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Exhibit 2.1
SHARE EXCHANGE AND INTEGRATION AGREEMENT
BY AND AMONG
MASTERCARD INCORPORATED,
MASTERCARD INTERNATIONAL INCORPORATED,
AND
EUROPAY INTERNATIONAL S.A.
DATED AS OF
, 2001
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SHARE EXCHANGE AND INTEGRATION AGREEMENT
This SHARE EXCHANGE AND INTEGRATION AGREEMENT (the "AGREEMENT") is made
and entered into as of __________ __, 2001, by and among MasterCard
Incorporated, a Delaware corporation ("MC GLOBAL"), MasterCard International
Incorporated, a Delaware non-stock corporation. ("MCI"), and Europay
International S.A., a company limited by shares, organized and existing under
the laws of Belgium ("EPI"). Capitalized terms not otherwise defined herein have
the meanings set forth in SECTION 9.1.
WHEREAS, MCI operates a global payments system that supports a family of
proprietary brands including the MasterCard(R) and Cirrus(R) brands;
WHEREAS, EPI operates a European payments system that supports a family of
proprietary brands including the Eurocard(R), ec eurocheque(R) and ec Picto(R)
brands;
WHEREAS, MCI and EPI jointly operate a global payments system that
supports the Maestro(R) brand;
WHEREAS, MCI and EPI are parties to an Alliance Agreement, dated as of
November 14, 1996 (the "ALLIANCE AGREEMENT"), and a Maestro Agreement, dated as
of June 19, 1997 (the "MAESTRO AGREEMENT"), under which EPI was delegated
certain authority to manage the licensing of MCI's brands and Maestro(R) brands,
respectively, to European financial institutions;
WHEREAS, the Boards of Directors of MCI, MC Global and EPI have each
approved a transaction in which the business, assets and operations of MCI and
EPI will be combined into a single global enterprise, the parent of which will
be known as "MasterCard Incorporated," and immediately thereafter the Alliance
Agreement and the Maestro Agreement will be terminated;
WHEREAS, the Boards of Directors of MCI and EPI have each approved a term
sheet relating to the transactions provided for in this Agreement, which term
sheet is superseded by this Agreement;
WHEREAS, MCI and MC Global will consummate a stock conversion (the
"CONVERSION") in accordance with the Agreement and Plan of Merger attached
hereto as EXHIBIT A, in which all Principal Members of MCI will exchange their
existing Principal Membership Interests in MCI for Class A membership interests
in MCI and for shares of MC Global Class A Stock, par value $.01 per share (the
"MC GLOBAL CLASS A STOCK"), and MC Global Class B Stock, par value $.01 per
share (the "MC GLOBAL CLASS B STOCK");
WHEREAS, immediately following the Conversion, (i) the shareholders of EPI
(each, an "EPI SHAREHOLDER," and collectively, the "EPI SHAREHOLDERS"), other
than MCI and MasterCard/Europay U.K. Limited, a company limited by shares
organized and existing under the laws of the United Kingdom ("MEPUK"), will
exchange their shares of EPI (the "EPI SHARE EXCHANGE") for shares of MC Global
Class A Stock and MC Global Class B Stock and (ii) simultaneously therewith, the
shareholders of MEPUK (the "MEPUK SHAREHOLDERS") will exchange their shares of
MEPUK for shares of MC Global Class A Stock and MC Global Class B Stock (the
"MEPUK SHARE EXCHANGE") (the EPI Share Exchange and the MEPUK Share Exchange are
collectively referred to as the "SHARE EXCHANGE") as more fully provided herein;
WHEREAS, the shares of MC Global Class A Stock and MC Global Class B Stock
to be issued to the European Members in the Conversion and the shares of MC
Global Class A Stock and MC Global Class B Stock to be issued to the EPI
Shareholders and the MEPUK Shareholders in the Share Exchange will constitute 33
l/3% of the Outstanding Shares of MC Global; and
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WHEREAS, immediately following the Conversion and the Share Exchange, the
Members Outside Europe will own shares of MC Global Class A Stock and MC Global
Class B Stock that constitute 66 2/3% of the Outstanding Shares of MC Global;
WHEREAS, for United States federal income tax purposes, the parties intend
that the transactions contemplated by this Agreement and the related documents,
including (i) the effective transfer by the Principal Members to MC Global of
the equity rights associated with their Principal Membership Interests, in the
form of a Class B membership interest in MCI, pursuant to the Conversion, (ii)
the Share Exchange and (iii) the reallocations of shares of MC Global Class A
Stock and MC Global Class B Stock among the shareholders of MC Global, shall
together constitute an integrated series of transactions consisting solely of
transfers of property to MC Global in exchange for shares of MC Global Stock
described in Section 351(a) of the Code;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE OF SHARES
1.1 CONVERSION. At the Closing and immediately prior to the Share
Exchange, MCI and MC Global shall consummate the Conversion. In the Conversion,
the existing Principal Membership Interests held by the Members Outside Europe
will be converted into Class A membership interests in MCI and an aggregate of
56,000,000 shares of MC Global Class A Stock and 10,666,667 shares of MC Global
Class B Stock and the existing Principal Membership Interests held by the
European Members will be converted into Class A membership interests in MCI and
an aggregate of 4,236,788 shares of MC Global Class A Stock and 807,007 shares
of MC Global Class B Stock. In the Conversion, shares of MC Global Class A Stock
and MC Global Class B Stock will be issued in respect of and in proportion to
each of the existing Principal Membership Interests held by the Members Outside
Europe and the European Members.
1.2 SHARE EXCHANGE; REALLOCATION OF SHARES.
(a) At the Closing, immediately following the consummation of the
Conversion pursuant to SECTION 1.1, MC Global and the EPI Shareholders shall
consummate the EPI Share Exchange, and MC Global and the MEPUK Shareholders
shall consummate the MEPUK Share Exchange. In the EPI Share Exchange, each EPI
Shareholder, other than MCI and MEPUK, will exchange each share of capital stock
of EPI held by it for 270.79657 shares of MC Global Class A Stock and 51.58030
shares of MC Global Class B Stock or an aggregate of 19,624,086 shares of MC
Global Class A Stock and 3,737,921 shares of MC Global Class B Stock. In the
MEPUK Share Exchange, the shareholders of MEPUK will exchange their shares of
capital stock of MEPUK for an aggregate of 4,139,126 shares of MC Global Class A
Stock and 788,405 shares of MC Global Class B Stock.
(b) At the Closing, immediately following the consummation of the
Conversion pursuant to Section 1.1 and the Share Exchange pursuant to Section
1.2(a), and as an integral part of the integrated series of transactions that
includes the Conversion and the Share Exchange, (i) the shares of MC Global
Class A Stock and MC Global Class B Stock held by the Shareholders of Europe
shall immediately be reallocated among each of the Shareholders of Europe so
that each such shareholder will receive such number of shares of MC Global Class
A Stock as is equal to its proportionate share of the European Regional Proxy
Amount as of December 31, 2000 multiplied by 28,000,000, and such number of
shares of MC Global Class B Stock as is equal to its proportionate share of the
European Regional Proxy Amount as of December 31, 2000 multiplied by 5,333,333,
and the shares of MC Global Class B Stock shall be held by the Shareholders of
Europe through a trust formed under the laws of the United Kingdom under a Trust
Deed in substantially the form attached hereto as EXHIBIT B (the "TRUST"), and
(ii) the shares of MC Global Class A Stock and MC Global Class B
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Stock held by the Shareholders Outside Europe shall immediately be reallocated
among each of the Shareholders Outside Europe so that each such shareholder will
receive such number of shares of MC Global Class A Stock as is equal to its
proportionate share of the Outside Europe Proxy Amount as of December 31, 2000
multiplied by 56,000,000, and such number of shares of MC Global Class B Stock
as is equal to its proportionate share of the Outside Europe Proxy Amount as of
December 31, 2000 multiplied by 10,666,667; provided, however, that no
fractional shares of MC Global Class A Stock or MC Global Class B Stock shall be
issued or delivered by MC Global, and any fractional share interests shall be
rounded in such manner as the management of MC Global shall determine in its
sole discretion.
(c) The MC Global Class A Stock to be held by the Shareholders of
Europe immediately following the Conversion and the Share Exchange shall
represent 28%, and the MC Global Class A Stock to be held by the Shareholders
Outside Europe immediately following the Conversion and the Share Exchange shall
represent 56%, of the number of Outstanding Shares of MC Global immediately
following the Conversion and the Share Exchange. The MC Global Class B Stock to
be held by the Shareholders of Europe through the Trust immediately following
the Conversion and the Share Exchange shall represent 5 1/3%, and the MC Global
Class B Stock to be held by the Shareholders Outside Europe immediately
following the Conversion and the Share Exchange shall represent 10 2/3%, of the
number of Outstanding Shares of MC Global.
1.3 TRANSITION PERIOD; FURTHER REALLOCATION OF SHARES.
(a) The MC Global Class A Stock and the MC Global Class B Stock
shall be subject to the MC Global Charter and the MC Global Bylaws. Among other
things, the MC Global Charter and the MC Global Bylaws provide that any
purported transfer of MC Global Class A Stock and MC Global Class B Stock prior
to the Transition Date that does not comply with the MC Global Charter and the
MC Global Bylaws shall be void.
(b) As provided in the MC Global Charter and the MC Global Bylaws,
as of the close of business, New York City time, on the Transition Date, each
outstanding share of MC Global Class B Stock, other than any MC Global Class B
Stock that constitutes ec Picto Stock, shall automatically be converted into one
share of MC Global Class A Stock. As an integral part of the integrated series
of transactions that includes the Conversion and the Share Exchange, shares of
MC Global Class A Stock shall then be reallocated among the holders of MC Global
Class A Stock on the Transition Date in accordance with the following:
(i) FIRST, shares of MC Global Class A Stock shall be
allocated to the Shareholders of Europe, in the aggregate, and to the
Shareholders Outside Europe, in the aggregate, in accordance with the following:
(1) If the European Regional Proxy Amount for the last year of
the Transition Period is 26% or less, then the Shareholders of Europe shall be
entitled in the aggregate to an allocation of MC Global Class A Stock that
represents 26% of the number of Outstanding Shares of MC Global.
(2) If the European Regional Proxy Amount for the last year of
the Transition Period is greater than 26% but less than or equal to 28%, then
the Shareholders of Europe shall be entitled in the aggregate to an allocation
of MC Global Class A Stock that represents 28% of the number of Outstanding
Shares of MC Global.
(3) If the European Regional Proxy Amount for the last year of
the Transition Period is greater than 28%, then the Shareholders of Europe shall
be entitled in the aggregate to an allocation of MC Global Class A Stock that is
equal, in percentage terms, to the European Regional Proxy Amount for the last
year of the Transition Period, up to a maximum amount, when taken together with
any ec Picto Stock, of 44% of the number of Outstanding Shares of MC Global
(consisting of the
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MC Global Class A Stock issued to the Shareholders of Europe in the Conversion
and the Share Exchange (28% of the Outstanding Shares of MC Global), the MC
Global Class B Stock issued in the Conversion and Share Exchange and held by
the Trust (5 1/3% of the Outstanding Shares of MC Global) and the MC Global
Class B Stock issued to the Shareholders Outside Europe (10 2/3% of the
Outstanding Shares of MC Global)).
(4) Any MC Global Class B Stock that constitutes ec Picto
Stock shall not be converted into MC Global Class A Stock on the Transition Date
and shall not be subject to reallocation to the Shareholders Outside Europe at
such time. Instead, the Trust shall hold any ec Picto Stock through the second
anniversary of the Transition Date.
(5) The Shareholders Outside Europe shall be entitled in the
aggregate to an allocation of MC Global Class A Stock that represents the
remaining number of outstanding shares of MC Global Class A Stock after the
shares of MC Global Class A Stock and ec Picto Stock have been allocated to the
Shareholders of Europe and the Trust, as the case may be, in accordance with
paragraphs (1)-(4) above.
(ii) SECOND, in accordance with the MC Global Charter and the MC
Global Bylaws, all shares of MC Global Class A Stock that have been allocated in
the aggregate to the Shareholders of Europe and in the aggregate to the
Shareholders Outside Europe, shall immediately be delivered to each of the
Shareholders of Europe, on the one hand, and to each of the Shareholders Outside
Europe, on the other hand, in proportion to each such shareholder's
proportionate share of the European Regional Proxy Amount or the Outside Europe
Proxy Amount, as the case may be for the last year of the Transition Period.
