EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
FIRST DATA CORPORATION
FB MERGING CORPORATION
AND
PAYMENTECH, INC.
DATED AS OF MARCH 22, 1999
TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
ARTICLE I
Page
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THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Contributions of Cash and Shares to Holdco . . . . . . . . . 2
Section 1.2 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4 Effects of the Merger . . . . . . . . . . . . . . . . . . . 3
Section 1.5 Charter and By-laws; Directors and Officers. . . . . . . . . 3
Section 1.6 Conversion of Securities . . . . . . . . . . . . . . . . . . 3
Section 1.7 Exchange of Certificates . . . . . . . . . . . . . . . . . . 4
Section 1.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . 6
Section 1.9 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB . . . . . . . . . 7
Section 2.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.3 Consents and Approvals; No Violations . . . . . . . . . . . 7
Section 2.4 Information Supplied . . . . . . . . . . . . . . . . . . . . 9
Section 2.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.6 Ownership of the Company's Capital Stock . . . . . . . . . . 9
Section 2.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . 9
Section 3.1 Organization, Standing and Power . . . . . . . . . . . . . . 9
Section 3.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3 Capital Structure . . . . . . . . . . . . . . . . . . . . 10
Section 3.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 Consents and Approvals; No Violation . . . . . . . . . . . 11
Section 3.6 SEC Documents and Other Reports . . . . . . . . . . . . . 12
Section 3.7 Information Supplied. . . . . . . . . . . . . . . . . . . 13
Section 3.8 Absence of Certain Changes or Events . . . . . . . . . . . 13
Section 3.9 Permits and Compliance . . . . . . . . . . . . . . . . . . 14
Section 3.10 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.11 Actions and Proceedings. . . . . . . . . . . . . . . . . 15
Section 3.12 Certain Agreements. . . . . . . . . . . . . . . . . . . . 16
Section 3.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.14 Liabilities; Services . . . . . . . . . . . . . . . . . . 18
Section 3.15 Labor Matters . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.16 Intellectual Property; Software; Year 2000 . . . . . . . 19
Section 3.17 Title to and Sufficiency of Assets. . . . . . . . . . . . 20
Section 3.18 Required Vote of Company Stockholders . . . . . . . . . . 20
Section 3.19 Environmental Matters . . . . . . . . . . . . . . . . . . 20
Section 3.20 Customers and Employees . . . . . . . . . . . . . . . . . 21
Section 3.21 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.22 Transactions with Affiliates . . . . . . . . . . . . . . . 22
Section 3.23 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.24 State Takeover Statute . . . . . . . . . . . . . . . . . 23
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . . . . . . . . . 23
Section 4.1 Conduct of Business Pending the Merger . . . . . . . . . . 23
Section 4.2 No Solicitation . . . . . . . . . . . . . . . . . . . . . 26
Section 4.3 Third Party Standstill Agreements . . . . . . . . . . . . 28
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.1 Stockholder Meeting . . . . . . . . . . . . . . . . . . . 28
Section 5.2 Access to Information . . . . . . . . . . . . . . . . . . 29
Section 5.3 Costs and Expenses; Termination Fee . . . . . . . . . . . 29
Section 5.4 Stock Options . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.5 Reasonable Best Efforts . . . . . . . . . . . . . . . . . 31
Section 5.6 Public Announcements . . . . . . . . . . . . . . . . . . . 32
Section 5.7 State Takeover Laws . . . . . . . . . . . . . . . . . . . 32
Section 5.8 Indemnification; Directors and Officers Insurance . . . . 32
Section 5.9 Notification of Certain Matters . . . . . . . . . . . . . 33
Section 5.10 Certain Litigation . . . . . . . . . . . . . . . . . . . 33
Section 5.11 Revolving Credit Agreement . . . . . . . . . . . . . . . 33
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER . . . . . . . . . . . . . . . . . . 34
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.2 Additional Conditions to Obligations of Parent and
Merger Sub . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.3 Additional Conditions to Obligation of the Company . . . 35
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . 36
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . 37
Section 7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VIII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.1 Non-Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.3 Interpretation; Definitions . . . . . . . . . . . . . . . 39
Section 8.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.5 Entire Agreement; No Third-Party Beneficiaries . . . . . . 42
Section 8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.8 Severability . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.9 Enforcement of this Agreement . . . . . . . . . . . . . . 43
EXHIBITS
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Exhibit A Stockholder Agreement
Exhibit B Contribution Agreement
Exhibit C Amendments to Certificate of Incorporation of the Company
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 22, 1999 (this
"Agreement"), among First Data Corporation, a Delaware corporation
("Parent"), FB Merging Corporation, a Delaware corporation ("Merger Sub")
and a wholly-owned subsidiary of FDC Offer Corporation, which in turn is a
Delaware corporation ("Holdco") and a wholly-owned subsidiary of Parent,
and Paymentech, Inc., a Delaware corporation (the "Company") (Merger Sub
and the Company being hereinafter collectively referred to as the
"Constituent Corporations").
W I T N E S S E T H:
WHEREAS, BANK ONE CORPORATION, a Delaware corporation ("Bank
One"), through its wholly-owned subsidiary First USA Financial, Inc., a
Delaware corporation ("First USA"), owns an aggregate of 19,979,081 shares
of Common Stock, par value $.01 per share, of the Company (the "Company
Common Stock"; shares of Company Common Stock being hereinafter referred to
as the "Shares");
WHEREAS, the respective Boards of Directors of Parent, Merger Sub
and the Company have approved and declared advisable this Agreement and the
transactions contemplated hereby, including the merger of Merger Sub into
the Company (the "Merger"), upon the terms and subject to the conditions
set forth herein, whereby each issued and outstanding Share not owned
directly or indirectly by Parent, Bank One, the Company or any of their
Subsidiaries (including, without limitation, Merger Sub) (other than such
Shares held by Parent, Bank One, the Company or any of their Subsidiaries
in a fiduciary, collateral, custodial or similar capacity which will be
converted) will be converted into the right to receive from the Surviving
Corporation (as hereinafter defined) in cash, without interest $25.50 per
Share (the "Merger Consideration") and the respective Boards of Directors
of Merger Sub and the Company have approved and declared advisable this
Agreement;
WHEREAS, in order to induce Parent and Merger Sub to enter into
this Agreement, concurrently herewith Parent, Holdco, Merger Sub, Bank One
and First USA are entering into a Stockholder Agreement dated as of the
date hereof (the "Stockholder Agreement") in the form of the attached
Exhibit A whereby, among other things, First USA has agreed to contribute
to Holdco the Shares it owns in exchange for shares of capital stock of
Holdco and to vote in favor of the adoption of this Agreement;
WHEREAS, pursuant to the Stockholder Agreement, Parent has agreed
to contribute to Holdco sufficient cash to pay the aggregate Merger
Consideration in accordance with Section 1.6 in exchange for shares of
capital stock of Holdco, and each of Parent and First USA has agreed to
cause Holdco to contribute to Merger Sub all of the Shares it receives from
First USA and all of the cash it receives from Parent pursuant to the
Stockholder Agreement; and
WHEREAS, Parent has entered into a Contribution Agreement dated
as of the date hereof (the "Contribution Agreement") with Bank One in the
form of the attached Exhibit B which provides, among other things, that
following the Merger Parent and Bank One, through Holdco, will cause
substantially all of the assets and liabilities and business of the
Company, as the Surviving Corporation (as hereinafter defined), to be
contributed to Bank One Payment Services, L.L.C., a Delaware limited
liability company and an alliance between wholly-owned subsidiaries of
Parent and Bank One (the "Alliance"), in exchange for the issuance to the
Surviving Corporation of a membership interest in the Alliance.
NOW, THEREFORE, in consideration of the premises,
representations, warranties and agreements herein contained, the parties
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 Contributions of Cash and Shares to Holdco.
Pursuant to the Stockholder Agreement, immediately prior to the transfers
referred to in the last sentence of this Section 1.1, Parent will
contribute to Holdco cash in the amount necessary for the payment of the
aggregate Merger Consideration pursuant to Section 1.6, and simultaneously
therewith First USA will contribute to Holdco all of the Shares it owns
(other than such Shares held in a fiduciary, collateral, custodial or
similar capacity), in each case in exchange for shares of common stock of
Holdco. At that time each of Parent, Bank One and First USA will execute
that certain stockholder agreement relating to the governance of Holdco and
the Company. Immediately following such transfers and immediately prior to
the Effective Time each of Parent and First USA will cause Holdco to
contribute to Merger Sub all of the Shares it receives from First USA and
all of the cash it receives from Parent in exchange for shares of capital
stock of Merger Sub (in an amount to be agreed upon between Parent and
First USA).
Section 1.2 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the General Corporation Law of
the State of Delaware, as amended (the "DGCL"), Merger Sub shall be merged
into the Company at the Effective Time (as hereinafter defined). Following
the Merger, the separate corporate existence of Merger Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and
obligations of Merger Sub and the Company in accordance with the DGCL.
Notwithstanding anything to the contrary herein, at the joint election of
Parent and Bank One, any direct or indirect jointly-owned Subsidiary (as
hereinafter defined) of Parent and Bank One may be substituted for Merger
Sub as a constituent corporation in the Merger. In such event, the parties
agree to execute an appropriate amendment to this Agreement, in form and
substance reasonably satisfactory to Parent, Bank One and the Company, in
order to reflect such substitution; provided, however, that no such
substitution shall (i) alter or change the amount or kind of consideration
to be received by the holders of Shares in the Merger or (ii) materially
delay receipt of any approval referred to in this Agreement or the
consummation of the transactions contemplated hereby.
Section 1.3 Effective Time. The Merger shall become effective
when a certificate of merger (the "Certificate of Merger"), executed in
accordance with the relevant provisions of the DGCL, is filed with the
Secretary of State of the State of Delaware, or at such other time as
Merger Sub and the Company shall agree and as specified in the Certificate
of Merger. When used in this Agreement, the term "Effective Time" shall
mean the later of the date and time at which the Certificate of Merger is
duly filed with the Secretary of State of the State of Delaware or such
later time established by the Certificate of Merger. The filing of the
Certificate of Merger shall be made prior to or on the date of the Closing
(as hereinafter defined).
Section 1.4 Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the DGCL.
Section 1.5 Charter and By-laws; Directors and Officers. (a) At
the Effective Time, the Certificate of Incorporation of the Company, as
amended (the "Company Charter"), as further amended to read in its
entirety as indicated on the attached Exhibit C, shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law. At the Effective Time,
the By-laws of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by the Company Charter.
(b) The directors of Merger Sub at the Effective Time of the
Merger shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be. The
officers of the Company at the Effective Time of the Merger shall be the
officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
Section 1.6 Conversion of Securities. As of the Effective Time,
by virtue of the Merger and without any action on the part of Merger Sub,
the Company or the holders of any securities of the Constituent
Corporations:
(a) Capital Stock of Merger Sub. Each issued and outstanding
share of common stock of Merger Sub shall be converted into one
validly issued, fully paid and nonassessable share of common stock of
the Surviving Corporation.
(b) Treasury Shares, Parent Owned Shares, Bank One Shares. All
Shares that are held in the treasury of the Company or by any wholly-
owned Subsidiary of the Company and any Shares owned by Parent, Bank
One or Merger Sub or by any wholly-owned Subsidiary of Parent or Bank
One (other than such Shares held in a fiduciary, collateral, custodial
or similar capacity) shall be canceled and no capital stock of Parent
or other consideration shall be delivered in exchange therefor.
(c) Conversion of Shares. Each Share issued and outstanding
immediately prior to the Effective Time (other than shares to be
canceled in accordance with Section 1.6(b) and other than Dissenting
Shares (as hereinafter defined)) shall be converted into the right to
receive from the Surviving Corporation the Merger Consideration. All
such Shares, when so converted, shall no longer be outstanding and
shall automatically be canceled and retired and each holder of a
certificate representing any such Shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration, less any applicable withholding taxes, upon surrender
of the Certificate (as hereinafter defined) that formerly evidenced
such Shares in the manner provided in Section 1.7.
(d) Shares of Dissenting Stockholders. Notwithstanding anything
in this Agreement to the contrary, any issued and outstanding Shares
held by a person (a "Dissenting Stockholder") who has not voted in
favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance
with Section 262 of the DGCL and otherwise complies with all of the
provisions of the DGCL concerning the right of holders of Shares to
require appraisal of their Shares ("Dissenting Shares") shall not be
converted into or represent the right to receive the Merger
Consideration, unless such stockholder fails to perfect or withdraws
or loses its right to appraisal. Such stockholders shall be entitled
to receive payment of the appraised value of such Shares held by them
in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights
to appraisal of such Shares under such Section 262 shall thereupon be
deemed to have been converted into and to have become exchangeable
for, as of the Effective Time, the right to receive the Merger
Consideration, without any interest or dividends thereon, upon
surrender of the Certificate or Certificates that formerly evidenced
such Shares in the manner provided in Section 1.7. The Company shall
give Parent and Bank One (i) prompt notice of any demands for payment
received by the Company, withdrawals of such demands and any other
instruments served pursuant to the DGCL and received by the Company
and (ii) the opportunity to participate in and direct all negotiations
and proceedings with respect to any such demand for appraisal under
the DGCL. The Company shall not, without the prior written consent of
Parent and Bank One, voluntarily make any payment with respect to, or
settle, offer to settle or otherwise negotiate, any such demands.
