EXHIBIT 2.1
FORM OF
DISTRIBUTION AGREEMENT
PLAN OF REORGANIZATION AND DISTRIBUTION
This DISTRIBUTION AGREEMENT ("Agreement") is entered into as of ________
___, 2000 by and between National Data Corporation, a Delaware corporation
("NDC"), and Global Payments Inc., a Georgia corporation ("Global Payments").
BACKGROUND
A. Global Payments is a wholly-owned subsidiary of NDC formed for the
purpose of taking title to the stock of the NDC eCommerce Subsidiaries (as
defined below) that currently constitute NDC's eCommerce Business (as defined
herein).
B. The Board of Directors of NDC has determined that it is in the best
interests of NDC and its stockholders to contribute, transfer and assign to
Global Payments effective at and after the Effective Time (as defined herein)
(i) the capital stock of the NDC eCommerce Subsidiaries that hold directly and
indirectly the assets and liabilities that currently constitute NDC's eCommerce
Business, (ii) a 0.85% general partnership interest in GPS Holding Limited
Partnership and (iii) the eCommerce Assets, as a contribution (the
"Contribution") to the capital of Global Payments and to receive in exchange
therefor shares of Global Payments Common Stock (as defined herein).
C. The Board of Directors of NDC has further determined that it is in the
best interests of NDC and its stockholders following the Contribution to make a
distribution (the "Distribution") to the holders of NDC Common Stock (as defined
herein) of all of the outstanding shares of Global Payments Common Stock at the
rate of eight-tenths (0.8) of a share of Global Payments Common Stock for each
share of NDC Common Stock outstanding as of the Record Date (as defined herein).
D. The parties intend that the Distribution not be taxable to NDC or its
stockholders pursuant to Section 355 of the Code (as defined herein).
E. The parties have determined that it is necessary and desirable to set
forth the principal transactions required to effect the Distribution and to set
forth other agreements that will govern certain other matters following the
Distribution.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meaning:
"Action" means any claim, suit, arbitration, inquiry, proceeding or
investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any other tribunal.
"Aggregate Intercompany Account Balance" as of any date means the aggregate
intercompany accounts owed to the Global Payments Group by NDC and its
subsidiaries other than the Global Payments Group (net of such accounts owed to
NDC and its subsidiaries other than the Global Payments Group by the Global
Payments Group) as of such date.
"Ancillary Agreements" means all of the written agreements, instruments,
understandings, assignments and other arrangements entered into in connection
with the transactions contemplated hereby, including, without limitation, the
Employee Benefits Agreement, the Transition Support Agreement, the Intercompany
Systems/Network Services Agreement, the Intellectual Property Agreement, the Tax
Sharing and Indemnification Agreement, the Batch Processing Agreement and the
Real Estate Agreements.
"Assets" means all properties, rights, contracts, leases and claims, of
every kind and description, wherever located, whether tangible or intangible,
and whether real, personal or mixed.
"Batch Processing Agreement" means the Services Agreement (Batch
Processing) entered into at or prior to the Effective Time between NDC and
Global Payments, as amended from time to time.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Contribution" is defined in the recitals to this Agreement.
"Distribution Agent" means SunTrust Bank, Atlanta, in its capacity as agent
for NDC in connection with the Distribution.
"Distribution Date" means the date upon which the Distribution shall be
effective, as determined by the Board of Directors of NDC.
"Distribution" is defined in the recitals to this Agreement.
"eCommerce Balance Sheet" means the consolidated balance sheet of NDC's
eCommerce business as of the Distribution Date, which balance sheet shall be
prepared by NDC on a basis consistent with financial statements contained in the
Form 10, and in a manner consistent with generally accepted accounting
principles, consistently applied during the periods involved.
"eCommerce Business" means the business of providing electronic transaction
processing and information systems and services, including financial and
information services offering a variety of electronic data interchange and cash
management services, and processing of independent transactions for credit cards
and debit cards.
"eCommerce Assets" means all Assets that are (i) owned of record or held in
the name of a member of the Global Payments Group at the Effective Time, (ii)
treated for internal financial reporting purposes of NDC prior to the Effective
Time or on the eCommerce Balance Sheet as owned by a member of the Global
Payments Group, or (iii) at the Effective Time used exclusively by one or more
members of the Global Payments Group.
"eCommerce Marks" means those trademarks, trade names, service marks and
other intellectual property owned or licensed by NDC and used by the NDC
eCommerce Subsidiaries and their subsidiaries prior to the date of this
Agreement in connection with the eCommerce Business.
"Effective Time" means 11:59 p.m. Atlanta, Georgia time on the Distribution
Date.
"Employee Benefits Agreement" means the Employee Benefits Agreement entered
into at or prior to the Effective Time between NDC and Global Payments, as
amended from time to time.
"Estimated Aggregate Intercompany Account Balance" means the good faith
estimate of NDC as of the Distribution Date of the amount of the Aggregate
Intercompany Account Balance as of the Distribution Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form 10" means the registration statement on Form 10 filed by Global
Payments with the Commission to effect the registration of Global Payments under
the Exchange Act, as such registration statement may be amended from time to
time.
"Global Payments Articles" means the articles of incorporation of Global
Payments in the form filed as an exhibit to the Form 10 at the time it becomes
effective.
"Global Payments Business" means the eCommerce Business now or formerly
conducted by the NDC eCommerce Subsidiaries and their subsidiaries.
"Global Payments Bylaws" means the bylaws of Global Payments in the form
filed as an exhibit to the Form 10 at the time it becomes effective.
"Global Payments Common Stock" means the outstanding shares of common
stock, no par value, of Global Payments.
"Global Payments Group" means (a) Global Payments Inc., (b) the NDC
eCommerce Subsidiaries, (c) the subsidiaries of the NDC eCommerce Subsidiaries
and (d) any division of any member of the NDC Group that is included in the
operations of the Global Payments Business and is included in the results of the
Global Payments Business for internal financial reporting purposes.
"Global Payments Liabilities" means (a) Liabilities of any member of the
Global Payments Group under this Agreement or any Ancillary Agreement, (b)
except as otherwise expressly provided in this Agreement or any Ancillary
Agreement, Liabilities incurred in connection with the conduct or operation of
the Global Payments Business (including any acquired businesses) or the
ownership or use of the Global Payments Assets, whether arising before, at or
after the Effective Time, (c) Liabilities arising under or in connection with
the Form 10, (d) except as otherwise expressly provided in this Agreement or any
Ancillary Agreement, Liabilities set forth on the eCommerce Balance Sheet, and
(e) any Liabilities relating to or arising out of the acquisition (whether
through an acquisition of stock or assets or a merger, share exchange or other
form of business combination) of any business prior to the Effective Time by any
member of the Global Payments Group, except to the extent such Liabilities arise
out of or are based upon the issuance of securities of NDC in any such business
combination transaction.
"Group" means the NDC Group or the Global Payments Group, as the context so
requires.
"Guaranteed NDC Liabilities" means the NDC Liabilities on which any member
of the Global Payments Group is an obligor by reason of any guarantee or
contractual commitment.
"Guaranteed Global Payments Liabilities" means the Global Payments
Liabilities on which any member of the NDC Group is an obligor by reason of any
guarantee or contractual commitment.
"Health Information Services Business" means the division of NDC engaged in
the business of providing health information solutions, including electronic
commerce solutions, to a wide variety of segments in the health care industry
(including hospitals, health systems, practice management system vendors,
physician practices, managed care organizations, payers, third-party
administrators, pharmacies, pharmaceutical manufacturers and wholesalers).
"Indemnifiable Loss" means any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
reasonable attorneys' fees and expenses) in connection with any and all Actions
or threatened Actions.
"Information Statement" means the information statement required by the
Commission to be sent to each holder of NDC Common Stock in connection with the
Distribution, and prepared in accordance with the Exchange Act.
