UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2011
Commission file numbers:
SunGard Capital Corp. 000-53653
SunGard Capital Corp. II 000-53654
SunGard Data Systems Inc. 1-12989
SunGard® Capital Corp.
SunGard® Capital Corp. II
SunGard® Data Systems Inc.
(Exact name of registrant as specified in its charter)
Delaware | 20-3059890 | |
Delaware | 20-3060101 | |
Delaware | 51-0267091 | |
(State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) | |
680 East Swedesford Road Wayne, Pennsylvania |
19087 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (484) 582-2000
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
On August 4, 2011, SunGard Data Systems Inc., a Delaware corporation (SunGard Data) and SunGard Higher Education Inc., a Delaware corporation and wholly owned indirect subsidiary of SunGard Data (the Company), entered into an Asset Purchase Agreement (the Asset Purchase Agreement) with Sophia, L.P., a Delaware limited partnership (Purchaser Parent), and Sophia Purchaser Company, L.P., a Delaware limited partnership and wholly owned subsidiary of Purchaser Parent (Purchaser Company), companies affiliated with Hellman & Friedman Capital Partners VI, L.P. Also on August 4, 2011, SunGard Capital Corp., a Delaware corporation (SunGard Capital), SunGard Data, SunGard Investment Ventures LLC, a Delaware limited liability company and wholly owned subsidiary of SunGard Data, and the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Sophia Holding I, L.P., a Delaware limited partnership (Sophia Holding I), Sophia Holding II, L.P., a Delaware limited partnership and wholly owned subsidiary of Sophia Holding I (Sophia Holding II), Purchaser Parent, Purchaser Company, Sophia HE Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Purchaser Parent (Merger Sub), and Datatel Parent Corp., a Delaware corporation (Datatel).
Pursuant to the terms and conditions of the Asset Purchase Agreement, Purchaser Company will purchase the assets of SunGard Datas Higher Education business segment (excluding SunGard Datas K-12 education business) relating to the development, licensing and sale of software, and the provision of managed services and professional services to colleges and universities (the SMS Assets), for a cash purchase price of $750 million, subject to certain adjustments.
Consummation of the transactions contemplated by the Asset Purchase Agreement is subject to the satisfaction or waiver of certain customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act). In addition, the parties have agreed to seek a private letter ruling from the Internal Revenue Service (IRS) in respect of certain tax matters related to the transactions contemplated by the Asset Purchase Agreement and the Merger Agreement, as well as a valuation of the SMS Assets that will be obtained from a third party valuation firm.
Pursuant to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into the Company, with the Company becoming a wholly owned subsidiary of Purchaser Parent, and as a result of which, if the transactions contemplated by the Asset Purchase Agreement have been consummated, Purchaser Parent will acquire the Company (including the remaining portion of SunGard Datas Higher Education business segment other than SunGard Datas K-12 education business), for an aggregate cash merger consideration of $1.025 billion, subject to certain adjustments. Following the closing of the transactions, each of the Company, Purchaser Company and Datatel will be wholly owned by Purchaser Parent.
Consummation of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of certain customary conditions, including the expiration or termination of the waiting period under the HSR Act. In addition, consummation of the transactions contemplated by the Merger Agreement is subject to the closing of the transactions contemplated by the Asset Purchase Agreement or the termination of the Asset Purchase Agreement in accordance with its terms. If the transactions contemplated by the Asset Purchase Agreement are consummated, then, generally, the conditions under the Merger Agreement will be deemed to be satisfied and the merger contemplated by the Merger Agreement will be consummated on the immediately following business day.
The Asset Purchase Agreement will terminate automatically if the other closing conditions under such agreement have been satisfied or waived but the closing condition related to the receipt of a reasonably satisfactory IRS private letter ruling and/or the closing condition related to the receipt of a reasonably satisfactory valuation has not been satisfied or waived within 180 days of the date of the Asset Purchase Agreement. In addition, Purchaser Parent may deliver a written notice to SunGard Data at any time to exercise its right to terminate the Asset Purchase Agreement. In the event that the Asset Purchase Agreement is terminated in either of the circumstances described above, the Company will continue to hold the SMS Assets, and subject to the satisfaction of the closing conditions under the Merger Agreement, such SMS Assets will be transferred as part of the merger under the Merger Agreement for an aggregate cash merger consideration of $1.775 billion, subject to certain adjustments.
The Merger Agreement and the Asset Purchase Agreement also contain customary representations and warranties, covenants and agreements and indemnification of and by the parties.
The closing of the transactions is expected to occur after the later of the satisfaction or waiver of the closing conditions under the Asset Purchase Agreement or the Merger Agreement, as applicable, and the completion of a customary marketing period for the debt financing of Purchaser Parent required to fund the transactions. Subject to specified exceptions, this marketing period will not exceed 25 business days and will commence following the satisfaction of certain of the conditions to the transactions, including the expiration or termination of the waiting period under the HSR Act, and the delivery by SunGard Data to Purchaser Parent of certain financial information relating to the Company. SunGard Data intends to use the transaction proceeds of $1.775 billion, less applicable taxes and fees, to repay a portion of its existing indebtedness.
The Merger Agreement is subject to termination under certain circumstances, including the right of Purchaser Parent or SunGard Data to terminate the Merger Agreement if the closing has not occurred by August 2, 2012.
The foregoing descriptions of the Merger Agreement and the Asset Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement and the Asset Purchase Agreement, as applicable, which are filed as Exhibits 2.1 and 2.2 hereto, and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
Exhibit Title | |
2.1* | Agreement and Plan of Merger, dated as of August 4, 2011, by and among SunGard Capital Corp., SunGard Data Systems Inc., SunGard Investment Ventures LLC, SunGard Higher Education Inc., Sophia Holding I, L.P., Sophia Holding II, L.P., Sophia, L.P., Sophia Purchaser Company, L.P., Sophia HE Merger Sub, Inc. and Datatel Parent Corp. | |
2.2* | Asset Purchase Agreement, dated as of August 4, 2011, by and among SunGard Data Systems Inc., SunGard Higher Education Inc., Sophia, L.P. and Sophia Purchaser Company, L.P. |
* | Certain exhibits and schedules have been omitted and SunGard Data agrees to furnish supplementally to the Commission a copy of any omitted exhibits upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SunGard Capital Corp. SunGard Capital Corp. II | ||||||
August 10, 2011 | By: | /s/ Victoria E. Silbey | ||||
Name: Victoria E. Silbey | ||||||
Title: Vice President |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SunGard Data Systems Inc. | ||||||
August 10, 2011 | By: | /s/ Victoria E. Silbey | ||||
Name: Victoria E. Silbey | ||||||
Title: Senior Vice President Legal and Chief Legal Officer |
Exhibit Index
Exhibit |
Exhibit Title | |
2.1* | Agreement and Plan of Merger, dated as of August 4, 2011, by and among SunGard Capital Corp., SunGard Data Systems Inc., SunGard Investment Ventures LLC, SunGard Higher Education Inc., Sophia Holding I, L.P., Sophia Holding II, L.P., Sophia, L.P., Sophia Purchaser Company, L.P., Sophia HE Merger Sub, Inc. and Datatel Parent Corp. | |
2.2* | Asset Purchase Agreement, dated as of August 4, 2011, by and among SunGard Data Systems Inc., SunGard Higher Education Inc., Sophia, L.P. and Sophia Purchaser Company, L.P. |
* | Certain exhibits and schedules have been omitted and SunGard Data agrees to furnish supplementally to the Commission a copy of any omitted exhibits upon request. |
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
SunGard Capital Corp.,
SunGard Data Systems Inc.,
SunGard Investment Ventures LLC,
SunGard Higher Education Inc.,
Sophia Holding I, L.P.,
Sophia Holding II, L.P.,
Sophia, L.P.,
Sophia Purchaser Company, L.P.,
Sophia HE Merger Sub, Inc.
and
Datatel Parent Corp.
Dated as of August 4, 2011
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINED TERMS |
2 | |||||
Section 1.1 |
Defined Terms | 2 | ||||
Section 1.2 |
Terms Defined Elsewhere in this Agreement | 14 | ||||
ARTICLE II THE MERGER |
17 | |||||
Section 2.1 |
The Merger | 17 | ||||
Section 2.2 |
Merger Consideration | 17 | ||||
Section 2.3 |
Closing | 17 | ||||
Section 2.4 |
Effective Time | 18 | ||||
Section 2.5 |
Effects of the Merger | 18 | ||||
Section 2.6 |
Certificate of Incorporation and Bylaws | 18 | ||||
Section 2.7 |
Directors | 18 | ||||
Section 2.8 |
Officers | 18 | ||||
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES |
18 | |||||
Section 3.1 |
Effect on Capital Stock | 18 | ||||
Section 3.2 |
Determination and Payment of Estimated Merger Consideration | 19 | ||||
Section 3.3 |
Withholding Taxes | 20 | ||||
Section 3.4 |
Post-Closing Purchase Price Adjustment | 20 | ||||
Section 3.5 |
Accounting Advisors | 22 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SUNGARD ENTITIES |
23 | |||||
Section 4.1 |
Organization and Good Standing; Authority | 23 | ||||
Section 4.2 |
Ownership | 23 | ||||
Section 4.3 |
Conflicts; Consents of Third Parties | 23 | ||||
Section 4.4 |
Litigation | 24 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SUNGARD ENTITIES |
24 | |||||
Section 5.1 |
Organization and Good Standing | 24 | ||||
Section 5.2 |
Authorization of Agreement | 25 | ||||
Section 5.3 |
Conflicts; Consents of Third Parties | 25 | ||||
Section 5.4 |
Capitalization | 26 | ||||
Section 5.5 |
Subsidiaries | 26 | ||||
Section 5.6 |
Financial Statements | 28 | ||||
Section 5.7 |
No Undisclosed Liabilities | 28 | ||||
Section 5.8 |
Absence of Certain Developments | 28 | ||||
Section 5.9 |
Taxes | 29 | ||||
Section 5.10 |
Real Property | 31 | ||||
Section 5.11 |
Intellectual Property | 31 | ||||
Section 5.12 |
Material Contracts | 33 | ||||
Section 5.13 |
Employee Benefit Plans | 35 |
i
Section 5.14 |
Labor | 38 | ||||
Section 5.15 |
Litigation | 38 | ||||
Section 5.16 |
Compliance with Laws; Permits | 38 | ||||
Section 5.17 |
Environmental Matters | 39 | ||||
Section 5.18 |
Insurance | 40 | ||||
Section 5.19 |
Transactions with Related Persons; Affiliates | 40 | ||||
Section 5.20 |
Sufficiency of Assets | 40 | ||||
Section 5.21 |
Financial Advisors | 40 | ||||
Section 5.22 |
No Other Representations or Warranties; Schedules | 40 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE DATATEL ENTITIES |
41 | |||||
Section 6.1 |
Organization and Good Standing | 41 | ||||
Section 6.2 |
Conflicts; Consents of Third Parties | 42 | ||||
Section 6.3 |
Brokers or Finders | 42 | ||||
Section 6.4 |
Financing | 42 | ||||
Section 6.5 |
Solvency | 44 | ||||
Section 6.6 |
Investment Representation | 44 | ||||
Section 6.7 |
No Prior Activities | 44 | ||||
Section 6.8 |
No Other Representations or Warranties; Schedules | 45 | ||||
ARTICLE VII COVENANTS |
45 | |||||
Section 7.1 |
Conduct of the Business Prior to the Closing | 45 | ||||
Section 7.2 |
Efforts | 49 | ||||
Section 7.3 |
No Solicitation | 50 | ||||
Section 7.4 |
Tax Matters | 50 | ||||
Section 7.5 |
Employee Matters | 59 | ||||
Section 7.6 |
Competition Law Approvals | 62 | ||||
Section 7.7 |
Termination of Affiliate Arrangements; Intercompany Balances | 64 | ||||
Section 7.8 |
Access | 65 | ||||
Section 7.9 |
Director and Officer Indemnification | 65 | ||||
Section 7.10 |
Public Announcements | 66 | ||||
Section 7.11 |
Resignations | 66 | ||||
Section 7.12 |
Control of Other Partys Business | 67 | ||||
Section 7.13 |
Non-Solicitation and Hiring of Employees | 67 | ||||
Section 7.14 |
Covenant Not To Compete | 68 | ||||
Section 7.15 |
Financing | 69 | ||||
Section 7.16 |
Stockholders Consent | 73 | ||||
Section 7.17 |
Use of Name | 74 | ||||
Section 7.18 |
Restructuring | 74 | ||||
Section 7.19 |
Post-Closing Access to Records and Personnel | 75 | ||||
Section 7.20 |
Mail Handling | 77 | ||||
Section 7.21 |
Confidentiality | 78 | ||||
Section 7.22 |
Insurance Matters | 78 | ||||
Section 7.23 |
Services in India | 79 | ||||
Section 7.24 |
No Activities | 79 | ||||
Section 7.25 |
Certain Ancillary Arrangements | 79 | ||||
Section 7.26 |
Release of Liens; Substitution | 80 |
ii
Section 7.27 |
Transition Services | 80 | ||||
Section 7.28 |
Receivables Sale Agreement | 81 | ||||
ARTICLE VIII CONDITIONS OF THE MERGER |
81 | |||||
Section 8.1 |
Conditions to the Obligations of Each Party | 81 | ||||
Section 8.2 |
Additional Conditions to the Obligations of the SunGard Entities and the Company | 81 | ||||
Section 8.3 |
Additional Conditions to the Obligations of the Datatel Entities | 82 | ||||
Section 8.4 |
Satisfaction of Conditions Upon the Occurrence of the Asset Closing | 83 | ||||
ARTICLE IX TERMINATION, ENFORCEMENT AND EXPENSES |
83 | |||||
Section 9.1 |
Termination or Abandonment | 83 | ||||
Section 9.2 |
Parent Termination Fee | 85 | ||||
Section 9.3 |
Effect of Termination | 86 | ||||
Section 9.4 |
Enforcement | 87 | ||||
Section 9.5 |
Expenses | 90 | ||||
ARTICLE X INDEMNIFICATION |
91 | |||||
Section 10.1 |
Indemnification | 91 | ||||
Section 10.2 |
Certain Limitations | 92 | ||||
Section 10.3 |
Procedures for Third Party Claims | 93 | ||||
Section 10.4 |
Remedies Exclusive; Mitigation | 95 | ||||
ARTICLE XI GENERAL PROVISIONS |
96 | |||||
Section 11.1 |
Notices | 96 | ||||
Section 11.2 |
Counterparts | 98 | ||||
Section 11.3 |
Entire Agreement; No Third-Party Beneficiaries | 98 | ||||
Section 11.4 |
Assignment | 98 | ||||
Section 11.5 |
Governing Law | 98 | ||||
Section 11.6 |
Waiver of Jury Trial | 99 | ||||
Section 11.7 |
Severability | 99 | ||||
Section 11.8 |
Headings | 99 | ||||
Section 11.9 |
Amendment | 99 | ||||
Section 11.10 |
Extension; Waiver | 100 | ||||
Section 11.11 |
Non-Recourse | 100 | ||||
Section 11.12 |
Interpretation | 100 |
iii
EXHIBITS AND SCHEDULES | ||
Exhibit A | Closing Net Working Capital | |
Exhibit B | Form of Intellectual Property Agreement | |
Exhibit C | Restructuring | |
Exhibit D | Form of Transition Services Agreement | |
Exhibit E | Form of Press Release | |
SunGard Disclosure Schedules | ||
Company Disclosure Schedules | ||
Datatel Disclosure Schedules |
iv
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of August 4, 2011 (this Agreement), is entered into by and among SunGard Capital Corp., a Delaware corporation (SunGard Capital), SunGard Data Systems Inc., a Delaware corporation and wholly owned subsidiary of SunGard Capital (SunGard Data), SunGard Investment Ventures LLC, a Delaware limited liability company and wholly owned subsidiary of SunGard Data (the Seller and together with SunGard Capital and SunGard Data, the SunGard Entities), SunGard Higher Education Inc., a Delaware corporation and wholly owned, indirect subsidiary of SunGard Data (the Company), Sophia Holding I, L.P., a Delaware limited partnership (Sophia Holding I), Sophia Holding II, L.P., a Delaware limited partnership and wholly owned subsidiary of Sophia Holding I (Sophia Holding II), Sophia, L.P., a Delaware limited partnership and wholly owned subsidiary of Sophia Holding II (Parent), Sophia Purchaser Company, L.P., a Delaware limited partnership and wholly owned subsidiary of Parent (Purchaser Company), Sophia HE Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (Merger Sub), and Datatel Parent Corp., a Delaware corporation (Datatel, and together with Parent, Sophia Holding I, Sophia Holding II, Purchaser Company and Merger Sub, the Datatel Entities, and the Company, the Datatel Entities and the SunGard Entities, collectively, the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, concurrent with the execution of this Agreement, as an inducement to the Datatel Entities willingness to enter into this Agreement and incur the obligations set forth herein, SunGard Data, the Company, Parent and Purchaser Company have entered into an Asset Purchase Agreement, dated as of the date hereof (as it may be amended from time to time in accordance with its terms, the Asset Purchase Agreement) pursuant to which, upon the terms and subject to the conditions set forth therein, the Company and its respective Subsidiaries will sell prior to the Closing certain assets to Purchaser Company (the Purchased Assets) and distribute the proceeds to Seller, and Purchaser Company will assume prior to the Closing certain liabilities of the Company and its respective Subsidiaries; and
WHEREAS, the Board of Directors of Merger Sub has (i) determined that the Merger and this Agreement and the Asset Purchase Agreement are advisable, fair to, and in the best interests of Merger Sub and its sole stockholder, Parent, and has approved this Agreement and the Asset Purchase Agreement and the transactions contemplated hereby and thereby, including the Merger, and (ii) recommended the adoption by Parent, as the sole stockholder of Merger Sub, of this Agreement and the approval of the transactions contemplated hereby; and
WHEREAS, the Board of Directors of the Company has (i) determined that the Merger and this Agreement and the Asset Purchase Agreement are advisable, fair to, and in the best
1
interests of the Company and its sole stockholder, Seller, and has approved this Agreement and the Asset Purchase Agreement and the transactions contemplated hereby and thereby, including the Merger, and (ii) recommended the adoption by Seller, as the sole stockholder of the Company, of this Agreement and the approval of the transactions contemplated hereby; and
WHEREAS, the respective Boards of Directors of the SunGard Entities (other than Merger Sub) have each approved this Agreement and the Asset Purchase Agreement and the transactions contemplated hereby and thereby, including the Merger; and
WHEREAS, the respective Boards of Directors of the Datatel Entities have each approved this Agreement and the Asset Purchase Agreement and the transactions contemplated hereby and thereby, including the Merger; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Parties hereby agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Defined Terms. When used in this Agreement, the following terms shall have the respective meanings specified therefor below (such meanings to be equally applicable to both the singular and plural forms of the terms defined).
Acquisition Alternative shall mean, other than the transactions contemplated by this Agreement and the Ancillary Agreements, any merger, consolidation, stock exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Business or any of the Company Entities, or with respect to any purchase of at least 10% of the assets of the Business, taken as a whole, or with respect to the purchase of any capital stock or other equity interests of any of the Company Entities.
Action shall mean any action, claim, arbitration, proceeding, litigation or suit (whether civil, criminal or administrative) commenced, brought or heard by or before any Governmental Body.
Affiliate has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act; provided, however, that (a) none of the SunGard Entities or the Company shall be considered an Affiliate of any of the SunGard Capital Stockholders or any portfolio company in which any of such stockholders or any of their respective investment fund Affiliates have made a debt or equity investment (or vice versa) and (b) none of the Datatel Entities shall be considered an Affiliate of any of the stockholders of Datatel or partners of Sophia Holding I or any portfolio company in which any of such stockholders or limited partners or any of their respective investment fund Affiliates have made a debt or equity investment (or vice versa).
Ancillary Agreements shall mean, collectively, (a) the Transition Services Agreement, (b) the Asset Purchase Agreement, and (c) the Intellectual Property Agreement.
2
Applicable Base Merger Consideration shall mean (a) if the Asset Closing has occurred, $1,775,000,000 minus the Base Purchase Price (as defined in the Asset Purchase Agreement) or (b) if the Asset Purchase Agreement terminates pursuant to Section 9.1(b) thereof, $1,775,000,000.
Applicable Closing shall mean the Asset Closing or, if the Asset Purchase Agreement terminates pursuant to Section 9.1(b) thereof, the Closing.
Asset Closing shall mean the Closing as defined in the Asset Purchase Agreement.
Asset Purchase shall mean the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities pursuant to the Asset Purchase Agreement.
Assumed Liabilities shall have the meaning set forth in the Asset Purchase Agreement.
Business shall mean the business of providing software and technology services to colleges and universities, as conducted on the Closing Date by the business segment of SunGard Capital and its Subsidiaries identified as the Higher Education business in SunGard Datas Form 10-K and financial statements for the year ended December 31, 2010, with the exception that the Business does not include the provision of software and technology services to school districts or private schools (K-12 or the equivalent).
Business Day shall mean any day, other than a Saturday, Sunday or one on which banks are authorized by Law to close in New York, New York.
Business Employee shall mean any individual who is engaged primarily in the conduct of the Business and is an employee with respect to the Business immediately prior to the Closing (including SMS Employees (as defined in the Asset Purchase Agreement) who are employees in respect of the Business immediately prior to the Asset Closing and employees who are not actively at work by reason of illness, vacation, personal days, leave of absence or disability); provided, however that any Business Employee who is receiving or entitled to receive long-term disability benefits under any SunGard Benefit Plan on or prior to the Closing shall become or remain the sole responsibility of the SunGard Entities and shall not be considered a Business Employee for any purpose hereunder until such time as such individual returns to employment or is entitled to return to employment with the Company Entities so long as such return to employment occurs not later than the first anniversary of the Closing (or such later date as required by applicable Law).