Section 1.7 Exchange of Certificates. (a) Paying Agent. Prior
to the Effective Time, Parent shall designate First Chicago Trust Company
of New York (or such other person or persons as shall be reasonably
acceptable to Parent, Bank One and the Company) to act as paying agent in
the Merger (the "Paying Agent"), and at the Effective Time, Merger Sub
shall make available to the Paying Agent cash in the amount necessary for
the payment of the Merger Consideration upon surrender of certificates
representing Shares as part of the Merger pursuant to this Section 1.7.
Any and all interest earned on funds made available to the Paying Agent
pursuant to this Agreement shall be paid over to Parent.
(b) Exchange Procedure. As soon as reasonably practicable after
the Effective Time, the Paying Agent shall mail to each holder of record of
a certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to
the Paying Agent and shall be in a form and have such other provisions as
Parent may reasonably specify) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration.
Upon surrender of a Certificate for cancellation to the Paying Agent or to
such other agent or agents as may be appointed by Parent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of cash into
which the Shares theretofore represented by such Certificate shall have
been converted pursuant to Section 1.6, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership of
Shares that is not registered in the transfer records of the Company,
payment may be made to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the
person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 1.7, each Certificate
(other than Certificates representing Dissenting Shares) shall be deemed at
any time after the Effective Time to represent only the right to receive
upon such surrender the amount of cash, without interest, into which the
Shares theretofore represented by such Certificate shall have been
converted pursuant to Section 1.6. No interest will be paid or will accrue
on the cash payable upon the surrender of any Certificate. Parent or the
Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement such amounts as
Parent or the Paying Agent is required to deduct and withhold with respect
to the making of such payment under the Code (as hereinafter defined) or
under any provisions of state, local or foreign tax law. To the extent
that amounts are so withheld by Parent or the Paying Agent, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the person in respect of which such deduction or withholding was
made by the Parent or the Paying Agent and any such amounts deducted or
withheld shall be promptly and timely paid by Parent or the Paying Agent to
the appropriate taxing authority.
(c) No Further Ownership Rights in Shares. All cash paid upon
the surrender of Certificates in accordance with the terms of this
Article I shall be deemed to have been paid in full satisfaction of all
rights pertaining to the Shares theretofore represented by such
Certificates. At the Effective Time, the stock transfer books of the
Company shall be closed, and there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the
Shares that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the Paying Agent for any reason, they shall be canceled and
exchanged as provided in this Article I.
(d) Termination of Payment Fund. Any portion of the funds made
available to the Paying Agent to pay the Merger Consideration which remains
undistributed to the holders of Shares for six months after the Effective
Time shall be delivered to Parent, upon demand, and any holders of Shares
who have not theretofore complied with this Article I and the instructions
set forth in the letter of transmittal mailed to such holders after the
Effective Time shall thereafter look only to Parent for payment of the
Merger Consideration to which they are entitled, without interest or
dividends.
(e) No Liability. None of Parent, Holdco, Merger Sub, the
Company or the Paying Agent shall be liable to any person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If any Certificates shall not have been
surrendered prior to seven years after the Effective Time (or immediately
prior to such earlier date on which any payment pursuant to this Article I
would otherwise escheat to or become the property of any Governmental
Entity (as hereinafter defined)), the cash payment in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or
interests of any person previously entitled thereto.
(f) Lost, Stolen or Destroyed Certificates. If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such Certificate to be lost, stolen or
destroyed and, if required by Parent or the Paying Agent, the posting by
such person of a bond, in such reasonable amount as Parent or the Paying
Agent may direct as indemnity against any claim that may be made against
them with respect to such Certificate, the Paying Agent will pay in
exchange for such lost, stolen or destroyed Certificate the amount of cash
to which the holders thereof are entitled pursuant to Section 1.6.
Section 1.8 Further Assurances. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments or assurances or any other acts or
things are necessary, desirable or proper (a) to vest, perfect or confirm,
of record or otherwise, in the Surviving Corporation its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of either of the Constituent Corporations, or (b)
otherwise to carry out the purposes of this Agreement, the Surviving
Corporation and its proper officers and directors or their designees shall
be authorized to execute and deliver, in the name and on behalf of either
of the Constituent Corporations, all such deeds, bills of sale, assignments
and assurances and to do, in the name and on behalf of either Constituent
Corporation, all such other acts and things as may be necessary, desirable
or proper to vest, perfect or confirm the Surviving Corporation's right,
title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and
otherwise to carry out the purposes of this Agreement.
Section 1.9 Closing. The closing of the Merger (the "Closing")
and all actions specified in this Agreement to occur at the Closing shall
take place at the offices of Sidley & Austin, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., local time, no later than the
second business day following the day on which the last of the conditions
set forth in Article VI shall have been fulfilled or waived (if
permissible) or at such other time and place as Parent and the Company
shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as
follows:
Section 2.1 Organization. Each of Parent, Holdco and Merger Sub
is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
being conducted except where the failure to be so organized, existing or in
good standing or to have such power or authority would not, individually or
in the aggregate, have a Material Adverse Effect on Parent.
Section 2.2 Authority. On or prior to the date of this
Agreement, the Boards of Directors of Parent and Merger Sub have declared
the Merger advisable and the Board of Directors of Merger Sub has approved
this Agreement in accordance with the DGCL. Each of Parent and Merger Sub
has all requisite power and authority to execute and deliver this
Agreement, the Stockholder Agreement and the Contribution Agreement, and
each of Parent and Merger Sub has all requisite corporate power and
authority to consummate the transactions contemplated hereby and thereby,
as applicable. The execution, delivery and performance by Parent and
Merger Sub of this Agreement, the Stockholder Agreement and the
Contribution Agreement, as applicable, and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action (including Board action) on the part of
Parent and Merger Sub and no other corporate proceedings on the part of
Parent or Merger Sub or their respective Boards of Directors are necessary
to authorize and approve this Agreement (or the Stockholder Agreement or
Contribution Agreement, as applicable) or to consummate the transactions
contemplated hereby and thereby, as applicable, other than, in the case of
this Agreement, the filing of the Certificate of Merger as required by the
DGCL. Each of the Agreement, the Stockholder Agreement and the
Contribution Agreement has been duly executed and delivered by Parent,
Holdco and Merger Sub, as applicable, and (assuming the valid
authorization, execution and delivery of this Agreement by the Company, the
valid authorization, execution and delivery of the Stockholder Agreement by
Bank One and First USA, the valid authorization, execution and delivery of
the Contribution Agreement by Bank One and the validity and binding effect
hereof and thereof on the Company and Bank One and First USA, as
applicable) this Agreement, the Stockholder Agreement and the Contribution
Agreement constitute the valid and binding obligation of each of Parent,
Holdco and Merger Sub that is a party thereto, enforceable against them in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to the enforcement of creditors' rights generally, and by general
equitable principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law).
Section 2.3 Consents and Approvals; No Violations. Assuming
that all consents, approvals, authorizations and other actions described in
this Section 2.3 have been obtained and all filings and obligations
described in this Section 2.3 have been made, the execution and delivery of
this Agreement, the Stockholder Agreement and the Contribution Agreement do
not, and the consummation of the transactions contemplated hereby and
thereby and compliance with the provisions hereof and thereof will not,
result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or result in the loss of a
material benefit under, or result in the creation of any Lien (as
hereinafter defined) upon any of the properties or assets of Parent or any
of its Subsidiaries under, any provision of (i) the Certificate of
Incorporation or the By-Laws of Parent, each as amended to date, (ii) any
provision of the comparable charter or organization documents of any of
Parent's Subsidiaries, (iii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Parent or any of its
Subsidiaries or (iv) any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent or any of its Subsidiaries or any
of their respective properties or assets, other than, in the case of
clauses (iii) or (iv), any such violations, defaults, rights or Liens that,
individually or in the aggregate, would not have a Material Adverse Effect
on Parent, materially impair the ability of Parent, Holdco or Merger Sub to
perform their respective obligations hereunder or under the Stockholder
Agreement or prevent or materially delay the consummation of any of the
transactions contemplated hereby or thereby. No filing or registration
with, or authorization, consent or approval of, any domestic (federal and
state), foreign or supranational court, commission, governmental body,
regulatory agency, authority or tribunal (each, a "Governmental Entity"),
Card Association or other Person is required by or with respect to Parent
or any of its Subsidiaries in connection with the execution and delivery of
this Agreement or the Stockholder Agreement by Parent, Holdco or Merger Sub
or is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement or the Stockholder Agreement,
except (i) in connection, or in compliance, with the provisions of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the Exchange Act, (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the
Company or any of its Subsidiaries is qualified to do business, (iii) such
filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or
required approval triggered by the Merger or by the transactions
contemplated by this Agreement, the Stockholder Agreement or the
Contribution Agreement, (iv) such filings, authorizations, orders and
approvals as may be required by state takeover laws (the "State Takeover
Approvals"), (v) applicable requirements, if any, of state securities or
"blue sky" laws ("Blue Sky Laws"), (vi) as may be required under foreign
laws, (vii) such filings, authorizations and approvals under the Change in
Bank Control Act, (viii) such filings, authorizations and approvals under
Sections 7-1-701 through 7-1-716 and 7-8-3 through 7-8-20 of the Utah code
(collectively, the "Utah Statute"), (ix) such filings, authorizations and
approvals under Section 4 of the Bank Holding Company Act, and (x) such
other consents, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually
or in the aggregate, have a Material Adverse Effect on Parent, materially
impair the ability of Parent, Holdco or Merger Sub to perform its
obligations hereunder or under the Stockholder Agreement or the
Contribution Agreement or prevent or materially delay the consummation of
any of the transactions contemplated hereby or thereby.
Section 2.4 Information Supplied. None of the information
supplied or to be supplied by Parent, Holdco, or Merger Sub specifically
for inclusion or incorporation by reference in (i) a Rule 13e-3 Transaction
Statement pursuant to Rule 13e-3 (the "Schedule 13e-3") under the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act"), or (ii) the proxy
statement (together with any amendments or supplements thereto, the "Proxy
Statement") relating to the adoption of this Agreement and approval of the
Merger by the holders of a majority of the outstanding Shares, which
majority shall, unless otherwise agreed by the Company, Parent and Bank
One, include not less than 662/3% of the outstanding Shares not owned
directly or indirectly by Bank One, Parent or their respective Affiliated
Persons or associates including, without limitation, Holdco and Merger Sub
(the "Company Stockholder Approval"), will (a) in the case of the Schedule
13e-3, at the time the Schedule 13e-3 is filed with the Securities and
Exchange Commission ("SEC") or (b) in the case of the Proxy Statement, at
the time the Proxy Statement is first mailed to the Company's stockholders
or at the time of the Stockholder Meeting (as hereinafter defined), contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
Section 2.5 Financing. Parent has sufficient funds available
for it to pay the aggregate Merger Consideration.
Section 2.6 Ownership of the Company's Capital Stock. Except
for Shares held in a fiduciary or similar capacity, as of the date hereof,
none of Parent, Holdco, Merger Sub or any Subsidiary of Parent (i)
beneficially owns (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, or (ii) is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing
of, in each case, shares of the capital stock of the Company.
Section 2.7 Brokers. No broker, investment banker, financial
advisor or other person, other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co., the
fees and expenses of which will be paid by Parent, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of Parent, Holdco or Merger Sub.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub as
follows:
Section 3.1 Organization, Standing and Power. The Company and
each of its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to carry
on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect
on the Company. The Company and each of its Subsidiaries are duly
qualified to do business, and are in good standing, in each jurisdiction
where the character of their properties owned or held under lease or the
nature of their activities makes such qualification necessary, except where
the failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect on the Company or materially delay the
consummation of the Merger.
Section 3.2 Subsidiaries. Section 3.2 of the letter dated the
date hereof and delivered on the date hereof by the Company to Parent,
which relates to this Agreement and is designated therein as the Company
Letter (the "Company Letter") lists each Subsidiary of the Company. All of
the outstanding shares of capital stock of each such Subsidiary that is a
corporation have been validly issued and are fully paid and nonassessable.