"Intercompany Indebtedness" means the Liabilities owed by NDC and its
subsidiaries, other than the Global Payments Group to the Global Payments Group
as of the Effective Time, and the Liabilities owed to the Global Payments Group
to NDC and its subsidiaries other than the Global Payments Group, in each case
other than obligations arising under this Agreement or any Ancillary Agreement.
"Intercompany Systems/Network Services Agreement" means the Intercompany
Systems/Network Services Agreement entered into at or prior to the Effective
Time between NDC and Global Payments, as amended from time to time.
"IRS" means Internal Revenue Service.
"Liabilities" means any and all claims, debts, liabilities and obligations,
absolute or contingent, matured or not matured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, including all costs
and expenses relating thereto, and including, without limitation, those debts,
liabilities and obligations arising under this Agreement or any Ancillary
Agreement, any law, rule, regulation, action, order or consent decree of any
governmental entity or any award of any arbitrator of any kind, and those
arising under any contract, commitment or undertaking.
"NDC Business" means the Health Information Services Business now or
formerly conducted by NDC and its present and former subsidiaries, joint
ventures and partnerships and the remnants or vestiges of any other business
heretofore conducted by NDC, excluding NDC's eCommerce Business.
"NDC Common Stock" means the outstanding shares of common stock, $0.125 par
value, of NDC.
"NDC eCommerce Subsidiaries" means National Data Payment Systems, Inc.,
Global Payment Holding Company, NDC Holdings (UK) Ltd., and Merchant Services
USA, Inc.
"NDC Group" means NDC and its subsidiaries, joint ventures and partnerships
conducting the Health Information Services Business.
"NDC Liabilities" means (i) Liabilities of any member of the NDC Group
under this Agreement or any Ancillary Agreement, and (ii) Liabilities incurred
in connection with the operation of the NDC Business, whether arising before, at
or after the Effective Time.
"Prime Rate" means the prime rate of interest as published in the "Money
Rates" column of The Wall Street Journal, Eastern Edition; in the event that
more than one such rate is reported the "Prime Rate" shall equal the average of
such rates. Use of the term "Prime Rate" shall mean a per annum rate, simple
interest.
"Real Estate Agreements" means all subleases, releases, assignments,
consents and agreements relating to the division of real property and interests
therein between members of the NDC Group and members of the Global Payments
Group entered into at or prior to the Effective Time, in each case as amended
from time to time.
"Record Date" means the date designated by NDC's Board of Directors as the
record date for determining the stockholders of NDC entitled to receive the
Distribution.
"Revolving Credit Agreement" means the Revolving Credit Agreement among
various lenders and Global Payments, which provides for up to $110 million of
availability.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" shall have the meaning given to such term in the Tax Sharing and
Indemnification Agreement.
"Tax Sharing and Indemnification Agreement" means the Tax Sharing and
Indemnification Agreement entered into at or before the Effective Time between
NDC and Global Payments, as amended from time to time.
"Transition Support Agreement" means the Transition Support Agreement
entered into at or prior to the Effective Time between NDC and Global Payments,
as amended from time to time.
ARTICLE II
REORGANIZATION; CONVEYANCE OF CERTAIN ASSETS;
ASSUMPTION OF CERTAIN LIABILITIES; CERTAIN PAYMENTS
Section 2.01 Reorganization; Conveyance of Assets; Discharge of
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Liabilities. Except as otherwise expressly provided herein or in any of the
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Ancillary Agreements:
(a) At or before the Effective Time, NDC shall contribute to Global
Payments (i) all of the issued and outstanding capital stock of the NDC
eCommerce Subsidiaries, (ii) a 0.85% general partnership interest in GPS Holding
Limited Partnership and (iii) all right, title and interest of NDC and its
Subsidiaries other than the Global Payments Group, in and to the eCommerce
Assets, in exchange for a number of shares of Global Payments Common Stock that
when combined with the shares of Global Payments Common Stock already owned by
NDC shall equal the product of (i) and (ii) the number of shares of
NDC Common Stock outstanding as of the close of business on the Distribution
Date.
(b) At or before the Effective Time, NDC shall cause National Data
Corporation of Canada, Ltd. ("NDCC") to sell to Global Payments, and Global
Payments
shall purchase from NDCC, the 0.3% membership interest in Global Payment Systems
LLC owned by NDCC for a purchase price of $240,000.
(c) At or before the Effective Time, Global Payments shall cause the
Global Payments Group to forgive and release or distribute indirectly as a
dividend to NDC the Intercompany Indebtedness owed to the Global Payments Group
by NDC and its subsidiaries other than the Global Payments Group.
(d) At or before the Effective Time, NDC shall, and shall cause the NDC
Subsidiaries other than the Global Payments Group to forgive and release or
distribute indirectly as a contribution of capital to Global Payments the
Intercompany Indebtedness owed to NDC and its subsidiaries other than the Global
Payments Group by the Global Payments Group.
(e) At or prior to the Effective Time, Global Payments shall distribute to
NDC a cash dividend in the amount of $96,125,000 (the "Dividend").
(f) If the Estimated Aggregate Intercompany Account Balance as of the
Distribution Date is less than the Aggregate Intercompany Account Balance as of
May 31, 2000, at or prior to the Effective Time, Global Payments shall pay NDC
in cash, an amount equal to the amount by which the Aggregate Intercompany
Account Balance as of May 31, 2000 exceeds the Estimated Aggregate Intercompany
Account Balance (the "Estimated Dividend"). The Estimated Dividend shall be
calculated by NDC as of the Distribution Date in accordance with the provisions
of Section 8.03 hereof.
(g) If the Estimated Aggregate Intercompany Account Balance is greater
than the Aggregate Intercompany Account Balance as of May 31, 2000, at or prior
to the Effective Time, NDC shall pay to Global Payments in cash, as a
contribution of capital, an amount equal to the amount by which the Estimated
Aggregate Intercompany Account Balance exceeds the Aggregate Intercompany
Account Balance as of May 31, 2000 (the "Estimated Capital Contribution"). The
Estimated Capital Contribution shall be calculated by NDC as of the Distribution
Date in accordance with the provisions of Section 8.03 hereof.
(h) Global Payments agrees that at and after the Effective Time it will
assume and thereafter timely pay and discharge all of the Global Payments
Liabilities.
(i) NDC agrees that at and after the Effective Time it will timely pay and
discharge all of the NDC Liabilities.
(j) In the event that any conveyance of an Asset required hereby is not
effected at or before the Effective Time, the obligation to transfer such Asset
shall continue past the Effective Time and shall be accomplished as soon
thereafter as practicable.
(k) If any Asset may not be transferred by reason of the requirement to
obtain the consent of any third party and such consent has not been obtained by
the
Effective Time, then such Asset shall not be transferred until such consent has
been obtained, and NDC and Global Payments, as the case may be, shall cause the
owner of such Asset to use all reasonable efforts to provide to the appropriate
member of the other Group all the rights and benefits under such Asset and cause
such owner to enforce such Asset for the benefit of such member. Both parties
shall otherwise cooperate and use all reasonable efforts to provide the economic
and operational equivalent of an assignment or transfer of the Asset.
(l) From and after the Effective Time, each party shall promptly transfer
or cause the members of its Group promptly to transfer to the other party or the
appropriate member of the other party's Group, from time to time, any property
received that is an Asset of the other party or a member of its Group. Without
limiting the foregoing, funds received by a member of one Group upon the payment
of accounts receivable that belong to a member of the other Group shall be
transferred to the other Group by wire transfer not more than five business days
after receipt of such payment.
(m) Except as expressly set forth in this Agreement or any Ancillary
Agreement, instrument or document contemplated by this Agreement or any
Ancillary Agreement, neither any member of the NDC Group nor any member of the
Global Payments Group has made or shall be deemed to have made any
representation or warranty as to (i) the Assets, business or Liabilities
retained, transferred or assumed as contemplated hereby or thereby, (ii) any
consents or approvals required in connection with the transfer or assumption by
such party of any Asset or Liability contemplated by this Agreement, (iii) the
value or freedom from any lien, claim, equity or other encumbrance of, or any
other matter concerning, any Assets of such party or (iv) the absence of any
defenses or right of setoff or freedom from counterclaim with respect to any
claim or other Asset of such party. EXCEPT AS MAY BE EXPRESSLY SET FORTH IN
THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, ALL ASSETS WERE, OR ARE BEING,
TRANSFERRED, OR ARE BEING RETAINED ON AN "AS IS," "WHERE IS" BASIS.