(c) At the second anniversary of the Transition Date, each
share of ec Picto Stock shall be converted into one share of MC Global Class A
Stock and shall be allocated to the Shareholders Outside Europe and Shareholders
of Europe depending upon the percentage of ec Picto Volumes that have been
converted to Maestro Volumes by that time and the types of Volumes into which
they have been converted. The shares of MC Global Class A Stock that result from
the conversion of ec Picto Stock shall be allocated in the aggregate to the
Shareholders of Europe in proportion to the percentage of ec Picto Volumes that
have actually been converted to Maestro Volumes by that time, and the balance
shall be allocated to the Shareholders Outside Europe. Those shares of MC Global
Class A Stock allocated to the Shareholders of Europe shall then immediately be
delivered to those individual Shareholders of Europe who were responsible for
the ec Picto Volumes that were actually converted in proportion to the amount of
converted ec Picto Volumes attributable to each of them, and the shares
allocated to the Shareholders Outside Europe shall immediately be delivered to
each of the Shareholders Outside Europe in proportion to each such shareholder's
proportionate share of the Outside Europe Proxy Amount; provided, however, that
no fractional shares of MC Global Class A Stock or MC Global Class B Stock shall
be issued or delivered by MC Global, and any fractional share interests shall be
rounded in such manner as the management of MC Global shall determine in its
sole discretion.
(d) For purposes of determining the Global Proxy Calculation for the
last year of the Transition Period (and any adjustment to reflect ec Picto(R)
conversion at the end of the two-year additional period, if necessary), the
conversion of European currencies into U.S. dollars will be based on the average
exchange rate during the twenty-day period ending on the day prior to the
applicable measurement date (the "PREVAILING EXCHANGE RATE"); provided, however,
that:
(i) if the Prevailing Exchange Rate for one Euro is equal to
or greater than $.9065 U.S. and less than or equal to $1.0065 U.S., then the
exchange rate to be used for the calculation shall be $.9565 U.S.; and
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(ii) if the Prevailing Exchange Rate for one Euro does not
fall within the band described in subparagraph (i), the exchange rate to be used
for the calculation shall be $.9565 U.S., adjusted upward or downward, as
applicable, by the difference between the Prevailing Exchange Rate and (A)
$1.0065 U.S., if the Prevailing Exchange Rate is greater than $.9565 U.S., or
(B) $.9065 U.S. if the Prevailing Exchange Rate is less than $.9565 U.S.
(e) Section 2(b) of ARTICLE IV of the MC Global Bylaws provides
that, during the Transition Period, one-third of the Directors of MC Global
shall be representatives of Shareholders of Europe. This provision of the MC
Global Bylaws shall remain in effect during the Transition Period.
(f) Section 1(c) of Article FIFTH of the MC Global Charter provides
that no holder of capital stock eligible to be voted in the election of
directors of MC Global, together with its affiliates (as defined in the MC
Global Charter), shall be entitled to exercise voting power in excess of 7% of
the outstanding shares of capital stock entitled to be voted in any election of
directors. This provision of the MC Global Charter shall not be changed during
the Transition Period.
(g) Any shareholder whose ownership of MC Global Class A Stock is
reduced as a result of the reallocation described in SECTIONS 1.2(B), 1.3(B) AND
1.3(C) shall transfer the excess number of shares of MC Global Class A Stock to
MC Global, which shall then deliver such excess shares of MC Global Class A
Stock to any shareholder that is entitled to an additional number of shares of
MC Global Class A Stock as a result of such reallocation.
1.4 CLOSING. The Closing of the transactions under this Agreement will
take place at the offices of Xxxxxxxx Chance Xxxxxx & Xxxxx LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as the parties may agree
in writing) at 10:00 a.m., New York City time, on the Closing Date.
(a) At the Closing, following the Conversion:
(i) the EPI Shareholders and the MEPUK Shareholders will
assign and transfer to MC Global good and valid title in and to their shares of
EPI and MEPUK, respectively, free and clear of all Liens, by delivering to MC
Global a certificate or certificates representing their shares, duly endorsed in
blank or accompanied by duly executed stock powers endorsed in blank;
(ii) MC Global shall issue to each of the EPI Shareholders and
each of the MEPUK Shareholders the number of shares of MC Global Class A Stock
and MC Global Class B Stock to which each is entitled under SECTIONS 1.1 AND 1.2
and the shares of MC Global Class B Stock shall be held by such Shareholders
through the Trust; and
(iii) MCI shall issue to each of the EPI Shareholders (other
than MEPUK) and each of the MEPUK Shareholders an MCI Class A membership
interest unless such shareholder has received such Class A membership interest
in the Conversion.
(b) Shares of MC Global Class A Stock and MC Global Class B Stock
and MCI Class A membership interests are uncertificated; therefore, the issuance
of the MC Global Class A Stock, MC Global Class B Stock and MCI Class A
membership interests pursuant to the Conversion, the Share Exchange and the
reallocation pursuant to Section 1.2(b) shall be accomplished by registering the
issuance on the books and records of MC Global and MCI, respectively, and
delivering evidence of the issuance to the holders thereof.
(c) In addition, at the Closing, the parties shall execute and
deliver original counterparts of the certificates and other documents and
instruments to be delivered under ARTICLES V AND VI.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF EPI
EPI represents and warrants to MC Global and MCI as to the matters set
forth below.
2.1 ORGANIZATION OF EPI. EPI is a company limited by shares duly organized
and validly existing under the laws of Belgium and has all requisite corporate
power and authority to own, use and lease its Assets and Properties and to
conduct its business as and to the extent presently conducted. EPI is duly
qualified, licensed or admitted to do business in those jurisdictions specified
in SECTION 2.1(A) OF THE DISCLOSURE SCHEDULE, which are the only jurisdictions
in which the failure to be qualified, licensed or admitted and in good standing
would have a material adverse effect on the Business or Condition of EPI. The
name of each director and officer of EPI on the date hereof, and the position
with EPI held by each, are listed in SECTION 2.1(B) OF THE DISCLOSURE SCHEDULE.
Prior to the execution of this Agreement, EPI has delivered to MC Global true
and complete copies of the certificate or articles of association and bylaws (or
other comparable charter documents) of EPI as in effect on the date hereof.
2.2 AUTHORITY. EPI has all requisite power and legal capacity to execute
and deliver this Agreement. The execution, delivery and performance by EPI of
this Agreement have been duly and validly authorized by all necessary corporate
and shareholder action. This Agreement has been duly and validly executed and
delivered by EPI and constitutes a legal, valid and binding obligation of EPI
enforceable against EPI in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws relating to or affecting creditors'
rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
2.3 CAPITALIZATION. The authorized capital stock of EPI consists of
100,000 capital shares, of which 100,000 have been issued and are outstanding.
The Shares are owned by the EPI Shareholders in the amounts set forth on
SCHEDULE 2.3 OF THE DISCLOSURE SCHEDULE. The Shares have been duly authorized
and validly issued and are fully paid and nonassessable. There are no
outstanding Options with respect to EPI.
2.4 SUBSIDIARIES. SECTION 2.4 OF THE DISCLOSURE SCHEDULE lists the name of
each Subsidiary of EPI. Each Subsidiary is a corporation duly organized and
validly existing under the laws of its jurisdiction of organization identified
in SECTION 2.4 OF THE DISCLOSURE SCHEDULE, and has all requisite power and
authority to own, use and lease its Assets and Properties and to conduct its
business as and to the extent presently conducted. Each Subsidiary is duly
qualified, licensed or admitted to do business in those jurisdictions specified
in SECTION 2.4 OF THE DISCLOSURE SCHEDULE, which are the only jurisdictions in
which the failure to be qualified, licensed or admitted would have a material
adverse effect on the Business or Condition of EPI. SECTION 2.4 OF THE
DISCLOSURE SCHEDULE lists for each Subsidiary the amount of its authorized
capital stock, the amount of its outstanding capital stock and the record owners
of such outstanding capital stock. All of the outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable, and are owned, beneficially and of record, by EPI or one
or more of its Subsidiaries wholly owned by EPI, free and clear of all Liens.
There are no outstanding Options with respect to any Subsidiary.
2.5 NO CONFLICTS. The execution and delivery by EPI of this Agreement do
not, and the performance by EPI of its obligations under this Agreement and the
consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate or articles of incorporation
or bylaws (or other comparable charter documents) of EPI or any Subsidiary;
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(b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices disclosed in SECTION 2.6 OF THE DISCLOSURE
SCHEDULE, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to EPI, any Subsidiary or any of their
respective Assets and Properties; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require EPI or any Subsidiary to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or under
the terms of, (iv) result in or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) result in
or give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under or (vi) result in the
creation or imposition of any Lien upon any Assets and Properties of EPI or any
Subsidiary under, any Contract or License to which EPI or any Subsidiary is a
party or by which any of their respective Assets and Properties is bound, except
where the occurrence of any circumstance specified in clauses (i) through (vi)
above would not have a material adverse effect on the Business or Condition of
EPI.
2.6 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in SECTION 2.6
OF THE DISCLOSURE SCHEDULE, no consent, approval or action of, filing with or
notice to any Governmental or Regulatory Authority on the part of EPI or any
Subsidiary is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
2.7 FINANCIAL STATEMENTS. Prior to the execution of this Agreement, EPI
has delivered or caused to be delivered to MC Global and MCI true and complete
copies of the following financial statements:
(a) the audited balance sheets of EPI and its consolidated
Subsidiaries as of December 31, 1998, December 31, 1999 and December 31, 2000,
and the related audited consolidated statements of operations, shareholders'
equity and cash flows for each of the fiscal years then ended, together with a
true and correct copy of the report on such audited information by Ernst & Young
LLP, EPI's statutory auditors; and
(b) the unaudited balance sheets of EPI and its consolidated
Subsidiaries as of June 30, 2000 and 2001, and the related unaudited
consolidated statements of operations, stockholders' equity and cash flows for
the six-month period then ended.
Except as set forth in the notes thereto, all such financial statements were
prepared in accordance with International Accounting Standards and fairly
present the consolidated financial condition and results of operations of EPI
and its consolidated Subsidiaries as of the respective dates of them and for the
respective periods covered by them.
(c) ABSENCE OF CHANGES. Except for the execution and delivery of
this Agreement and the transactions to take place pursuant hereto on the Closing
Date, since the EPI Audited Financial Statement Date there has not been any
material adverse change, or any event or development which, individually or
together with other such events, could reasonably be expected to result in a
material adverse change in the Business or Condition of EPI.
2.8 NO UNDISCLOSED LIABILITIES. Except as reflected or reserved against in
the balance sheet included in the EPI Audited Financial Statements or in the
notes thereto, (i) there are no Liabilities against, relating to or affecting
EPI or any Subsidiary or any of their respective Assets and Properties, other
than Liabilities incurred in the ordinary course of business consistent with
past practice which in the aggregate are not material to the Business or
Condition of EPI and (ii) no payments shall be due to any Person pursuant to any
agreement, whether written or oral, as a result of the acquisition by MC Global
of a controlling interest in EPI in the EPI Share Exchange.
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2.9 TAXES.
(a) EPI and its Subsidiaries have filed all Tax Returns required to
be filed by applicable Law, maintained all documents and records relating to
Taxes as are required to be made or provided or maintained by it and has
complied in all respects with all legislation relating to Taxes applicable to
it. All Tax Returns were in all respects (and, as to Tax Returns not filed as of
the date hereof, will be) true, complete and correct and filed on a timely
basis. Neither EPI nor any of its Subsidiaries is aware that any claim has been
made by an authority of a jurisdiction where EPI or any of its Subsidiaries does
not file Tax Returns that any of EPI or any of its Subsidiaries is or may be
subject to taxation by that jurisdiction.
(b) EPI and each Subsidiary has, within the time and in the manner
prescribed by law, paid (and until the Closing Date will pay within the time and
in the manner prescribed by law) all Taxes that are due and payable.
(c) EPI and each Subsidiary has established (and until the Closing
Date will maintain) on its Books and Records reserves adequate to pay all Taxes
not yet due and payable in accordance with International Accounting Standards
that are reflected in the EPI Audited Financial Statements to the extent
required.
(d) There are no Tax Liens upon the assets of EPI or any Subsidiary
except Liens for Taxes not yet due.
(e) Except as disclosed in SECTION 2.9 OF THE DISCLOSURE SCHEDULE,
no audits or other administrative proceedings or court proceedings are presently
pending with regard to any Taxes or Tax Returns of EPI or any of its
Subsidiaries, and no Tax Authority has notified EPI or any of its Subsidiaries
that it intends to investigate its Tax affairs.