Except as set forth in Section 3.2 of the Company Letter, all of the
outstanding shares of capital stock of each Subsidiary of the Company are
owned by the Company, by another Subsidiary of the Company or by the
Company and another Subsidiary of the Company, free and clear of any and
all mortgages, liens, encumbrances, charges, claims, restrictions, pledges,
security interest or impositions (collectively, "Liens") and free and clear
of all options, rights of first refusal, agreements or limitations on
voting rights of any nature whatsoever. Except as set forth in Section 3.2
of the Company Letter and except for the capital stock of its Subsidiaries,
the Company does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership, joint venture,
limited liability company or other entity which is material to the business
or financial position of the Company.
Section 3.3 Capital Structure. The authorized capital stock of
the Company consists of 200,000,000 Shares and 10,000,000 shares of
Preferred Stock, par value $.01 per share ("Company Preferred Stock"). At
the close of business on January 30, 1999:
(i) 36,360,377 Shares were issued and outstanding, all of which
were validly issued, fully paid and nonassessable and free of
preemptive rights;
(ii) No shares of Company Preferred Stock were issued and
outstanding;
(iii) No Shares were held in the treasury of the Company or by
Subsidiaries of the Company;
(iv) 6,500,000 Shares were reserved for issuance in the aggregate
upon the exercise of outstanding stock options issued under the
Company's 1996 Amended and Restated Stock Option Plan, (the "Company
Stock Option Plan");
(v) 400,000 Shares were reserved for issuance in the aggregate
pursuant to the Company's Employee Stock Purchase Plan (the "Company
Stock Purchase Plan"); and
(vi) 500,000 Shares were reserved for issuance in the aggregate
pursuant to the Company's 1996 Restricted Stock Plan (the "Company
Restricted Stock Plan").
Section 3.3 of the Company Letter contains a correct and complete list
as of the date of this Agreement of each outstanding option to purchase
shares of Company Common Stock issued under the Company Stock Option Plan
(collectively, the "Company Stock Options"), including the holder, date of
grant, exercise price and number of shares of Company Common Stock subject
thereto and whether the option is vested and exercisable. Except for the
Company Stock Options, the Company Stock Option Plan, the Company Stock
Purchase Plan and the Company Restricted Stock Plan, there are no options,
warrants, calls, rights or agreements to which the Company or any of its
Subsidiaries is a party or by which any of them is bound obligating the
Company or any of its Subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock of the
Company or any of its Subsidiaries or obligating the Company or any of its
Subsidiaries to grant, extend or enter into any such option, warrant, call,
right or agreement. Except as set forth in Section 3.3 of the Company
Letter, there are no outstanding contractual obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of Company Common Stock or any capital stock of or any equity
interests in any of the Company's Subsidiaries. The Company does not have
any outstanding bonds, debentures, notes or other obligations the holders
of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the stockholders of the Company
on any matter.
Section 3.4 Authority. On or prior to the date of this
Agreement, the Board of Directors of the Company has unanimously approved
and declared the Merger Agreement advisable, approved this Agreement and
the transactions contemplated hereby, including the Merger, in accordance
with the DGCL, resolved to recommend the acceptance of the approval of this
Agreement and the Merger by the Company's stockholders and directed that
this Agreement be submitted to the Company's stockholders for approval.
The Company has all requisite corporate power and authority to enter into
this Agreement and, subject to approval by the stockholders of the Company
of this Agreement and the Merger, to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the Merger
and of the other transactions contemplated hereby have been duly authorized
by all necessary corporate action (including Board action) on the part of
the Company, and no other corporate proceedings on the part of the Company
or its Board of Directors are necessary to authorize and approve this
Agreement or to consummate the transactions contemplated hereby, other than
(x) approval and adoption of this Agreement by the stockholders of the
Company and (y) the filing of the Certificate of Merger as required by the
DGCL. This Agreement has been duly executed and delivered by the Company
and (assuming the valid authorization, execution and delivery of this
Agreement by Parent and Merger Sub and the validity and binding effect of
this Agreement on Parent and Merger Sub) constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally, and by general equitable
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
Section 3.5 Consents and Approvals; No Violation. Assuming that
all consents, approvals, authorizations and other actions described in this
Section 3.5 have been obtained and all filings and obligations described in
this Section 3.5 have been made, the execution, delivery or performance of
this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not,
result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give to others a right of termination,
cancellation or acceleration of any obligation or result in the loss of a
material benefit under, or result in the creation of any Lien, upon any of
the properties or assets of the Company or any of its Subsidiaries under,
any provision of (i) the Company Charter or the By-laws of the Company,
(ii) any provision of the comparable charter or organization documents of
any of the Company's Subsidiaries, (iii) except as set forth in Section 3.5
of the Company Letter, any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license (including any of the Company Merchant Contracts)
applicable to the Company or any of its Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
the Company or any of its Subsidiaries or any of their respective
properties or assets (including any of the Company Merchant Contracts),
other than, in the case of clauses (iii) or (iv), any such violations,
defaults, rights, or Liens that, individually or in the aggregate, would
not have a Material Adverse Effect on the Company, materially impair the
ability of the Company to perform its obligations hereunder or prevent or
materially delay the consummation of any of the transactions contemplated
hereby. No filing or registration with, or authorization, consent or
approval of, any Governmental Entity, Card Association or any other Person
is required by or with respect to the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by the Company
or is necessary for the consummation of the Merger, except (i) in
connection, or in compliance, with the provisions of the HSR Act and the
Exchange Act, (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware and appropriate documents with
the relevant authorities of other states in which the Company or any of its
Subsidiaries is qualified to do business, (iii) such filings and consents
as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or by the transactions contemplated by this
Agreement, (iv) such filings, authorizations, orders and approvals as may
be required to obtain the State Takeover Approvals, (v) applicable
requirements, if any, of Blue Sky Laws or the New York Stock Exchange, (vi)
as may be required under foreign laws, (vii) such filings, authorizations
and approvals under the Change in Bank Control Act, (viii) such filings,
authorizations and approvals under the Utah Statute, (ix) such filings,
authorizations and approvals under Section 4 of the Bank Holding Company
Act, and (x) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would
not, individually or in the aggregate, have a Material Adverse Effect on
the Company, materially impair the ability of the Company to perform its
obligations hereunder or prevent or materially delay the consummation of
any of the transactions contemplated hereby.
Section 3.6 SEC Documents and Other Reports. The Company has
filed all required documents (including proxy statements) with the SEC
since June 29, 1997 (as such documents have been amended since the time of
their filing and prior to the date hereof, the "Company SEC Documents").
As of their respective dates or, if amended, as of the date of the last
such amendment, the Company SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and, at the
respective times they were filed or, if amended, as of the date of the last
such amendment, none of the Company SEC Documents, including the financial
statements of the Company and the notes thereto, contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
consolidated financial statements (including, in each case, any notes
thereto) of the Company included in the Company SEC Documents complied as
to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto,
were prepared in accordance with United States GAAP (except, in the case of
the unaudited statements, as permitted by Form 10-Q of the SEC) applied on
a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly presented the consolidated
financial position of the Company and its consolidated Subsidiaries as at
the respective dates thereof and the consolidated results of their
operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein none of which
were or will be material in amount or effect). Except as disclosed in the
Company SEC Documents or as required by GAAP, the Company has not, since
June 29, 1997, made any change in the accounting practices or policies
applied in the preparation of financial statements.
Section 3.7 Information Supplied. None of the information
supplied or to be supplied by the Company specifically for inclusion or
incorporation by reference in (i) the Proxy Statement or (ii) the Schedule
13e-3 will (a) in the case of the Schedule 13e-3, at the time the
Schedule 13e-3 is filed with the SEC, or (b) in the case of the Proxy
Statement, at the time the Proxy Statement is first mailed to the Company's
stockholders or at the time of the Stockholder Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act, except that no representation or warranty
is made by the Company with respect to statements made or incorporated by
reference therein based on information supplied by Parent or Merger Sub
specifically for inclusion or incorporation by reference therein.
Section 3.8 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed with the SEC prior to the date
of this Agreement or as set forth in Section 3.8 of the Company Letter,
since June 30, 1998, the Company and its Subsidiaries have conducted their
respective business in all material respects only in the ordinary course
and (A) the Company and its Subsidiaries have not incurred any liability or
obligation (indirect, direct or contingent) that would result in a Material
Adverse Effect on the Company, or entered into any material oral or written
agreement or other transaction that is not in the ordinary course of
business or that would result in a Material Adverse Effect on the Company,
(B) the Company and its Subsidiaries have not sustained any loss or
interference with their business or properties from fire, flood, windstorm,
accident or other calamity (whether or not covered by insurance) that has
had a Material Adverse Effect on the Company, (C) there has been no change
in the capital stock of the Company except for the issuance of shares of
the Company Common Stock pursuant to Company Stock Options, the Company
Stock Purchase Plan or the Company Restricted Stock Plan and no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its stock, (D) there has not been (v) any adoption of a new Company Plan
(as hereinafter defined), (w) any amendment to a Company Plan materially
increasing benefits thereunder, (x) any granting by the Company or any of
its Subsidiaries to any executive officer or other key employee of the
Company or any of its Subsidiaries of any increase in compensation, except
in the ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Company SEC Documents,
(y) any granting by the Company or any of its Subsidiaries to any such
executive officer or other key employee of any increase in severance or
termination agreements in effect as of the date of the most recent audited
financial statements included in the Company SEC Documents or (z) any entry
by the Company or any of its Subsidiaries into any employment, severance or
termination agreement with any such executive officer or other key
employee, (E) there has not been any material changes in the amount or
terms of the indebtedness of the Company and its Subsidiaries from that
described in the Company SEC Documents filed prior to the date hereof, (F)
any revaluation by the Company of any of material assets and (G) no
Material Adverse Effect on the Company has occurred.
Section 3.9 Permits and Compliance. Each of the Company and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity or Card
Association necessary for the Company or any of its Subsidiaries to own,
lease and operate its properties or to carry on its business as it is now
being conducted (the "Company Permits"), except where the failure to have
any of the Company Permits would not, individually or in the aggregate,
have a Material Adverse Effect on the Company or prevent or materially
delay the consummation of the Merger, and no suspension or cancellation of
any of the Company Permits is pending or, to the knowledge of the Company,
threatened, except where the suspension or cancellation of any of the
Company Permits would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Merger. Neither the Company nor any of its
Subsidiaries nor, for purposes of clause (D), any of the Company's or any
of its Subsidiary's independent sales organizations, is in violation of (A)
its charter, by-laws or other organizational documents, (B) any law,
ordinance, administrative or governmental rule or regulation, (C) any
order, decree or judgment of any Governmental Entity having jurisdiction
over the Company or any of its Subsidiaries or (D) any applicable Card
Association rules, by-laws or regulations, except in the case of clauses
(A), (B), (C) and (D), for any violations that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Merger. Except as
disclosed in the Company SEC Documents filed prior to the date of this
Agreement or in Section 3.9 of the Company Letter, there are no contracts
or agreements of the Company or its Subsidiaries (including the Company
Merchant Contracts) having terms or conditions which would have a Material
Adverse Effect on the Company or having covenants that purport to bind any
stockholder or any Affiliated Person (as hereinafter defined) of any
stockholder of the Company after the Effective Time. Except as set forth
in the Company SEC Documents filed prior to the date of this Agreement or
in Section 3.9 of the Company Letter, no event of default or event that,
but for the giving of notice or the lapse of time or both, would constitute
an event of default exists or, upon the consummation by the Company of the
transactions contemplated by this Agreement, will exist under any
indenture, mortgage, loan agreement, note or other agreement or instrument
for borrowed money, any guarantee of any agreement or instrument for
borrowed money or any lease, contractual license or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any such Subsidiary is bound or to which any of the
properties, assets or operations of the Company or any such Subsidiary is
subject, other than any defaults that, individually or in the aggregate,
would not have a Material Adverse Effect on the Company.
Section 3.10 Tax Matters. Except as set forth in Section 3.10
of the Company Letter, (i) the Company and each of its Subsidiaries have
timely filed all federal, and all material state, local, foreign and
provincial, Tax Returns (as hereinafter defined) required to have been
filed (giving effect to all applicable extensions), and such Tax Returns
are correct and complete, except to the extent that any failure to so file
or any failure to be correct and complete would not, individually or in the
aggregate, have a Material Adverse Effect on the Company; (ii) all material
Taxes (as hereinafter defined) shown to be due on such Tax Returns and all
material Taxes for which no return was filed (x) have been timely paid or
extensions for payment have been properly obtained, (y) are being timely
and properly contested or (z) have been reserved for in the financial
statements of the Company (in accordance with GAAP); (iii) neither the
Company nor any of its Subsidiaries has waived any statute of limitations
in respect of its Taxes; and (iv) all deficiencies asserted or assessments
made as a result of any examination of such Tax Returns by any taxing
authority have been paid in full. For purposes of this Agreement: (i)
"Taxes" means any federal, state, local, foreign or provincial income,
gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or added minimum, ad valorem,
value-added, transfer or excise tax, or other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty imposed by any Governmental Entity,
and (ii) "Tax Return" means any return, report or similar statement
(including the attached schedules) required to be filed with respect to any
Tax, including any information return, claim for refund, amended return or
declaration of estimated Tax.