Section 2.02 Ancillary Agreements. As of the Effective Time, NDC (or its
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appropriate subsidiary) and Global Payments (or its appropriate subsidiary) will
deliver:
(a) A duly executed Employee Benefits Agreement;
(b) A duly executed Tax Sharing and Indemnification Agreement;
(c) A duly executed Intercompany Systems/Network Services Agreement;
(d) A duly executed Transition Support Agreement;
(e) A duly executed Intellectual Property Agreement;
(f) Duly executed copies of the Real Estate Agreements;
(g) A duly executed Batch Processing Agreement; and
(h) Such other agreements, leases, documents or instruments as the parties
may agree are necessary or desirable in order to achieve the purposes
hereof.
Section 2.03 Issuance of Global Payments Common Stock. At the Effective
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Time and in exchange for the transfers described in Section 2.01(a), and the
surrender for reissue of all certificates representing outstanding shares of
Global Payments Common Stock, Global Payments will issue and deliver to NDC a
certificate representing all of the shares of Global Payments Common Stock to
be distributed as provided in Section 3.02 below.
Section 2.04 Resignations. On the Distribution Date, Global Payments will
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deliver or cause to be delivered to NDC resignations of each person who is an
officer or director of NDC or any of its subsidiaries or affiliates not
constituting a member of the Global Payments Group immediately prior to the
Distribution Date and who will be an employee of Global Payments or another
member of the Global Payments Group from and after the Distribution Date. On the
Distribution Date, NDC will deliver or cause to be delivered to Global Payments
resignations of each person who is an officer or director of Global Payments or
another member of the Global Payments Group immediately prior to the
Distribution Date and who will be an employee of NDC from and after the
Distribution Date.
Section 2.05 Conduct of Global Payments Business. Prior to the
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Distribution Date, the Global Payments Business shall have been operated for the
sole benefit of NDC as Global Payments' sole shareholder. Upon consummation of
the Distribution, the Global Payments Business shall be deemed to have been
operated for the sole benefit of Global Payments and its new shareholders, as of
and after the Effective Time. After the Distribution, any amounts advanced or
contributed by NDC to Global Payments after the Effective Time shall be repaid
by Global Payments, together with the payments prescribed by Section 8.03
hereof, as set forth in Section 8.03.
ARTICLE III
THE DISTRIBUTION
Section 3.01 Conditions Precedent to the Distribution.
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In no event shall the Distribution occur unless the following conditions shall
have been satisfied or waived by NDC:
(a) NDC's Board of Directors, or a duly appointed committee thereof, shall,
in its sole discretion, have established the Record Date and the Distribution
Date and any appropriate procedures in connection with the Distribution;
(b) NDC and Global Payments shall have prepared, and NDC shall have mailed
to the holders of NDC Common Stock, the Information Statement, which sets forth
appropriate disclosure concerning Global Payments, the Distribution and any
other appropriate matters. NDC and Global Payments shall have also prepared,
and Global Payments shall have filed with the Commission, the Form 10, which
shall have included the Information Statement. The Form 10 shall have been
declared effective by the Commission under the Exchange Act;
(c) NDC, as the sole shareholder of Global Payments, shall have approved
and adopted the Global Payments employee benefit plans contemplated by the
Employee Benefits Agreement and NDC and Global Payments shall have prepared and
filed with the Commission under the Securities Act any registration statements
or amendments thereto that are appropriate to reflect the establishment of or
amendments to any employee benefit plan of Global Payments contemplated by the
Employee Benefits Agreement, including without limitation, a Form S-8 with
respect thereto. Any such registration statements shall have been declared
effective by the Commission under the Securities Act. Nothing in this Section
3.01(c) shall require Global Payments to file with the Commission any
registration statements relating to any grantor trusts that may be contemplated
by the Employee Benefits Agreement.
(d) NDC and Global Payments shall have taken all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States in connection with the
transactions contemplated by this Agreement or any Ancillary Agreement;
(e) the Global Payments Common Stock shall have been approved for listing
on the New York Stock Exchange, subject to official notice of issuance;
(f) the Global Payments Board of Directors, as named in the Form 10, shall
have been elected by NDC, as sole shareholder of Global Payments, and the Global
Payments Articles and Global Payments Bylaws shall have been adopted and be in
effect;
(g) NDC shall have received a favorable ruling from the IRS that the
Distribution will not be taxable to NDC or its stockholders pursuant to Section
355 of the Code;
(h) Global Payments shall have entered into the Revolving Credit Agreement;
(i) Global Payments (or its appropriate subsidiary) shall have performed
fully its (or their) obligations under Section 2.02;
(j) no order, injunction or decree issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing consummation of
the Distribution shall be in effect;
(k) all necessary regulatory approvals shall have been received; and
(l) NDC and Global Payments shall have each performed its obligations
under this Agreement and each Ancillary Agreement, which are required to be
performed prior to or at the time of the Distribution.
Section 3.02 The Distribution.
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(a) On or before the Distribution Date, subject to satisfaction or waiver
of the conditions set forth in this Agreement, NDC shall deliver to the
Distribution Agent a certificate or certificates representing all of the then
outstanding shares of Global Payments Common Stock, endorsed in blank, and shall
instruct the Distribution Agent, except as otherwise provided in Section
3.02(b), to distribute to each holder of record of NDC Common Stock on the
Record Date eight-tenths (0.8) of a share of Global Payments Common Stock for
each share of NDC Common Stock so held by crediting a book entry account created
by the Distribution Agent for that purpose.
(b) The Distribution Agent shall not distribute any fractional share of
Global Payments Common Stock. The Distribution Agent shall aggregate all such
fractional shares and sell them in an orderly manner after the Distribution Date
in the open market and, after completion of such sales, distribute a pro rata
portion of the proceeds from such sales, based upon the average gross selling
price of all such Global Payments Common Stock, less a pro rata portion of the
aggregate brokerage commissions payable in connection with such sales, to each
holder of NDC Common Stock who would otherwise have received a fractional share
of Global Payments Common Stock.
Section 3.03 Certain Conduct Following the Distribution.
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(a) Guaranteed Global Payments and NDC Liabilities.
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(1) Global Payments shall use all reasonable efforts (excluding
payment of money) to obtain as promptly as practicable after the Distribution
Date the release of NDC from its obligations with respect to Guaranteed Global
Payments Liabilities. In no event shall any member of the Global Payments Group
extend the term of any Guaranteed Global Payments Liabilities (such as by
exercising an option to renew a lease) or modify any such Guaranteed Global
Payments Liability, in either instance in any way that would increase the
liability guaranteed thereunder unless the guarantee of NDC is released as to
any extended or modified liability obligations under such Guaranteed Global
Payments Liabilities or NDC otherwise consents in writing.
(2) NDC shall use all reasonable efforts (excluding payment of money)
to obtain as promptly as practicable after the Distribution Date the release of
Global Payments from its obligations with respect to Guaranteed NDC Liabilities.
In no event shall any member of the NDC Group extend the term of any Guaranteed
NDC Liabilities (such as by exercising an option to renew a lease) or modify any
such
Guaranteed NDC Liability, in either instance in any way that would increase the
liability guaranteed thereunder unless the guarantee of Global Payments is
released as to any extended or modified liability obligations under such
Guaranteed NDC Liabilities or Global Payments otherwise consents in writing.
(3) In the event that NDC is required to pay any Guaranteed Global
Payments Liabilities, without limiting any of NDC's rights and remedies against
Global Payments under this Agreement or otherwise, in order to secure Global
Payments' indemnity obligations to NDC hereunder in respect of such Guaranteed
Global Payments Liabilities, NDC shall be entitled to all the rights of the
payee in any property of any member of the Global Payments Group pledged as
security for such Guaranteed Global Payments Liabilities.
