received all such counterpart
originals or certified or other copies of all documents relating to
Fiserv and Fiserv Sub incident to the transactions contemplated hereby
as the Company and the Shareholders and said counsel may reasonably
request and such documents shall be reasonably satisfactory in form and
substance to the Company and the Shareholders and said counsel.
(d) Opinion of Counsel for Fiserv and Fiserv Sub. The Company
shall have received the favorable opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
General Counsel of Fiserv, dated the Effective Time, substantially in
the form and to the effect set forth in Exhibit G annexed hereto.
47
(e) Legal Actions or Proceedings. No legal action or
proceeding shall have been instituted that is reasonably likely to have
a Fiserv Material Adverse Effect.
(f) Supporting Documents. On or prior to the Effective Time,
the Company shall have received copies of the following supporting
documents:
(i) (A) copies of the Articles or Certificate of
Incorporation of Fiserv and Fiserv Sub, and all amendments
thereto, certified as of a recent date by the Department of
Financial Institutions of the State of Wisconsin or the
Secretary of State of the State of Delaware, as applicable,
(B) a certificate of said Department or Secretary of State
dated as of a recent date as to the status of Fiserv and (C) a
certificate of said Secretary dated as of a recent date as to
the good standing and due incorporation of Fiserv Sub; and
(ii) a certificate of the Secretary or an Assistant
Secretary of each of Fiserv and Fiserv Sub dated the Effective
Time and certifying substantially to the effect (A) that
attached thereto is a true and complete copy of the By-laws of
the particular company as in effect on the date of such
certification and at all times since January 1, 2001 or its
date of incorporation, if more recent; (B) that attached
thereto is a true and complete copy of resolutions adopted by
the Board of Directors of the particular company authorizing
the execution, delivery and performance of this Agreement and
that all such resolutions are still in full force and effect
and are all the resolutions adopted in connection with the
transactions contemplated by this Agreement; (C) that the
Articles of or Certificate Incorporation of the particular
corporation have not been amended since the date of the last
amendment referred to in the certificate delivered pursuant to
clause (i)(1) above; and (D) as to the incumbency and specimen
signature of each officer of the particular company executing
this Agreement and a certification by another officer of such
company as to the incumbency and signature of the officer
singing the certificate referred to in this paragraph (ii).
All such documents shall be reasonably satisfactory in form
and substance to the Company and its counsel.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual consent of Fiserv and Fiserv Sub, on the one
hand, and the Company, on the other hand;
(b) by either Fiserv and Fiserv Sub, on the one hand, or the
Company on the other hand, if (i) the Effective Time shall not have
occurred on or before that is the date that is six months from the date
of this Agreement (provided that the right to terminate
48
this Agreement under this Section 8.01(b) shall not be available to any
party whose failure to fulfill, or cause to be fulfilled, any
obligation under this Agreement or material breach of this Agreement
has been the cause of or resulted in the failure of the Effective Time
to occur on or before such time) or (ii) any court of competent
jurisdiction or other governmental body shall have issued an order,
decree or ruling or taken any other action (which order, decree or
ruling the parties shall use their commercially reasonable efforts to
lift or reverse) permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable, provided, however, if a
proceeding shall have been initiated by a governmental entity to
restrain, enjoin or otherwise prohibit the Merger or any other
transaction contemplated by the Agreement, and such proceeding is
continuing on the date six months after the date referred to in clause
(b)(i) above, then either Fiserv and Fiserv Sub, on the one hand, or
the Company, on the other hand, may terminate this Agreement and
abandon the Merger provided that such terminating party shall have
caused any such proceeding to be dismissed as to all parties thereto;
or
(c) by either Fiserv and Fiserv Sub, on the one hand, or the
Company on the other hand, if the Company Stockholder Approval is not
received at the Company Special Meeting;
(d) by Fiserv and Fiserv Sub if either (i) the Board of
Directors of the Company has recommended to the Company stockholders,
or entered into an agreement regarding, a Superior Proposal, or (ii)
the Board of Directors of the Company has withdrawn or modified in a
manner adverse to Fiserv its recommendation of the Merger;
(e) by the Company prior to Company Stockholder Approval being
obtained if (i) it is not in material breach of its obligations under
this Agreement and has complied with, and continues to comply with, all
requirements, conditions and procedures of Section 6.07 in all material
respects, (ii) the Board of Directors of the Company has authorized,