Business Material Adverse Effect shall mean (i) a material and adverse effect on the business, assets, liabilities, results of operations or financial condition of (x) the Company and its Subsidiaries (taken as a whole) or (y) the Business, or (ii) an effect that prevents or materially delays the SunGard Entities or the Company from performing their material obligations under this Agreement and the Ancillary Agreements, in each case, other than an effect if and to the extent resulting from an Excluded Matter. Excluded Matter means any one or more of the following, either alone or in combination with each other: (A) the effect of any change that generally affects the industry in which the Business, the Company and its Subsidiaries operate; (B) general legal, regulatory or political conditions (or changes therein), or changes generally affecting the
3
economy or the credit, debt, financial or capital markets, in each case, in the United States or other jurisdictions, including changes in interest or exchange rates; (C) the effect of any change arising in connection with natural disasters or acts of nature, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (D) the negotiation, execution, announcement or pendency of this Agreement and the Asset Purchase Agreement or the consummation of the transactions contemplated hereby and thereby, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, financing sources, employees, revenue and profitability; (E) any increase in the cost or availability of financing necessary for the Datatel Entities to consummate the transactions contemplated hereby and by the Asset Purchase Agreement; (F) the effect of any changes in applicable Laws or accounting rules; (G) the failure by the Company or the Business to meet any estimates, projections or budgets (provided, however, that, except as otherwise provided in clauses (A), (B), (C), (D), (E), (F) and (H) of this definition, the underlying causes of such failure may be taken into account in determining whether a Business Material Adverse Effect has occurred); or (H) any circumstance, change or effect that results from any action taken that is required by this Agreement (other than Section 7.1(a)) or the failure to take any action expressly prohibited by this Agreement; provided, however, that any effect, event, change, occurrence or circumstance referred to in any of clauses (A), (B), (C) and (F) shall be taken into account for purposes of such clause only to the extent such effect, event, change, occurrence or circumstance does not adversely affect the Business or the Company and its Subsidiaries, taken as a whole, in a materially disproportionate manner relative to other participants in the industry in which the Business, the Company and its Subsidiaries operate. In connection with determining whether Section 8.3(a) has been satisfied, the exception set forth in clause (D) shall not apply with respect to Section 4.3, Section 5.3 or Section 5.13(f).
Closing Net Working Capital shall mean Company Specified Current Assets minus Company Specified Current Liabilities, in each case, as of the close of business on the Business Day immediately prior to the date of the Applicable Closing and as determined in accordance with Exhibit A. For the avoidance of doubt, Closing Net Working Capital will be determined after giving effect to the Asset Purchase unless the Asset Purchase Agreement has been terminated in accordance with Section 9.1(b) thereof, and shall not include Taxes.
Code shall mean the U.S. Internal Revenue Code of 1986, as amended.
Company Common Stock shall mean the common stock, par value $0.10, of the Company.
Company Specified Current Assets shall mean the consolidated assets of the Company identified on Exhibit A as Company Specified Current Assets.
Company Specified Current Liabilities shall mean the consolidated liabilities of the Company identified on Exhibit A as Company Specified Current Liabilities.
Company Subsidiaries shall mean the direct and indirect Subsidiaries of the Company.
4
Company Transaction Fees and Expenses shall mean, except as otherwise provided in this Agreement or the Asset Purchase Agreement, the aggregate amount of all fees and expenses paid or incurred and payable by the Company and its Subsidiaries in connection with this Agreement, the Ancillary Agreements, the Transactions and the exploration of any sale, business combination, spin-off, split-off or other similar transaction involving the Business and/or any of the Company Entities by the SunGard Entities, the Company Entities, the SunGard Capital Stockholders or any of their respective Affiliates (each, an Alternative Transaction Action), in each case, that have not been paid prior to the close of business on the Business Day immediately prior to the date of the Applicable Closing, including (i) the fees and expenses paid or incurred or payable by the Company and its Subsidiaries to any other Person retained by the Company, the SunGard Entities, the SunGard Capital Stockholders or any of their respective Affiliates for brokerage, financial advisory or investment banking services or services as a finder rendered to the Company, the SunGard Entities or any of their respective Affiliates in connection with this Agreement, the Ancillary Agreements, the Transactions and any Alternative Transaction Action, (ii) the fees and expenses paid or incurred or payable by the Company and its Subsidiaries to Shearman & Sterling LLP, Axinn, Veltrop and Harkrider LLP, Ropes & Gray LLP and any other attorneys engaged by the Company, the SunGard Entities, the SunGard Capital Stockholders or any of their respective Affiliates in connection with this Agreement, the Ancillary Agreements, the Transactions and any Alternative Transaction Action, (iii) the fees and expenses paid or incurred or payable by the Company and its Subsidiaries to PricewaterhouseCoopers LLP and any other outside accountants or other advisors incurred in connection with this Agreement, the Ancillary Agreements, the Transactions and any Alternative Transaction Action, (iv) any fees and expenses paid or incurred or payable by the Company or any of its Subsidiaries, directly or indirectly, to any SunGard Entity, SunGard Capital Stockholder or any Affiliate of any SunGard Capital Stockholder or SunGard Entity pursuant to any management agreement, transaction advisory agreement or other similar agreement or arrangement, (v) any change of control payments, special bonuses, stay or retention bonus payments and similar compensation paid or incurred or payable by the Company or any of its Subsidiaries to any Business Employee in connection with the Transactions and (vi) the fees and expenses, but excluding any Taxes, of the Company and its Subsidiaries in connection with the Restructuring. Company Transaction Fees and Expenses shall not include any fees or expenses (x) paid before the close of business on the Business Day immediately prior to the date of the Applicable Closing, (y) included in Company Specified Current Liabilities as of the close of business on the Business Day immediately prior to the date of the Applicable Closing, or (z) expressly reimbursable to the Company or any of the SunGard Entities by any of the Datatel Entities under this Agreement or the Asset Purchase Agreement.
Competition Laws shall mean the HSR Act (and any similar Law enforced by any Governmental Antitrust Entity regarding preacquisition notifications for the purpose of competition reviews), the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other Laws of any Governmental Body that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition or restraint of trade.
5
Confidentiality Agreement shall mean the Confidentiality Agreement, dated as of March 8, 2011, by and between SunGard Data and Datatel, Inc., as amended as of March 8, 2011 and June 6, 2011 and from time to time thereafter.
Contract shall mean any written or oral agreement, arrangement, authorization, sale order, purchase order, open bid, commitment, contract, indenture, mortgage, note, instrument, evidence of indebtedness, real estate or other lease, loan, license, obligation, restriction, memorandum of understanding, letter of intent, covenant, or undertaking of any kind or character, or other document to which any Person is a party or that is binding on any Person or its capital stock, assets or business, in each case, whether express or implied, but in each case, only to the extent legally binding, and including all amendments, modifications and supplements thereto and waivers and consents thereunder.
Datatel Benefit Plan shall mean each employee benefit plan as defined in Section 3(3) of ERISA, whether or not subject to ERISA, sponsored or maintained by Datatel or any of its Subsidiaries.
Datatel Material Adverse Effect shall mean an effect that prevents or materially delays any of the Datatel Entities from performing their material obligations under this Agreement and the Ancillary Agreements.
DGCL shall mean the General Corporation Law of the State of Delaware, as amended.
DOJ shall mean the U.S. Department of Justice.
Environmental Law shall mean any applicable Law relating to the protection of the environment, protection of human health as it relates to any harmful or deleterious substances or protection of natural resources, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.) the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), and the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), as each has been amended and the regulations promulgated pursuant thereto.
ERISA Affiliate shall mean, with respect to any Person, any other Person or any trade or business, whether or not incorporated, that, together with such first Person would be deemed a single employer within the meaning of Section 4001(b) of ERISA.
Escrow Account shall mean the escrow account established pursuant to the Escrow Agreement.
Escrow Agent shall mean J.P. Morgan or such other escrow agent of national standing to which SunGard Data and Parent agree.
Escrow Agreement shall have the meaning set forth in the Asset Purchase Agreement.
6
Estimated Company Transaction Fees and Expenses shall mean Sellers good faith estimate of the Company Transaction Fees and Expenses.
Estimated Net Working Capital shall mean SunGard Datas good faith estimate of the Closing Net Working Capital as determined in accordance with Exhibit A.
Estimated Purchase Price shall have the meaning set forth in the Asset Purchase Agreement.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excess Costs shall have the meaning set forth in Exhibit C.
Fee Letter means the Project Sophia Credit Facilities Fee Letter, dated the date hereof, entered into between the Debt Financing Sources and Parent, a redacted copy of which has been provided to SunGard Capital.
Financing Sources shall mean the Persons that have committed to provide or otherwise entered into agreements in connection with the Financing Commitments or alternative financings in connection with the transactions contemplated hereby and by the Asset Purchase Agreement, including the parties named in Section 6.4 and any joinder agreements, indentures or credit agreements entered into pursuant thereto or relating thereto together with their Affiliates, officers, directors, employees and representatives involved in the Financing and their successors and assigns.
GAAP shall mean generally accepted accounting principles of the United States, as in effect from time to time.
Governmental Antitrust Entity shall mean any Governmental Body with jurisdiction over enforcement of any applicable Competition Law.
Governmental Body shall mean any government or governmental or regulatory body thereof, or political subdivision thereof, whether foreign, European Union or other supra-national, national, federal, regional, state or local or any agency, instrumentality or authority thereof, or any court or arbitrator.
HSR Act shall mean the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder.
Indebtedness shall mean, with respect to any Person, (a) indebtedness of such Person for money borrowed, (b) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, (c) all obligations of the type referred to in clauses (a) or (b) of other Persons for the payment of which such first Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations, (d) any capitalized lease obligations, (e) any amounts payable as a result of terminating any interest rate swap, currency swap, forward currency or interest rate contracts or other interest rate or currency hedging arrangements and (f)
7
all outstanding reimbursement obligations in respect of drawn letters of credit issued for the account of, or on behalf of, such Person.
Independent Accountant shall mean KPMG LLP or such other firm of independent accountants of national standing to which Parent and SunGard Data agree.
Intellectual Property shall mean all worldwide intellectual property or industrial property rights, including those associated with all: (i) patents and patent applications, including continuations, divisionals, continuations-in-part, reissues or reexaminations and patents issuing thereon (collectively, Patents), (ii) trademarks, service marks, trade dress, logos, corporate names, trade names and Internet domain names, together with the goodwill associated with any of the foregoing, and all applications and registrations therefor (collectively, Marks), (iii) copyrights and copyrightable works, including copyrights in Software, and registrations and applications therefor (collectively, Copyrights), and (iv) confidential and proprietary information, trade secrets, discoveries, concepts, research and development, algorithms, know-how, formulae, inventions (whether or not patentable), processes, techniques, technical data, designs, drawings, specifications, and customer lists (collectively, Trade Secrets).
Intellectual Property Agreement shall mean the Intellectual Property Agreement between SunGard Data and the Company, in the form attached hereto as Exhibit B, with such changes as SunGard Data and Parent may agree.
IRS shall mean the U.S. Internal Revenue Service.
IRS Ruling shall mean a letter ruling from the IRS to be obtained in accordance with Section 7.4(h), in form and substance reasonably satisfactory to the SunGard Entities and Parent and upon which the SunGard Entities and Parent can rely, to the effect that (i) the Company and, if applicable, any lower-tier Company Entity will recognize gain on the sale of the SMS Business to Purchaser Company, which gain will be included in the consolidated taxable income of SunGard Capital; (ii) for purposes of calculating SunGard Datas gain or loss in respect of the shares of Company Common Stock as a result of the Merger, prior to the Merger SunGard Datas tax basis in the stock of the Company will be increased to reflect the gain recognized by the Company and, if applicable, any other lower-tier Company Entity on the sale of the SMS Business to Purchaser Company, and will be reduced to reflect the distribution of the net cash proceeds from the sale of the SMS Business to Seller pursuant to Treas. Reg. § 1.1502-32(b)(3)(i), (iii) and (v); (iii) the Merger will not be treated as a qualified stock purchase within the meaning of Section 338(d)(3) of the Code, so the consistency rules of Section 338(e) of the Code and Treas. Reg. § 1.338-8 will not apply to cause Parent to take a carryover basis in the SMS Business assets; and (iv) if applicable, the treatment of a conversion of a lower-tier corporate Company Entity to a limited liability company as a liquidation under Section 332 of the Code. For the avoidance of doubt, the IRS Ruling will not be reasonably satisfactory if the IRS Ruling includes any caveats or limitations on either partys ability to rely on the above rulings.
8
Knowledge shall mean the actual knowledge of the persons listed on Section 1.1 of the Company Disclosure Schedules.
Law shall mean any federal, state, county, local, provincial, municipal or other U.S. or foreign constitution, code, law (including common law), ordinance, regulation, reporting or licensing requirement, rule, plan, or statute applicable to a Person or its assets, liabilities, or business, including those promulgated, interpreted or enforced by any Governmental Body.
Liability means any debt, liability or obligation (whether direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due).
Lien shall mean any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option to purchase, right of first refusal, easement, servitude or transfer restriction. It is understood that Lien does not include any license, covenant not to sue or similar right granted by the Company Entities with respect to any Intellectual Property.
Losses means any and all losses, damages, liabilities, costs (including reasonable out-of-pocket costs of investigation) and expenses, including interest, penalties, settlement costs, judgments, awards, fines, costs of mitigation, court costs and fees (including reasonable attorneys fees and expenses).
Marketing Period shall mean the first period of 25 consecutive Business Days throughout which: (A) Parent shall have the Required Financial Information that the SunGard Entities and the Company are required to provide to Parent pursuant to Section 7.15(d)(ii), and (B) the conditions set forth in Section 8.1 shall be satisfied (other than Section 8.1(a)) and nothing has occurred and no condition exists that would cause any of the conditions set forth in Section 8.1 or Section 8.3 to fail to be satisfied assuming the Closing were to be scheduled for any time during such 25 Business Day period; provided that (v) if Parent shall have received the Required Financial Information at least five (5) Business Days prior to the satisfaction of the conditions described in clause (B), the references to the 25 Business Day period referred to in this definition shall instead refer to a 20 Business Day period, (w) November 25, 2011 shall not be considered a Business Day for purposes of this definition; (x) if the Marketing Period has not been completed on or prior to December 17, 2011, the Marketing Period shall commence no earlier than January 3, 2012; (y) if the Marketing Period has not been completed on or prior to February 10, 2012, the Marketing Period shall commence no earlier than the earlier of (i) the date audited consolidated financial statements of Datatel and its Subsidiaries for the fiscal year ended December 31, 2011 have been completed (including the delivery of the report of Datatels independent auditor) or (ii) March 31, 2012; and (z) the Marketing Period shall not be deemed to have commenced and the Required Financial Information shall be deemed not to have been provided if, prior to the completion of such 25 Business Day (or 20 Business Day, if applicable) period, (i) PricewaterhouseCoopers LLP shall have withdrawn its audit opinion with respect to any audited financial statements set forth in the Required Financial Information; (ii) the financial statements included in the Required Financial Information that is available to Parent on the first day of any such 25 Business Day (or 20 Business Day, if applicable) period would be required to be updated under Rule 3-12 of Regulation S-X in order to be sufficiently current on any day during such 25 Business Day (or 20 Business Day, if applicable) period to permit a registration statement using such financial statements to be declared effective by the SEC on the last day of a
9
25 Business Day (or 20 Business Day, if applicable) period (it being understood that under such circumstances the new Marketing Period will be 25 Business Days), in which case the Marketing Period shall not be deemed to commence until the receipt by Parent of updated Required Financial Information that would be required under Rule 3-12 of Regulation S-X to permit a registration statement using such financial statements to be declared effective by the SEC on the last day of such new 25 Business Day period or (iii) SunGard Capital, SunGard Data, the Company or any of their respective Affiliates shall have publicly announced any intention to restate any financial information included in the Required Financial Information or that any such restatement is under consideration, or SunGard Data or the Company shall have determined that the Company is required to restate any financial information included in the Required Financial Information, in which case the Marketing Period shall be deemed not to commence at the earliest unless and until such restatement has been completed and the Required Financial Information has subsequently been delivered to Parent or SunGard Data and the Company have determined that no restatement shall be required and shall have notified Parent in writing of such determination; provided, however, that in no event will the Marketing Period commence before the earlier of (x) the day after the satisfaction of the condition set forth in Section 8.1(e) of the Asset Purchase Agreement or (y) the 25th Business Day (or 20th Business Day, if applicable) prior to the 180th day from the date of this Agreement; provided, further, that the Marketing Period shall end on any earlier date on which the Debt Financing is consummated (it being understood that, regardless of whether the Note Escrow Closing occurs, the Marketing Period shall not end earlier than its specified period unless and until the proceeds of all of the Debt Financing have been received).
Materials of Environmental Concern shall mean any material, substance or waste characterized or regulated under Environmental Laws as hazardous, toxic, radioactive or a pollutant, contaminant, or terms of similar import, including gasoline or petroleum (including crude oil or any fraction thereof) or petroleum product, polychlorinated biphenyl, asbestos or asbestos-containing material, urea-formaldehyde insulation, radioactive material, or toxic mold.
Note Escrow Closing means the closing of the sale and issuance of the Notes issued pursuant to an Escrow Demand Notice (as defined in the Fee Letter).
Notes shall mean the Notes as defined in the Debt Financing Commitment.
Order shall mean any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Body of competent jurisdiction.
Ordinary Course of Business means, with respect to any Person, the ordinary course of business of such Person consistent with past practice.
Permit shall mean any approval, authorization, consent, license, permit, easement, variance, exception, order or certificate of a Governmental Body.
Permitted Liens shall mean (i) all defects, exceptions, restrictions, easements, rights of way, covenants, conditions, encumbrances and other similar matters disclosed in policies of title insurance delivered or made available to Parent prior to the date hereof, (ii) statutory liens for
10
current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings, provided an appropriate reserve is established therefor to the extent required by GAAP, (iii) mechanics, carriers, workers, repairers, landlords and similar Liens, (iv) zoning, building codes, entitlement and other land use and environmental regulations by any Governmental Body, none of which materially and adversely impact the current use and operation of the affected property, (v) title of a lessor under a capital or operating lease, (vi) with respect to the Owned Real Property, (A) non-monetary real property Liens of public record and (B) matters that would be identified by a survey of the Owned Real Property and (vii) such other Liens that do not materially and adversely impact the current use and operation of the affected property.
Person shall mean any natural person, firm, business trust, trust, association, corporation, partnership, limited liability company, joint venture, company, unincorporated entity or Governmental Body.
Pre-Closing Tax Period shall mean any Taxable Period ending on or before the Closing Date.
Post-Closing Tax Period shall mean any Taxable Period beginning after the Closing Date.
Purchase Price shall have the definition set forth in the Asset Purchase Agreement.
Representative shall mean, with respect to any Person, any officer, director, principal, partner, manager, member, attorney, accountant, agent, employee, consultant, financial advisor, Financing Source or other authorized representative of such Person.
Required Financial Information means (i) all information and data regarding the Company and its Subsidiaries necessary to satisfy paragraph 6 of Exhibit D to the Debt Financing Commitment (or any substantially identical requirements in any amendment, modification, supplement, restatement or replacement thereof permitted or required pursuant to Section 7.15(b) or (c)), (ii) financial statements and other financial data regarding the Company and its Subsidiaries, including research and development expense and the related managements discussion and analysis of financial condition and results of operations covering the financial periods of such financial statements (excluding information required by Regulation S-X Rule 3-10), in all cases, of the type and form customarily included in offering memoranda used in private placements of debt securities under Rule 144A of the Securities Act (including as necessary to permit Parent and Merger Sub to prepare the offering memorandum required by paragraph 7 of Exhibit D to the Debt Financing Commitment (or any substantially identical requirements in any amendment, modification, supplement, restatement or replacement thereof permitted or required pursuant to Section 7.15(b) or (c)) (144A Offering Materials), in each case assuming that such offering(s) of debt securities were consummated at the same time during the Companys fiscal year as such offering(s) of debt securities will be made, (iii) (x) statements of operations of the Company and its Subsidiaries for any applicable interim fiscal period that would be necessary to be included in any pro forma financial statements of Parent giving effect to the Transactions and related financing for the last twelve month period ending on the date of
11
the most recently completed fiscal period of Parent and (y) for purposes of including such information in a description of selected financial data of the Company, balance sheet data as of the end of the third most recently completed fiscal period and (iv) drafts of customary comfort letters by the independent auditors of the Company, which such auditors are prepared to issue upon completion of customary procedures of such accountants. Notwithstanding the foregoing but without limiting the SunGard Entities obligations under Section 7.15(d), other than Section 7.15(d)(ii)(B), Required Financial Information shall not include (1) any financial information regarding the Company and its Subsidiaries for any period prior to January 1, 2007 or (2) any compensation, discussion and analysis disclosure, provided that on and after the Note Escrow Closing (if it occurs) the Required Financial Information will be deemed to not include any financial statements and financial data specified in clause (ii) or (iii) above that is not required by Parent to satisfy the conditions set forth in paragraphs 6 and 7 of Exhibit D to the Debt Financing Commitment (or any substantially identical requirements in any amendment, modification, supplement, restatement or replacement thereof permitted or required pursuant to Section 7.15(b) or (c)).
Restructuring shall mean the transactions described in Exhibit C.
SEC shall mean the U.S. Securities and Exchange Commission.
Securities Act shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
SMS Business shall have the meaning set forth in the Asset Purchase Agreement.
Software shall mean 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.
Solvent means, when used with respect to any Person, that, on a consolidated basis as of any date of determination, (i) the amount of the present fair saleable value of the assets of such Person will, as of such date, exceed the amount of all liabilities of such Person, as of such date, as such amounts are determined in accordance with applicable Law governing determinations of the insolvency of debtors, (ii) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liabilities of such Person on its debts as such debts become absolute and matured, (iii) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business as then conducted and (iv) such Person will be able to pay its debts as they mature. For purposes of this definition, (A) debt means liability on a claim and (B) claim means any right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured. The amount of liabilities at any time shall be computed as the amount that,
12
in light of all the facts and circumstances existing at the time, represents the amount that can reasonably be expected to become an actual or matured liability.
