EXHIBIT (c)(2)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 30, 1997, among
FISERV, INC., a Wisconsin corporation ("Fiserv"), FISERV CLEARING, INC., a
Delaware corporation ("Fiserv Clearing") and a wholly-owned subsidiary of
Fiserv, and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ HOLDINGS, INC., a Colorado corporation (the
"Company").
W I T N E S S E T H :
WHEREAS, the Company owns all of the capital stock of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Clearing Corp., a Colorado corporation ("Clearing"), ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Investments, Inc., a Colorado corporation ("Investments"), and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Inc., a Colorado corporation ("▇▇▇▇▇▇▇, ▇▇▇▇▇▇"; collectively, Clearing,
Investments and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and their respective direct and indirect
subsidiaries being referred to as the "Subsidiaries"); and
WHEREAS, Fiserv and Fiserv Clearing desire that the Company merge with
and into Fiserv Clearing (the "Merger"), and the Company also desires that the
Company merge with and into Fiserv Clearing, upon the terms and conditions set
forth in this Agreement and in accordance with the General Corporation Law of
the State of Delaware and the Colorado Business Corporation Act, and that each
outstanding share of Common Stock, $.01 par value per share, of the Company
("Company Common Stock"), excluding any such shares held in the treasury of the
Company, be converted upon such merger into the right to receive such number of
shares of Common Stock, $.01 par value, of Fiserv ("Fiserv Common Stock") and
such amount of cash as is provided in this Agreement (Fiserv Clearing and the
Company sometimes referred to in this Agreement as the "Constituent
Corporations" and Fiserv Clearing sometimes referred to in this Agreement as the
"Surviving Corporation");
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained in this Agreement,
and in order to set forth the terms of the Merger and the mode of carrying the
Merger into effect, the parties to this Agreement agree as follows:
ARTICLE I
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MERGER
SECTION 1.01 The Merger. At the Effective Date (as defined in
Section 1.04), the Company will be merged with and into Fiserv Clearing on the
terms set forth in this Agreement as permitted by and in accordance with the
General Corporation Law of the State of Delaware and the Colorado Business
Corporation Act. Upon the Merger, the separate existence of the Company will
cease; Fiserv Clearing, as the Surviving Corporation, will continue to exist
under and be governed by the General Corporation Law of the State of Delaware
and the Certificate of Incorporation and By-laws of Fiserv Clearing, until
further amended in accordance with the provisions of the Certificate of
Incorporation, By-laws and applicable law.
SECTION 1.02 Articles of Merger. As soon as practicable following
fulfillment or waiver of the conditions specified in Article VII of this
Agreement, and provided that this Agreement has not been terminated and
abandoned pursuant to Article IX of this Agreement, (a) the Company and Fiserv
Clearing will cause the Certificate of Merger in substantially the form of
Exhibit A attached to this Agreement (the "Delaware Certificate of Merger") to
be executed and filed with the Secretary of State of Delaware and (b) the
Company and Fiserv Clearing will cause the Articles of Merger in substantially
the form of Exhibit B attached to this Agreement (the "Colorado Articles of
Merger") to be executed and filed with Secretary of State of the State of
Colorado as provided in the Colorado Business Corporation Act. The purpose of
the Surviving Corporation will be to engage in any and all business activities
in which a corporation is permitted to engage in accordance with the General
Corporation Law of the State of Delaware.
SECTION 1.03 Stockholders' Meeting. The Company, acting through its
Board of Directors, shall in accordance with applicable law as soon as
practicable following the date hereof:
(i) duly call, give notice of, convene and hold an annual or special
meeting of its shareholders (the "Stockholders' Meeting") for the purpose
of considering and taking action upon this Agreement;
(ii) include in the proxy materials that will be distributed to the
Company's shareholders in connection with the Stockholders' Meeting,
including any amendments or supplements thereto (the "Proxy Statement").
The Proxy Statement will form
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a part of the registration statement (the "Registration Statement") of
Fiserv under the Securities Act of 1933 (the "Securities Act") with respect
to the Fiserv Common Stock to be issued in the Merger; and
(iii) use its commercially reasonable efforts to obtain and furnish
the information required to be included by it in the Proxy Statement and,
after consultation with Fiserv and Fiserv Clearing, respond promptly to any
comments made by the staff of the Securities and Exchange Commission (the
"SEC") with respect to the Proxy Statement and cause the Proxy Statement to
be mailed to its Stockholders at the earliest practicable time following
the date hereof and, subject to its fiduciary duties under applicable law,
to obtain the necessary approvals of its Stockholders of this Agreement and
the transactions contemplated hereby.
SECTION 1.04 Effective Date of the Merger. The Merger will become
effective upon the close of business on the later of the date of filing of the
Certificate of Merger with the Secretary of State of Delaware or the date of
filing of the Articles of Merger with the Secretary of State of the State of
Colorado, or on such other date as the parties may agree. The date and time of
such effectiveness is referred to as the "Effective Date."
SECTION 1.05 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 the Company, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10 a.m., local time, on the
business day next after the date 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 1.06 Certain Intended Effects of the Merger. The parties
have endeavored to structure the Merger as a tax-deferred "reorganization" under
Section 368(a)(1)(A) and (a)(2)(D) of the Internal Revenue Code of 1986, as
amended (the "Code"). The parties represent, warrant and agree: (i) to report
the transaction in such manner; and (ii) not to take or fail to take any action
that would jeopardize such tax treatment.
ARTICLE II
DIRECTORS AND OFFICERS
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SECTION 2.01 Directors. From and after the Effective Date, the
members of the Board of Directors of the Surviving Corporation will consist of
the members of the Board of Directors of Fiserv Clearing (as constituted
immediately prior to the Effective Date) until changed in accordance with its
Certificate of Incorporation and By-laws and applicable law.
SECTION 2.02 Officers. From and after the Effective Date, the
officers of the Surviving Corporation will consist of the officers of Fiserv
Clearing (as constituted immediately prior to the Effective Date) until changed
in accordance with its Certificate of Incorporation and By-laws and applicable
law.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.01 Conversion. (a) Upon the Effective Date, each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Date will, without any further action on the part of Fiserv or Fiserv Clearing,
on the one hand, or the Company, on the other hand, be converted into the right
to receive (the "Merger Consideration") directly (i) such number of shares of
Fiserv Common Stock as shall equal the quotient (the "Exchange Ratio") of (A)
the quotient of (I) 51% of the ▇▇▇▇▇▇▇ Value (as hereinafter defined), divided
by (II) the number of shares of Company Common Stock outstanding on the
Effective Date, 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 National Association of Securities Dealers, Inc. Automated Quotations
(as reported in The Wall Street Journal) for the 20 business days ending two
business days prior to the Effective Date (the "Fiserv Share Value") and (ii)
such amount of cash as shall equal the quotient of (A) 49% of the ▇▇▇▇▇▇▇ Value,
divided by (B) the number of shares of Company Common Stock outstanding on the
Effective Date. As of the Effective Date there will be no outstanding shares of
Company Preferred Stock. All shares of Company Common Stock and Company
Preferred Stock held in the Company's treasury and, subject to Section 7.01(p),
all outstanding unexercised stock options will be canceled. The names, addresses
and number of shares of Company Common Stock owned on the date of this Agreement
by the stockholders of the Company (the "Stockholders") is set forth on Schedule
I to this Agreement.
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(b) Not less than three days prior to the Effective Date the Company
shall deliver to Fiserv and Fiserv Clearing an estimated balance sheet of the
Company as of the Effective Date, which shall have been prepared in accordance
with GAAP (as hereinafter defined) (the "Estimated Balance Sheet"), setting
forth, in reasonable detail the Company's estimate of the consolidated
Stockholders' Equity for the Company and the Subsidiaries, but excluding any
accruals for or payments of Taxes arising out of or related to the transactions
contemplated hereby (other than (x) a sale of assets or capital stock of a
Subsidiary, (y) a sale of assets of the Company and (z) Taxes accrued in the
ordinary course of business of the Company or any Subsidiary) (the
"Stockholders' Equity"). As the only exception to preparation in accordance
with GAAP, with respect to the New York Stock Exchange ("NYSE") seat currently
held by Hanifen, Imhoff, Stockholders' Equity shall be calculated using the last
published sale price of the NYSE for NYSE seats with option trading rights,
rather than in accordance with GAAP. The "▇▇▇▇▇▇▇ Value" shall mean the sum of
(i) difference (positive or negative) between (A) the Final Stockholders' Equity
(as hereinafter defined) and (B) $30,000,000, plus (ii) $97,200,000.
(c) As promptly as practicable following the Effective Date, but in
no event later than 45 days subsequent to the Effective Date, Fiserv Clearing
shall deliver to the persons who served on the Board of Directors of the Company
immediately prior to the Effective Date (the "Representatives") a schedule (the
"Final Schedule"), which shall include the consolidated balance sheet of the
Company and the Subsidiaries as of the Effective Date prepared in accordance
with GAAP, and Fiserv Clearing's calculation as of the Effective Date of the
amount of the Stockholders' Equity, prepared on the same basis as the Adjusted
Balance Sheet (the "Final Stockholders' Equity"). If the Representatives
dispute the correctness of the Final Schedule, they, acting together, shall
notify Fiserv and Fiserv Clearing of the objections within five business days
after delivery of the Final Schedule and shall set forth in reasonable detail in
such notice the reason for the Representatives' objections. If the
Representatives fail to deliver such notice within such time period, the
Stockholders shall be deemed to have accepted Fiserv Clearing's calculation of
the Final Stockholders' Equity. If the Representatives deliver such notice,
Fiserv, Fiserv Clearing and the Representatives shall endeavor in good faith to
resolve their dispute over the determination of the Final Stockholders' Equity
within five business days after the receipt by Fiserv and Fiserv Clearing of
such notice. If they are unable to do so within such five-
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business-day period, the dispute shall be submitted to an audit partner
experienced in the clearing industry of an independent nationally-recognized
accounting firm in the United States as shall be mutually acceptable to Fiserv
and Fiserv Clearing, on the one hand, and the Representatives (an "Independent
Accounting Firm") who shall act as an expert and not as an arbitrator, and who
shall resolve the dispute within 10 days of the submission of such dispute. The
decision of the Independent Accounting Firm as to the Final Stockholders' Equity
shall be final and binding upon Fiserv, Fiserv Clearing and the Stockholders.
