AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by and among

FIDELITY NATIONAL INFORMATION SERVICES, INC.,

CARS HOLDINGS, LLC

and

METAVANTE TECHNOLOGIES, INC.

 

DATED AS OF MARCH 31, 2009

TABLE OF CONTENTS

 

 

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Exhibit A – Form of Support Agreement

Exhibit B – Form of Articles of Merger

Exhibit C – Reserved

Exhibit D – Knowledge of Wisconsin

Exhibit E – Knowledge of Georgia

Exhibit F – Form of Shareholders Agreement

Exhibit G – Form of Stock Purchase Right Agreement

Exhibit H – Form of Tax Opinion

 

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INDEX OF DEFINED TERMS

 

 

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of March 31, 2009 (this “ Agreement ”), by and among FIDELITY NATIONAL INFORMATION SERVICES, INC., a Georgia corporation (“ Georgia ”), CARS HOLDINGS, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Georgia that is disregarded as an entity separate from Georgia under Treasury Regulation Section 301.7701-3 (“ Merger Sub ”) and METAVANTE TECHNOLOGIES, INC., a Wisconsin corporation (“ Wisconsin ”).

W I T N E S S E T H:

WHEREAS, the Boards of Directors of Wisconsin and Georgia, and the managing member of Merger Sub, have approved, and have determined that it is in the best interests of their respective companies and their shareholders and sole member, respectively, to consummate, the strategic business combination transaction provided for in this Agreement in which Wisconsin will, on the terms and subject to the conditions set forth in this Agreement, merge with and into Merger Sub (the “ Merger ”), so that Merger Sub is the surviving company in the Merger (sometimes referred to in such capacity as the “ Surviving Company ”); and

WHEREAS, for United States federal income tax purposes, it is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the “ Code ”), and this Agreement is intended to be and is adopted as a “plan of reorganization” for purposes of Sections 354 and 361 of the Code; and

WHEREAS, in connection with the execution and delivery of this Agreement by the parties hereto: (i) WPM, L.P. (the “ Shareholder ”) has entered into a Support Agreement (the “ Support Agreement ”), dated as of the date hereof, with Georgia, Merger Sub and Wisconsin, in the form attached hereto as Exhibit A , pursuant to which the Shareholder has agreed, among other things, to vote all of the Wisconsin Common Stock (as defined herein) beneficially owned by it in favor of the Merger; (ii) Georgia and the Shareholder have entered into a Shareholders Agreement (the “ Shareholders Agreement ”) in the form attached hereto as Exhibit F , which will become effective upon the Closing; and (iii) Georgia, the Shareholder and Wisconsin have entered into a Stock Purchase Right Agreement (the “ SPR Agreement ”) in the form attached hereto as Exhibit G; and

WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

 

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ARTICLE I

THE MERGER

1.1 The Merger . (a) Subject to the terms and conditions of this Agreement, in accordance with the Wisconsin Business Corporation Law (the “ WBCL ”) and the Delaware Limited Liability Company Act (the “ DLLCA ”), at the Effective Time, Wisconsin shall merge with and into Merger Sub. Merger Sub shall be the Surviving Company in the Merger, and shall continue its limited liability company existence under the Laws of the State of Delaware. As of the Effective Time, the separate corporate existence of Wisconsin shall cease.

(b) Georgia may at any time prior to the Effective Time change the method of effecting the combination (including by providing for the merger of Wisconsin directly into Georgia, with Georgia surviving the merger) if it determines in good faith that such change is necessary or desirable to address legal, commercial, regulatory or Tax concerns, and the parties shall cooperate with each other in good faith to implement such alternative method, including by entering into an appropriate amendment to this Agreement (to the extent such amendment only changes the method of effecting the business combination and does not substantively affect this Agreement or the rights and obligations of the parties or their respective shareholders hereunder); provided , however , that no such change shall (i) alter or change the amount or kind of the Merger Consideration provided for in this Agreement, (ii) adversely affect the Tax treatment of Wisconsin’s shareholders as a result of receiving the Merger Consideration or the Tax treatment of either party pursuant to this Agreement, (iii) increase the conditionality or prevent the satisfaction of any condition to the consummation of the transactions contemplated by this Agreement, or (iv) materially impede or delay consummation of the transactions contemplated by this Agreement.

1.2 Effective Time . The Merger shall become effective as set forth in the articles of merger (the “ Articles of Merger ”) that shall be filed with the Department of Financial Institutions of the State of Wisconsin and the certificate of merger (“ Certificate of Merger ”) that shall be filed with the Secretary of State of the State of Delaware on or before the Closing Date. The term “ Effective Time ” shall be the date and time when the Merger becomes effective as set forth in the Articles of Merger and Certificate of Merger. A copy of the form of Articles of Merger (with an attached Plan of Merger as required by the WBCL) is attached hereto as Exhibit B . “ Effective Date ” shall mean the date on which the Effective Time occurs.

1.3 Effects of the Merger . At and after the Effective Time, the Merger shall have the effects set forth in this Agreement and in the applicable provisions of the WBCL and the DLLCA.

1.4 Conversion of Wisconsin Capital Stock . At the Effective Time, by virtue of the Merger and without any action on the part of Georgia, Merger Sub, Wisconsin or the holder of any of the securities described in the following subsections:

(a) Subject to Section 2.2(e) , each share of the common stock, par value $0.01 per share, of Wisconsin issued and outstanding immediately prior to the Effective Time (“ Wisconsin Common Stock ”), except for shares of Wisconsin Common Stock owned by

 

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Georgia, Merger Sub or Wisconsin (which shall be cancelled in accordance with Section 1.4(c) ), shall be converted into the right to receive 1.35 (the “ Exchange Ratio ”) fully paid and nonassessable shares of common stock, par value $.01 per share (“ Georgia Common Stock ”), of Georgia (the “ Merger Consideration ”).

(b) All of the shares of Wisconsin Common Stock converted into the right to receive the Merger Consideration pursuant to this Section 1.4 shall no longer be outstanding and shall automatically be cancelled and shall cease to exist as of the Effective Time, and each certificate or evidence of shares in book-entry form previously representing any such shares of Wisconsin Common Stock (such certificates and evidence of shares in book-entry form, collectively, “ Certificates ”) shall thereafter represent only the right to receive (A) the Merger Consideration and (B) cash in lieu of fractional shares into which the shares of Wisconsin Common Stock represented by such Certificate have been converted pursuant to this Section 1.4 and Section 2.2(e) , as well as any dividends or distributions to which holders of Wisconsin Common Stock are entitled in accordance with Section 2.2(b) . If, prior to the Effective Time, the outstanding shares of Georgia Common Stock or Wisconsin Common Stock shall have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, an appropriate and proportionate adjustment shall be made to the Merger Consideration.

(c) Notwithstanding anything in this Agreement to the contrary, at the Effective Time, all shares of Wisconsin Common Stock that are owned by Wisconsin, Georgia or Merger Sub shall be cancelled and shall cease to exist and no Georgia Common Stock, stock of Merger Sub or other consideration shall be delivered in exchange therefor.

1.5 Georgia Common Stock . At and after the Effective Time, each share of Georgia Common Stock issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall not be affected by the Merger.

1.6 Merger Sub Units . At and after the Effective Time, each Merger Sub Unit issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall not be affected by the Merger.

1.7 Wisconsin Equity and Equity-Based Awards . (a)  Wisconsin Stock Options . Effective as of the Effective Time, each then outstanding option to purchase shares of Wisconsin Common Stock (each a “ Wisconsin Stock Option ”), pursuant to the equity-based compensation plans identified on Section 3.11(a) of the Wisconsin Disclosure Schedule (the “ Wisconsin Stock Plans ”) and the award agreements evidencing the grants thereunder, granted to any current or former employee or director of, or consultant to, Wisconsin or any Wisconsin Subsidiary shall be assumed by Georgia and converted into an option to purchase a number of shares of Georgia Common Stock (an “ Assumed Stock Option ”) equal to the product (rounded down to the nearest whole share) of (i) the number of shares of Wisconsin Common Stock subject to such Wisconsin Stock Option immediately prior to the Effective Time multiplied by (ii) the Exchange Ratio; and the per share exercise price for Georgia Common Stock issuable upon the exercise of such Assumed Stock Option shall be equal to the quotient (rounded up to the nearest whole cent) of (i) the exercise price per share of Wisconsin Common Stock at which

 

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such Wisconsin Stock Option was exercisable immediately prior to the Effective Time divided by (ii) the Exchange Ratio; provided , however , that it is intended that such conversion be effected (i) with respect to any Wisconsin Stock Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, in a manner consistent with Section 424(a) of the Code and (ii) in all events, in a manner satisfying the requirements of Section 409A of the Code and the Treasury Regulations thereunder. The Assumed Stock Options shall be subject to the same terms and conditions (including expiration date and exercise provisions) as were applicable to the corresponding Wisconsin Stock Options immediately prior to the Effective Time.