subject to terminating this Agreement, the Company to enter into a
binding written agreement concerning a transaction that constitutes a
Superior Proposal and the Company notifies Fiserv in writing that it
intends to enter into such binding agreement, which notice must have
attached to it the most current version of such agreement ready for
execution, and (iii) Fiserv does not make, within five business days
after receipt of such notice from the Company, any offer that the Board
of Directors of the Company reasonably and in good faith determines,
after consultation with its financial and legal advisors, is at least
as favorable to the stockholders of the Company as the Superior
Proposal and during such five business-day period the Company
reasonably considers and discusses in good faith all proposals
submitted by Fiserv and, without limiting the foregoing, meets with,
and causes its financial advisors and legal advisors to meet with,
Fiserv and its advisors from time to time as reasonably requested by
Fiserv to reasonably consider and discuss in good faith Fiserv's
proposals. The Company agrees (x) that it will not enter into a binding
agreement referred to in clause (ii) above until at least the sixth
business day after Fiserv has received the notice to Fiserv required by
clause (ii) above, and (y) to notify Fiserv promptly if its intention
to enter into the binding agreement included in its notice to Fiserv
shall change at any time after giving such notice;
49
(f) by Fiserv and Fiserv Sub if (i) Fiserv and Fiserv Sub are
not in material breach of their obligations under this Agreement and
(ii) there has been a material breach by the Company of any of its
covenants (including without limitation the covenants contained in
Section 6.07) or obligations under this Agreement or by an Affiliate of
the Company under such person's affiliate's letter described in Section
6.11 or by an officer, director or stockholder of the Company under
such person's Agreement to Facilitate Merger described in Section 6.19
such that the conditions in Section 7.02 will not be satisfied, and the
breach is not curable or, if curable, is not cured by the Company
within 30 calendar days after receipt by the Company of written notice
from Fiserv of such breach;
(g) by the Company if (i) the Company is not in material
breach of its obligations under this Agreement and (ii) there has been
a material breach by Fiserv and Fiserv Sub of any of their
representations, warranties, or obligations under this Agreement such
that the conditions in Section 7.03 will not be satisfied, and the
breach is not curable or, if curable, is not cured by Fiserv or Fiserv
Sub within 30 calendar days after receipt by Fiserv of written notice
from the Company of such breach.
SECTION 8.02 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void and have no effect, without any liability, on the part of
any party or its affiliates, directors, officers or shareholder, other than the
provisions of this Section 8.02.
(a) Nothing contained in this Section 8.02 shall relieve any
party from liability for any breach of this Agreement and the
Confidentiality Agreement shall survive the termination and abandonment
of this Agreement.
(b) In recognition of the time, efforts, and expenses expended
and incurred by Fiserv and its subsidiaries with respect to the Company
and the opportunity that the acquisition of the Company presents to
Fiserv, if (i) this Agreement is terminated pursuant to Section 8.01(d)
or 8.01(e) or (ii) this Agreement is terminated pursuant to Section
8.01(f) and within twelve months after such termination the Company
shall have consummated a transaction of the type described in clauses
(i) through (iii) of the definition of "Acquisition Proposal", then the
Company shall pay to Fiserv a fee in the amount of $ 400,000 plus
Fiserv Transaction Expenses (the "Fee"), payable upon the same date
that this Agreement is so terminated. The Fee, if payable, shall be
paid by wire transfer of immediately available funds to an account
designated by Fiserv for such purpose. The Company acknowledges that
the agreements contained in this Section 8.02(b) are an integral part
of the transactions contemplated by this Agreement and are not a
penalty, and that, without these agreements, Fiserv would not enter
into this Agreement. If the Company fails to pay promptly the fee due
pursuant to this Section 8.02(b), the Company shall also pay to Fiserv
Fiserv's and its subsidiaries' costs and expenses (including legal fees
and expenses) in connection with any action, including the filing of
any lawsuit or other legal action taken to collect payment. "Fiserv
Transaction Expenses" shall mean the aggregate of all fees and expenses
of Fiserv and/or its Affiliates (including, without limitation, Trewit)
incurred in connection with the
50
preparation of the transactions contemplated hereby, including without
limitation all accounting, legal, printing, filing, financial advisory
and internal staff costs incurred in (i) conducting the due diligence
review of the Company, (ii) negotiating and preparing this Agreement
and (iii) preparing, filing and distributing the Proxy Statement and
Registration Statement.