(4) In the event that Global Payments is required to pay any Guaranteed
NDC Liabilities, without limiting any of Global Payments' rights and remedies
against NDC under this Agreement or otherwise, in order to secure NDC's
indemnity obligations to Global Payments hereunder in respect of such Guaranteed
NDC Liabilities, Global Payments shall be entitled to all the rights of the
payee in any property of any member of the NDC Group pledged as security for
such Guaranteed NDC Liabilities.
(b) Insurance.
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(1) Following the Distribution, Global Payments will use its best
efforts to procure and maintain directors' and officers' liability insurance
coverage at least equal to the amount of NDC's current directors' and officers'
insurance coverage for a period of five (5) years from the Distribution Date
with respect to directors and officers of NDC who will become directors and
officers of Global Payments as of the Distribution Date for acts as directors
and officers of members of the Global Payments Group for periods from and after
the Distribution Date.
(2) Following the Distribution, NDC will use its best efforts to
maintain directors' and officers' liability insurance coverage at least equal to
the amount of NDC's current directors' and officers' liability insurance
coverage for a period of five years from the Distribution Date with respect to
the directors and officers of NDC who will become directors and officers of
members of the Global Payments Group as of the Distribution Date for acts as
directors and officers of members of the NDC Group during periods prior to the
Distribution Date.
ARTICLE IV
INDEMNIFICATION
Section 4.01 Global Payments Indemnification of the NDC Group. If the
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Distribution occurs, on and after the Distribution Date, Global Payments shall
indemnify, defend and hold harmless each member of the NDC Group, and each of
their respective directors, officers, employees and agents (the "NDC
Indemnitees") from and against any
and all Indemnifiable Losses incurred or suffered by any of the NDC Indemnitees
and arising out of, or due to, (a) the failure of Global Payments or any member
of the Global Payments Group to pay, perform or otherwise discharge, any of the
Global Payments Liabilities and (b) any untrue statement or alleged untrue
statement of any material fact contained in the preliminary or final Form 10,
the Information Statement or any amendment or supplement thereto or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading (other than
the information provided by NDC contained in the Section entitled "NDC
Corporation" of the Form 10, the Information Statement or any amendment or
supplement thereto).
Section 4.02 NDC Indemnification of Global Payments Group. If the
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Distribution occurs, on and after the Distribution Date, NDC shall indemnify,
defend and hold harmless each member of the Global Payments Group and each of
their respective directors, officers, employees and agents (the "Global Payments
Indemnitees") from and against any and all Indemnifiable Losses incurred or
suffered by any of the Global Payments Indemnitees and arising out of, or due
to, (a) the failure of NDC or any member of the NDC Group to pay, perform or
otherwise discharge, any of the NDC Liabilities and (b) any untrue statement or
alleged untrue statement of any material fact contained in the Section entitled
"NDC Corporation" of the Form 10, the Information Statement or any amendment or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Section 4.03 Contribution. In circumstances in which the indemnity
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agreements provided for in Sections 4.01(b) and 4.02(b) are unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any Indemnifiable Losses, each indemnifying party, in order to provide for
just and equitable contribution, shall contribute to the amount paid or payable
by such indemnified party as a result of such Indemnifiable Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or omissions
that resulted in such Indemnifiable Losses, as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by Global Payments or NDC, the
parties' relative intents, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.
Section 4.04 Insurance and Third Party Obligations. No insurer or any
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other third party shall be, by virtue of the foregoing indemnification
provisions, (a) entitled to a benefit it would not be entitled to receive in the
absence of such provisions, (b) relieved of the responsibility to pay any claims
to which it is obligated, or (c) entitled to any subrogation rights with respect
to any obligation hereunder.
ARTICLE V
INDEMNIFICATION PROCEDURES
Section 5.01 Notice and Payment of Claims. If any NDC or Global
----------------------------
Payments Indemnitee (the "Indemnified Party") determines that it is or may be
entitled to indemnification by a party (the "Indemnifying Party") under Article
IV (other than in connection with any Action or claim subject to Section 5.02),
the Indemnified Party shall deliver to the Indemnifying Party a written notice
specifying, to the extent reasonably practicable, the basis for its claim for
indemnification and the amount for which the Indemnified Party reasonably
believes it is entitled to be indemnified. After the Indemnifying Party shall
have been notified of the amount for which the Indemnified Party seeks
indemnification, the Indemnifying Party shall, within 30 days after receipt of
such notice, pay the Indemnified Party such amount in cash or other immediately
available funds (or reach agreement with the Indemnified Party as to a mutually
agreeable alternative payment schedule) unless the Indemnifying Party objects to
the claim for indemnification or the amount thereof. If the Indemnifying Party
does not give the Indemnified Party written notice objecting to such claim and
setting forth the grounds therefor within the same 30 day period, the
Indemnifying Party shall be deemed to have acknowledged its liability for such
claim and the Indemnified Party may exercise any and all of its rights under
applicable law to collect such amount. Any amount owed under this Section 5.01
that is past due shall bear interest at a simple rate of interest per annum
equal to the Prime Rate plus 2%.
Section 5.02 Notice and Defense of Third Party Claims. Promptly
----------------------------------------
following the earlier of (a) receipt of notice of the commencement by a third
party of any Action against or otherwise involving any Indemnified Party or (b)
receipt of information from a third party alleging the existence of a claim
against an Indemnified Party, in either case, with respect to which
indemnification may be sought pursuant to this Agreement (a "Third Party
Claim"), the Indemnified Party shall give the Indemnifying Party written notice
thereof. The failure of the Indemnified Party to give notice as provided in
this Section 5.02 shall not relieve the Indemnifying Party of its obligations
under this Agreement, except to the extent that the Indemnifying Party is
prejudiced by such failure to give notice. Within 30 days after receipt of such
notice, the Indemnifying Party shall by giving written notice thereof to the
Indemnified Party, (a) acknowledge, as between the parties hereto, liability
for, and at its option assume the defense of such Third Party Claim at its sole
cost and expense or (b) object to the claim of indemnification set forth in the
notice delivered by the Indemnified Party pursuant to the first sentence of this
Section 5.02 setting forth the grounds therefor; provided that if the
--------
Indemnifying Party does not within the same 30 day period give the Indemnified
Party written notice acknowledging liability and electing to assume the defense
or objecting to such claim and setting forth the grounds therefor, the
Indemnifying Party shall be deemed to have acknowledged, as between the parties
hereto, its liability to the Indemnified Party for such Third Party Claim. Any
contest of a Third Party Claim as to which the Indemnifying Party has elected to
assume the defense shall be conducted by attorneys employed by the Indemnifying
Party and reasonably satisfactory to the Indemnified
Party; provided that the Indemnified Party shall have the right to participate
--------
in such proceedings and to be represented by attorneys of its own choosing at
the Indemnified Party's sole cost and expense. If the Indemnifying Party
assumes the defense of a Third Party Claim, the Indemnifying Party may settle
or compromise the claim without the prior written consent of the Indemnified
Party; provided that the Indemnifying Party may not agree to any such
--------
settlement pursuant to which any remedy or relief, other than monetary damages
for which the Indemnifying Party shall be responsible hereunder, shall be
applied to or against the Indemnified Party, without the prior written consent
of the Indemnified Party, which consent shall not be unreasonably withheld. If
the Indemnifying Party does not assume the defense of a Third Party Claim for
which it has acknowledged liability for indemnification under Article IV, the
Indemnified Party may require the Indemnifying Party to reimburse it on a
current basis for its reasonable expenses of investigation, reasonable
attorneys' fees and reasonable out-of-pocket expenses incurred in defending
against such Third Party Claim and the Indemnifying Party shall be bound by the
result obtained with respect thereto by the Indemnified Party; provided that the
--------
Indemnifying Party shall not be liable for any settlement effected without its
consent, which consent shall not be unreasonably withheld. The Indemnifying
Party shall pay to the Indemnified Party in cash the amount for which the
Indemnified Party is entitled to be indemnified (if any) within 15 days after
the final resolution of such Third Party Claim (whether by the final
nonappealable judgment of a court of competent jurisdiction or otherwise), or,
in the case of any Third Party Claim as to which the Indemnifying Party has not
acknowledged liability, within 15 days after such Indemnifying Party's objection
has been resolved by settlement, compromise or the final nonappealable judgment
of a court of competent jurisdiction.