(b) Wisconsin Restricted Shares . Effective immediately prior to the Effective Time, each restricted share of Wisconsin Common Stock granted to any employee or director of Wisconsin, any Wisconsin Subsidiary or any of Wisconsin’s predecessors under any Wisconsin Stock Plan that is outstanding immediately prior to the Effective Time (collectively, the “ Wisconsin Restricted Shares ”) shall, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by Georgia and converted into the number of shares of Georgia Common Stock equal to the product (rounded down to the nearest whole number of shares of Georgia Common Stock) of (i) the number of shares of Wisconsin Common Stock underlying or subject to the Wisconsin Restricted Share, multiplied by (ii) the Exchange Ratio (each an “ Assumed Restricted Share ”). Each Assumed Restricted Share shall be subject to the same terms and conditions (including vesting schedule) as were applicable to the corresponding Wisconsin Restricted Shares immediately prior to the Effective Time.

(c) Wisconsin Performance Shares . Effective as of the Effective Time, each performance share denominated in shares of Wisconsin Common Stock granted to any current or former employee or director of Wisconsin or any Wisconsin Subsidiary under any Wisconsin Stock Plan that is unsettled immediately prior to the Effective Time (collectively, the “ Wisconsin Performance Shares ”) shall, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by Georgia and converted into the right of the holder of such Wisconsin Performance Share to receive (x) a number of restricted shares of Georgia Common Stock equal to the product (rounded down to the nearest whole number of shares of Georgia Common Stock) of (i) the number of shares of Wisconsin Common Stock underlying or subject to the Wisconsin Performance Shares at target, multiplied by (ii) a fraction, the numerator of which is the number of whole calendar months remaining in the performance period from and after the Effective Time and the denominator of which is the total number of calendar months in the applicable performance period, multiplied by (iii) the Exchange Ratio (each an “ Assumed Performance Share ”), and each such Assumed Performance Share shall be subject to the same terms and conditions (including vesting schedule) as were applicable to the corresponding Wisconsin Performance Shares immediately prior to the Effective Time and any obligations in respect thereof shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Assumed Performance Share, and (y) a cash amount based upon the portion of the performance period that has been completed as of the Effective Time, equal to the product of (i) the number of shares of Wisconsin Common Stock underlying or subject to the Wisconsin Performance Shares at target, multiplied by (ii) a fraction, the numerator of which is the number of whole or partial calendar months elapsed between the beginning of the performance period and the Effective Time and the denominator of which is the total number of calendar months in the applicable performance period, multiplied by (iii) the

 

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closing sale price of Wisconsin Common Stock as reported in the Midwest Edition of The Wall Street Journal immediately prior to the Effective Date, which cash amount shall be paid in accordance with the terms of the agreement, plan or arrangement relating to such Wisconsin Performance Shares.

(d) Stock Units . Effective as of the Effective Time, each outstanding stock unit denominated in shares of Wisconsin Common Stock granted to, or held in a deferral account for the benefit of, any current or former employee or director of Wisconsin or any Wisconsin Subsidiary under the Wisconsin Directors Deferred Compensation Plan, the Wisconsin Executive Deferred Compensation Plan or any Wisconsin Stock Plan that is unsettled immediately prior to the Effective Time (collectively, the “ Wisconsin Stock Units ”) shall, by virtue of the Merger and without any action on the part of the holder thereof, be assumed by Georgia and converted into the right to receive the number of shares of Georgia Common Stock (or an amount in respect thereof for cash settled Wisconsin Stock Units) equal to the product (rounded down to the nearest whole number of shares of Georgia Common Stock) of the number of shares of Wisconsin Common Stock underlying or subject to the Wisconsin Stock Unit, multiplied by the Exchange Ratio (each an “ Assumed Stock Unit ”). Each Assumed Stock Unit shall have the same terms and conditions (including vesting schedule) as were applicable to the corresponding Wisconsin Stock Unit immediately prior to the Effective Time and any obligations in respect thereof shall be payable or distributable in accordance with the terms of the agreement, plan or arrangement relating to such Assumed Stock Unit.

(e) ESPP . The Board of Directors of Wisconsin shall adopt such resolutions or take such other actions as may be required to provide that with respect to Wisconsin’s Employee Stock Purchase Plan (the “ ESPP ”): (i) participants may not increase their payroll deductions or purchase elections from those in effect on the date of this Agreement; (ii) no new participants may commence participation in the ESPP following the date of this Agreement; (iii) the ESPP shall be suspended effective as of Wisconsin’s payroll period ending immediately prior to the Effective Time (but in no event less than fifteen (15) business days prior to the Effective Time), such that the offering period in effect as of such date will be the final offering period under the ESPP; and (iv) as of the Effective Time and subject to the consummation of the transactions contemplated by this Agreement, the ESPP shall terminate. To the extent any offering period under the ESPP is in progress prior to the suspension contemplated by clause (iii) above, Wisconsin shall ensure that such offering period ends at the time of such suspension and that each participant’s accumulated contributions for such offering period are applied towards the purchase of Wisconsin Common Stock unless the participant has previously withdrawn from such offering period in accordance with the terms of the ESPP.

(f) Actions . Prior to the Effective Time, the Compensation Committee of the Board of Directors of Wisconsin shall make such adjustments and determinations and shall adopt any resolutions and take any corporate actions with respect to the Wisconsin Stock Options, Wisconsin Restricted Shares, Wisconsin Performance Shares, Wisconsin Stock Units and the ESPP to implement the foregoing provisions of this Section 1.7 . Wisconsin shall take all actions necessary to ensure that after the Effective Time, neither Georgia nor the Surviving Company will be required to deliver shares of Wisconsin Common Stock or other capital stock of Wisconsin to any person pursuant to or in settlement of Wisconsin Stock Options, Wisconsin

 

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Restricted Shares, Wisconsin Performance Shares, Wisconsin Stock Units or any other stock-based award.

(g) Georgia shall take all corporate action necessary to reserve for issuance a sufficient number of shares of Georgia Common Stock for delivery upon exercise of Assumed Stock Options or settlement of Assumed Performance Shares and Assumed Stock Units. As soon as reasonably practicable after the Effective Time, Georgia shall file a registration statement on Form S-3 or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to the shares of Georgia Common Stock subject to such assumed equity awards and shall use its reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such assumed equity awards remain outstanding.

1.8 Certificate of Formation and Operating Agreement of the Surviving Company . The certificate of formation of Merger Sub (the “ Certificate of Formation ”) as in effect immediately prior to the Effective Time shall be the articles of organization of the Surviving Company until thereafter amended in accordance with applicable Law. The operating agreement of Merger Sub (the “LLC Agreement ”) as in effect immediately prior to the Effective Time shall be the operating agreement of the Surviving Company until thereafter amended in accordance with applicable Law.

1.9 Governance Arrangements .

(a) Georgia Board of Directors . On or prior to the Effective Time, Georgia’s Board of Directors shall cause the number of directors that will comprise the full Board of Directors of Georgia to be nine (9) and shall approve and adopt resolutions effecting the composition contemplated by this Section 1.9. The Board of Directors of Georgia at the Effective Time shall be comprised of (i) four (4) current non-employee Georgia directors designated by Georgia, the current Executive Chairman of Georgia, and the current President and Chief Executive Officer of Georgia (collectively the “ Continuing Georgia Directors ”), and (ii) one (1) current non-employee Wisconsin directors designated by Wisconsin, one (1) designee of the Shareholder, who may or may not be a current non-employee Wisconsin director, and the current Chairman and Chief Executive Officer of Wisconsin (collectively the “ Continuing Wisconsin Directors ”). Effective as of the Effective Time, Mr. William P. Foley, II shall serve as Chairman of the Board of Georgia and Mr. Lee A. Kennedy shall serve as an executive Vice Chairman of the Board of Georgia. The Continuing Wisconsin Directors shall be allocated one director to each of the three (3) classes of the Georgia Board of Directors. The Continuing Wisconsin Directors together with the class of the Georgia Board of Directors such individuals have been allocated to, is set forth in Section 1.9(a) of the Georgia Disclosure Schedule. In the event that, prior to the Effective Time, any person selected to serve as a Continuing Georgia Director or a Continuing Wisconsin Director, as applicable, after the Effective Time is unable or unwilling to serve in such position, the Board of Directors of either Georgia or Wisconsin (or the Shareholder), as applicable, shall designate another person to serve in such person’s stead.

(b) Committees of the Georgia Board of Directors . Immediately following the Effective Time, the Board of Directors of Georgia will have the committees set forth in Section 1.9(b) of the Georgia Disclosure Schedule.

 

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(c) President and Chief Executive Officer of Georgia . At the Effective Time, Mr. Frank R. Martire shall become President and Chief Executive Officer of Georgia.

1.10 Tax Consequences . It is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement shall constitute, and is adopted as, a “plan of reorganization” for purposes of Sections 354 and 361 of the Code.

1.11 No Dissenters Rights . Holders of Wisconsin Common Stock will not have dissenters’ rights under Section 180.1302(4) of the WBCL with respect to the Merger.

1.12 Headquarters of Georgia and the Surviving Company . From and after the Effective Time, the location of the headquarters and principal executive offices of Georgia and the Surviving Company shall be Jacksonville, Florida.

1.13 Other Matters . Wisconsin and Georgia agree to the additional matters set forth in Section 1.13 of the Wisconsin Disclosure Schedule.

