MASTER INVESTMENT AGREEMENT

Exhibit 2.1

 

MASTER INVESTMENT AGREEMENT

among

FIFTH THIRD BANK,

FIFTH THIRD FINANCIAL CORPORATION,

ADVENT-KONG BLOCKER CORP.,

FTPS HOLDING, LLC

and

FIFTH THIRD PROCESSING SOLUTIONS, LLC

Dated March 27, 2009

As amended June 30, 2009

 

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EXHIBITS AND SCHEDULES

 

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MASTER INVESTMENT AGREEMENT, dated March 27, 2009, as amended June 30, 2009, among (i) Fifth Third Bank, a bank chartered under the laws of the State of Ohio (“ Seller ”), (ii) Fifth Third Financial Corporation, a corporation organized under the laws of the State of Ohio (“ FTFC ”), (iii) Advent-Kong Blocker Corp., a corporation organized under the laws of the State of Delaware (“ Buyer ”), (iv) FTPS Holding, LLC (f/k/a Fifth Third Processing Solutions, LLC), a limited liability company formed under the laws of the State of Delaware (“ Holdco ”), and (v) Fifth Third Processing Solutions, LLC (f/k/a FTPS Opco, LLC), a limited liability company formed under the laws of the State of Delaware (“ Opco ”) (the “ Agreement ”). Holdco and Opco are referred to in this Agreement collectively as the “ Companies .” Other capitalized terms used in this Agreement are defined in Section 1.1 below.

W I T N E S S E T H:

WHEREAS, Seller is, directly and indirectly through its wholly owned subsidiary, Card Management Corporation, an Indiana corporation and wholly-owned subsidiary of Seller (“ CMC ”), engaged in the Fifth Third Processing Solutions division of Seller and CMC, including (i) merchant processing services (including payment authorization, clearing and settlement for credit, debit, check authorization and truncation), (ii) gift, private label, stored value and prepaid card processing, (iii) electronic funds transfer services to business customers (including debt and ATM card processing and driving services, PIN and signature debit transaction authorization, settlement and exception processing), (iv) payment and ATM network switching services (including the Jeanie network), (v) credit and debit card production, activation, replacement and related management services (including on an outsourced basis), (vi) certain payments-related reselling services, (vii) other value added services (including fraud detection, prevention and management services) relating to the foregoing, (viii) promotional messaging service relating to the foregoing, (ix) debit portfolio management services related to the foregoing, and (x) certain data processing services (collectively, the “ Processing Business ”) (the Processing Business together with the business conducted by FTFC indirectly through the Canadian Sub, and other than (i) underwriting and issuing credit cards branded by Seller and (ii) such services as are provided by Seller to itself and/or its customers and which are either (A) not performed for Seller by the Fifth Third Processing Solutions division of Seller or CMC as of the date of this Agreement and set forth on Schedule A or (B) not reflected as services provided by the Fifth Third Processing Solutions division of Seller in the Historical Financial Statements, is referred to in this Agreement collectively as the “ Business ”);

WHEREAS, prior to the original execution of this Agreement:

(i) Seller formed Holdco on December 11, 2008, Opco on March 25, 2009 and FTPS Partners, LLC, a limited liability company organized under the laws of the State of Delaware (“ FTPS Partners ”) on February 24, 2009;

(ii) On February 24, 2009, Seller contributed $9,800,000 of cash to Holdco in exchange for 98% of the limited liability company interests therein and CMC contributed $200,000 of cash to Holdco in exchange for 2% of the limited liability company interests therein, and each of Seller and CMC entered into a limited liability company agreement of Holdco (the “ Preclosing Holdco LLC Agreement ”);

 

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(iii) On March 3, 2009, Seller contributed $100,000 of cash to FTPS Partners in exchange for 100% of the interests in FTPS Partners;

(iv) Seller, FTPS Partners and CMC entered into a contribution agreement pursuant to which Seller shall contribute 100% of the equity interest in CMC to FTPS Partners, thereafter CMC shall distribute its interest in Holdco to FTPS Partners and thereafter CMC shall be converted into an Indiana limited liability company (“ CMC LLC ”) (the “CMC Contribution Agreement”);

(v) Seller, FTPS Partners and Holdco entered into a contribution agreement (the “ Holdco Contribution Agreement ”) pursuant to which:

(A) Seller agreed to contribute all of the equity interests in Opco and cash in an aggregate amount equal to $89,175,000, taking into account all cash previously contributed by Seller and CMC to Holdco (the “ Cash Contribution ”), to Holdco including (A) $5,000,000, which Holdco will at Closing pay to Buyer as reimbursement for a portion of Buyer’s transaction expenses (the “ Transaction Expenses Contribution ”), and (B) $75,000,000 to be used for any costs associated with establishing Holdco as a stand-alone entity and any other matters covered by the Transition Plan, including costs related to separate facilities, systems and infrastructure, redundancy costs or costs associated with hiring new personnel, and any cash needs associated with daily working capital and cash settlement requirements (the “ Transition Infrastructure Contribution ”);

(B) FTPS Partners agreed to contribute 100% of the equity interests in CMC LLC to Holdco; and

(C) After Seller has contributed Opco to Holdco, Holdco agreed to contribute 100% of the equity interests in CMC LLC to Opco, along with all of the cash held by Holdco, other than the Transaction Expenses Contribution, with the Transition Infrastructure Contribution remaining in a segregated separate account to be used solely for any costs associated with establishing the Companies as stand-alone entities and any other matters covered by the Transition Plan until the end of the Transition Period, at which time, Holdco may use any amounts remaining in such account for its general corporate purposes;

(v) Seller contributed $100,000 in cash to Opco in exchange for membership interests therein, entered into the limited liability company agreement of Opco (the “ Preclosing Opco LLC Agreement ”); and

(vi) Seller entered into a contribution agreement pursuant to which it agreed to contribute Business-related assets to Opco (the “ Opco Contribution Agreement ,” and together with the Holdco Contribution Agreement and the CMC Contribution Agreement, the “ Contribution Agreements ”).

WHEREAS, after execution of this Agreement, but at least one day prior to Closing:

(i) Seller shall borrow $1.25 billion under the Notes;

 

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(ii) Seller shall contribute its Business-related assets (which, for the sake of clarity, do not include assets of the Canadian Sub) to Opco and Opco shall assume Seller’s obligations under the Note;

(iii) Seller shall contribute 100% of its interests in Opco (collectively, the “ Opco LLC Interests ”) and the cash amount described above to Holdco;

(iv) Seller shall contribute 100% of the equity interests in CMC to FTPS Partners, and thereafter CMC shall distribute its interest in Holdco to FTPS Partners and thereafter CMC shall be converted into CMC LLC;

(v) FTPS Partners shall contribute 100% of the equity interests in CMC LLC to Holdco;

(vi) Holdco shall contribute the equity interests in CMC LLC it received from FTPS Partners and the cash it received from Seller (other than the Transaction Expenses Contribution) to Opco;

WHEREAS, as part of and at the Closing, inter alia :

(i) Seller and FTPS Partners shall cause the Preclosing Holdco LLC Agreement to be amended and restated in its entirety in the form of the Holdco LLC Agreement;

(ii) Holdco shall cause the Preclosing Opco LLC Agreement to be amended and restated in its entirety in the form of the Opco LLC Agreement;

(iii) Seller shall sell, transfer and convey to Buyer, and Buyer shall purchase from Seller, 50,930,455 Class A Units; and

(iv) FTFC shall sell, transfer and convey to Buyer, and Buyer shall purchase from FTFC, 50,930,455 shares of common stock of TransActive Ecommerce Solutions Inc., a corporation organized under the federal laws of Canada (the “ Canadian Sub ”);

WHEREAS, Holdco is classified as a partnership for U.S. federal income tax purposes and Opco is properly disregarded as an entity separate from Seller for U.S. federal income tax purposes; and

WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, a 50.93% interest in Holdco, as more particularly set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and undertakings contained in this Agreement, and for other good and valuable consideration, the parties agree as follows:

 

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ARTICLE I

DEFINITIONS AND TERMS

Section 1.1 Certain Definitions . As used in this Agreement, the following terms have the meanings set forth below (including for purposes of the Recitals):

“ 2008 Net Revenues ” means, with respect to a Transferred Contract, (i) the Net Revenue generated by a Customer that is the counterparty to such Transferred Contract during calendar year 2008, or (ii) with respect to any Customer that was a counterparty to such Transferred Contract that was not a Customer for the entirety of the 2008 calendar year, the annualized Net Revenue generated by such Customer during calendar year 2008.

“ A Note ” has the meaning set forth in the definition of “Notes.”

“ A Note Amount ” means $950,000,000 or such other amount as Seller determines prior to the consummation of the transactions described in Section 2.1(a).

“ Absent Employee ” has the meaning set forth in Section 5.5(a).

“ Acceptable Adjustments ” has the meaning set forth in Section 3.25.

“ Acceptable Increases ” has the meaning set forth in Section 3.25.

“ Adjustment Date ” has the meaning set forth in Section 2.11(a).

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made (it being understood and agreed that, for purposes of this Agreement, the Companies, CMC LLC and the Canadian Sub shall only be deemed to be Affiliates of Seller and FTFC with respect to the period occurring on or prior to the Closing and with respect to the period occurring thereafter shall be deemed to be Affiliates of Buyer). For purposes of this definition, the term “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

“ Aggregate Price Adjustment ” has the meaning set forth in Section 2.11(c).