The expense of the Independent Accounting Firm shall be borne in proportion to
the difference between the final determined amount of the Independent Accounting
Firm and such amounts proposed by Fiserv and Fiserv Clearing, on the one hand,
and the Representatives acting for the Stockholders on the other hand. The
Representatives and Fiserv and Fiserv Clearing shall cooperate with the other
party in the determination of the Final Stockholders' Equity, including without
limitation, allowing the Representatives access after the Effective Date to the
books and records of the Company and to the accounting and other representatives
and advisors of the Company and its books and records for the purposes of making
such determination. Within three business days following final determination of
the Final Stockholders' Equity, as appropriate, Fiserv shall issue shares of
Fiserv Common Stock and pay the remaining amounts of cash payable to the
Stockholders hereunder in accordance with previously received instructions of
the Stockholders or the Stockholders shall pay such amounts to Fiserv and return
such number of shares of Fiserv Common Stock (with accompanying stock powers).
SECTION 3.02 Surrender and Payments. On and after the Effective
Date, each Stockholder which is not a Dissenting Stockholder (as hereinafter
defined) will be entitled, upon the surrender of such Stockholder's certificates
representing shares of stock of the Company that are outstanding on the
Effective Date, in compliance with the procedures determined by Fiserv's
Transfer Agent, Firstar Trust Company (including completion of a letter of
transmittal), to receive (a) a check or checks for the amount of cash into which
the shares of Company Common Stock theretofore represented by the certificate or
certificates so surrendered shall have been converted as provided in Section
3.01 above (including cash in lieu of fractional shares under Section 3.06), and
(b) a certificate or certificates representing the number of shares of Fiserv
Common Stock into which the shares of Company Common Stock theretofore
represented by the certificate or certificates so surrendered shall have been
converted as provided in Section 3.01 above, calculating in the case of each
portion of the amount paid
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or number of shares issued, as the case may be, the ▇▇▇▇▇▇▇ Value for this
purpose by using the Stockholders' Equity from the Adjusted Balance Sheet
instead of Final Stockholders' Equity, and subject to a holdback by Fiserv of
cash equal to 5% of Stockholders' Equity pending determination of the Final
Stockholders' Equity. Promptly upon said determination, the remaining amount of
cash to be paid hereunder shall be so paid or cash previously paid in connection
with this Agreement shall be paid back to Fiserv, provided that payments
relating to undisputed amounts shall be paid out within five business days after
the parties determine that no reasonable dispute exists with respect to all or
any portion of such funds. If any payment of cash or certificate representing
shares of Fiserv Common Stock is to be paid to a person or entity, or made in a
name, other than that in which the certificate theretofore surrendered for
exchange is registered, it shall be a condition of such payment or issuance that
the certificate so surrendered be properly endorsed or otherwise in proper form
for transfer and that the person requesting such transfer either pay to Fiserv
any transfer or other taxes required by reason of the transfer to a person other
than the registered holder of the certificate surrendered or establish to the
satisfaction of Fiserv that such tax has been paid or is not payable.
SECTION 3.03 No Further Transfers. Upon or after the date of this
Agreement through the Effective Date, except for transfers in the ordinary
course or otherwise required by contractual commitments in effect on the date
hereof, no transfer of the shares of Company Common Stock outstanding prior to
the Effective Date will be made on the stock transfer books of the Company or
the Surviving Corporation. The Company will promptly, and in any event prior to
the Closing Date, notify Fiserv concerning any transfers of Company Common Stock
by the Stockholders, and the parties then will make an appropriate amendment to
Schedule I to this Agreement to reflect any such transfer.
SECTION 3.04 Dissenting Shares. Any shares of Company Common Stock
held by a holder who, prior to and after the taking of the vote of the
Stockholders of the Company on this Agreement, complies with Section ▇-▇▇▇-▇▇▇
through ▇-▇▇▇-▇▇▇ of the Colorado Business Corporation Act (the "Statute") shall
be herein called "Dissenting Shares" and a holder thereof a "Dissenting
Stockholder". Any Dissenting Stockholder shall not after the date of written
objection to the Merger as provided in the Statute, have any rights of a
stockholder, except as otherwise provided in the
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Colorado Business Corporation Act, but shall have the rights provided in the
Statute.
SECTION 3.05 Shares Acquired Upon Payment of Appraisal Rights.
Dissenting Shares, if any, acquired upon payments to Dissenting Stockholders
pursuant to the Colorado Business Corporation Act shall be cancelled.
SECTION 3.06 No Fractional Shares. No certificate or scrip
representing fractional shares of Fiserv Common Stock shall be issued upon the
surrender for exchange of certificates, and no dividend, stock split or interest
shall relate to any such fractional shares. In lieu of any fractional share of
Fiserv Common Stock being issued, such fractional share will be rounded down to
the nearest whole share of Fiserv Common Stock and cash shall be paid to the
Stockholder in respect of such fractional share based on the Fiserv Share Value.
ARTICLE IV
CERTAIN EFFECTS OF MERGER
SECTION 4.01 Effect of Merger. Upon and after the Effective Date:
(a) the Company will merge with and into the Surviving Corporation; (b) the
separate existence of the Company will cease; (c) the shares of the Company will
be converted as provided in this Agreement; (d) the former holders of such
shares will be entitled only to the rights provided in this Agreement or to the
rights provided under Section ▇-▇▇▇-▇▇▇ of the Colorado Business Corporation
Act; and (e) the Merger will otherwise have the effect provided under the
applicable laws of the State of Delaware (including the General Corporation Law
of the State of Delaware, Section 259) and the State of Colorado (including
Colorado Business Corporation Act, Section 7-111-106).
SECTION 4.02 Further Assurances. If at any time after the Effective
Date, the Surviving Corporation will 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 will execute and deliver all such property, deeds,
assignments and
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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 or any non-material update
thereof which the Company may provide from time to time prior to Closing (the
"Disclosure Schedule") annexed to this Agreement as Schedule II, the Company
represents and warrants to, and agrees with, Fiserv and Fiserv Clearing as
follows:
(a) Organization and Qualification, etc. The Company and the
Subsidiaries are each a corporation duly organized, validly existing and in
good standing under the laws of their state of incorporation, have
corporate power and authority to own all of their respective properties and
assets and to carry on their business as they are now being conducted, are
duly qualified to do business and are in good standing in each other
jurisdiction as set forth in the Disclosure Schedule, and are not required
to be qualified to do business in any other jurisdiction where the failure
to so qualify would have a Material Adverse Effect (as defined below). The
copies of the Articles of Incorporation and Bylaws of the Company and each
Subsidiary, as amended to date, which have been delivered to Fiserv are
complete and correct, and such instruments, as so amended, are in full
force and effect.
"Material Adverse Effect," for purpose of this Agreement, when used
with respect to any party, means any change in or effect on, or any series
of changes in or effects on the business, assets or prospects of such
party, as such business is currently conducted by such party, that is
materially adverse to the results of its operations, financial, or other
conditions, arising or accruing before or after giving effect to the
transactions contemplated by this Agreement, but only to the extent that
the aggregate impact of
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all of such changes or effects, after taking into account both positive and
adverse changes and effects (other than ordinary operating profits)
decreases the worth of the Company and Subsidiaries taken as a whole by
$4,750,000 in the aggregate. "Adverse Effect" means any change in, or
effect on, or series of changes in, or effects on, the business, or assets,
of a party, that would result in the incurrence of damages or liability of
the sum of $80,000 or more.
(b) Capital Stock. The authorized capital stock of the Company
consists of 3,000,000 shares of Company Common Stock, of which 1,232,643
shares are outstanding on a fully diluted basis and 1,000,000 shares of
Preferred Stock, $.01 par value per share ("Company Preferred Stock"), of
which no shares are outstanding; all of such outstanding shares of Company
Common Stock are validly issued, fully paid and nonassessable; all of
such outstanding shares of Company Common Stock are held of record by the
Stockholders; and no shares of Company Common Stock are held in the
treasury of the Company. The authorized capital stock of each of the
Subsidiaries consists only of the number of shares of common stock and
preferred stock set forth in the Disclosure Schedule, of which the number
of shares of common stock and preferred stock outstanding is set forth in
the Disclosure Schedule; all of such outstanding shares of Subsidiary
common stock are validly issued, fully paid and nonassessable; and all of
such outstanding shares of Subsidiary common stock and preferred stock are
held of record by the Company. Except as set forth in the Disclosure
Schedule and, in the case of stock options, on Schedule III hereto, neither
the Company nor any Subsidiary has any commitments to issue or sell any
shares 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 the Company or any Subsidiary, any shares of its capital
stock and no securities or obligations evidencing any such rights are
outstanding.
(c) Other Subsidiaries. Neither the Company nor any Subsidiary
owns of record or beneficially, directly or indirectly, (i) any shares of
outstanding capital stock or securities convertible into capital stock of
any corporation (other than the capital stock of a Subsidiary) or (ii) any
participating interest in any partnership, joint venture, limited liability
company, or other non-corporate business enterprise.
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(d) Authority Relative to Agreement. The Company has the corporate
power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated on the part of the Company by this
Agreement. The execution and delivery by the Company of this Agreement and
the consummation by the Company of the transactions contemplated hereby
have been duly authorized by its board of directors other than approval of
the Stockholders and as otherwise provided in this Agreement. Other than
approval by the Company's Stockholders, no other corporate or institutional
proceedings on the part of the Company are necessary to authorize the
execution and delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and, assuming the due
authorization of this Agreement by the Stockholders and the due
authorization, execution and delivery of this Agreement by Fiserv and
Fiserv Clearing, and assuming all required approvals by governmental
agencies and self-regulatory organizations, is a valid and binding
agreement of the Company, 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; (ii) general
principles of equity, including, without limitation, concepts of
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); and (iii) regulatory and
self-regulatory authorities.
(e) Non-Contravention. Subject to approval of the Stockholders,
and assuming all required approvals by governmental agencies and self-
regulatory organizations, the execution and delivery of this Agreement by
the Company do not and the consummation by the Company of the transactions
contemplated hereby will not (i) violate any provision of the Articles of
Incorporation or Bylaws of the Company or any Subsidiary, (ii) to the
knowledge of the Company, 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
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Subsidiary pursuant to any provision of, any mortgage or lien or lease,
agreement, license or instrument or any order, arbitration award, judgment
or decree to which the Company or any Subsidiary is a party or by which any
assets of the Company or any Subsidiary 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 Subsidiary 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 lease,
agreement, license or instrument to which the Company or any Subsidiary is
a party, or (iii) violate any law, ordinance or regulation to which the
Company or any Subsidiary is subject.