Section 3.11 Actions and Proceedings. Except as set forth in
Section 3.11 of the Company Letter, there are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity
against or involving the Company or any of its Subsidiaries, or, to the
knowledge of the Company, against or involving any of the present or former
directors, officers, employees, consultants or agents of the Company or any
of its Subsidiaries with respect to the Company or any of its Subsidiaries,
any of the properties, assets or business of the Company or any of its
Subsidiaries or any Company Plan that, individually or in the aggregate,
would have a Material Adverse Effect on the Company, materially impair the
ability of the Company to perform its obligations hereunder or prevent or
materially delay the consummation of the Merger. Except as disclosed in
the Company SEC Documents filed with the SEC prior to the date hereof or in
Section 3.11 of the Company Letter, there are no actions, suits or claims
or legal, administrative or arbitrative proceedings or investigations
(including claims for workers' compensation) pending or, to the knowledge
of the Company, threatened against or involving the Company or any of its
Subsidiaries or, to the Company's knowledge, any of its or their present or
former directors, officers, employees, consultants or agents with respect
to the Company or any of its Subsidiaries, or any of the properties, assets
or business of the Company or any of its Subsidiaries or any Company Plan
that, individually or in the aggregate, would have a Material Adverse
Effect on the Company, materially impair the ability of the Company to
perform its obligations hereunder or prevent or materially delay the
consummation of the Merger. The Company's expenses, losses and liabilities
in connection with, including any adverse outcome of, that class action
lawsuit filed in the United States District Court for the Northern District
of Texas against the Company by certain stockholders of the Company,
entitled ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ v. Paymentech
Inc. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. Truetzel, will, to the best of the
Company's knowledge, be covered by insurance maintained by the Company
other than for the applicable deductibles under the Company's insurance
policies (which deductibles do not exceed, in the aggregate, $1,000,000).
There are no actions, suits, labor disputes or other litigation, legal or
administrative proceedings or governmental investigations pending or, to
the knowledge of the Company, threatened against or affecting the Company
or any of its Subsidiaries or, to the Company's knowledge, any of its or
their present or former officers, directors, employees, consultants or
agents with respect to the Company or its Subsidiaries, or any of the
properties, assets or business of the Company or any of its Subsidiaries,
in each case relating to the transactions contemplated by this Agreement.
Section 3.12 Certain Agreements. Except as set forth in Section
3.12 of the Company Letter, neither the Company nor any of its Subsidiaries
is a party to any oral or written agreement or plan, including any
employment agreement, severance agreement, stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan
(collectively, the "Compensation Agreements"), pension plan (as defined in
Section 3(2) of ERISA) or welfare plan (as defined in Section 3(1) of
ERISA) any of the benefits of which will be increased, or the vesting of
the benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement. Except as set forth in
Section 5.4, no holder of any option to purchase Shares, or Shares granted
in connection with the performance of services for the Company or its
Subsidiaries, is or will be entitled to receive cash from the Company or
any of its Subsidiaries in lieu of or in exchange for such option or shares
as a result of the transactions contemplated by this Agreement. Section
3.12 of the Company Letter sets forth (i) for each officer, director or
employee who is a party to, or will receive benefits under, any
Compensation Agreement as a result of the transactions contemplated herein,
the total amount that each such person may receive, or is eligible to
receive, assuming that the transactions contemplated by this Agreement are
consummated on the date hereof, and (ii) the total amount of indebtedness
for borrowed money owed to the Company or its Subsidiaries from each
officer, director or employee of the Company and its Subsidiaries.
Section 3.13 ERISA. (a) As used herein, (i) "Company Plan"
means a "pension plan" (as defined in section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (other than a
Company Multiemployer Plan)), a "welfare plan" (as defined in section 3(1)
of ERISA), or any other written or oral bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, restricted stock, stock appreciation right,
holiday pay, vacation, severance, medical, dental, vision, disability,
death benefit, sick leave, fringe benefit, personnel policy, insurance or
other plan, arrangement or understanding, in each case established or
maintained by the Company or any of its Subsidiaries or ERISA Affiliates or
as to which the Company or any of its Subsidiaries or ERISA Affiliates has
contributed or otherwise may have any liability, (ii) "Company
Multiemployer Plan" means a "multiemployer plan" (as defined in section
4001(a)(3) of ERISA) to which the Company or any of its Subsidiaries or
ERISA Affiliates is or has been obligated to contribute or otherwise may
have any liability, and (iii) "ERISA Affiliate" means any trade or business
(whether or not incorporated) which would be considered a single employer
with the Company pursuant to section 414(b), (c), (m) or (o) of the Code
and the regulations promulgated under those sections or pursuant to section
4001(b) of ERISA and the regulations promulgated thereunder.
(b) Each material Company Plan is listed in Section 3.13(b) of
the Company Letter. With respect to each Company Plan listed therein, the
Company has made available to Parent a true and correct copy of (i) the
three most recent annual reports (Form 5500) filed with the IRS if
applicable, (ii) each such Company Plan that has been reduced to writing
and all amendments thereto, (iii) each trust agreement, insurance contract
or administration agreement relating to each such Company Plan, (iv) a
written summary of each unwritten Company Plan, (v) the most recent summary
plan description or other written explanation of each Company Plan provided
to participants, (vi) the most recent determination letter and request
therefore, if any, issued by the IRS with respect to any Company Plan
intended to be qualified under section 401(a) of the Code, (vii) any
request for a determination currently pending before the IRS and (viii) all
material correspondence with the IRS, the Department of Labor, the SEC or
Pension Benefit Guaranty Corporation relating to any potential
investigation or outstanding controversy. Except as would not have a
Material Adverse Effect on the Company, each Company Plan complies in all
respects with the ERISA, the Code and all other applicable statutes and
governmental rules and regulations. Except for Company Plans listed in
Section 3.13(b) of the Company Letter, neither the Company nor any ERISA
Affiliate currently maintains, contributes to or has any liability or, at
any time during the past six years has maintained or contributed to any
pension plan which is subject to section 412 of the Code or section 302 of
ERISA or Title IV of ERISA. Except for Company Multiemployer Plans listed
in Section 3.13(b) of the Company Letter, neither the Company nor any ERISA
Affiliate currently maintains, contributes to or has any liability or, at
any time during the past six years has maintained or contributed to any
Company Multiemployer Plan.
(c) Except as listed in Section 3.13(c) of the Company Letter,
with respect to the Company Plans, no event has occurred and, to the
knowledge of the Company, there exists no condition or set of circumstances
in connection with which the Company or any Subsidiary of the Company or
ERISA Affiliate or Company Plan fiduciary could reasonably be expected to
be subject to any liability under the terms of such Company Plans, ERISA,
the Code or any other applicable law which would have a Material Adverse
Effect on the Company. All Company Plans that are intended to be qualified
under section 401(a) of the Code have been determined by the IRS to be so
qualified, or a timely application for such determination is now pending
and the Company is not aware of any reason why any such Company Plan is not
so qualified in operation. Except as disclosed in Section 3.13(c) of the
Company Letter, neither the Company nor any of its Subsidiaries or ERISA
Affiliates has any liability or obligation under any welfare plan to
provide benefits after termination of employment to any employee or
dependent other than as required by section 4980B of the Code. Neither the
Company nor any Subsidiary of the Company nor any ERISA Affiliate has any
liability whether direct, indirect, contingent or otherwise, under (i)
Section 302 of ERISA or section 412 of the Code or (ii) Title IV of ERISA.
(d) Section 3.13(d) of the Company Letter contains a list of all
(i) severance and employment agreements with employees of the Company and
each of its Subsidiaries with respect to any employee whose annual rate of
base salary exceeds $100,000, and (ii) severance programs and policies of
the Company and each of its Subsidiaries with or relating to its employees
and (iii) plans, programs, agreements and other arrangements of the Company
and each of its Subsidiaries with or relating to its employees containing
change of control or similar provisions.
(e) Except as set forth in Section 3.13(e) of the Company
Letter, neither the Company nor any of its Subsidiaries is a party to any
agreement, contract or arrangement that could result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the
meaning of section 280G of the Code or that provides for payments that
would be nondeductible under section 162(m) of the Code.
(f) Except as set forth in Section 3.13(f) of the Company
Letter, with respect to each Company Plan not subject to United States law
(a "Company Foreign Benefit Plan"), except as would not have a Material
Adverse Effect on the Company, (i) the fair market value of the assets of
each funded Company Foreign Benefit Plan, the liability of each insurer for
any Company Foreign Benefit Plan funded through insurance or the reserve
shown on the Company's consolidated financial statements for any unfunded
Company Foreign Benefit Plan, together with any accrued contributions, is
sufficient to procure or provide for the benefit obligations, as of the
Effective Time, with respect to all current and former participants in such
plan according to reasonable, country specific actuarial assumptions and
valuations and no transaction contemplated by this Agreement shall cause
such assets or insurance obligations or book reserve to be less than such
benefit obligations; and (ii) each Company Foreign Benefit Plan required to
be registered has been registered and has been maintained in good standing
with the appropriate regulatory authorities.
Section 3.14 Liabilities; Services. (a) Except (i) as fully
reflected or reserved against in the financial statements included in the
Company SEC Documents filed with the SEC prior to the date hereof, or
disclosed in the footnotes thereto, (ii) for liabilities incurred in the
ordinary course of business since December 31, 1998, or (iii) as set forth
in Section 3.14(a) of the Company Letter, neither the Company nor any of
its Subsidiaries has any liabilities (including Tax liabilities) or
obligations of any nature, whether accrued, absolute, contingent or
otherwise required by generally accepted accounting principles ("GAAP") to
be set forth on a consolidated balance sheet of the Company and its
Subsidiaries or in the notes thereto, other than liabilities or obligations
that would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. As of the date hereof, the indebtedness for
borrowed money of the Company and its Subsidiaries does not exceed $85
million.
(b) Except as set forth in Section 3.14(b) of the Company
Letter, to the knowledge of the Company, no product or service sold or
delivered or service rendered by the Company or any of its Subsidiaries is
subject to any guaranty, warranty or other indemnity.
Section 3.15 Labor Matters. Except as set forth in Section 3.15
of the Company Letter, neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or labor contract with any
union. Neither the Company nor any of its Subsidiaries has engaged in any
unfair labor practice with respect to any persons employed by or otherwise
performing services primarily for the Company or any of its Subsidiaries
(the "Company Business Personnel"), and there is no unfair labor practice
complaint or grievance against the Company or any of its Subsidiaries by
any person pursuant to the National Labor Relations Act or any comparable
state or foreign law pending or threatened in writing with respect to the
Company Business Personnel, except where such unfair labor practice,
complaint or grievance would not have a Material Adverse Effect on the
Company. There is no labor strike, dispute, slowdown or stoppage pending
or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries which may interfere with the respective
business activities of the Company or any of its Subsidiaries, except where
such dispute, strike or work stoppage would not have a Material Adverse
Effect on the Company.
Section 3.16 Intellectual Property; Software; Year 2000. (a)
For purposes of this Agreement, the following terms shall have the
following meanings: (i) "Computerized Assets" means all software,
hardware, firmware, embedded systems and other systems, components and/or
services that are owned or leased by the Company or any of its Subsidiaries
and used in the conduct of its business; (ii) "Intellectual Property
Rights" means all patents, trademarks, trade names, service marks, trade
secrets, copyrights and other proprietary intellectual property rights; and
(iii) "Software" means computer software programs and software systems,
including, without limitation, all databases, compilations, tool sets,
compilers, higher level or "proprietary" languages, related documentation
and materials, whether in source code, object code or human readable form.
(b) Except as would not, individually or in the aggregate, have
a Material Adverse Effect on the Company, (i) the Company and its
Subsidiaries have all Intellectual Property Rights as are necessary in
connection with the business of the Company and its Subsidiaries, taken as
a whole, (ii) neither the Company nor any of its Subsidiaries is in breach
of any agreement affecting the Company's and/or its Subsidiaries' rights to
use any of the licensed Intellectual Property Rights or Software, and (iii)
none of the owned Intellectual Property Rights or Software infringes any
Intellectual Property Rights of any other Person.
(c) Except as would not have a Material Adverse Effect on the
Company or where a failure is attributable to the licensors or other third-
party providers of the Company or any of its Subsidiaries, all of the
Company's and each of its Subsidiary's Computerized Assets will be on or
prior to January 1, 2000 capable of providing and will provide
uninterrupted millennium functionality to record, store, process and
present calendar dates falling on or after January 1, 2000 and date
dependent data in such a manner and with such functionality as is necessary
for the operations of the Company and its Subsidiaries, and will not cause
an interruption in the ongoing operations or business of the Company or any
of its Subsidiaries on or after January 1, 2000.