“ Agreement ” means this Master Investment Agreement, as amended or supplemented from time to time in accordance with its terms.

“ Allocated Services and Assets ” means those services, occupancy, employees, capital charges and assets used by the Business and covered by the “Allocated Expense” line item in the Audited Financial Statements, other than such services, occupancy, employees, capital charges and assets that were excluded in Schedule 3.6(c).

 

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“ Ancillary Agreements ” means collectively those agreements, substantially in the form or consistent with the term sheet, as the case may be, attached hereto as Exhibits 1.1(a)(A) – (M), respectively, to be entered into at Closing.

“ Applicable Accounting Principles ” has the meaning set forth in Section 2.4(a).

“ Applicable Contract ” has the meaning set forth in Section 2.11(a).

“ Applicable Employees ” means the employees of the Business as identified by name, job title and job site location on Schedule 5.5(a), which schedule also sets forth the current base salary or annual wages, as applicable, annual cash bonus opportunity plans, as applicable, stock based incentive plans and years of credited service with Seller and its Affiliates for each such Applicable Employee; provided , that Seller shall furnish to Buyer an updated Schedule 5.5(a) not later than five Business Days prior to the Closing Date, which schedule shall indicate any newly hired employee of the Business and any employee of the Business whose employment has terminated following the date hereof.

“ Applicable Renegotiation Price Adjustment ” has the meaning set forth in Section 2.11(b)(iii).

“ Applicable Termination Price Adjustment ” has the meaning set forth in Section 2.11(a)(ii).

“ Approved Replacement ” has the meaning set forth in Section 5.3(b).

“ Asset Identification Process ” has the meaning set forth in Section 2.12.

“ Assumed Liabilities ” means (i) all current liabilities of Seller or any of its Affiliates included in the calculation of the Closing Working Capital to the extent of the amounts that are set forth on or reserved for on the face of the Closing Statement, other than any Liabilities for Taxes (except for Taxes for which the Companies are expressly responsible pursuant to Section 5.4), (ii) all Liabilities of the Business under the Transferred Contracts (excluding the Transferred Contracts of the Canadian Sub), other than those relating to or arising from any obligation under any such Transferred Contract by Seller or its Affiliates that arose prior to the Closing (regardless of whether such Liabilities are discovered and/or identified prior to or after the Closing), except to the extent such obligation has been reflected in the Historical Financial Statements or is included in the calculation of Closing Working Capital, (iii) any other Liabilities of the Business set forth on Schedule 1.1(a) and (iv) any other Liabilities of the Business that the Companies have expressly assumed or agreed to assume under this Agreement and the Ancillary Agreements, provided , however , that Assumed Liabilities shall not include any Canadian Liabilities.

“ Audited Financial Statements ” has the meaning set forth in Section 3.6.

“ B Note ” has the meaning set forth in the definition of “Notes.”

“ B Note Amount ” means $1,250,000,000, minus the A Note Amount.

 

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“ Base Working Capital Value ” means the applicable amount corresponding to the month in which the Closing occurs set forth on Schedule 1.1(b).

“ Benefit Plans ” means each “employee benefit plan” (as defined in Section 3(3) of ERISA) and each other material profit-sharing, bonus, stock option, stock purchase, restricted stock units/shares, stock ownership, pension, retirement, severance, deferred compensation, excess benefit, supplemental unemployment, post-retirement medical or life insurance, welfare, incentive, sick leave or other leave of absence, short- or long-term disability, salary continuation, medical, hospitalization, life insurance, other insurance plan, or other employee benefit plan, program or arrangement, including individual employment, severance, change of control or similar agreements, maintained, sponsored or contributed to (or for which a contribution obligation exists) by Seller or its Affiliates (including affiliates within the meaning of Code Sections 414(b), (c) and (m)).

“ BIN/ICA Sponsorship Agreement ” means that certain Clearing, Settlement and Sponsorship Services Agreement, substantially in the form attached hereto as Exhibit 1.1(a)(A).

“ Business ” has the meaning set forth in the Recitals.

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banks in Cincinnati, Ohio or New York, New York are authorized or obligated by Law or executive order to close.

“ Buyer ” has the meaning set forth in the Preamble.

“ Buyer Indemnified Parties ” has the meaning set forth in Section 7.2(a).

“ Buyer Required Approvals ” means all consents, approvals, waivers, authorizations, notices and filings from or with a Government Entity that are required to be and are listed on Schedule 4.3.

“ Canadian Financial Statements ” has the meaning set forth in Section 5.12(d).

“ Canadian Liabilities ” means Liabilities of the Canadian Sub.

“ Canadian Non-Indemnifiable Liabilities ” means (i) all Canadian Liabilities consisting of Liabilities under any agreements, contracts, leases and subleases, purchase orders, arrangements, commitments and licenses that are (A) primarily related to the Business as of the Closing or (B) related to any Intellectual Property or Technology primarily used, held for use or acquired or developed for use in the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, other than those relating to or arising from any performance that occurred prior to the Closing, (ii) all Canadian Liabilities arising out of, relating to or otherwise in respect of the Canadian Sub’s business following the Closing, and (iii) all Liabilities for Taxes on the earnings of the Canadian Sub from April 1, 2009 through the Closing (provided such earnings were not distributed out to its shareholders during such period).

“ Canadian Sub ” has the meaning set forth in the Recitals.

 

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“ Canadian Sub Cash Purchase Price ” has the meaning set forth in Section 2.3(f) .

“ Cap ” has the meaning set forth in Section 7.2(b).

“ Capital Lease ” has the meaning set forth in Section 5.16.

“ Cash ” means the amount of cash and bank deposits as reflected in the bank statements, and certificates of deposit, less escrowed amounts or other restricted cash balances and less the amounts of any unpaid checks, drafts and wire transfers issued on or prior to the date of determination, in each case, calculated in accordance with the Applicable Accounting Principles.

“ Cash Contribution ” has the meaning set forth in the Recitals.

“ Cash Purchase Price ” has the meaning set forth in Section 2.3(f).

“ Catastrophic Data Breach ” means any actual breach of security of, or unauthorized access to or acquisition, use, loss, destruction, compromise or disclosure of any personal information, confidential or proprietary data or any other such information maintained or stored by, the Business (other than with respect to any such breaches occurring in systems maintained by customers of the Business or other third parties (other than vendors or contractors engaged or retained by the Business) for which the Business is not at fault) involving data of customers, suppliers, consumers or other similarly situated individuals that affects more than 1 million individuals or individual accounts.

“ Chosen Courts ” has the meaning set forth in Section 9.11.

“ Claim Notice ” has the meaning set forth in Section 7.5(a).

“ Class A Units ” has the meaning set forth in the Holdco LLC Agreement.

“ Class B Units ” has the meaning set forth in the Holdco LLC Agreement.

“ Closing ” means the closing of the Sale Transaction.

“ Closing Date ” means the date on which the Closing occurs.

“ Closing Statement ” has the meaning set forth in Section 2.5(a).

“ Closing Working Capital ” means the difference between (i) the current assets of the Business that constitute Transferred Assets, minus (ii) the current liabilities of the Business (for the avoidance of doubt, which do not include any liabilities for Taxes) other than the current liabilities of the Canadian Sub, in each case, as of the close of business on the Closing Date and calculated in accordance with the Applicable Accounting Principles, except with respect to vacation accruals, as set forth in Section 2.5(a).

“ CMC ” has the meaning set forth in the Recitals.

 

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“ CMC Business ” means, prior to the conversion of CMC into CMC LLC, CMC, and following such conversion, CMC LLC.

“ CMC Contribution Agreement ” has the meaning set forth in the Recitals.

“ CMC LLC ” has the meaning set forth in the Recitals.

“ CMC LLC Agreement ” means the Limited Liability Company of CMC LLC.

“ CMC LLC Interests ” means the limited liability company interests of CMC LLC.

“ COBRA Coverage ” means the health continuation coverage required by Section 4980B of the Code and Part 6 of Title I of ERISA and the relevant provisions of the American Recovery and Reinvestment Act of 2009.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Commitment ” has the meaning set forth in Section 4.8.

“ Companies ” have the meanings set forth in the Preamble.

“ Company Plans ” has the meaning set forth in Section 5.5(b).

“ Company Required Approvals ” means all consents, approvals, waivers, authorizations, notices and filings from or with a Government Entity that are required to be and are listed on Schedule 3.3(b).

“ Confidentiality Agreement ” means the Confidentiality Agreement between Seller and a certain Affiliate of Buyer, dated July 17, 2008.

“ Consent Payment ” has the meaning set forth in Section 2.11(e).

“ Consideration ” has the meaning set forth in Section 5.4(f).

“ Contribution ” has the meaning set forth in Section 2.1(b).

“ Contribution Agreements ” has the meaning set forth in the Recitals.

“ Copyrights ” has the meaning set forth in the “Intellectual Property” definition.

“ CPA Firm ” means an internationally recognized “Big Four” firm of independent certified public accountants designated jointly by Seller and Buyer.

“ Customer ” means a Person who is a customer of the Business.

“ Deductible ” has the meaning set forth in Section 7.2(b).

“ Direct Claim ” has the meaning set forth in Section 7.6.

 

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“ Disclosing Party ” has the meaning set forth in Section 5.10.

“ EFT Business ” has the meaning set forth in Section 3.6.