(f) Government Approvals. To the Company's knowledge, except for
(i) the filing of the Delaware Certificate of Merger with the Secretary of
State of Delaware and the Colorado Articles of Merger with the Secretary of
State of the State of Colorado, (ii) filings with the Federal Trade
Commission (the "Commission") and the Antitrust Division of the Department
of Justice (the "Antitrust Division") under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the termination
of the requisite waiting period thereunder, (iii) filings with and
approvals of the Securities and Exchange Commission (the "SEC"), any
applicable state regulatory authorities (the "State Commissions"), the
National Association of Securities Dealers, Inc. (the "NASD") and the New
York Stock Exchange (the "NYSE") or (iv) 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, 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 by this Agreement. The Company and the
Subsidiaries have delivered to Fiserv and Fiserv Clearing complete and
correct copies of all filings made by the Company and the Subsidiaries
since September 25, 1994 with the SEC, the State Commissions, the NASD and
the NYSE, all as set forth on the Disclosure Schedule.
(g) Financial Statements. The Company has previously furnished
Fiserv with true and complete copies of (i) the audited statements of
financial condition of the
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Company (Parent only) and of each of its Subsidiaries as of September 27,
1996, and the related audited statements of income, stockholders' equity
and cash flows for each entity for the fiscal year then ended, certified by
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ LLP, successor in interest to McGladrey & ▇▇▇▇▇▇,
LLP, the independent accountants of the Company (the "Audited Company
Financial Statements") and (ii) the unaudited statements of financial
condition of the Company (Parent only) and of each of its Subsidiaries as
of June 27, 1997, and the related unaudited statements of income,
stockholders' equity for each entity for the period then ended (the
"Unaudited Company Financial Statements"; collectively, the "Company
Financial Statements"). Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis ("GAAP"). Except as disclosed on the Disclosure Schedule,
neither the Company nor any Subsidiary has any obligations in connection
with any acquisition of the business or assets of any other person which is
not reflected on the Company Financial Statements.
(h) Absence of Certain Changes or Events. Since September 27,
1996, except as disclosed in the Company Financial Statements, neither the
Company nor any Subsidiary has:
(i) incurred any obligation or liability (fixed or contingent),
except trade or business obligations incurred in the ordinary course
of business;
(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;
(iii) other than in the ordinary course of business, 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));
(iv) transferred, leased or otherwise disposed of any of its
assets or properties or acquired any assets or properties, except in
the ordinary course of business;
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(v) canceled or compromised any debt or claim, except in the
ordinary course of business;
(vi) waived or released, under any contract, rights of the
Company having value to the Company or any of its Subsidiaries, except
in any case in the ordinary course of business and consistent with
past practice;
(vii) except for the transactions contemplated by the Asset
Purchase Agreement, transferred or granted any rights under any
concessions, leases, licenses, agreements, patents, inventions,
trademarks, trade names, service marks or copyrights or with respect
to any know-how, except in the ordinary course of business and
consistent with past practice;
(viii) except in the ordinary course of business, and except as
shown on the Disclosure Schedule, 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 into any
transaction of any other nature with, any officer or employee of the
Company or any Subsidiary, as the case may be;
(ix) entered into any transaction, contract or commitment,
except those listed, or which pursuant to the terms hereof are not
required to be listed, on the Disclosure Schedule, this Agreement and
the transactions contemplated hereby, and those entered into in the
ordinary course of business;
(x) except as contemplated by this Agreement, declared, paid or
made any provision for payment of any dividends or other distribution
in respect of shares of Company Common Stock, or acquired or made any
provision for acquiring any shares of Company Common Stock or capital
stock of any Subsidiary;
(xi) declared, paid or made provisions for any other payment to
the Stockholders or any other affiliate of the Stockholders or the
Company, other than from a Subsidiary to the Company;
14
(xii) 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; or
(xiii) to the Company's knowledge, suffered any Material
Adverse Effect.
"Permitted Exceptions" means (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 (as
hereinafter defined) and assessments not yet payable; (iii) liens for
Taxes, assessments and charges and other claims, the validity of which the
Company or any Subsidiary is contesting in good faith under circumstances
in which the property subject to the lien, assessment, charge or other
claim is not thereby jeopardized and adequate reserves for such matters are
reflected on the Company Financial Statements; and (iv) imperfections of
title, liens, security interests, claims and other charges and encumbrances
the existence of which would not have in the aggregate an Adverse Effect.
(i) Title to Properties; Absence of Liens and Encumbrances, etc.
The Company and each Subsidiary has good title to all of the 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 and the Disclosure Schedule
and except that the foregoing representation and warranty as it affects the
securities position of Clearing is made to the Company's knowledge. The
Company's and each Subsidiary's intangible properties and assets (excluding
leasehold interests and other than any intangible properties and assets
described in Section 5.01(j) and 5.01(n), which sections contain the
Company's representations and warranties with respect to such intangible
properties and assets) are to the Company's knowledge 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 and the Disclosure Schedule.
(j) Software. The Disclosure Schedule contains a list or
description by type of all operating and
15
applications computer programs and data bases ("Software") which the
Company or any Subsidiary, as the case may be, uses or has available for
use and plans to use, and such Software constitutes all the Software which
is used in connection with or, to the Company's knowledge, is necessary to
operate the business of the Company or any Subsidiary, as the case may be,
as currently conducted. Except as indicated in the Disclosure Schedule,
such Software is owned outright by the Company or a Subsidiary, as the case
may be. As to any Software which is listed in the Disclosure Schedule and
is not owned by the Company or a Subsidiary, as the case may be, the
Company or the Subsidiary, as the case may be, has the right to use the
same pursuant to valid leases or licenses therefor, and, except as
otherwise disclosed in the Disclosure Schedule, all such leases and
licenses are in full force and effect and there is no default, nor any
event which with notice or the lapse of time or both, will become a default
under any such lease or license by the Company or any Subsidiary, as the
case may be, or any other parties thereto. To the knowledge of the Company,
none of the Software used by or available to the Company or any Subsidiary,
as the case may be, as aforesaid, and no use thereof, infringes upon or
violates any patent, copyright, trade secret or other proprietary right of
anyone else and neither the Company nor any Subsidiary, as the case may be,
has received notice of any claim with respect to any such infringement or
violation. Either the Company or a Subsidiary possess the original and all
copies of all documentation, including without limitation all source codes,
for all Software owned outright by it (other than such as shall have been
furnished to customers in connection with the provision of the services of
the Company or a Subsidiary, as the case may be). Upon consummation of the
transactions contemplated hereby, (x) each of the Company and a Subsidiary
will continue to own all of the Software owned outright by the Company or
the Subsidiary prior to the Closing, free and clear of all claims, liens,
encumbrances, obligations and liabilities except those existing at Closing
and except for such claims, liens, encumbrances, obligations and
liabilities of the Company or the Subsidiary, as the case may be, (i)
applicable to Software licensed to third parties and (ii) as may be granted
by the Company or the Subsidiary, as the case may be, after the Closing
Date; and (y) with respect to all agreements for the lease or license of
Software which require consents or other actions (which consents or other
actions are listed in the Disclosure Schedule) as a result of the
consummation of the transactions contemplated hereby in order
16
for the Company or the Subsidiary, as the case may be, to continue to use
and operate such Software after the Closing Date, the Company and each
Subsidiary will endeavor to obtain such consents or take such other actions
as reasonably required.
(k) List of Properties, Contracts and Other Data. The Disclosure
Schedule contains a list setting forth with respect to the Company and each
Subsidiary as of the date hereof the following:
(i) all real properties owned in fee simple by the Company or
any Subsidiary, as the case may be;
(ii) all leases of real or personal property to which the
Company or any Subsidiary, as the case may be, 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
$80,000;
(iii) (a) all patents, trademarks and trade names, trademark
and trade name registrations, servicemark registrations, copyrights
and copyright registrations, unexpired as of the date hereof, all
applications pending on said date for patents or for trademark, trade
name, service ▇▇▇▇ or copyright registrations, all other proprietary
rights owned or held by the Company or any Subsidiary, as the case may
be, and reasonably necessary to, or used by the Company or any
Subsidiary, as the case may be, primarily in connection with, its
business and (b) all licenses granted by or to the Company or any
Subsidiary, as the case may be, and all other agreements to which the
Company or any Subsidiary, as the case may be, is a party which
relate, in whole or in part, to any items of the categories mentioned
in (a) above, other than any such license or other agreement requiring
payments during its remaining life aggregating less than $80,000 or
terminable by the Company or any Subsidiary, as the case may be,
within one year without payment of a premium or penalty;
(iv) all collective bargaining agreements, employment and
consulting agreements (other than consulting agreements terminable
by the Company or a Subsidiary,
17
as the case may be, within 60 days without payment of a premium or a
penalty), executive compensation plans, bonus plans, deferred
compensation agreements, employee pension plans or retirement plans,
employee profit sharing plans, employee stock purchase and stock
option plans, group life insurance, hospitalization insurance or other
plans or arrangements providing for benefits to employees of the
Company or any Subsidiary, as the case may be;
(v) all contracts and commitments (including, without
limitation, mortgages, indentures and loan agreements) to which the
Company or any Subsidiary, as the case may be, is a party, or to which
it or any of its assets or properties are subject and which are not
specifically referred to in (i), (ii), (iii) or (iv) above; provided
that there need not be listed in the Disclosure Schedule (unless
required pursuant to the preceding clauses (i), (ii), (iii) or (iv)
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 or any Subsidiary, as the case may be, during its
remaining life aggregating less than $80,000;
(vi) all clearing and execution arrangements and all other
arrangements relating to the ability of Clearing to execute and clear
trades (and the Company represents that all provisions relating to the
rights of the other party to terminate such agreements are contained
in such agreements);
(vii) the current annual compensation of all employees of the
Company and Clearing (by position or by department) as of a recent
date (a copy of which has been submitted to Fiserv and Fiserv each
Subsidiary but is not included in the Disclosure Schedule); and
(viii) all audits, examinations and reports for the last three
(3) years submitted to or by regulatory and self-regulatory agencies
with jurisdiction over the Company or any Subsidiary.