Section 3.17 Title to and Sufficiency of Assets. (a) As of the
date hereof, the Company and its Subsidiaries own, and as of the Effective
Time the Company and its Subsidiaries will own, good and marketable title
to all of their assets (excluding, for purposes of this sentence, assets
held under leases), free and clear of any and all Liens, except as set
forth in the Company SEC Documents filed with the SEC prior to the date
hereof or in Section 3.17 of the Company Letter and except where the
failure to own such title would not, individually or in the aggregate, have
a Material Adverse Effect on the Company. Such assets, together with all
assets held by the Company and its Subsidiaries under leases, include all
tangible and intangible personal property, contracts and rights necessary
or required for the operation of the businesses of the Company as presently
conducted, except for such assets the failure to have would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company.
(b) Neither the Company nor any of its Subsidiaries owns any
Real Estate. All Real Estate assets held by the Company and its
Subsidiaries under leases or subleases are adequate for the operation of
the businesses of the Company as presently conducted, except for such
assets the failure to have would not, individually or in the aggregate,
have a Material Adverse Effect. The leases and subleases to all Real
Estate occupied by the Company and its Subsidiaries which are material to
the operation of the businesses of the Company are in full force and effect
and no event has occurred which with the passage of time, the giving of
notice, or both, would constitute a default or event of default by the
Company or any of its Subsidiaries or, to the knowledge of the Company, any
other person who is a party signatory thereto, other than such defaults or
events of default which, individually or in the aggregate, would not have a
Material Adverse Effect on the Company. For purposes of this Agreement,
"Real Estate" means, with respect to the Company or any of its
Subsidiaries, as applicable, all of the fee or leasehold ownership right,
title and interest of such person, in and to all real estate and
improvements owned or leased by any such person and which is used by any
such person in connection with the operation of its business.
Section 3.18 Required Vote of Company Stockholders. The Company
Stockholder Approval is required to adopt this Agreement and to consummate
the Merger. No other vote of the security holders of the Company is
required by law, the Company Charter or the By-laws of the Company or
otherwise in order for the Company to consummate the Merger and the
transactions contemplated hereby.
Section 3.19 Environmental Matters.
(a) For purposes of this Agreement, the following terms shall
have the following meanings: (i) "Hazardous Substances" means (A)
petroleum and petroleum products, by-products or breakdown products,
radioactive materials, asbestos-containing materials and polychlorinated
biphenyls, and (B) any other chemicals, materials or substances regulated
as toxic or hazardous or as a pollutant, contaminant or waste or for which
liability or standards of care are imposed under any applicable
Environmental Law; (ii) "Environmental Law" means any foreign, federal,
state or local law, past, present or future and as amended, and any
judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, or common law,
relating to pollution or protection of the environment, health or safety or
natural resources, including those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Substances; and (iii) "Environmental Permit" means any permit,
approval, identification number, license or other authorization required
under any applicable Environmental Law.
(b) Except as disclosed in Section 3.19 of the Company Letter,
the Company and its Subsidiaries are and have been in compliance with all
applicable Environmental Laws, have obtained all Environmental Permits and
are in compliance with their requirements, and have resolved all past non-
compliance with Environmental Laws and Environmental Permits without any
pending, on-going or future obligation, cost or liability, except in each
case for the notices set forth in Section 3.19 of the Company Letter or
where such non-compliance would not, individually or in the aggregate, have
a Material Adverse Effect on the Company. To the knowledge of the Company,
there are no circumstances that are reasonably likely to prevent or
interfere with such compliance in the future. Except as disclosed in
Section 3.19 of the Company Letter, to the knowledge of the Company, there
are no past or present actions or activities, including, without
limitation, the release, emission, discharge or disposal of any Hazardous
Substances at any site presently or previously owned by the Company or its
Subsidiaries in the conduct of their business that could form the basis of
any claim against the Company or its Subsidiaries under Environmental Laws,
except for such claims as would not, individually or in the aggregate, have
a Material Adverse Effect on the Company.
Section 3.20 Customers and Employees. (a) Except as set forth in
Section 3.20(a) of the Company Letter, neither the Company nor any of its
Subsidiaries has received any notice prior to the date of this Agreement
that (i) any of the top 25 customers of the Company and its Subsidiaries,
as determined with respect to the revenues generated in 1997 and 1998 from
such customers (the "Top 25 Customers"), intends to terminate or limit or
alter its business relationship with the Company or any of its
Subsidiaries, or (ii) any key employee intends to terminate or has
terminated his or her employment with the Company or any of its
Subsidiaries.
(b) Except as set forth in Section 3.20(b) of the Company
Letter, (i) each contract between the Company and/or any of its
Subsidiaries, on the one hand, and any provider of goods and/or services
that accepts Transaction Cards as a payment vehicle which provider is one
of the Top 25 Customers, on the other hand (the "Company Merchant
Contracts"), constitutes a valid and binding obligation of the parties
thereto and is in full force and effect, (ii) the Company and/or its
Subsidiary, as applicable, has fulfilled and performed in all material
respects its obligations under each of the Company Merchant Contacts, (iii)
the Company is not in, or alleged to be in, any material breach or default
under, nor is there or is there alleged to be any reasonable basis for
termination of, any of the Company Merchant Contracts and (iv) to the
knowledge of the Company, no other party to any of the Company Merchant
Contracts has materially breached or defaulted thereunder.
Section 3.21 Insurance. The Company and its Subsidiaries carry
or are entitled to the benefits of insurance as the Company believes are in
such character and amount at least equivalent to that carried by persons
engaged in similar businesses and subject to the same or similar perils or
hazards, except for any such failures to maintain insurance policies as set
forth in Section 3.21 of the Company Letter or that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company. The
Company and each of its Subsidiaries have made any and all payments
required to maintain such policies in full force and effect, except where
the failure to make any such payments, in the aggregate, would not have a
Material Adverse Effect on the Company.
Section 3.22 Transactions with Affiliates. (a) For purposes of
this Section 3.22 and Section 3.9 hereof, the term "Affiliated Person"
means (i) any direct or indirect holder of 5% or more of the Company Common
Stock, (ii) any director or officer of the Company, any of its Subsidiaries
or any Person described in clause (i), (iii) any Person that directly or
indirectly controls, is controlled by, or is under common control with, any
of the Company, any of its Subsidiaries or any Person described in clause
(i), or (iv) any member of the immediate family or any of such persons.
(b) Except as set forth in Section 3.22 of the Company Letter or
in the Company SEC Reports filed with the SEC prior to the date hereof,
since June 30, 1998, the Company and its Subsidiaries have not, in the
ordinary course of business or otherwise, (i) purchased, leased or
otherwise acquired any material property or assets or obtained any material
services from, (ii) sold, leased or otherwise disposed of any material
property or assets or provided any material services to (except with
respect to remuneration for services rendered in the ordinary course of
business as director, officer or employee of the Company or any of its
Subsidiaries), (iii) entered into, renewed or modified in any manner any
contract with, or (iv) borrowed any money from, or made or forgiven any
loan or other advance (other than expenses or similar advances made in the
ordinary course of business) to, any Affiliated Person.
(c) Except as set forth in Section 3.22 of the Company Letter or
in the Company SEC Reports filed with the SEC prior to the date hereof, (i)
the contracts of the Company and its Subsidiaries do not include any
material obligation or commitment between the Company or any of its
Subsidiaries and any Affiliated Person, (ii) the assets of the Company or
any of its Subsidiaries do not include any receivable or other obligation
or commitment from an Affiliated Person to the Company or any of its
Subsidiaries and (iii) the liabilities of the Company and its Subsidiaries
do not include any payable or other obligation or commitment from the
Company or any of its Subsidiaries to any Affiliated Person.
(d) To the knowledge of the Company and except as set forth in
Section 3.22 of the Company Letter or in the Company SEC Reports filed with
the SEC prior to the date hereof, no Affiliated Person of any of the
Company or any of its Subsidiaries is a party to any contract with any
customer or supplier of the Company or any of its Subsidiaries that affects
in any material manner the business, financial condition or results of
operation of the Company or any of its Subsidiaries.
Section 3.23 Brokers. No broker, investment banker or other
person, other ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), the fees and
expenses of which will be paid by the Company is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The maximum amount of
such fees of ▇▇▇▇▇▇▇ ▇▇▇▇▇ has been disclosed by the Company to Parent.
Section 3.24 State Takeover Statute. If the Merger is
consummated as provided in this Agreement following receipt of the Company
Stockholder Approval, Section 203 of the DGCL will be inapplicable to the
Merger.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business Pending the Merger. (a) Except
as expressly permitted by clauses (i) through (xvi) of this Section 4.1,
during the period from the date of this Agreement through the Effective
Time, the Company shall, and shall cause each of its Subsidiaries to, in
all material respects, carry on its business in the ordinary course of its
business as currently conducted and, to the extent consistent therewith,
use commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers and
employees and preserve its relationships with customers, suppliers and
others having business dealings with it. Without limiting the generality
of the foregoing, and except as otherwise expressly contemplated by this
Agreement or as set forth in the Company Letter (with specific reference to
the applicable subsection below), the Company shall not, and shall not
permit any of its Subsidiaries to, without the prior written consent of
Parent (provided that with respect to clauses (v), (vi), (viii), (xi),
(xiii) and (xiv) below, such consent shall not be unreasonably withheld or
delayed):
(i) (A) declare, set aside or pay any dividends on, or make any
other actual, constructive or deemed distributions in respect of, any
of the Company's or any of its Subsidiaries' capital stock, or
otherwise make any payments or other distributions (whether in cash or
property) to its stockholders in their capacity as such, other than
dividends, distributions or other such payments by the Company's
Subsidiaries in the ordinary course of business consistent with past
practice, (B) split, combine or reclassify any of the Company's or
any of its Subsidiaries' capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of the Company's or any of its Subsidiaries'
capital stock or (C) purchase, redeem or otherwise acquire any shares
of capital stock of the Company or any of its Subsidiaries or any
other securities thereof or any rights, warrants or options to acquire
any such shares or other securities, other than in connection with
cashless exercises of Company Stock Options;
(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of the Company's or any of its Subsidiaries'
capital stock, any other voting securities or equity equivalent or any
securities convertible into, or any rights, warrants or options
(including options under the Company Stock Option Plan) to acquire any
such shares, voting securities, equity equivalent or convertible
securities, other than (A) the issuance of shares of Company Common
Stock upon the exercise of Company Stock Options outstanding on the
date of this Agreement in accordance with their current terms, (B)
pursuant to the Company Stock Purchase Plan or (C) as set forth in
Section 4.1(ii) of the Company Letter;
(iii) amend the Company Charter or By-laws or other similar
organizational documents of any of the Company's Subsidiaries;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or
equity in, or by any other manner, any business or any corporation,
limited liability company, partnership, association or other business
organization or division thereof, except for acquisitions in the
ordinary course of business consistent with past practice and
involving aggregate consideration of up to $25 million (if the
Effective Time is on or prior to the 90th day following the date
hereof) or $50 million (if the Effective Time is thereafter);
(v) except as provided in the Contribution Agreement, sell,
lease, encumber or otherwise dispose of, or agree to sell, lease,
encumber or otherwise dispose of, any of its assets, other than sales
of inventory that are in the ordinary course of business consistent
with past practice and sales of assets having an aggregate fair market
value of up to $10 million;
(vi) incur any indebtedness for borrowed money, guarantee any
such indebtedness or make any loans, advances or capital contributions
to, or other investments in, any other person, other than (A) in the
ordinary course of business consistent with past practice and, in the
case of indebtedness and guarantees, in an amount not to exceed $50
million in the aggregate in excess of amounts outstanding on the date
hereof and (B) indebtedness, loans, advances, capital contributions
and investments between the Company and any of its Subsidiaries or
between any of such Subsidiaries, in each case in the ordinary course
of business consistent with past practice;
(vii) except as provided in Section 4.1(vii) of the Company
Letter, alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or
ownership of the Company or any of its Subsidiaries;
(viii) except as provided in Section 4.1(viii) of the Company
Letter and Section 5.4 hereof, increase the compensation payable or to
become payable to the Company's or any of its Subsidiaries' directors,
officers or employees or grant any severance or termination pay to, or
enter into any employment or severance agreement with, any director,
officer or employee of the Company or any of its Subsidiaries, or
establish, adopt, enter into, or, except as may be required to comply
with applicable law, amend in any material respect or take action to
enhance in any material respect or accelerate any rights or benefits
under, any labor, collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for the
benefit of any director, officer or employee, except in any such case
in the ordinary course of business or where the aggregate annual
expense to the Company and its Subsidiaries, taken as a whole,
associated with such actions is not in excess of $5 million;
(ix) knowingly violate or knowingly fail to perform, in any
material respect, any obligation or duty imposed upon the Company or
any of its Subsidiaries by any applicable federal, state or local law,
rule, regulation, guideline or ordinance;
(x) make any change to accounting policies, practices or
procedures (other than actions required to be taken as a result of a
change in law or GAAP);
(xi) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods;
(xii) settle or compromise any federal, state, local or foreign
income tax dispute in excess of $10 million;
(xiii) settle or compromise any claims or litigation where (i)
the consideration paid by the Company and its Subsidiaries, in the
aggregate, has a fair market value in excess of $6 million or (ii)
there are potential criminal liabilities;
(xiv) other than in the ordinary course of business consistent
with past practice and other than the Processing Agreement, dated as
of the date hereof, between the Company and First Data Merchant
Services Corporation, enter into, amend or terminate any agreement or
contract to which the Company or any of its Subsidiaries is a party,
(i) having a remaining term in excess of 12 months or (ii) which
involves or is expected to involve future receipt or payment of $10
million or more during the term thereof, or waive, release or assign
any material rights or claims under any such agreement or contract; or
purchase any Real Estate, or make or agree to make any new capital
expenditure or expenditures (other than the purchase of real property)
which in the aggregate are in excess of 15% higher than expenditures
contemplated by the Company's capital budget for fiscal 1999 or fiscal
2000 as previously provided to Parent in writing;
(xv) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) in excess of $6 million, other than the payment, discharge
or satisfaction, in the ordinary course of business consistent with
past practice and in accordance with their terms, of any such claims,
liabilities or obligations (in each case not related to pending
litigation) reflected or disclosed in the most recent consolidated
financial statements (or the notes thereto) of the Company included in
the Company SEC Documents or incurred since the date of such financial
statements in the ordinary course of business consistent with past
practice;
(xvi) except as required by applicable law or by order of a
Governmental Entity, do any other act which would cause any
representation or warranty of the Company in this Agreement to be or
become untrue; or
(xvii) authorize, recommend, propose or announce an intention to
do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
(b) Except as permitted herein, during the period from the date
of this Agreement through the Effective Time, Parent shall not, and shall
cause each of its Subsidiaries not to, consummate or enter into any
agreement to consummate any transaction which would reasonably be expected
to delay or impede the consummation of the Merger or which relates to the
merchant acquiring business and would require filings to be made under the
HSR Act; provided, however, that this Section 4.1(b) shall be inapplicable
with respect to the exercise or enforcement by Parent or any of its
Subsidiaries of any of their current rights (including, without limitation,
options to acquire assets or perform services) or the performance by Parent
or any of its Subsidiaries of any current obligations (including, without
limitation, in connection with rights of third parties to require Parent or
any of its Subsidiaries to acquire assets or perform services).