(f) Notwithstanding the disclosure of any matter on SECTION 2.9 OF
THE DISCLOSURE SCHEDULE pursuant to clause (e) above, EPI and its Subsidiaries
have complied (and until the Closing Date will comply) in all respects with the
provisions of applicable law relating to the payment and withholding of Taxes,
and have, within the time and in the manner prescribed by law, withheld and paid
over to the proper Governmental or Regulatory Authority all amounts required in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder or other third party.
2.10 LEGAL PROCEEDINGS. Except as disclosed in SECTION 2.10 OF THE
DISCLOSURE SCHEDULE (with paragraph references corresponding to those set forth
below):
(a) there are no Actions or Proceedings pending or, to the knowledge
of EPI, threatened against, relating to or affecting EPI or any Subsidiary or
any of their respective Assets and Properties which (i) could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or otherwise result in a material
diminution of the benefits contemplated by this Agreement to MC Global and MCI,
or (ii) if determined adversely, could reasonably be expected to result in (x)
any injunction or other equitable relief against EPI or any Subsidiary that
would interfere in any material respect with its business or operations or (y)
Losses by EPI or any Subsidiary, individually or in the aggregate with Losses in
respect of other such Actions or Proceedings, exceeding $500,000;
(b) there are no facts or circumstances known to EPI that could
reasonably be expected to give rise to any Action or Proceeding that would be
required to be disclosed pursuant to clause (a) above; and
(c) there are no Orders outstanding against EPI or any Subsidiary.
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Prior to the execution of this Agreement, EPI delivered or caused to be
delivered to MC Global and MCI all responses of counsel for EPI and its
Subsidiaries to auditors' requests for information delivered in connection with
the EPI Audited Financial Statements (together with any updates provided by such
counsel) regarding Actions or Proceedings pending or threatened against,
relating to or affecting EPI or any Subsidiary.
2.11 COMPLIANCE WITH LAWS AND ORDERS. Neither EPI nor any Subsidiary is or
has at any time within the last five years been, or has received any notice that
it is or has at any time within the last five years been, in violation of or in
default under, in any material respect, any Law or Order applicable to EPI or
any Subsidiary or any of their respective Assets and Properties.
2.12 REAL PROPERTY.
(a) EPI or one of its Subsidiaries has good and marketable fee
simple title to each parcel of real property included as an asset on the latest
balance sheet included in the EPI Unaudited Financial Statements, and in each
case such parcel is free and clear of all Liens, other than Permitted Liens.
(b) EPI or one of its Subsidiaries has a valid and subsisting
leasehold estate in and the right to quiet enjoyment of the real properties
leased by it as lessee for the full term of the lease thereof. Each lease
referred to in paragraph (b) is a legal, valid and binding agreement,
enforceable in accordance with its terms, of EPI or one of its Subsidiaries and
of each other Person that is a party thereto and there is no, and neither EPI
nor any Subsidiary has received notice of any, default (or any condition or
event which, after notice or lapse of time or both, would constitute a default)
thereunder.
(c) No tenant or other party in possession of any of EPI's owned
real properties has any right to purchase, or holds any right of first refusal
to purchase, such properties.
2.13 INTELLECTUAL PROPERTY RIGHTS. SECTION 2.13 OF THE DISCLOSURE SCHEDULE
contains a list of trademarks, trade names, trademark registrations and
applications, and service marks that are material to the business of EPI and its
Subsidiaries. EPI or a Subsidiary, as indicated, owns the entire right, title
and interest including, without limitation, the right to use and license the
same. EPI and its Subsidiaries have the right to use any software they use which
is material to the running of their business.
2.14 LICENSES. EPI and each Subsidiary own or validly hold all Licenses
that are material to its business or operations. Each such License is valid,
binding and in full force and effect; and neither EPI nor any Subsidiary is, or
has received any notice that it is, in default (or with the giving of notice or
lapse of time or both, would be in default) under any such License.
2.15 INSURANCE. The material insurance policies that insure the business,
operations or employees of EPI and its Subsidiaries are in full force and
effect, and are in amounts and have coverages that are reasonable and customary
for Persons engaged in businesses and operations and having Assets and
Properties similar to EPI and its Subsidiaries.
2.16 BROKERS. Except for Xxxxxxx Xxxxx & Co., whose fees, commissions and
expenses have been paid by EPI, all negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the EPI
Shareholders and EPI directly with MC Global and MCI without the intervention of
any Person on behalf of any EPI Shareholder or EPI in such manner as to give
rise to any valid claim by any Person against MC Global, MCI, EPI or any
Subsidiary for a finder's fee, brokerage commission or similar payment.
2.17 EMPLOYEE BENEFIT PLANS. SECTION 2.17 OF THE DISCLOSURE SCHEDULE
contains a list of each plan, agreement or understanding maintained by EPI or
its Subsidiaries for the benefit of the employees of EPI or its Subsidiaries,
which plan, agreement or understanding provides for health or welfare benefits,
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retirement income, severance benefits or accident or death benefits or any
similar benefits for such employees (or their dependants and beneficiaries).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MC GLOBAL AND MCI
MC Global and MCI hereby jointly and severally represent and warrant to
EPI as to the matters set forth below.
3.1 ORGANIZATION. Each of MC Global and MCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own, use and
lease its Assets and Properties and to conduct its business as and to the extent
presently conducted. Each of MC Global and MCI is duly qualified, licensed or
admitted to do business and is in good standing in those jurisdictions in which
the ownership, use or leasing of its Assets and Properties, or the conduct or
nature of its business, makes such qualification, licensing or admission
necessary, except for those jurisdictions in which the adverse effects of all
such failures by MC Global or MCI, as applicable, to be qualified, licensed or
admitted and in good standing can in the aggregate be eliminated without
material cost or expense by MC Global or MCI becoming qualified or admitted and
in good standing.
3.2 AUTHORITY. Each of MC Global and MCI has all requisite corporate power
and legal capacity to execute and deliver this Agreement. The execution,
delivery and performance by each of MC Global and MCI of this Agreement have
been duly and validly authorized by all necessary corporate, shareholder and
member action. This Agreement has been duly and validly executed and delivered
by each of MC Global and MCI and constitutes legal, valid and binding
obligations of each of MC Global and MCI enforceable against MC Global or MCI,
as applicable, in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws relating to or affecting creditors' rights
generally and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
3.3 CAPITALIZATION. As of the Closing, the authorized capital stock of MC
Global will consist solely of 275 million shares of MC Global Class A Stock, 25
million shares of MC Global Class B Stock and 75 million shares of MC Global
Class C Stock, of which no shares have been issued or are outstanding. The
shares of MC Global Class A Stock and MC Global Class B Stock, when issued at
the Closing in the manner contemplated by SECTION 1.4, will be validly issued,
fully paid and nonassessable, and will be free and clear of all Liens. Except
for this Agreement and as disclosed in SECTION 3.3 OF THE DISCLOSURE SCHEDULE,
there are no outstanding Options with respect to MC Global or MCI.
3.4 NO CONFLICTS. The execution and delivery by each of MC Global and MCI
of this Agreement do not, the performance by each of MC Global and MCI of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate or articles of incorporation
or bylaws (or other comparable charter documents) of MC Global or MCI, as
applicable;
(b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices disclosed in SECTION 3.5 OF THE DISCLOSURE
SCHEDULE, conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to MC Global or MCI, as applicable, or
any of its Assets and Properties; or
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(c) except as disclosed in Section 3.4 OF THE DISCLOSURE SCHEDULE,
(i) conflict with or result in a violation or breach of, (ii) constitute (with
or without notice or lapse of time or both) a default under, (iii) require MC
Global or MCI, as applicable, to obtain any consent, approval or action of, make
any filing with or give any notice to any Person as a result or under the terms
of, (iv) result in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (v) result in or give to any
Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under or (vi) result in the creation or
imposition of any Lien upon any Assets and Properties of MC Global or MCI, as
applicable, under, any Contract or License to which MC Global or MCI, as
applicable, is a party or by which any of its Assets and Properties is bound.
3.5 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in SECTION 3.5
OF THE DISCLOSURE SCHEDULE, no consent, approval or action of, filing with or
notice to any Governmental or Regulatory Authority on the part of MC Global or
MCI is required in connection with the execution, delivery and performance of
this Agreement or any of the Operative Agreements to which it is a party or the
consummation of the transactions contemplated hereby or thereby.
3.6 FINANCIAL STATEMENTS. Prior to the execution of this Agreement, MCI
has delivered or caused to be delivered to EPI true and complete copies of the
following financial statements:
(a) the audited balance sheets of MCI and its consolidated
subsidiaries as of December 31, 1998, December 31, 1999 and December 31, 2000,
and the related audited consolidated statements of operations, members' equity
and cash flows for each of the fiscal years then ended, together with a true and
correct copy of the report on such audited information by PricewaterhouseCoopers
LLP, MCI's independent accountants; and
(b) the unaudited balance sheets of MCI and its consolidated
Subsidiaries as of June 30, 2000 and 2001, and the related unaudited
consolidated statements of operations, members' equity and cash flows for the
six-month period then ended.
Except as set forth in the notes thereto, all such financial statements were
prepared in accordance with U.S. GAAP and fairly present the consolidated
financial condition and results of operations of MCI and its consolidated
Subsidiaries as of the respective dates of them and for the respective periods
covered by them. Except for those Subsidiaries listed in SECTION 3.6 OF THE
DISCLOSURE SCHEDULE, the financial condition and results of operations of each
Subsidiary are, and for all periods referred to in this SECTION 3.6 have been,
consolidated with those of MCI.
3.7 ABSENCE OF CHANGES. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on the Closing
Date, since the MCI Audited Financial Statement Date there has not been any
material adverse change, or any event or development which, individually or
together with other such events, could reasonably be expected to result in a
material adverse change in the Business or Condition of MCI.
3.8 NO UNDISCLOSED LIABILITIES. Except as reflected or reserved against in
the balance sheet included in the MCI Audited Financial Statements or in the
notes thereto or as disclosed in SECTION 3.8 OF THE DISCLOSURE SCHEDULE, there
are no Liabilities against, relating to or affecting MC Global or MCI or any of
their respective Subsidiaries, Assets and Properties, other than Liabilities
incurred in the ordinary course of business consistent with past practice which
in the aggregate are not material to the Business or Condition of MC Global and
MCI.
3.9 LEGAL PROCEEDINGS. Except as disclosed in SECTION 3.9 OF THE
DISCLOSURE SCHEDULE (with paragraph references corresponding to those set forth
below):
(a) there are no Actions or Proceedings pending or, to the knowledge
of MC Global or MCI, threatened against, relating to or affecting MC Global or
MCI or any of its Assets and Properties
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which (i) could reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or
otherwise result in a material diminution of the benefits contemplated by this
Agreement to EPI, or (ii) if determined adversely to MC Global or MCI, could
reasonably be expected to result in (x) any injunction or other equitable relief
against MC Global or MCI that would interfere in any material respect with its
business or operations or (y) Losses by MC Global or MCI, individually or in the
aggregate with Losses in respect of other such Actions or Proceedings, exceeding
$6,000,000;
(b) there are no facts or circumstances known to MC Global or MCI
that could reasonably be expected to give rise to any Action or Proceeding that
would be required to be disclosed pursuant to clause (a) above; and
(c) there are no Orders outstanding against MC Global or MCI.
3.10 COMPLIANCE WITH LAWS AND ORDERS. Except as disclosed in SECTION 3.10
OF THE DISCLOSURE SCHEDULE, neither MCI nor any Subsidiary is or has at any time
within the last five years been, or has received any notice that it is or has at
any time within the last five years been, in violation of or in default under,
in any material respect, any Law or Order applicable to MCI or any Subsidiary or
any of their respective Assets and Properties.
3.11 TAXES.
(a) MCI has filed all Tax Returns required to be filed by applicable
Law, and has complied in all material respects with all legislation relating to
Taxes applicable to it. All Tax Returns were in all material respects (and, as
to Tax Returns not filed as of the date hereof, will be) true, complete and
correct and filed on a timely basis.
(b) MCI has, within the time and in the manner prescribed by law,
paid (and until the Closing Date will pay within the time and in the manner
prescribed by law) all Taxes that are due and payable, except for Taxes, the
failure of which to pay would not reasonably be expected to have a material
adverse effect on the Business or Condition of MC Global or MCI.
(c) MCI has established (and until the Closing Date will maintain)
on its Books and Records reserves adequate to pay all Taxes not yet due and
payable in accordance with U.S. GAAP that are reflected in the MCI Audited
Financial Statements to the extent required.
(d) There are no Tax Liens upon the assets of MCI except Liens for
Taxes not yet due.
(e) MCI has complied (and until the Closing Date will comply) in all
material respects with the provisions of applicable law relating to the payment
and withholding of Taxes.