True and complete copies of all written documents, agreements or
commitments (if any) referred to in (i) through (viii) above and, to the
Company's knowledge, summaries of all
18
oral agreements (if any) referred to in (i) through (vi) above, have been
provided to Fiserv or its counsel. Except as set forth in the Disclosure
Schedule, neither the Company nor any Subsidiary has been notified in
writing of any claim that any contract listed in the Disclosure Schedule
for this subsection (k) 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 material default or event of default or event which
with notice or lapse of time or both would constitute such a material
default. With respect to the arrangements set forth in clause (vi), none of
such arrangements will be terminated or made subject to termination at the
direction of anyone other than Clearing nor will any of such arrangements
be materially altered as a result of consummation of the transactions
contemplated hereby.
(l) Litigation. Except as set forth in the Disclosure Schedule,
there are no actions, suits, investigations or proceedings with respect to
the business of the Company or any Subsidiary pending against the Company
or any Subsidiary of which the Company has knowledge, or before or by any
federal, state, municipal, foreign or other governmental department,
commission, board, bureau, agency or instrumentality, nor has either the
Company or any Subsidiary received any notice of, or any written threats
concerning the possible commencement of, any such actions, suits or
proceedings with respect to the business of the Company or any Subsidiary,
as the case may be, nor has the Company or any Subsidiary reason to know of
any potential action, suit or proceeding with respect to the business of
the Company or such Subsidiary, as the case may be, other than that
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ is engaged in a business that often involves litigation in
which it is a defendant.
(m) Labor Controversies. Except as would not reasonably be
expected to have in the aggregate an Adverse Effect and except as set forth
on the Disclosure Schedule:
(i) there are no controversies between the Company or any
Subsidiary, as the case may be, 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 or any Subsidiary and, to the knowledge of the
Company, there are not and during the last two years prior to the date
hereof there have not
19
been any formal or informal organizing efforts by a labor organization
and/or a group of Company or any Subsidiary, as the case may be,
employees; and
(ii) neither the Company nor any Subsidiary has received notice
of any claim that it has not complied with any laws relating to the
employment of labor, including any provisions thereof relating to
wages, hours, collective bargaining, the payment of social security
and similar taxes, equal employment opportunity, employment
discrimination and employment safety, or that it is liable for any
arrears of wages or any Taxes or penalties for failure to comply with
any of the foregoing.
(n) Patent, Trademark, etc. Claims. No person has made or, to the
knowledge of the Company, threatened to make any claims that the operation
of the business of the Company or any Subsidiary, as the case may be, is in
violation or infringement of any patent, patent license, trade name,
trademark, servicemark, brandmark, brand name, copyright, know-how or other
proprietary or trade rights of any third party[; and neither the Company or
Clearing knows of any non-frivolous basis for any such claims].
(o) Use of Real Property. Neither the Company nor any Subsidiary
has received any notice of violation of any applicable zoning or building
regulation, ordinance or other law, order, regulation or requirement
relating to the operations of the Company or any Subsidiary, as the case
may be, 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 would
have in the aggregate an Adverse Effect and, to the knowledge of the
Company, there is no such violation or default which would have in the
aggregate an Adverse Effect. Neither the Company nor any Subsidiary has
received any notice that any plant or other building which 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 neither the Company nor any Subsidiary has received
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 or such Subsidiaries, as the case may be.
20
(p) Compliance with Law.
(i) Neither the Company nor any Subsidiary has been notified
that it is in violation of any laws (including but not limited to
orders, judgments or rulings of any court, governmental authority or
arbitration board or tribunal), ordinances, governmental rules or
regulations to which it is subject or 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. The Company and each Subsidiary to their
knowledge have conducted their operations in compliance with
applicable laws and rules and regulations (including those of non-
governmental, quasi-governmental, or self-regulatory organizations)
relating to broker dealers, investment managers and clearing brokers,
except for such instances of noncompliance which in the aggregate
would not have an Adverse Effect.
(ii) Clearing has not received notice that there has occurred
any act or default on the part of Clearing which would adversely
affect the status of Clearing as a broker/dealer engaged in providing
various execution and clearing services under federal or state law,
would constitute a violation of federal or state law by Clearing or
would otherwise have an Adverse Effect.
(iii) To the extent set forth on the Disclosure Schedule, the
Company has continually maintained a surety bond insuring it and each
of its Subsidiaries against acts of dishonesty by its and its
Subsidiaries' employees in such amounts as is customary, usual and
prudent for a corporation of its size. Except as set forth on the
Disclosure Schedule, no claims in excess of the deductible limits of
the surety bond have been made under such bond, and to the knowledge
of the Company, there are no facts, circumstances or conditions
existing that could reasonably be expected to result in the occurrence
of any claim that would have an Adverse Effect.
(iv) Except as set forth on the Disclosure Schedule and to the
knowledge of the Company, the Company and each Subsidiary has filed
all applicable reports, returns and filing information data with
federal
21
securities authorities, State Commissions and other regulatory
agencies as are required by federal or state law and regulations, the
failure of which would result in an Adverse Effect.
(v) Except as set forth on the Disclosure Schedule or the
Financial Statements, no officer or director of the Company or any
Subsidiary, no beneficial owner of 10% or more of the outstanding
common stock of the Company (a "principal stockholder"), no member of
the immediate family of any such officer, director, or principal
stockholder, and no entity in which any of such person owns any
beneficial interest, has any loan agreement, note or borrowing
arrangement or any other agreement with the Company or any Subsidiary
(other than normal employment arrangements complying with all
applicable laws and regulations) or any interest in any property,
real, personal or mixed, tangible or intangible, used and/or
pertaining to the business of the Company or any Subsidiary. For
purposes of this paragraph, the members of the immediate family of any
officer, director, or principal shareholder will consist of the
spouse, parents, children, siblings, mothers and fathers-in-law, sons
and daughters-in-law, and brothers and sisters-in-law of such officer,
director or principal stockholder.
(vi) The Company has on file a valid Form I-9 for each
employee hired by the Company or any Subsidiary 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 and each Subsidiary are (A) United States
citizens, or lawful permanent residents of the United States, (B)
aliens whose right to work in the United States allows them to work
for the Company or Clearing, as the case may be, (C) aliens who have
valid, unexpired work authorization issued by the Attorney General of
the United States (Immigration and Naturalization Service) or (D)
aliens who have been continually employed by the Company or a
Subsidiary since November 6, 1986 or the applicable date of hire. To
the Company's knowledge, the Company has not been the subject of an
immigration 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
22
Department of Labor or the Attorney General of the United States
(Immigration and Naturalization Service).
(q) Employee Benefits.
(i) The Disclosure Schedule sets forth a list identifying each
"employee 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 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 and its Subsidiaries , or which cover
any employee or former employee of the Company or a Subsidiary.
Collectively, the Pension Plans and Welfare Plans are hereinafter
referred to as the "Employee Plans". Except as otherwise identified on
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) The Company has delievered or has caused to be delivered to
Fiserv 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, if
any, (C) written interpretations of the Employee Plans, (D) material
employee written 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
any such report was required), including all attachments (including
without limitation the audited financial statements, if any) and (F)
the three most recent actuarial valuation reports prepared in
connectiuon with each Employee Plan (if any such report was required).
23
(iii) 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) Each Employee Plan has been maintained in substantial
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) To the Company's knowledge, 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 delivered or caused
to be delivered to Fiserv the latest determination letters of the
Internal Revenue Service relating to each Pension Plan. To the
Company's knowledge, 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. To the Company's knowledge
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. To the
Company's knowledge, no distributions have been made from any of the
Pension Plans that would violate in any respect the restrictions under
Treas. Reg. Section 1.401(a)(4)-5(b), and none will have been made by
the Effective Date.
24
(vi) 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 Date, the Company shall notify Fiserv of such action prior
to the Effective Date.
(vii) To the Company's knowledge, neither the Company nor any
Subsidiary has 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 Date. 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) To the Company's knowledge, 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 Date.
(ix) The Company has made all required contributions under each
Pension Plan on a timely basis or, if not yet due, adequate accruals
therefor have been provided for in the financial statements. No
Pension Plan has incurred any "accumulated funding deficiency"
25
within the meaning of Section 302 of ERISA or Section 412 of the Code
and no Pension Plan has applied for or received a waiver of the
minimum funding standards imposed by Section 412 of the Code.
(x) 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, to the Company's
knowledge, 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 Date 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) 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 the
Disclosure Schedule, there has been (A) no material adverse change in
the financial condition of any such Pension Plan, (B) no change in
actuarial assumptions with respect to any such Pension Plan and (C) no
increase in benefits under any 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.
26
(xii) 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) To the Company's knowledge, no Employee Plan provides
benefits, including without limitation, 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
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 financial statements of the Company or
(D) benefits, the full cost of which is borne by the current or
former employee (or his or her beneficiary).
(xiv) To the Company's knowledge, 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. To the Company's knowledge, each Employee Plan
which is a group health plan, within the meaning of Section 9805(a) of
the Code, has complied with and satisfied the applicable requirements
of Section 9801 and 9802 of the Code.
27
(r) Insurance. The Disclosure Schedule accurately summarizes the
amount and kinds of all policies of insurance covering the directors,
employees, assets or operations of the Company or any Subsidiary in effect
on the date of this Agreement (referred to as "Current Policies"). The
Company has delivered to Fiserv a true and complete copy of each insurance
policy described in the preceding sentence. To the Company's knowledge, all
Current Policies are in full force and effect except as set forth in the
Disclosure Schedule. No notice of cancellation or termination of any
Current Policies has been given to the Company or any Subsidiary by the
carrier of any such policy. To the Company's knowledge, no application
filed for a Current Policy contains any material misstatement of fact or
fails to state any material fact which may materially and adversely affect
the insurance coverage provided.
(s) Bank Accounts. The Disclosure Schedule lists all bank, money
market, savings and similar accounts and safe deposit boxes of the Company
and each Subsidiary specifying the account numbers and the authorized
signatories of persons having access to them.
(t) Taxes.