Section 4.2 No Solicitation. (a) The Company shall, and shall
cause its Subsidiaries and its and their respective officers, directors,
employees, financial advisors, attorneys and other advisors and
representatives (collectively, "Company Representatives") to immediately
cease any discussions or negotiations with any Person that may be ongoing
with respect to any possibility or consideration of making a Takeover
Proposal (as hereinafter defined). The Company shall not, nor shall it
permit any of its Subsidiaries to, nor shall it authorize or permit any
Company Representative to, directly or indirectly, (i) solicit, initiate or
encourage any inquiries or the making or implementation of any Takeover
Proposal, (ii) make or implement or participate in the making or
implementation of any Takeover Proposal, (iii) approve or recommend (except
with respect to a Superior Proposal in respect of which the Company is
entitled to discuss or negotiate in accordance with this Section 4.2), or
enter into any agreement with respect to, any Takeover Proposal or (iv)
participate in any discussions or negotiations regarding, or furnish to any
Person any information with respect to the Company or any of its
Subsidiaries in connection with, or take any other action that may
reasonably be expected to lead to any Takeover Proposal; provided, however,
that nothing contained in this Section 4.2(a) shall prohibit the Company or
its directors from complying with Rules 14d-9 and 14e-2 promulgated under
the Exchange Act with regard to a tender or exchange offer; and provided,
further, that prior to the Effective Time, if (A) the Company receives a
request for non-public information that was not solicited in violation of
this Section 4.2(a) from a party who proposes a written bona fide Takeover
Proposal and if the Board of Directors of the Company determines in good
faith that the failure to provide the information requested would be
inconsistent with such Board's fiduciary duties to the Company and its
stockholders or otherwise breach or violate applicable law (based on the
advice of outside legal counsel to the Company to such effect, which advice
shall specifically take into account the Stockholder Agreement and all the
terms thereof, including the obligations and agreements therein of Bank One
and First USA with respect to the Shares owned by First USA and voting for
the Merger and against any Takeover Proposal other than the Merger (the
"Legal Advice")), then the Company and the Company Representatives may, in
response to an unsolicited request therefor, and subject to compliance with
Section 4.2(b), furnish information with respect to the Company and its
Subsidiaries to the Person making such Takeover Proposal pursuant to a
customary confidentiality agreement (as determined by the Company's outside
legal counsel) on terms not in the aggregate materially more favorable to
such Person than the terms contained in the Confidentiality Agreement, and
(B) (i) a Takeover Proposal constitutes a Superior Proposal (as hereinafter
defined), and (ii) the Board of Directors of the Company reasonably
determines in good faith that the failure to provide the information
requested or to engage in discussions or negotiations would be inconsistent
with such Board's fiduciary duties to the Company and its stockholders or
otherwise breach or violate applicable law (based on Legal Advice), then to
the extent such failure is inconsistent with such Board's fiduciary duties
(determined as aforesaid), the Company and the Company Representatives may,
in response to an unsolicited request therefor, and subject to compliance
with Section 4.2(b), participate in discussions or negotiations with such
Person. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any
Company Representative, whether or not such person is purporting to act on
behalf of the Company or any of its Subsidiaries or otherwise, shall be
deemed to be a breach of this Section 4.2(a) by the Company. For purposes
of this Agreement, "Takeover Proposal" means (i) any written proposal or
offer for a tender offer, recapitalization, merger, consolidation or other
business combination involving the Company or any of its Subsidiaries or
any proposal or offer to acquire in any manner, directly or indirectly, an
equity interest in, any voting securities of, or a substantial portion of
the assets of the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement, the Stockholder Agreement and
the Contribution Agreement or (ii) any other transaction the consummation
of which could reasonably be expected to impede, interfere with, prevent or
materially delay the Merger or which could reasonably be expected to dilute
or adversely affect materially the benefits to Parent of the transactions
contemplated by this Agreement, the Stockholder Agreement and the
Contribution Agreement, and "Superior Proposal" means a bona fide Takeover
Proposal made by a third party on terms which the Board of Directors of the
Company reasonably determines in good faith to be more favorable to the
Company's stockholders than the Merger (based on a written opinion, with
only customary qualifications, from a nationally recognized investment
banking firm serving as financial advisor to the Company (a "Banker
Opinion") that the value of the consideration provided for in such proposal
exceeds the Merger Consideration) and for which financing, to the extent
required, is then committed or which the Board of Directors reasonably
determines in good faith (based on a Banker Opinion) is highly likely to be
obtained by such third party. In making its determination whether a
Takeover Proposal constitutes a Superior Proposal pursuant to the preceding
sentence, the Board of Directors shall take into account whether such
Takeover Proposal has a reasonable prospect of being consummated prior to
October 1, 1999. Notwithstanding the foregoing, unless this Agreement
shall have been terminated pursuant to the terms hereof, nothing shall
prevent Parent, in its discretion, from consummating the Merger.
(b) The Company shall advise Parent and Bank One orally and in
writing of (i) any Takeover Proposal or any inquiry with respect to or
which could lead to any Takeover Proposal received by any officer or
director of the Company or, to the knowledge of the Company, any other
Company Representative and (ii) the identity of the Person making any such
Takeover Proposal or inquiry, no later than 24 hours following receipt of
such Takeover Proposal or inquiry. If the Company intends to furnish any
Person with any information with respect to any Takeover Proposal in
accordance with Section 4.2(a), the Company shall advise Parent and Bank
One orally and in writing of such intention not less than 24 hours in
advance of providing such information and shall promptly provide to Parent
and Bank One any information concerning the Company, its Subsidiaries,
business, properties or assets furnished to any third party and which has
not previously been provided to Parent and Bank One.
Section 4.3 Third Party Standstill Agreements. During the
period from the date of this Agreement through the Effective Time, the
Company shall not terminate, amend, modify or waive any provision of any
standstill agreement to which the Company or any of its Subsidiaries is a
party (other than, to the extent mutually agreed between Parent and the
Company, any such agreement involving Parent). During such period, the
Company agrees to enforce, to the fullest extent permitted under applicable
law, the provisions of any such agreements, including, but not limited to,
obtaining injunctions to prevent any breaches of such agreements and to
enforce specifically the terms and provisions thereof in any court of the
United States or any state thereof having jurisdiction.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Stockholder Meeting. (a) As soon as practicable
following the execution of this Agreement, the Company will duly call, give
notice of, convene and hold a meeting of stockholders (the "Stockholder
Meeting") for the purpose of considering the adoption of this Agreement and
the approval of the Merger and at such meeting call for a vote and cause
proxies to be voted in respect of the adoption of this Agreement and the
Company will, through its Board of Directors, recommend to its stockholders
the adoption of this Agreement, and shall not withdraw or modify such
recommendation (unless it has been previously withdrawn pursuant to the
terms of Section 4.2). This Agreement shall be submitted to the Company's
stockholders at the Stockholder Meeting whether or not the Board of
Directors determines at any time that this Agreement is no longer advisable
and recommends that the stockholders reject it.
(b) As soon as practicable after the execution of this
Agreement, the Company shall prepare and file a preliminary Proxy Statement
with the SEC and shall use its reasonable best efforts to respond to any
comments of the SEC or its staff and to cause the Proxy Statement to be
mailed to the Company's stockholders as promptly as practicable after
responding to all such comments to the satisfaction of the staff. The
Company shall notify Parent and Bank One promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Parent and Bank One with copies of
all correspondence between the Company or any of its representatives, on
the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement or the Merger. If at any time prior to the Stockholder
Meeting there shall occur any event that should be set forth in an
amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its stockholders such an amendment or supplement.
Parent and its counsel and Bank One and its counsel shall be given a
reasonable opportunity to review and comment upon the Proxy Statement and
any such correspondence prior to its filing with the SEC or dissemination
to the Company's Stockholders. The Company shall not so file or
disseminate any Proxy Statement, or any amendment or supplement thereto, to
which Parent or Bank One reasonably objects. Parent and Bank One shall
cooperate with the Company in the preparation of the Proxy Statement or any
amendment or supplement thereto.
Section 5.2 Access to Information. During the period from the
date of this Agreement through the Effective Time and subject to currently
existing contractual and legal restrictions applicable to the Company or
any of its Subsidiaries, the Company shall, and shall cause each of its
Subsidiaries to, afford to the accountants, counsel, financial advisors and
other representatives of Parent reasonable access to, and permit them to
make such inspections as they may reasonably require of, all of their
respective properties, books, contracts, commitments and records and,
during such period, the Company shall, and shall cause each of its
Subsidiaries to (i) furnish promptly to Parent a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws,
(ii) furnish promptly to Parent all other information concerning its
business, properties and personnel as Parent may reasonably request and
(iii) promptly make available to Parent all personnel of the Company and
its Subsidiaries knowledgeable about matters relevant to such inspections;
provided, however, that the foregoing shall not require the Company or any
of its Subsidiaries to furnish or otherwise make available to Parent or any
of its Subsidiaries customer-specific data or competitively sensitive
information relating to areas of the company's business in which Parent
and/or any of its Subsidiaries competes against the Company. No
investigation pursuant to this Section 5.2 shall affect any representation
or warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto. All information obtained by Parent
pursuant to this Section 5.2 shall be kept confidential in accordance with
the Letter Agreement, dated September 4, 1997 between Parent and the
Company, as confirmed in a letter dated October 22, 1998 from Parent to the
Company (collectively, the "Confidentiality Agreement").
Section 5.3 Costs and Expenses; Termination Fee. (a) Except as
provided in this Section 5.3, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby (including the
Merger), including the fees and disbursements of counsel, financial
advisors and accountants, shall be paid by the party incurring such costs
and expenses, whether or not the Merger is consummated.
(b) The Company shall pay, or cause to be paid, in same day funds
to Parent $10 million (the "Termination Fee"), under the circumstances and
at the times set forth as follows:
(i) if Parent terminates this Agreement under Section 7.1(d) the
Company shall pay the Termination Fee upon demand; and
(ii) if the Company terminates this Agreement under Section
7.1(e), the Company shall pay the Termination Fee simultaneously with
such termination.