Straddle Period shall mean any Taxable Period beginning on or before the Closing Date and ending after the Closing Date.
Subsidiary of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of the issued and outstanding capital stock or other equity interests having ordinary voting power to elect a majority of the board of directors of such corporation or other governing body of a non-corporate Person is at the time directly or indirectly owned or controlled by such Person and one or more of its other Subsidiaries or by one or more of such Persons other Subsidiaries. The term Subsidiary shall include all Subsidiaries of any Subsidiary.
SunGard Capital II shall mean SunGard Capital Corp. II, a Delaware corporation.
SunGard Capital Equity Plan shall mean the SunGard 2005 Management Incentive Plan, as amended from time to time.
SunGard Capital Option shall mean each option to acquire shares of capital stock of SunGard Capital and/or SunGard Capital II granted under the SunGard Capital Equity Plan.
SunGard Capital RSU shall mean each restricted stock unit of SunGard Capital and/or SunGard Capital II granted under SunGard Capital Equity Plan.
SunGard Capital Stockholder shall mean any Person, together with its Affiliates, holding 5% or more of the shares of capital stock of SunGard Capital outstanding on the date hereof or any of their respective successors or assigns (for the avoidance of doubt, SunGard Capital Stockholder includes any Affiliates of Bain Capital LLC, the Blackstone Group, L.P., Goldman Sachs & Co., Kohlberg Kravis Roberts & Co., L.P., Providence Equity Partners Inc., Silver Lake Management, L.L.C. and TPG Capital, L.P. that hold any shares of capital stock of SunGard Capital at any time).
Target Net Working Capital shall mean the amount indentified as such in Exhibit A.
Taxable Period shall mean any taxable year or any other period that is treated as a taxable year (or other period, in the case of a Tax imposed with respect to such other period) with respect to which any Tax may be imposed under any applicable Law.
Taxes shall mean any and all U.S. federal, state, and local and any and all non-U.S. taxes, assessments, duties, impositions, levies and other governmental charges and liabilities in the nature of taxes, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, gains, franchise, withholding, payroll, recapture, employment, excise, unemployment, insurance, social security, business license, occupation, business organization, stamp, environmental and property taxes, whether disputed or not, together with all interest, penalties and additions imposed by any taxing authority with respect to such amounts. For purposes of this Agreement, Taxes also includes any obligations under any agreements or arrangements with any Person with respect to
13
the liability for, or sharing of, Taxes (including pursuant to Section 1.1502-6 of the Treasury Regulations or comparable provisions of state, local or foreign Tax Law), other than agreements or arrangements entered into in the ordinary course as arms-length commercial agreements or arrangements that do not relate primarily to Taxes, such as loan or leasing agreements, and including any liability for Taxes as a transferee or successor.
Tax Return shall mean all returns, declarations, reports, estimates, information returns and statements required to be filed with a taxing authority in respect of any Taxes and any schedules or attachments thereto.
Transactions shall mean, collectively, the transactions contemplated by this Agreement and the Ancillary Agreements.
Transfer Tax shall mean any transfer, filing, recordation, ad valorem, value added, bulk sales, use, stamp duties, excise, license or similar tax, fee or charge imposed by any taxing authority upon the sale, transfer or assignment of real, personal, tangible or intangible property or any interest therein, or upon the recording of any such sale, transfer or assignment, together with any interest, additions or penalties in respect thereof.
Transition Services Agreement shall mean the Transition Services Agreement among the Company, Purchaser Company and SunGard Data in the form attached hereto as Exhibit D.
Treasury Regulations shall mean the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the U.S. Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
Section 1.2 Terms Defined Elsewhere in this Agreement.
144A Offering Materials | Definition of Required Financial Information | |
Affiliate Arrangements | Section 7.7(a) | |
Agreement | Preamble | |
Alternative Transaction Action | Definition of Company Transaction Fees and Expenses | |
Asset Purchase Agreement | Recital | |
Balance Sheet | Section 5.6 | |
Balance Sheet Date | Section 5.6 | |
Books and Records | Section 7.19(d) | |
Certificate | Section 3.2(b) | |
Certificate of Merger | Section 2.4 | |
Closing | Section 2.3 | |
Closing Date | Section 2.3 | |
Collective Bargaining Agreement | Section 7.5(a) | |
Company | Preamble | |
Company Benefit Plan | Section 5.13(a) | |
Company Charter Documents | Section 5.1 |
14
Company Disclosure Schedules | ARTICLE V | |
Company Entities | Section 5.1 | |
Company Registered Intellectual Property | Section 5.11(a) | |
Company Stock Basis | Section 7.4(e)(i) | |
Company Stockholder Approval | Section 7.16 | |
Company Subsidiary | Section 5.5(a) | |
Competing Business | Section 7.14(a) | |
Copyrights | Definition of Intellectual Property | |
Covered Person | Section 7.13(a) | |
D&O Indemnified Parties | Section 7.9(a) | |
D&O Released Parties | Section 7.9(b) | |
Datatel | Preamble | |
Datatel Disclosure Schedules | ARTICLE VI | |
Datatel Entities | Preamble | |
Datatel Indemnified Party | Section 10.1(a) | |
Datatel Losses | Section 10.1(a) | |
Debt Financing | Section 6.4 | |
Debt Financing Commitment | Section 6.4 | |
Debt Financing Sources | Section 6.4 | |
Disclosure Schedules | ARTICLE VI | |
Effective Time | Section 2.4 | |
Employee Census Information | Section 5.13(i) | |
ERISA | Section 5.13(a) | |
Estimated Merger Consideration | Section 3.2(a) | |
Excluded Matter | Definition of Business Material Adverse Effect | |
Existing Stock | Section 7.17(a) | |
Financial Statements | Section 5.6 | |
Financing | Section 6.4 | |
Financing Commitments | Section 6.4 | |
FTC | Section 7.6(a) | |
Fundamental Representations | Section 8.3(a) | |
Indemnified Party | Section 10.2(d) | |
Indemnifying Party | Section 10.3(a) | |
Intercompany Balances | Section 7.7(b) | |
Investors | Section 6.4 | |
IRS Submissions | Section 7.4(h) | |
Liability Limitation | Section 9.3(c) | |
Maintenance Contracts | Section 5.12(a)(iii) | |
Managed Services Contracts | Section 5.12(a)(iii) | |
Marks | Definition of Intellectual Property | |
Material Contracts | Section 5.12(a) | |
Material In-Bound License Agreements | Section 5.11(i) | |
Material Out-Bound License Agreements | Section 5.11(j) | |
Merger | Section 2.1 | |
Merger Consideration | Section 2.2 | |
Merger Consideration Excess | Section 3.4(d)(i) | |
Merger Consideration Shortfall | Section 3.4(d)(ii) |
15
Merger Sub | Preamble | |
Merger Sub Stockholder Approval | Section 7.16 | |
Minimum Amount | Section 10.2(b) | |
New Holding Company | Section 7.14(a) | |
Notification | Section 7.4(c) | |
Objection Notice | Section 3.4(a) | |
Objection Period | Section 3.4(a) | |
Ordinary Course Material Contract | Section 7.1(b)(xvi) | |
Outside Date | Section 9.1(b) | |
Owned Real Property | Section 5.10(b) | |
Parent | Preamble | |
Parent Termination Fee | Section 9.2(a) | |
Parties | Preamble | |
Party | Preamble | |
Patents | Definition of Intellectual Property | |
Pension Plan | Section 5.13(d) | |
Post-Closing Calculation Objection | Section 3.4(a) | |
Post-Closing Statement | Section 3.4(a) | |
Pre-Closing Tax Returns | Section 7.4(b)(ii) | |
Proceeding | Section 7.6(a) | |
Purchased Assets | Recital | |
Purchaser Company | Preamble | |
Real Property Lease | Section 5.10(a) | |
Real Property Leases | Section 5.10(a) | |
Receivables Sale Agreement | Section 7.28 | |
Reimbursable Insurance Claims | Section 7.22 | |
Related Parties | Section 9.3(b) | |
Related Party | Section 9.3(b) | |
Releasing Parties | Section 7.9(b) | |
Relevant Fiscal Quarter | Section 7.19(b) | |
Restricted Person | Section 7.14(a) | |
Seller | Preamble | |
Sophia Holding I | Preamble | |
Sophia Holding II | Preamble | |
Specified Open Source Licenses | Section 5.11(h) | |
Stockholder Approvals | Section 7.16 | |
Subsidiary Charter Documents | Section 5.5(d) | |
SunGard Benefit Plan | Section 5.13(a) | |
SunGard Capital | Preamble | |
SunGard Consolidated Tax Returns | Section 7.4(b)(i) | |
SunGard Damages | Section 9.3(b) | |
SunGard Data | Preamble | |
SunGard Disclosure Schedules | ARTICLE IV | |
SunGard Entities | Preamble | |
SunGard Indemnified Party | Section 10.1(b) | |
SunGard Losses | Section 10.1(b) | |
SunGard Marks | Section 7.17(a) | |
Surviving Corporation | Section 2.1 |
16
Surviving Pre-Closing Covenants | Section 10.1(a) | |
Tax Benefit Items | Section 7.4(d)(ii)(C) | |
Tax Claim | Section 7.4(c) | |
Termination Fee Equity Financing | Section 6.4 | |
Termination Fee Equity Financing Commitment | Section 6.4 | |
Threshold | Section 10.2(b) | |
Trade Secrets | Definition of Intellectual Property | |
Transaction Equity Financing | Section 6.4 | |
Transaction Equity Financing Commitment | Section 6.4 | |
Transaction Filing Positions | Section 7.4(b)(ii) | |
Transaction Financing | Section 6.4 | |
Transaction Financing Commitments | Section 6.4 |
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, Merger Sub shall be merged with and into the Company at the Effective Time (the Merger). Following the Effective Time, the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving corporation in the Merger (the Surviving Corporation) and shall succeed to and assume all the rights and obligations of Merger Sub in accordance with the DGCL.
Section 2.2 Merger Consideration. The Merger Consideration shall mean an amount equal to the Applicable Base Merger Consideration, minus (A) the Company Transaction Fees and Expenses, plus (B) the amount (if any) by which the Closing Net Working Capital is greater than the Target Net Working Capital, minus (C) the amount (if any) by which the Closing Net Working Capital is less than the Target Net Working Capital.
Section 2.3 Closing. Subject to the satisfaction of the conditions set forth in Article VIII (or the waiver thereof by the Party entitled to waive any such condition), the closing of the Merger (the Closing) will take place at 9:00 a.m. (Eastern Time), at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, (x) if the Asset Purchase Agreement has not terminated pursuant to Section 9.1(b) thereof, on the Business Day immediately following the Business Day on which the Asset Closing occurs or (y) if the Asset Purchase Agreement has terminated pursuant to Section 9.1(b) thereof, on the later of (a) the third Business Day after satisfaction or waiver of each condition to the Closing set forth in Article VIII (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions at the Closing) and (b) the earlier of (i) a date during the Marketing Period to be specified by Parent on no fewer than three Business Days notice to the Company (it being understood that such date may be conditioned upon the simultaneous completion of Parents debt financing for the Transactions) and (ii) the final day of the Marketing Period, or such other place and time or on such other date as Parent and SunGard Data may mutually determine (the date on which the Closing actually occurs is referred to as the Closing Date).
17
Section 2.4 Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, Parent and SunGard Data shall file (or cause to be filed) a certificate of merger (the Certificate of Merger) executed in accordance with the relevant provisions of the DGCL and, as soon as practicable on or after the Closing Date, shall make all other filings or recordings required under the DGCL in connection with the Merger. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such other time as Parent and SunGard Data shall agree and shall specify in the Certificate of Merger (the time the Merger becomes effective being the Effective Time).
Section 2.5 Effects of the Merger. The Merger shall have the effects set forth in Section 259 of the DGCL.
Section 2.6 Certificate of Incorporation and Bylaws. Effective immediately following the Merger, the certificate of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the certificate of incorporation of the Surviving Corporation until amended in accordance with applicable Law. Effective immediately following the Merger, the bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation until amended in accordance with applicable Law.
Section 2.7 Directors. The directors of Merger Sub at the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal.
Section 2.8 Officers. The officers of the Company at the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until their successors are duly elected or appointed and qualified or until their earlier death, resignation or removal.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any shares of Company Common Stock or any shares of capital stock of Merger Sub:
(a) Capital Stock of Merger Sub. Each issued and outstanding share of capital stock of Merger Sub shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each share of Company Common Stock that is owned by the Company, Parent or Merger Sub shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor. Each share of Company Common Stock owned by any wholly owned Subsidiary of the Company shall remain outstanding as a share in the Surviving Corporation, and no payment shall be made with respect thereto.
18
(c) Conversion of Company Common Stock. All of the issued and outstanding shares of Company Common Stock (other than shares to be canceled or to remain outstanding in accordance with Section 3.1(b)), in the aggregate, shall be converted into the right to receive a cash payment equal to the Merger Consideration, without interest. Except as provided in Section 3.1(b), at the Effective Time, all shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and Seller shall cease to have any rights with respect thereto except the right to receive (i) the Estimated Merger Consideration, without interest, and (ii) any payments due to Seller based upon the final determination of the Merger Consideration pursuant to Section 3.4.
Section 3.2 Determination and Payment of Estimated Merger Consideration.
(a) Determination of Estimated Merger Consideration. No later than two (2) Business Days before the Closing Date, SunGard Data shall deliver to Parent SunGard Datas calculations of the Estimated Net Working Capital, the Estimated Company Transaction Fees and Expenses and the Estimated Merger Consideration, with reasonable supporting detail as to such calculations. The Estimated Merger Consideration shall mean an amount equal to (A) the Applicable Base Merger Consideration, minus (B) the Estimated Company Transaction Fees and Expenses, plus (C) the amount (if any) by which the Estimated Net Working Capital is greater than the Target Net Working Capital, minus (D) the amount (if any) by which the Estimated Net Working Capital is less than the Target Net Working Capital.
(b) Payment. At the Closing, (a) all certificates which immediately prior to the Effective Time represented any shares of Company Common Stock (each, a Certificate) shall be surrendered by Seller to the Surviving Corporation and (b)(x) if the Asset Purchase Agreement has been terminated pursuant to Section 9.1(b) thereof, the Surviving Corporation shall cause the Estimated Merger Consideration to be paid to Seller by wire transfer of immediately available funds to an account specified to Parent at least two Business Days prior to the Closing by Seller or (y) if the Asset Closing has occurred, subject to the terms of the Escrow Agreement, the Escrow Agent shall cause the Estimated Merger Consideration that was deposited in the Escrow Account at the Asset Closing to be paid to Seller by wire transfer of immediately available funds to an account identified to the Escrow Agent at least two Business Days prior to the Closing by Seller. At the Asset Closing (in the event it occurs), Parent shall deliver, or cause to be delivered, to the Escrow Agent an amount equal to the Estimated Merger Consideration to be held in the Escrow Account in accordance with the terms of the Escrow Agreement.
(c) No Further Ownership Rights in Company Stock. All cash paid upon the surrender of Certificates in accordance with the terms of this Section 3.2 shall, subject to any payments that may be required to be made pursuant to Section 3.4, be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock previously represented by such Certificates. From and after the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time.
19
(d) FIRPTA Certificate. Seller shall deliver to Parent at the Closing a duly executed certificate, in the form of section 1.1445-2(b)(2)(iv)(B) of the Treasury Regulations, certifying that SunGard Data is not a foreign person for U.S. federal income tax purposes and SunGard Datas U.S. taxpayer identification number.
Section 3.3 Withholding Taxes. Notwithstanding anything to the contrary contained herein, Parent, the Surviving Corporation and the SunGard Entities shall be entitled to deduct and withhold from all amounts payable pursuant to this Agreement such amounts as are required to be deducted and withheld under any applicable Tax Law. To the extent that amounts are so deducted and withheld and paid over to the applicable taxing authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. If Parent or the Surviving Corporation intends to deduct and withhold from the Merger Consideration, or any other amount, payable to Seller under this Agreement, Parent shall notify Seller in writing at least ten (10) Business Days prior to the date withholding is required, together with a statement setting forth the amount to be deducted and withheld. If Seller objects in writing to the determination within five (5) Business Days of such notice, the Parties shall negotiate in good faith to agree on the amount that should be deducted and withheld. If the Parties are unable to agree on such amount prior to the applicable payment date, they shall request a mutually agreeable independent leading law firm or accounting firm in the relevant jurisdiction to render an opinion on the amount required to be deducted and withheld, which opinion, absent manifest error, shall be conclusive and binding and the disputed amount of withholding shall be transferred by Parent to a mutually agreeable independent escrow agent, which shall hold the disputed amount until such law firm or accounting firm has rendered its opinion and subsequently release the amount to the Surviving Corporation and/or Seller as directed by such opinion; provided that such disputed amount may be paid over to the applicable taxing authority when due prior to the resolution of the dispute pursuant to this Section 3.3 if payment is required to comply with the applicable procedures of the Tax Law at issue. If any amounts are paid over to the applicable taxing authority and the withholding party was determined to be in error by such law firm or accounting firm, Parent shall pay to the Seller the amount incorrectly withheld (together with interest at the rate prescribed for U.S. federal income tax refunds) and shall be entitled to any refund (including any interest thereon paid by the applicable taxing authority) in respect of the withheld amounts; provided that Seller shall cooperate, at Parents expense, with the withholding party in obtaining any such refund. The costs incurred in connection with the engagement of such law firm or accounting firm and escrow agent shall be paid by the Party whose position was not followed in such opinion. Similar rights and procedures shall apply in favor of Parent and the Company Entities with respect to any withholding by the SunGard Entities in respect of payments under this Agreement.
Section 3.4 Post-Closing Purchase Price Adjustment.
(a) As promptly as practicable, but in no event later than ninety (90) days following the date of the Applicable Closing, Parent shall prepare and deliver to SunGard Data a statement (the Post-Closing Statement), certified by the chief financial officer of Parent and accompanied by reasonable supporting detail, setting forth the Closing Net Working Capital, the Company Transaction Fees and Expenses and the Merger Consideration, including, in each case, the calculation thereof in
20
reasonable detail. The calculations set forth in the Post-Closing Statement shall be final and binding on all Parties unless SunGard Data gives Parent written notice of its objections thereto (an Objection Notice), with reasonable supporting detail as to each such objection (each, a Post-Closing Calculation Objection), within forty-five (45) days after receipt of the Post-Closing Statement (the Objection Period). In the event SunGard Data fails to give Parent an Objection Notice prior to the expiration of the Objection Period or otherwise earlier notifies Parent in writing that SunGard Data has no objections to the calculations set forth in the Post-Closing Statement, the Post-Closing Statement shall be deemed final and binding on all Parties hereto, and all payments to be made in accordance with Section 3.4(d) shall be derived therefrom. Any component of the calculations set forth in the Post-Closing Statement that is not the subject of a timely delivered Objection Notice by SunGard Data shall be final and binding on all Parties except to the extent such component could be affected by other components of the calculations set forth in the Post-Closing Statement. Throughout the period following the Closing Date until the components of the calculations set forth in the Post-Closing Statement are deemed final and binding pursuant to this Section 3.4, subject to Section 7.21, Parent shall permit SunGard Data and its Representatives reasonable access (with the right to make copies), during business hours upon reasonable advance notice, to the financial books and records of the Surviving Corporation and its Subsidiaries for the purposes of the review and objection right contemplated herein.
(b) Parent and SunGard Data shall use reasonable efforts to resolve any dispute arising under Section 3.4(a); provided, that if such Parties are unable to do so within thirty (30) days following SunGard Datas delivery to Parent of an Objection Notice, then by notice from either such Party to the other such Party, the disagreement with respect to such Post-Closing Calculation Objections may be submitted for resolution to the Independent Accountant. If a dispute is submitted to the Independent Accountant for resolution, Parent and SunGard Data shall enter into a customary engagement letter with, and to the extent necessary each Party to this Agreement will waive and cause its controlling Affiliates to waive any conflicts with, the Independent Accountant at the time such dispute is submitted to the Independent Accountant and shall cooperate with the Independent Accountant in connection with its determination pursuant to this Section 3.4. Within ten (10) days after the Independent Accountant has been retained, each such Party shall furnish, at its own expense, to the Independent Accountant and the other party a written statement of its positions with respect to each matter in dispute. Within five (5) Business Days after the expiration of such ten (10) day period, each such Party may deliver to the Independent Accountant and to each other its response to the others position on each matter in dispute. With each submission, each such Party may also furnish to the Independent Accountant such other information and documents as it deems relevant or such information and documents as may be requested by the Independent Accountant with copies being given to the other such Party substantially simultaneously. The Independent Accountant may, at its discretion, conduct a conference concerning the disagreement and each such Party shall have the right to present additional documents, materials and other information and to have present its Representatives. No Party or its Representatives shall be permitted to engage in any ex parte communications with the Independent Accountant.
(c) The Independent Accountant shall be directed to promptly, and in any event within thirty (30) days after its appointment pursuant to Section 3.4(b), render its decision
21
on the disputed Post-Closing Calculation Objections. The Independent Accountants determination as to each Post-Closing Calculation Objection in dispute shall be set forth in a written statement delivered to each such Party, which shall include the Independent Accountants determination as to the calculation of the disputed Post-Closing Calculation Objections, all of which shall be final and binding on all Parties absent manifest error. In resolving any disputed Post-Closing Calculation Objection, the Independent Accountant may not assign a value to such Post-Closing Calculation Objection greater than the greatest value for such Post-Closing Calculation Objection claimed by Parent in its Post-Closing Statement or by SunGard Data in its Objection Notice or less than the lowest value for such item claimed by Parent in its Post-Closing Statement or by SunGard Data in its Objection Notice. The fees and expenses of the Independent Accountant pursuant to this Section 3.4 shall be shared one half by Parent and one half by SunGard Data.