(i) Each of the Company and the Subsidiaries has (a) duly
and timely filed all Tax Returns (as defined below) required to be
filed for all periods ending on or prior to the Effective Date, which
Tax Returns are true, correct and complete in all material respects
and (b) timely paid all Taxes (as defined below) shown as due and
payable on such Tax Returns in respect of all periods up to and
including the Effective Date and has properly accrued on its financial
statements all Taxes not yet payable in respect of all periods up to
and including the Effective Date. Prior to the Closing Date, the
Company shall provide Fiserv with a schedule which sets forth each
Taxing jurisdiction in which the Company or any Subsidiary has filed
or is required to file Tax Returns and whether such Tax Return was
filed on a consolidated, combined, unitary or separate basis and a
copy of such Tax Returns as have been requested by Fiserv. To the
Company's knowledge, the Company and each Subsidiary has timely and
properly withheld or collected, paid over and reported all Taxes
28
required to be withheld or collected by the Company or any Subsidiary
on or before the Effective Date. Except for Tax Returns which cover
only the Company and the Subsidiaries, none of the Company or the
Subsidiaries have filed consolidated, combined or unitary Tax Returns
with any other entities.
(ii) Except as set forth in the Disclosure Schedule, (a) no
Taxing authority has asserted any adjustment that could result in an
additional Tax for which the Company or any Subsidiary is or may be
liable, (b) there is no pending audit, examination, investigation,
dispute, proceeding or claim (collectively, "Proceeding") relating to
any Tax for which the Company or any Subsidiary is or may be liable
and, to the knowledge of the Company, no Taxing authority is
contemplating such a Proceeding and, to the Company's knowledge, there
is no basis for any such Proceeding, (c) no statute of limitations
with respect to any Tax for which the Company or any Subsidiary is or
may be liable has been waived or extended, (d) there is no outstanding
power of attorney authorizing anyone to act on behalf of the Company
or any Subsidiary in connection with any Tax, Tax Return or Proceeding
relating to any Tax, (e) there is no outstanding closing agreement,
ruling request, request to consent to change a method of accounting,
subpoena or request for information with or by any Taxing Authority
with respect to the Company or any Subsidiary, any of their income,
assets or business, or any Tax for which the Company or any Subsidiary
is or may be liable and (f) neither the Company nor any Subsidiary is
a party to any Tax sharing or Tax allocation agreement, arrangement or
understanding. The Company and each Subsidiary have duly and timely
paid all Taxes asserted by any Taxing authority to be payable unless
such Tax is being contested by the Company or Subsidiary diligently
and in good faith.
(iii) Neither the Company nor any Subsidiary is a party to any
agreement, contract or arrangement 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. Neither
the Company nor any Subsidiary is a "consenting corporation" within
the meaning of Section 341(f) of the Code. Neither the Company nor any
Subsidiary has any
29
"tax-exempt use property" within the meaning of Section 168(h) of the
Code. None of the assets of the Company or any Subsidiary 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. None of the Company nor any Subsidiary has ever made, or
been required to make, an election under Section 338 of the Code.
(iv) For purposes of this Agreement, "Taxes" shall mean all
federal, state, local and foreign taxes, charges, fees, levies,
deficiencies or other assessments of whatever kind or nature
(including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, estimated,
severance, stamp, occupation, property, 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 or any similar
provision under applicable law, as a result of Treasury Regulation
Section 1.1502-6 or 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) As used herein, "Tax Return" includes any return,
declaration, report, information return or statement, and any
amendment thereto, including without limitation 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.
(u) Correspondent Agreements. Set forth on Section 5.01(u) of the
Disclosure Schedule are true and complete copies of Clearing's standard
fully disclosed correspondent agreement and corresponding ancillary
documents.
30
The correspondent agreements and corresponding ancillary documents actually
entered into by Clearing with its various clients are substantially similar
to the copies attached hereto.
(v) Books and Records. To the Company's knowledge, the books and
records of the Company and each Subsidiary are complete and accurate in all
material respects.
(w) Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Company and
the Stockholders directly with Fiserv, without the intervention of any
other person on behalf of the Company or any Stockholder in such manner as
to give rise to any valid claim by any other person against the Company or
any Stockholder for a finder's fee, brokerage commissions or similar
payment, except for a fee payable to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., which fee will be
paid in full, or fully accrued on the Company's financial records, prior to
the Effective Date.
(x) Limitation on Representations and Warranties. The Company shall
not be deemed to have made to Fiserv or Fiserv Clearing any representation
or warranty, other than those as expressly made by the Company in Section
5.01 hereof. Without limiting the generality of the foregoing, and
notwithstanding any other express representations and warranties made by
the Company in Section 5.01, the Company makes no representation or
warranty to Fiserv or Fiserv Clearing with respect to: (i) any projections,
estimates or budgets heretofore delivered to or made available to Fiserv of
future revenues, expenses or expenditures, future results of operations,
etc.; or (ii) any other information or documents made available to Fiserv,
Fiserv Clearing or their counsel, accountants or advisors, except as
expressly covered by representations and warranties contained in Section
5.01 hereof. Fiserv and Fiserv Clearing each acknowledge that: (i) it is a
sophisticated investor capable of making all investment decisions regarding
acquisition of the Company; (ii) it has conducted extensive due diligence
regarding the Company, its Subsidiaries and their business activities and
is fully familiar with the business and prospects of the Company and
Clearing; and (iii) it has not relied on any representations or warranties
regarding the Company, Clearing or their businesses except those set forth
in Section 5.01 hereof.
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(y) Limitation on Breaches of Representations and Warranties.
Notwithstanding any provision in this Section 5.01 to the contrary, no
breach of a representation or warranty by the Company will be deemed to
have occurred unless the sum of all losses exceeds $4,750,000.
SECTION 5.02 Representations and Warranties of Fiserv and Fiserv
Clearing. Fiserv and Fiserv Clearing, jointly and severally, represent and
warrant to, and agree with, the Company as follows:
(a) Organization and Qualification, etc. Fiserv and Fiserv Clearing
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 Clearing 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
Clearing 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 of this Agreement by Fiserv and Fiserv
Clearing and the consummation by each of them of the transactions
contemplated on its part by this Agreement have been duly authorized by
their respective board of directors and, in the case of Fiserv Clearing,
its sole stockholder. No other corporate proceedings on the part of Fiserv
or Fiserv Clearing are necessary to authorize the execution and delivery of
this Agreement. This Agreement have been duly executed and delivered by
Fiserv and Fiserv Clearing and, assuming the due authorization, execution
and delivery of this Agreement by the Company, is a valid and binding
agreement, enforceable against Fiserv and Fiserv Clearing, 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, without limitation, concepts of
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).
32
(c) Non-Contravention. The execution and delivery of this Agreement
by Fiserv and Fiserv Clearing, do not, and the consummation by Fiserv and
Fiserv Clearing of the transactions contemplated by this Agreement will not
(i) violate any provision of the Articles of Incorporation or By-laws of
Fiserv or the Certificate of Incorporation or By-laws of Fiserv Clearing,
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 Clearing
pursuant to any provision of any mortgage or lien or lease, agreement,
license or instrument or any order, arbitration award, judgment or decree
to which Fiserv or Fiserv Clearing 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 Clearing is subject or by which any of its respective assets may be
bound, and the same does not and will not constitute an event permitting
termination of any such mortgage or lien or lease, agreement, license or
instrument to which Fiserv or Fiserv Clearing is a party or (iii) violate
in any material respect any law, ordinance or regulation to which Fiserv or
Fiserv Clearing is subject.
(d) Government Approvals. Except for (i) the filing of the Delaware
Certificate of Merger with the Secretary of State of Delaware and the
Colorado Articles of Merger with the Secretary of State of the State of
Colorado, (ii) the filings with the Commission and the Antitrust Division
under the HSR Act, and the termination of the requisite waiting period
thereunder, (iii) as may be necessary as a result of any facts or
circumstances relating solely to the Company or its Subsidiaries or (iv)
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, 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 Clearing, and
the consummation by Fiserv and Fiserv Clearing of the transactions
contemplated by this Agreement.
33
(e) SEC Reports. Fiserv has provided the Company with all required
forms, reports and documents which it has been required to file with the
SEC since January 1, 1996 (collectively, the "Fiserv SEC Reports"), each
of which has complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act. As of their
respective dates, the Fiserv SEC Reports, including, without limitation,
any financial statements or schedules included therein, 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, except, in the case of any Fiserv SEC Report, any statement or
omission therein that has been corrected or otherwise disclosed in a
subsequent Fiserv SEC Report. The audited financial statements and
unaudited interim financial statements of Fiserv included in its Annual
Report on Form 10-K for the fiscal year ended December 31, 1995 and in its
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1996, June 30, 1996 and September 30, 1996, in its Annual Report on Form
10-K for the fiscal year ended December 31, 1996 and in its Quarterly
Reports on Form 10-Q for the fiscal quarters ended March 31, 1997 and June
30, 1997 present, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), fairly present the consolidated financial position of the
Fiserv and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for
the periods then ended (subject to normal year-end adjustments and the
absence of certain footnote disclosures in the case of any unaudited
interim financial statements).
(f) Capitalization of Fiserv. The authorized capital stock of Fiserv
consists of 150,000,000 shares of Fiserv Common Stock and 25,000,000 shares
of Preferred Stock, of which no shares of Preferred Stock and 52,426,181
shares of Fiserv Common Stock are validly issued and outstanding, fully
paid and nonassessable. Except as set forth on Schedule 5.02(f), 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.
34
(g) Capitalization of Fiserv Clearing. Fiserv Clearing has authorized
common stock, par value $.001 per share ("Fiserv Clearing Common Stock"),
of which 7,500 shares are validly issued and outstanding, fully paid and
nonassessable and all of which are owned by Fiserv. Fiserv Clearing 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 Clearing, any shares of its
capital stock and no securities or obligations evidencing such rights are
outstanding.
(h) 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 hereof shall, upon
consummation of the Merger, be validly issued and outstanding, fully paid
and nonassessable shares of Fiserv Common Stock.
(i) Absence of Material Adverse Effect. Since December 31, 1996,
Fiserv has not experienced any change which could have a Material Adverse
Effect.
(j) Brokers. All negotiations relative to this Agreement and the
transactions contemplated by this Agreement have been carried out by Fiserv
and Fiserv Clearing directly with the Stockholders and the Company, without
the intervention of any person on behalf of Fiserv or Fiserv Clearing in
such manner as to give rise to any valid claim by any person against Fiserv
or Fiserv Clearing for a finder's fee, brokerage commission, or similar
payment.