(c) If this Agreement is terminated pursuant to Section
7.1(b)(i) and at the time of such termination the condition set forth in
Section 6.1(c) shall not have been fulfilled, then Parent shall reimburse
the Company upon demand for all documented out-of-pocket fees and expenses
incurred or paid by or on behalf of the Company in connection with this
Agreement and the transactions contemplated hereby, including all fees and
expenses of its counsel, financial advisor, accountant and other
consultants and advisors; provided, however, that Parent shall not be
obligated to make payments pursuant to this Section 5.3(c) in excess of $2
million in the aggregate.
Section 5.4 Stock Options. (a) Prior to the Effective Time,
the Board of Directors of the Company (or, if appropriate, any committee
thereof) shall adopt appropriate resolutions and take all other actions
necessary or appropriate, if any, to (i) cause each Company Stock Option
that is outstanding as of the date hereof to vest and to be exercisable
immediately prior to the consummation of the Merger, (ii) cause all
restrictions applicable to any restricted stock award heretofore granted
under the Company Restricted Stock Plan or any other similar plan
outstanding upon the consummation of the Merger to lapse immediately prior
to the Effective Time and (iii) cause each Company Stock Option that is
outstanding upon the consummation of the Merger to be exercisable solely
for the Merger Consideration for each Share issuable upon exercise thereof
immediately prior to the Effective Time. The Company shall offer each
holder of a Company Stock Option (an "Option Holder"), in exchange for the
cancellation thereof, the right to receive from the Company an amount equal
to (A) the product of (1) the number of shares of Company Common Stock
subject to such Company Stock Option and (2) the excess, if any, of the
Merger Consideration over the exercise price per share for the purchase of
the Company Common Stock subject to such Company Stock Option, minus (B)
all applicable federal, state and local Taxes required to be withheld in
respect of such payment. The amounts payable pursuant to the immediately
preceding sentence of this 5.4 shall be paid as soon as reasonably
practicable following the Effective Time. The surrender of an Option in
exchange for the consideration contemplated by the second sentence of this
Section 5.4 shall be deemed a release of any and all rights the Option
Holder had or may have had in respect thereof. The Company shall take all
such steps as may be required to cause the transactions contemplated by
this Section 5.4 and any other dispositions of Company equity securities
(including derivative securities) in connection with this Agreement by each
individual who is a director or officer of the Company to be exempt under
Rule 16b-3 promulgated under the Exchange Act, such steps to be taken in
accordance with the No-Action Letter dated January 12, 1999, issued by the
SEC to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
(b) The Company shall take all actions necessary to ensure that
(i) the Offering Period (as defined in the Company Stock Purchase Plan)
applicable to the options outstanding under the Company Stock Purchase Plan
(each, a "Purchase Plan Option") is shortened in accordance with Section 16
of the Company Stock Purchase Plan so as to have an Exercise Date (as
defined in the Company Stock Purchase Plan) that occurs before the
Effective Time; (ii) no new Offering Period, other than the Offering Period
scheduled to commence on April 1, 1999, shall commence on or after the date
hereof, and (iii) no holder of a Purchase Plan Option is permitted to
increase his or her rate of payroll deduction under the Company Stock
Purchase Plan from and after the date hereof.
(c) The Company shall take all actions necessary to provide
that, prior to the Effective Time, (i) the Company Stock Option Plan, the
Company Stock Purchase Plan and any similar plan or agreement of the
Company shall be terminated, (ii) any rights under any other plan, program,
agreement or arrangement to the issuance or grant of any other interest in
respect of the capital stock of the Company or any of its Subsidiaries
shall be terminated, and (iii) no Option Holder will have any right to
receive any shares of capital stock of the Company or, if applicable, the
Surviving Corporation, upon exercise of any Company Stock Option.
(d) The Company represents and warrants that it has the power
and authority under the terms of the Company Stock Purchase Plan and each
of the Company Stock Option Plan and the Company Restricted Stock Plan to
comply with subsections (a), (b) and (c) hereof without the consent of any
Option Holder or any other person.
Section 5.5 Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable
to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including: (i) the obtaining of all necessary actions or non-
actions, waivers, consents and approvals from all Governmental Entities and
Card Associations and the making of all necessary registrations and filings
(including filings under the HSR Act, the Change in Bank Control Act and
the Utah Statute and other filings with Governmental Entities) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental
Entity (including furnishing all information required under the HSR Act,
the Change in Bank Control Act and the Utah Statute and actions in
connection with State Takeover Approvals); (ii) the obtaining of all
necessary consents, approvals or waivers from third parties; (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby and thereby, including seeking to have any
stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed; and (iv) the execution and
delivery of any additional instruments necessary to consummate the
transactions contemplated by this Agreement. Each party will promptly
consult with the other with respect to, provide any necessary information
with respect to and provide the other (or its counsel) and Bank One (or its
counsel) copies of, all filings made by such party with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby. In addition, if at any time prior to the Effective Time any event
or circumstance relating to any of the Company, Parent or Merger Sub or any
of their respective Subsidiaries, or any of their respective officers or
directors, should be discovered by the Company, Parent or Merger Sub, as
the case may be, and which should be set forth in an amendment or
supplement to the Proxy Statement or the Schedule 13e-3, the discovering
party will promptly inform the other party of such event or circumstance.
No party to this Agreement shall consent to any voluntary delay of the
consummation of the Merger at the behest of any Governmental Entity without
the consent of the other parties to this Agreement, which consent shall not
be unreasonably withheld.
(b) Each party shall use all reasonable best efforts to not take
any action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or
result in a breach of any covenant made by it in this Agreement.
(c) Notwithstanding anything to the contrary contained in this
Agreement, in connection with any filing or submission required or action
to be taken by either Parent or the Company to effect the Merger and to
consummate the other transactions contemplated hereby, the Company shall
not, without Parent's prior written consent, commit to any divestiture
transaction other than with respect to the Excluded Assets (as defined in
the Contribution Agreement), and neither Parent nor any of its affiliates
shall be required to divest or hold separate or otherwise take or commit to
take any action that limits its freedom of action with respect to, or its
ability to retain, the Company or any of the businesses, product lines or
assets of Parent or any of its Subsidiaries or that would have a Material
Adverse Effect on Parent.
Section 5.6 Public Announcements. Parent and the Company will
not issue any press release with respect to the transactions contemplated
by this Agreement or otherwise issue any written public statements with
respect to such transactions without prior consultation with the other
party and Bank One, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange.
Section 5.7 State Takeover Laws. If any "fair price," "business
combination" or "control share acquisition" statute or other similar
statute or regulation is or may become applicable to the transactions
contemplated hereby, in the Stockholder Agreement or in the Contribution
Agreement such that, without further approval or action by Parent, the
Company or their respective Boards of Directors, such transactions cannot
be consummated in accordance with the terms hereof and thereof and such
statute or regulations, then Parent and the Company and their respective
Boards of Directors shall use their reasonable efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated hereby and thereby may be consummated as promptly as
practicable on the terms contemplated hereby and thereby and otherwise act
to minimize the effects of any such statute or regulation on the
transactions contemplated hereby and thereby.
Section 5.8 Indemnification; Directors and Officers Insurance.
(a) From and after the Effective Time, Parent shall cause the Surviving
Corporation to indemnify and hold harmless all past and present officers
and directors of the Company and of its Subsidiaries (each an "Indemnified
Party") to the same extent and in the same manner such persons are
indemnified as of the date of this Agreement by the Company pursuant to the
DGCL, the Company Charter or the Company's By-laws for acts or omissions
occurring at or prior to the Effective Time. Parent also agrees to advance
expenses as incurred to the fullest extent permitted under the DGCL upon
receipt from the applicable Indemnified Party to whom expenses are to be
advanced of an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification pursuant to
this Section 5.8(a).
(b) Parent shall cause the Surviving Corporation to provide, for
an aggregate period of not less than six years from the Effective Time, the
Company's current directors and officers an insurance and indemnification
policy that provides coverage for events occurring prior to the Effective
Time (the "D&O Insurance") that is substantially similar to the Company's
existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the
Surviving Corporation shall not be required to pay an annual premium for
the D&O Insurance in excess of 150% of the last annual premium paid prior
to the date hereof but in such case shall purchase as much coverage as
possible for such amount.
(c) The provisions of this Section 5.8(i) are intended to be for
the benefit of, and will be enforceable by, each Indemnified Party, his or
her heirs and his or her representatives and (ii) are in addition to, and
not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise.
Section 5.9 Notification of Certain Matters. Parent shall use
its reasonable best efforts to give prompt notice to the Company and Bank
One, and the Company shall use its reasonable best efforts to give prompt
notice to Parent and Bank One, of: (i) the occurrence, or non-occurrence,
of any event the occurrence, or non-occurrence, of which it is aware and
which would be reasonably likely to cause (x) any representation or
warranty contained in this Agreement and made by it to be untrue or
inaccurate in any material respect or (y) any covenant, condition or
agreement contained in this Agreement and made by it not to be complied
with or satisfied in all material respects, (ii) any failure of Parent or
the Company, as the case may be, to comply in a timely manner with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder or (iii) any change or event which has had a
Material Adverse Effect on the Company; provided, however, that the
delivery of any notice pursuant to this Section 5.9 shall not limit or
otherwise affect the remedies available hereunder to the party receiving
such notice.
Section 5.10 Certain Litigation. The Company agrees that it
shall not settle any litigation commenced after the date hereof against the
Company or any of its directors by any stockholder of the Company relating
to the Merger, this Agreement or the Stockholder Agreement without the
prior written consent of Parent, which consent may not be unreasonably
withheld. In addition, the Company shall not voluntarily cooperate with
any third party that may hereafter seek to restrain or prohibit or
otherwise oppose the Merger and shall cooperate with Parent and Merger Sub
to resist any such effort to restrain or prohibit or otherwise oppose the
Merger.
Section 5.11 Revolving Credit Agreement. The Company agrees to
use reasonable efforts to obtain a waiver of the restrictions on dividends
or other distributions by the Company under its existing revolving credit
agreement and the consent to the transfer of such revolving credit
agreement to the Alliance.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions:
(a) Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(b) No Order. No court or other Governmental Entity having
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect
and has the effect of making illegal the Merger or any of the other
transactions contemplated by this Agreement, the Stockholder Agreement or
the Contribution Agreement.
(c) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the Merger shall have expired or been
terminated.
(d) Regulatory Approvals. The parties shall have received the
approval of the Federal Deposit Insurance Corporation under the Change in
Bank Control Act and the approval of the Utah Department of Financial
Institutions under the Utah Statute, and any other governmental or
regulatory notices or approvals required with respect to the transactions
contemplated hereby shall have been either filed or received, except for
those the failure to have given or obtain would not have a Material Adverse
Effect on the Company.
Section 6.2. Additional Conditions to Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to effect the Merger
shall be subject to fulfillment of the following additional conditions, any
of which, subject to Section 7.4, may be waived exclusively by Parent:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified as
to materiality shall be true and correct as of the date of the Closing and
the representations and warranties that are not so qualified shall be true
and correct in all material respects, in each case as though made on and as
of the date of the Closing (except to the extent any such representation or
warranty expressly speaks as of an earlier date); and Parent and Merger Sub
shall have received a certificate signed on behalf of the Company by an
executive officer of the Company to such effect.
(b) Performance of Obligations. The Company shall have
performed in all material respects each material obligation and agreement
and shall have complied in all material respects with each material
covenant required to be performed and complied with by it under this
Agreement at or prior to the Effective Time; and Parent and Merger Sub
shall have received a certificate signed on behalf of the Company to such
effect.
(c) Absence of Material Adverse Change. There shall not have
occurred any Material Adverse Change with respect to the Company.
(d) Absence of Pending Litigation. There shall not be pending
by any Governmental Entity any suit, action or proceeding (i) seeking to
restrain or prohibit the Merger or the performance of any of the other
transactions contemplated by this Agreement, the Stockholder Agreement or
the Contribution Agreement or seeking to obtain from the Company or Parent
any damages that would have a Material Adverse Effect on Parent or the
Company, (ii) seeking to compel the Company or Parent or any of their
Affiliates to dispose of or hold separate any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole,
or Parent and its Subsidiaries, taken as a whole, as a result of the Merger
or any of the other transactions contemplated by this Agreement, the
Stockholder Agreement or the Contribution Agreement or (iii) which
otherwise is reasonably likely to have a Material Adverse Effect on the
Company, other than such suits, actions or proceedings which, in the
reasonable opinion of both counsel to Parent and to the Company, are
unlikely to result in an adverse judgement.
(e) Stockholder Agreement and Contribution Agreement. Neither
Bank One nor First USA shall have terminated the Stockholder Agreement or
the Contribution Agreement (whether or not in accordance with the terms
thereof) and neither Bank One nor First USA shall be in material breach
thereof or shall have indicated its intention not to perform such party's
obligations thereunder.