ARTICLE VI
EMPLOYEE MATTERS
Section 6.01 Employees. As of the Effective Time, all persons who are
---------
employees of the NDC eCommerce Subsidiaries shall be employees of Global
Payments, and all persons who are employees of the NDC Group shall be employees
of NDC, and no person shall be an employee of both NDC and Global Payments.
Section 6.02 Employee Benefits Agreement. All matters relating to or
---------------------------
arising out of any employee benefit, compensation or welfare arrangement in
respect of any present and former employee of the NDC Group or the Global
Payments Group shall be governed by the Employee Benefits Agreement, except as
may be expressly stated herein. In the event of any inconsistency between the
Employee Benefits Agreement and this Agreement or any Ancillary Agreement, the
Employee Benefits Agreement shall govern.
ARTICLE VII
TAX MATTERS
Section 7.01 Tax Sharing and Indemnification Agreement. All matters
-----------------------------------------
relating to Taxes shall be governed exclusively by the Tax Sharing and
Indemnification Agreement, except as may be expressly stated herein. In the
event of any inconsistency between the Tax Sharing and Indemnification Agreement
and this Agreement or any other Ancillary Agreement, the Tax Sharing and
Indemnification Agreement shall govern.
ARTICLE VIII
ACCOUNTING MATTERS
Section 8.01 Allocation of Prepaid Items and Reserves. All prepaid
----------------------------------------
items and reserves that have been maintained by NDC on a consolidated basis but
that relate in part to assets or liabilities of the Global Payments Group shall
be fairly allocated between NDC and Global Payments as determined by NDC in its
reasonable discretion.
Section 8.02 Accounting Treatment of Assets Transferred and Liabilities
----------------------------------------------------------
Assumed. The transfer by NDC of (a) the shares of capital stock of the NDC
-------
eCommerce Subsidiaries to Global Payments pursuant to this Agreement, (b) the
0.85% general partnership interest in GPS Holding Limited Partnership to Global
Payments pursuant to this Agreement, net of the Liabilities of the eCommerce
Business assumed by Global Payments and (c) all right, title and interest of NDC
and its Subsidiaries other than the Global Payments Group in and to the
eCommerce Assets shall constitute a contribution by NDC to the capital of Global
Payments.
Section 8.03 Dividend; Estimated Dividend; and Estimated Capital
---------------------------------------------------
Contribution.
------------
Attached hereto as Schedule 8.03 is a schedule prepared by NDC which sets
forth the Aggregate Intercompany Account Balance as of May 31, 2000 as well as
the Estimated Dividend or the Estimated Capital Contribution, as applicable, as
of the Effective Time. On the Distribution Date, the Estimated Dividend or the
Estimated Capital Contribution shall be paid by Global Payments or NDC, as
applicable, in accordance with Section 2.01(f) and (g) hereof.
Within 90 business days after the Effective Time, NDC shall prepare and
deliver to Global Payments the eCommerce Balance Sheet and, unless separately
stated in the eCommerce Balance Sheet, a calculation of the Aggregate
Intercompany Account Balance as of the Distribution Date. Within ten business
days after the delivery of the eCommerce Balance Sheet:
(a) if an Estimated Dividend was paid at or prior to the Effective Time and
the Aggregate Intercompany Account Balance as of the Distribution Date is less
than
the Aggregate Intercompany Account Balance as of May 31, 2000, then (i) if the
amount by which the Aggregate Intercompany Account Balance at May 31, 2000
exceeds the Aggregate Intercompany Account Balance as of the Distribution Date
is greater than the Estimated Dividend, Global Payments shall pay to NDC the
difference between the Estimated Dividend and the actual amount of the
difference in the Aggregate Intercompany Account Balance between May 31, 2000
and the Distribution Date, or (ii) if the amount by which the Aggregate
Intercompany Account Balance as of May 31, 2000 exceeds the Aggregate
Intercompany Account Balance as of the Distribution Date is less than the
Estimated Dividend, NDC shall pay to Global Payments the difference between the
Estimated Dividend and the actual amount of the difference in the Aggregate
Intercompany Account Balance between May 31, 2000 and the Distribution Date;
(b) if an Estimated Dividend was paid at or prior to the Effective
Time and the Aggregate Intercompany Account Balance as of the Distribution Date
is more than the Aggregate Intercompany Account Balance as of May 31, 2000, NDC
shall pay to Global Payments an amount equal to the sum of the Estimated
Dividend plus an amount equal to the excess of the Aggregate Intercompany
Account Balance as of the Distribution Date over the Aggregate Intercompany
Account Balance as of May 31, 2000; or
(c) if an Estimated Capital Contribution was made at or prior to the
Effective Time and the Aggregate Intercompany Account Balance as of the
Distribution Date is less than the Aggregate Intercompany Account Balance as of
May 31, 2000, Global Payments shall pay to NDC a cash dividend in an amount
equal to the sum of the Estimated Capital Contribution plus an amount equal to
the excess of the Aggregate Intercompany Account Balance as of May 31, 2000 over
the Aggregate Intercompany Account Balance as of the Distribution Date; or
(d) if an Estimated Capital Contribution was made at or prior to the
Effective Time and the Aggregate Intercompany Account Balance as of the
Distribution Date is greater than the Aggregate Intercompany Account Balance as
of May 31, 2000, then (i) if the amount by which the Aggregate Intercompany
Account Balance as of the Distribution Date exceeds the Aggregate Intercompany
Account Balance as of May 31, 2000 is greater than the Estimated Capital
Contribution, NDC shall pay to Global Payments the difference between the
Estimated Capital Contribution and the actual amount of the difference in the
Aggregate Intercompany Account Balance between May 31, 2000 and the Distribution
Date, or (ii) if the amount by which the Aggregate Intercompany Account Balance
as of the Distribution Date exceeds the Aggregate Intercompany Account Balance
as of May 31, 2000 is less than the Estimated Capital Contribution, Global
Payments shall pay to NDC the difference between the Estimated Capital
Contribution and the actual amount of the difference in the Aggregate
Intercompany Account Balance between May 31, 2000 and the Distribution Date.
Any amounts paid by Global Payments to NDC pursuant to Section 2.01(e)
and (f) or this Section 8.03 shall be deemed a dividend or return of capital.
Any amounts paid
by NDC to Global Payments pursuant to Section 2.01(g) or this Section 8.03 shall
constitute a capital contribution.
Any disputes arising from the adjustments required by the eCommerce Balance
Sheet and the Change in Aggregate Intercompany Balance shall be resolved in
accordance with Section 15.02 hereof.
ARTICLE IX
INFORMATION TECHNOLOGY SERVICES
Section 9.01 Intercompany Systems/Network Services Agreement. All
-----------------------------------------------
matters relating to the sharing of telecommunications, networks and related
services shall be governed exclusively by the Intercompany Systems/Network
Services Agreement. In the event of any inconsistency between the Intercompany
Systems/Network Services Agreement and this Agreement or between the Information
Systems/Network Services Agreement and any other Ancillary Agreement, the
Intercompany Systems/Network Services Agreement shall govern.
Section 9.02 Batch Processing Agreement. All matters relating to
--------------------------
Global Payments' provision of Unisys Batch Processing services shall be governed
exclusively by the Batch Processing Agreement. In the event of any
inconsistency between the Batch Processing Services Agreement and this Agreement
or between the Batch Processing Services Agreement and any other Ancillary
Agreement, the Batch Processing Services Agreement shall govern.