ARTICLE II

EXCHANGE OF SHARES

2.1 Georgia to Make Merger Consideration Available . As promptly as practicable following the Effective Time, Georgia shall deposit, or shall cause to be deposited, with a bank or trust company reasonably acceptable to each of Wisconsin and Georgia (the “ Exchange Agent ”), for the benefit of the holders of shares of Wisconsin Common Stock, for exchange in accordance with this Article II , (i) certificates representing the shares of Georgia Common Stock sufficient to deliver the aggregate Merger Consideration, (ii) immediately available funds equal to any dividends or distributions payable in accordance with Section 2.2(b) and (iii) cash in lieu of any fractional shares (such cash and certificates for shares of Georgia Common Stock, collectively being referred to as the “ Exchange Fund ”), to be issued pursuant to Section 1.4 and paid pursuant to Section 2.2(e) in exchange for outstanding shares of Wisconsin Common Stock.

2.2 Exchange of Shares . (a) As soon as practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of one or more Certificates a letter of transmittal in customary form as prepared by Georgia and reasonably acceptable to Wisconsin (which shall specify, among other things, that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration and any cash in lieu of fractional shares into which the shares of Wisconsin Common Stock represented by such Certificate or Certificates shall have been converted pursuant to this Agreement and any dividends or distributions to which such holder is entitled pursuant to Section 2.2(b) . Upon proper surrender of a Certificate or Certificates for exchange and cancellation to the Exchange Agent, together with such properly completed letter of transmittal, duly executed, the holder of such Certificate or Certificates shall be entitled to receive in exchange therefor, as applicable, (i) a certificate representing the number of whole

 

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shares of Georgia Common Stock to which such holder of Wisconsin Common Stock shall have become entitled pursuant to the provisions of Article I (after taking into account all shares of Wisconsin Common Stock then held by such holder), (ii) a check representing the amount of any cash in lieu of fractional shares which such holder has the right to receive in respect of the Certificate or Certificates surrendered pursuant to the provisions of this Article II , and (iii) a check representing the amount of any dividends or distributions then payable pursuant to Section 2.2(b)(i) , and the Certificate or Certificates so surrendered shall forthwith be cancelled. No interest will be paid or accrued on any cash in lieu of fractional shares or on any unpaid dividends and distributions payable to holders of Certificates. Until so surrendered, each Certificate shall represent after the Effective Time for all purposes only the right to receive the Merger Consideration, together with any cash in lieu of fractional shares and any dividends or distributions as contemplated by Section 2.2(b) .

(b) No dividends or other distributions declared with respect to Georgia Common Stock shall be paid to the holder of any unsurrendered Certificate until the holder thereof shall surrender such Certificate in accordance with this Article II . After the surrender of a Certificate in accordance with this Article II , the record holder thereof shall be entitled to receive (i) the amount of any dividends or distributions with a record date prior to the Effective Time which have been declared by Wisconsin in respect of the shares of Wisconsin Common Stock after the date of this Agreement in accordance with the terms of this Agreement and which remain unpaid at the Effective Time, (ii) the amount of dividends or other distributions with a record date after the Effective Time theretofore paid, without any interest thereon, with respect to the whole shares of Georgia Common Stock represented by such Certificate, and (iii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and a payment date subsequent to surrender, with respect to shares of Georgia Common Stock represented by such Certificate.

(c) If any certificate representing shares of Georgia Common Stock is to be issued in, or any cash is paid to, a name other than that in which the Certificate or Certificates surrendered in exchange therefor is or are registered, it shall be a condition to the issuance or payment thereof that the Certificate or Certificates so surrendered shall be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the Person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other similar Taxes required by reason of the payment or issuance in any name other than that of the registered holder of the Certificate or Certificates surrendered, or required for any other reason, or shall establish to the satisfaction of the Exchange Agent that such Tax has been paid or is not payable. For purposes of this Agreement, the term “ Person ” means any individual, corporation, limited liability company, partnership, association, joint venture, trust, unincorporated organization, other entity or group (as defined in the Exchange Act), including any Governmental Entity.

(d) After the Effective Time, there shall be no transfers on the stock transfer books of Wisconsin of the shares of Wisconsin Common Stock that were issued and outstanding immediately prior to the Effective Time other than to settle transfers of Wisconsin Common Stock that occurred prior to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be cancelled and exchanged for the Merger Consideration as provided in this Article II .

 

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(e) Notwithstanding anything to the contrary contained in this Agreement, no certificates or scrip representing fractional shares of Georgia Common Stock shall be issued upon the surrender of Certificates for exchange, no dividend or distribution with respect to Georgia Common Stock shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a shareholder of Georgia. In lieu of the issuance of any such fractional share, Georgia shall pay to each former shareholder of Wisconsin that otherwise would be entitled to receive such fractional share (after taking into account all shares of Wisconsin Common Stock held at the Effective Time by such holder) an amount in cash (rounded to the nearest cent) determined by multiplying (i) the average, rounded to the nearest ten thousandth, of the closing sale prices of Georgia Common Stock on the New York Stock Exchange (the “ NYSE ”) as reported by The Wall Street Journal for the five full NYSE trading days immediately preceding (but not including) the Effective Date by (ii) the fraction of a share (rounded to the nearest thousandth when expressed in decimal form) of Georgia Common Stock to which such holder would otherwise be entitled to receive pursuant to Section 1.4 .

(f) Any portion of the Exchange Fund that remains unclaimed by the shareholders of Wisconsin as of the first anniversary of the Effective Time shall be paid to Georgia. Any former shareholders of Wisconsin who have not theretofore complied with this Article II shall thereafter look only to Georgia for payment of the Merger Consideration, cash in lieu of any fractional shares and any unpaid dividends and distributions payable in accordance with Section 2.2(b) in respect of each share of Wisconsin Common Stock, as the case may be, such shareholder holds as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of Georgia, Merger Sub, Wisconsin, the Exchange Agent or any other Person shall be liable to any former holder of Wisconsin Common Stock for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar Laws.

(g) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by Georgia, the posting by such Person of a bond in such amount as Georgia may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration, any cash in lieu of fractional shares deliverable in respect thereof pursuant to this Agreement and any dividends or distributions payable pursuant to Section 2.2(b) .

2.3 Withholding Rights . The Exchange Agent (or, subsequent to the first anniversary of the Effective Time, Georgia) shall be entitled to deduct and withhold from the Merger Consideration, any cash in lieu of fractional shares of Georgia Common Stock, cash dividends or distributions payable pursuant to Section 2.2(b) hereof and any other cash amounts otherwise payable pursuant to this Agreement to any holder of Wisconsin Common Stock such amounts as the Exchange Agent or Georgia, as the case may be, is required to deduct and withhold under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment. To the extent the amounts are so withheld by the Exchange Agent or Georgia, as the case may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Wisconsin Common Stock in respect of whom

 

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such deduction and withholding was made by the Exchange Agent or Georgia, as the case may be.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF WISCONSIN

Except (i) as disclosed in, and reasonably apparent from, any report, schedule, form or other document filed with, or furnished to, the SEC by Wisconsin and publicly available prior to the date of this Agreement or any report, schedule, form or other document filed with, or furnished to, the SEC by Marshall & Ilsley Corporation (“ M&I ”) in 2007 that specifically relates to the spin-off transaction involving Wisconsin and M&I (such reports, schedules, forms and other documents so filed by M&I, collectively, the “ M&I Reports ”) (excluding, in each case, any disclosures set forth in any risk factor section and in any section relating to forward-looking statements to the extent that they are cautionary, predictive or forward-looking in nature), or (ii) as disclosed in a correspondingly numbered section of the disclosure schedule (the “ Wisconsin Disclosure Schedule ”) delivered by Wisconsin to Georgia and Merger Sub prior to the execution of this Agreement (which schedule sets forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in this Article III , or to one or more of Wisconsin’s covenants contained herein; provided that, notwithstanding anything in this Agreement to the contrary, the mere inclusion of an item in such schedule shall not be deemed an admission that such item is required to be disclosed therein or represents a material exception or material fact, event or circumstance or that such item has had or is reasonably likely to have a Material Adverse Effect on Wisconsin; provided , further , that the disclosure of any item in any section of the Wisconsin Disclosure Schedule shall be deemed disclosed with respect to any other section of the Wisconsin Disclosure Schedule to which such item is relevant, whether or not a specific cross reference appears, so long as the relevance is reasonably apparent from the face of such disclosure), Wisconsin hereby represents and warrants to Georgia and Merger Sub as follows:

3.1 Corporate Organization .

(a) Wisconsin is a corporation duly organized, validly existing and in active status under the Laws of the State of Wisconsin. Wisconsin has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to have such power and authority or to be so licensed and qualified is not reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect on Wisconsin.

(b) True, correct and complete copies of the restated articles of incorporation of Wisconsin (the “ Wisconsin Articles ”) and the amended and restated by-laws of Wisconsin (the “ Wisconsin By-laws ”), as in effect as of the date of this Agreement, have previously been made available to Georgia.