“ Encumbrance ” means any lien, pledge, charge, claim, encumbrance, security interest, option, mortgage, easement, lease, license, right of first refusal, proxy, voting trust, transfer restriction or other restriction of any kind.

“ Environmental Claim ” has the meaning set forth in Section 3.19(b).

“ Environmental Laws ” has the meaning set forth in Section 3.19(a).

“ Equipment Assets ” means any infrastructure asset (including all forms of hardware, information technology systems, mainframes, servers, PCs, computer systems, networking and telecommunications equipment, routers, switches, storage devices (SAN, NAS), tape and back-up devices, printers and other peripherals, mail-related equipment, power supplies, cabling, firewalls, security hardware and the like), other than any Intellectual Property.

“ Equity Commitments ” has the meaning set forth in Section 4.8.

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

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“ Excluded Assets ” means (i) all furniture, furnishings, equipment, computers, tools and other tangible personal property listed on Schedule 1.1(c), (ii) all trade accounts and notes receivable and other miscellaneous receivables of the Business listed on Schedule 1.1(c), (iii) all agreements, contracts, leases and subleases, purchase orders, arrangements, commitments and licenses listed on Schedule 1.1(c), (iv) Seller’s and its Affiliates’ rights under this Agreement, the Ancillary Agreements and those agreements governing Seller Leased Property, (v) all Intellectual Property listed on Schedule 1.1(c), (vi) (A) all books, ledgers, files, reports, plans, records, manuals and other materials (in any form or medium) other than the Transferred Books and Records and (B) Seller’s corporate organizational records and documents, (vii) all of Seller’s and its Affiliates’ rights under insurance policies, (viii) all rights in connection with and assets of Benefit Plans, (ix) all assets specifically excluded from the definition of Transferred Assets by virtue of the explicit limitations contained therein and (x) any other items listed on Schedule 1.1(c); it being understood that any assets identified through the Asset Identification Process as not being those that remain Excluded Assets shall, at the time of transfer pursuant to this Agreement or the Transition Plan, cease to be Excluded Assets and shall thereafter become Transferred Assets under this Agreement for all purposes.

“ Excluded Liabilities ” has the meaning set forth in Section 2.2(b).

“ Excluded Services ” means the services and corporate allocations set forth on Schedule 1.1(d).

 

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“ Financial/EFT Contracts ” means those Transferred Contracts with Customers of the EFT Business that require the consent of such Customers to transfer such contract to the Companies in connection with the Transactions and that are set forth on Schedule 3.3(c).

“ Financial/EFT Percentage ” has the meaning set forth in Schedule 2.11.

“ FTFC ” has the meaning set forth in the Preamble.

“ FTFC’s Knowledge ” or any similar phrase means the actual knowledge of any of persons set forth on Schedule 1.1(e), after due inquiry of the employees primarily responsible for the subject matter in question.

“ Fundamental Representations ” has the meaning set forth in Section 7.1.

“ GAAP ” means United States generally accepted accounting principles.

“ Government Antitrust Entity ” means any Government Entity with jurisdiction over the enforcement of any Antitrust Law.

“ Government Entity ” means any federal, state, local or foreign government, governmental subdivision, administrative body or other governmental or quasi-governmental agency, tribunal, court or other entity with competent jurisdiction, including any Government Antitrust Entity.

“ Governmental Authorizations ” means all licenses, permits, certificates and other authorizations and approvals related to the Transferred Assets or the Business and issued by or obtained from a Government Entity or Self-Regulatory Organization.

“ Historical Financial Statements ” has the meaning set forth in Section 3.6.

“ Holdco ” has the meaning set forth in the Preamble.

“ Holdco Cash Purchase Price ” has the meaning set forth in Section 2.3(d).

“ Holdco Contribution ” has the meaning set forth in Section 2.1(a)(C).

“ Holdco Contribution Agreement ” has the meaning set forth in the Recitals.

“ Holdco LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of Holdco substantially consistent with the term sheet attached hereto as Exhibit 1.1(a)(B).

“ Holdco LLC Interests ” means, collectively, the Class A Units, the Class B Units and, upon issuance pursuant to the Warrant, the Class C Units.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“ Indemnified Parties ” has the meaning set forth in Section 7.2(a).

 

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“ Indemnifying Party ” has the meaning set forth in Section 7.5(a).

“ Indemnity Amount ” has the meaning set forth in Section 7.9.

“ Intellectual Property ” means all intellectual property rights, whether protected, created or arising under the Laws of the United States or any other jurisdiction or under any international convention, including all: (i) trademarks, service marks, brand names, Internet domain names, logos, symbols, trade dress, trade names, all applications and registrations for the foregoing, including all renewals and extensions of same, and all goodwill associated therewith and symbolized thereby (collectively, “ Trademarks ”), (ii) patents and the issuances, registrations, invention disclosures and applications therefor, including divisions, continuations, continuations-in-part, provisionals, renewal applications, and renewals, extensions, reexaminations and reissues and any patents issuing on any of the foregoing (collectively, “ Patents ”), (iii) trade secrets, know how and similar confidential information protected by the Uniform Trade Secrets Act or similar legislation (collectively, “ Trade Secrets ”), (iv) works of authorship in any media and the copyrights therein and thereto (including Software and other compilations of information), the registrations and applications therefor, and renewals, extensions, restorations and reversions thereof (collectively, “ Copyrights ”), (v) all intellectual property rights arising from or in respect of Technology, and (vi) all income, royalties, proceeds and rights to damages and other payments now or hereafter due or payable or able to be asserted under and with respect to any of the foregoing, including all rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.

“ IP/Software License Agreement ” means the IP/Software License Agreement substantially in the form attached hereto as Exhibit 1.1(a)(C).

“ Law ” means any law, statute, ordinance, rule, regulation, code, Order, judgment, injunction or decree enacted, issued, promulgated, enforced or entered by a Government Entity or Self-Regulatory Organization (including, for the sake of clarity, any policy statement or interpretation that has the force of law with respect to any of the foregoing, and including common law).

“ Legal Proceeding ” means any judicial, administrative or arbitral actions (whether civil, criminal, administrative or otherwise), suits, demands, mediations, arbitrations, hearings, investigations, inquiries, investigations, proceedings or claims (including counterclaims) by or before a Government Entity.

“ Liabilities ” means any and all debts, guarantees, claims, damages, costs, expenses, the obligation to make a payment based on future earnings in connection with an acquisition, fines, penalties, liabilities, commitments and obligations of any kind, whether direct or indirect, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or not accrued, asserted or not asserted, known or unknown, determined, determinable or otherwise, whenever or however arising (including, whether arising out of any contract or tort based on negligence or strict liability) and whether or not the same would be required by GAAP to be reflected in financial statements or disclosed in the notes thereto.

 

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“ LLC Agreements ” means the Holdco LLC Agreement and the Opco LLC Agreement, collectively.

“ Losses ” has the meaning set forth in Section 7.2(a).

“ Master Lease Agreement ” means the lease agreement between Opco and Seller pursuant to which Opco shall lease real property from Seller, substantially in the form attached hereto as Exhibit 1.1(a)(E).

“ Master Services Agreement ” means the agreement (including all addenda and schedules thereto) between Seller, as customer, and Opco, as service provider, substantially in the form attached hereto as Exhibit 1.1(a)(D).

“ Master Sublease Agreement ” means the sublease agreement between Opco and Seller pursuant to which Opco shall sublease real property from Seller, substantially in the form attached hereto as Exhibit 1.1(a)(F).

“ Material Adverse Effect ” means (a) any effect that is, or is reasonably likely to be, materially adverse to the business, assets, financial condition or results of operations of the Business or the Companies, taken as a whole, (b) the execution of any definitive agreement to consummate, or the consummation of, any change of control of Seller, any of its parent corporations or any of its depository institution Affiliates or any significant discussions or negotiations relating thereto except to the extent that the successor party thereto agrees in writing to assume all of the obligations of Seller or Seller’s Affiliate that is party to such transaction or such obligations are assumed as a matter of law, (c)(i) the execution of any definitive agreement to consummate, or the consummation of, any one or more transactions that results in any Government Entity owning, directly or indirectly, in the aggregate more than 20% of the Seller, any of its parent corporations or any of its depository institution Affiliates, and (ii) a change in (A) two of the Seller’s four designees to Holdco’s Board of Directors or (B) two of the Seller’s three designees to the Steering Committee that, in each case of (A) and (B), unless (I) such change is due to the death or disability of such designee, (II) such change is due to a voluntary resignation that occurs more than 9 months from the event described in clause (c)(i), or (III) any of the two Approved Replacements is designated to the Holdco’s Board of Directors or the Steering Committee, as applicable, (d) the occurrence of a Catastrophic Data Breach or the discovery thereof, (e) any commencement of bankruptcy, insolvency or receivership proceedings (whether voluntary or involuntary) of Seller, any of its parent corporations or any of its depository institution Affiliates or (f) any effect that is, or is reasonably likely to be, materially adverse to Seller’s ability to provide in the aggregate the services contemplated by the Ancillary Agreements; provided , that none of the following (or the effects or results thereof) shall be included in determining whether there shall have occurred a Material Adverse Effect: (i) any change in Law or accounting standards or interpretations thereof applicable to the Business or the Companies that does not materially and disproportionately adversely affect the business, assets, financial condition or results of operations of the Business or the Companies, taken as a whole, compared to businesses or entities operating in the same industry in which the Business or the Companies operate; (ii) general changes in economic, business or political conditions that do not materially and disproportionately adversely affect the business, assets, financial condition or results of operations of the Business or the Companies, taken as a whole, compared to