(k) Proxy Statement/Prospectus. On the date on which Fiserv files its
Registration Statement with the Commission, on the date of effectiveness
thereof, on the date on which the Proxy Statement/Prospectus is mailed to
the holders of Company common Stock, on the date the Stockholders' Meeting
is held and at Closing, such Registration Statement and and the Proxy
Statement/Prospectus will comply in all material respects with the
requirements of the Securities Act, the rules and regulations of the
Commission thereunder and all other applicable requirements, and will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were
made; provided, however,
35
that the foregoing representation and waranty shall not apply to
information concerning the Company and the Subsidiaries furnished by the
Company in writing expressly for use in such Registration Statement or in
the Proxy Statement/Prospectus.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 6.01 Conduct of Business.
(a) During the period from the date of this Agreement to the Effective
Date, except as otherwise contemplated by this Agreement, the Company will
conduct and will cause each Subsidiary to conduct, its respective
operations according to its ordinary and usual course of business, and the
Company will, and will cause each Subsidiary to, use its commercially
reasonable efforts to preserve substantially intact its respective business
organization, keep available the services of its officers and employees,
and maintain its respective present relationships with licensors,
suppliers, distributors, customers and others having significant business
relationships with it, including without limitation Knight Securities, and
endeavor to maintain all clearing or execution arrangements and not alter
in any material respect those arrangements. Representatives of the Company
and each Subsidiary will confer with representatives of Fiserv and Fiserv
Clearing to keep them informed with respect to the general status of the
on-going operations of the business of the Company and each Subsidiary.
(b) From the date of this Agreement through the Effective Date, except
as otherwise contemplated by this Agreement, the Company will, and will
cause each of the Subsidiaries, not to (i) pay any dividends or make any
other distribution on its stock or purchase or otherwise acquire capital
stock of any Subsidiary, (ii) acquire or dispose of any substantial assets,
or acquire any assets which would make completion of the Merger impossible
or a violation of applicable laws, rules or regulations, or (iii) enter
into any other material transaction or incur any material obligation that
is not in the ordinary course of business or is not consistent with past
practice.
SECTION 6.02 Access to Information by Fiserv and Fiserv Clearing.
Fiserv and Fiserv Clearing may prior to the Effective
36
Date have access to the business and properties of the Company and Clearing and
information concerning their respective financial and legal condition, as Fiserv
and Fiserv Clearing deem necessary or advisable in connection with the
consummation of the transactions contemplated by this Agreement, provided that
such access will be during normal business hours and will not interfere with
normal operations of the Company or any Subsidiary. The Company agrees to permit
Fiserv and Fiserv Clearing and their authorized representatives, including
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.C. and Deloitte & Touche LLP, or cause any of them to be
permitted to have, after the date of this Agreement and until the Effective
Date, full access to the premises, books and records of the Company and each
Subsidiary during normal business hours, and the officers of the Company and
each Subsidiary will furnish Fiserv and Fiserv Clearing with such financial and
operating data and other information with respect to the business and properties
of the Company and each Subsidiary as Fiserv and Fiserv Clearing from time to
time reasonably request. If Fiserv has discovered or discovers, prior to the
Closing, a fact, circumstance or condition and Fiserv has actual knowledge that
such fact, circumstance or condition constitutes a breach of a representation
and warranty by the Company, then Fiserv will promptly provide notice to the
Company describing in general terms the fact, circumstance or condition and, if
the Closing occurs, then the existence of such fact, circumstance or condition
will not form the basis for any liability by reason of the breach of such
representation and warranty.
SECTION 6.03 Consents and Authorizations. As soon as practicable,
each of the parties to this Agreement 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 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. In addition, after the
Effective Date, the Stockholders will cooperate with the Company, Clearing and
Fiserv in the preparation of any audited financial statements of the Company or
Clearing required for filing by Fiserv with the SEC under the Securities
Exchange Act of 1934, as amended, or otherwise.
SECTION 6.04 Non-Assignable Licenses, Leases and Contracts. The
Company will use its commercially reasonable efforts to obtain and deliver to
Fiserv or Fiserv Clearing at or prior to the Effective Date such consents or
waivers as are required in
37
order that any contract 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 under this Agreement, will not
be so breached or violated or result in such right of cancellation. The Company
will use its commercially reasonable efforts to obtain and deliver to Fiserv or
Fiserv Clearing at or prior to the Effective Date such consents or waivers as
will be reasonably requested by Fiserv or Fiserv Clearing for any contracts not
required to be listed on the Disclosure Schedule which, as a result of the
occurrence of the Merger under this Agreement, would be breached or violated or
would give any other party the right to cancel the same, in order that such
contracts will not be so breached or violated or result in such right of
cancellation.
SECTION 6.05 Employee Matters. It is intended that the employees of
Clearing will remain employees of Clearing following the Merger, and such
employment will be employment at will or in accordance with contracts in effect
at the Effective Date. Thereafter, for so long as they are employed by Clearing,
they will be paid, depending on their duties and responsibilities, in accordance
with the compensation policies of Fiserv with respect to its employees
generally. In addition, after the Effective Date and the employees of the
Company and each Subsidiary will be entitled to participate in the benefit plans
that Fiserv maintains for its employees generally (except with respect to
Fiserv's sabbatical plan or policy) on substantially the same terms and
conditions as other employees of Fiserv. For this purpose, each "year of
service" with the Company and each Subsidiary will be treated as a "year of
service" with Fiserv.
SECTION 6.06 Tax Returns. The Company will file and the Company will
cause each Subsidiary to file, on a timely basis, all Tax Returns required to be
filed by the Company or any Subsidiary with respect to any period ending on or
prior to the Effective Date and to timely pay all Taxes required to be paid.
Such Tax Returns will be prepared on a basis consistent with prior Tax Returns
filed by them and will not make, amend or terminate any election by the Company
or any Subsidiary without Fiserv's prior written consent. The Company will give
Fiserv a copy of each such Tax Return for its review with sufficient time for
comments prior to filing.
SECTION 6.07 Notifications of Exceptions. The Company will notify
Fiserv and Fiserv Clearing, within two business days after the Company or any
Stockholder has become aware of such matters (and in any event prior to the
Effective Date), concerning
38
any exception to any of the representations and warranties set forth in Section
5.01, to the extent any such exception arises, or the Company otherwise becomes
aware of such exception, from the date of this Agreement through the Effective
Date. Such notice will include a description in reasonable detail of the facts
and circumstances that cause there to be an exception to such representations
and warranties.
SECTION 6.08 Change of Name. Promptly after the Effective Date,
Fiserv will cause the business and legal name of Clearing and any associated
trademarks to be changed to maintain a distinction from the names of Investments
and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇.
SECTION 6.09 Continuing Indemnity. Fiserv and Fiserv Clearing each
agree that after the Effective Date it will not alter the rights of any person
who has a right to indemnification (the "Indemnitees") from the Company or
Clearing pursuant to the Articles of Incorporation and/or Bylaws of the Company
or Clearing, as applicable, in effect on the date of this Agreement. In
addition, Fiserv and Fiserv Clearing shall be bound by all deterrminations made
by the Board of Directors of both the Company and Clearing prior to the Closing
(including, but not limited to, determinations of whether officers and/or
directors acted in good faith); subject, however, to the terms and provisions of
the Articles of Incorporation and/or By-laws of the Company or Clearing
regarding indemnification. Fiserv Clearing shall assume the obligations of the
Company to provide indemnification to the Indemnitees of the Company as if such
persons were directors of Fiserv Clearing. Fiserv and Fiserv Clearing each
covenant that they will not take or permit any action that would impair in any
material respect the ability or obligation of Fiserv and Fiserv Clearing to
comply with this Section 6.09. Fiserv and Fiserv Clearing shall, if reasonably
possible, obtain coverage for such Indemnitees under their D&O insurance policy
or policies. In the event either Fiserv Clearing or Clearing is or are disposed
of, sold or reorganized (regardless of the method or structure of such
disposition, sale or reorganization), as a condition precedent to such
disposition, sale or reorganization, Fiserv Clearing or Clearing (or their
parent company) shall either: (i) continue to provide substantially the same
coverage for the Indemnitees as required hereby; or (ii) require the acquiring
entity with which they are dealing to assume and continue their obligations
under this Section 6.09. If the scope of indemnity to which the Indemnitees are
entitled under the Articles of Incorporation and/or Bylaws of the Company or
Clearing is more beneficial than the right of indemnification provided by Fiserv
Clearing, the indemnification obligation of Fiserv Clearing
39
hereunder shall be automatically expanded to provide the Indemnitees with the
maximum indemnification rights provided by the Articles of Incorporation and/or
Bylaws of the Company or Clearing.
SECTION 6.10 NASDAQ Requirement. Fiserv shall provide timely notice
to NASDAQ of its intent to issue additional shares of Fiserv Common Stock to
holders of Company Common Stock pursuant to the Merger and will comply in full
with any and all requirements of NASDAQ's National Market System applicable to
the issuance of such shares or the trading of such shares subsequent to the
Merger.
SECTION 6.11 Registration Statement. As soon as practicable after
the execution of this Agreement, Fiserv shall file with the Commission the
Registration Statement to register the shares of Fiserv Common Stock to be
issued pursuant to the Merger and the resale thereof by persons who may be
deemed to be underwriters under Rule 145 of the Securities Act, shall use its
commercially reasonable efforts to have the Commission declare the Registration
Statement effective as soon as practicable and shall maintain the effectiveness
of the Registration Statement for a period of two years following the Effective
Date. To the extent the original Registration Statement ceases for any reason
to be effective during such two-year period, Fiserv shall immediately use its
commercially reasonable efforts to prepare and file a registration statement on
Form S-3 for the benefit of Company Shareholders who have received Fiserv Common
Stock in the Merger, such registration statement to remain effective for the
duration of such two-year period.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 Conditions Precedent to the Obligations of Fiserv and
Fiserv Clearing. The obligations of Fiserv and Fiserv Clearing to consummate
the Merger under this Agreement are subject to the satisfaction in all material
respects or waiver by Fiserv and Fiserv Clearing prior to or on the Effective
Date of each of the following conditions:
(a) Stockholder Approval. This Agreement shall have been adopted by
the affirmative vote of the Stockholders of the Company at the
Stockholders' Meeting (or any proper adjournment thereof) by the requisite
vote in accordance with the Articles of Incorporation of the Company and
the Colorado Business Corporation Law.