 

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(c) Each Wisconsin Subsidiary (i) is duly organized and validly existing under the Laws of its jurisdiction of organization, (ii) is duly qualified to do business and in good standing or active status (where such concept is recognized) in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified and (iii) has all requisite corporate or similar power and authority to own or lease its properties and assets and to carry on its business as now conducted, except in each of (i) – (iii) as would not be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect on Wisconsin. As used in this Agreement, (i) the word “ Subsidiary ” when used with respect to either party, means any corporation, partnership, limited liability company or other organization, whether incorporated or unincorporated, that is consolidated with such party for financial reporting purposes under U.S. generally accepted accounting principles (“ GAAP ”), and the terms “ Wisconsin Subsidiary ” and “ Georgia Subsidiary ” shall mean any direct or indirect Subsidiary of Wisconsin or Georgia, respectively ( provided , however , that in no event shall M&I be considered a Wisconsin Subsidiary), and (ii) the term “ Material Adverse Effect ” means, with respect to Georgia, Merger Sub, Wisconsin or the Surviving Company, as the case may be, a material adverse effect on (A) the business, assets, properties, results of operations or condition (financial or otherwise) of such party and its Subsidiaries taken as a whole ( provided , however , that, with respect to this clause (A), Material Adverse Effect shall not be deemed to include effects to the extent resulting from (1) changes, after the date hereof, in GAAP (or any interpretation thereof) generally applicable to companies engaged in the industries in which Wisconsin and Georgia operate, (2) changes, after the date hereof, in Laws of general applicability or interpretations or enforcement thereof by Governmental Entities, (3) actions or omissions of Georgia or Merger Sub, on the one hand, or Wisconsin, on the other hand, taken with the prior written consent of the other or expressly required hereunder, including the impact thereof on relationships (contractual or otherwise) with customers, suppliers, vendors, lenders, employees, investors or venture partners, (4) changes, after the date hereof, in general economic or market conditions (including conditions of the securities and credit markets) generally affecting companies engaged in the industries in which Wisconsin and Georgia operate, except to the extent that such changes have a disproportionate adverse effect on such party relative to other participants in the same industries, (5) the execution or public disclosure of this Agreement or the transactions contemplated hereby, including the directly attributable impact thereof on relationships (contractual or otherwise) with customers, suppliers, vendors, lenders, employees, investors or venture partners, (6) acts of war, armed hostilities or terrorism or any escalation or worsening thereof, except to the extent that such events have a disproportionate adverse effect on such party relative to other participants in the industries in which Wisconsin and Georgia operate, (7) changes in the price or trading volume of the stock of Wisconsin or Georgia, as applicable, in and of itself (provided that events, circumstances and conditions underlying any such change may nonetheless be considered in determining whether a Material Adverse Effect has occurred), or (8) any failure by Wisconsin or Georgia, as applicable, to meet any projections or forecasts for any period ending (or for which revenues or earnings are released) on or after the date hereof (provided that events, circumstances and conditions underlying any such failure may nonetheless be considered in determining whether a Material Adverse Effect has occurred), or (B) the ability of such party to timely consummate the transactions contemplated by this Agreement.

3.2 Capitalization . (a) The authorized capital stock of Wisconsin consists of 200,000,000 shares of Wisconsin Common Stock, of which, as of March 26, 2009, 119,834,772

 

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shares were issued and outstanding, 100,000,000 shares of Class A common stock, par value $0.01 per share, of which, as of the date hereof, no shares were issued and outstanding, and 5,000,000 shares of preferred stock, par value $0.01 per share, of which, as of the date hereof, no shares were issued and outstanding. As of March 26, 2009, 44,725 shares of Wisconsin Common Stock were held in Wisconsin’s treasury. As of the date hereof, no shares of Wisconsin Common Stock were reserved for issuance except for under the Wisconsin Stock Plans, the ESPP, and the Amended and Restated Wisconsin Stock Purchase Right Agreement, dated as of August 21, 2008, between Wisconsin and the Shareholder (the “ Wisconsin Stock Purchase Right Agreement ”). As of March 12, 2009 (i) 10,782,977 Wisconsin Stock Options to acquire shares of Wisconsin Common Stock were outstanding pursuant to the Wisconsin Stock Plans or otherwise, (ii) 481,168 Wisconsin Restricted Shares were outstanding pursuant to the Wisconsin Stock Plans or otherwise, (iii) 206,999 Wisconsin Performance Shares (at target) were outstanding pursuant to the Wisconsin Stock Plans or otherwise, (iv) 44,341 Wisconsin Stock Units were outstanding and unsettled pursuant to the Wisconsin Stock Plans or otherwise, and (v) rights to acquire up to 2,302,356 shares of Common Stock were outstanding pursuant to the Wisconsin Stock Purchase Right Agreement. All of the issued and outstanding shares of Wisconsin Common Stock have been, and all shares of Wisconsin Common Stock that may be issued upon the exercise of the Wisconsin Stock Options, the vesting of Wisconsin Restricted Shares, the settlement of outstanding Wisconsin Performance Shares, the settlement of Wisconsin Stock Units or pursuant to the Wisconsin Stock Purchase Right Agreement will be, when issued in accordance with the terms thereof, duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights (except as provided pursuant to the terms of the Wisconsin Stock Purchase Right Agreement and the Shareholders Agreement, dated as of November 1, 2007, between the Company and the Shareholder (the “ Wisconsin Shareholders Agreement ”)), with no personal liability attaching to the ownership thereof. Except pursuant to this Agreement, the Wisconsin Stock Plans, the Wisconsin Stock Purchase Right Agreement, the Wisconsin Shareholders Agreement, the Wisconsin Directors Deferred Compensation Plan and the Wisconsin Executive Deferred Compensation Plan, Wisconsin does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of Wisconsin Common Stock or any other equity securities of Wisconsin or any securities representing the right to purchase or otherwise receive any shares of Wisconsin Common Stock. Wisconsin has provided Georgia with a true and complete list of all Wisconsin Stock Options, Wisconsin Restricted Shares, Wisconsin Performance Shares and Wisconsin Stock Units outstanding under the Wisconsin Stock Plans or otherwise as of March 12, 2009, the number of shares subject to each such award, the grant date of each such award, the vesting schedule of each such award and the exercise price for each such Wisconsin Stock Option; since March 12, 2009 through the date hereof, other than pursuant to the terms of the ESPP, Wisconsin has not issued or awarded, or authorized the issuance or award of, any options, restricted stock or other equity-based awards under the Wisconsin Stock Plans or otherwise.

(b) All of the issued and outstanding shares of capital stock or other equity ownership interests of each “significant subsidiary” (as such term is defined under Regulation S-X of the SEC) of Wisconsin are owned by Wisconsin, directly or indirectly, free and clear of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind (other than liens for property Taxes not yet due and payable, “ Liens ”), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid,

 

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nonassessable and free of preemptive rights. No such significant subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary. No Wisconsin Subsidiary owns any Wisconsin Common Stock or other equity interest in Wisconsin.

3.3 Authority; No Violation . (a) Wisconsin has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation by Wisconsin of the transactions contemplated hereby have been duly, validly and unanimously approved by the Board of Directors of Wisconsin. The Board of Directors of Wisconsin has adopted and approved this Agreement, has determined that this Agreement and the transactions contemplated hereby are in the best interests of Wisconsin and its shareholders and, subject to Section 6.11(c) hereof, has directed that this Agreement and the transactions contemplated by this Agreement be submitted to Wisconsin’s shareholders for approval and adoption at a duly held meeting of such shareholders and, except for the approval of this Agreement and the transactions contemplated by this Agreement by the affirmative vote of a majority of all the votes entitled to be cast by holders of outstanding Wisconsin Common Stock (the “ Wisconsin Shareholder Approval ”), no other corporate proceedings on the part of Wisconsin are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Wisconsin and (assuming due authorization, execution and delivery by Georgia and Merger Sub) constitutes the valid and binding obligation of Wisconsin, enforceable against Wisconsin in accordance with its terms (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies).

(b) Neither the execution and delivery of this Agreement by Wisconsin nor the consummation by Wisconsin of the transactions contemplated hereby, nor compliance by Wisconsin with any of the terms or provisions of this Agreement, will (i) assuming the Wisconsin Shareholder Approval is obtained, violate any provision of the Wisconsin Articles or the Wisconsin By-laws or any equivalent organizational documents of any Wisconsin Subsidiary or (ii) assuming that the consents, approvals and filings referred to in Section 3.4 shall have been duly obtained and/or made prior to the Effective Time and any waiting period required thereunder shall have been terminated or expired prior to the Effective Time, (A) violate any Law or Order applicable to Wisconsin, any Wisconsin Subsidiary or any of their respective properties or assets or (B) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination, amendment or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Wisconsin or any Wisconsin Subsidiary under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation (collectively, “ Contracts ”) to which Wisconsin or any Wisconsin Subsidiary is a party, or by which they or any of their respective properties or assets may be bound or affected, except for

 

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such violations, conflicts, breaches or defaults with respect to clause (ii) that are not reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect on Wisconsin.

(c) Notwithstanding anything in this Agreement to the contrary, to the extent the accuracy of Wisconsin’s representations and warranties set forth in this Section 3.3 is based on the accuracy of Georgia’s representations and warranties in Section 4.25 , Wisconsin’s representations and warranties in Section 3.3 shall be limited to the extent affected by any inaccuracy in Section 4.25 .