(d) Upon the date that the Post-Closing Statement becomes final and binding in all respects pursuant to this Section 3.4 in the event the Asset Purchase Agreement has been terminated pursuant to Section 9.1(b) thereof, or, if the Asset Purchase Agreement has not been terminated, upon the later of (x) the date that the Post-Closing Statement becomes final and binding in all respects pursuant to this Section 3.4 and (y) the date that the Asset Purchase Post-Closing Statement (as defined in the Asset Purchase Agreement) becomes final and binding in all respects pursuant to Section 3.7 thereof:
(i) if the amount of the Merger Consideration exceeds the amount of the Estimated Merger Consideration (such excess, the Merger Consideration Excess), then within five (5) Business Days after such date Parent shall pay, or cause to be paid, an amount in cash by wire transfer to Seller equal to the Merger Consideration Excess; or
(ii) if the amount of the Estimated Merger Consideration exceeds the Merger Consideration (such excess, the Merger Consideration Shortfall), then within five (5) Business Days after such date SunGard Data (on behalf of Seller) shall pay, or cause to be paid, an amount in cash by wire transfer to Parent equal to the Merger Consideration Shortfall.
Section 3.5 Accounting Advisors.
(a) The Parties agree that Parent, the Surviving Corporation and any of their Affiliates may engage Deloitte LLP and its Affiliates to advise or represent them in connection with the determination of Post-Closing Statement and the matters addressed by Section 3.4. Each Party will enter into such waivers, indemnities and other agreements as Deloitte LLP or its Affiliates shall reasonably require to permit Deloitte LLP and each of its Affiliates to provide such advice or representation.
(b) The Parties agree that SunGard Data, Seller and any of their Affiliates may engage PricewaterhouseCoopers LLP and its Affiliates to advise or represent them in connection with the determination of the Post-Closing Statement and the matters addressed by Section 3.4. Each Party will enter into such waivers, indemnities and other agreements as
22
PricewaterhouseCoopers LLP or its Affiliates shall reasonably require to permit PricewaterhouseCoopers LLP and each of its Affiliates to provide such advice or representation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUNGARD ENTITIES
Except as set forth on the disclosure schedules delivered by the SunGard Entities to the Datatel Entities prior to the execution of this Agreement (the SunGard Disclosure Schedules) (it being understood and agreed that each item in a particular section of the SunGard Disclosure Schedules applies to the corresponding section hereof and to any other section as to which its relevance is reasonably apparent on the face of such item), the SunGard Entities, jointly and severally, represent and warrant to the Datatel Entities as follows:
Section 4.1 Organization and Good Standing; Authority. Each SunGard Entity is duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each SunGard Entity has all requisite power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the Transactions have been duly authorized by all requisite corporate action on behalf of each SunGard Entity. This Agreement and the Asset Purchase Agreement has been, and each of the other Ancillary Agreements will be at or prior to the Closing, duly and validly executed and delivered by each applicable SunGard Entity and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) each of this Agreement and the Asset Purchase Agreement constitutes, and each other Ancillary Agreement when so executed and delivered will constitute, the legal, valid and binding obligations of each SunGard Entity, enforceable against each SunGard Entity in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 4.2 Ownership. Seller holds of record and owns beneficially all of the Company Common Stock free and clear of all Liens (other than any restrictions on the sale, transfer or other disposition of the Company Common Stock as a result of such securities not having been registered under the Securities Act or any state securities laws). Seller is not a party to any Contract (other than this Agreement) that could require, or restrict or impair the ability of, Seller to sell, transfer, or otherwise dispose of any capital stock of the Company. Seller is not a party to any Contract with respect to the transfer or voting of any capital stock of the Company.
Section 4.3 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by any SunGard Entity of this Agreement or the Ancillary Agreements, the consummation of the Transactions, or compliance by any SunGard Entity with any of the provisions hereof or thereof will (i) conflict with or violate any provision of the certificate of incorporation and bylaws or comparable organizational and governing documents of such SunGard Entity, (ii) conflict with, result in any breach or violation
23
of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under or require a consent or waiver under, require the payment of a penalty or increased Liabilities or fees or the loss of a benefit under or result in the imposition of any Lien under, any provision of any Contract or Permit to which any SunGard Entity is a party or by which any of its properties, rights or assets are bound or (iii) violate any Order or, assuming compliance with the requirements set forth in Section 4.3(b), any Law applicable to any SunGard Entity or by which any of the properties, rights or assets are bound, except in the case of clauses (ii) and (iii), for such matters that individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of any SunGard Entity in connection with the execution and delivery of this Agreement or any Ancillary Agreement or the compliance by any SunGard Entity with any of the provisions hereof or thereof, or the consummation of the Transactions, except for (i) compliance with the applicable requirements of the HSR Act and any other Competition Laws, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which any SunGard Entity is qualified to do business, and (iii) the IRS Submissions and the IRS Ruling, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations or filings that, individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
Section 4.4 Litigation. There are no Actions pending or, to the Knowledge of the Company, threatened against any SunGard Entity or any of their respective Subsidiaries (other than the Company Entities) before any Governmental Body, that relate to the Business and that, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect. No SunGard Entity is subject to any Orders that relate to the Business except to the extent the same, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SUNGARD ENTITIES
Except as set forth on the disclosure schedules delivered by the Company to the Datatel Entities prior to the execution of this Agreement (the Company Disclosure Schedules) (it being understood and agreed that each item in a particular section of the Company Disclosure Schedules applies to the corresponding section hereof and to any other section as to which its relevance is reasonably apparent on the face of such item), the SunGard Entities and the Company, jointly and severally, represent and warrant to the Datatel Entities as follows and in each case (other than Section 5.3, Section 5.5 and Section 5.6) after giving effect to the Restructuring (unless otherwise expressly indicated):
Section 5.1 Organization and Good Standing. Each of the Company and its Subsidiaries (the Company Entities) is duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation or formation and has all requisite corporate or equivalent power and authority to
24
own, lease and operate its properties and to carry on the Business (to the extent such Company Entity carries on the Business) as now conducted. Each of the Company Entities is duly qualified or authorized to do business as a foreign entity and is in good standing under the laws of each jurisdiction in which it owns or leases real property and each other jurisdiction in which the conduct of the Business or the ownership of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Business Material Adverse Effect. The Company has made available to Parent prior to the date hereof a true and complete copy of its certificate of incorporation and bylaws, each as amended to date (the Company Charter Documents), and each such instrument is in full force and effect and no other organizational documents are applicable to or binding upon the Company. The Company is not in violation in any material respect of any of the provisions of the Company Charter Documents.
Section 5.2 Authorization of Agreement. The Company and each of the other Company Entities has all requisite power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the Ancillary Agreements and the consummation of Transactions have been duly authorized by all requisite corporate or equivalent action on behalf of each Company Entity, except for obtaining the written consent of Seller, as the sole stockholder of the Company, in accordance with Section 228 of the DGCL. Each of this Agreement and the Asset Purchase Agreement has been, and each of the other Ancillary Agreements will be at or prior to the Closing, duly and validly executed and delivered by the applicable Company Entities, and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) each of this Agreement and the Asset Purchase Agreement constitutes, and each other Ancillary Agreement when so executed and delivered will constitute, the legal, valid and binding obligations of the applicable Company Entities, enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
Section 5.3 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Company of this Agreement and by any Company Entity, as applicable, of any Ancillary Agreement, the consummation of the Transactions (including the Restructuring and the Merger) or compliance by the Company Entities with any of the provisions hereof or thereof will (i) conflict with or violate any provision of the certificate of incorporation and bylaws or comparable organizational documents of the Company or any Company Subsidiary; (ii) conflict with, result in any breach or violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under, or require a consent or waiver under, require the payment of a penalty or increased Liabilities or fees or the loss of a benefit under or result in the imposition of any Lien under, any provision of any Contract or Permit to which the Company or any Company Subsidiary is a party or which may be transferred or assigned to a Company Entity pursuant to the Restructuring or by which any of the properties or assets of the Business are bound;
25
(iii) violate any Order applicable to the Business, the Company or any Company Subsidiary or by which any of the properties or assets of the Business are bound; or (iv) assuming compliance with the requirements set forth in Section 5.3(b), violate any applicable Law, except in the case of clauses (ii) through (iv), for such matters that individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of the Business or the Company or any Company Subsidiary in connection with the execution and delivery of this Agreement or the Ancillary Agreements or the compliance by the Company Entities with any of the provisions hereof or thereof, or the consummation of the Transactions, except for (i) compliance with the applicable requirements of the HSR Act and any other Competition Laws, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which any Company Entity is qualified to do business and (iii) the IRS Submissions and the IRS Ruling, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations or filings that, individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
Section 5.4 Capitalization.
(a) The authorized capital stock of the Company consists of 100 shares of Company Common Stock. As of the date hereof, there are 100 shares of Company Common Stock issued and outstanding, all of which are owned, beneficially and of record, on the date hereof by Seller. All of the issued and outstanding shares of Company Common Stock are duly authorized for issuance and are validly issued, fully paid and non-assessable, free and clear of any and all Liens (other than any restrictions on the sale, transfer or other disposition of the Company Common Stock as a result of such securities not having been registered under the Securities Act or any state securities laws).
(b) There is no existing Contract of any character to which the Company is a party or otherwise subject to requiring, and there are no securities of any Person outstanding that upon conversion, exercise or exchange would require, the issuance of any shares of capital stock of the Company or other securities convertible into, exchangeable for or evidencing the right to subscribe for, purchase or receive shares of capital stock of the Company. Neither Seller nor the Company is a party to, or otherwise subject to, any Contract with respect to the voting, redemption, repurchase, sale, transfer or other disposition or registration of Company Common Stock.
(c) None of the Company or any of the other Company Entities has any Indebtedness, provided that, solely for purposes of Section 8.3(a) and, for such purposes, solely with respect to Indebtedness of the type described in clause (f) of the definition of Indebtedness, the representation and warranty in this clause (c) is made only as of the date hereof.
Section 5.5 Subsidiaries.
26
(a) Section 5.5(a) of the Company Disclosure Schedules sets forth, as of the date hereof without giving effect to the Restructuring, the name of each Subsidiary of the Company (each, a Company Subsidiary), and, with respect to each Subsidiary, the jurisdiction in which it is incorporated or organized, the number of shares of its authorized capital stock or other equity interests, the number and class of shares thereof duly issued and outstanding, the names of all stockholders or other equity owners and the number of shares of stock or other equity interests owned by each stockholder or the amount of equity owned by each equity owner. Each Company Subsidiary is a duly organized and validly existing corporation or other entity in good standing under the Laws of the jurisdiction of its incorporation or organization. Each Company Subsidiary is duly qualified or authorized to do business as a foreign corporation or entity and is in good standing under the Laws of each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect. Each Company Subsidiary has all requisite corporate or entity power and authority to own, lease and operate its properties and carry on its business as now conducted, except where the failure to have such power or authority, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
(b) The Company owns all of the outstanding shares of capital stock or other equity interests of all of its Subsidiaries, free and clear of any and all Liens (other than any restrictions on the sale, transfer or other disposition of such capital stock or other equity interests, as applicable, as a result of such securities not having been registered under the Securities Act or any state securities laws). Neither the Company nor any Company Subsidiary owns any capital stock or other equity interests in any Person that is not a Company Subsidiary. There is no existing Contract of any character to which any Company Subsidiary is a party or otherwise subject to requiring, and there are no securities of any Person outstanding that upon conversion, exercise or exchange would require, the issuance of any shares of capital stock or other equity interests of any Company Subsidiary or other securities convertible into, exchangeable for or evidencing the right to subscribe for, purchase or receive shares of capital stock or other equity interests of any Company Subsidiary.
(c) The outstanding shares of capital stock and other equity interests of each Company Subsidiary are validly issued, fully paid and non-assessable. No shares of capital stock are held by any Company Subsidiary as treasury stock. No Company Entity is party to, or otherwise subject to, any Contract with respect to the voting, redemption, repurchase, sale, transfer or other disposition or registration of the shares of capital stock or other equity interests of any Company Subsidiary.
(d) The Company has made available to Parent true and complete copies of the charter, by-laws or other organizational documents of each Subsidiary of the Company (the Subsidiary Charter Documents), and each such instrument is in full force and effect and no other organizational documents are applicable to or binding upon such Subsidiaries. None of the Subsidiaries is in violation in any material respect of any of the provisions of its Subsidiary Charter Documents.
27
Section 5.6 Financial Statements. The SunGard Entities have delivered to Parent prior to the date hereof true and complete copies of (i) the audited consolidated balance sheets of the Company and its Subsidiaries as at December 31, 2009 and 2010 and the related audited consolidated statements of income, cash flows and stockholders equity of the Company and its Subsidiaries for the years ended December 31, 2008, 2009 and 2010 and (ii) the unaudited consolidated balance sheet of the Company and its Subsidiaries as at June 30, 2011, and the related unaudited consolidated statements of income, and cash flows of the Company and its Subsidiaries for the six month period then ended (such audited and unaudited statements, including the related notes and schedules thereto, which are presented on a carve out basis, are referred to herein as the Financial Statements). Except as set forth in the notes thereto and, in the case of the unaudited financial statements, normal recurring year-end adjustments, each of the Financial Statements has been prepared in accordance with GAAP and presents fairly in all material respects the consolidated financial position, results of operations and cash flows of the Company and its Subsidiaries as at the dates and for the periods indicated therein. For the purposes hereof, the unaudited consolidated balance sheet of the Company and its Subsidiaries as at June 30, 2011, is referred to as the Balance Sheet and June 30, 2011, is referred to as the Balance Sheet Date.
Section 5.7 No Undisclosed Liabilities.
(a) Neither the Company nor any Company Subsidiary has any Liabilities of any kind that would have been required to be reflected in, reserved against or otherwise described on the Balance Sheet or in the notes thereto in accordance with GAAP and were not so reflected, reserved against or described, other than (i) Liabilities incurred in the Ordinary Course of Business after the Balance Sheet Date, (ii) Company Transaction Fees and Expenses and any fees and expenses incurred in connection with the debt financings contemplated by the Debt Financing Commitment or (iii) Liabilities that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, (i) any off balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between or among the Company and any of its Subsidiaries, on the one hand, and any unconsolidated Affiliate on the other hand), including any off-balance sheet arrangement (as defined in Item 303(a) of Regulation S-K promulgated by the SEC) or (ii) any hedging, derivatives or similar Contract.
Section 5.8 Absence of Certain Developments.
(a) Since the Balance Sheet Date, (i) the Business has been conducted in the Ordinary Course of Business (except as otherwise expressly contemplated by this Agreement and the Ancillary Agreements) and (ii) there have not been any effects, events, changes, occurrences or circumstances that, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect.
(b) Without limiting the generality of the foregoing, (i) since the Balance Sheet Date through the date hereof, none of the Company Entities or, to the extent related to the Business
28
solely with respect to clause (C), the SunGard Entities or any of their Subsidiaries (A) has incurred any Indebtedness, (B) has sold, licensed, transferred or otherwise disposed of any of its material properties or assets or any material interest therein, or agreed to do any of the foregoing, except sales and non-exclusive licenses of products and services in the Ordinary Course of Business or the disposal of obsolete or worthless assets, (C) (1) has granted, or is committed to grant, salary or wage increases or any increase in or addition to any other compensation or benefits to Business Employees (except in the case of employees that are not officers, increases in salary, wages or incentive compensation in the Ordinary Course of Business), (2) has made any loan or advance of money or other property to any of the Business Employees (other than routine advances to employees for business expenses in the Ordinary Course of Business in an amount not exceeding $25,000 at any time to any individual employee), (3) has established, adopted, entered into, amended or terminated any Company Benefit Plans, or (4) has granted or promised to grant any equity or equity-based awards to any Business Employees except in the Ordinary Course of Business, (D) has changed its methods of keeping of its books of account or accounting practices, except as required by GAAP, (E) except in the Ordinary Course of Business, has materially changed or modified its existing credit, collection and payment policies, procedures and practices (including any material acceleration in the collection of receivables or material delay in the payment of payables), (F) has entered into any transaction, agreement or arrangement outside the Ordinary Course of Business that would be required to be disclosed in Section 5.20 of the Company Disclosure Schedules or (G) has agreed or committed to do any of the foregoing and (ii) since the Balance Sheet Date through the date hereof, none of the Company Entities or, to the extent related to the Business, the SunGard Entities or any of their Subsidiaries has waived or released any of its rights with respect to its business, assets (tangible or intangible) or Permits or permitted any of such rights to lapse, except where such waiver, release or permission, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.
Section 5.9 Taxes. Except to the extent that, individually or in the aggregate, it has not had and would not reasonably be expected to have a Business Material Adverse Effect:
(a) All material Tax Returns relating to the Company Entities and the Business that are required by applicable Laws to be filed with any taxing authority have duly and timely been filed, and such Tax Returns are complete and accurate in all material respects.
(b) All material Taxes that are due and payable to any taxing authority relating to any Company Entity or the Business (including any estimated Taxes) have been paid or remitted to the appropriate taxing authority, other than those Taxes being contested in good faith through appropriate proceedings for which provision has been made in accordance with GAAP on the Financial Statements, and with respect to any Taxes not yet due or owing, the Company Entities or, with respect to the Business, the SunGard Entities have made due and sufficient accruals for such Taxes in the Financial Statements or, with respect to the Business, the Financial Statements and in its books and records.
(c) All material Taxes that the Company Entities or, with respect to the Business, the SunGard Entities are required by Law to withhold and collect at or prior to Closing have been duly withheld, collected and paid over, in each case, to the proper taxing authorities to the extent due and payable.
29
(d) All Taxes of the Company Entities or relating to the Business that are due with respect to any completed and settled audit, examination or deficiency litigation with any taxing authority have been paid in full. There is no audit, examination, deficiency or refund litigation pending with respect to any Taxes of any Company Entity or relating to the Business and no taxing authority has given written notice of the commencement of (or its intent to commence) any audit, examination or deficiency litigation with respect to any such Taxes.
(e) There are no outstanding assessments, claims or deficiencies for any Taxes of any Company Entity or relating to the Business that have been proposed, asserted or assessed by any taxing authority, in each case in writing.
(f) No written claim has been made by a taxing authority that any Company Entity or, with respect to the Business, any SunGard Entity is or may be subject to Tax in a jurisdiction where any Company Entity or, with respect to the Business, any SunGard Entity does not file Tax Returns.
(g) There are no Liens as a result of any unpaid Taxes upon any of the assets of any Company Entity or, with respect to the Business, any SunGard Entity (other than Permitted Liens).
(h) Since August 2005, none of the Company Entities (A) is or has ever been a member of an affiliated group (other than a group the common parent of which is SunGard Capital) filing a consolidated federal income Tax Return or (B) has any liability for Taxes of any person arising from the application of Treasury Regulation Section 1.1502-6 or any analogous provision of state, local or foreign law, or as a transferee or successor, by contract, or otherwise (other than as a result of being in a group the common parent of which is SunGard Capital).
(i) None of the Company Entities is a party to, is bound by or has any obligation under any Tax sharing or Tax indemnity agreement or similar contract or arrangement other than commercially customary tax indemnities under loan agreements, lease agreements or similar commercial agreements entered into in the ordinary course of business that do not relate primarily to Taxes.
(j) None of the Company Entities has constituted either a distributing corporation or a controlled corporation (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two years prior to the date of this Agreement.
(k) None of the Company Entities will be required to include any item of income in, or exclude any item of deduction from, taxable income as a result of (A) any change in accounting method initiated by it or any other relevant party on or prior to the Closing Date, (B) a closing agreements pursuant to Section 7121 of the Code or any similar provision of state, local or foreign law entered into on or prior to the Closing Date, (C) an installment sale or open transaction arising on or prior to the Closing Date, (D) a prepaid amount received, or paid, on or prior to the Closing Date, (E) deferred gains arising from a transaction on or prior to the Closing Date or (F) an election under Section 108(i) of the Code.
30
(l) None of the Company Entities has engaged in any listed transactions as defined in Section 6707A(c) of the Code or the regulations promulgated thereunder and any reportable transactions, as defined in Section 6111 of the Code, have been properly reported.
(m) The Company is a member of the consolidated group of which SunGard Capital is the parent for U.S. federal income tax purposes.
This Section 5.9 and Section 5.13 contain the sole and exclusive representations and warranties of the Company Entities regarding Tax matters.
Section 5.10 Real Property.
(a) Section 5.10(a) of the Company Disclosure Schedules sets forth a complete list of all leases and subleases of real property to or by the Company or a Subsidiary involving annual payments in excess of $100,000 as of the date hereof (individually, a Real Property Lease and collectively, the Real Property Leases).
(b) Section 5.10(b) of the Company Disclosure Schedules sets forth the address and description of each parcel of real property owned by the Company or a Subsidiary as of the date hereof (together with all buildings and improvements now or subsequently located thereon, the Owned Real Property). With respect to each Owned Real Property: (i) the Company or a Company Subsidiary (as the case may be) has good and marketable fee simple title to such Owned Real Property, which shall be free and clear of all Liens as of the Closing Date, except Permitted Liens, (ii) each Company Entity has not leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof, (iii) other than rights of the Datatel Entities pursuant to this Agreement, there are no outstanding options, rights of first offer or rights refusal to purchase such Owned Real Property or any portion thereof or interest therein, and (iv) each Company Entity is not a party to any agreement or option to purchase any real property or interest therein relating to the Business.
Section 5.11 Intellectual Property.
(a) Section 5.11(a) of the Company Disclosure Schedules sets forth an accurate and complete list of all issued Patents, pending Patent applications, registered Marks, pending applications for registration of Marks, registered Copyrights, and Internet domain names owned by the Company or any Company Subsidiary as of the date hereof (the foregoing being, collectively, the Company Registered Intellectual Property). Section 5.11(a) of the Company Disclosure Schedules lists (x) the record owner of each such item of Company Registered Intellectual Property and (y) the jurisdictions in which each such item of Company Registered Intellectual Property has been issued or registered or in which each such application for issuance or registration of such item of Company Registered Intellectual Property has been filed.
(b) All material Intellectual Property owned by the Company or a Company Subsidiary used in the Business will, as of the Closing, be owned free and clear of all Liens (except for Permitted Liens).