 

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businesses or entities operating in the same industry in which the Business or the Companies operate; (iii) general changes in the securities, credit or financial markets or in the banking industry that do not disproportionately adversely affect the business, assets, financial condition or results of operations of the Business or the Companies, taken as a whole, compared to businesses or entities operating in the same industry in which the Business or the Companies operate; (iv) general changes in the electronic funds transfer, debit, credit and/or merchant transaction processing, ATM network operations and/or other data processing industries that do not disproportionately adversely affect the business, assets, financial condition or results of operations of the Business or the Companies, taken as a whole, compared to businesses or entities operating in the same industry in which the Business or the Companies operate; (v) the taking of any action required or permitted by this Agreement or consented to or requested, in each case, in writing, by Buyer; (vi) any acts of war, terrorism, insurrection or civil disobedience; (vii) any items disclosed as of the date hereof on any of Seller’s Disclosure Schedules to this Agreement, but only to the extent such effect is reasonably apparent from the reading of the specific disclosure set forth therein, and (viii) any adverse effect to the business, assets, financial condition or results of operations of the Business or the Companies as a result of the execution of this Agreement or the announcement of the Transactions contemplated hereby. For the sake of clarity, the foregoing proviso is not applicable to clauses (b) and (c) of this definition.

“ Merchant Contracts ” means those Transferred Contracts with Customers of the Merchant Processing Business that require the consent of such Customers to transfer such contract to the Companies in connection with the Transactions and that are set forth on Schedule 3.3(c).

“ Merchant Percentage ” has the meaning set forth in Schedule 2.11.

“ Merchant Processing Business ” has the meaning set forth in Section 3.6.

“ Necessary Employee ” has the meaning set forth in Section 5.5(a).

“ Net Revenue ” means, on an aggregate basis, net revenue (net of interchange) determined in accordance with GAAP consistently applied and consistent with Seller’s past practices and as reported in the Historical Financial Statements, and:

(i) with respect to Transferred Contracts with Customers of the EFT Business, revenues based on billing data from the FTPS (XAA) billing systems and includes the revenues defined on customer service invoices as FTPS generated “Processing” fees but excludes fees billed to customers through such billing system related to pass-through fees and PIN interchange, mark-ups on pass-through fees, revenues and reductions to revenues based on manual entries to the ledger, and the amortization of signing bonuses provided to customers as part of any conversion or renewal;

(ii) with respect to Transferred Contracts with Customers of the Merchant Business, revenues based on billing data from the FTPS (XAA) billing system and the bankcard settlement system and includes FTPS generated processing fees for signature, PIN and other products and services provided but excludes interchange and other network pass-through related

 

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fees and revenues not billed to specific customers through such billing systems, such as draft retrieval, association rebates, signing bonus amortization and other extraordinary items and excludes third party processing costs, debit network expense, gift card and plastics expense, equipment and supplies, marketing rebates, telecommunications and postage; and

(iii) with respect to Transferred Contracts with Customers of the CMC Business, the sum of (A) revenues based on billing data from the CMC Business billing system and includes CMC fees for services provided to support credit, debit, pre-paid, and private label card programs per the Services Agreements with the CMC Business’s clients and (B) administrative service fee revenue paid to the CMC Business by First Data Resources for client aggregation/administration (based on a percentage of aggregated processing volume) but, in either case, shall exclude pass-through related processing fees.

“ Network Rules ” has the meaning set forth in Section 3.24(a).

“ Non-Governmental Authorizations ” means all licenses, permits, certificates and other authorizations and approvals other than Governmental Authorizations that are either (i) (a) held by Seller or its Affiliates and (b) related to the Transferred Assets, or (ii) related to the business of the Canadian Sub.

“ Notes ” means, collectively, (i) a Secured Term Loan Agreement (including all exhibits, annexes and schedules thereto) substantially in the form attached as Exhibit 1.1(a)(G) with an original aggregate outstanding principal amount payable thereunder by Opco following the Opco Contribution equal to the A Note Amount (the “ A Note ”), and (ii) a Secured Term Loan Agreement (including all exhibits, annexes and schedules thereto) substantially in the form attached as Exhibit 1.1(a)(G) with an original aggregate outstanding principal amount payable thereunder by Opco following the Opco Contribution equal to the B Note Amount (the “ B Note ”).

“ Notes Amount ” means $1,250,000,000.

“ Notice Period ” has the meaning set forth in Section 7.5(a).

“ Opco 401(k) Plan ” has the meaning set forth in Section 5.5(e).

“ Opco Contribution ” has the meaning set forth in Section 2.1(a)(B).

“ Opco Contribution Agreement ” has the meaning set forth in the Recitals.

“ Opco ” has the meaning set forth in the Preamble.

“ Opco LLC Agreement ” means the Amended and Restated Limited Liability Company Agreement of Opco that will be agreed between Buyer and Seller prior to the Closing and will be substantially consistent with the Holdco LLC Agreement, except that Holdco shall be the only Member.

“ Opco LLC Interests ” means has the meaning set forth in the Recitals.

 

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“ Order ” means any order, injunction, judgment, decree, writ or other enforcement action of a Government Entity.

“ Ordinary Course ” means the ordinary and usual conduct of normal day-to-day operations of the Business and/or use of the Transferred Assets consistent with, and in accordance with, Seller’s, the Canadian Sub’s or the CMC Business’s, as applicable, historical customs, practices and procedures.

“ Party ” means any of Buyer, Seller, FTFC and the Companies, and “ Parties ” means, collectively, each of Buyer, Seller, FTFC and the Companies.

“ Patents ” has the meaning set forth in the “Intellectual Property” definition.

“ Permitted Encumbrances ” means (i) Encumbrances reflected or reserved against or otherwise disclosed in the Historical Financial Statements, (ii) mechanics’, materialmen’s, warehousemen’s, carriers’, workers’, or repairmen’s liens or other similar common law or statutory Encumbrances arising or incurred in the Ordinary Course and that are not material in amount or effect on the Business, (iii) liens for current Taxes, assessments and other governmental charges that are (a) not yet due and payable, (b) due but not delinquent or (c) being contested in good faith by appropriate Legal Proceedings, and that in each case have been sufficiently reflected or reserved against on the face of the balance sheets contained in the Historical Financial Statements or related to a period after such Historical Financial Statements; in each case, in an amount that would not be material, (iv) Encumbrances incurred in the Ordinary Course since the date of the Historical Financial Statements and that are not material in amount or effect on the Business, (v) Encumbrances that would not materially impair the conduct of the Business, or the use or value of the relevant Transferred Assets or any assets of the Canadian Sub that are material to the Business and (vi) Encumbrances under the Notes.

“ Person ” means an individual, a corporation, a partnership, an association, a limited liability company, a joint venture, a Government Entity, a trust or other entity or organization.

“ Preclosing Holdco LLC Agreement ” means Holdco’s initial limited liability company agreement effective as of the date hereof, a true and correct copy of which has been provided to Buyer on or before the date hereof.

“ Preclosing LLC Agreements ” means the Preclosing Holdco LLC Agreement and the Preclosing Opco LLC Agreement, collectively.

“ Preclosing Opco LLC Agreement ” means Opco’s initial limited liability company agreement effective as of the date hereof, a true and correct copy of which has been provided to Buyer on or before the date hereof.

“ Processing Business ” has the meaning set forth in the Recitals.

“ Purchase Consideration ” means the Cash Purchase Price.

“ Receiving Party ” has the meaning set forth in Section 5.10.

 

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“ Reference Date ” has the meaning set forth in Section 2.11(b).

“ Reference Statement ” has the meaning set forth in Section 2.4(a).

“ Reference Working Capital ” means the difference, as set forth on the Reference Statement, between (i) the estimated current assets of the Business that constitute Transferred Assets, minus (ii) the estimated current liabilities of the Business other than the current liabilities of the Canadian Sub, in each case, as of the close of business on the Closing Date and calculated in accordance with the Applicable Accounting Principles provided that such Reference Statement shall not include any vacation accrual.

“ Reference Working Capital Adjustment Amount ” has the meaning set forth in Section 2.4(b).

“ Referral Agreement ” means the agreement between Seller and Opco substantially in the form attached hereto as

Exhibit 1.1(a)(H).

“ Registration Rights Agreement ” means the Registration Rights Agreement substantially consistent with the term sheet attached hereto as Exhibit 1.1(a)(I).

“ Related Persons ” has the meaning set forth in Section 3.23.

“ Sale Transaction ” has the meaning set forth in Section 2.3(c).

“ Self-Regulatory Organization ” means the Financial Industry Regulatory Authority, the American Stock Exchange, the National Futures Association, the Chicago Board of Trade, the New York Stock Exchange, any national securities exchange (as defined in the Exchange Act), any other securities exchange, futures exchange, contract market, any other exchange or corporation or similar self-regulatory body or organization.

“ Seller ” has the meaning set forth in the Preamble.

“ Seller 401(k) Plan ” has the meaning set forth in Section 5.5(e).

“ Seller Indemnified Parties ” has the meaning set forth in Section 7.3(a).