3.4 Consents and Approvals . Except for (i) the filing with the Securities and Exchange Commission (the “ SEC ”) of a proxy statement in definitive form relating to the meetings of Wisconsin’s shareholders and Georgia’s shareholders to be held in connection with this Agreement and the transactions contemplated by this Agreement (together with any amendments or supplements thereto, the “ Joint Proxy Statement ”) and of a registration statement on Form S-4 (together with any amendments or supplements thereto, the “ Form S-4 ”) in which the Joint Proxy Statement will be included as a prospectus, and declaration of effectiveness of the Form S-4, and such reports under Sections 12, 13(a), 13(d), 13(g) and 16(a) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “ Exchange Act ”) as may be required in connection with this Agreement, the Support Agreement and the transactions contemplated hereby and thereby, and obtaining from the SEC such orders as may be required in connection therewith, (ii) the filing of the Articles of Merger with the Department of Financial Institutions of the State of Wisconsin pursuant to the WBCL and the filing of the Certificate of Merger with the Secretary of State of the State of Delaware pursuant to the DLLCA, (iii) any notices or filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) and the termination or expiration of any applicable waiting period thereunder, and such other consents, approvals, filings or registrations as may be required under any foreign antitrust, merger control or competition Laws, (iv) such filings and approvals as are required to be made or obtained under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “ Securities Act ”), and the securities or “Blue sky” Laws of various states in connection with the issuance of the shares of Georgia Common Stock pursuant to this Agreement, and approval of the listing of such Georgia Common Stock on the NYSE, (v) such filings, consents and approvals as may be set forth on Section 3.4 of the Wisconsin Disclosure Schedule, (vi) the Wisconsin Shareholder Approval, (vii) filings, if any, required as a result of the particular status of Georgia or Merger Sub, (viii) such filings or notices required under the rules and regulations of the NYSE, and (ix) such other consents, approvals, filings or registrations the failure of which to be made or obtained, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect on Wisconsin, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or applicable self-regulatory organization (each a “ Governmental Entity ”) are necessary in connection with (A) the execution and delivery by Wisconsin of this Agreement and (B) the consummation by Wisconsin of the Merger and the other transactions contemplated by this Agreement.

3.5 Reports . Since May 22, 2007, Wisconsin has timely filed all forms, documents, statements and reports required to be filed by it with the SEC under the Securities Act or the Exchange Act prior to the date hereof (the forms, documents, statements and reports

 

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so filed with the SEC since May 22, 2007 and those filed with the SEC subsequent to the date of this Agreement under the Securities Act or the Exchange Act, if any, including any amendments thereto, the “ Wisconsin Reports ”). As of their respective dates, or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseded filing prior to the date hereof, the Wisconsin Reports complied, and each of the Wisconsin Reports filed subsequent to the date of this Agreement will comply, in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 and rules and regulations promulgated thereunder (collectively, the “ Sarbanes-Oxley Act ”), as applicable. No Wisconsin Subsidiary is subject to the periodic reporting requirements of the Exchange Act. As of the time of filing with the SEC, none of the Wisconsin Reports so filed or that will be filed subsequent to the date of this Agreement contained or will contain, as the case may be, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent that the information in such Wisconsin Report has been amended or superseded by a later Wisconsin Report filed prior to the date hereof. Wisconsin has made available to Georgia correct and complete copies of all material correspondence with the SEC since May 22, 2007 and prior to the date hereof. To the Knowledge of Wisconsin, as of the date hereof, none of the Wisconsin Reports is the subject of any ongoing SEC review, outstanding SEC comment or outstanding SEC investigation. For purposes of this Agreement, “ Knowledge of Wisconsin ” shall mean the actual knowledge of the Persons listed on Exhibit D .

3.6 Financial Statements . Wisconsin has previously made available to Georgia copies of the consolidated balance sheets of Wisconsin and the Wisconsin Subsidiaries as of December 31, 2007 and 2008, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2008 as reported in Wisconsin’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the “ Wisconsin 2008 10-K ”) filed with the SEC under the Exchange Act, accompanied by the audit report of Deloitte & Touche LLP, independent public accountants with respect to Wisconsin for the years ended December 31, 2006, 2007 and 2008. The December 31, 2008 consolidated balance sheet of Wisconsin (including the related notes, where applicable) fairly presents in all material respects the consolidated financial position of Wisconsin and the Wisconsin Subsidiaries as of the date thereof, and the other financial statements referred to in this Section 3.6 (including the related notes, where applicable) fairly present in all material respects the results of the consolidated operations, cash flows and changes in shareholders equity and consolidated financial position of Wisconsin and the Wisconsin Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth, subject to normal year-end audit adjustments in amounts consistent with past practice in the case of unaudited financial statements, which adjustments, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect on Wisconsin; each of such statements (including the related notes, where applicable) complies in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto; and each of such statements (including the related notes, where applicable) has been prepared in all material respects in accordance with GAAP consistently applied during the periods involved, except, in each case, as indicated in such statements or in the notes thereto.

 

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3.7 Broker’s Fees . Neither Wisconsin nor any Wisconsin Subsidiary nor any of their respective officers or directors has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement, other than Barclays Capital Inc., all of the fees and expenses of which shall be the sole responsibility of Wisconsin; and a true and complete copy of the agreement with respect to such engagement has previously been made available to Georgia.

3.8 Absence of Certain Changes or Events . Except for liabilities incurred in connection with this Agreement or as publicly disclosed in the Forms 10-K, 10-Q and 8-K and any registration statements, proxy statements or prospectuses comprising the Wisconsin Reports filed prior to the date of this Agreement, (i) since December 31, 2008, (A) Wisconsin and the Wisconsin Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business consistent with past practice, and (B) there has not been any Material Adverse Effect with respect to Wisconsin; and (ii) since December 31, 2008 through the date hereof, there has not been:

(a) any issuance or awards of Wisconsin Stock Options, Wisconsin Restricted Shares, Wisconsin Stock Units or other equity-based awards in respect of Wisconsin Common Stock to any director, officer or employee of Wisconsin or any of the Wisconsin Subsidiaries, other than in the ordinary course of business consistent with past practice;

(b) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any of Wisconsin’s capital stock;

(c) except as required by the terms of any Wisconsin Benefit Plans (as defined below) or by applicable Law, (i) any granting by Wisconsin or any of the Wisconsin Subsidiaries to any current or former director, officer or employee of any increase in compensation, bonus or other benefits, except for any such increases to employees who are not current directors or executive officers in the ordinary course of business consistent with past practice, (ii) any granting by Wisconsin or any of the Wisconsin Subsidiaries to any current or former director or executive officer of any increase in severance or termination pay, (iii) any entry by Wisconsin or any of its Subsidiaries into, or any amendment of, any employment, deferred compensation, consulting, severance, termination or indemnification agreement with any current or former director or executive officer or (iv) any establishment, adoption, entry into, amendment or modification of any Wisconsin Benefit Plan;

(d) any change in any material respect in accounting methods, principles or practices by Wisconsin affecting its assets, liabilities or business, other than changes after the date hereof to the extent required by a change in GAAP or regulatory accounting principles;

(e) any material Tax election or change in or revocation of any material Tax election, material amendment to any Tax return, closing agreement with respect to a material amount of Taxes, or settlement or compromise of any material income Tax liability by Wisconsin or any of the Wisconsin Subsidiaries;

 

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(f) any material change in its investment or risk management or other similar policies; or

(g) any agreement or commitment (contingent or otherwise) to do any of the foregoing.

3.9 Legal Proceedings . (a) There are no (i) actions, claims, suits, oppositions, cancellations, arbitrations, objections, investigations or proceedings (each, an “ Action ”) pending (or, to the Knowledge of Wisconsin, threatened) against or affecting Wisconsin or any Wisconsin Subsidiary, or any of their respective properties, at law or in equity, or (ii) orders, judgments, injunctions, awards, stipulations, decrees or writs handed down, adopted or imposed by, including any consent decree, settlement agreement or similar written agreement with, any Governmental Entity (collectively, “ Orders ”) against Wisconsin or any Wisconsin Subsidiary, in the case of each of clause (i) or (ii), which would, individually or in the aggregate, reasonably be likely to have a Material Adverse Effect on Wisconsin. As of the date hereof, there is no Action pending against (or, to the Knowledge of Wisconsin, threatened against) Wisconsin that in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Merger.

(b) Neither Wisconsin nor any Wisconsin Subsidiary is subject to any cease-and-desist or other Order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is party to any commitment letter or similar undertaking to, or is subject to any Order or directive by, or has been since January 1, 2006, a recipient of any supervisory letter from, or has been ordered to pay any material civil money penalty by, or since January 1, 2006, has adopted any policies, procedures or board resolutions at the request or suggestion of any Governmental Entity, in each case that currently restricts in any material respect the conduct of its business (each, whether or not set forth in the Wisconsin Disclosure Schedule, a “ Wisconsin Regulatory Agreement ”), nor has Wisconsin or any Wisconsin Subsidiary been advised since January 1, 2006, by any Governmental Entity that it is considering issuing, initiating, ordering or requesting any such Wisconsin Regulatory Agreement.