31
(c) To the Knowledge of the Company, the conduct of the Business of the Company and the Company Subsidiaries (including the products and services of the Business as provided by the Company and the Company Subsidiaries) does not infringe, violate or constitute misappropriation of any Intellectual Property of any third Person except for such infringements, violations and misappropriations that, individually or in the aggregate, would not have a Business Material Adverse Effect.
(d) To the Knowledge of the Company, no third Person is infringing, violating, or misappropriating any material Intellectual Property owned by the Company or any Company Subsidiary.
(e) There is no Action pending or, to the Knowledge of the Company, threatened in writing, against the SunGard Entities or their Subsidiaries (including the Company Entities) alleging that the conduct of the Business has, during the three (3) year period prior to the date of this Agreement, infringed, violated or misappropriated, or is infringing or violating any Intellectual Property rights of any third Person.
(f) There are no Orders to which the SunGard Entities or their Subsidiaries (including the Company Entities) is a party or, to the Knowledge of the Company, by which any of the foregoing are bound, that restricts the Companys or the Company Subsidiaries rights to use any material Intellectual Property used in the Business.
(g) No material Trade Secret of the Business has, to the Knowledge of the Company, been disclosed by the SunGard Entities or any of their Subsidiaries (including the Company Entities) to any third Person other than pursuant to a written nondisclosure agreement restricting the disclosure and use of such Trade Secrets. The SunGard Entities and their Subsidiaries (including the Company Entities) have taken commercially reasonable security measures to protect the confidentiality of the material Trade Secrets of the Business. The SunGard Entities and their Subsidiaries (including the Company Entities) have in place and take commercially reasonable efforts to enforce a practice whereby all of their respective officers, employees, consultants and contractors that may develop material Intellectual Property of the Business execute confidentiality and Intellectual Property assignment and/or employees rights agreements with the SunGard Entities, the Company or their respective Subsidiaries, as applicable.
(h) Except as set forth on Section 5.11(h)(i) of the Company Disclosure Schedules or as, individually or in the aggregate, has not had and would not have a Business Material Adverse Effect, no SunGard Entity or any of its Subsidiaries (including the Company Entities) has incorporated any open source, freeware, shareware or other Software code having similar licensing restrictions or distribution models in any Software of the Business that would require the public distribution, contribution, licensing or public disclosure of the proprietary source code of the Business or impose limitations on the Company Entities right to require payments in connection therewith (such licenses, Specified Open Source Licenses). Section 5.11(h)(ii) of the Company Disclosure Schedules sets forth as of the date hereof a list of all license agreements for all Open Source Software (as defined in the Intellectual Property Agreement) provided by SunGard Data as part of the IAF and the IPP (each as defined in the Intellectual Property Agreement) pursuant to the Intellectual Property Agreement.
32
(i) Section 5.11(i) of the Company Disclosure Schedules sets forth a complete and accurate list of all Contracts of the Business or to which the Company or any Company Subsidiary is a party, and pursuant to which the Company or any Company Subsidiary is granted the right to use any third Persons Intellectual Property (excluding licenses pertaining to off-the-shelf commercially available Software used pursuant to shrink-wrap or click-through license agreements for a license fee of no more than $100,000 in the aggregate per Software product) that (i) is material to the functionality of any currently released commercial product, or for the performance of any currently provided service, of the Company or any Company Subsidiary and cannot be replaced in a reasonable period of time, at a reasonable cost, with other Intellectual Property that does not materially change the functionality of such product or the ability to provide such service or (ii) is material to the operation of the Business and cannot be replaced in a reasonable period of time, at a reasonable cost, with other Intellectual Property (the foregoing being, collectively, the Material In-Bound License Agreements).
(j) Section 5.11(j) of the Company Disclosure Schedules sets forth a complete and accurate list of all Contracts of the Business or to which the Company or any Company Subsidiary is a party, and pursuant to which the Company or any Company Subsidiary has granted to any third Person the right to use any material Intellectual Property of the Company or any Company Subsidiary, other than non-exclusive licenses entered into in the Ordinary Course of Business (the Material Out-Bound License Agreements).
(k) Except as set forth on Section 5.11(k) of the Company Disclosure Schedules and except as, individually or in the aggregate, has not had or would not have a Business Material Adverse Effect, (i) the Company and its Subsidiaries have taken commercially reasonable steps to protect the confidentiality and security of their Software, systems, networks and internet sites from any unauthorized use, access, interruption or modification by third parties, and (ii) the Company and its Subsidiaries have complied with their own policies with respect to the privacy of all their customers and any of their personally identifiable information, and, to the Knowledge of the Company, no written claims have been asserted or threatened in writing against the Company or any of its Subsidiaries by any Person alleging a violation of any of the foregoing.
Section 5.12 Material Contracts.
(a) Section 5.12(a) of the Company Disclosure Schedules sets forth all of the following Contracts of the Business or to which the Company or any of its Subsidiaries is a party or by which it is bound as of the date hereof (collectively and together with those Contracts set forth on Section 5.10(a) of the Company Disclosure Schedules, the Material In-Bound License Agreements and the Material Out-Bound License Agreements, the Material Contracts):
(i) each Contract with any SunGard Capital Stockholder or any current officer or director of any Company Entity or any Affiliate (other than a Subsidiary) of the Company;
(ii) each Contract with any labor union or association representing any Business Employee;
33
(iii) (A) each Contract relating to the sale of any of the assets of, or the provisions of any services by, the Business or the Company or any of its Subsidiaries other than the sale or provision of goods and services in the Ordinary Course of Business, for consideration, in excess of $500,000 or the equivalent in other currencies during the twelve-month period ending on the date hereof, (B) each of the ten (10) Contracts for the provision of maintenance and support services (Maintenance Contracts) that generated the highest amount of revenues in 2010 for the Business from Maintenance Contracts and (C) each of the ten (10) Contracts for the provision of managed services (Managed Services Contracts) that generated the highest amount of revenues in 2010 for the Business from Managed Services Contracts;
(iv) each Contract relating to the acquisition or disposition by the Business or the Company or any of its Subsidiaries of any business, division or product line or the capital stock of any other Person, in each case (A) entered into during the three-year period ending on the date hereof and for consideration in excess of $500,000 or the equivalent in other currencies or (B) pursuant to which any material Liabilities or obligations of the Company or its Subsidiaries remain outstanding;
(v) each Contract relating to (A) the incurrence of Indebtedness, (B) a letter of credit, performance bond, cash collateral or escrow requirement or similar credit support or (C) the making of any loans (other than routine advances to employees for business expenses in the Ordinary Course of Business in an amount not exceeding $25,000 at any time to any individual employee);
(vi) each Contract creating or governing a partnership, limited liability company, joint venture or similar arrangement;
(vii) each Contract (A) containing a covenant expressly limiting the freedom of the Business or the Company or any of its Subsidiaries to engage in any business with any Person or in any geographic area or to compete with any Person or limiting the ability of the Company or any of its Subsidiaries to incur Indebtedness or to create Liens, (B) containing most favored nation or similar provisions in favor of any customer or other counterparty to the Business or the Company or any of its Subsidiaries that involves a payment to be made to the Company in excess of $500,000 or (C) obligating the Business or the Company or any of its Subsidiaries to purchase or otherwise obtain any product or service exclusively from a single party or sell any product or service exclusively to a single party;
(viii) each Contract creating a Lien (other than Permitted Liens) upon any assets (including any Lien placed on the Companys or any of the Company Subsidiaries Intellectual Property), other than purchase money security interests in connection with the acquisition of equipment in the Ordinary Course of Business;
(ix) each Contract reflecting a settlement of any threatened or pending Actions, other than (A) releases immaterial in nature or amount entered into with former employees or independent contractors of the Company and its Subsidiaries in the
34
Ordinary Course of Business in connection with the routine cessation of such employees or independent contractors employment with the Company and its Subsidiaries, (B) settlement agreements for cash only (which has been paid) and does not exceed $500,000 as to such settlement or (C) settlement agreements entered into more than three (3) years prior to the date of this Agreement under which none of the Business or the Company or its Subsidiaries have any continuing Liabilities or rights (excluding releases);
(x) each Contract creating or governing a co-marketing, reseller, distributor or similar arrangement for consideration in excess of $500,000 or the equivalent in other currencies; and
(xi) each other Contract that involves any single or related expenditures by the Company or any Company Subsidiary pursuant to which the Company or any Company Subsidiary has future financial obligations of more than $250,000 or the equivalent in other currencies per year.
(b) True and correct copies of each Material Contract have been made available to Parent prior to the date hereof. Each Material Contract is a valid and binding agreement of the relevant Company Entity, as the case may be, and, to the Companys Knowledge, the other parties thereto, in each case enforceable in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting generally the enforcement of creditors rights and subject to general principles of equity), except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect. The Company or its Subsidiaries that are parties to the Material Contracts and, to the Knowledge of the Company, each of the other parties thereto, have performed all obligations required to be performed by them under, and are not in breach of, default or violation under, any of such Material Contracts and no event has occurred that with notice or lapse of time, or both, would constitute such a default, except where such noncompliance, breach, default or violation has not had and would not reasonably be expected to have, individually or in the aggregate, a Business Material Adverse Effect. None of the SunGard Entities or any of their Subsidiaries has received written notice of any default or event that with notice or lapse of time, or both, would constitute a default under any Material Contract, except for any such defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.
Section 5.13 Employee Benefit Plans.
(a) (i) Section 5.13(a)(i) of the Company Disclosure Schedules contains a list of each material employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA)), including multiemployer plans within the meaning of Section 3(37) of ERISA, and all stock purchase, stock option, severance, employment, change of control, bonus, incentive or deferred compensation, employee loan, collective bargaining, and each other material employee benefit plan, program or arrangement (whether or not subject to ERISA) under which any current or former employee, director or consultant of the Company Entities has any right to benefits and which is contributed to, sponsored or maintained by the Company Entities, the SunGard Entities
35
or any of their respective Subsidiaries or under which the Company Entities, whether directly or by reason of their affiliation with any ERISA Affiliate, has any material liability, in each case as of the date hereof (each, a SunGard Benefit Plan), and (ii) Section 5.13(a)(ii) of the Company Disclosure Schedules contains a list of each SunGard Benefit Plan that is solely sponsored by the Company or a Company Subsidiary as of the date hereof (each, a Company Benefit Plan).
(b) With respect to each Company Benefit Plan, SunGard Data has made available to the Datatel Entities copies of the following, to the extent applicable: (i) the plan document and any related trust agreement, (ii) the most recent IRS determination letter, (iii) the most recent summary plan description, and (iv) for the most recent plan year, the IRS Form 5500.
(c) Each Company Benefit Plan has been maintained, funded and administered in all material respects in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and other applicable Laws. Each Company Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS, and, to the Knowledge of the Company, no event or circumstance has occurred or failed to occur that would reasonably be expected to cause the loss of such qualification. No condition exists that would reasonably be expected to subject the Company Entities, either directly or by reason of their affiliation with any member of their Controlled Group (defined as any organization which is a member of a controlled group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code), to any material tax, fine, lien or penalty or other material liability imposed by ERISA, the Code or other applicable laws, rules, and regulations in connection with any employee benefit plan (within the meaning of Section 3(3) of ERISA). To the Knowledge of the Company, no nonexempt prohibited transaction (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has occurred with respect to any SunGard Benefit Plan that would reasonably be expected to subject the Company Entities to any material liability. None of the Company Entities has incurred any current or projected material liability in respect of post-employment or post-retirement health, medical or life insurance benefits for any Business Employee or former employee, director or consultant of the Company Entities, except as required to avoid an excise tax under Section 4980B of the Code or as may be required under any other applicable Law.
(d) Neither the Company Entities nor any of their ERISA Affiliates, sponsors, maintains or contributes to or has any obligation to contribute to, or at any time during the preceding six years, has sponsored, maintained or contributed to or had any obligation to contribute to, any retirement plan subject to Title IV or Section 302 of ERISA or Section 412 of the Code (including a multiemployer plan within the meaning of Section 3(37) of ERISA) or any other defined benefit pension plan (a Pension Plan) and neither the Company Entities nor any of their ERISA Affiliates has any material liability under any Pension Plan that could reasonably be expected to become a liability of the Datatel Entities and their Affiliates.
(e) With respect to any Company Benefit Plan, (i) no actions, suits or claims (other than routine claims for benefits in the Ordinary Course of Business) are pending or, to the Knowledge of the Company, threatened that would result in a material Liability to the Company
36
Entities, (ii) to the Knowledge of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any such actions, suits or claims, and (iii) to the Knowledge of the Company, no administrative investigation, audit or other administrative proceeding by the Department of Labor, the IRS or any other Governmental Bodies are pending, in progress or threatened that, if adversely determined, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect.
(f) Neither the execution, delivery or performance of this Agreement nor the consummation of the Transactions (whether alone or in connection with any other events(s)) will (i) accelerate the vesting or increase benefits or the amount payable under any SunGard Benefit Plan, (ii) cause any of the Company Entities to record additional compensation expense on its income statement with respect to any outstanding stock option or other equity-based award or (iii) result in payments under any of the SunGard Benefit Plans (1) which would not be deductible under Section 280G of the Code, or (2) which would result in any excise tax on any Business Employee under Section 4999 of the Code or any other comparable Law.
(g) Except with respect to any employment agreement or other bilateral Contract with any current or former Business Employee, to the extent permitted by applicable Law, each Company Benefit Plan is amendable and terminable unilaterally by the Company or its successor, at any time without liability to the Company (or its successor) and its Affiliates as a result thereof.
(h) SunGard Capital has provided Parent prior to the date hereof with a true and correct list of the following information as of a recent date (i) with respect to each outstanding SunGard Capital Option held by any Business Employee as of the date hereof: (A) the name of the holder of such SunGard Capital Option, (B) the number and type of shares of capital stock subject to such SunGard Capital Option, (C) the exercise price of such SunGard Capital Option, (D) the date on which such SunGard Capital Option was granted and (E) the vesting schedule for such SunGard Capital Option and (ii) the following information with respect to each outstanding SunGard Capital RSU held by any Business Employee as of the date hereof: (A) the name of the recipient of the SunGard Capital RSU, (B) the number and type of shares of SunGard Capital stock subject to such SunGard Capital RSU, (C) the date on which such SunGard Capital RSU was granted and (D) the vesting schedule for such SunGard Capital RSU.
(i) SunGard Data has provided Datatel prior to the date hereof with a true and correct list of all Business Employees as of a recent date, together with the following information for each such Business Employee (the Employee Census Information): name; employee number; job title; job code; tier; department; work location (city, state and zip code); current base salary rate and target bonus amount; 2010 base salary, 2010 target bonus amount and any 2010 bonus amount paid; hire date; most recent rehire date; and amount of service recognized for eligibility, vesting and benefit accrual for each SunGard Benefit Plan under which such service is applicable.
(j) This Section 5.13 and Section 5.6, Section 5.7, and Section 5.8 represent the sole and exclusive representations and warranties of the Company regarding employee benefit matters.
37
Section 5.14 Labor.
(a) None of the Company Entities is (i) a party to, or bound by, or presently negotiating, any collective bargaining agreement, contract or other arrangement or understanding with a labor union or a labor organization or (ii) obligated to inform or consult any works council or similar entity with respect to the Transactions.
(b) There are no current (i) strikes, work stoppages, work slowdowns or lockouts pending or, to the Knowledge of the Company, threatened against or involving any of the Company Entities, or (ii) unfair labor practice charges, grievances or complaints pending or, to the Knowledge of the Company, threatened by or on behalf of any employee or group of employees of the Company Entities. To the Knowledge of the Company, there are no investigations, inquiries or proceedings before the U.S. National Labor Relations Board, the U.S. Equal Employment Opportunity Commission, the U.S. Department of Labor, the U.S. Department of Justice, the U.S. Occupational Health and Safety Administration or any other Governmental Body with respect to or relating to the terms and conditions of employment of the Business Employees.
Section 5.15 Litigation. There are no Actions pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of their respective executive officers relating to the Business before any Governmental Body, that, if adversely determined, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect. None of the Company Entities or the Business is subject to any Order except to the extent the same, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
Section 5.16 Compliance with Laws; Permits.
(a) The Company Entities and, to the extent related to the Business, the SunGard Entities and their other Subsidiaries, are in compliance with all Laws of any Governmental Body applicable to the Business, and the Company Entities, and to the extent related to the Business, the SunGard Entities and their other Subsidiaries, are in compliance with all rules and regulations of the Office of Foreign Assets Control of the United States Department of the Treasury, in each case except where the failure to be in compliance, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect. The Company Entities and, to the extent related to the Business, the SunGard Entities and their other Subsidiaries have not received any written notice of or been charged with the violation of any such Laws, except where such violation, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
(b) The Company Entities currently have all Permits that are required for the operation of the Business, except where the failure to have such Permits, individually or in the aggregate, has not had and would not have a Business Material Adverse Effect. None of the Company Entities is in default or violation (and no event has occurred that, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of any material Permit to which it is a party, except where such default or violation, individually or in the aggregate, has not had and would not have a Business Material Adverse Effect.
38
Section 5.17 Environmental Matters.
(a) Except, individually and in the aggregate, as has not had and would not reasonably be expected to have a Business Material Adverse Effect:
(i) the Company Entities or, to the extent related to the Business, the SunGard Entities and their other Subsidiaries are, and have been since December 31, 2007, in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with all Permits required under applicable Environmental Laws to operate the Business;
(ii) none of the Company Entities or the Business is the subject of any outstanding Order or Contract with any Governmental Body pursuant to any Environmental Laws or concerning any Materials of Environmental Concern that imposes obligations on the Company or any of its Subsidiaries or the Business, and, to the Knowledge of the Company, no other Person is the subject of any such Order or Contract that would reasonably be expected to adversely affect the Company or any of its Subsidiaries or the Business;
(iii) neither the Company Entities nor, to the extent related to the Business, any of the SunGard Entities or their other Subsidiaries are subject to any pending Actions or, to the Knowledge of the Company, threatened Actions alleging noncompliance with or potential Liability under Environmental Laws, and, to the Knowledge of the Company, no other Person is the subject of any such Action that would reasonably be expected to adversely affect the Company or any of its Subsidiaries or the Business;
(iv) to the Knowledge of the Company, there are no investigations of the businesses of the Company Entities or, to the extent related to the Business, the SunGard Entities or any of their other Subsidiaries, currently or previously owned, operated or leased property of the Company Entities or, to the extent related to the Business, the SunGard Entities or any of their other Subsidiaries, pending or threatened that would reasonably be expected to result in the Company or any of its Subsidiaries incurring any Liabilities under Environmental Laws or concerning Materials of Environmental Concern; and
(v) to the Knowledge of the Company, Materials of Environmental Concern are not present at, on, in or under any property currently or formerly owned or leased by the Company or any of its Subsidiaries or otherwise used by or for the Business, or at any other location (including any property used for the treatment, storage or disposal of wastes generated by the Company or any of its Subsidiaries or the Business), in a condition or under circumstances that would reasonably be expected to result in material Liability to the Company or any of its Subsidiaries as a result of any Environmental Law.
(vi) The Company has made available to Parent prior to the date hereof true and correct copies of all material studies, audits, assessments or other similar documents, concerning compliance with, or liability or obligations under, any Environmental Laws affecting the Company or any of its Subsidiaries, to the extent such documents are in the possession or under the reasonable control of any SunGard Entity or any of its Subsidiaries (including any Company Entity).
39
This Section 5.17 constitutes the sole and exclusive representation and warranty with respect to Environmental Laws and any and all environmental and natural resource matters.
Section 5.18 Insurance. Section 5.18 of the Company Disclosure Schedules lists as of the date hereof all material insurance policies held by the Company Entities, or by the SunGard Entities and their other Subsidiaries for the benefit of the Company Entities or the Business, including all directors and officers and corporate liability insurance policy or policies provided for directors and officers of the Company Entities, each of which is in full force and effect, and no SunGard Entity or any of its Subsidiaries (including any Company Entity) is in material default with respect to any of its obligations under any of such insurance policies. To the Knowledge of the Company, (i) there is no threatened termination of any of such policies and (ii) there is no material claim pending regarding the Business or the Company or any of its Subsidiaries under any of such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies.
Section 5.19 Transactions with Related Persons; Affiliates. None of the Company Entities is a party to any Contract or transactions with, or has any Liabilities, contractual or otherwise (excluding any Liabilities pursuant to employment and compensation and benefits arrangements), owed to or owing from, directly or indirectly, any SunGard Entity or any of its Subsidiaries (other than the Company Entities) or any SunGard Capital Stockholder or any of its Affiliates, in each case other than Contracts and commercial transactions (and Liabilities arising thereunder) entered into in the Ordinary Course of Business on an arms length basis with portfolio companies of the SunGard Capital Stockholders (or of their Affiliates).
Section 5.20 Sufficiency of Assets; Title.
(a) Immediately following the consummation of the Merger, the Company Entities, and, unless the Asset Purchase Agreement has been terminated pursuant to Section 9.1(b) thereof, Purchaser Company and its Subsidiaries, taken as a whole, will, taking into account the services to be provided pursuant to the Transition Services Agreement and the Intellectual Property to be licensed or assigned pursuant to the Intellectual Property Agreement, own or have a right to use all of the assets and other rights (tangible and intangible) used in the Business as it is conducted as of the Applicable Closing.
(b) Subject to the transactions contemplated by the Asset Purchase Agreement and the Intellectual Property Agreement, the Company and the Company Subsidiaries have good, valid and marketable title to their respective owned properties and assets (tangible and intangible) free and clear of any material Liens, other than Permitted Liens.
Section 5.21 Financial Advisors. No Person has acted, directly or indirectly, as a broker, finder or financial advisor for any of the SunGard Entities or their respective Affiliates (including the Company and its Subsidiaries) in connection with the transactions contemplated by this Agreement or the Ancillary Agreements.