3.12 LICENSES. MCI owns or validly holds all Licenses that are material to
its business or operations. Each such License is valid, binding and in full
force and effect; and MCI is not, nor has it received any notice that it is, in
default (or with the giving of notice or lapse of time or both, would be in
default) under any such License.
3.13 BROKERS. Except for Credit Suisse First Boston, whose fees,
commissions and expenses are the sole responsibility of MC Global or MCI, all
negotiations relative to this Agreement and the transactions contemplated hereby
have been carried out by MC Global or MCI directly with the EPI Shareholders and
EPI without the intervention of any Person on behalf of MC Global or MCI in such
manner as to give rise to any valid claim by any Person against EPI or any EPI
Shareholder for a finder's fee, brokerage commission or similar payment.
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ARTICLE IV
ACTIONS PRIOR TO CLOSING
4.1 REGULATORY AND OTHER APPROVALS.
(a) EPI and its Subsidiaries will (i) take all commercially
reasonable steps necessary or desirable, and proceed diligently and in good
faith and use all commercially reasonable efforts, as promptly as practicable to
obtain all consents, approvals or actions of, to make all filings with and to
give all notices to Governmental or Regulatory Authorities or any other Person
required of EPI or any Subsidiary to consummate the transactions contemplated
hereby, (ii) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as MC Global or MCI or
such Governmental or Regulatory Authorities or other Persons may reasonably
request and (iii) cooperate with MC Global and MCI as promptly as practicable in
obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental or Regulatory Authorities or other Persons
required of MC Global and MCI to consummate the transactions contemplated
hereby. EPI will provide prompt notification to MC Global when any such consent,
approval, action, filing or notice referred to in clause (i) above is obtained,
taken, made or given, as applicable, and will advise MC Global of any
communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by this
Agreement.
(b) Each of MC Global and MCI will (i) take all commercially
reasonable steps necessary or desirable, and proceed diligently and in good
faith and use all commercially reasonable efforts, as promptly as practicable to
obtain all consents, approvals or actions of, to make all filings with and to
give all notices to Governmental or Regulatory Authorities or any other Person
required of MC Global and MCI to consummate the transactions contemplated
hereby, (ii) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as EPI or such
Governmental or Regulatory Authorities or other Persons may reasonably request
and (iii) cooperate with EPI and its Subsidiaries as promptly as practicable in
obtaining all consents, approvals or actions of, making all filings with and
giving all notices to Governmental or Regulatory Authorities or other Persons
required of EPI or any Subsidiary to consummate the transactions contemplated
hereby. MC Global will provide prompt notification to EPI when any such consent,
approval, action, filing or notice referred to in clause (i) above is obtained,
taken, made or given, as applicable, and will advise EPI of any communications
(and, unless precluded by Law, provide copies of any such communications that
are in writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement.
4.2 COMPETITION FILINGS. In addition to the covenants contained in SECTION
4.1, each of MC Global, MCI and EPI will (a) take promptly all actions necessary
to make the filings required of it under the HSR Act and any similar law or
regulation of the European Union, (b) comply at the earliest practicable date
with any request for additional information received by it from any Governmental
or Regulatory Authorities in the area of competition laws and (c) cooperate in
all respects to assist the others in connection with any filing under applicable
competition laws and in connection with resolving any investigation or other
inquiry concerning the transactions contemplated by this Agreement commenced by
Governmental or Regulatory Authorities in the area of competition laws.
4.3 PREPARATION OF THE REGISTRATION STATEMENT AND THE PROXY STATEMENT;
MEMBERS' MEETING.
(a) As soon as practicable following the date of this Agreement, MC
Global shall prepare and file a Registration Statement on Form S-4 covering the
shares of MC Global Class A Stock and MC Global Class B Stock to be issued in
the Conversion and the Share Exchange (the "REGISTRATION STATEMENT") with the
SEC. The Registration Statement will include a proxy statement relating to the
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MCI Member Meeting described below (the "PROXY STATEMENT"). The Proxy Statement
also will be used as a disclosure statement relating to the Share Exchange. MC
Global and MCI shall use their commercially reasonable efforts to (i) respond to
any comments of the staff of the SEC and (ii) have the Registration Statement
declared effective under the Securities Act as promptly as practicable after
such filing and to keep the Registration Statement effective as long as is
necessary to consummate the Conversion and the Share Exchange. MCI will use its
commercially reasonable efforts to cause the Proxy Statement to be mailed to all
of the MCI Principal Members as promptly as practicable after the Registration
Statement is declared effective under the Securities Act and each of the EPI
Shareholders and each of the MEPUK Shareholders has executed and delivered to MC
Global and MCI an EPI Share Exchange Agreement, a form of which is attached
hereto as EXHIBIT C (an "EPI SHARE EXCHANGE AGREEMENT"), or a MEPUK Share
Exchange Agreement, a form of which is attached hereto as EXHIBIT D (the "MEPUK
SHARE EXCHANGE AGREEMENT"). MCI will notify EPI promptly of the receipt of any
comments from the SEC and of any request by the SEC for amendments or
supplements to the Registration Statement or the Proxy Statement or for
additional information and will supply EPI with copies of all correspondence
between MCI or any of its representatives and the SEC with respect to the
Registration Statement or the Proxy Statement. The information to be provided by
each of the parties hereto for inclusion in the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the information provided not misleading, including but not
limited to the financial statements (including the related notes and supporting
schedules) which will present fairly the financial condition and results of
operations of the parties and their respective Subsidiaries at the dates and for
the periods indicated.
(b) MCI will, as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of the MCI
Principal Members (the "MCI MEMBER MEETING") for the purpose of obtaining the
approval of the Conversion by the MCI Principal Members. MCI covenants that it
will, through its Board of Directors, recommend to the MCI Principal Members
approval of the Conversion and further covenants that the Proxy Statement will
include such recommendation.
4.4 INVESTIGATION BY MC GLOBAL. EPI will and will cause its Subsidiaries
to, (a) provide MC Global and MCI and their respective officers, directors,
employees, agents, counsel, accountants, financial advisors, consultants and
other representatives (together, "REPRESENTATIVES") with full access, upon
reasonable prior notice and during normal business hours, to the officers,
employees, agents and accountants of EPI and its Subsidiaries and their Assets
and Properties and Books and Records, and (b) furnish MC Global, MCI and such
other Persons with such information and data concerning the business and
operations of EPI and its Subsidiaries as MC Global, MCI or any of such other
Persons reasonably may request in connection with such investigation and the
preparation of the Registration Statement.
4.5 ALTERNATIVE SOLICITATIONS. If EPI or any Subsidiary (or any Person
acting for or on their behalf) (a) receives from any Person (other than MC
Global or MCI) any offer, inquiry or informational request relating to a
proposed Business Combination involving EPI or any Subsidiary of EPI, or (b)
receives any notice from any EPI Shareholder that such EPI Shareholder intends
to sell its Shares, then EPI will promptly, orally and in writing, advise MC
Global of such offer, inquiry or request and deliver a copy of such notice to MC
Global.
4.6 CONDUCT OF BUSINESS OF MC GLOBAL AND MCI. Prior to the Closing, each
of MC Global and MCI will conduct business in the ordinary course and consistent
with past practice.
4.7 CONDUCT OF BUSINESS OF EPI. Prior to the Closing, EPI will, and will
cause its Subsidiaries to, conduct business in the ordinary course consistent
with past practice.
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4.8 EMPLOYEE MATTERS. Except as may be required by Law, as previously
disclosed to MCI or as agreed by MC Global, EPI will, and will cause its
Subsidiaries to, refrain, from directly or indirectly:
(a) making any increase in the salary, wages or other compensation
of any officer, employee or consultant of EPI or any Subsidiary whose annual
salary, wages or other compensation from EPI is or, after giving to such change,
would be US$100,000 or more; and
(b) adopting, entering into, amending, modifying or terminating
(partially or completely) any employee benefit or welfare plan.
4.9 CERTAIN RESTRICTIONS.
(a) Except as otherwise agreed to in writing by MC Global or MCI,
EPI will, and will cause its Subsidiaries to, refrain from:
(i) amending their certificates or articles of association or
bylaws (or other comparable charter documents) or taking any action with respect
to any such amendment or any reorganization, liquidation or dissolution of any
such corporation;
(ii) authorizing, issuing, selling or otherwise disposing of
any shares of capital stock or other equity interests of or any Option with
respect to EPI or any Subsidiary, or modifying or amending any right of any
holder of outstanding shares of capital stock or other equity interests of or
Option with respect to EPI or any Subsidiary;
(iii) declaring, setting aside or paying any dividend or other
distribution in respect of the capital stock of other equity interests of EPI or
any Subsidiary not wholly owned by EPI, or directly or indirectly redeeming,
purchasing or otherwise acquiring any capital stock or other equity interests of
or any Option with respect to EPI or any Subsidiary not wholly owned by EPI;
(iv) acquiring or disposing of, or incurring any Lien (other
than a Permitted Lien) on, any Assets and Properties, other than in the ordinary
course of business consistent with past practice;
(v) (i) incurring Indebtedness in an aggregate principal
amount exceeding (euro)15,000,000 (net of any amounts of Indebtedness discharged
during such period) other than indebtedness incurred in the ordinary course of
business in connection with the settlement of payment transactions, or (ii)
voluntarily purchasing, canceling, prepaying or otherwise providing for a
complete or partial discharge in advance of a scheduled payment date with
respect to, or waiving any right of EPI or any Subsidiary under, any
Indebtedness of or owing to EPI or any Subsidiary (in either case other than
Indebtedness of EPI or a Subsidiary owing to EPI or a wholly-owned Subsidiary);
(vi) engaging with any Person in any Business Combination;
(vii) making capital expenditures or commitments for capital
expenditures in an aggregate amount exceeding(euro)15,000,000; or
(viii) entering into any agreement or resolving to do or
engage in any of the foregoing.
(b) Except as otherwise agreed to in writing by EPI, MC Global and
MCI, will, and will cause their Subsidiaries to, refrain from:
(i) taking any action with respect to any liquidation or
dissolution of any such corporation;
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(ii) declaring, setting aside or paying any dividend or other
distribution in respect of the capital stock of other equity interests of MC
Global, MCI or any Subsidiary not wholly owned by MC Global or MCI, or directly
or indirectly redeeming, purchasing or otherwise acquiring any capital stock or
other equity interests of or any Option with respect to MC Global or MCI or any
Subsidiary not wholly owned by MC Global or MCI; or
(iii) engaging with any Person in any Business Combination
that is material to MC Global or MCI unless that Business Combination is
disclosed in the Registration Statement.
4.10 BOOKS AND RECORDS. On the Closing Date, EPI will make available to MC
Global and MCI at the offices of EPI all of the Books and Records, and if at any
time after the Closing any EPI Shareholder or EPI or any Subsidiary discovers in
its possession or under its control any other Books and Records, it will
forthwith deliver such Books and Records to MC Global.
4.11 NOTICE AND CURE. Each party (the "DEFAULTING PARTY") will notify the
others (the "NON-DEFAULTING PARTY") promptly in writing of, and
contemporaneously will provide the Non-Defaulting Party with true and complete
copies of any and all information or documents relating to, and will use all
commercially reasonable efforts to cure before the Closing, any event,
transaction or circumstance occurring after the date of this Agreement that
causes or will cause any covenant or agreement of such Defaulting Party under
this Agreement to be breached or that renders or will render untrue any
representation or warranty of such Defaulting Party contained in this Agreement
as if the same were made on or as of the date of such event, transaction or
circumstance. Each party also will notify the other promptly in writing of, and
will use all commercially reasonable efforts to cure, before the Closing, any
violation or breach of any representation, warranty, covenant or agreement made
by such party in this Agreement, whether occurring or arising before, on or
after the date of this Agreement. No notice given pursuant to this Section shall
have any effect on the representations, warranties, covenants or agreements
contained in this Agreement for purposes of determining satisfaction of any
condition contained herein or shall in any way limit the other's right to seek
damages, at law and/or at equity, for breaches of any of the foregoing.
4.12 FULFILLMENT OF CONDITIONS.
(a) EPI will take all commercially reasonable steps necessary or
desirable and proceed diligently and in good faith to satisfy each other
condition to the obligations of MC Global and MCI contained in this Agreement
and will not, and will not permit EPI or any Subsidiary to, take or fail to take
any action that could reasonably be expected to result in the nonfulfillment of
any such condition.