“ Seller Leased Property ” means those assets or rights not included in the Transferred Assets that are to be leased, licensed or otherwise provided by Seller and/or any of its Affiliates to Opco pursuant to this Agreement or any Ancillary Agreement.

“ Seller Licensed Intellectual Property ” means the Intellectual Property and Technology to be licensed to Opco by Seller or any of its Affiliates pursuant to the IP/Software License Agreement.

“ Seller Required Approvals ” means all consents, approvals, waivers, authorizations, notices and filings that are required to be and are listed on Schedule 3.3(a).

 

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“ Seller Services ” means those rights, assets and services to be provided by Seller or its Affiliates to the Companies from and after the Closing pursuant to this Agreement or any Ancillary Agreement.

“ Seller’s Knowledge ” or any similar phrase means the actual knowledge of any of persons set forth on Schedule 1.1(e), after due inquiry of the employees primarily responsible for the subject matter in question.

“ Seller’s Objection ” has the meaning set forth in Section 2.5(b).

“ Skipjack Business ” means that portion of the Business related to electronic credit card authorization, electronic settlement, reporting and support services to merchant customers and originally purchased as part of an asset acquisition from Skipjack Financial Services, Inc. consummated as of April 1, 2009.

“ Steering Committee ” has the meaning set forth on Schedule 5.3(b)(ii).

“ Software ” means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code; (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (iii) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons; and (iv) all documentation, including user manuals and other training documentation related to any of the foregoing.

“ Sub Contribution ” has the meaning set forth in Section 2.1(a)(E).

“ Sub-Basket ” means an aggregate amount equal to the sum of (i) 2.5% of the Purchase Consideration and (ii) 2.5% of the Notes Amount.

“ Tax Returns ” means any report, return, declaration, estimate, claim for refund or information return or statement relating to, or required to be filed with respect to Taxes, including any schedule, form, attachment or amendment.

“ Taxes ” means any federal, state, local, territorial, provincial or foreign taxes of any kind whatsoever, including income, net income, gross receipts, windfall profits, value added, severance, real property, personal property, production, single business, unincorporated business, sales, use, stamp, duty, license, excise, franchise, payroll, employment, unemployment, occupation, premium, environmental (including taxes under Section 59A of the Code), customs duties, capital stock, franchise, profits, gains, withholding, social security (or similar), disability, workers compensation, ad valorem, replacement, transfer, registration, alternative or add-on minimum, estimated taxes, fees and charges together with any interest, additions, fines or penalties with respect thereto and any interest in respect of such additions or penalties, whether or not disputed and whether imposed by Law, contract or otherwise.

“ Technology ” means, collectively, all Software, formulae, algorithms, work product of research and development, technical data, technical or business specifications,

 

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business processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), works of authorship and other similar materials, and all tangible embodiments of the foregoing, in any form whether or not specifically listed herein.

“ Termination Date ” has the meaning set forth in Section 8.1(b).

“ Third-Party Claim ” has the meaning set forth in Section 7.5(a).

“ Trade Secrets ” has the meaning set forth in the “Intellectual Property” definition.

“ Trademark License Agreement ” means that certain trademark license agreement, executed by Seller in favor of Opco as of the Closing Date, substantially in the form attached hereto as Exhibit 1.1(a)(J).

“ Trademarks ” has the meaning set forth in the “Intellectual Property” definition.

“ Transaction Expense Contribution ” has the meaning set forth in the Recitals.

“ Transactions ” means all of the transactions contemplated by this Agreement and any of the Closing documents to occur before, at or following the Closing.

“ Transfer Date ” has the meaning set forth in Section 5.5(a).

“ Transfer Taxes ” has the meaning set forth in Section 5.4(d).

“ Transferred Assets ” has the meaning set forth in Section 2.1(a)(E).

“ Transferred Books and Records ” means copies of all books, ledgers, files, reports, plans, records, manuals and other materials (in any form or medium) primarily related to, or maintained primarily in connection with, the Transferred Assets and/or the operation of the Business, including those relating to products, services, marketing, advertising, promotional materials, Transferred Intellectual Property, personnel files for Transferred Employees and all files, customer files and documents (including credit information), supplier lists, records, literature and correspondence, but excluding any such items to the extent (i) they are included in or primarily related to any Excluded Assets or Excluded Liabilities or (ii) any Law prohibits their transfer.

“ Transferred Canadian Sub Stock ” has the meaning set forth in Section 2.3(c).

“ Transferred Contracts ” means all agreements, contracts, leases and subleases, purchase orders, arrangements, commitments and licenses (other than this Agreement, the Ancillary Agreements, and those governing Seller Leased Property) that are (i) primarily related to the Business as of the Closing, or to which any of the Transferred Assets are subject or (ii) related to any Intellectual Property or Technology primarily used, held for use or acquired or developed for use in the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, in each case, whether written or oral, except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article

 

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II hereof and unless otherwise indicated, “Transferred Contracts” shall include all such equivalent agreements or contracts of the Canadian Sub.

“ Transferred Copyrights ” means all Copyrights primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, including the Copyrights listed on Schedule 1.1(f), except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Copyrights” shall include all such equivalent Copyrights of the Canadian Sub.

“ Transferred Employee ” has the meaning set forth in Section 5.5(a).

“ Transferred Equipment ” means all equipment, including Equipment Assets, and other tangible personal property primarily related to, or primarily used, held for use or acquired or developed for use in connection with, the Business.

“ Transferred Intellectual Property ” means all Intellectual Property owned by Seller or its Affiliates that is primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, including the Transferred Copyrights, Transferred Patents, Transferred Trade Secrets and Transferred Trademarks, except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Intellectual Property” shall include all such equivalent Intellectual Property of the Canadian Sub.

“ Transferred Interests ” has the meaning set forth in Section 2.3(c).

“ Transferred Inventory ” means all inventory and other tangible personal property primarily related to, or primarily used, held for use or acquired or developed for use in connection with, the Business.

“ Transferred Patents ” means all Patents primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, including the Patents set forth on Schedule 1.1(g), except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Patents” shall include all such equivalent Patents of the Canadian Sub.

“ Transferred Receivables ” means all accounts and notes receivable and other miscellaneous receivables of the Business as of the Closing arising out of the sale or other disposition of goods or services of the Business, except to the extent specifically included in Schedule 1.1(c) as Excluded Assets.

“ Transferred Software ” means all Software primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, including the Software

 

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listed on Schedule 1.1(h), except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Software” shall include all such equivalent Software of the Canadian Sub.

“ Transferred Technology ” means all Technology primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Technology” shall include all such equivalent Technology of the Canadian Sub.

“ Transferred Trade Secrets ” means all Trade Secrets primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Trade Secrets” shall include all such equivalent Trade Secrets of the Canadian Sub.

“ Transferred Trademarks ” means all Trademarks primarily related to or primarily used, held for use or acquired or developed for use in connection with the Business as currently conducted and proposed to be conducted by Seller and its Affiliates, including the Trademarks set forth on Schedule 1.1(i), together with the goodwill of the Business appurtenant thereto and/or symbolized thereby, except to the extent specifically included in Schedule 1.1(c) as Excluded Assets. For the sake of clarity, other than for purposes of Article II hereof and unless otherwise indicated, “Transferred Trademarks” shall include all such equivalent Trademarks of the Canadian Sub.

“ Transition Infrastructure Contribution ” has the meaning set forth in the Recitals.

“ Transition Plan ” has the meaning set forth in Section 5.3(b).

“ Transition Plan Term Sheet ” has the meaning set forth in Section 5.3(b).

“ Transition Plan Start Date ” means the first business day following the date on which the Transition Plan is completed.

“ Transition Service Agreement ” means the Transition Service Agreement substantially in the form attached hereto as Exhibit 1.1(a)(K), provided that the cumulative changes, if any, to the Transition Service Agreement (including each of the exhibits and schedules, including Exhibit A, thereto) in the form attached to this Agreement as of the date hereof shall not result in an increase in payments to be made by Opco under the execution version of the Transition Service Agreement exceeding $1,000,000 in the aggregate, excluding all pass-through costs.

“ Unaudited Canadian Financial Statements ” has the meaning set forth in Section 3.6.

 

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“ Unaudited Financial Statements ” has the meaning set forth in Section 3.6.

“ Unaudited US Financial Statements ” has the meaning set forth in Section 3.6.

“ U.S. Antitrust Laws ” means the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, and all other federal and state statutes, rules, regulations, Orders, decrees, administrative and judicial doctrines and other Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade.

“ Warrant ” means the warrant in a form consistent with the term sheet attached hereto as Exhibits 1.1(a)(L).

“ Welfare Benefits ” has the meaning set forth in Section 5.5(c).

“ Working Capital True-Up Amount ” has the meaning set forth in Section 2.5(e).

Section 1.2 Other Terms . Other terms may be defined elsewhere in the text of this Agreement and, unless otherwise indicated, shall have such meaning throughout this Agreement.

Section 1.3 Other Definitional and Interpretational Provisions . Unless the express context otherwise requires (other than with respect to clause (g) below):

(a) the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

(b) the terms defined in the singular have a comparable meaning when used in the plural, and vice versa;

(c) the terms “Dollars” and “$” mean United States Dollars;

(d) references herein to a specific Article, Section, Subsection or Schedule shall refer, respectively, to Articles, Sections, Subsections or Schedules of this Agreement;

(e) wherever the word “include”, “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”;

(f) references herein to any gender includes each other gender;

(g) it is the intention of the Parties that the Agreement not be construed more strictly with regard to one Party than with regard to any other Party; and

(h) references herein to “the date hereof” and “the date of this Agreement” shall be deemed to refer to March 27, 2009 with respect to the Business

 

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other than the Canadian Sub and shall be deemed to refer to April 1, 2009 with respect to the Canadian Sub.