ARTICLE X
TRADEMARK AND SERVICE ▇▇▇▇ LICENSE
Section 10.01 Grant of License to Marks. Subject to the terms and
-------------------------
conditions of this Agreement, NDC hereby grants to Global Payments, the NDC
eCommerce Subsidiaries and their subsidiaries, (individually, a "Licensee" and
collectively, the "Licensees") for a period of eighteen (18) months from the
Distribution Date, a NON-EXCLUSIVE, NON-TRANSFERABLE, WORLDWIDE LICENSE, WITHOUT
THE RIGHT TO SUBLICENSE, to use the eCommerce Marks in connection with the
eCommerce Business.
Section 10.02 Limitations on License.
----------------------
(a) No rights or licenses are herein granted to the Licensees expressly
or by implication, to use any eCommerce Marks , other than in accordance with
this Article X.
(b) Notwithstanding anything herein to the contrary, no license or
sublicense is granted hereunder if any such license or sublicense would require
the consent of a third party or is not otherwise able to be licensed by NDC
under the terms of any license agreement or other obligations or instruments
binding upon NDC. Similarly, no license or sublicense is granted hereunder if
any such license or sublicense would require NDC to pay royalties or other
consideration to a third party or would otherwise adversely impact NDC.
Section 10.03 Ownership of eCommerce Marks.
----------------------------
(a) Global Payments acknowledges that NDC is the sole owner of all right,
title and interest in and to the eCommerce Marks and all registrations thereof
in any form or embodiment thereof and is also the sole owner of all goodwill
attached to the eCommerce Marks in connection with its use by the Licensees
shall not, at any time, do or suffer to be done any act or thing which will in
any way impair the rights of Licensor in and to the eCommerce Marks or any
registrations thereof or which will depreciate the value or reputation of the
eCommerce Marks. Global Payments agrees that it will not, directly or
indirectly, challenge, or permit any other Licensee to challenge, NDC's
ownership of or the validity of the eCommerce Marks or any registrations or
applications for registration thereof. Global Payments agrees to do whatever
acts NDC may deem necessary or advisable, including the execution of any
instruments, to confirm and maintain ownership by NDC of the eCommerce Marks.
(b) Global Payments acknowledges that any use of the eCommerce Marks shall
not create in the Licensees' favor any right, title or interest in or to the
eCommerce Marks, except as granted in this Article X. Global Payments expressly
agrees and understands that all uses of the eCommerce Marks by the Licensees,
and any goodwill created in the eCommerce Marks thereby, shall inure solely to
the benefit of, and be owned exclusively by, NDC.
Section 10.04 Duration and Termination of License.
-----------------------------------
(a) NDC shall have the right to terminate the license granted in this
Article X upon the occurrence of a "Material Breach." It shall be a Material
Breach if Global Payments fails to cure a default within fifteen (15) days
following receipt of a written notice of such default. For purposes of this
Article X, it shall be a default if any Licensee:
(i) conducts any portion of its business or uses any of the eCommerce
Marks in a manner that NDC believes threatens the validity or integrity of
any of the eCommerce Marks or threatens the goodwill associated therewith;
(ii) attempts to assign an interest in the license granted in this
Article X in violation of Section 10.07 of this Agreement;
(iii) becomes insolvent by reason of an inability to pay debts as
they mature or makes an assignment for the benefit of creditors or any
admission of inability to pay obligations as they become due; or
(iv) fails or refuses to comply with any other provision of this
Article X or any instruction of NDC concerning use of the eCommerce Marks.
(b) It shall be a Material Breach, and NDC shall have the right to
terminate the license granted by this Article X without further action or notice
to the Licensees, if any Licensee:
(i) misuses or makes an unauthorized use of the eCommerce Marks or
commits an act which could reasonably be expected to materially impair the
goodwill associated with the eCommerce Marks; or
(ii) is convicted of or pleads no contest to a felony or other
crime or offense that NDC believes is likely to adversely affect the
reputation of NDC, its goodwill, or the eCommerce Marks.
In the event of termination of the license under this Section 10.04(b), the
Licensees shall not be entitled to cure the matter giving rise to termination.
Section 10.05 Effect of Termination of Expiration. Upon the
-----------------------------------
expiration or prior termination of the license granted in this Article X (the
"Trademark License"), the Licensees shall:
(a) cease using any advertising materials, forms, invoices, or other
materials that bear any eCommerce Marks;
(b) discontinue use of any eCommerce Marks, or any colorable imitation
thereof, in any manner or for any purpose, and discontinue utilizing for any
purpose any eCommerce Marks or other ▇▇▇▇ that suggests or indicates a current
or prior connection or association with NDC, its affiliates or its transferee;
(c) destroy all uses of the eCommerce Marks, or deliver up to NDC or
its duly authorized representative for destruction all materials bearing the
eCommerce Marks;
(d) furnish to NDC or its transferee within thirty (30) days after
the effective date of termination, evidence satisfactory to NDC or its
transferee of [Global Payments'] compliance with the foregoing obligations.
Section 10.06 Survival of Obligations. All obligations of NDC, or its
-----------------------
transferee, and the Licensees that expressly or by their nature survive the
expiration or termination of the license granted in this Article X shall
continue in full force and effect subsequent
to and notwithstanding its expiration or termination and until they are
satisfied in full or by their nature expire.
Section 10.07 Intellectual Property Liability. The eCommerce Marks are
-------------------------------
licensed or sublicensed to the Licensees "AS IS" without representation or
warranty, express or implied, including without limitation any representation or
warranty that the eCommerce Marks do not result in the infringement of
intellectual property rights of any third party. Global Payments shall be
solely responsible and liable for any claim, damage, cost, expense or liability
the Licensees incur arising out of threatened or claimed infringements by
eCommerce Marks. THE LICENSEES ACKNOWLEDGE AND AGREE THAT THEY MAY NOT BRING
ANY CLAIMS OR OTHERWISE RECOVER ANY AMOUNT FROM NDC BY VIRTUE OF EXERCISE OF THE
RIGHTS GRANTED HEREUNDER.
The Licensees agree and acknowledge that NDC shall not be liable directly
or indirectly or as an indemnitor of the Licensees as a consequence of any
license or sublicense granted hereunder.
10.08 Assignment of License. Licensees shall not have the right to assign
---------------------
the license granted by this Article X to any third party, by agreement,
operation of law, or otherwise, without the prior written consent of NDC, which
may be withheld by NDC in its sole discretion; provided that such license may be
assigned by a party to any company or concern acquiring substantially the entire
business of such party relating to the eCommerce Marks licensed hereunder,
provided such assignee first agrees in writing to be bound by all terms and
conditions of such license including the obligations of such party hereunder.
ARTICLE XI
TRANSITION SUPPORT
Section 11.01 Transition Support Agreement. All matters relating to
----------------------------
the provision of support by the NDC Group to the Global Payments Group and
support by the Global Payments Group to the NDC Group after the Effective Time
shall be governed exclusively by the Transition Support Agreement, except as may
be expressly stated herein. In the event of any inconsistency between the
Transition Support Agreement and this Agreement or the Transition Support
Agreement and any other Ancillary Agreement, the Transition Support Agreement
shall govern.
ARTICLE XII
REAL PROPERTY MATTERS
Section 12.01 Real Estate Agreements. All matters relating to real
----------------------
property to be owned by a member of the NDC Group or the Global Payments Group
and leased, occupied or shared by a member of the other of such groups after the
Effective Time shall
be governed by the Real Estate Agreements. In the event of any inconsistency
between the Real Estate Agreements and this Agreement or the Real Estate
Agreements and any other Ancillary Agreement, the Real Estate Agreements shall
govern.
ARTICLE XIII
INFORMATION
Section 13.01 Provision of Corporate Records. As soon as practicable
------------------------------
following the Effective Time, NDC and Global Payments shall each arrange for the
provision to the other of existing corporate documents (e.g., minute books,
stock registers, stock certificates, documents of title, contracts, etc.) in its
possession relating to the other or its business and affairs or to any other
entity that is part of such other's respective Group or to the business and
affairs of such other entity.