(b) Each of MC Global and MCI will take all commercially reasonable
steps necessary or desirable and proceed diligently and in good faith to satisfy
each other condition to the obligations of EPI and the EPI Shareholders
contained in this Agreement and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such
condition.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF MC GLOBAL AND MCI
The obligations of each of MC Global and MCI hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in writing in whole or in part by MC Global and
MCI in their sole discretion):
5.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by EPI in this Agreement (other than those made as of a
specified date earlier than the Closing Date) shall be true and correct in all
material respects (except that representations and warranties that are qualified
as to
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materiality or as to absence of material adverse effect will be true and correct
in all respects) on and as of the Closing Date as though such representation or
warranty was made on and as of the Closing Date, and any representation or
warranty made as of a specified date earlier than the Closing Date shall have
been true and correct in all material respects (except that representations and
warranties that are qualified as to materiality or as to absence of material
adverse effect will be true and correct in all respects) on and as of such
earlier date.
5.2 PERFORMANCE. EPI shall have performed and complied with, in all
material respects, each agreement, covenant and obligation required by this
Agreement to be so performed or complied with by EPI or any Subsidiary at or
before the Closing.
5.3 OFFICERS' CERTIFICATES. EPI shall have delivered to MC Global a
certificate, dated the Closing Date and executed by its Chairman of the Board,
its President or any Executive or Senior Vice President or Managing Director,
substantially in the form and to the effect of EXHIBIT E or hereto, as
applicable, and a certificate, dated the Closing Date and executed by its
General Manager, Corporate Affairs, substantially in the form and to the effect
of EXHIBIT F hereto.
5.4 ORDERS AND LAWS. There shall not be in effect on the Closing Date any
Order or Law restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement or
which could reasonably be expected to otherwise result in a material diminution
of the benefits of the transactions contemplated by this Agreement to MC Global
and MCI, and there shall not be pending or threatened on the Closing Date any
Action or Proceeding or any other action in, before or by any Governmental or
Regulatory Authority which could reasonably be expected to result in the
issuance of any such Order or the applicability of any such Law.
5.5 REGULATORY CONSENTS AND APPROVALS. All consents, approvals and actions
of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit the parties to this Agreement to perform their obligations
under it and to consummate the transactions contemplated hereby and thereby, (a)
shall have been duly obtained, made or given, (b) shall be in form and substance
reasonably satisfactory to MC Global and MCI, (c) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement,
including under competition laws, shall have occurred.
5.6 THIRD PARTY CONSENTS. All consents (or in lieu thereof waivers) to the
performance by the parties to this Agreement of their obligations under it or to
the consummation of the transactions contemplated hereby as are required under
any Contract to which any party or any of its Subsidiaries is a party or by
which any of their respective Assets and Properties are bound and where the
failure to obtain any such consent (or in lieu thereof waiver) could reasonably
be expected, individually or in the aggregate with other such failures, to
materially adversely affect MC Global and MCI or the Business or Condition of
EPI or otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement to MC Global and MCI, (a) shall have
been obtained, (b) shall be in form and substance reasonably satisfactory to MC
Global and MCI, (c) shall not be subject to the satisfaction of any condition
that has not been satisfied or waived and (d) shall be in full force and effect.
5.7 OPINION OF COUNSEL. MC Global and MCI shall have received the opinion
of Xxxxxxxx & Xxxxxxxx, U.S. counsel to EPI, and Linklaters & Alliance, Belgian
counsel to EPI, dated the Closing Date, substantially in the form and to the
effect of EXHIBITS G-1 AND G-2, hereto, respectively, and to such further effect
as MC Global and MCI may reasonably request.
5.8 CHARTERS AND BYLAWS. A certificate of incorporation and bylaws
substantially in the form of EXHIBITS H AND I, respectively, shall be in effect
as the certificate of incorporation and bylaws of MCI.
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A certificate of incorporation and bylaws substantially in the form of EXHIBITS
J AND K, respectively, shall be in effect as the certificate of incorporation
and bylaws of MC Global.
5.9 CERTIFICATES. EPI shall have delivered to MC Global copies of the
certificates or articles of incorporation (or other comparable corporate charter
documents), including all amendments thereto, of EPI and each Subsidiary
certified by the appropriate official of the jurisdiction of organization.
5.10 RESIGNATIONS OF DIRECTORS. The members of the boards of directors of
EPI and its Subsidiaries shall have tendered, effective at the Closing, their
resignations as such directors.
5.11 INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT. EURO Kartensysteme
EUROCARD und eurocheque GmbH and GZS Gesellschaft for Zahlungssysteme mbH shall
have entered into an Intellectual Property Assignment Agreement with EPI
substantially in the form of EXHIBIT L hereto and that Agreement shall be in
full force and effect.
5.12 ENTRY INTO LICENSE AGREEMENT. Any member of EPI that is not,
immediately prior to the Closing, a Principal Member of MCI shall execute and
deliver to MCI an MCI License Agreement in the form of EXHIBIT M (an "MCI
LICENSE AGREEMENT").
5.13 MEPUK SHARE EXCHANGE AGREEMENT. Each MEPUK Shareholder shall have
entered into the MEPUK Share Exchange Agreement, as required by SECTION 4.3.
5.14 EPI SHARE EXCHANGE AGREEMENT. Each EPI Shareholder other than MCI and
MEPUK shall have entered into an EPI Share Exchange Agreement, as required by
SECTION 4.3.
5.15 REGISTRATION STATEMENT. The Registration Statement shall have become
effective under the Securities Act of 1933, as amended, and shall not be the
subject of any stop order or proceeding by the SEC seeking a stop order.
5.16 TAX MATTERS. MC Global and MCI shall have received the opinion of
Pillsbury Winthrop LLP in form and substance reasonably satisfactory to MC
Global and MCI, or the satisfactory ruling of the Internal Revenue Service, with
respect to the United States federal income tax consequences of the Conversion
and the EPI Share Exchange.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF EPI
The obligations of EPI hereunder are subject to the fulfillment, at or
before the Closing, of each of the following conditions (all or any of which may
be waived in writing in whole or in part by EPI in its sole discretion):
6.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by MC Global and MCI in this Agreement (other than those made as
of a specified date earlier than the Closing Date) shall be true and correct in
all material respects (except that representations and warranties that are
qualified as to materiality or as to absence of material adverse effect will be
true and correct in all respects) on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date, and any
representation or warranty made as of a specified date earlier than the Closing
Date shall have been true and correct in all material respects (except that
representations and warranties that are qualified as to materiality or as to
absence of material adverse effect will be true and correct in all respects) on
and as of such earlier date.
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6.2 PERFORMANCE. MC Global and MCI shall have performed and complied with,
in all material respects, each agreement, covenant and obligation required by
this Agreement to be so performed or complied with by MC Global and MCI at or
before the Closing.
6.3 OFFICERS' CERTIFICATES. MC Global and MCI shall have delivered to EPI
a certificate, dated the Closing Date and executed by the Chairman of the Board,
the President or any Senior Executive, Executive or Senior Vice President of MC
Global and MCI, substantially in the form and to the effect of EXHIBIT N hereto,
and a certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of MC Global and MCI, substantially in the form and to the
effect of EXHIBIT O hereto.
6.4 ORDERS AND LAWS. There shall not be in effect on the Closing Date any
Order or Law that became effective after the date of this Agreement restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement to EPI, and there shall not be
pending or threatened on the Closing Date any Action or Proceeding or any other
action in, before or by any Governmental or Regulatory Authority which could
reasonably be expected to result in the issuance of any such Order or the
applicability of any such Law.
6.5 REGULATORY CONSENTS AND APPROVALS. All consents, approvals and actions
of, filings with and notices to any Governmental or Regulatory Authority
necessary to permit the parties to this Agreement to perform their obligations
under it and to consummate the transactions contemplated hereby, (a) shall have
been duly obtained, made or given, (b) shall be in form and substance reasonably
satisfactory to EPI, (c) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (d) shall be in full force
and effect, and all terminations or expirations of waiting periods imposed by
any Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement, including under competition laws,
shall have occurred.
6.6 THIRD PARTY CONSENTS. All consents (or in lieu thereof waivers) to the
performance by the parties to this Agreement of their obligations under it or to
the consummation of the transactions contemplated hereby as are required under
any Contract to which any party or any of its Subsidiaries is a party or by
which any of their respective Assets and Properties are bound and where the
failure to obtain any such consent (or in lieu thereof waiver) could reasonably
be expected, individually or in the aggregate with other such failures, to
materially adversely affect EPI or the Business or Condition of MC Global and
MCI or otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement to EPI, (a) shall have been obtained
in form and substance reasonably satisfactory to EPI, (b) shall not be subject
to the satisfaction of any condition that has not been satisfied or waived and
(c) shall be in full force and effect.
6.7 OPINION OF COUNSEL. EPI shall have received the opinion of Xxxxxxxx
Chance Xxxxxx & Xxxxx LLP, counsel to MC Global and MCI, dated the Closing Date,
substantially in the form and to the effect of EXHIBIT P hereto.
6.8 CHARTERS AND BYLAWS. A certificate of incorporation and bylaws
substantially in the form of EXHIBITS H AND I, respectively, shall be in effect
as the certificate of incorporation and bylaws of MCI. A certificate of
incorporation and bylaws substantially in the form of EXHIBITS J AND K,
respectively, shall be in effect as the certificate of incorporation and bylaws
of MC Global.
6.9 GOOD STANDING CERTIFICATES. MC Global and MCI shall have delivered to
EPI copies of the certificates or articles of incorporation (or other comparable
corporate charter documents), including all amendments thereto, of MC Global and
MCI and each Subsidiary of MC Global or MCI certified by the appropriate
official of the jurisdiction of organization.
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6.10 NO STOP ORDERS. The Registration Statement shall have become
effective under the Securities Act of 1933, as amended, and shall not be the
subject of any stop order or proceeding by the SEC seeking a stop order.
6.11 MERGER AGREEMENT. The Agreement and Plan of Merger by and among MC
Global, MCI and MasterCard Merger Sub, Inc. to effectuate the Conversion shall
have been executed in substantially the form attached hereto as EXHIBIT A, shall
not have been amended or terminated, and shall have become effective.
6.12 TAX MATTERS. EPI or the applicable EPI Shareholders or MEPUK
Shareholders shall have received an opinion or opinions, in form and substance
reasonably satisfactory to EPI, of recognized tax counsel, or the satisfactory
rulings of the appropriate Tax Authorities, with respect to the tax consequences
of the Conversion and the Share Exchange to the EPI Shareholders and the MEPUK
Shareholders in the United Kingdom, France and ____________.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS; POST-CLOSING COVENANTS
7.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS. The
representations, warranties, covenants and agreements contained in this
Agreement will survive the Closing (a) indefinitely with respect to the
representations and warranties contained in SECTIONS 2.1, 2.2, 2.3 AND 2.5(A)
AND 3.1, 3.2, 3.3 AND 3.4(A), (b) until 60 calendar days after the expiration of
all applicable statutes of limitation (including all periods of extension,
whether automatic or permissive) with respect to matters covered by SECTION 2.9,
(c) with respect to each other representation and warranty, until the Transition
Date or (d) indefinitely with respect to each other covenant or agreement
contained in this Agreement, except that any representation, warranty, covenant
or agreement that would otherwise terminate in accordance with clause (b), (c)
or (d) above will continue to survive if a notice describing, in reasonable
detail, a claim for indemnification pursuant to the applicable EPI Share
Exchange Agreement or MEPUK Share Exchange Agreement has been given by a party
seeking indemnification to the parties from whom indemnification is being sought
on or prior to such termination date, until the related claim for
indemnification has been satisfied or otherwise resolved. The parties agree that
claims for indemnification for Loss resulting from a breach of this Agreement
shall be handled in the manner contemplated by the New MCI Bylaws.
7.2 POST-CLOSING COVENANTS.
(a) MC Global will initiate and maintain a Global Center of
Excellence in Waterloo, Belgium as the primary focus of global debit activities
for three years, so long as it is commercially reasonable to do so;
(b) MC Global will initiate a Global Center of Excellence for mobile
commerce and chip products in Waterloo, Belgium for three years, so long as it
is commercially reasonable to do so;
(c) MC Global and MCI confirm that they will not prohibit the use of
Eurocard(R) as a program name so long as it is used in a manner consistent with
any rules of MC Global or MCI concerning the use of program names;
(d) subject to the approval of technical convergence of European
Payment Systems Services S.A. and MCI's Global Technology and Operations
division, it is the intention of the parties that members will not experience
any adverse impact on pricing or service levels as a result of a convergence;
and
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(e) marketing support to the Eurocard(R) brand (E.G., European
football sponsorship) will continue until the European Football Championships in
2004 (Euro 2004) in accordance with the terms and conditions set forth in
Section 5 of the Alliance Agreement and notwithstanding its termination.