3.10 Taxes and Tax Returns . (a) Each of Wisconsin and the Wisconsin Subsidiaries has duly and timely filed (including all applicable extensions) all material Tax Returns required to be filed by it (all such Tax Returns being accurate and complete in all material respects), has timely paid or withheld all Taxes shown thereon as arising and has duly and timely paid or withheld all material Taxes that are due and payable or claimed to be due from it by United States federal, state, foreign or local taxing authorities other than Taxes that are being contested in good faith, which have not been finally determined, and have been adequately reserved against in accordance with GAAP on Wisconsin’s most recent consolidated financial statements. Wisconsin and each Wisconsin Subsidiary have withheld and paid all material Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, shareholder or other third party. Neither Wisconsin nor any Wisconsin Subsidiary has granted any extension or waiver of the limitation period for the assessment or collection of Tax that remains in effect. All assessments for Taxes of Wisconsin or any Wisconsin Subsidiary due with respect to completed and settled examinations or any concluded litigation have been fully paid. There are no disputes, audits, examinations or proceedings pending, or claims asserted, for material Taxes upon Wisconsin or any Wisconsin

 

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Subsidiary. There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any of the assets of Wisconsin or any Wisconsin Subsidiary. Neither Wisconsin nor any Wisconsin Subsidiary is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among Wisconsin and the Wisconsin Subsidiaries and compensation agreements with Tax indemnification provisions that are in the range of ordinary practice for such agreements). Neither Wisconsin nor any Wisconsin Subsidiary (A) has been a member of an affiliated group filing a consolidated United States federal income Tax Return (other than a group the common parent of which was Wisconsin) or (B) has any material liability for the Taxes of any Person (other than Wisconsin or any Wisconsin Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), or as a transferee or successor, by contract or otherwise. Neither Wisconsin nor any Wisconsin Subsidiary has been, within the past two years or otherwise as part of a “plan (or series of related transactions)” within the meaning of Section 355(e) of the Code of which the Merger is also a part, a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code. Neither Wisconsin nor any Wisconsin Subsidiary has requested or is the subject of or bound by any private letter ruling, technical advice memorandum, or similar ruling or memorandum with any taxing authority with respect to any material Taxes, nor is any such request outstanding. Neither Wisconsin nor any Wisconsin Subsidiary has been a party to any “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2). Wisconsin is not and has not been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(b) As used in this Agreement, the term “ Tax ” or “ Taxes ” means all United States federal, state, local, and foreign income, excise, gross receipts, gross income, ad valorem , profits, gains, property, capital, sales, transfer, use, payroll, employment, severance, withholding, backup withholding, duties, intangibles, franchise, and other taxes, charges, fees, levies or like assessments, together with all penalties and additions to tax and interest thereon.

(c) As used in this Agreement, the term “ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Entity.

3.11 Employee Benefits . For purposes of this Agreement, the following terms shall have the following meaning:

“ Controlled Group Liability ” means, with respect to Wisconsin or Georgia, any and all liabilities (i) under Title IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971 of the Code, and (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq . of ERISA and Section 4980B of the Code other than such liabilities that arise solely out of, or relate solely to, the Wisconsin Benefit Plans or the Georgia Benefit Plans, as applicable.

 

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“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

“ ERISA Affiliate ” means, with respect to any entity, trade or business, any other entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the first entity, trade or business, or that is, or was at the relevant time, a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

“ Multiemployer Plan ” means any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA.

“ Wisconsin Benefit Plan ” means any material employee benefit plan, program, policy, practice, or other arrangement (other than any Wisconsin Employment Agreement) providing benefits to any current or former employee, officer or director of Wisconsin or any Wisconsin Subsidiary or any beneficiary or dependent thereof that is sponsored or maintained by Wisconsin or any Wisconsin Subsidiary or to which Wisconsin or any Wisconsin Subsidiary contributes or is obligated to contribute, whether or not written, including any employee welfare benefit plan within the meaning of Section 3(1) of ERISA, any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA) and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, change of control or fringe benefit plan, program or policy.

“ Wisconsin Employment Agreement ” means a contract, offer letter or agreement of Wisconsin or any Wisconsin Subsidiary with or addressed to any individual who is rendering or has rendered services thereto as an employee or consultant pursuant to which Wisconsin or any Wisconsin Subsidiary has any actual or contingent liability or obligation to provide compensation and/or benefits in consideration for past, present or future services.

“ Wisconsin Plan ” means any Wisconsin Benefit Plan other than a Multiemployer Plan and each Wisconsin Employment Agreement.

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title IV of ERISA.

(a) Section 3.11(a) of the Wisconsin Disclosure Schedule includes a true and complete list of all Wisconsin Benefit Plans and all material Wisconsin Employment Agreements.

(b) With respect to each Wisconsin Plan, Wisconsin has delivered or made available to Georgia a true, correct and complete copy of: (i) each writing constituting a part of such Wisconsin Plan, including all plan documents, employee communications, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current summary plan description and any material modifications thereto, if any (in each case, whether or not required to be furnished under ERISA); (iv) the most recent annual financial report, if any;

 

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(v) the most recent actuarial report, if any; and (vi) the most recent determination letter from the Internal Revenue Service (the “ IRS ”), if any. Wisconsin has delivered or made available to Georgia a true, correct and complete copy of each material Wisconsin Employment Agreement.

(c) All contributions required to be made to any Wisconsin Plan by applicable law or regulation or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Wisconsin Plan, for any period through the date hereof have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been reflected on the financial statements to the extent required by GAAP. Each Wisconsin Benefit Plan that is an employee welfare benefit plan under Section 3(1) of ERISA either (i) is funded through an insurance company contract and is not a “welfare benefit fund” within the meaning of Section 419 of the Code or (ii) is unfunded.

(d) With respect to each Wisconsin Plan, Wisconsin and the Wisconsin Subsidiaries have complied, and are now in compliance, in all material respects, with all provisions of ERISA, the Code and all Laws applicable to such Wisconsin Plans. Each Wisconsin Plan has been administered in all material respects in accordance with its terms. To the Knowledge of Wisconsin, there is not now, nor do any circumstances exist that would reasonably be expected to give rise to, any requirement for the posting of security with respect to a Wisconsin Plan or the imposition of any material lien on the assets of Wisconsin or any Wisconsin Subsidiary under ERISA or the Code. Section 3.11(d) of the Wisconsin Disclosure Schedule identifies each Wisconsin Plan that is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code (“ Wisconsin Qualified Plans ”). Each Wisconsin Qualified Plan (A)(i) has received a favorable determination letter from the IRS with respect to such qualification or (ii) is a standardized prototype plan that is the subject of a favorable opinion letter from the IRS on which Wisconsin is entitled to rely, and (B) unless clause (A)(ii) applies, has been submitted to the IRS for a determination letter within the applicable remedial amendment period under Section 401(b) of the Code or has a remedial amendment period that has not yet expired, and to the Knowledge of Wisconsin, there are no existing circumstances and no events have occurred that would reasonably be expected to adversely affect the qualified status of any Wisconsin Qualified Plan or the tax-exempt status of its related trust. Section 3.11(d) of the Wisconsin Disclosure Schedule identifies each trust funding any Wisconsin Plan which is intended to meet the requirements of Section 501(c)(9) of the Code, and each such trust meets such requirements and provides no disqualified benefits (as such term is defined in Code Section 4976(b)). None of Wisconsin and the Wisconsin Subsidiaries nor, to the Knowledge of Wisconsin, any other Person, including any fiduciary, has engaged in any “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA), which would reasonably be expected to subject any of the Wisconsin Plans or their related trusts, Wisconsin, any Wisconsin Subsidiary or, to the Knowledge of Wisconsin, any Person that Wisconsin or any Wisconsin Subsidiary has an obligation to indemnify, to any material Tax or penalty imposed under Section 4975 of the Code or Section 502 of ERISA.

(e) With respect to each Wisconsin Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code, (i) there does not exist any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived, and, (ii) except as would not have, individually or in the aggregate, a Material Adverse Effect: (A) the fair market value of the assets of such Wisconsin Plan equals

 

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or exceeds the actuarial present value of all accrued benefits under such Wisconsin Plan (whether or not vested) based on the assumptions used in the latest annual actuarial report for such plan; (B) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred; (C) all premiums to the Pension Benefit Guaranty Corporation (the “ PBGC ”) have been timely paid in full; (D) no liability (other than for premiums to the PBGC) under Title IV of ERISA has been or would reasonably be expected to be incurred by Wisconsin or any Wisconsin Subsidiary or any of their respective ERISA Affiliates; and (E) to the Knowledge of Wisconsin, the PBGC has not instituted proceedings to terminate any such Wisconsin Plan and, to Wisconsin’s Knowledge, no condition exists which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any such Wisconsin Plan.

(f) (i) No Wisconsin Benefit Plan is a Multiemployer Plan or a plan that has two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA (a “ Multiple Employer Plan ”); (ii) none of Wisconsin and the Wisconsin Subsidiaries nor any of their respective ERISA Affiliates has, at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan or Multiple Employer Plan; and (iii) none of Wisconsin and the Wisconsin Subsidiaries nor any of their respective ERISA Affiliates has incurred, during the last six years, any Withdrawal Liability that has not been satisfied in full. To the Knowledge of Wisconsin, there does not now exist, nor do any circumstances exist that would reasonably be expected to result in, any Controlled Group Liability that would be a liability of Wisconsin or any Wisconsin Subsidiary following the Effective Time, other than such liabilities that arise solely out of, or relate solely to, the Wisconsin Benefit Plans. Without limiting the generality of the foregoing, neither Wisconsin nor any Wisconsin Subsidiary, nor, to Wisconsin’s Knowledge, any of their respective ERISA Affiliates, has engaged in any transaction described in Section 4069 or Section 4204 or 4212 of ERISA.