Section 13.02 Access to Information. From and after the Effective
---------------------
Time, NDC and Global Payments shall each afford the other and its accountants,
counsel and other designated representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
and duplicating rights during normal business hours to all records, books,
contracts, instruments, computer data and other data and information in its
possession relating to the business and affairs of the other or a member of its
Group (other than data and information subject to an attorney/client or other
privilege), insofar as such access is reasonably required by the other
including, without limitation, for audit, accounting and litigation purposes.
Section 13.03 Litigation Cooperation. NDC and Global Payments shall
----------------------
each use reasonable efforts to make available to the other, upon written
request, its officers, directors, employees and agents, and the officers,
directors, employees and agents of its subsidiaries, as witnesses to the extent
that such persons may reasonably be required in connection with any legal,
administrative or other proceedings arising out of the business of the other, or
of any entity that is part of the other's respective Group, prior to the
Effective Time in which the requesting party or one of its subsidiaries may from
time to time be involved.
Section 13.04 Retention of Records. Except as otherwise required by
--------------------
law or agreed to in writing, each party shall, and shall cause the members of
its Group to, retain all information relating to the other's business in
accordance with the past practice of such party. Notwithstanding the foregoing,
either party may destroy or otherwise dispose of any information at any time in
accordance with the corporate record retention policy maintained by such party
with respect to its own records.
Section 13.05 Confidentiality. Each party shall, and shall cause each
---------------
member of its Group to, hold and cause its directors, officers, employees,
agents, consultants and advisors to hold, in strict confidence, unless compelled
to disclose by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law, all information concerning the other
party (except to the extent that this Agreement or any
Ancillary Agreement permits the use or disclosure of such information or to the
extent that such information can be shown to have been (a) in the public domain
through no fault of such disclosing party or (b) later lawfully acquired after
the Effective Time on a non-confidential basis from other sources by the
disclosing party), and neither party shall release or disclose such information
to any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors who shall be advised of the provisions of
this Section 13.05 and be bound by them. Each party shall be deemed to have
satisfied its obligation to hold confidential information concerning or supplied
by the other party if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
Section 13.06 Privileged Matters. The parties hereto recognize that
------------------
legal and other professional services that have been and will be provided prior
to the Distribution Date have been and will be rendered for the benefit of each
of the members of the NDC Group, and the members of the Global Payments Group,
and that each of the members of the NDC Group, and each of the members of the
Global Payments Group should be deemed to be the client for the purposes of
asserting all privileges which may be asserted under applicable law. Except as
otherwise specifically provided in the Ancillary Agreements, to allocate the
interests of each party in the information as to which any party is entitled to
assert a privilege, the parties agree as follows:
(a) NDC shall be entitled, in perpetuity, to control the assertion or
waiver of all privileges in connection with privileged information that relates
solely to the NDC Business, whether or not the privileged information is in the
possession of or under the control of NDC or Global Payments. NDC shall also be
entitled, in perpetuity, to control the assertion or waiver of all privileges in
connection with privileged information that relates solely to the subject matter
of any claims constituting NDC Liabilities, now pending or which may be asserted
in the future, in any lawsuits or other proceedings initiated against or by NDC,
whether or not the privileged information is in the possession of or under the
control of NDC or Global Payments.
(b) Global Payments shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
that relates solely to the Global Payments Business, whether or not the
privileged information is in the possession of or under the control of NDC or
Global Payments. Global Payments shall also be entitled, in perpetuity, to
control the assertion or waiver of all privileges in connection with privileged
information which relates solely to the subject matter of any claims
constituting Global Payments Liabilities, now pending or which may be asserted
in the future, in any lawsuits or other proceedings initiated against or by
Global Payments, whether or not the privileged information is in the possession
of Global Payments or under the control of NDC or Global Payments.
(c) The parties hereto agree that they shall have a shared privilege,
with equal right to assert or waive, subject to the restrictions in this Section
13.06, with respect to all privileges not allocated pursuant to the terms of
Sections 13.06 (a) and (b). All privileges relating to any claims, proceedings,
litigation, disputes, or other matters
which involve NDC and Global Payments in respect of which such parties retain
any responsibility or liability under this Agreement, shall be subject to a
shared privilege among them.
(d) No party hereto may waive any privilege which could be asserted
under any applicable law and in which any other party hereto has a shared
privileged, without the consent of the other party, which consent shall not be
unreasonably withheld or delayed, except to the extent reasonably required in
connection with any litigation with third parties or as provided in subsection
(e) below. Consent shall be in writing, or shall be deemed to be granted unless
written objection is made within twenty (20) days after notice upon the other
party requesting such consent.
(e) In the event of any litigation or dispute between or among any of
the parties hereto, any party and a member of the Group of the other party, or a
member of a Group of one party hereto and a member of a Group of the other party
hereto, either such party may waive a privilege in which the other party has a
shared privilege, without obtaining the consent of the other party, provided
that such waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between or among the
relevant parties and/or members of their Groups, and shall not operate as a
waiver of the shared privilege with respect to third parties.
(f) If a dispute arises between or among the parties hereto or their
respective Group members regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by the other party. Each party hereto specifically agrees that it
will not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(g) Upon receipt by any party hereto or by any member of a Group
thereof of any subpoena, discovery or other request which arguably calls for the
production or disclosure of information subject to a shared privilege or as to
which another party has the sole right hereunder to assert a privilege, or if
any party obtains knowledge that any of its, or any of its Group members',
current or former directors, officers, agents or employees have received any
subpoena, discovery or other requests that arguably calls for the production or
disclosure of such privileged information, such party shall promptly notify the
other party of the existence of the request and shall provide the other party a
reasonable opportunity to review the information and to assert any rights it or
they may have under this Section 13.06 or otherwise to prevent the production or
disclosure of such privileged information.
(h) The transfer of all agreements, documents, books, records, files
and other information pursuant to this Agreement is made in reliance on the
agreement of NDC and Global Payments, as set forth in Sections 13.05 and 13.06,
to maintain the confidentiality of privileged information and to assert and
maintain all applicable privileges. The access to information being granted
pursuant to Section 13.02 hereof, the
agreement to cooperate pursuant to Section 13.03 hereof, the furnishing of
notices and documents and other cooperative efforts contemplated herein, and the
transfer of privileged information between and among the parties and the members
of their respective Groups pursuant to this Agreement shall not be deemed a
waiver of any privilege that has been or may be asserted under this Agreement or
otherwise.
Section 13.06 Ownership of Information. Any information owned by any
------------------------
party or members of its Group that is provided to a requesting party pursuant to
this Article XIII shall be deemed to remain the property of the providing party.
Unless specifically set forth herein, nothing contained in this Agreement shall
be construed as granting or conferring rights of license or otherwise in any
such information.
ARTICLE XIV
INTEREST ON PAYMENTS
Section 14.01 Interest. Except as otherwise expressly provided in
--------
this Agreement or an Ancillary Agreement, all payments by one party to the other
under this Agreement or any Ancillary Agreement shall be paid, by company check
or wire transfer of immediately available funds to an account in the United
States designated by the recipient, within 30 days after receipt of an invoice
or other written request for payment setting forth the specific amount due and a
description of the basis therefor in reasonable detail. Any amount remaining
unpaid beyond its due date, including disputed amounts that are ultimately
determined to be payable, shall bear interest at a rate of simple interest per
annum equal to the Prime Rate plus 2%.
ARTICLE XV
MISCELLANEOUS
Section 15.01 Consolidation, Merger, Etc. Involving Global Payments or
--------------------------------------------------------
NDC.