ARTICLE VIII
TERMINATION
8.1 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement of
all of the parties;
(b) at any time before the Closing, by EPI, on the one hand, or MC
Global or MCI, on the other hand, in the event (i) of a material breach hereof
by the non-terminating party if such non-terminating party fails to cure such
breach within five Business Days following notification thereof by the
terminating party or (ii) upon notification of the non-terminating party by the
terminating party that the satisfaction of any condition to the terminating
party's obligations under this Agreement becomes impossible or impracticable
with the use of commercially reasonable efforts if the failure of such condition
to be satisfied is not caused by a breach hereof by the terminating party; or
(c) at any time after March 31, 2002 by EPI, on the one hand, or MC
Global or MCI, on the other hand, upon notification to the non-terminating party
by the terminating party if the Closing shall not have occurred on or before
such date and such failure to consummate is not caused by a breach of this
Agreement by the terminating party.
8.2 EFFECT OF TERMINATION. If this Agreement is validly terminated
pursuant to SECTION 8.1, this Agreement will forthwith become null and void, and
there will be no liability or obligation on the part of EPI or MC Global or MCI
(or any of their respective officers, directors, employees, agents or other
representatives or Affiliates), except as provided in the next succeeding
sentence and except that the provisions with respect to expenses in SECTION 10.3
and confidentiality in SECTION 10.5 will continue to apply following any such
termination. Notwithstanding any other provision in this Agreement to the
contrary, upon termination of this Agreement pursuant to SECTION 8.1(B), EPI
will remain liable to MC Global and MCI for any breach of this Agreement by EPI
existing at the time of such termination, and MC Global and MCI will remain
liable to EPI for any breach of this Agreement by MC Global or MCI existing at
the time of such termination, and EPI or MC Global or MCI may seek such
remedies, including damages and fees of attorneys, against the other with
respect to any such breach as are provided in this Agreement or as are otherwise
available at law or in equity.
ARTICLE IX
DEFINITIONS
9.1 DEFINITIONS. (a) As used in this Agreement, the following defined
terms shall have the meanings indicated below:
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding, arbitration
or Governmental or Regulatory Authority investigation or audit.
"ACTUAL ALLOCATION" has the meaning ascribed to it in the definition of ec
Picto Stock.
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"AFFILIATE" means any Person that directly, or indirectly through one of
more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by Contract or otherwise and, in
any event and without limitation of the previous sentence, any Person owning ten
percent (10%) or more of the voting securities of a second Person shall be
deemed to control that second Person.
"AGREEMENT" means this Share Exchange and Integration Agreement, the
Exhibits and the Disclosure Schedule and the certificates delivered in
accordance with SECTIONS 5.3 and 6.3, as the same shall be amended from time to
time.
"ALLIANCE AGREEMENT" has the meaning ascribed to it in the forepart of
this Agreement.
"ASSETS AND PROPERTIES" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including, without limitation, cash,
cash equivalents, securities, accounts and notes receivable, chattel paper,
documents, instruments, general intangibles, real estate, equipment, inventory,
goods and intellectual property rights.
"BOOKS AND RECORDS" means all files, documents, instruments, papers, books
and records relating to the Business or Condition of EPI, including, without
limitation, financial statements, Tax Returns and related work papers and
letters from accountants, budgets, pricing guidelines, ledgers, journals, deeds,
title policies, minute books, stock certificates and books, stock transfer
ledgers, Contracts, Licenses, customer lists, computer files and programs,
retrieval programs, operating data and plans and environmental studies and
plans.
"BUSINESS COMBINATION" means with respect to any Person any merger,
consolidation or combination to which such Person is a party, any sale,
dividend, split or other disposition of capital stock or other equity interests
of such Person or any sale, dividend or other disposition of all or
substantially all of the Assets and Properties of such Person.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on which
banks located in Brussels, Belgium or New York City are authorized or obligated
to close.
"BUSINESS OR CONDITION" means with respect to any Person, the business,
condition (financial or otherwise), results of operations, Assets and Properties
and prospects of that person and its Subsidiaries taken as a whole.
"CLOSING" means the closing of the transactions contemplated by SECTION
1.4.
"CLOSING DATE" means (a) the fifth Business Day after the day on which the
last of the consents, approvals, actions, filings, notices or waiting periods
described in or related to the filings described in SECTIONS 5.5, 5.6 and 5.16
and SECTIONS 6.5, 6.6 and 6.12 has been obtained, made or given or has expired,
as applicable, or (b) such other date as MC Global, MCI and EPI mutually agree
upon in writing.
"CODE" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"CONTRACT" means any agreement, lease, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract (whether written or oral).
"CONVERSION" has the meaning ascribed to it in the forepart of this
Agreement.
"DEFAULTING PARTY" has the meaning ascribed to it in SECTION 4.11.
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"DISCLOSURE SCHEDULE" means the record delivered to MC Global by EPI and
by MC Global and MCI to EPI herewith and dated as of the date hereof, containing
all lists, descriptions, exceptions and other information and materials as are
required to be included therein pursuant to this Agreement.
"EC PICTO" means the ec (Pictogram)(R) xxxx owned by EPI, either alone or
combined with the ec(R) xxxx owned by EPI.
"EC PICTO STOCK" means shares of MC Global Class B Stock in an amount,
expressed as a percentage of the number of Outstanding Shares of MC Global that,
as of the close of business New York City time on the Transition Date, is equal
to the difference (the "DIFFERENCE") between (x) the Simulated Result and (y)
the European Regional Proxy Amount for the last 12 months of the Transition
Period, up to a maximum Difference of 5 1/3%; provided, however, that if the
percentage of MC Global Class A Stock that is allocated to the Shareholders of
Europe on the Transition Date in accordance with SECTION 1.3(B)(I)(1)-(3) (the
"ACTUAL ALLOCATION") exceeds the European Regional Proxy Amount for the last 12
months of the Transition Period, then the Difference shall be reduced by the
amount of the excess; and provided further that if the Actual Allocation exceeds
the Simulated Result, then the Difference shall be deemed to be zero.
"EPI" has the meaning ascribed to it in the forepart of this Agreement.
"EPI AUDITED FINANCIAL STATEMENT DATE" means December 31, 2000.
"EPI AUDITED FINANCIAL STATEMENTS" means the Financial Statements for the
most recent fiscal year of EPI delivered to MC Global pursuant to SECTION 2.7.
"EPI FINANCIAL STATEMENTS" means the consolidated financial statements of
EPI and its consolidated Subsidiaries delivered to MC Global pursuant to SECTION
2.7.
"EPI SHARE EXCHANGE" has the meaning described in the forepart of this
Agreement.
"EPI SHARE EXCHANGE AGREEMENT" has the meaning ascribed to it in SECTION
4.3.
"EPI SHAREHOLDER" has the meaning ascribed to it in the forepart of this
Agreement.
"EPI UNAUDITED FINANCIAL STATEMENT DATE" means the last day of the most
recent fiscal quarter of EPI for which Financial Statements are delivered to MC
Global pursuant to SECTION 2.7.
"EPI UNAUDITED FINANCIAL STATEMENTS" means the Financial Statements for
the most recent fiscal quarter of EPI delivered to MC Global pursuant to SECTION
2.7.
"EUROPE REGION" shall mean those countries set forth on EXHIBIT Q.
"EUROPEAN MEMBER" means a Principal Member of MCI in the Europe Region.
"EUROPEAN REGIONAL PROXY AMOUNT" means that portion of the Global Proxy
Calculation for all shareholders of MC Global that is attributable to the
Shareholders of Europe.
"GLOBAL PROXY CALCULATION" means the calculation that shall be made for
each successive 12 month period beginning on the first day of the first fiscal
quarter beginning after the Closing, in accordance with the following sentence.
The Global Proxy Calculation for each shareholder, other than a shareholder that
is a Travelers Cheque Member of MCI, shall be equal to the sum obtained by
adding (A) .25 multiplied by a fraction, the numerator of which is the
shareholder's Gross Dollar Volume (GDV) and the denominator of which is MC
Global's Gross Dollar Volume (GDV) attributable to all shareholders of MC
Global, plus (B) .25 multiplied by a fraction, the numerator of which is the
shareholder's Gross Acquiring Volume (GAV) and the denominator of which is MC
Global's Gross Acquiring Volume (GAV) attributable to all shareholders of MC
Global, plus (C) .50 multiplied a fraction, the numerator of
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which is the Revenues Paid by the shareholder to MC Global and its subsidiaries
and the denominator of which is the Revenues Paid by all shareholders to MC
Global and its subsidiaries, in each case for the applicable period. The Global
Proxy Calculation for each shareholder that is a Travelers Cheque member of
MasterCard International Incorporated shall be equal to a fraction, the
numerator of which is the Revenues Paid by the shareholder to MC Global and its
subsidiaries and the denominator of which is the Revenues Paid by all
shareholders to MC Global and its subsidiaries, in each case for the applicable
period. Only actual, as opposed to estimated, Gross Dollar Volume (GDV) and
Gross Acquiring Volume (GAV) and Revenues Paid information will be used in
determining the Global Proxy Calculation for each shareholder.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"GROSS ACQUIRING VOLUME" or "GAV" means processed and non-processed
acquired Volumes (including domestic and international retail purchases, cash
transactions, on-us transactions, intra-processor transactions and local use
only transactions) that occur as a result of one or more of (A) a transaction
involving any one of MC Global's brands (E.G., MasterCard(R), Eurocard(R),
Maestro(R), Cirrus(R) and ec Picto(R)) or (B) a non-MasterCard branded
transaction involving a card which includes any one of MC Global's brand logos
as well as other payment brand logos, provided that such other payment brands
are not in direct competition with any of MC Global's brands as determined by MC
Global.
"GROSS DOLLAR VOLUME" or "GDV" means processed and non-processed issued
Volumes (including domestic and international retail purchases, cash
transactions, convenience checks, on-us transactions, intra-processor
transactions, local use only transactions and balance and commercial funds
transfers) that occur as a result of one or more of (A) a transaction involving
any one of MC Global's brands (E.G., MasterCard(R), Eurocard(R), Maestro(R),
Cirrus(R) and ec Picto(R)) or (B) a non-MasterCard branded transaction involving
a card which includes any one of MC Global's brand logos as well as other
payment brand logos, provided that such other payment brands are not in direct
competition with any of MC Global's brands as determined by MC Global.
"HSR ACT" means Section 7A of the Xxxxxxx Act (Title II of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and the rules
and regulations promulgated thereunder.
"INDEBTEDNESS" of any Person means all obligations of such Person (i) for
borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"LAWS" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"LIABILITIES" means all Indebtedness, obligations and other liabilities of
a Person (whether absolute, accrued, contingent, fixed or otherwise).
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claim, levy, charge or other encumbrance of any kind, or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
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"LOSS" means any and all damages, fines, fees, penalties, deficiencies,
losses and expenses (including, without limitation, interest, court costs, fees
of attorneys, accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or assessment).
"MC GLOBAL" has the meaning ascribed to it in the forepart of this
Agreement.
"MC GLOBAL BYLAWS" means the Bylaws of MC Global that will be in effect as
of the Closing and will be substantially in the form of EXHIBIT K.
"MC GLOBAL CHARTER" means the Certificate of Incorporation of MC Global
that will be in effect as of the Closing and will be substantially in the form
of EXHIBIT J.
"MC GLOBAL CLASS A STOCK" means the class A common stock, $.01 par value
per share, of MC Global.
"MC GLOBAL CLASS B STOCK" means the class B common stock, $.01 par value
per share, of MC Global, which shall not have any voting rights following the
Transition Date.
"MC GLOBAL CLASS C STOCK" means the class C common stock, $.01 par value
per share, of MC Global.
"MCI" has the meaning ascribed to it in the forepart of this Agreement.
"MCI AUDITED FINANCIAL STATEMENT DATE" means December 31, 2000.
"MCI AUDITED FINANCIAL STATEMENTS" means the Financial Statements for the
most recent fiscal year of MCI delivered to EPI pursuant to SECTION 3.6
"MCI FINANCIAL STATEMENTS" means the consolidated financial statements of
MCI and its consolidated Subsidiaries delivered to EPI pursuant to SECTION 3.6.
"MCI LICENSE AGREEMENT" has the meaning given such term in SECTION 5.12.
"MCI MEMBER MEETING" has the meaning ascribed to it in SECTION 4.3(B).
"MCI UNAUDITED FINANCIAL STATEMENT DATE" means the last day of the most
recent fiscal quarter of MCI for which Financial Statements are delivered to MC
Global pursuant to SECTION 3.6.
"MCI UNAUDITED FINANCIAL STATEMENTS" means the Financial Statements for
the most recent fiscal quarter of MCI delivered to EPI pursuant to SECTION 3.6.