(g) Wisconsin and the Wisconsin Subsidiaries have no liability for life, health, medical or other welfare benefits to former employees or beneficiaries or dependents thereof, except for health continuation coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA and at no expense to Wisconsin and the Wisconsin Subsidiaries.

(h) Neither the execution nor the delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement will, either alone or in conjunction with any other event (whether contingent or otherwise), (i) result in any payment or benefit becoming due or payable, or required to be provided, to any director, employee or independent contractor of Wisconsin or any Wisconsin Subsidiary, (ii) increase the amount or value of any benefit or compensation otherwise payable or required to be provided to any such director, employee or independent contractor, (iii) result in the acceleration of the time of payment, vesting or funding of any such benefit or compensation or (iv) result in any amount failing to be deductible by reason of Section 280G of the Code.

(i) Each Wisconsin Benefit Plan and each Wisconsin Employment Agreement that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code and any award thereunder, in each case that is subject to Section 409A of the

 

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Code, has been established and maintained in all material respects in accordance with the requirements of Section 409A of the Code and the Treasury Regulations thereunder.

(j) No labor organization or group of employees of Wisconsin or any Wisconsin Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or, to Wisconsin’s Knowledge, threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. Each of Wisconsin and the Wisconsin Subsidiaries is in material compliance with all applicable Laws and collective bargaining agreements respecting employment and employment practices, terms and conditions of employment, wages and hours and occupational safety and health.

3.12 Compliance with Law; Permits . (a) Wisconsin and each Wisconsin Subsidiary is, and at all times since the later of January 1, 2006 or its respective date of formation or organization has been, in material compliance with all applicable federal, state, local or foreign or provincial law, statute, ordinance, rule, regulation, judgment, order, injunction, decree, award, settlement or agency requirement of or undertaking to or agreement with any Governmental Entity, including common law (collectively, “ Laws ” and each, a “ Law ”) and is not in material default under or in violation of any applicable Laws.

(b) Wisconsin and the Wisconsin Subsidiaries are in possession of all material franchises, tariffs, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity (collectively, “ Permits ”) necessary for Wisconsin and the Wisconsin Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “ Wisconsin Permits ”). All Wisconsin Permits are in full force and effect. Wisconsin and the Wisconsin Subsidiaries are not, and since January 1, 2006 have not been, in material violation or breach of, or default under, any Wisconsin Permit.

(c) This Section 3.12 does not relate to matters with respect to Taxes and Tax Returns (which are the subject of Section 3.10 ) and Employee Benefits (which are the subject of Section 3.11 ).

3.13 Certain Contracts . (a) Except as set forth in the exhibit index to the Wisconsin 2008 10-K, or as permitted pursuant to Section 5.2 hereof or as set forth on Section 3.13 of the Wisconsin Disclosure Schedule, neither Wisconsin nor any Wisconsin Subsidiary is a party to or bound by (i) any Contract relating to the incurrence or guarantee of Indebtedness by Wisconsin or any Wisconsin Subsidiary in an amount in excess in the aggregate of $25,000,000 (collectively, “ Wisconsin Instruments of Indebtedness ”), (ii) any “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC), (iii) any non-competition Contract, or any other agreement or obligation which purports to limit or restrict in any material respect (A) the ability of Wisconsin or its Subsidiaries to solicit customers or (B) the manner in which, or the localities in which, all or any portion of the business of Wisconsin and the Wisconsin Subsidiaries or, following consummation of the transactions contemplated by this Agreement, Georgia and the Georgia Subsidiaries, is or would be conducted, (iv) any Contract providing for any payments that are conditioned, in whole or in part, on a change of control of Wisconsin or any Wisconsin Subsidiary, (v) any collective bargaining agreement, (vi) any joint

 

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venture or partnership agreement related to the formation, creation, operation or management or any joint venture or partnership that is material to Wisconsin and the Wisconsin Subsidiaries, taken as a whole, (vii) any Contract that grants any right of first refusal or right of first offer or similar right that limits or purports to limit the ability of Wisconsin or any Wisconsin Subsidiary to own, operate, sell, transfer, pledge or otherwise dispose of any assets or business, (viii) any material Contract that contains a “most favored nation” or other term providing preferential pricing or treatment to a third party, and (ix) any Contract not made in the ordinary course of business which (A) is material to Wisconsin and the Wisconsin Subsidiaries taken as a whole or (B) which would reasonably be expected to materially delay the consummation of the Merger or any other transaction contemplated by this Agreement (the Contracts and obligations of the type described in clauses (i) through (ix), together with (x) all Wisconsin IP Contracts, (y) any Contract (or group of related Contracts with the same party) pursuant to which Wisconsin or any Wisconsin Subsidiary generated revenues of $17,000,000 or more in the 12 months ended December 31, 2008 or is expected to generate revenues of $17,000,000 or more in the 12 months ending December 31, 2009, and (z) any Contract (or group of related Contracts with the same party) that involves annual expenditures by Wisconsin and the Wisconsin Subsidiaries in excess of $17,000,000 in the 12 months ended December 31, 2008 or is expected to involve annual expenditures by Wisconsin and the Wisconsin Subsidiaries in excess of $17,000,000 in the 12 months ending December 31, 2009, (of which Contracts Wisconsin has provided true, correct and complete copies to Georgia prior to the date hereof) being referred to herein as “ Wisconsin Material Contracts ”).

(b) Each Wisconsin Material Contract is valid and binding on Wisconsin (or, to the extent a Subsidiary of Wisconsin is a party, such Subsidiary) and, to the Knowledge of Wisconsin, any other party thereto, and is in full force and effect and enforceable against Wisconsin or a Wisconsin Subsidiary, as applicable (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies). Neither Wisconsin nor any Wisconsin Subsidiary is in material breach or default under any Wisconsin Material Contract. Neither Wisconsin nor any Subsidiary of Wisconsin has received notice of any material violation or default under any Wisconsin Material Contract by any other party thereto. Prior to the date hereof, Wisconsin has made available to Georgia true and complete copies of all Wisconsin Material Contracts. For purposes of this Agreement, “ Indebtedness ” of a Person means (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes and similar agreements, (iii) all leases of such Person capitalized pursuant to GAAP, and (iv) all obligations of such Person under sale-and-lease back transactions, agreements to repurchase securities sold and other similar financing transactions.

3.14 Undisclosed Liabilities . Neither Wisconsin nor any Wisconsin Subsidiary has incurred any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for (i) liabilities that are reflected or reserved against on the consolidated balance sheet of Wisconsin included in the Wisconsin 2008 10-K (including any notes thereto), (ii) liabilities incurred in connection with this Agreement and the transactions contemplated hereby, (iii) liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2008, and (iv) liabilities that have not had and are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Wisconsin.

 

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3.15 Environmental Liability . Except for matters that, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect on Wisconsin, (i) there are no legal, administrative, arbitral or other proceedings, claims, actions, causes of action, private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that are reasonably likely to result in the imposition, on Wisconsin of any liability or obligation under Environmental Laws, or pending or, to the Knowledge of Wisconsin, threatened against Wisconsin; (ii) Wisconsin is not subject to any Order or party to any agreement, order, judgment, decree, letter or memorandum by or with any third party imposing any liability or obligation under any Environmental Laws; (iii) Wisconsin has complied and is in compliance with all Environmental Laws, including obtaining and complying with all Permits that may be required pursuant to Environmental Laws; and (iv) Wisconsin has not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released, or exposed any person to any hazardous substance or waste, or owned or operated any property or facility contaminated by any hazardous substance or waste so as to give rise to any current or future liabilities under Environmental Laws. For purposes of this Agreement, “ Environmental Laws ” means any common law or local, state, federal or foreign statute, regulation, ordinance or similar provision having the force or effect of law, any judicial and administrative order or determination, or any contractual obligation concerning public health and safety, worker health and safety, or pollution or protection of the environment, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

3.16 Real Property .

(a) Each of Wisconsin and the Wisconsin Subsidiaries has good title free and clear of all Liens to all real property owned by such entities (the “ Wisconsin Owned Properties ”), except for Liens that do not materially detract from the present use of such real property.

(b) A true and complete copy of each agreement pursuant to which Wisconsin or any Wisconsin Subsidiary leases any material real property (such agreements, together with any amendments, modifications and other supplements thereto, collectively, the “ Wisconsin Leases ”) has heretofore been made available to Georgia. Each Wisconsin Lease is valid, binding and enforceable against Wisconsin or an applicable Wisconsin Subsidiary in accordance with its terms and is in full force and effect (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies), except where the failure to be valid, binding, enforceable and in full force and effect, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on Wisconsin. There are no defaults by Wisconsin or any Wisconsin Subsidiary, as applicable, under any of the Wisconsin Leases which, in the aggregate, would result in the termination of such Leases and a Material Adverse Effect on Wisconsin. The consummation of the transactions contemplated by this Agreement will not cause defaults under the Wisconsin Leases, except for any such default which would not individually or in the aggregate, have a Material Adverse Effect on Wisconsin and the Wisconsin Subsidiaries taken as a whole.