ARTICLE II

RECAPITALIZATION AND PURCHASE AND SALE OF LLC INTERESTS

Section 2.1 Amendment and Recapitalization . (a) On the terms and subject to the conditions set forth herein and in the Preclosing LLC Agreements and the Contribution Agreements, as applicable, at least one day prior to the Closing:

(A) Seller shall borrow $1.25 billion under the Notes;

(B) Seller shall contribute, transfer and convey to Opco all of Seller’s right, title and interest, as of the time of such contribution, in and to the Transferred Assets free and clear of all Encumbrances, other than Permitted Encumbrances, and Opco shall assume Seller’s obligations under the Notes (collectively, the “ Opco Contribution ”);

(C) Seller shall contribute, transfer and convey 100% of the equity interest in CMC to FTPS Partners, and thereafter, CMC shall distribute its interest in Holdco to FTPS Partners and thereafter CMC shall be converted into CMC LLC;

(D)(i) Seller shall contribute, transfer and convey to Holdco all of Seller’s right, title and interest, as of the time of such contribution, in and to the Opco LLC Interests and the Cash Contribution, in each case, free and clear of all Encumbrances (in the case of the Cash Contribution, other than Permitted Encumbrances), and (ii) FTPS Partners shall contribute, transfer and convey 100% of the equity interest in CMC LLC to Holdco free and clear of all Encumbrances, other than Permitted Encumbrances (clauses (i) and (ii) collectively, the “ Holdco Contribution ”); and

(E) Holdco shall contribute, transfer and convey to Opco the equity interests in CMC LLC it received from FTPS Partners and the cash it received from Seller and CMC (other than the Transaction Expenses Contribution), in each case, free and clear of all Encumbrances, other than Permitted Encumbrances (collectively, the “ Sub Contribution ,” and together with the Opco Contribution and the Holdco Contribution, the “ Contribution ”). “ Transferred Assets ” shall mean all of the assets, rights, properties, claims, contracts, business and goodwill of Seller required for, primarily related to, or primarily used, held for use or acquired or developed for use in, the Business as currently conducted, wherever situated and of whatever kind and nature, real or personal, tangible or intangible, whether or not reflected on the books and records of Seller (other than the Excluded Assets), including each of the following assets (it being understood that Transferred Assets does not include any assets, rights, properties, claims, contracts, business or goodwill of the Canadian Sub):

(i) all Cash and Transferred Receivables;

(ii) Transferred Contracts;

(iii) Transferred Intellectual Property;

 

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(iv) Transferred Technology;

(v) Transferred Equipment;

(vi) Transferred Inventory;

(vii) Transferred Books and Records;

(viii) with respect to the Holdco Contribution, 100% of Opco LLC Interests (for the sake of clarity, all of Opco’s assets shall be deemed to be Transferred Assets under this Agreement);

(ix) all causes of action, lawsuits, judgments, claims and demands of any nature available to or being pursued by Seller or any of its Affiliates to the extent related to the Transferred Assets (unless such cause of action, lawsuit, judgment, claim or demand is a counterclaim with respect to an Excluded Liability), the Assumed Liabilities or the ownership, use, function or value of any Transferred Asset (unless such cause of action, lawsuit, judgment, claim or demand is a counterclaim with respect to an Excluded Liability), whether arising by way of counterclaim or otherwise;

(x) all credits, prepaid charges and expenses, deferred charges, advance payments, security and other deposits, prepaid items and duties to the extent related to a Transferred Asset;

(xi) all guaranties, warranties, indemnities and similar rights in favor of Seller or any of its Affiliates to the extent related to any Transferred Asset (unless the liability that is the subject of such guarantee, warranty, indemnity or similar right is an Excluded Liability) or Assumed Liability, including guarantees made by suppliers, manufacturers and contractors to the extent relating to products sold or services provided to Seller or any of its Affiliates;

(xii) to the extent assignable, all Governmental Authorizations, and all Non-Governmental Authorizations used by Seller in the Business and all rights, and incidents of interest therein;

(xiii) to the extent assignable, all rights of Seller under non-disclosure or confidentiality, non-compete or non-solicitation agreements with current and former employees, consultants and agents of Seller or with third parties, in each case, to the extent relating to the Business or the Transferred Assets (or any portion thereof) other than any such agreements relating to the sale of the Business;

(xiv) all third-party property and casualty insurance proceeds, and all rights to third-party property and casualty insurance proceeds, in each case to the extent received or receivable in respect of the Business (excluding the Canadian Sub) or the Transferred Assets and not related to an Excluded Liability; and

(xv) all goodwill and other intangible assets associated with the Business (excluding the Canadian Sub) or the Transferred Assets, including the goodwill

 

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associated with the Transferred Intellectual Property (other than the Transferred Intellectual Property of the Canadian Sub).

(b) Nothing herein contained shall be deemed to sell, transfer, assign or convey the Excluded Assets to the Companies, and Seller and its Affiliates shall retain all right, title and interest to, in and under the Excluded Assets.

(c) Any assets of the Seller transferred subsequent to the Closing pursuant to the Asset Identification Process shall be considered Transferred Assets as of March 27, 2009 and the Closing Date for purposes of the representations and warranties of the Seller set forth herein.

Section 2.2 Assumption of Liabilities; Excluded Liabilities . (a) On the terms and subject to the conditions set forth herein, at the time of the Contribution, Opco shall assume, effective as of the Closing, the Assumed Liabilities. For the avoidance of doubt, Canadian Liabilities shall remain Liabilities of the Canadian Sub.

(b) Neither of the Companies will assume or be liable for any Liabilities of Seller or any of its Affiliates that are not Assumed Liabilities (“ Excluded Liabilities ”). For the avoidance of doubt, Excluded Liabilities shall include, except to the extent included in Assumed Liabilities or Canadian Liabilities, the following Liabilities:

(i) all Liabilities of Seller or its Affiliates arising out of, relating to or otherwise in respect of the Business on or before the Closing (whether or not discovered before, on or after the Closing);

(ii) all Liabilities of Seller in respect of any services performed by, or on behalf of, Seller on or before the Closing;

(iii) except to the extent specifically provided in Section 5.5, all Liabilities of Seller arising out of, relating to or with respect to the employment or performance of services, or termination of employment or services by Seller or any of its Affiliates of any individual (including any Applicable Employee) on or before the Closing Date (including relating to Transferred Employees on or before the Transfer Date, irrespective of whether such claims are made prior to or after the Closing Date), (B) workers’ compensation claims against Seller or any of its Subsidiaries that relate to the period on or before the Closing Date, irrespective of whether such claims are made prior to or after the Closing, and (C) any Benefit Plan, (D) any bonuses or incentive compensation (payable in either in cash or equity) owed or owing to employees (including any Applicable Employees) by Seller or any of its Affiliates on or before the Closing Date; provided , however , it being understood by Buyer and Seller that any such liability incurred on or after the Closing Date but prior to the applicable Transfer Date, with respect to an Applicable Employee, shall be reimbursed by Opco to Seller to the extent provided in the Transition Service Agreement;

(iv) (A) all Liabilities of Seller arising out of, under or in connection with contracts of the Seller or its Affiliates that are not Transferred Contracts and, (B) with

 

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respect to Transferred Contracts, all Liabilities in respect of (1) performance by, or on behalf of, Seller under such Transferred Contracts with respect to any period prior to the Closing or (2) a breach by, or default of, Seller accruing under such contracts with respect to any period prior to the Closing;

(v) all Liabilities of Seller arising out of, under, or in connection with, any indebtedness of Seller (other than capital leases primarily related to the Business);

(vi) all Liabilities of Seller for Taxes (except for Taxes for which the Companies are expressly responsible pursuant to Section 5.4);

(vii) all Liabilities of Seller in respect of any pending or threatened Legal Proceeding (including, for the sake of clarity, all Liabilities arising from the matters set forth on Schedule 3.7, including any indemnification, contribution or other Liabilities in respect of, arising from, or otherwise relating to, such Legal Proceedings or the facts and circumstances pursuant to which such Legal Proceedings relate), or any claim, in each case arising out of, relating to or otherwise in respect of (A) the operation of the Business to the extent such Legal Proceeding or claim relates to such operation on or prior to the Closing Date, or (B) any Excluded Assets;

(viii) all Liabilities arising out of, relating to, or otherwise in respect of, any actual breach of security of, or unauthorized access to or acquisition, use, loss, destruction, compromise or disclosure of any personal information, confidential or proprietary data or any other such information maintained or stored by, the Business (other than such breaches occurring in systems maintained by customers of the Business for which the Business is not at fault) involving data of customers, suppliers, consumers or other similarly situated individuals, in any case, occurring before the Closing; and

(ix) all Liabilities of Seller (whether under Network Rules or otherwise) arising out of, relating to, or otherwise in respect of, any customers of the Business that have commenced any bankruptcy, insolvency or receivership proceedings (whether voluntary or involuntary) before the Closing.