"MEMBERS OUTSIDE EUROPE" means those Principal Members of MCI outside the
Europe Region.
"MEPUK" has the meaning ascribed to it in the forepart of this Agreement.
"MEPUK SHARE EXCHANGE" has the meaning ascribed to it in the forepart of
this Agreement.
"MEPUK SHARE EXCHANGE AGREEMENT" has the meaning ascribed to it in SECTION
4.3.
"MEPUK SHAREHOLDER(S)" has the meaning ascribed to it in the forepart of
this Agreement.
"NEW MCI BYLAWS" means the Bylaws of MCI that will be in effect as of the
Closing and will be substantially in the form of EXHIBIT I.
"NEW MCI CHARTER" means the Certificate of Incorporation of MCI that will
be in effect as of the Closing and will be substantially in the form of EXHIBIT
H.
"NON-DEFAULTING PARTY" has the meaning ascribed to it in SECTION 4.11.
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"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(ii) receive any benefits or rights similar to any rights enjoyed by or accruing
to the holder of shares of capital stock of such Person, including any rights to
participate in the equity, income or election of directors or officers of such
Person.
"ORDER" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"OUTSIDE EUROPE PROXY AMOUNT" means that portion of the Global Proxy
Calculation for all shareholders of MC Global that is attributable to the
Shareholders Outside Europe.
"OUTSTANDING SHARES OF MC GLOBAL" means the total number of shares of MC
Global Class A Stock and MC Global Class B Stock that are outstanding at the
time.
"PERMITTED LIEN" means (i) any Lien for Taxes not yet due or delinquent or
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with U.S. GAAP or International
Accounting Standards, as applicable, (ii) any statutory Lien arising in the
ordinary course of business by operation of Law with respect to a Liability that
is not yet due or delinquent and (iii) any minor imperfection of title or
similar Lien which individually or in the aggregate with other such Liens does
not materially impair the value of the property subject to such Lien or the use
of such property in the conduct of the business of EPI or MCI or any of their
respective Subsidiaries.
"PERMITTED PURSE BRAND" means a brand representing a stored value
application that is permitted to be used by the members of MCI under the Bylaws
and Rules of MCI.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"PRINCIPAL MEMBER" means a member of MCI that is a Principal Member,
Association Member or Travelers Cheque Member within the meaning of MCI's bylaws
and any Person that is a Class A Member of MCI within the meaning of the New MCI
Bylaws.
"PRINCIPAL MEMBERSHIP INTEREST" means a membership interest in MCI held by
a Principal Member.
"PROXY STATEMENT" has the meaning ascribed to it in SECTION 4.3.
"REGISTRATION STATEMENT" has the meaning ascribed to it in SECTION 4.3.
"REPRESENTATIVES" has the meaning ascribed to it in SECTION 4.4.
"REVENUES PAID" for any period means, with respect to a particular
shareholder, all revenues of MC Global on a consolidated basis, calculated in
accordance with U.S. GAAP, that are generated by the activities of that
shareholder, other than (1) any fees or other charges associated with the
termination of that shareholder's membership in MCI, (2) Integration Assessments
(as defined in Section 4(d) of Article VI of the New MCI Bylaws) paid by that
shareholder, (3) other fees and charges paid by that shareholder in its capacity
as a member of MCI if those fees and charges were imposed on less than all of
the members of MCI (except for fees and charges pertaining to business
development, ordinary course of business and other matters deemed to be
includable by the management of MCI in its sole discretion) and (4) fines and
penalties paid by that shareholder (except as determined in the sole discretion
of the management of MCI).
"SEC" means the U.S. Securities and Exchange Commission or any successor
agency.
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28
"SHARE EXCHANGE " has the meaning ascribed to it in the forepart of this
Agreement.
"SHAREHOLDERS OF EUROPE" means those holders of Outstanding Shares of MC
Global that are designated as part of the Europe Region of MC Global.
"SHAREHOLDERS OUTSIDE EUROPE" means those holders of Outstanding Shares of
MC Global that are designated as part of a region of MC Global other than the
Europe Region.
"SIMULATED RESULT" means the result derived from:
(a) computing all ec Picto(R) volumes derived from cards bearing
the ec Picto(R) xxxx that are subject to binding, enforceable
contractual commitments under which, by the end of the second
anniversary of the Transition Date, (i) the ec Picto(R) xxxx
will be removed from such cards and (ii) all volumes flowing
from such cards will be Maestro; and
(b) calculating the European Regional Proxy Amount by applying
such volumes derived from (a) as if conversion of such ec
Picto(R) volumes to Maestro volumes had occurred at the
opening of business on the first day of the third year of the
Transition Period. In calculating the Simulated Result,
volumes subject to the contractual commitments described above
will receive the appropriate weighting based upon the terms of
such contractual commitments (E.G., volume assessments will
receive 100% weighting and card fee assessments will receive
75% weighting). In the event that the contractual commitments
do not indicate otherwise, the volumes will be considered Type
1a volumes as described under "Volumes."
"SUBSIDIARY" means any Person in which any other Person directly or
indirectly through one or more Subsidiaries or otherwise, beneficially owns more
than 50% of either the equity interests or the voting control. Unless the
context otherwise requires, all references herein to a "Subsidiary" mean a
Subsidiary of EPI.
"TAX AUTHORITY" means the U.S. Internal Revenue Service and any state,
local, foreign or other Governmental or Regulatory Authority charged by law with
the administration or collection of any Tax.
"TAX RETURN" means a report, return, notification or other information
required to be supplied to a Governmental or Regulatory Authority with respect
to Taxes.
"TAXES" means any Federal, state, county, local or foreign taxes, charges,
surcharges, fees, levies, or other assessments, including all net income, gross
income, sales and use, value added, AD VALOREM, transfer, gains, profits,
excise, franchise, real and personal property, gross receipt, capital stock,
production, business and occupation, disability, employment, payroll, license,
estimated, stamp, duties, imposts, severance or withholding taxes or charges
imposed by any government entity, and includes any interest and penalties (civil
or criminal) on or additions to any such taxes and any expenses incurred in
connection with the determination, settlement or litigation of any Tax
liability.
"TRANSITION DATE" means the third anniversary of the first day of the
first fiscal quarter beginning after the fiscal quarter in which the Closing
occurs; provided however, that if such date is not a Business Day, then the
Transition Date shall be the next day on which banks in New York City are open
for business.
"TRANSITION PERIOD" means the three years prior to and ending on the
Transition Date.
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29
"TRAVELERS CHEQUE MEMBER" means a financial institution or other entity
that is eligible for, and is elected by the Board of Directors of MCI to,
membership pursuant to the bylaws of MCI and that participates or proposes to
participate directly in the travelers cheque programs of MCI.
"TRUST" has the meaning ascribed to it in SECTION 1.2(B).
"U.S. GAAP" means generally accepted accounting principles in the United
States.
"VOLUMES" means the following four types of volumes in the specified
percentages:
(1) TYPE 1 shall include 100% of all (1) MasterCard(R) branded
volumes that are subject to volume-based assessments or non DE MINIMIS,
meaningful card fee assessments, (2) Maestro(R) and Cirrus(R) processed debit
volumes and (3) Maestro(R) and Cirrus(R) stand-alone debit assessed volumes so
long as Maestro(R), a Permitted Purse Brand and/or Cirrus(R) is the sole
acceptance brand on the card and the assessments are non DE MINIMIS.
(2) TYPE 1A shall include 75% of all ec Picto(R) volumes converted
to Maestro(R) volumes as the sole acceptance debit brand with BONA FIDE, non DE
MINIMIS volume-based or card fee assessments and other similar debit volumes
with BONA FIDE, non DE MINIMIS volume-based or card fee assessments; provided,
in each case, that there exists a binding commitment to remove the ec Picto(R)
brand logo and all other acceptance brand logos, other than the Maestro(R) brand
logo or a Permitted Purse Brand logo, on the cards not later than the fifth
anniversary of the first fiscal quarter beginning after the fiscal quarter in
which the Closing Date occurs.
(3) TYPE 2 shall include the following percentages of all volumes
for regional debit brands owned solely by MC Global on cards that include a
Maestro(R) and/or Cirrus(R) logo; provided that such cards are subject to non DE
MINIMIS volume-based or card fee assessments; and provided, further, that for
calculations for the last year of the Transition Period through the year ending
on the second anniversary of the Transition Date, there is a binding written
commitment to remove all acceptance brand logos other than the Maestro(R) brand
logo or a Permitted Purse Brand logo on the cards not later than the fifth
anniversary of the first fiscal quarter beginning after the fiscal quarter in
which the Closing Date occurs:
(a) 40% of such volumes for the last year of the Transition
Period;
(b) 30% of such volumes for the year ending on the one-year
anniversary of the end of the Transition Period;
(c) 20% of such volumes for the year ending on the two-year
anniversary of the end of the Transition Period; and
(d) 10% of such volumes for subsequent years.
(4) TYPE 3 shall include 1% of (i) volumes for regional debit brands
not owned by MC Global on cards that include a Maestro(R) and/or Cirrus(R) brand
logo and are subject to non DE MINIMIS volume-based or card fee assessments and
(ii) volumes for balance and commercial funds transfers.
(5) In determining each Shareholder of Europe's proportionate share
of (i) the European Regional Proxy Amount for purposes of the reallocation
contemplated by SECTION 1.2(B) and (ii) the European Regional Proxy Amount for
each year of the Transition Period other than the last year of the Transition
Period, ec Picto(R) Volumes shall be accorded a weighting of 10% (unless those
volumes satisfy the criteria of Type 1a or Type 2 Volumes, in which case those
volumes shall be accorded the weighting contemplated by those Types, as
appropriate). Thereafter, ec Picto(R) Volumes shall be accorded the weighting
determined in accordance with the definitions of the Types of Volumes described
above.
(6) For each Global Proxy Calculation, all Volumes described above
will be included in calculating Gross Dollar Volume and Gross Acquiring Volume
whether those Volumes are assessed
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30
directly or the cards to which they relate are subject to card fee assessments
of the type contemplated by the applicable type of Volume. In addition, for each
Global Proxy Calculation performed prior to the expiration of the Transition
Period, Volumes of the types described above will be included even if they are
not subject to volume-based or card fee assessments.
Unless the context of this Agreement otherwise requires, (i) words of any
gender include each other gender; (ii) words using the singular or plural number
also include the plural or singular number, respectively; (iii) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement; (iv) the terms "Article" or "Section" refer to the specified
Article or Section of this Agreement; and (v) the phrases "ordinary course of
business" and "ordinary course of business consistent with past practice" refer
to the business and practice of EPI or a Subsidiary or MCI or any of its
Subsidiaries, as applicable. All accounting terms used herein and not expressly
defined herein shall have the meanings given to them under U.S. GAAP or the
International Accounting Standards, as applicable.
ARTICLE X
MISCELLANEOUS
10.1 NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or mailed (first class postage prepaid) to the parties at the
following addresses:
If to MC Global or MCI, to:
MasterCard International Incorporated
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Fax Number: 000-000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx Chance Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
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31
If to EPI, to:
Europay International S.A.
000X Xxxxxxxx xx Xxxxxxxx
X-0000 Xxxxxxxx
Xxxxxxx
Fax Number: 000-00-0-000-0000
Attention: General Manager - Corporate Affairs
with copies to:
Europay International S.A.
000X Xxxxxxxx xx Xxxxxxxx
X-0000 Xxxxxxxx
Xxxxxxx
Fax Number: 000-00-0-000-0000
Attention: Legal Department
- and -
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax Number: 000-000-0000
Attention: Xxxxxxx X. Xxxx
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery and (ii) if delivered by mail in the manner described above to the
address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section). Any party from time to time may change its address or other
information for the purpose of notices to that party by giving notice specifying
such change to the other party hereto.
10.2 ENTIRE AGREEMENT. This Agreement, including all exhibits, schedules
and annexes hereto, supersedes all prior discussions and agreements between the
parties with respect to the subject matter hereof and thereof and contains the
sole and entire agreement between the parties hereto with respect to the subject
matter hereof and thereof.
10.3 EXPENSES. Except as otherwise expressly provided in this Agreement
(including, without limitation, as provided in SECTION 8.2), whether or not the
transactions contemplated hereby are consummated, each party will pay its own
costs and expenses, incurred in connection with the negotiation, execution and
closing of this Agreement and the transactions contemplated hereby.