Section 5.22 No Other Representations or Warranties; Schedules. Except for the representations and warranties contained in Article IV and this Article V (each as modified by the Schedules hereto) and Article IV of the Asset Purchase Agreement, neither the SunGard
40
Entities, the Company nor any other Person makes any other express or implied representation or warranty with respect to the Company, the Company Subsidiaries, the Business or the Transactions, and the SunGard Entities and the Company disclaim any other representations or warranties, whether made by the SunGard Entities, the Company or any of their respective Affiliates, officers, directors, employees, agents or representatives. Except for the representations and warranties contained in Article IV and this Article V (each as modified by the Schedules hereto) and Article IV of the Asset Purchase Agreement, the SunGard Entities and the Company hereby disclaim all liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Datatel Entities or their respective Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Datatel Entities by any director, officer, employee, agent, consultant, or representative of the SunGard Entities, the Company or any of their respective Affiliates). Neither the Company nor the SunGard Entities makes any representations or warranties to the Datatel Entities regarding the probable success or profitability of the Company or any of its Subsidiaries.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE DATATEL ENTITIES
Except as set forth on the disclosure schedules delivered by the Datatel Entities to the SunGard Entities and the Company prior to the execution of this Agreement (the Datatel Disclosure Schedules, and together with the SunGard Disclosure Schedules and the Company Disclosure Schedules, the Disclosure Schedules) (it being understood and agreed that each item in a particular section of the Datatel Disclosure Schedules applies to the corresponding section hereof and to any other section as to which its relevance is reasonably apparent on the face of such item), the Datatel Entities, jointly and severally, hereby represent and warrant to the SunGard Entities and the Company that:
Section 6.1 Organization and Good Standing. Each of the Datatel Entities is duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each of the Datatel Entities has all requisite power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the Transactions have been duly authorized by all requisite corporate or equivalent action on behalf of each Datatel Entity, except for obtaining the written consent of Parent, as the sole stockholder of Merger Sub. This Agreement and the Asset Purchase Agreement has been, and each of the other Ancillary Agreements to which it is a party will be at or prior to the Closing, duly and validly executed and delivered by Datatel and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each Ancillary Agreement when so executed and delivered will constitute, the legal, valid and binding obligations of each Datatel Entity, enforceable against each Datatel Entity in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
41
Section 6.2 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Datatel Entities of this Agreement or the Ancillary Agreements, the consummation of the Transactions, or compliance by the Datatel Entities with any of the provisions hereof or thereof will (i) conflict with or violate any provision of the certificate of incorporation and bylaws or comparable organizational and governing documents of any Datatel Entity or any of its Subsidiaries, (ii) conflict with, result in any breach or violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under or require a consent or waiver under, any Contract or Permit to which any Datatel Entity or any of its Subsidiaries, is a party or by which any of its properties, rights or assets is bound or (iii) violate any Order or, assuming compliance with the requirements set forth in Section 6.2(b), any Law, applicable to any Datatel Entity or any of its Subsidiaries or by which any of its properties, rights or assets are bound, except in the case of clauses (ii) through (iii), for such matters that, individually or in the aggregate, would not reasonably be expected to have a Datatel Material Adverse Effect.
(b) No material consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of any Datatel Entity or any of its Subsidiaries in connection with the execution and delivery of this Agreement or the Ancillary Agreements or the compliance by the Datatel Entities with any of the provisions hereof or thereof, or the consummation of the Transactions, except for (i) compliance with the applicable requirements of the HSR Act and any other Competition Laws, (ii) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which any Datatel Entity is qualified to do business and (iii) the IRS Submissions and the IRS Ruling, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations or filings that individually or in the aggregate, would not reasonably be expected to have a Datatel Material Adverse Effect.
Section 6.3 Brokers or Finders. No Person has acted, directly or indirectly, as a broker, finder or financial advisor for any of the Datatel Entities in connection with the transactions contemplated by this Agreement.
Section 6.4 Financing. Parent has delivered to the Company true and complete copies of: (i) the executed commitment letter, dated as of August 4, 2011 between Parent, Bank of America, N.A., Merrill Lynch, Pierce Fenner & Smith Incorporated, Barclays Bank PLC, Barclays Capital, the investment banking division of Barclays Bank, Citigroup Global Markets Inc., Credit Suisse AG, Credit Suisse Securities (USA) LLC, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC (collectively, the Debt Financing Sources) and excerpts of those portions of the Fee Letter and any other executed fee letter and engagement letter associated therewith that contain any conditions to funding or flex provisions or other provisions (excluding provisions related solely to fees and economic terms (other than covenants) agreed to by the parties) regarding the terms and conditions of the financing to be provided by such commitment letter (such commitment letter, including all exhibits, schedules, annexes and amendments thereto and each such fee letter and engagement letter, collectively, (the Debt Financing Commitment), pursuant to which, upon the terms and subject to the conditions set forth therein, the Debt Financing Sources have agreed to lend the amounts set
42
forth therein (the Debt Financing) for the purpose of funding the Transactions; (ii) the executed equity commitment letter, dated as of August 4, 2011 among Sophia Holding I and Hellman & Friedman Capital Partners VI, L.P. and the other parties thereto (collectively, the Investors) (the Transaction Equity Financing Commitment and together with the Debt Financing Commitment, the Transaction Financing Commitments), pursuant to which, upon the terms and subject to the conditions set forth therein, each of the Investors has committed to invest the cash amount set forth therein (the Transaction Equity Financing and together with the Debt Financing, the Transaction Financing); and (iii) the executed equity commitment letter, dated as of August 4, 2011 among Datatel and the Investors (the Termination Fee Equity Financing Commitment and together with the Transaction Financing Commitments, the Financing Commitments), pursuant to which, upon the terms and subject to the conditions set forth therein, each of the Investors has committed to invest the cash amount set forth therein (the Termination Fee Equity Financing and together with the Transaction Financing, the Financing). None of the Financing Commitments have been amended or modified prior to the date of this Agreement, and, as of the date hereof, the respective commitments contained in the Financing Commitments have not been withdrawn, terminated or rescinded in any respect. As of the date hereof, there are no other agreements, side letters or arrangements to which Parent or Merger Sub is a party relating to any of the Financing Commitments that could affect the availability of the Financing. As of the date hereof, the Financing Commitments are in full force and effect and constitute the legal, valid and binding obligations of each of Parent and, to the knowledge of Parent, the other parties thereto. There are no conditions precedent related to the funding of the full net proceeds of the Financing (including any market flex provisions) other than as expressly set forth in the Financing Commitments. Assuming the satisfaction of the conditions set forth in Section 8.3(a) and Section 8.3(b), or Section 8.3(a) and Section 8.3(b) of the Asset Purchase Agreement, as applicable, the aggregate proceeds to be disbursed pursuant to the agreements contemplated by the Transaction Financing Commitments, in the aggregate and together with the available cash, cash equivalents and marketable securities of Datatel and its Subsidiaries, will be sufficient for Parent and the Surviving Corporation to pay the Merger Consideration, Purchaser Company to pay the Purchase Price, Datatel and each of its Subsidiaries to refinance their outstanding Indebtedness that is required by its terms to be refinanced in connection with the consummation of the Transactions and the Datatel Entities and their respective Subsidiaries to pay the fees and expenses of the Datatel Entities and the SunGard Entities (to the extent reimbursable under Section 7.15) related to the foregoing. As of the date hereof, no event has occurred which would result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) by Parent under any of the Financing Commitments, and neither Sophia Holding I nor Datatel has any reason to believe that any of the conditions to any of the Financing will not be satisfied or that the Financing will not be available to Sophia Holding I or Datatel, as applicable, on the date of the Applicable Closing or, in the case of the Termination Fee Equity Financing, on the date the Parent Termination Fee is payable in accordance with Section 9.2(b). The Datatel Entities have fully paid all commitment fees or other
43
fees required to be paid on or prior to the date hereof pursuant to the Financing Commitments. Except as otherwise contemplated by Section 9.4, the obligations of the Datatel Entities under this Agreement and the Asset Purchase Agreement are not subject to any conditions regarding their ability to obtain financing for the Transactions.
Section 6.5 Solvency. None of the Datatel Entities is entering into this Agreement or the Financing Commitments with the intent to hinder, delay or defraud either present or future creditors. Immediately after giving effect to all of the transactions contemplated by this Agreement, the Asset Purchase Agreement and the Financing Commitments, including the Transaction Financing, the payment of the Merger Consideration, the payment of the Purchase Price (if applicable), the payment of the Company Transaction Fees and Expenses, the payment of the Datatel Entities fees and expenses and any other repayment or refinancing of debt that may be contemplated in the Debt Financing Commitment, assuming (i) the satisfaction of the conditions to Parents and Merger Subs obligation to consummate (x) the Merger as set forth herein and (y) the Asset Purchase as set forth in the Asset Purchase Agreement, and (ii) the accuracy of the representations and warranties set forth in Article IV and Article V hereof (such that the condition contained in Section 8.3(a) and Section 8.3(a) of the Asset Purchase Agreement would each be satisfied), the Surviving Corporation and the Surviving Corporations Subsidiaries, taken as a whole, will be Solvent.
Section 6.6 Investment Representation. Parent is acquiring the Company Common Stock for its own account with the present intention of holding such securities for investment purposes and not with a view to, or for sale in connection with, any distribution of such securities in violation of any federal or state securities laws. Parent is an accredited investor as defined in Regulation D promulgated by the SEC under the Securities Act. Parent acknowledges that it is informed as to the risks of the transactions contemplated hereby and of ownership of the Company Common Stock. Parent acknowledges that the Company Common Stock has not been registered under the Securities Act, or any state or foreign securities laws and that the Company Common Stock may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation or other disposition is pursuant to the terms of an effective registration statement under the Securities Act and the Company Common Stock is registered under any applicable state or foreign securities laws or sold pursuant to an exemption from registration under the Securities Act and any applicable state or foreign securities laws.
Section 6.7 No Prior Activities. Except for obligations incurred in connection with its incorporation or organization or the negotiation and consummation of this Agreement and the Ancillary Agreements and the Transactions, none of Sophia Holding I, Sophia Holding II, Merger Sub nor Purchaser Company has incurred any obligation or Liability nor engaged in any business or activity of any type or kind whatsoever or entered into any Contract with any Person. In addition, Datatel has no material assets other than the capital stock of Datatel Investment Holding Corp., and no Liabilities of any kind other than (a) Liabilities arising from its franchise Taxes or payments payable to registered agents or similar Liabilities related to the maintenance of its legal existence, (b) immaterial amounts of customary administrative, legal, accounting and similar overhead expenses, (c) income Tax Liabilities in respect of consolidated, combined, unitary, affiliated or separate federal, state or local Tax Returns, (d) Liabilities in respect of its equity incentive plans and agreements and its stockholders agreements and (e) Liabilities
44
incurred in order to consummate the Transactions. Datatel is a non-operating holding company and does not conduct, and has not conducted, any business other than holding the capital stock of Datatel Investment Holding Corp.
Section 6.8 No Other Representations or Warranties; Schedules. Except for the representations and warranties contained in this Article VI (as modified by the Datatel Disclosure Schedules) and Article VI of the Asset Purchase Agreement, neither the Datatel Entities nor any other Person makes any other express or implied representation or warranty with respect to the Datatel Entities, their respective Subsidiaries or the Transactions contemplated by this Agreement or the Asset Purchase Agreement, and each Datatel Entity disclaims any other representations or warranties, whether made by the Datatel Entities or any of their respective Affiliates or Representatives. Except for the representations and warranties contained in this Article VI (as modified by the Datatel Disclosure Schedules) and Article V of the Asset Purchase Agreement, the Datatel Entities hereby disclaim all Liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the SunGard Entities, the Company or their respective Affiliates or Representatives (including any opinion, information, projection, or advice that may have been or may be provided to a SunGard Entity, the Company or any of their respective Affiliates or Representatives by any Representative of the Datatel Entities or any of their Affiliates).
ARTICLE VII
COVENANTS
Section 7.1 Conduct of the Business Prior to the Closing.
(a) Prior to the Closing, except (i) as set forth on Section 7.1(a) of the SunGard Disclosure Schedules or Section 7.1(a) of the Company Disclosure Schedules, as applicable, (ii) as required by applicable Law, (iii) as otherwise expressly contemplated by this Agreement (including the Restructuring) and the Ancillary Agreements (including the Asset Purchase Agreement) or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), each of the SunGard Entities (with respect to the Business only) and the Company shall, and shall cause their respective Subsidiaries to:
(i) conduct the Business only in the Ordinary Course of Business in all material respects; and
(ii) use its commercially reasonable efforts to (A) preserve in all material respects the present business operations and organization of the Business, (B) preserve the goodwill and present relationships with customers, suppliers and (C) submit claims in the Ordinary Course of Business under the insurance policies covering the Business.
(b) Prior to the Closing, except (i) as set forth on Section 7.1(b) of the SunGard Disclosure Schedules or Section 7.1(b) of the Company Disclosure Schedules, as applicable, (ii) as required by applicable Law, (iii) as otherwise expressly contemplated by this Agreement (including the Restructuring) and the Ancillary Agreements (including the Asset Purchase Agreement) or (iv) with the prior written consent of Parent (which consent shall not be
45
unreasonably withheld, delayed or conditioned), each of the SunGard Entities (with respect to the Business only) and the Company shall not, and shall not permit their respective Subsidiaries to:
(i) declare, set aside, make or pay any dividend or other distribution in respect of the capital stock of the Company or the Company Subsidiaries or repurchase, redeem or otherwise acquire, or grant any rights or enter into any Contracts or commitments to repurchase, redeem or acquire, any outstanding shares of the capital stock or other securities of, or other ownership interests in, the Company or any of the Company Subsidiaries, in each case except for (A) payment of cash dividends with a record date and payment time prior to the close of business on the Business Day immediately prior to the date of the Applicable Closing, (B) the payment of cash dividends or other distributions of the Estimated Purchase Price by the Company to SunGard Data following the Applicable Closing as contemplated by the Asset Purchase Agreement and (C) distributions by any wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company;
(ii) issue or sell any shares of capital stock or other securities of the Company or any of its Subsidiaries or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of the Company or any of its Subsidiaries;
(iii) adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(iv) amend the certificate of incorporation or bylaws (or comparable organizational documents) of the Company or any of its Subsidiaries;
(v) except as required as of the date of this Agreement by the terms of any SunGard Benefit Plan or Company Benefit Plan (or as required by the terms of any plan, program or arrangement entered into in accordance with this Section 7.1(b) which, if in effect as of the date of this Agreement, would be a SunGard Benefit Plan or a Company Benefit Plan), (A) increase the annual level of compensation of any Business Employee (except increases in salaries and wages in the Ordinary Course of Business), (B) except in the Ordinary Course of Business, grant any bonus, equity or equity-based compensation, benefit or other direct or indirect compensation to any Business Employee, (C) except in the Ordinary Course of Business, increase the coverage or benefits available under any (or create any new), or accelerate the timing of payments or vesting under any, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other SunGard Benefit Plan or Company Benefit Plan or otherwise modify or amend or terminate any such SunGard Benefit Plan or Company Benefit Plan, (D) except entering into offer letters and non-competition agreements with new employees in the Ordinary Course of Business and entering into employment agreements with non-U.S., non-senior management employees in the Ordinary Course of Business, enter into any employment, deferred compensation, non-competition or similar agreement (or amend any such
46
agreement) involving any Business Employee that would be a SunGard Benefit Plan or Company Benefit Plan if it were in existence as of the date of this Agreement, or (E) except for immaterial amounts paid in the Ordinary Course of Business to Business Employees terminating employment prior to the Closing in exchange for customary general releases of claims, grant any severance or termination compensation or increase the coverage or benefits available under any (or create any new), or accelerate the timing of payments or vesting under any, severance pay or termination pay;
(vi) acquire any material properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material properties or assets of the Business, the Company or any of its Subsidiaries (except sales and non-exclusive licenses of products and services in the Ordinary Course of Business or the disposal of obsolete or worthless assets);
(vii) make any loan, advance or capital contribution to or investment in any Person (other than (A) loans, advances or capital contributions to or investments in wholly-owned Company Subsidiaries and (B) routine advances to Business Employees for business expenses in the Ordinary Course of Business in an amount not exceeding $25,000 at any time to any individual Business Employee);
(viii) other than in the Ordinary Course of Business, cancel or compromise any material debt or claim or waive or release any material right of the Business, the Company or any of the Company Subsidiaries or permit any such right to lapse;
(ix) initiate, compromise or settle any Action (other than in connection with the enforcement of the Companys rights under this Agreement and the Ancillary Agreements), other than settlements of any claims against the Business or any of the Company Entities solely for money damages in excess of $500,000 payable prior to the close of business on the Business Day immediately prior to the date of the Applicable Closing;
(x) enter into, modify or terminate any labor or collective bargaining agreement or, through negotiations or otherwise, make any commitment or incur any Liability to any labor organizations;
(xi) enter into or agree to enter into any merger or consolidation with any corporation or other entity, or acquire the securities or any division, business or all or substantially all of the assets of any other Person, in each case, involving the expenditure, or potential expenditure, of more than $100,000 individually or $500,000 in the aggregate;
(xii) to the extent that doing so would reasonably be expected to increase any Taxes of any Company Entity or with respect to the Business in any Post-Closing Tax Period or the portion of a Straddle Period beginning after the Closing Date, make, change or rescind any material election relating to Taxes of any Company Entity or with respect to the Business, change any method of Tax accounting in respect of material Taxes of any Company Entity or with respect to the Business, file any amended Tax Return in respect
47
of material Taxes of any Company Entity or with respect to the Business, settle or compromise any claim, investigation, audit or controversy relating to a material amount of Taxes of any Company Entity or with respect to the Business, enter into any closing agreement with respect to any material Tax of any Company Entity or with respect to the Business or surrender any right to claim a material Tax refund of any Company Entity or with respect to the Business;
(xiii) change its fiscal year or, except to the extent required by Law or GAAP or in conjunction with an action taken by SunGard Capital, SunGard Capital II and SunGard Data with respect to their overall accounting methods and practices, make any material change to any of its methods of accounting or methods of reporting revenue and expenses or accounting practices;
(xiv) (A) sell, assign, transfer or convey to any Person, including to any SunGard Entity or any of its Subsidiaries (other than the Company Entities), or otherwise dispose of any of the material Intellectual Property owned by the Company and its Subsidiaries, (B) grant any licenses under any Intellectual Property owned by the Company and its Subsidiaries (other than non-exclusive licenses granted in the Ordinary Course of Business) or enter into any Specified Open Source Licenses, or (C) make any contributions of Intellectual Property to the IAF or any contributions of source code to the IPP (as such terms are defined in the Intellectual Property Agreement);
(xv) enter into any joint venture, general or limited partnership agreement, limited liability company agreement or other similar agreement;
(xvi) (A) enter into any new Contract that would be a Material Contract (other than pursuant to clauses (iii), (v)(B), (x) or (xi) of such definition (each, an Ordinary Course Material Contract)) if entered into on or prior to the date hereof or, except as required by their terms, terminate or amend or modify any Material Contract (other than an Ordinary Course Material Contract) or any such new Contract or (B) enter into any new Contract that would be an Ordinary Course Material Contract or terminate, amend or modify any Ordinary Course Material Contract or any such new Contract, except in each case pursuant to this clause (B), in the Ordinary Course of Business;
(xvii) (A) incur any Indebtedness (other than incurring Indebtedness in the Ordinary Course of Business in an aggregate amount at any time not exceeding $1,000,000 which will be repaid prior to the Applicable Closing and other than draw downs of any letter of credit issued as of the date hereof or thereafter in the Ordinary Course of Business), (B) other than in the Ordinary Course of Business, enter into any letter of credit, performance bond, cash collateral or escrow requirement or similar credit support arrangement on behalf of the Business or any of the Company Entities or (C) incur any Lien (other than Permitted Liens) on any asset or properties (whether tangible or intangible) of the Company or any of the Company Subsidiaries unless such Lien will be released prior to the Applicable Closing;
48
(xviii) amend, extend, renew or permit to lapse existing insurance policies or enter into new insurance policies, except in either case (A) on such terms and for such amounts in the Ordinary Course of Business or (B) in a manner consistent with the overall insurance programs and policies applicable to the SunGard Entities and their Subsidiaries;
(xix) other than with respect to notice rights that do not provide any additional rights to any other Person or subject the Business or the Company or any of its Subsidiaries or any of their respective assets to any additional obligations, liabilities or Liens, enter into any Contract that would be material to the Business, taken as a whole, with any Person that provides such Person rights or entitlements in connection with a change of control of the Business or the Company or any of its Subsidiaries;
(xx) transfer any Business Employee to any SunGard Entity or any of its Affiliates (other than the Company and the Company Subsidiaries) or transfer any employee (other than a Business Employee) of SunGard Data or any of its Affiliates to the Company or any of its Subsidiaries;
(xxi) except in the Ordinary Course of Business, materially change or modify any credit, collection and payment policies, procedures or practices (including any material acceleration in the collection of receivables or material delay in the payment of payables);
(xxii) make any contributions of Intellectual Property to the IAF or any source code to the IPP (as such terms are defined in the Intellectual Property Agreement); or
(xxiii) agree or commit to do anything prohibited by this Section 7.1(b).
(c) Prior to the Applicable Closing, each of the SunGard Entities (with respect to the Business only) and the Company shall, and shall cause their respective Subsidiaries to, use its commercially reasonable efforts to cause all unrestricted cash and cash equivalents inside the United States held by any of the Company Entities to be distributed to Seller prior to the close of business on the Business Day immediately prior to the date of the Applicable Closing.
Section 7.2 Efforts. Subject to the terms and conditions herein provided and without limiting the obligations of any Party to the extent a higher standard of efforts is expressly provided for in this Agreement with respect to any specific action or matter, each of the Parties agrees to use commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done as promptly as practicable, all things necessary, proper and advisable under applicable Laws to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and the Ancillary Agreements, including cooperating with one another and using all commercially reasonable efforts to prepare all necessary documentation to effect all necessary filings and to obtain all consents, waivers and approvals necessary to consummate the transactions contemplated by this Agreement (including the Restructuring) and the Ancillary Agreements (including the Asset Purchase), including the consents and approvals referred to in Section 4.3, Section 5.3 and Section 6.2 (or the Disclosure Schedules thereto); provided, however, that (a) no Party shall be obligated to pay any consideration to any third party
49
from whom any such consent, waiver or approval is requested and (b) the prior written consent of Parent shall be required with respect to any amendment or modification to, or termination of, any Contract of the Business in connection with obtaining any such consent, waiver or approval that is adverse in any material respect to the Datatel Entities, the Company or any of their respective Subsidiaries.