40
(b) Effectiveness of Registration Statement. The Registration
Statement shall have become effective and no stop order suspending such
effectiveness shall have been issued or proceedings for such purpose shall
have been instituted or threatened.
(c) Regulatory Approvals. All permits and consents required by state
securities laws for the consummation of the Merger shall have been
obtained.
(d) Accuracy of Representations and Warranties. The representations
and warranties of the Company contained in this Agreement, in the
Disclosure Schedule (or in any update thereof submitted by the Company
provided such changes are not material) or in any closing certificate or
document delivered to Fiserv and Fiserv Clearing pursuant to this Agreement
are true and correct at and as of the Effective Date as though made at and
as of that time, other than such representations and warranties as are
specifically made as of another date (which representations and warranties
are true and correct at and as of the date made), and the Company has
delivered to Fiserv and Fiserv Clearing a certificate to that effect.
(e) Compliance with Covenants. The Company has performed and complied
in all respects with all covenants of this Agreement to be performed or
complied with or by it at or prior to the Effective Date (except where such
non-compliance would not have an Adverse Effect on the Company or prevent
it from consummating the transactions contemplated hereby), and the Company
has delivered to Fiserv and Fiserv Clearing a certificate to that effect.
(f) All Proceedings to be Satisfactory. The Delaware Certificate of
Merger and the Colorado Articles of Merger have been filed and accepted by
the Secretary of State of Delaware and the Colorado Secretary of State,
respectively. Fiserv and Fiserv Clearing and their counsel also must have
received certified or other copies or control over or possession of all
material documents relating to the Company incident to the transactions
contemplated by this Agreement as Fiserv, Fiserv Clearing or said counsel
may reasonably request and such documents are reasonably satisfactory in
form and substance to Fiserv, Fiserv Clearing and said counsel.
41
(g) Opinion of Counsel for the Company. Fiserv has received the
favorable opinions of ▇▇▇▇▇, Johnson, Robinson, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.,
counsel to the Company, dated the Effective Date, substantially in the form
and to the effect set forth in Exhibit C.
(h) Legal Actions or Proceedings. No legal action or proceeding has
been instituted after the date of this Agreement against the Company, or
against Fiserv or Fiserv Clearing, arising by reason of the Merger pursuant
to this Agreement, which is reasonably likely (i) to restrain, prohibit or
invalidate the consummation of the transactions contemplated by this
Agreement or (ii) to have a Material Adverse Effect on the Company, any
Subsidiary, Fiserv or Fiserv Clearing.
(i) Clearing Agreement. Clearing and New LLC (as hereinafter defined)
shall have entered into a clearing agreement with a term of five years for
all of New LLC's clearing needs on terms that are consistent with other
third party arrangements and which are acceptable to Fiserv and Fiserv
Clearing.
(j) ▇▇▇▇▇▇▇ Employment Agreement. Fiserv and Clearing shall have
entered into an Employment Agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as president of
Clearing.
(k) HSR Act Waiting Period. The requisite waiting period under the
HSR Act shall have expired.
(l) Tax Representation Letter; FIRPTA Affidavit. The Company shall
have delivered to Fiserv and Fiserv Clearing a signed Tax Representation
Letter substantially in the form of Exhibit D-1 attached hereto. The
Company and each Subsidiary shall have delivered to Fiserv a FIRPTA
affidavit, signed under penalties of perjury, substantially in the form of
Exhibit D-2 attached hereto. The parties understand that such affidavits
will be retained by Fiserv and will be made available to the Internal
Revenue Service upon request.
(m) Contractual Consents. The Company has delivered to Fiserv
consents from all parties to all material contracts with the Company or any
Subsidiary, including without limitation those contracts listed on Exhibit
E attached hereto, which, as a result of the transactions contemplated by
this Agreement, are required to be obtained in order for such
42
contracts to remain in full force and effect, such contracts to be on the
same terms and conditions as though the transactions contemplated hereby
had not taken place.
(n) Business Operations. The Company, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and/or
Investments shall have sold certain of their assets (which assets shall be
subject to the reasonable approval of Fiserv and Fiserv Clearing) as set
forth in a closing schedule for fair and adequate consideration to a
limited liability company treated as a partnership for federal income Tax
purposes ("New LLC").
(o) Governmental Approvals. All consents and approvals described in
Section 5.01(f) have been obtained, in form and substance satisfactory to
Fiserv in its sole discretion.
(p) Exercise of Stock Options; Dissenters' Rights. The holders of the
stock options of the Company listed on Schedule IV hereto shall have
exercised such options in the amounts indicated on Schedule IV. The owners
of no more than 5% of the Company Common Stock shall have exercised
Dissenters' Rights in connection with the transactions contemplated hereby.
(q) Non-Compete Agreement. Each member of the Board of Directors of
the Company, on the one hand, and Fiserv, on the other hand, shall have
entered into a Non-Compete Agreement substantially in the form of Exhibit
F.
(r) Confidentiality Agreements. Each Member of the Board of Directors
of the Company, on the one hand, and Fiserv, on the other hand, shall have
entered into a Confidentiality Agreement substantially in the form of
Exhibit G.
(s) Resignations of Directors. The directors of the Company and each
Subsidiary (other than Clearing) shall have resigned.
(t) Supporting Documents. On or prior to the Effective Date, Fiserv,
Fiserv Clearing and their counsel have received copies of the following
supporting documents:
(i) copies of Articles of Incorporation and By-laws of the
Company and each Subsidiary, and all amendments to such documents,
certified as of a recent
43
date by the Secretary of State of the pertinent state of incorporation
or formation of such entity and (2) a certificate of said Secretary
dated as of a recent date as to the due incorporation or formation and
good standing of the Company and each Subsidiary and listing all
documents of the Company and each Subsidiary on file with said
Secretary; and
(ii) certificates of the Secretary or an Assistant Secretary of
the Company and each Subsidiary dated the Effective Date and
certifying substantially to the effect (1) that attached to such
Certificate is a true and complete copy of the By-laws of the Company
and each Subsidiary, respectively, as in effect on the date of such
certification and at all times since September 27, 1996; (2) that
attached to such Certificate is a true and complete copy of
resolutions adopted by the board of directors and stockholders of the
Company, authorizing the execution, delivery and performance of the
Transaction Agreements 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 the Transaction Agreements; (3)
that the Articles of Incorporation of the Company and of each
Subsidiary, respectively, have not been amended since the date of the
last amendment referred to in the certificate (if any) delivered
pursuant to clause (i)(2) above; and (4) as to the incumbency and
specimen signature of each officer of the Company executing the
Transaction Agreements and any certificate or instrument furnished
pursuant to the Transaction Agreements, 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 will be reasonably satisfactory in form and substance to
Fiserv, Fiserv Clearing and their counsel (except where this Agreement
provides that such documents must be satisfactory to Fiserv in its sole
discretion).
SECTION 7.02 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 in all material respects or waiver by the Company
prior to or on the Effective Date of each of the following conditions:
44
(a) Stockholder Approval. This Agreement shall have been adopted by
the affirmative vote of the Stockholders of the Company at the Stockholders
Meeting (or any proper adjournment thereof) by the requisite vote in
accordance with the Articles of Incorporation of the Company and the
Colorado Business Corporation Law.
(b) Effectiveness of Registration Statement. The Registration
Statement shall have become effective and no stop order suspending such
effectiveness shall have been issued or proceedings for such purpose shall
have been instituted or threatened.
(c) Regulatory Approvals. All permits and consents required by state
securities laws for the consummation of the Merger shall have been
obtained.
(d) Accuracy of Representations and Warranties. The representations
and warranties of Fiserv and Fiserv Clearing contained in this Agreement or
in any closing certificate or document delivered to the Company pursuant to
this Agreement are true and correct on and as of the Effective Date as
though made at and as of that date, other than such representations and
warranties as are specifically made as of another date (which
representations and warranties are true and correct at and as of the date
made), and Fiserv and Fiserv Clearing have delivered to the Company a
certificate to that effect.
(e) Compliance with Covenants. Fiserv and Fiserv Clearing have
performed and complied with all covenants of this Agreement to be performed
or complied with by Fiserv and/or Fiserv Clearing on or prior to the
Effective Date (except where such non-compliance would not have a Material
Adverse Effect on Fiserv or Fiserv Clearing), and Fiserv and Fiserv
Clearing have delivered to the Company a certificate to such effect.
(f) All Proceedings to be Satisfactory. The Company and the Company's
counsel have received all such counterpart originals or certified or other
copies of all documents relating to Fiserv and Fiserv Clearing incident to
the transactions contemplated by the Transaction Agreements as the Company
or said counsel may reasonably request and such documents are reasonably
satisfactory in form and substance to the Company, and said counsel.
45
(g) Opinion of Counsel for Fiserv and Fiserv Clearing. The Company has
received the favorable opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of
Fiserv, dated the Effective Date, substantially in the forms and to the
effects set forth in Exhibit H.
(h) Legal Actions or Proceedings. No legal action or proceeding has
been instituted against the Company or Fiserv or Fiserv Clearing that is
reasonably likely to (i) restrain, prohibit, violate or otherwise affect
the consummation of the transactions contemplated by this Agreement or (ii)
have a Material Adverse Effect on Fiserv or Fiserv Clearing.
(i) Clearing Agreement. Clearing and New LLC shall have entered into
the clearing agreement referred to in Section 7.01(i) above.
(j) ▇▇▇▇▇▇▇ Employment Agreement. Fiserv and Clearing shall have
entered into an employment agreement with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as President of
Clearing.
(k) HSR Act Waiting Period. The requisite waiting period under the
HSR Act shall have expired.
(l) Fairness Opinion. The Board of Directors of the Company and the
trustees of the Profit-Sharing Plan shall have received (i) an opinion as
to the fairness from a financial point of view of the transactions
contemplated hereby and (ii) from Ehrhardt, Keefe, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
an opinion as to certain valuation matters relating to the sale of certain
assets to New LLC. This condition shall also be deemed to have been
satisfied if no such opinion shall have been delivered with respect to
clause (i) no later than October 15, 1997 and with respect to clause (ii)
no later than the date of the Proxy Statement.