SECTION 8.03 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
SECTION 8.04 Extension; Waiver. At any time prior to the Effective
Time, Fiserv and Fiserv Sub, on the one hand, or the Company on the other hand,
may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (c) to the extent permitted by
applicable laws, waive compliance by the other party with any of the agreements
or conditions contained herein. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Expenses, Etc. Whether or not the transactions
contemplated by this Agreement are consummated, none of the parties shall have
any obligation to pay any of the fees and expenses of the other parties incident
to the negotiation, preparation and execution of this Agreement, including the
fees and expenses of counsel, accountants and other experts; provided, that the
foregoing shall not limit or prohibit the Company's payment of such expenses
following completion of the Merger, if the Merger is in fact consummated.
SECTION 9.02 Execution in Counterparts. For the convenience of the
parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 9.03 Notices. All notices and other communications which are
required or may be given pursuant to the terms of this Agreement shall be in
writing, shall be effective when received, and shall in any event be deemed to
have been received (a) when delivered, if delivered personally or by commercial
delivery service, (b) three business days after deposit with the U.S. Mail, if
mailed by registered or certified mail (return receipt requested), (c) one
business day after the business day of timely deposit with a recognized national
courier service for next day delivery (or two business days after such deposit
if timely deposited for second business day delivery), if delivered by such
means or (d) one business day after delivery by facsimile transmission with copy
by U.S. Mail, if sent via facsimile plus mail copy (with acknowledgement of
complete transmission), to the parties as follows:
If to the Company, to:
51
AVIDYN, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
If to Fiserv, Trewit or Fiserv Sub, to:
Fiserv, Inc.
Fiserv Merger Sub, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
Trewit Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
52
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fiserv, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
or such other address or addresses as any party shall have designated by notice
in writing to the other parties.
SECTION 9.04 Entire Agreement. This Agreement, its Exhibits and
Schedules and the Confidentiality Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral and written, among the parties hereto
with respect to the subject matter hereof. No representation, warranty, promise,
inducement or statement of intention has been made by any party hereto which is
not embodied in this Agreement, and no party shall be bound by, or be liable
for, any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.
SECTION 9.05 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to conflict of law provisions that would defer to the laws of another
jurisdiction. The rights and obligations of the parties hereunder shall be
governed by and determined in accordance with such laws.
SECTION 9.06 Binding Effect; Benefits. This Agreement shall inure to
the benefit of and be binding upon the parties and their respective successors
and assigns. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 9.07 Investigation; Survival of Representations and Warranties.
The respective representations and warranties of Fiserv and Fiserv Sub and the
Company contained herein or in any certificates or other documents delivered
prior to or at the Closing shall not be deemed waived or otherwise affected by
any investigation made by any party hereto. Each and every representation and
warranty contained herein shall be deemed to be conditions to the Merger and
shall not survive the Merger. This Section 9.07 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Closing.
SECTION 9.08 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in
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accordance with their specific terms or were otherwise breached. Accordingly,
the parties further agree that each party will be entitled to seek an injunction
or restraining order to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other right or
remedy to which such party may be entitled under this Agreement, at law or in
equity.
SECTION 9.09 Assignability. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any party without the prior
written consent of the other parties.
SECTION 9.10 Prevailing Party. The prevailing party in any suit or
action brought against any other party to enforce the terms of this Agreement or
any rights or obligations hereunder shall be entitled to receive reimbursement
of its costs, expenses and attorneys' fees (internal and external) and
disbursements, including the costs and expenses of experts and internal
resources expended, actually incurred in connection with such suit or action.
SECTION 9.11 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
rule or regulation, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision has never comprised a part hereof. The remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
SECTION 9.12 Interpretation. Time is of the essence of this Agreement.
Unless otherwise qualified, references in this Agreement to "Article",
"article", "Section" or "section" are to provisions of this Agreement and a
reference thereto includes any subparts. The Table of Contents and the
descriptive headings of the articles and sections, or of or in the Exhibits and
Schedules, are inserted for convenience only and are not a part of this
Agreement. As used herein, the singular includes the plural, the plural includes
the singular, and words in one gender include the others. As used herein, the
terms "herein", "hereunder" and "hereof" refer to the whole of this Agreement,
and "include", "including" and similar terms are not words of limitation.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
FISERV, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Senior Executive Vice President
---------------------------------
FISERV MERGER SUB, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Title: President
----------------------------------
AVIDYN, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: President
----------------------------------
55