10.4 PUBLIC ANNOUNCEMENTS. Each of MC Global and MCI, on the one hand, and
EPI, on the other hand, will cooperate with each other in the development and
distribution of all news releases and other public disclosures relating to the
transactions contemplated by this Agreement. EPI will not issue or make, any
press release or public announcement concerning the transactions contemplated by
this Agreement without the consent of MC Global. Neither MC Global nor MCI will
issue or make, any press release or public announcement concerning the
transactions contemplated by this Agreement without the consent of EPI.
Notwithstanding the foregoing, any party may make such news releases and public
disclosures if and to the extent such disclosures are required by Law, but in
any event only after giving
- 30 -
32
both MC Global and EPI a reasonable opportunity to comment on such release or
announcement in advance, consistent with such applicable legal requirements.
10.5 CONFIDENTIALITY. Each party hereto will hold, and will use its best
efforts to cause its Affiliates, and their respective Representatives to hold,
in strict confidence from any Person (other than any such Affiliate or
Representative), unless (i) compelled to disclose by judicial or administrative
process (including, without limitation, in connection with obtaining the
necessary approvals of this Agreement and the transactions contemplated hereby
of Governmental or Regulatory Authorities) or by other requirements of Law or
(ii) disclosed in an Action or Proceeding brought by a party hereto in pursuit
of its rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Representatives in connection with this
Agreement or the transactions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to another party hereto to keep such
documents and information confidential; PROVIDED that following the Closing the
foregoing restrictions will not apply to MC Global's or MCI's use of documents
and information concerning EPI and the Subsidiaries furnished by EPI hereunder.
In the event the transactions contemplated hereby are not consummated, upon the
request of the other party, each party hereto will, and will cause its
Affiliates and their respective Representatives to, promptly redeliver or cause
to be redelivered all copies of documents and information furnished by the other
party in connection with this Agreement or the transactions contemplated hereby
and destroy or cause to be destroyed all notes, memoranda, summaries, analyses,
compilations and other writings related thereto or based thereon prepared by the
party furnished such documents and information or its Representatives.
10.6 WAIVER. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under this
Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
10.7 AMENDMENT. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto;
provided, however, that during the Transition Period, SECTION 7.2 may be
amended, supplemented or modified only if the amendment, supplement or
modification has been approved by a majority of the board of directors of MC
Global and a majority of the board of directors of the regional board of the
Europe Region; and PROVIDED, FURTHER, that until the end of the Transition
Period and the final implementation of all calculations contemplated by SECTIONS
1.1, 1.2 AND 1.3, none of those Sections nor any of the related definitions in
SECTION 10.1 may be amended, supplemented or modified without the approval of
75% of the members of the board of directors of MC Global present at a meeting
at which a quorum is present and the approval of all the shareholders of EPI
(other than MCI and MEPUK) and the shareholders of MEPUK.
10.8 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than the EPI Shareholders (other than MCI and MEPUK) and the shareholders of
MEPUK which shall be third-party beneficiaries of the agreements contained in
SECTIONS 1.1, 1.2 AND 1.3 and the related definitions in SECTION 10.1.
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33
10.9 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other party hereto and any attempt to do so will be
void. Subject to the foregoing, this Agreement is binding upon, inures to the
benefit of and is enforceable by the parties hereto and their respective
successors and assigns.
10.10 HEADINGS. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
10.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EPI hereby
irrevocably appoints Xxxxxxxx & Xxxxxxxx, at its office at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, its lawful agent and attorney to accept and acknowledge
service of any and all process against it in any action, suit or proceeding
arising in connection with this Agreement and upon whom such process may be
served, with the same effect as if such party were a resident of the State of
New York and had been lawfully served with such process in such jurisdiction,
and waives all claims of error by reason of such service, PROVIDED that in the
case of any service upon such agent and attorney, the party effecting such
service shall also deliver a copy thereof to EPI, at the address and in the
manner specified in SECTION 10.1. EPI will enter into such agreements with such
agents as may be necessary to constitute and continue the appointment of such
agents hereunder. In the event that such agent and attorney resigns or otherwise
becomes incapable of acting as such, EPI will appoint a successor agent and
attorney in New York, New York, reasonably satisfactory to MC Global, with like
powers. Each party to this Agreement hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York or any court of the State of New York located in the County of New York
in any such action, suit or proceeding, and agrees that any such action, suit or
proceeding shall be brought only in such court (and waives any objection based
on FORUM NON CONVENIENS or any other objection to venue therein).
10.12 INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
10.13 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the substantive Laws of the State of New York, without regard to
its conflicts of law principles.
10.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[Remainder of page intentionally left blank.]
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34
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MASTERCARD INCORPORATED
By:
------------------------------------------
Name:
Title:
MASTERCARD INTERNATIONAL INCORPORATED
By:
------------------------------------------
Name:
Title:
EUROPAY INTERNATIONAL S.A.
By:
------------------------------------------
Name:
Title: Chairman of the Board
By:
------------------------------------------
Name:
Title: Managing Director and Chief
Executive Officer
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35
TABLE OF CONTENTS
PAGE
ARTICLE I EXCHANGE OF SHARES.........................................................................2
1.1 Conversion.....................................................................................2
1.2 Share Exchange; Reallocation of Shares.........................................................2
1.3 Transition Period; Further Reallocation of Shares..............................................3
1.4 Closing........................................................................................5
ARTICLE II REPRESENTATIONS AND WARRANTIES OF EPI......................................................6
2.1 Organization of EPI............................................................................6
2.2 Authority......................................................................................6
2.3 Capitalization.................................................................................6
2.4 Subsidiaries...................................................................................6
2.5 No Conflicts...................................................................................6
2.6 Governmental Approvals and Filings.............................................................7
2.7 Financial Statements...........................................................................7
2.8 No Undisclosed Liabilities.....................................................................7
2.9 Taxes..........................................................................................8
2.10 Legal Proceedings..............................................................................8
2.11 Compliance With Laws and Orders................................................................9
2.12 Real Property..................................................................................9
2.13 Intellectual Property Rights...................................................................9
2.14 Licenses.......................................................................................9
2.15 Insurance......................................................................................9
2.16 Brokers.......................................................................................10
2.17 Employee Benefit Plans........................................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF MC GLOBAL AND MCI.......................................10
3.1 Organization..................................................................................10
3.2 Authority.....................................................................................10
3.3 Capitalization................................................................................10
3.4 No Conflicts..................................................................................11
3.5 Governmental Approvals and Filings............................................................11
3.6 Financial Statements..........................................................................11
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TABLE OF CONTENTS
(CONTINUED)
PAGE
3.7 Absence of Changes............................................................................11
3.8 No Undisclosed Liabilities....................................................................12
3.9 Legal Proceedings.............................................................................12
3.10 Compliance With Laws and Orders...............................................................12
3.11 Taxes.........................................................................................12
3.12 Licenses......................................................................................13
3.13 Brokers.......................................................................................13
ARTICLE IV ACTIONS PRIOR TO CLOSING..................................................................13
4.1 Regulatory and Other Approvals................................................................13
4.2 Competition Filings...........................................................................13
4.3 Preparation of the Registration Statement and the Proxy Statement; Members' Meeting...........14
4.4 Investigation by MC Global....................................................................14
4.5 Alternative Solicitations.....................................................................14
4.6 Conduct of Business of MC Global and MCI......................................................15
4.7 Conduct of Business of EPI....................................................................15
4.8 Employee Matters..............................................................................15
4.9 Certain Restrictions..........................................................................15
4.10 Books and Records.............................................................................16
4.11 Notice and Cure...............................................................................16
4.12 Fulfillment of Conditions.....................................................................16
ARTICLE V CONDITIONS TO OBLIGATIONS OF MC GLOBAL AND MCI............................................17
5.1 Representations and Warranties................................................................17
5.2 Performance...................................................................................17
5.3 Officers' Certificates........................................................................17
5.4 Orders and Laws...............................................................................17
5.5 Regulatory Consents and Approvals.............................................................17
5.6 Third Party Consents..........................................................................17
5.7 Opinion of Counsel............................................................................18
5.8 Charters and Bylaws...........................................................................18
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TABLE OF CONTENTS
(CONTINUED)
PAGE
5.9 Certificates..................................................................................18
5.10 Resignations of Directors.....................................................................18
5.11 Intellectual Property Assignment Agreement....................................................18
5.12 Entry into License Agreement..................................................................18
5.13 MEPUK Share Exchange Agreement................................................................18
5.14 EPI Share Exchange Agreement..................................................................18
5.15 Registration Statement........................................................................18
5.16 Tax Matters...................................................................................18
ARTICLE VI CONDITIONS TO OBLIGATIONS OF EPI..........................................................18
6.1 Representations and Warranties................................................................19
6.2 Performance...................................................................................19
6.3 Officers' Certificates........................................................................19
6.4 Orders and Laws...............................................................................19
6.5 Regulatory Consents and Approvals.............................................................19
6.6 Third Party Consents..........................................................................19
6.7 Opinion of Counsel............................................................................19
6.8 Charters and Bylaws...........................................................................20
6.9 Good Standing Certificates....................................................................20
6.10 No Stop Orders................................................................................20
6.11 Merger Agreement..............................................................................20
6.12 Tax Matters...................................................................................20
ARTICLE VII SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS; POST-CLOSING
COVENANTS.................................................................................20
7.1 Survival of Representations, Warranties, Covenants and Agreements.............................20
7.2 Post-Closing Covenants........................................................................20
ARTICLE VIII TERMINATION...............................................................................21
8.1 Termination...................................................................................21
8.2 Effect of Termination.........................................................................21
ARTICLE IX DEFINITIONS...............................................................................22
9.1 Definitions...................................................................................22
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE X MISCELLANEOUS.............................................................................29
10.1 Notices.......................................................................................29
10.2 Entire Agreement..............................................................................30
10.3 Expenses......................................................................................30
10.4 Public Announcements..........................................................................30
10.5 Confidentiality...............................................................................31
10.6 Waiver........................................................................................31
10.7 Amendment.....................................................................................31
10.8 No Third Party Beneficiary....................................................................31
10.9 No Assignment; Binding Effect.................................................................31
10.10 Headings......................................................................................32
10.11 Consent to Jurisdiction and Service of Process................................................32
10.12 Invalid Provisions............................................................................32
10.13 Governing Law.................................................................................32
10.14 Counterparts..................................................................................32
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EXHIBITS
EXHIBIT A Agreement and Plan of Merger
EXHIBIT B Trust Deed
EXHIBIT C EPI Share Exchange Agreement
EXHIBIT D MEPUK Share Exchange Agreement
EXHIBIT E Officers' Certificate of EPI
EXHIBIT F Certificate of EPI General Manager, Corporate Affairs
EXHIBIT G-1 Opinion of U.S. Counsel to EPI
EXHIBIT G-2 Opinion of European Counsel to EPI
EXHIBIT H Certificate of Incorporation of MCI
EXHIBIT I Bylaws of MCI
EXHIBIT J Certificate of Incorporation of MC Global
EXHIBIT K Bylaws of MC Global
EXHIBIT L Intellectual Property Assignment Agreement
EXHIBIT M MCI License Agreement
EXHIBIT N Officers' Certificate of MC Global and MCI
EXHIBIT O Secretary's Certificate of MC Global and MCI
EXHIBIT P Opinion of Counsel to MC Global and MCI
EXHIBIT Q Europe Region Countries
40
DISCLOSURE SCHEDULE
Schedule 2.1(a) EPI Jurisdictions of Qualification
Schedule 2.1(b) Directors and Officers of EPI
Schedule 2.3 Shareholders of EPI
Schedule 2.4 EPI Subsidiaries
Schedule 2.6 Consents, Approvals, Actions and Filings With Governmental
or Regulatory Authorities Required to be Obtained by EPI and
Its Subsidiaries
Schedule 2.9 Tax Matters concerning EPI and Its Subsidiaries
Schedule 2.10 Legal Proceedings Relating to EPI and Its Subsidiaries
Schedule 2.13 Intellectual Property Owned by EPI and Its Subsidiaries
Schedule 2.17 Employee Benefit Plans for Employees of EPI and Its
Subsidiaries
Schedule 3.3 Outstanding Options With Respect to MCI and MC Global
Schedule 3.4 Conflicts, Violations, Defaults, Etc. by MCI and MC Global
Under Contracts and Licenses
Schedule 3.5 Consents, Approvals, Actions and Filings With Regulatory
Authorities Required to be Obtained by MCI and MC Global
Schedule 3.6 MCI and MC Global Subsidiaries
Schedule 3.8 Undisclosed Liabilities of MCI and MC Global and Their
Subsidiaries
Schedule 3.9 Legal Proceedings Relating to MCI and MC Global
Schedule 3.10 Violations and Defaults Under Laws and Orders Applicable to
MCI and Its Subsidiaries