(m) Approval of Merger Shares for Listing. The Merger Shares shall
have been approved for listing on NASDAQ upon notice of issuance.
(n) Tax Representation Letter. Fiserv shall have delivered to the
Company a signed Tax Representation Letter substantially in the form of
Exhibit D-3 attached hereto.
(o) Contractual Consents. Fiserv has delivered to the Company
consents from all parties to all material contracts
46
with Fiserv, if any, which, as a result of the transactions contemplated by
this Agreement, are required to be obtained in order for such contracts to
remain in full force and effect, such contracts to be on the same terms and
conditions as though the transactions contemplated hereby had not taken
place.
(p) Governmental Approvals. All consents and approvals required of
Fiserv with respect to this transaction have been obtained, in form and
substance satisfactory to the Company in its sole discretion.
(q) Supporting Documents. On or prior to the Effective Date, the
Company and its counsel have received copies of the following supporting
documents:
(i) (1) copies of the Articles of Incorporation of Fiserv and
the Certificate of Incorporation of Fiserv Clearing, and all
amendments to such Articles or Certificate, certified as of a recent
date by the Secretary of State of the State of Wisconsin, in the case
of Fiserv, or by the Secretary of State of Delaware, in the case of
Fiserv Clearing, and (2) a certificate of said Secretaries dated as of
a recent date as to the due incorporation and good standing of Fiserv
or Fiserv Clearing, as the case may be, and listing all documents of
the relevant company on file with said Secretary; and
(ii) a certificate of the Secretary or an Assistant Secretary of
each of Fiserv and Fiserv Clearing dated the Effective Date and
certifying substantially to the effect (1) that attached to such
certificate 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 December 31, 1996; (2) that attached to such
certificate 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; (3) that the articles of incorporation of the
particular corporation have not been amended since the date of the
last amendment referred to in the certificate (if any) delivered
pursuant to clause (i)(2) above; and (4) as to
47
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 signing the certificate referred to in this paragraph
(ii).
All such documents will be reasonably satisfactory in form and
substance to the Company and its counsel.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 8.01 Representations and Warranties. The representations and
warranties of the parties contained in this Agreement will not survive the
Effective Date.
SECTION 8.02 Covenants. All covenants contained in Article VI that
relate to periods, activities and obligations subsequent to the Effective Date
shall survive the Effective Date.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
SECTION 9.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Date:
(a) by mutual written consent of Fiserv and Fiserv Clearing, on the
one hand, and the Company, on the other hand;
(b) by either Fiserv and Fiserv Clearing, on the one hand, or the
Company, on the other hand, if (x) the Effective Date has not occurred on
or before December 31, 1997 (provided that the right to terminate this
Agreement under this Section 9.01(b) will not be available to any party
whose failure to fulfill, or cause to be fulfilled, any obligation under
this Agreement has been the cause of or resulted in the failure of the
Effective Date to occur on or before such date) or (y) any court of
competent jurisdiction or other governmental body will have issued an
order, decree or ruling or taken any other action (which order, decree or
ruling the parties will use their commercially reasonable efforts to lift
or reverse) permanently restraining, enjoining or otherwise prohibiting
48
the Merger and such order, decree, ruling or other action will have become
final and nonappealable;
(c) by the Company, if there has been a material breach on the part of
Fiserv or Fiserv Clearing of the covenants of Fiserv or Fiserv Clearing set
forth herein, or any material failure on the part of Fiserv, Fiserv
Clearing or any of their respective affiliates to perform its obligations
hereunder (provided that the terminating party shall have performed and
complied with, in all material respects, all agreements and covenants
required by this Agreemnt to have been performed or complied with by such
terminating party) prior to such time;
(d) by the Company, if the Company has received an Acquisition
Proposal (as hereinafter defined) which the Board of Directors of the
Company determines in good faith that it would be in breach of its
fiduciary duties if it did not accept such proposal. In the event that the
Company terminates this Agreement because it has received an Acquisition
Proposal which the Board of Directors of the Company determines in good
faith that it would be in breach of its fiduciary duties if it did not
accept, the Company agrees to pay Fiserv a termination fee of $3,000,000
within 20 business days of such termination. For purposes of this Section
9.01(d), an Acquisition Proposal shall mean any proposal or offer to
acquire all or any significant part of the Company's and Clearing's
business and properties or their capital stock, whether by merger, purchase
of assets, tender offer or otherwise.
(e) by Fiserv or the Company under the provisions of Section 7.01
(o)(Government approvals).
SECTION 9.02 Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 9.01, this Agreement will
become void and have no effect, without any liability on the part or any party
or its affiliates, directors, officers or stockholders, other than the
provisions of this Section 9.02. Nothing contained in this Section 9.02 will
relieve any party from liability for any breach of this Agreement.
SECTION 9.03 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of all the parties to this Agreement.
49
SECTION 9.04 Extension; Waiver. At any time prior to the Effective
Date, Fiserv and Fiserv Clearing, 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 in this Agreement or in any
document, certificate or writing delivered pursuant to this Agreement, or (c) to
the extent permitted by applicable laws, waive compliance by the other party
with any of the agreements or conditions contained in this Agreement. Any
agreement on the part of any party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such party.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Expenses, Etc. If the transactions contemplated by
this Agreement are not consummated, none of the parties will 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 if the
transactions contemplated by this Agreement are not consummated due to the
breach of this Agreement by a party, such party will be liable for any damages
to any other party resulting from such breach. If the transactions contemplated
by this Agreement are consummated, Fiserv and Fiserv Clearing, will indemnify
the Company and hold the Company harmless from and against, any claims for
finders' fees or brokerage commissions in relation to or in connection with such
transactions as a result of any agreement or understanding between such
indemnifying party and any third party. If the transactions contemplated by
this Agreement are consummated, the Stockholders will indemnify Fiserv, Fiserv
Clearing and the Surviving Corporation, and hold them harmless from and against,
any claims for finders' fees or brokerage commissions in relation to or in
connection with such transactions as a result of any agreement or understanding
between the Stockholders, the Company, or any Subsidiary and any third party.
The Stockholders shall be responsible for payment of any transfer taxes in
connection with the transactions contemplated hereby.
SECTION 10.02 No Solicitation. The Company will not, and the Company
will cause each Subsidiary not to solicit,
50
entertain or discuss offers from any other party for the acquisition of the
outstanding common or preferred stock of the Company or any Subsidiary or the
assets or the business of the Company or any Subsidiary, and the Company and
each Subsidiary will not engage in any discussions or negotiations with, or
provide any information to, any other party with respect to such transaction.
SECTION 10.03 Execution in Counterparts. For the convenience of
the parties, this Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.
SECTION 10.04 Notices. All notices which are required or may be
given pursuant to the terms of this Agreement will be in writing and will be
sufficient in all respects if given in writing and delivered or mailed by
registered or certified mail postage prepaid, or sent by telex, telecopier,
facsimile transmission or telegraph as follows:
If to the Company to:
If to the Company, to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
51
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇, Johnson, Robinson, ▇▇▇▇ & Ragonetti, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX ▇▇▇-▇▇▇-▇▇▇▇
If to Fiserv or Fiserv Clearing, to:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fiserv, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or addresses as any party will have designated by notice
in writing to the other parties. Any notice or other communication pursuant to
this Agreement will be deemed to have been duly given or made and to have become
effective when delivered in hand to the party to which directed or, if sent by
first-class mail postage prepaid or by telex, telecopier, facsimile transmission
or telegraph and properly addressed as set forth above, at the time when
received by the addressee.
SECTION 10.05 Entire Agreement. This Agreement, its Exhibits and
Schedules, the Non-Compete Agreements among Fiserv,
52
Fiserv Clearing, Clearing and the former directors of the Company, the Tax
Representation Letter and the Confidentiality Agreement among Fiserv, Fiserv
Clearing, Clearing and the former directors of the Company executed in
connection with this Agreement, constitute the entire agreement among the
parties with respect to the subject matter of this Agreement and supersede all
prior agreements and understandings, oral and written, among the parties to this
Agreement with respect to the subject matter of this Agreement. No
representation, warranty, promise, inducement or statement of intention has been
made by any party to this Agreement which is not embodied in this Agreement, and
no party will be bound by, or be liable for, any alleged representation,
warranty, promise, inducement or statement of intention not embodied in this
Agreement.
SECTION 10.06 Applicable Law; Jurisdiction and Venue. This Agreement
will be governed by and construed in accordance with the laws of the State of
Colorado, without regard to conflict of law provisions. Each party hereto
irrevocably agrees that the state and federal courts of Colorado, located in the
city and county of Denver shall have sole and exclusive jurisdiction over any
suit or other proceeding arising out of or based upon this Agreement, and each
party hereto hereby waives any claim that it or he is not subject personally to
the jurisdiction of said courts or that any such suit or proceeding is brought
in an inconvenient forum or improper venue. Each party irrevocably agrees that
service of process in any such suit or other proceeding shall be properly made
if delivered to the address shown in Section 10.04 hereof.
SECTION 10.07 Binding Effect; Benefits. This Agreement will 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 10.08 Assignability. Neither this Agreement nor any of the
parties' rights under this Agreement will be assignable by any party without the
prior written consent of the other parties to this Agreement.
SECTION 10.09 Public Announcements. Fiserv and Fiserv Clearing, on
the one hand, and the Company, on the other hand, will
53
consult with each other before issuing any press release or otherwise making any
public statement with respect to the transactions contemplated in this Agreement
and will not issue any such press release or make any such public statement
without the approval of the others, unless, after a party proposing to issue
such a release or statement has consulted with the other and such other party
has not approved such release within a reasonable time in the circumstances,
counsel to the issuing party has advised such party that such release or other
public statement must be issued immediately and the issuing party has not been
able, despite its good faith efforts, to secure the prior approval of the other
parties.
SECTION 10.10 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 will be fully severable and this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part of this Agreement. The remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there will 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 10.11 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 to any of the foregoing includes any subparts. The Table of
Contents, and the descriptive headings of the articles and sections, of or in
the Exhibits and Schedules, are inserted for convenience only and are not a part
of this Agreement. As used in this Agreement, the singular includes the plural,
the plural includes the singular, and words in one gender include the others.
As used in this Agreement the "include", "including" and similar terms are not
words of limitation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
FISERV, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
54
Title: Senior Executive Vice
President
FISERV CLEARING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
55