(f) Accounting Matters Applicable to Bank One. The conditions
set forth in Section 5.9 of the Contribution Agreement shall have been
fulfilled or waived pursuant to the terms of the Contribution Agreement.
Section 6.3. Additional Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger shall be subject to
fulfillment of the following additional conditions, any of which, subject
to Section 7.4, may be waived exclusively by the Company:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub set forth in this Agreement that are
qualified as to materiality shall be true and correct as of the date of the
Closing and the representations and warranties that are not so qualified
shall be true and correct in all material respects, in each case as though
made on and as of the date of the Closing (except to the extent any such
representation or warranty expressly speaks as of an earlier date); and the
Company shall have received certificates signed on behalf of each of Parent
and Merger Sub by an executive officer of each to such effect.
(b) Performance of Obligations. Parent and Merger Sub shall
have performed in all material respects each material obligation and
agreement and shall have complied in all material respects with each
material covenant required to be performed and complied with by either of
them under this Agreement at or prior to the Effective Time; and the
Company shall have received certificates signed on behalf of each of Parent
and Merger Sub to such effect.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval of
this Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the Merger shall not have been consummated prior to
October 1, 1999; provided, however, that the right to terminate
this Agreement pursuant to this Section 7.1(b)(i) shall not be
available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of any
such condition or if the failure of such condition results from
facts or circumstances that constitute a breach of any
representation or warranty under this Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger or the other
transactions contemplated by this Agreement, the Stockholder
Agreement or the Contribution Agreement and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by Parent or the Company in the event of a breach by the
other (or Merger Sub, in the case of Parent) of any representation,
warranty, covenant or other agreement contained in this Agreement
which (i) would reasonably be expected to give rise to the failure of
a condition set forth in Sections 6.2 (a) or (b) or 6.3 (a) or (b), as
the case may be, and (ii) cannot be or has not been cured within
30 days after the giving of written notice of such breach to the
Company;
(d) by Parent if (i) the Board of Directors of the Company or
any committee thereof shall have withdrawn or modified in a manner
adverse to Parent its approval or recommendation of the Merger or this
Agreement, or approved or recommended any Takeover Proposal (whether
or not in compliance with Section 4.2) or (ii) the Board of Directors
of the Company or any committee thereof shall have resolved to take
any of the foregoing actions; or
(e) by the Company prior to receipt of the Company Stockholder
Approval if (i) a Takeover Proposal constitutes a Superior Proposal,
and (ii) the Board of Directors of the Company reasonably determines
in good faith that the failure to terminate this Agreement and accept
such Superior Proposal would be inconsistent with such Board's
fiduciary duties to the Company and its stockholders or otherwise
breach or violate applicable law (based on Legal Advice); provided,
however, that this Agreement shall not terminate pursuant to this
Section 7.1(e) unless (i) the Company has complied with all provisions
of Section 4.2, including the notice provisions therein, (ii)
simultaneously with such termination the Company has complied with the
requirements of Section 5.3(b) relating to the payment (including the
timing of any payment) of the Termination Fee to the extent required
by Section 5.3(b) and (iii) simultaneously with such termination the
Company enters into a definitive acquisition, merger or similar
agreement to effect such Superior Proposal; and provided, further,
that the Company may not terminate this Agreement pursuant to this
Section 7.1(e) unless and until 120 hours have elapsed following
delivery to Parent and Bank One of a written notice of such
determination by the Board of Directors of the Company and during such
120 hours Parent has not informed the Company that it is willing to
substantially match the terms and conditions of such Superior
Proposal.
The right of any party hereto to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any party
hereto, any person controlling any such party or any of their respective
officers or directors, after the execution of this Agreement.
Section 7.2 Effect of Termination. In the event of termination
of this Agreement by either Parent or the Company, as provided in Section
7.1, this Agreement shall forthwith become void and there shall be no
liability hereunder on the part of the Company, Parent, Merger Sub or their
respective officers or directors (except for Section 2.5, 2.7, 3.23, the
last sentence of Section 5.2, Section 5.3, this Section 7.2 and Article
VIII, all of which shall survive the termination); provided, however, that
nothing contained in this Section 7.2 shall relieve any party hereto from
any liability for any willful breach of a representation or warranty
contained in this Agreement or the material breach of any covenant
contained in this Agreement.
Section 7.3 Amendment. This Agreement may be amended by the
parties hereto, at any time before or after Company Stockholder Approval
(if required by law); provided, that (i) if the Company Stockholder
Approval shall have been obtained, thereafter no amendment shall be made
which by law requires further approval by such stockholders without such
further approval and (ii) no amendment of this Agreement shall be made
effective without the prior written consent of Bank One which consent shall
not be unreasonably withheld. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
Section 7.4 Extension; Waiver. At any time prior to the
Effective Time and subject to in clause (ii) of Section 7.3, the parties
hereto may to the extent legally allowed (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations, Warranties and
Agreements. None of the representations, warranties and agreements (except
those agreements referred to in the immediately following sentence in the
event of the Merger or those agreements and matters referred to in Section
7.2 in the event of the termination of this Agreement in accordance with
Section 7.1) in this Agreement or in any instrument delivered pursuant to
this Agreement shall survive the Effective Time or the termination of this
Agreement pursuant to Section 7.1, as the case may be. This Section 8.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time of the Merger.
Section 8.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, one day after being delivered to an overnight courier or when
telecopied (with a confirmatory copy sent by overnight courier) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
First Data Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
and
Sidley & Austin
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: 312-853-7036
(b) if to the Company, to:
Paymentech, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: 212-735-2000
(c) if to Bank One, to:
BANK ONE CORPORATION
One First National Plaza
Law Department
Mail Suite 0287
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Section 8.3 Interpretation; Definitions. (a) When a reference
is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by the
words "without limitation."
(b) As used in this Agreement, the following terms have the
meanings specified in this Section 8.3(b) and shall be equally applicable
to both the singular and plural forms:
"Bank Card Association" means Mastercard International, Inc.,
VISA U.S.A., Inc. or VISA International, Inc.
"Bank Cards" means a credit card, charge card, debit card, stored
value card or similar instrument that is issued by a licensee of a Bank
Card Association.
"Bank Holding Company Act" means the Bank Holding Company Act of
1956, as amended.
"Card Associations" means (i) Bank Card Associations and (ii)
Other Card companies (e.g. Discover, JCB, American Express, debit card
networks or links) and any other card association or similar entity with
whom the Company and/or any of its Subsidiaries may have a contract for
processing and/or facilitating settlement of transaction media (including
direct send contracts with Bank Card issuing banks) generated by holders of
cards or similar instruments issued by licensees of such groups.
"Cards" means Bank Cards and all Other Cards.
"Change in Bank Control Act" means Section 18(c)(1)(A) of the
Federal Insurance Corporation Act.
"IRS" means the Internal Revenue Service.
"Material Adverse Change" or "Material Adverse Effect" means,
when used with respect to the Company or Parent, as the case may be, any
change or effect that is or would reasonably be expected (as far as can be
foreseen at the time) to be materially adverse to the business, results of
operations, or condition (financial or otherwise), of the Company and its
Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a
whole; provided, however, that the effects of changes that are generally
applicable to the industries in which the Company operates or to the United
States economy generally, or which result from the announcement of the
transactions contemplated by this Agreement, shall be excluded from such
determination.
"Other Cards" shall include Discover, JCB, American Express,
Diners Club, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and any other Card or similar instrument which
may be issued by a debit card network or any other Card Association (or
licensee thereof) other than Mastercard or Visa.
"Subsidiary" means any corporation, partnership, limited
liability company, joint venture or other legal entity of which Parent,
Bank One or the Company, as the case may be (either alone or through or
together with any other such Subsidiary), owns, directly or indirectly, 50%
or more of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or
other governing body of such corporation, partnership, limited liability
company, joint venture or other legal entity.
"Transaction Card" means a Card issued pursuant to a license from
a Card Association for which the Company and/or any of its Subsidiaries
currently provides service support.
(c) The following terms shall have the meanings set forth for
such terms in the Sections set forth below:
TERM SECTION
---- --------
"Affiliated Person" Section 3.22
"Agreement" Preamble
"Alliance" Recitals
"Bank One" Recitals
"Banker Opinion" Section 4.2(a)
"Blue Sky Laws" Section 2.3
"Certificate of Merger" Section 1.3
"Certificates" Section 1.7(b)
"Closing" Section 1.9
"Company" Preamble
"Company Business Personnel" Section 3.15
"Company Charter" Section 1.5(a)
"Company Common Stock" Recitals
"Company Foreign Benefit Plan" Section 3.13(f)
"Company Letter" Section 3.2
"Company Merchant Contracts" Section 3.20(c)
"Company Multiemployer Plan" Section 3.13(a)
"Company Permits" Section 3.9
"Company Plan" Section 3.13(a)
"Company Preferred Stock" Section 3.3
"Company Representatives" Section 4.2(a)
"Company Restricted Stock Plan" Section 3.3
"Company SEC Documents" Section 3.6
"Company Stock Option Plan" Section 3.3
"Company Stock Options" Section 3.3
"Company Stock Purchase Plan" Section 3.3
"Company Stockholder Approval" Section 2.4
"Compensation Agreements" Section 3.12
"Computerized Assets" Section 3.16
"Confidentiality Agreement" Section 5.2
"Constituent Corporations" Preamble
"Contribution Agreement" Recitals
"D&O Insurance" Section 5.8(b)
"DGCL" Section 1.2
"Dissenting Shares" Section 1.6(d)
"Dissenting Stockholder" Section 1.6(d)
"Effective Time" Section 1.3
"Environmental Law" Section 3.19(a)
"Environmental Permit" Section 3.19(a)
"ERISA" Section 3.13(a)
"ERISA Affiliate" Section 3.13(a)
"Exchange Act" Section 2.4
"First USA" Recitals
"GAAP" Section 3.14(a)
"Governmental Entity" Section 2.3
"Hazardous Substances" Section 3.19(a)
"Holdco" Preamble
"HSR Act" Section 2.3
"Intellectual Property Rights" Section 3.16
"Legal Advice" Section 4.2(a)
"Liens" Section 3.2
"Merger" Recitals
"Merger Consideration" Recitals
"Merger Sub" Preamble
"Option Holder" Section 5.4(a)
"Parent" Preamble
"Paying Agent" Section 1.7(a)
"Proxy Statement" Section 2.4
"Purchase Plan Option" Section 5.4(b)
"Real Estate" Section 3.17(b)
"Schedule 13e-3" Section 2.4
"SEC" Section 2.4
"Securities Act" Section 3.6
"Shares" Recitals
"Software" Section 3.16
"State Takeover Approvals" Section 2.3
"Stockholder Agreement" Recitals
"Stockholder Meeting" Section 5.1(a)
"Superior Proposal" Section 4.2(a)
"Surviving Corporation" Section 1.2
"Takeover Proposal" Section 4.2(a)
"Tax Return" Section 3.10
"Taxes" Section 3.10
"Termination Fee" Section 5.3(b)
"Top 25 Customers" Section 3.20(a)
Section 8.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
Section 8.5 Entire Agreement; No Third-Party Beneficiaries.
This Agreement, except as provided in the last sentence of Section 5.2,
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter hereof. This Agreement, except for the provisions of
Sections 1.2 and 5.8 and except as expressly set forth in Sections 1.5,
1.7(a), 2.4, 4.2(b), 5.1, 5.5, 5.6, 5.9, 7.3 and 8.5 with respect to Bank
One, is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
Section 8.6 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof. In addition, each of the parties
hereto (i) consents to submit itself to the personal jurisdiction of any
Federal or state court located in the State of Delaware in the event any
dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (ii) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, (iii) waives any objection based on forum non
conveniens or any other objection to venue thereof, and (iv) agrees that it
will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the State of Delaware.
Section 8.7 Assignment. Subject to Section 1.2, neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. This
Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
Section 8.8 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other terms, conditions and provisions
of this Agreement shall nevertheless remain in full force and effect so
long as the economic and legal substance of the transactions contemplated
hereby are not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order
that the transactions contemplated by this Agreement may be consummated as
originally contemplated to the fullest extent possible.
Section 8.9 Enforcement of this Agreement. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific wording or were otherwise breached. It is accordingly agreed that
the parties hereto shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions hereof, such remedy being in addition to any other remedy to
which any party is entitled at law or in equity. Each party hereto waives
any right to a trial by jury in connection with any such action, suit or
proceeding.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be signed by their respective officers thereunto
duly authorized all as of the date first written above.
FIRST DATA CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
FB MERGING CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
PAYMENTECH, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
Exhibit C
As of the Effective Time, the Company Charter shall be amended to read
in its entirety as follows:
FIRST: The name of this corporation (hereinafter called the "Corporation")
is
Paymentech, Inc.
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The amount of the total authorized capital stock of this
Corporation is Ten Dollars ($10.00) divided into 1,000 shares, par value
$0.01 per share.