Section 7.3 No Solicitation. Except as set forth on Section 7.3 of the SunGard Disclosure Schedules, each of the SunGard Entities and the Company agrees that after the date hereof until the earlier of the Closing or the termination of this Agreement in accordance with its terms, it shall not, and it shall cause its Subsidiaries, officers, directors and senior employees and the members of the operating committee of SunGard Capital, and shall use its reasonable best efforts to cause the SunGard Capital Stockholders and their respective officers, directors and senior employees and the investment bankers of any of the foregoing Persons, not to, directly or indirectly: (a) solicit, initiate, or knowingly facilitate the submission of any proposal for an Acquisition Alternative, (b) participate in any negotiations regarding, or furnish to any Person any information with respect to, any Acquisition Alternative, or (c) enter into any agreement with respect to any Acquisition Alternative. Without limiting the generality of the foregoing, each of the SunGard Entities and the Company shall, and shall cause its Subsidiaries, officers, directors and senior employees and the members of the operating committee of SunGard Capital to, and shall use its reasonable best efforts to cause the SunGard Capital Stockholders and their respective officers, directors and senior employees and the investment bankers of any of the foregoing Persons to, immediately cease and cause to be terminated any existing activities, including discussions or negotiations with any Person, conducted prior to the date hereof with respect to any Acquisition Alternative.
Section 7.4 Tax Matters.
(a) Transfer Taxes. The liability for Transfer Taxes imposed in connection with the transactions contemplated by this Agreement and the Asset Purchase Agreement shall be borne one-half by Parent and one-half by Seller; provided, that (1) any Transfer Taxes attributable to the Restructuring shall be borne solely by SunGard Data (except to the extent such Transfer Taxes are Excess Costs for which Parent is responsible pursuant to Exhibit C) and (2) any Transfer Taxes imposed in connection with the sale of the SMS Business pursuant to the Asset Purchase Agreement shall be borne solely by the Parent and the Purchaser Company (except to the extent such Transfer Taxes result from transactions that otherwise are required to occur pursuant to the Restructuring unless such Transfer Taxes are Excess Costs for which Parent is responsible pursuant to Exhibit C). Seller and Parent shall cooperate with each other in the provision of any information or preparation of any documentation that may be necessary or useful for obtaining any available mitigation, reduction or exemption from any Transfer Taxes and shall each use their reasonable best efforts to minimize the incurrence of Transfer Taxes in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.
(b) Tax Returns and Payment of Taxes.
(i) To the extent permitted under applicable Tax Law, SunGard Capital shall include the Company Entities, or cause the Company Entities to be included, in (x) the consolidated U.S. federal income Tax Returns of SunGard Capital for all Pre-Closing Tax
50
Periods, and (y) to the extent consistent with past practice, consolidated, affiliated, combined, or unitary Tax Returns for state and local income Taxes required to be filed by SunGard Capital or any of its Subsidiaries for all Pre-Closing Tax Periods (all such Tax Returns in (x) and (y), the SunGard Consolidated Tax Returns).
(ii) SunGard Capital shall prepare and file, or cause to be prepared and filed (x) all SunGard Consolidated Tax Returns, and (y) all other income or franchise or similar Tax Returns required to be filed after the date hereof by or with respect to the Company Entities or the Business for any Pre-Closing Tax Period (all such Tax Returns in (x) and (y), the Pre-Closing Tax Returns), and the Seller shall pay, or cause to be paid in full, all Taxes with respect to such Pre-Closing Tax Returns to the applicable taxing authority. SunGard Capital shall prepare such Tax Returns in a manner consistent with past practice, except as required by applicable Law. All Pre-Closing Tax Returns shall be prepared in a manner consistent with the terms of the Asset Purchase Agreement and this Agreement (including the Merger Consideration and the Purchase Price (as defined in the Asset Purchase Agreement)), the IRS Ruling and the Company Stock Basis determined pursuant to Section 7.4(e)(i) (the Transaction Filing Positions). Seller shall provide each Pre-Closing Tax Return that relates to the Company Entities or the Business and, to the extent relevant to the Company, the relevant portion of each pro forma SunGard Consolidated Tax Return for the Company Entities to Parent for Parents review and comment no later than thirty (30) days prior to the due date for filing each such Pre-Closing Tax Return (including extensions validly obtained). Seller shall make such revisions to such Pre-Closing Tax Returns that relate to the Company Entities or the Business and the relevant portion of each SunGard Consolidated Tax Return as are reasonably requested by Parent no later than fifteen (15) days after receipt of the applicable Tax Return (or relevant portion of a Tax Return), to the extent such revisions are required to file consistently with the Transaction Filing Positions. Parent shall file, or shall cause the relevant Company Entity to file, any Tax Return prepared by Seller that Seller may not file and that Parent, or such Company Entity, is required to or authorized to file. Neither SunGard Capital nor any of its Affiliates shall file any amended Pre-Closing Tax Returns that takes a position inconsistent with the Transaction Filing Positions without the consent of Parent.
(iii) Parent shall prepare or cause to be prepared and file or cause to be filed any income Tax Returns with respect to the Company Entities or the Business for any Straddle Period. Each such Tax Return shall be prepared consistent with past practice of the Company Entities, unless such practice is not consistent with applicable Law. Seller shall pay to Parent at least five days prior to the due date for such Tax Return (taking into account extensions validly obtained), an amount equal to the portion of the Taxes shown as due on such Tax Return that relates to the portion of such Straddle Period ending on (and including) the Closing Date after taking into account any payments of estimated Taxes previously paid for such portion. Parent shall (x) provide each such Tax Return to Seller no later than thirty (30) days prior to the due date for filing such Tax Return (including extensions validly obtained), (y) permit Seller to review and comment on each such Tax Return and (z) with respect to any items on any such Tax Return that may affect Sellers liability pursuant to Section 7.4, make such revisions to such Tax Return as are
51
reasonably requested by Seller, to the extent such revisions are consistent with past practice and in accordance with applicable Law; provided, however, in the event that Parent and Seller are unable to resolve any dispute regarding any such requested revisions within fifteen (15) days following delivery of such Tax Return to Seller, Parent and Seller shall resolve such dispute by jointly requesting that a mutually acceptable accounting firm resolve such dispute before the due date of such Tax Return (including extensions validly obtained). The scope of such accounting firms resolution shall be limited to the disputed item or items. If the due date for any disputed Tax Return (including extensions validly obtained) is prior to the resolution of such dispute pursuant to this Section 7.4(b)(iii), Parent shall be entitled to file such Tax Return prior to the resolution and shall amend the Tax Return as necessary to reflect the decision of the accounting firm pursuant to this Section 7.4(b)(iii). Each of Seller and Parent shall pay one half of the accounting firms fees and expenses related to such resolution.
(iv) Subject to Section 7.4(b)(v), the amount of Taxes allocable to the portion of the Straddle Period ending on (and including) the Closing Date shall (x) in the case of Taxes imposed on a periodic basis (such as real or personal property Taxes), be deemed to be the amount of such Tax for the entire Taxable Period multiplied by a fraction the numerator of which is the number of days in the Taxable Period ending on and including the Closing Date and the denominator of which is the number of days in the entire Taxable Period, and (y) in the case of any Tax not described in clause (x) above (such as Taxes based upon or related to income or receipts) be deemed to be equal to the amount which would be payable if the relevant Taxable Period ended on and included the Closing Date.
(v) For the avoidance of doubt, the Parties agree that any Taxes imposed in connection with the Restructuring or the sale of the SMS Business pursuant to the Asset Purchase Agreement shall be treated as occurring in a Pre-Closing Tax Period or the portion of a Straddle Period ending on and including the Closing Date and, subject to Section 7.4(d), Seller shall be responsible for the payment of such Taxes. Any gain or loss recognized in connection with the Restructuring or the sale of the SMS Business pursuant to the Asset Purchase Agreement shall be included in the consolidated U.S. federal income Tax Return of SunGard Capital and any consolidated, affiliated, combined, or unitary Tax Returns for state and local income Taxes required to be filed by SunGard Capital or any of its Subsidiaries.
(vi) Except as required by law, neither Parent nor any Company Entity shall, without the prior written consent of Seller, amend, refile or otherwise modify, or cause or permit an Affiliate to amend, refile or otherwise modify, any Tax election of Tax Return or Tax item that would be reflected on a Tax Return with respect to any taxable period (or portion thereof) ending on or before the Closing Date.
(vii) Seller, Parent and the Company Entities agree that if any Company Entity is permitted but not required under applicable U.S. federal, state, or local or foreign income Tax Laws to treat the Closing Date as the last day of a Taxable Period, then Seller, Parent and the Company Entities shall treat such day as the last day of a Taxable Period under such applicable Tax Law.
52
(viii) The Parties shall cooperate with each other in the filing of any Tax Returns and the conduct of any audit or other proceeding. They each shall make available such documents as are reasonably necessary to carry out the intent of this Section 7.4. Notwithstanding anything to the contrary in this Agreement, each Party shall retain each Tax Return, schedule and work paper and all material records or other documents that are in its possession immediately following the Closing, or created by or on behalf of it thereafter, relating to Tax matters of the Company Entities or that are otherwise the subject of this Section 7.4, for the taxable period of each relevant jurisdiction first ending after the Closing Date and for all prior taxable periods until the later of (x) the expiration of the statute of limitations of the taxable period to which such Tax Return or other documents relate, without regard to extensions except to the extent notified by the other Party in writing, or (y) six years following the due date (without extensions) for such Tax Return.
(c) Tax Controversies. Each Party shall promptly notify the other Party in writing (a Notification) after receipt of notice of any pending or threatened audits, assessments or proceedings with respect to Taxes for which the other Party (or any of its Affiliates) is liable under this Section 7.4 (a Tax Claim). Failure to give such Notification shall not relieve the indemnifying party from liability under Section 7.4, except if and to the extent that the indemnifying party is materially prejudiced thereby. Seller shall control the conduct, through counsel of its own choosing at its own expense, of any Tax Claim relating to a Pre-Closing Tax Period of any Company Entity and any Tax Claim involving the consolidated U.S. federal income Tax Return of SunGard Capital (and any combined, unitary or consolidated state Tax Return of SunGard Capital); provided that Parent shall be entitled to participate, at Parents expense, in any such Tax Claim for which Parent may be liable under Section 7.4 or that may affect the Taxes of Parent or any Company Entity in any Post-Closing Tax Period or the portion of a Straddle Period beginning after the Closing Date. Seller (and its Affiliates) shall not settle, compromise and/or concede any such Tax Claim without the consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, that, so long as Parent has caused to be delivered to SunGard Capital an opinion of nationally recognized counsel mutually agreeable to the Parties that there is a reasonable basis for Parents positions, Parent shall be entitled, through counsel of its own choosing at its own expense, to jointly control with Seller the conduct of the portion of any such Tax Claim that relates to issues that could give rise to an indemnification obligation under Section 7.4(d)(ii)(C) or Section 7.4(d)(ii)(D), and Seller shall not settle such portion of such Tax Claim without the consent of Parent. In the case of a Tax Claim that relates to Taxes for a Straddle Period of any Company Entity or for which Parent is otherwise liable under this Section 7.4, Parent shall, at its own expense, control the conduct of such Tax Claim; provided that Seller and Parent shall jointly control any such Tax Claim in respect of a Straddle Period if Seller has more or substantially the same reasonably expected liability under Section 7.4, and Seller shall be entitled to participate, at Sellers expense, in any other Tax Claim in respect of a Straddle Period; provided further that Parent shall not settle any such Tax Claim in respect of a Straddle Period without the consent of Seller, which consent shall not be unreasonably withheld, delayed or conditioned. The provisions of Section 10.3(a) shall not apply to Tax Claims governed by this Section 7.4(c).
(d) Indemnification for Taxes.
53
(i) From and after the Closing Date, and except to the extent that Parent is liable therefor pursuant to the Asset Purchase Agreement or Section 7.4(d)(ii), the SunGard Entities, on a joint and several basis, shall be liable for and pay, and shall indemnify, defend and hold harmless the Datatel Indemnified Parties from and against:
(A) | any and all Taxes of the Company Entities for (A) any Pre-Closing Tax Period, and (B) with respect to any Straddle Period, the portion thereof ending on and including the Closing Date (as determined under Section 7.4(b)(iv) and (v)) (including any Taxes resulting from the sale of the SMS Business pursuant to the Asset Purchase Agreement); |
(B) | any and all Taxes of any Person imposed under Treasury Regulation Section 1.1502-6 or under any comparable or similar provision of state, local or foreign Tax Law on a Company Entity as a result of such Company Entity being a member of a consolidated, combined, affiliated or unitary group on or prior to the Closing Date, or as a transferee or successor, or pursuant to any law, rule or regulation relating to an event or transaction prior to the Closing or pursuant to a Tax sharing or indemnity agreement, or similar arrangement (other than agreements or arrangements entered into in the ordinary course of business as arms-length commercial agreements or arrangements that do not relate primarily to Taxes, such as loan or leasing agreements) entered into by a Company Entity prior to the Closing; |
(C) | any and all Taxes of the Company Entities or Parent resulting from any breach by Seller of the covenant contained in Section 7.1(b)(xiii) of this Agreement; |
(D) | any and all Taxes of the Company Entities or Parent for any Pre-Closing Tax Period or the portion of a Straddle Period ending on and including the Closing Date resulting from a breach by the SunGard Entities or the Company of the representations and warranties contained in Section 5.9; |
(E) | any Transfer Taxes and Taxes in respect of the Restructuring for which Seller is liable pursuant to Section 7.4(a); and |
(F) | any reasonable out-of-pocket costs and expenses related to the items in (A) through (E) above. |
(ii) Parent, the Purchaser Company and the Company, on a joint and several basis, shall be liable for and pay, and shall indemnify, defend and hold harmless the SunGard Indemnified Parties from and against:
(A) | any and all Taxes of the Company Entities for (A) any Post-Closing Tax Period, and (B) with respect to any Straddle Period, |
54
the portion thereof beginning after the Closing Date (as determined under Section 7.4(b)(iv)); |
(B) | any and all Taxes of the Company Entities for (A) any Pre-Closing Tax Period or (B) with respect to any Straddle Period, the portion thereof ending on or before the Closing Date (as determined under Section 7.4(b)(iv)) in each case resulting from Tax elections made by Parent or any Company Entity or any of their Affiliates after the Closing or any actions on the Closing Date after the Closing, in each case not made in the ordinary course of business of the Company Entities or other than as explicitly contemplated by this Agreement or the Asset Purchase Agreement; |
(C) | the excess of (1) the amount of any and all U.S. federal income Taxes payable by the SunGard Capital consolidated group for the taxable year which includes the Closing Date or any other Taxable Period as a result of the transactions contemplated by the Asset Purchase Agreement and this Agreement, including the sale and purchase of the SMS Business and the Merger (including any such U.S. federal income Taxes payable in any Taxable Period as a result of losses, deductions, credits or carryovers of losses or credits (Tax Benefit Items) having been used to offset income or gain, or to reduce Taxes of the SunGard Capital consolidated group resulting, from such transactions) over (2) the amount of U.S. federal income Taxes that would have been payable by the SunGard Capital consolidated group for the taxable year which includes the Closing Date or such other Taxable Period if there had been no Asset Purchase Agreement and the Company Common Stock had been transferred pursuant to the Merger for $1,775,000,000, as adjusted pursuant to Section 2.2 (with such adjustment determined as if the Asset Purchase Agreement had terminated pursuant to Section 9.1(b) thereof) (including any such U.S. federal income Taxes payable in any Taxable Period as a result of any Tax Benefit Item having been used to offset income or gain, or to reduce Taxes of the SunGard Capital consolidated group resulting, from such transfer); provided that Taxes payable as the result of receiving an indemnity payment pursuant to this Agreement (including amounts payable to gross up for Taxes on receipt of an indemnity payment) shall not be taken into account in determining the amount indemnifiable pursuant to this Section 7.4(d)(ii)(C); |
(D) | the excess of (1) the amount of any and all foreign or U.S. state or local income, franchise or similar Taxes (based in whole or in part on net income) payable by any Company Entity, SunGard Capital or any Subsidiary of SunGard Capital for the taxable year which includes the Closing Date or any other Taxable Period as a result |
55
of the transactions contemplated by the Asset Purchase Agreement and this Agreement, including the sale and purchase of the SMS Business and the Merger (including any such Taxes payable in any Taxable Period as a result of any Tax Benefit Item having been used to offset income or gain, or to reduce Taxes of any Company Entity, SunGard Capital or any Subsidiary of SunGard Capital resulting, from such transactions) over (2) the amount of any such foreign or U.S. state or local income, franchise or similar Taxes (based in whole or in part on net income) determined to be payable by any Company Entity, SunGard Capital or any Subsidiary of SunGard Capital for any Taxable Period by reporting such transactions for such Tax purposes in a manner consistent with the terms of the Asset Purchase Agreement (including the sale of the SMS Business), this Agreement (including the Merger) and, to the extent relevant, the IRS Ruling (including any such Taxes payable in any Taxable Period as a result of any Tax Benefit Item having been used to offset income or gain, or to reduce Taxes of any Company Entity, SunGard Capital or any Subsidiary of SunGard Capital resulting, from such transactions); provided that Taxes payable as the result of receiving an indemnity payment pursuant to this Agreement (including amounts payable to gross up for Taxes on receipt of an indemnity payment) shall not be taken into account in determining the amount indemnifiable pursuant to this Section 7.4(d)(ii)(D); |
(E) | any Transfer Taxes for which Parent or the Purchaser Company is liable pursuant to Section 7.4(a); and |
(F) | any reasonable out of pocket costs and expenses related to the items in (A) through (E) above. |
(iii) Payment by the indemnifying Party of any amount under this Section 7.4(d) shall be made no later than the later of ten (10) days after written notice by the indemnified Party, which notice shall provide in reasonable detail the amount due to the relevant taxing authority and an explanation therefor, and three (3) days before payment is due to the relevant taxing authority; provided that in the case of a Tax that is contested in accordance with Section 7.4(c), payment of the Tax to the appropriate taxing authority will be considered due no earlier than the date of a determination, within the meaning of Section 1313 of the Code (or any comparable provision of state, local or foreign law), to such effect or such other final, binding settlement with a taxing authority.
(iv) In the event the Asset Purchase Agreement has terminated, Parent and the Company shall have no obligation to indemnify the SunGard Indemnified Parties pursuant to Section 7.4(d)(ii)(C) or Section 7.4(d)(ii)(D), and such Sections shall have no effect. For the avoidance of doubt, the applicability of Section 7.4(d)(ii)(C) and Section 7.4(d)(ii)(D) shall not be limited by reason of the receipt of the IRS Ruling.
56
(v) Notwithstanding anything to the contrary in this Agreement, this Section 7.4 shall be the sole provision governing indemnification for Taxes under this Agreement.
(e) Basis Determination; Certain Indemnity Issues.
(i) The SunGard Entities shall use their reasonable best efforts to cooperate with the Datatel Entities to permit the Datatel Entities to review and make an independent determination of SunGard Datas basis in the Company Common Stock (the Company Stock Basis). Within ten (10) Business Days after the date hereof, the SunGard Entities shall make available to the Datatel Entities a calculation of the Company Stock Basis along with reasonable supporting detail, as well as any books, records and studies related to the Company Stock Basis that may be useful to the basis determination by the Datatel Entities. The SunGard Entities shall also make available, on a reasonable basis and with reasonable notice, employees and Representatives to provide information and explanations of such materials. The SunGard Entities shall provide updated information related to the Company Stock Basis from time to time as reasonably requested by the Datatel Entities and shall provide the Datatel Entities with an updated calculation of the Company Stock Basis along with a reasonably detailed calculation thereof between twenty five (25) Business Days and fifteen (15) Business Days prior to the date that is reasonably expected to be the Closing Date. Prior to filing any Tax Return for which the Company Stock Basis is relevant (other than in respect of Taxes paid on an estimated basis within thirty (30) days of the Closing Date), the SunGard Entities shall provide the Datatel Entities with their calculation of the Company Stock Basis as of the Closing Date. If the Datatel Entities do not agree with the Company Stock Basis provided by the SunGard Entities, the parties shall attempt to resolve such disagreement within thirty (30) days after the Datatel Entities are provided with the Company Stock Basis calculation. If they are unable to do so, the Independent Accountant shall make a determination of the Company Stock Basis within thirty (30) days of a request by one of the Parties, and the Independent Accountant (or such other mutually acceptable tax advisor) shall provide to SunGard Data a letter in support of filing applicable Tax Returns using the Company Stock Basis so determined. The Company Stock Basis as agreed between the parties or as determined by the Independent Accountant shall be used in the preparation of the Tax Returns of the SunGard Entities as provided in Section 7.4(b). All reasonable and documented out-of-pocket expenses of the determination described in this Section 7.4(e)(i), including the fees of Representatives, service providers and the Independent Accountant, shall be paid by Parent. For the avoidance of doubt, the determination of the Company Stock Basis hereunder shall not relieve Parent, Purchaser Company and the Company from their obligations under Sections 7.4(d)(ii)(C) and/ or (D).