---
(a) Global Payments shall not consolidate with or merge into any other
entity or convey, transfer or lease all or any substantial portion of its
properties and assets to any entity, and Global Payments shall not permit any
entity to consolidate with or merge into Global Payments or convey, transfer or
lease all or any substantial portion of its properties and assets to Global
Payments, unless, in each case Global Payments shall consolidate with or merge
into another entity or convey, transfer or lease all or any substantial portion
of its properties and assets to any entity, the entity formed by such
consolidation or into which Global Payments is merged or the entity which
acquires by conveyance or transfer, or which leases, all or any substantial
portion of properties and assets of Global Payments shall be a corporation,
partnership, limited liability company or trust and shall expressly assume, by a
written agreement, executed and delivered to NDC, in form reasonably
satisfactory to NDC, all of the Liabilities, obligations and expenses to be
assumed by Global Payments under this Agreement and the Ancillary Agreements and
the due and punctual performance or observance of every agreement and
covenant of this Agreement and Ancillary Agreements on the part of Global
Payments to be performed or observed.
(b) NDC shall not consolidate with or merge into any other entity or
convey, transfer or lease all or any substantial portion of its properties and
assets to any entity, and NDC shall not permit any entity to consolidate with or
merge into NDC or convey, transfer or lease all or any substantial portion of
its properties and assets to NDC, unless in each case, NDC shall consolidate
with or merge into another entity or convey, transfer or lease all or any
substantial portion of its properties and assets to any entity, the entity
formed by such consolidation or into which NDC is merged or the entity which
acquires by conveyance or transfer, or which leases, all or any substantial
portion of properties and assets of NDC shall be a corporation, partnership,
limited liability company or trust and shall expressly assume, by a written
agreement, executed and delivered to Global Payments, in form reasonably
satisfactory to Global Payments, all of the Liabilities, obligations and
expenses to be assumed by NDC under this Agreement and the Ancillary Agreements
and the due and punctual performance or observance of every agreement and
covenant of this Agreement and the Ancillary Agreements on the part of NDC to be
performed or observed.
Section 15.02 Disputes.
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(a) All disputes arising from or in connection with this Agreement,
whether based on contract, tort, statute or otherwise, including, but not
limited to, disputes in connection with claims by third parties (collectively,
"Disputes"), shall be resolved only in accordance with the provisions of this
Section 15.02; provided, however, that nothing contained herein shall preclude
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either party from seeking or obtaining (i) injunctive relief to prevent an
actual or threatened breach of any of the provisions of this Agreement, or (ii)
equitable or other judicial relief to enforce the provisions of this Section
15.02 hereof or to preserve the status quo pending resolution of Disputes
hereunder.
(b) Either party may give the other party written notice of any Dispute
not resolved in the normal course of business. Within 10 days after delivery of
the notice of a Dispute, the receiving party shall submit to the other a written
response. The notice and the response shall include a statement of such party's
position and a summary of arguments supporting that position and the name and
title of the executive who will represent that party and of any other person who
will accompany such executive in resolving the Dispute. Within twenty (20) days
after delivery of the first notice, the executives of both parties shall meet at
a mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, and shall negotiate in good faith to attempt to resolve the
Dispute. All reasonable requests for information made by one party to the other
will be honored.
(c) If the Dispute has not been resolved by negotiation within sixty (60)
days of the first party's notice, the Dispute shall be submitted, upon
application of either party, for resolution by binding arbitration in accordance
with the Commercial
Arbitration Rules of the American Arbitration Association (the "Rules").
Arbitration shall be by a single arbitrator experienced in the matters that are
at issue in the Dispute, which arbitrator shall be selected by the parties in
accordance with the Rules. The arbitration shall be conducted in Atlanta,
Georgia (or at any other place agreed upon by the parties and the arbitrator).
The decision of the arbitrator shall be final and binding as to all matters at
issue in the Dispute; provided, however, if necessary such decision may be
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enforced by either party in any court of law having jurisdiction over the
parties or the subject matter of the Dispute. Unless the arbitrator shall assess
the costs and expenses of the arbitration proceeding and of the parties
differently, each party shall pay its costs and expenses incurred in connection
with the arbitration proceeding, and the costs and expenses of the arbitrator
shall be shared equally by the parties.
Section 15.03 Further Assurances and Consents. In addition to the
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actions specifically provided for elsewhere in this Agreement, each of the
parties hereto will use its reasonable efforts to (a) execute and deliver such
further instruments and documents and take such other actions as any other party
may reasonably request in order to effectuate the purposes of this Agreement and
to carry out the terms hereof and (b) take, or cause to be taken, all actions,
and do, or cause to be done, all things, reasonably necessary, proper or
advisable under applicable laws, regulations and agreements or otherwise to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, using its reasonable efforts to obtain any
consents and approvals, make any filings and applications and remove any liens,
claims, equity or other encumbrance on an Asset of the other party necessary or
desirable in order to consummate the transactions contemplated by this
Agreement; provided that no party hereto shall be obligated to pay any
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consideration therefor (except for filing fees and other similar charges) to any
third party from whom such consents, approvals and amendments are requested or
to take any action or omit to take any action if the taking of or the omission
to take such action would be unreasonably burdensome to the party or its Group
or the business thereof.
Section 15.04 Expenses. Except as specifically provided in this
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Agreement or any Ancillary Agreement, all costs and expenses incurred in
connection with the preparation, execution, delivery and implementation of this
Agreement and the Ancillary Agreements and with the consummation of the
transactions contemplated by this Agreement (including, but not limited to,
transfer taxes and the fees and expenses of the Distribution Agent and of all
counsel, accountants, capital identity consultants and financial and other
advisors) shall be paid by NDC. Without limiting the foregoing, NDC shall pay
the legal, filing, accounting, printing and other expenses in connection with
the preparation, printing and filing of the Form 10 and the Information
Statement.
Section 15.05 Notices. All notices and communications under this
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Agreement shall be deemed to have been given (a) when received, if such notice
or communication is delivered by facsimile, hand delivery or overnight courier,
and, (b) three (3) business days after mailing if such notice or communication
is sent by United States registered or certified mail, return receipt requested,
first class postage prepaid. All notices and
communications, to be effective, must be properly addressed to the party to whom
the same is directed at its address as follows:
If to NDC, to:
National Data Corporation Inc.
National Data ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
If to Global Payments, to:
Global Payments Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Either party may, by written notice delivered to the other party in
accordance with this Section 15.05, change the address to which delivery of any
notice shall thereafter be made.
Section 15.06 Amendment and Waiver. This Agreement may not be altered
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or amended, nor may any rights hereunder be waived, except by an instrument in
writing executed by the party or parties to be charged with such amendment or
waiver. No waiver of any terms, provision or condition of or failure to
exercise or delay in exercising any rights or remedies under this Agreement, in
any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition, right or remedy or as
a waiver of any other term, provision or condition of this Agreement.
Section 15.07 Entire Agreement. This Agreement, together with the
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Ancillary Agreements, constitutes the entire understanding of the parties hereto
with respect to the subject matter hereof, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject
matter. To the extent that the provisions of this Agreement are inconsistent
with the provisions of any Ancillary Agreement, the provisions of such Ancillary
Agreement shall prevail with respect to the subject matter hereof.
Section 15.08 Parties in Interest. Neither of the parties hereto may
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assign its rights or delegate any of its duties under this Agreement without the
prior written consent of the other party. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns. Nothing contained in this Agreement, express
or implied, is intended to confer any benefits, rights or remedies upon any
person or entity other than members of the NDC Group and the Global Payments
Group and the NDC Indemnitees and Global Payments Indemnitees under Articles IV
and V hereof.
Section 15.09 Severability. The provisions of this Agreement are
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severable and should any provision hereof be void, voidable or unenforceable
under any applicable law, such provision shall not affect or invalidate any
other provision of this Agreement, which shall continue to govern the relative
rights and duties of the parties as though such void, voidable or unenforceable
provision were not a part hereof.
Section 15.10 Governing Law. This Agreement shall be construed in
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accordance with, and governed by, the laws of the State of Georgia, without
regard to the conflicts of law rules of such state.
Section 15.11 Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original instrument, but all
of which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
NATIONAL DATA CORPORATION
By:
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Name:
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Title:
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GLOBAL PAYMENTS INC.
By:
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Name:
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Title:
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