For the avoidance of doubt, any Liabilities of the Business to the extent attributable to the operation or the ownership of the Transferred Assets or the Business, including the business of the Canadian Sub, from and after the Closing or the employment of the Transferred Employees after their respective Transfer Dates shall not constitute Excluded Liabilities.

Section 2.3 Purchase and Sale of LLC Interests and the Canadian Sub . On the terms and subject to the conditions set forth herein, at the Closing:

(a) Seller and FTPS Partners shall cause the Preclosing Holdco LLC Agreement to be amended and restated in its entirety in the form of the Holdco LLC Agreement;

(b) Holdco shall cause the Preclosing Opco LLC Agreement to be amended and restated in its entirety in the form of the Opco LLC Agreement;

 

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(c) (i) Seller shall sell, transfer and convey to Buyer, and Buyer shall purchase from Seller, 50,930,455 Class A Units (the “ Transferred Interests ”), free and clear of all Encumbrances, except as set forth in the Holdco LLC Agreement and (ii) FTFC shall sell, transfer and convey to Buyer, and Buyer shall purchase from FTFC, 50,930,455 shares of common stock of the Canadian Sub (the “ Transferred Canadian Sub Stock ”) (clauses (i) and (ii) collectively, the “ Sale Transaction ”);

(d) In consideration of the sale of the Transferred Interests, at the Closing (by wire transfer of immediately available funds to an account or accounts which have been designated by Seller at least two Business Days prior to the Closing Date), Buyer shall pay to Seller an amount in cash equal to $559,318,251.81 (the “ Holdco Cash Purchase Price ”), and Holdco shall issue the Warrant to Seller;

(e) Upon the payment by Buyer to Seller of the Holdco Cash Purchase Price, Holdco shall duly reflect in its books and records the admittance of Buyer as a member of Holdco and the transfer of the Transferred Interests from Seller to Buyer; and

(f) In consideration of the sale of the Transferred Canadian Sub Stock, at the Closing (by wire transfer of immediately available funds to an account or accounts which have been designated by FTFC at least two Business Days prior to the Closing Date), Buyer shall pay to FTFC an amount in cash equal to $916,748.19 (the “ Canadian Sub Cash Purchase Price ,” and together with the Holdco Cash Purchase Price, the “ Cash Purchase Price ”).

Section 2.4 Pre-Closing Adjustments . (a) Seller shall prepare, or cause to be prepared, and deliver to Buyer on or before the date that is three days before the anticipated Closing Date a statement (the “ Reference Statement ”) consisting of (A) an estimated consolidated balance sheet of the Business (other than the Canadian Sub) as of the close of business on the Closing Date, (B) a good faith estimation in reasonable detail of the Reference Working Capital (C) a good faith calculation of the amounts of any contribution or payments required under Section 2.4(b) and all other amounts specifically identified in this Agreement as being reflected on the face of the Reference Closing Statement. The Reference Statement shall be prepared in accordance with GAAP applied on a basis consistent with the accounting principles, methods, practices, policies and procedures (with consistent classifications, judgments and valuation and estimation methodologies) that were used to prepare the Historical Financial Statements, except as set forth in Exhibit 2.4(a) attached hereto and except for the exclusion of the Canadian Sub (with such exceptions, the “ Applicable Accounting Principles ”). For illustrative purposes, Exhibit 2.4(a) contains a pro forma calculation of the Reference Working Capital as of June 30, 2008 applying the Applicable Accounting Principles.

(b) The difference between (i) the Base Working Capital Value, minus (ii) the Reference Working Capital, expressed as a positive, if positive, or as a negative, if negative, is referred to in this Agreement as the “ Reference Working Capital Adjustment Amount .” In the event that the Reference Working Capital Adjustment Amount is a negative number, then Opco shall pay to the Seller Cash on

 

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or before the Closing Date (by wire transfer of immediately available funds) an amount in cash equal to the absolute value of the Reference Working Capital Adjustment Amount. In the event that the Reference Working Capital Adjustment Amount is a positive number, then Seller shall pay to Opco Cash on or before the Closing Date (by wire transfer of immediately available funds) an amount in cash equal to the value of the Reference Working Capital Adjustment Amount.

Section 2.5 Post-Closing True-Up . (a) As soon as practicable, but in no event more than 60 days following the Closing Date, Buyer shall prepare, or cause to be prepared, and deliver to Seller a statement (the “ Closing Statement ”) consisting of (i) an unaudited consolidated balance sheet of the Business (other than the Canadian Sub) as of the close of business on the Closing Date, (ii) a good faith calculation in reasonable detail of the Closing Working Capital derived from such balance sheet and (iii) a good faith calculation of the amount of any payment required under Section 2.5(e), 2.5(f) and all other amounts specifically identified in this Agreement as being reflected on the face of the Reference Closing Statement; provided that such Closing Statement shall not include any vacation accrual. The Closing Statement shall be prepared in accordance with the Applicable Accounting Principles, except that it shall not include any vacation accrual.

(b) Seller shall complete its review of the Closing Statement within 30 days after delivery thereof by Buyer. In the event that Seller determines that the Closing Statement has not been prepared on the basis set forth in Section 2.5(a), Seller shall, on or before the last day of such 30-day period, so inform Buyer in writing (the “ Seller’s Objection ”), setting forth a specific description of the basis of Seller’s determination and the adjustments to the Closing Statement and the corresponding adjustments to the Closing Working Capital that Seller believes should be made. If no Seller’s Objection is received by Buyer on or before the last day of such 30-day period, then the Closing Working Capital set forth on the Closing Statement delivered by Seller shall be final. Buyer shall have 30 days from its receipt of Seller’s Objection to review and respond to Seller’s Objection.

(c) If Seller and Buyer are unable to resolve all of their disagreements with respect to the proposed adjustments set forth in Seller’s Objection within 30 days following the completion of Buyer’s review of Seller’s Objection, they shall refer any remaining disagreements with respect to matters set forth in Seller’s Objection to the CPA Firm which, acting as an expert and not as an arbitrator, shall determine, on the basis set forth in and in accordance with Section 2.5(a), and only with respect to the remaining differences so submitted, whether and to what extent, if any, the Closing Statement and the Closing Working Capital require adjustment. Buyer and Seller shall instruct the CPA Firm to deliver its written determination to Buyer and Seller no later than 30 days after the remaining differences underlying Seller’s Objection are referred to the CPA Firm. In making such determination, the CPA Firm shall not assign a value to any item greater than the greatest value for such item claimed by Buyer or Seller, or less than the smallest value for such item claimed by Buyer or Seller. The CPA Firm’s determination shall be conclusive and binding upon Buyer and Seller and their respective Affiliates. The fees and disbursements of the CPA Firm shall be borne

 

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by Seller if the CPA Firm rules against a majority (by dollar value) of the items set forth in Seller’s Objection that are submitted to the CPA Firm and by Buyer if the CPA Firm rules in favor of a majority (by dollar value) of the items set forth in Seller’s Objection that are submitted to the CPA Firm. Buyer and Seller shall make readily available to the CPA Firm all relevant books and records and any work papers (including those of their respective accountants, to the extent permitted by such accountants) relating to the Closing Statement and Seller’s Objection and all other items reasonably requested by the CPA Firm in connection therewith, and may submit such additional data and information to the CPA Firm as each deems appropriate.

(d) Buyer and the Companies shall provide to Seller and its accountants full access to the books and records of the Business and to any other information, including work papers of its accountants (to the extent permitted by such accountants), and to any employees during regular business hours and on reasonable advance notice, to the extent necessary for Seller to review the Closing Statement and prepare materials for the CPA Firm in connection with Section 2.5(c).

(e) An amount equal to (A) the Reference Closing Working Capital, minus (B) the Closing Working Capital (as adjusted pursuant to this Section 2.5, if applicable), expressed as a positive, if positive, or as a negative, if negative, is referred to in this Agreement as the “ Working Capital True-Up Amount .” Subject to Section 2.5(f), if the Working Capital True-Up Amount is a negative number, then Opco shall pay to Seller (by wire transfer of immediately available funds) an amount in cash equal to the absolute value of the Working Capital True-Up Amount, and if the Working Capital True-Up Amount is a positive number, then Seller shall pay to Opco (by wire transfer of immediately available funds) an amount in cash equal to the value of the Working Capital True-Up Amount.

(f) If the amount that would otherwise constitute a Reference Working Capital Adjustment Amount or a Working Capital True-Up Amount is equal to or less than $250,000, no payment shall be made, except that any such amounts in respect of any accrued interest under the Notes as of the Closing shall be payable regardless of the limitation set forth in this Section 2.5(f).

(g) Within a reasonable time following each Transfer Date, Seller shall provide Opco with a cash payment equal to the aggregate vacation accrual of the Transferred Employees who become employees of Opco as of such Transfer Date; it being understood that if as of the last to occur of such Transfer Dates, the aggregate cash payment in respect of such vacation accruals would not have been payable as a result of Section 2.5(f) if it had been included in the Working Capital True-Up Amount, such payment shall not be made.

Section 2.6 Closing . Subject to the terms and conditions of this Agreement, the Closing shall take place at the offices of Seller on June 30, 2009 immediately following the execution hereof but subject to the fulfillment or waiver of the conditions set forth in Section 6.1,

 

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Section 6.2 and Section 6.3 and shall be deemed effective as of the close of business (Eastern time) on June 30, 2009.