(c) The Wisconsin Owned Properties and the properties leased pursuant to the Wisconsin Leases (the “ Wisconsin Leased Properties ”) constitute all of the real estate on which Wisconsin and the Wisconsin Subsidiaries maintain their facilities or conduct their business as of

 

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the date of this Agreement, except for locations the loss of which would not result in a Material Adverse Effect on Wisconsin and the Wisconsin Subsidiaries taken as a whole.

(d) A true and complete copy of each agreement pursuant to which Wisconsin or any Wisconsin Subsidiary leases any material real property to a third party (such agreements, together with any amendments, modifications and other supplements thereto, collectively, the “ Third Party Wisconsin Leases ”) has heretofore been made available to Georgia. Each Third Party Wisconsin Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies), except where the failure to be valid, binding, enforceable and in full force and effect, individually or in the aggregate, is not reasonably likely to have a Material Adverse Effect on Wisconsin. There are no existing defaults by the tenant under any Third Party Wisconsin Lease which, in the aggregate, would result in the termination of such Third Party Wisconsin Leases except for any such default which would not reasonably be expected to result in a Material Adverse Effect on Wisconsin and the Wisconsin Subsidiaries taken as a whole.

3.17 State Takeover Laws . Wisconsin has, or will have prior to the Effective Time, taken all necessary action so that, assuming compliance by Georgia and Merger Sub with their respective obligations hereunder and the accuracy of the representations and warranties made by Georgia and Merger Sub herein, no “business combination,” “moratorium,” “fair price,” “control share acquisition” or other state anti-takeover statute or regulation, nor any takeover-related provision in the Wisconsin Articles or the Wisconsin By-laws, would (i) prohibit or restrict Wisconsin’s ability to perform its obligations under this Agreement, any related agreement, the Support Agreement, or the Articles of Merger or its ability to consummate the transactions contemplated hereby and thereby, (ii) have the effect of invalidating or voiding this Agreement, the Support Agreement or the Articles of Merger, or any provision hereof or thereof, or (iii) subject Georgia to any impediment or condition in connection with the exercise of any of its rights under this Agreement or the Articles of Merger.

3.18 Reorganization . As of the date of this Agreement, Wisconsin is not aware of any fact or circumstance that could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

3.19 Opinion . Prior to the execution of this Agreement, the Board of Directors of Wisconsin has received an opinion from Barclays Capital Inc. to the effect that as of the date thereof and based upon and subject to the matters set forth therein, the Exchange Ratio is fair to the shareholders of Wisconsin from a financial point of view. Such opinion has not been amended or rescinded as of the date of this Agreement.

3.20 Internal Controls . (a) None of Wisconsin or its Subsidiaries’ records, systems, controls, data or information are recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of it or its Subsidiaries or accountants except as would not, individually or in the aggregate, reasonably be expected to result in a materially adverse effect on the system of internal accounting controls described in the

 

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next sentence. Wisconsin and the Wisconsin Subsidiaries have designed and maintained a system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

(b) Wisconsin (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to Wisconsin (including the Wisconsin Subsidiaries), is made known to the chief executive officer and the chief financial officer of Wisconsin by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to Wisconsin’s outside auditors and the Audit Committee of the Board of Directors of Wisconsin (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect Wisconsin’s ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in Wisconsin’s internal controls over financial reporting. These disclosures were made in writing by management to Wisconsin’s auditors and the Audit Committee of the Board of Directors of Wisconsin and a copy has previously been made available to Georgia. As of the date hereof, to the Knowledge of Wisconsin, there is no reason to believe that Wisconsin’s outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when next due.

(c) Since December 31, 2005 through the date hereof, (i) neither Wisconsin nor any Wisconsin Subsidiary has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Wisconsin or any Wisconsin Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Wisconsin or any Wisconsin Subsidiary has engaged in questionable accounting or auditing practices, and (ii) no attorney representing Wisconsin or any Wisconsin Subsidiary, whether or not employed by Wisconsin or any Wisconsin Subsidiary, has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by Wisconsin or any of its officers, directors, employees or agents to the Board of Directors of Wisconsin or any committee thereof or to any director or officer of Wisconsin.

3.21 Insurance . Wisconsin and the Wisconsin Subsidiaries are insured with reputable insurers against such risks and in such amounts as its management reasonably has determined to be prudent in accordance with industry practices. To the Knowledge of Wisconsin, neither Wisconsin nor any Wisconsin Subsidiary is in material breach or material default of any insurance policies maintained by Wisconsin or any Wisconsin Subsidiary or has taken any action or failed to take any action that, with notice or the lapse of time, would constitute such a breach or default or permit termination (prior to the scheduled termination or expiration thereof) or modification of any such insurance policies. To the Knowledge of Wisconsin, neither Wisconsin nor any Wisconsin Subsidiary has received any notice of

 

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termination or cancellation (prior to the scheduled termination or expiration thereof) or denial of coverage with respect to any such insurance policy.

3.22 Wisconsin Information . The information relating to Wisconsin or any Wisconsin Subsidiary to be included or incorporated by reference in the Joint Proxy Statement and the Form S-4 will not, at the time the Form S-4 is declared effective, the time the Joint Proxy Statement is first mailed to shareholders of Wisconsin and Georgia and the time of the Wisconsin Shareholders Meeting and the Georgia Shareholders Meeting, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The information relating to Wisconsin or any Wisconsin Subsidiary that is provided or to be provided by Wisconsin or its representatives for inclusion in any document (other than the Form S-4) filed with any other Governmental Entity in connection with the transactions contemplated by this Agreement will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. All documents that Wisconsin is responsible for filing with the SEC in connection with the Merger or the other transactions contemplated hereby (including the Joint Proxy Statement) (except for such portions thereof that relate only to Georgia, Merger Sub or any of their Subsidiaries) will comply as to form and substance in all material respects with the provisions of the Exchange Act.

3.23 Intellectual Property . For purposes of this Agreement, the following terms shall have the following meaning:

“ Intellectual Property ” means all intellectual property in any jurisdiction throughout the world including all (i) trademarks, service marks, brand names, Internet domain names, logos, symbols, trade dress, fictitious names, trade names, and other indicia of origin and all goodwill associated therewith and symbolized thereby; (ii) patents and inventions and discoveries, whether patentable or not, and improvements; (iii) confidential or proprietary information, trade secrets and know-how (including processes, schematics, business and other methods, formulae, drawings, specifications, prototypes, models, designs, plans, data, research and development, pricing and cost information, business and marketing plans and proposals, vendor, customer and supplier lists) (collectively, “ Trade Secrets ”); (iv) copyrights and works of authorship (including in any form or media) (whether or not copyrightable); (v) computer software programs (including source and object code), systems, data, databases and other compilations of information (and including all middleware, firmware, tools, applications and related documentation; (vi) disclosures, issuances, applications and registrations and any renewals thereof, and all extensions, modifications, reexaminations, renewals, divisions, continuations, continuations-in-part, reissues, restorations and reversions for or related to, as applicable, any of the foregoing; and (vii) copies and tangible embodiments or descriptions of any of the foregoing (in whatever form or medium).

“ Wisconsin IP Contract ” means any material Contract concerning Intellectual Property to which Wisconsin or any Wisconsin Subsidiary is a party.

 

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“ Wisconsin IT Assets ” means the computer software, firmware, middleware, servers, systems, networks, workstations, data communications lines, and all other information technology equipment, used by Wisconsin and the Wisconsin Subsidiaries.

(a) Section 3.23(a) of the Wisconsin Disclosure Schedule sets forth a true and complete list of all the following that are owned by Wisconsin or any Wisconsin Subsidiary, indicating for each item if applicable, the registration or application number, the record owner and the applicable filing jurisdiction: (i) material patented or registered Intellectual Property and (ii) pending patent applications or applications for registration of other material Intellectual Property.

(b) Either Wisconsin or a Wisconsin Subsidiary owns all right, title and interest in and to, or is licensed or otherwise possesses adequate rights to use, all Intellectual Property material to their respective businesses as currently conducted (together with all Intellectual Property set forth in Section 3.23(a), collectively the “ Wisconsin IP ”) free and clear of any Liens (other than, for the avoidance of doubt, obligations to pay royalties or other amounts due under any licenses of Intellectual Property), and all such rights shall survive the consummation of the transactions contemplated in this Agreement on substantially similar terms as such rights existed prior to Closing. There are no pending or, to the Knowledge of Wisconsin, there have not been threatened within the past two years any, claims by any Person alleging infringement, misappropriation or other violation by Wisconsin or any Wisconsin Subsidiary of any other Person’s Intellectual Property that, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on Wisconsin. To the Knowledge of Wisconsin, the conduct of the business of Wisconsin and the Wisconsin Subsidiaries and use of the Wisconsin IP does not misappropriate, infringe or otherwise violate in any material respect any Intellectual Property of any other Person. Neither Wisconsin nor any Wisconsin Subsidiary has filed any claim for misappropriation, infringement or other violation by another Person of its rights in or to any of the Wisconsin IP within the past twenty-four (24) months. To the Knowledge of Wisconsin, no Person is misappropriating, infringing or otherwise violating any material Wisconsin IP.

(c) Each Wisconsin IP Contract is valid and binding on Wisconsin and any Wisconsin Subsidiary to the extent such Subsidiary is a party thereto, as applicable, and in full force and effect (except as may be limited by bankruptcy,