Section 2.7 Deliveries by Buyer . (a) At the Closing, Buyer shall deliver to Seller the following:

(i) the Holdco Cash Purchase Price in immediately available funds by wire transfer to an account or accounts which have been designated by Seller at least two Business Days prior to the Closing Date;

(ii) a duly executed counterpart of each of the Ancillary Agreements to which Buyer is a party and a duly executed counterpart to the Holdco LLC Agreement;

(iii) evidence of the obtaining of, or the filing with respect to, the Buyer Required Approvals;

(iv) the certificate to be delivered pursuant to Section 6.3(d);

(v) secretary’s certificates, evidence of corporate existence and good standing, evidence of corporate approvals and other similar documents, and such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Seller, as may be required to give effect to this Agreement.

(b) At the Closing, Buyer shall deliver to FTFC the following:

(i) the Canadian Sub Cash Purchase Price in immediately available funds by wire transfer to an account or accounts which have been designated by FTFC at least two Business Days prior to the Closing Date; and

(ii) secretary’s certificates, evidence of corporate existence and good standing, evidence of corporate approvals and other similar documents, and such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to FTFC, as may be required to give effect to this Agreement.

Section 2.8 Deliveries by Seller and FTFC . (a) At the Closing, Seller shall deliver, or cause to be delivered, to Buyer the following:

(i) a duly executed counterpart of each of the Ancillary Agreements to which any of the Seller and Buyer are parties;

(ii) evidence of the obtaining of, or the filing with respect to, the Seller Required Approvals and the Company Required Approvals;

(iii) the certificate to be delivered pursuant to Section 6.2(d);

 

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(iv) delivery of the Reference Statement, as required pursuant to Section 2.4(a);

(v) a certificate of non-foreign status from Seller that complies with Section 1445 of the Code; and

(vi) secretary’s certificates, evidence of legal existence and good standing, evidence of corporate approvals and other similar documents, and such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

(b) At the time of the Opco Contribution, Seller shall deliver, or cause to be delivered, to Opco the following:

(i) bills of sale or other appropriate documents of transfer, in form and substance reasonably acceptable to Buyer, transferring the tangible personal property included in the Transferred Assets to Opco;

(ii) assignments, in form and substance reasonably acceptable to Buyer and, if applicable, as required by any Government Entity with which any of Seller’s or any of its Affiliates’ rights to any Transferred Intellectual Property (other than the Transferred Intellectual Property of the Canadian Sub) have been filed, assigning to Opco such Transferred Intellectual Property;

(iii) assignment and assumption agreements, in form and substance reasonably acceptable to Seller and Buyer, as may be necessary to effect the assignment to Opco of the Transferred Contracts (other than the Transferred Intellectual Property) or other Transferred Assets, other than tangible personal property included therein;

(iv) the Transferred Books and Records;

(v) a duly executed counterpart of each of the Ancillary Agreements to which Seller and Opco are parties; and

(vi) such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Seller and Buyer, as may be required to give effect to the Opco Contribution.

For the avoidance of doubt, the Transferred Intellectual Property, Transferred Contracts and Transferred Books and Records of the Canadian Sub will not be delivered, assigned or transferred to Opco.

(c) At the time of the Holdco Contribution, Seller shall deliver, or cause to be delivered, to Holdco the following:

(i) an assignment, in form and substance reasonably acceptable to Buyer, of all of FTPS Partners’ interests in CMC LLC; and

 

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(ii) an assignment, in form and substance reasonably acceptable to Buyer, of all of Seller’s interests in Opco.

(d) At the Closing, FTFC shall deliver, or cause to be delivered, to Buyer the following:

(i) a certificate or certificates issued in Buyer’s name, representing the Transferred Canadian Sub Stock, endorsed for transfer to, or accompanied by a duly executed stock power in favor of, Buyer, in a form reasonably acceptable to Buyer; and

(ii) secretary’s certificates, evidence of legal existence and good standing, evidence of corporate approvals and other similar documents, and such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Buyer, as may be required to give effect to this Agreement.

Section 2.9 Deliveries by Opco and Holdco . (a) At the Opco Contribution, Opco shall deliver to Seller the following:

(i) such instruments of assumption and other instruments or documents, in form and substance reasonably acceptable to Seller and Buyer, as may be necessary to effect Opco’s receipt and assumption of the Transferred Assets and Assumed Liabilities and the indebtedness under the Notes;

(ii) a duly executed counterpart of each of the Ancillary Agreements to which any of Opco and any of Seller is a party; and

(iii) such other customary instruments of transfer, assumptions, filings or documents, in form and substance reasonably satisfactory to Seller and Buyer, as may be required to give effect to the Opco Contribution.

(b) At the Closing, Holdco shall deliver to Seller the Warrant.

Section 2.10 Nonassignability of Assets . Notwithstanding anything to the contrary contained in this Agreement, to the extent that the sale, assignment, sublease, transfer, conveyance or delivery or attempted sale, sublease, assignment, transfer, conveyance or delivery to the Companies of any asset (other than an Applicable Contract) that would be a Transferred Asset or any claim or right or any benefit arising thereunder or resulting therefrom is prohibited by any applicable Law or would require any governmental or third-party authorizations, approvals, consents or waivers, and such authorizations, approvals, consents or waivers shall not have been obtained prior to the Closing, the Closing shall proceed without the sale, assignment, sublease, transfer, conveyance or delivery of such asset unless such failure causes a failure of any of the conditions to Closing set forth in Article VI, in which event the Closing shall proceed only if the failed condition is waived by the Party (or Parties, as applicable) entitled to the benefit thereof. In the event that the Closing proceeds without the transfer, sublease or assignment of any such asset (other than an Applicable Contract) that would be a Transferred Asset or any claim or right or any benefit arising thereunder or resulting therefrom, then following the Closing, the parties hereto shall use their commercially reasonable efforts, and cooperate with

 

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each other, to obtain promptly such authorizations, approvals, consents or waivers; provided , however , that none of the parties hereto or any of their Affiliates shall be required to pay any consideration therefor other than filing, recordation or similar fees, which shall be shared equally by Seller and Buyer. Pending such authorization, approval, consent or waiver, the parties hereto shall cooperate with each other in any mutually agreeable, reasonable and lawful arrangements designed to provide to the Companies the benefits of use of such asset and to Seller or its Affiliates the benefits, including any indemnities, that they would have obtained had the asset been conveyed to the Companies at the Closing. Once authorization, approval, consent or waiver for the sale, assignment, sublease, transfer, conveyance or delivery of any such asset not sold, assigned, subleased, transferred, conveyed or delivered at the Closing is obtained, Seller shall or shall cause its relevant Affiliates to, assign, transfer, convey and deliver such asset to the Companies at no additional cost. Subject to the Transition Plan and the Transition Service Agreement, to the extent that, within 90 days of the Closing Date, it is determined by Seller, with the consent of Buyer, such consent not to be unreasonably withheld or delayed, that any such asset cannot be transferred or the full benefits of use of any such asset cannot be provided to the Companies following the Closing pursuant to this Section 2.10, then Seller and the Companies shall enter into such arrangements (including subleasing, sublicensing or subcontracting) to provide to the parties hereto the economic (taking into account Tax costs and benefits) and operational equivalent, to the extent permitted, of obtaining such authorization, approval, consent or waiver and the performance by the Companies of the obligations thereunder, and upon the entering into of such arrangement by Seller and the Companies, such asset shall no longer be determined to be a Transferred Asset. Seller shall hold in trust for and pay to the Companies promptly upon receipt thereof, all income, proceeds and other monies received by Seller or any of its Affiliates in connection with its use of any asset (net of any Taxes and any other costs imposed upon Seller or any of its Affiliates) in connection with the arrangements under this Section 2.10.

Section 2.11 Transferred Contracts Adjustment .

(a) Subject to the Sub-Basket and the Cap, as applicable, if, prior to obtaining the consent of the applicable counterparty to a Merchant Contract or Financial/EFT Contract included in the Transferred Contracts (each, an “ Applicable Contract ”) to the transfer of such Applicable Contract to the Companies in connection with the Transactions, at any time between the date hereof through the first anniversary of the Closing Date (the “ Adjustment Date ”) (i) such Applicable Contract is terminated by the counterparty thereto for any reason, (ii) such counterparty thereto notifies Seller or the Companies that it will terminate such Applicable Contract for any reason or (iii) such counterparty thereto initiates a proposed renegotiation of such Applicable Contract prior to the expiration of its existing term and the counterparty to such Applicable Contract subsequently agrees no later than 18 months after the Closing Date upon an amendment or modification to such Applicable Contract that reduces its existing term, in the case of each of clauses (i) through (iii), where the effective date of such termination or expiration or proposed termination or expiration is prior to the original termination or expiration date of such Applicable Contract, then the Purchase Consideration shall be adjusted and the Notes shall be repaid in the proportion set forth in Section 2.11(c) for each such Applicable Contract by an aggregate amount equal to:

 

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(i) (1) 8.2, times (2) 2008 Net Revenues, times (3) (x) the Merchant Percentage (if such Applicable Contract is a Merchant Contract) or (y) the Financial/EFT Percentage (if such Applicable Contract is a Financial/EFT Contract), minus

(ii) Any liquidated damages or similar payments received by the Companies with respect to such termination or proposed termination of such Applicable Contract (such calculated amount, the “ Applicable Termination Price Adjustment ”).

(b) Subject to the Sub-Basket and the Cap, as applicable, if, prior to obtaining the consent of the applicable counterparty to an App