(ii) If, after the Closing Date, Seller determines that Parent, Purchaser Company and the Company have an indemnifiable obligation under Section 7.4(d)(ii)(C) and/or (D), Seller shall promptly notify Parent and provide Parent with copies of its calculation of the amount to be indemnified under Section 7.4(d)(ii)(C) or (D) (which shall include the component calculations in clauses (1) and (2) of such Sections), together with any documentation or supporting information reasonably requested by Parent to
57
enable it to verify the accuracy of such calculations. Seller and Parent shall attempt in good faith to resolve any disputes with respect to such calculations, and any such resolution shall be final and binding on the Parties. In the event that Seller and Parent are unable to reach agreement on such calculations after a period of sixty (60) days, then any items remaining in dispute shall be submitted for resolution to the Independent Accountant, which shall issue its determination within sixty (60) days after submission, and such determination shall be final and binding as to the Parties absent manifest error. Seller and Parent shall provide such accounting firm with any documentation or supporting information as may be reasonably requested in order to allow such accounting firm to make its determination. The fees and expenses of such accounting firm shall be borne by Parent. Notwithstanding the foregoing, nothing in this Section 7.4(e) shall limit the rights of any Party under Section 7.4(c).
(f) Refunds. Except as provided in Section 7.4(g), any refund of Taxes that were imposed on any Company Entity for any taxable period (or portion thereof) or otherwise and for which the SunGard Entities are liable under Section 7.4(d)(i) shall be the property of SunGard Data and, if received by any Company Entity or any Datatel Entity (including by way of credit offset or allowance against Taxes otherwise payable), an amount equal to such refund (net of any Taxes thereon) shall be paid to Seller promptly upon the date of its receipt or realization. Any refunds of Taxes with respect to a Straddle Period shall be equitably apportioned between SunGard Data and Parent in accordance with their respective indemnification obligations under Section 7.4(d). At SunGard Datas request, Parent shall file, or shall cause the relevant Company Entity to file, any amended Tax Returns or other claims for a refund of Taxes to which SunGard Data is entitled under this Section 7.4(f); provided that neither Parent nor any Company Entity shall be required to file any amended Tax Return or other claim for a refund if doing so would increase the Tax liability of any Datatel Entity or Company Entity in any Post-Closing Tax Period.
(g) Carrybacks. To the extent permitted by Law, the Datatel Parties and the Company shall not, or shall make an election not to, carry back losses, credits and similar items of the Company or any Company Subsidiary from any Straddle Period or Post-Closing Tax Period to a Pre-Closing Tax Period. With respect to any item for which an election not to carry back cannot be made, any refund actually received by a SunGard Entity (net of any cost, Tax or other reasonable expense incurred or paid by the SunGard Entities in connection with obtaining or receiving such refund) that is attributable to the carryback of such item shall be the property of, and shall be paid over promptly to the Datatel Parties
(h) IRS Ruling Request. The Parties shall use their reasonable best efforts to seek the IRS Ruling as promptly as practicable; provided that the Datatel Entities and their Representatives shall have the primary responsibility for preparing IRS Submissions (as defined below), subject to the SunGard Entities right to review and comment thereon. The SunGard Entities and the Datatel Entities shall, and shall cause their respective Affiliates, officers, agents, representatives and employees to reasonably cooperate with each other in connection with the preparation and filing of the request for the IRS Ruling (the IRS Submissions), including (i) providing each other reasonable access to information and Persons of the SunGard Entities and the Datatel Entities and their respective Affiliates necessary to effectively prepare and file any IRS Submissions, (ii) executing powers of
58
attorney such that the Datatel Entities, the SunGard Entities and their Representatives can communicate with the IRS in respect of the IRS Submissions, (iii) providing the IRS such information and representations as the IRS shall request from the SunGard Entities or the Datatel Entities directly, (iv) as required, executing and delivering any IRS Submissions and (v) jointly communicating with the IRS with respect to the matters addressed in the IRS Ruling; provided that neither any SunGard Entity nor any Company Entity shall be required to provide any access to information to the Datatel Entities or any information to the IRS if, in the good faith determination of SunGard Data, it would have a materially adverse effect on any SunGard Entity or any Company Entity. The Datatel Entities shall provide SunGard Capital with a draft of the IRS Submissions (excluding any information that is to be provided by any SunGard Entity or any Company Entity) promptly after the date of this Agreement for SunGard Capitals review and comment. SunGard Capital shall provide any such comments no later than seven (7) days after receipt of the draft of the IRS Submissions, and the Parties shall use their reasonable best efforts to cause the IRS Submissions to be filed no later than five (5) Business Days after SunGard Capitals comments, if any, have been provided. Notwithstanding the foregoing, SunGard Capital may redact from any IRS Submissions any information about any SunGard Entity or the Company that SunGard Capital determines, in its reasonable discretion, not to be publicly available information (including any legal analysis or conclusion) that is not pertinent to the transactions contemplated by this Agreement or the Asset Purchase Agreement. All reasonable costs and expenses incurred in respect of the IRS Submissions shall be borne by the Datatel Entities, and Parent shall reimburse the SunGard Entities for any reasonable and documented out-of-pocket costs and expenses, including reasonable attorneys and other advisors fees, incurred by or on behalf of a SunGard Entity in connection with the IRS Submissions. To the extent practicable, each of the SunGard Entities and the Datatel Entities and their respective Representatives shall not engage in any significant ex parte communication with the IRS in connection with the IRS Submissions. The SunGard Entities shall inform the IRS personnel handling the SunGard Entities spin-off ruling request about the IRS Submissions; provided that the Datatel Entities may participate in any communication so informing the IRS.
(i) No Section 338 Election. Parent is not eligible to make any election under Section 338(g) or Section 338(h)(10) in connection with the Merger in respect of any Company Entity, and the Parties agree that no such election shall be made in connection with the Merger.
(j) Tax Sharing Agreements. All Tax sharing agreements or similar agreements between any SunGard Entity and any Company Entity shall be terminated prior to the Closing and no further payments shall be made thereunder.
Section 7.5 Employee Matters.
(a) As of the Closing, except as otherwise contemplated by Section 7.5 of the Asset Purchase Agreement or Exhibit C, the Business Employees shall cease to be employees of the SunGard Entities or any of their respective Subsidiaries (other than the Company Entities), as applicable, and shall become or continue to be employees of the Company or its Subsidiaries, as applicable, without any interruption in employment, and the Company or its Subsidiaries shall be the sole employer of the Business Employees at the Closing. At the Closing, the Company Entities shall not employ any individuals other than the Business Employees. The Business Employees (including Business Employees covered by the Collective Bargaining Agreement,
59
defined below) shall be entitled to all compensation or benefits accrued and payable under each SunGard Benefit Plan other than a Company Benefit Plan (excluding any SunGard Benefit Plan providing severance or termination pay) immediately prior to the Closing, which shall be paid by the SunGard Entities in accordance with the terms and conditions of such SunGard Benefit Plans. Only to the extent Business Employees are covered by the collective bargaining agreement between the Company and Local 1723/TUCA Chapter, Council 47, American Federation of State, County and Municipal Employees, AFL-CIO, effective July 1, 2010 through June 30, 2013 (the Collective Bargaining Agreement), the Datatel Entities agree that, effective at the Closing, the Company shall assume and be bound by the Collective Bargaining Agreement with respect to the applicable Business Employees and shall provide employee benefits to the covered Business Employees in accordance with the terms of the Collective Bargaining Agreement or, to the extent necessary and permissible under the Collective Bargaining Agreement, shall provide substantially equivalent benefits.
(b) (i) None of the Company Entities shall establish, maintain or assume any benefit plan as of the Closing, and (ii) none of the Company Entities shall assume or be deemed to assume any Liabilities or obligations related to or with respect to any SunGard Benefit Plan as of the Closing.
(c) Subject to Section 7.5(c) of the Company Disclosure Schedules, for a period of at least one year following the Closing, the Datatel Entities shall provide, or cause their Subsidiaries or the Company to provide, to Business Employees, other than Business Employees covered by the Collective Bargaining Agreement, bonus and commission opportunity, base wages and salaries and employee benefits and fringe benefits under plans, programs and arrangements (other than equity-based plans) that are at least as favorable as the bonus and commission opportunities, base wages and salaries and employee benefits and fringe benefits provided by Datatel, Inc. to similarly situated employees of Datatel, Inc. For greater certainty, neither the Datatel Entities nor the Company or any of their respective Subsidiaries shall be under any obligation to retain any Company Benefit Plan or Datatel Benefit Plan following the Closing, other than as required by applicable Law.
(d) To the extent that service is relevant for purposes of eligibility or vesting (other than benefit accrual under a defined benefit plan and vesting pursuant to equity incentive plans) under any Datatel Benefit Plan or any other employee benefit or fringe benefit plan, program or arrangement established or maintained by the Datatel Entities or the Company Entities after the Closing for the benefit of Business Employees, such plan, program or arrangement shall credit Business Employees for service on or prior to the Closing with the SunGard Entities or their Subsidiaries, as the case may be, to the same extent credited for such purposes under the comparable plan, program or arrangement immediately prior to the Closing. For greater certainty, no service by a Business Employee need be recognized to the extent that such recognition would result in any duplication of benefits, or to the extent that such service was not recognized under the corresponding SunGard Benefit Plan, and no such service need be recognized for benefit accrual purposes in any Datatel Benefit Plan that constitutes a defined benefit pension plan in which such Business Employees may be eligible to participate after the Closing. Following the Closing, the Datatel Entities shall cause each employee welfare plan (as defined in Section 3(1) of ERISA) covering Business Employees (i) to reduce each such
60
eligible employees (and his or her eligible dependents) annual deductible limits under such plans for the plan year in which the Closing occurs to the extent deductible expenses were incurred and recognized for comparable purposes under the comparable SunGard Benefit Plan immediately prior to the Closing, and (ii) to the extent waived under the SunGard Benefit Plans, to waive any pre-existing condition limitations or exclusions that do not apply to such employees immediately prior to the Closing. Nothing in this Section 7.5(d) shall obligate the Datatel Entities or any of their Subsidiaries to provide any benefit under any Datatel Benefit Plan that is a welfare benefit plan that it did not provide under such plan as of the Closing Date.
(e) On the Closing Date, and from time to time prior to the Closing upon the reasonable request of Datatel, the SunGard Entities shall deliver to the Datatel Entities an updated list setting forth the Employee Census Information as of such time. In addition, on or prior to the Closing Date, the SunGard Entities shall deliver to the Datatel Entities information relating to the expenses incurred by the Business Employees that count against annual deductible limits and co-payments limits of the employee welfare plans covering Business Employees.
(f) SunGard Capital shall, and shall cause SunGard Capital II to, take all actions necessary so that, effective as of the Closing (or effective as of the Asset Closing in the case of a SMS Employee (as defined in the Asset Purchase Agreement)), each SunGard Capital Option and each SunGard Capital RSU held by a Business Employee shall (i) in the case of a SunGard Capital Option, be exercisable during the post-termination exercise period applicable to such SunGard Capital Option, at the election of the Business Employee holding such SunGard Capital Option, by a net exercise method whereby the aggregate exercise price for the shares being acquired upon such exercise, and, if permitted by applicable Law, all required tax withholdings due upon such exercise, will be satisfied by SunGard Capital or SunGard Capital II, as applicable, withholding from the shares for which the SunGard Capital Option is being exercised that number of shares having an aggregate fair market value equal to such exercise price and, if permitted by applicable Law, the required tax withholding liability (in which event, SunGard Capital or SunGard Capital, as applicable, shall pay such tax withholding to the applicable tax authorities on behalf of such Business Employee) and (ii) with respect to each SunGard Capital RSU, if so elected by the Business Employee holding such SunGard Capital RSU and if permitted by applicable Law, all required tax withholdings due upon the vesting of such SunGard Capital RSU will be satisfied by SunGard Capital or SunGard Capital, as applicable, withholding from the shares that would otherwise be delivered in settlement of such SunGard Capital RSU that number of shares having an aggregate fair market value equal to the required tax withholding liability (in which event, SunGard Capital or SunGard Capital, as applicable, shall pay such tax withholding to the applicable tax authorities on behalf of such Business Employee).
(g) As of immediately prior to the Applicable Closing, no Business Employee shall be seconded to any of the SunGard Entities or any of their respective Subsidiaries, except, if the Restructuring has not yet been completed, as expressly contemplated by Exhibit C.
(h) The Datatel Entities, the SunGard Entities and the Company acknowledge and agree that provisions contained in this Section 7.5 with respect to Business Employees are included for the sole benefit of the Datatel Entities, the SunGard Entities and the Company, and that nothing in this Agreement, whether express or implied, shall create any third party
61
beneficiary or other rights (i) in any other Person, including any Business Employees, any current or former participant in any SunGard Benefit Plan or Company Benefit Plan, or, in each case, any dependent or beneficiary thereof, or (ii) to continued employment with the Datatel Entities, the SunGard Entities and the Company, or any of their respective Subsidiaries or Affiliates.
Section 7.6 Competition Law Approvals.
(a) Each of the Parties will give any notices to, make any filings with, and use its reasonable best efforts to promptly obtain any required authorizations, consents and approvals of Governmental Antitrust Entities or the expiration of any applicable waiting periods under Competition Laws, including the HSR Act, in connection with the transactions contemplated by this Agreement and the Asset Purchase Agreement. Without limiting the generality of the foregoing, each of the Parties will, or will cause their Ultimate Parent Entities (as defined in the HSR Act) to, (i) file any Notification and Report Forms and related material that it may be required to file with the Federal Trade Commission (FTC) and the Antitrust Division of the DOJ under the HSR Act, within ten (10) days from the date of this Agreement, and any other notifications under any Competition Law that may be necessary or advisable as soon after the date of this Agreement as is reasonably practicable, (ii) request early termination of the applicable waiting period under the HSR Act, (iii) use reasonable best efforts to make any further filings that may be necessary, proper or advisable in connection with any such notification, (iv) promptly notify the other Parties of any communication relating to any Competition Law, including the HSR Act, to or from any Governmental Antitrust Entity (v) provide a certification as to substantial compliance with any Request for Additional Information or Documentary Material received from the FTC or DOJ pursuant to the HSR Act or similar requirement within 75 days of receipt, (vi) not withdraw any Notification and Report Form filed pursuant to the HSR Act, or agree to extend any waiting period pursuant to the HSR Act (or any other applicable Competition Law) (including by an agreement not to close the Transactions before a specified date or without prior notice to a Governmental Antitrust Entity) beyond January 4, 2012 without the prior written consent of the other Parties, and (vii) use its reasonable best efforts (including in connection with any litigation) to successfully resolve any investigation, inquiry, action or other administrative or judicial proceeding (a Proceeding) under or relating to any Competition Law commenced by either the FTC, the DOJ, any state attorney general or any foreign Governmental Antitrust Entity so as to permit the prompt consummation of the transactions contemplated by this Agreement, including contesting and defending against any attempt to preliminarily or permanently enjoin, restrain, rescind or block the transactions contemplated by this Agreement, or any attempt to declare the transactions contemplated by this Agreement to be unlawful, and seeking to lift or reverse on appeal any such order, injunction or judgment which may be entered, unless the Parties mutually agree not to contest or appeal any such motion, application or Proceeding.
(b) Each of the Parties will cooperate with each other and their respective representatives in connection with the filings and other submissions required by Section 7.6(a) and in connection with resolving any Proceeding under or relating to any Competition Law (including the HSR Act), including any inquiry concerning the transactions contemplated hereby commenced by either the FTC or the DOJ or any state attorney general. The Parties and their respective representatives shall consult with one another and consider in good faith the views of
62
each Party as to the appropriate strategy for resolving any such Proceeding under or relating to any Competition Law.
(c) Each Party will consult and cooperate with the other Parties, and will consider in good faith the views of each Party, in connection with any analysis, appearance, communication, presentation, memorandum, brief, argument, opinion or proposal made or submitted in connection with any Proceeding under or relating to any Competition Law, including the HSR Act. In addition, except as may be prohibited by any Governmental Antitrust Entity or by any Law, each Party and its respective representatives shall permit the other Parties and their respective representatives to be present at each meeting or conference relating to any Proceeding under or relating to any Competition Law (unless otherwise agreed between the Parties), including the HSR Act, and to have access to and be consulted in connection with any document, opinion or proposal made or submitted to any third party or Governmental Antitrust Entity in connection with any such Proceeding.
(d) In furtherance of Section 7.6(a), the Datatel Entities shall (i) upon request of a Governmental Antitrust Entity, agree to sell, divest, license or otherwise dispose of any asset(s), Subsidiar(ies), business(es) and/or product line(s) of the Company and its Subsidiaries (after giving effect to the Restructuring) that, in the aggregate, generated revenue during 2010 (as such revenue is reflected in the Companys SAP and Siebel systems) of up to (but not more than) one percent (1%) of the Applicable Base Merger Consideration (assuming with respect to such definition, solely for this purpose, that clause (b) of such definition applies) and/or (ii) if a Governmental Antitrust Entity has threatened to sue to enjoin the Transactions following certification of substantial compliance with any Request for Additional Information or Documentary Material received from the FTC or DOJ pursuant to the HSR Act, offer to sell, divest, license or otherwise dispose of any asset(s), Subsidiary(ies), business(es) and/or product line(s) of the Company and its Subsidiaries (after giving effect to the Restructuring) that, in the aggregate, generated revenue during 2010 (as such revenue is reflected in the Companys SAP and Siebel systems) of up to (but not more than) one percent (1%) of the Applicable Base Merger Consideration (assuming with respect to such definition, solely for this purpose, that clause (b) of such definition applies), and in each case consummate such an agreement if accepted by such Governmental Antitrust Entity. If an offer pursuant to clause (i) or clause (ii) of this Section 7.6(d) is not initially accepted by the Governmental Antitrust Entity, the Datatel Entities agree that they shall (x) at the request of the Governmental Antitrust Entity or SunGard Data at any time thereafter, re-extend such offer or (y) propose or accept, as applicable, any other offer to sell, divest, license or dispose of any asset(s), Subsidiar(ies), business(es) and/or product line(s) of the Company and its Subsidiaries (after giving effect to the Restructuring) that, in the aggregate, generated revenue during 2010 (as such revenue is reflected in the Companys SAP and Siebel systems) of up to (but not more than) one percent (1%) of the Applicable Base Merger Consideration (assuming with respect to such definition, solely for this purpose, that clause (b) of such definition applies) if requested by the Governmental Antitrust Entity and such a request is made at any time prior to the termination of this Agreement.
(e) Notwithstanding anything to the contrary contained in this Agreement other than as expressly set forth in Section 7.6(d), the Datatel Entities and their Affiliates shall not have any obligation under this Agreement to agree to and, without the prior written consent of the Datatel Entities, no SunGard Entity or Company Entity will agree to: (i) the sale, divestiture, license or
63
other disposition of any of such Persons or any of such Persons Affiliates assets or categories of assets, Subsidiaries or equity or businesses and/or product lines (whether existing or prospective), or (ii) limitations or restrictions of any kind (other than limitations or restrictions that are de minimis to the Surviving Corporation and its Affiliates) on such Persons or any of such Persons Affiliates existing or future respective activities, operations or businesses, including their or their respective Affiliates payment of any consideration to any business counterparty or entry into or modification of existing Contracts, licenses, joint ventures or other business or governance relationships relating to any of their or their Affiliates businesses, assets, product lines, property, intellectual property or services. As used in this Section 7.6(e), limitations or restrictions that are de minimis to the Surviving Corporation and its Affiliates shall include limitations or restrictions on activities, operations or businesses that would constitute a violation of the Sherman Act of 1890, as amended.
(f) Subject to Section 9.4(f), each Party acknowledges and agrees that the obligations of each Party with respect to authorizations, consents and approvals of Governmental Antitrust Entities and the expiration of any applicable waiting periods under Competition Laws, including the HSR Act, are only as set forth in this Section 7.6 and no other provision in this Agreement or any of the Ancillary Agreements shall be deemed to modify, expand or contract such obligations.
Section 7.7 Termination of Affiliate Arrangements; Intercompany Balances.
(a) Other than this Agreement, the Ancillary Agreements, Contracts entered into in the Ordinary Course of Business on an arms length basis with portfolio companies of the SunGard Capital Stockholders (or of their Affiliates) and the Contracts identified on Section 7.7 of the SunGard Disclosure Schedules, each of the SunGard Entities shall, and shall cause its Subsidiaries (other than the Company Entities) and the SunGard Capital Stockholders and their respective Affiliates to, take such actions as may be necessary to terminate prior to or concurrently with the Closing all Contracts and other instruments, arrangements, relationships and understandings between the Company and its Subsidiaries, on the one hand, and any of the SunGard Entities, the Subsidiaries of SunGard Entities (other than the Company Entities), the SunGard Capital Stockholders and their respective Affiliates, on the other hand (collectively, the Affiliate Arrangements), without consideration therefor, and from and after the Closing neither the Company nor its Subsidiaries shall have any obligation or Liability whatsoever with respect to any such terminated Affiliate Arrangement.
(b) Other than in respect of obligations in respect of the Contracts identified on Section 7.7 of the SunGard Disclosure Schedules or Section 7.7 of the Company Disclosure Schedules, the SunGard Entities and the Company shall take such action and make such payments as may be necessary so that, no later than the close of business on the Business Day immediately prior to the date of the Applicable Closing, the Company and its Subsidiaries, on the one hand, and the SunGard Entities and their respective Subsidiaries (other than the Company Entities), on the other hand, shall settle, discharge, offset, pay or repay in full all loans, notes, and advances regardless of their maturity, and all other intercompany receivables and payables, including any accrued and unpaid interest thereon, between the Company and its Subsidiaries, on the one hand, and the SunGard Entities and their respective Subsidiaries (other than the Company Entities), on the other hand (such balances, the Intercompany Balances),
64
free and clear of all Liens, obligations or Liabilities (including all Taxes) that would apply to the Company and its Subsidiaries after the Closing.
Section 7.8 Access.
(a) Subject to applicable Law and in accordance with the Confidentiality Agreement, upon reasonable notice, each of the SunGard Entities, with respect to the Business only, and the Company Entities, shall, throughout the period prior to the earlier of the Effective Time or the termination of this Agreement, afford to the Datatel Entities and their duly authorized Representatives reasonable access to its officers, employees, consultants and representatives and, during normal business hours, in a manner that does not unreasonably interfere with the Business, to its and its Subsidiaries and the Company Subsidiaries officers, properties, Contracts, books, records (including Tax Returns filed and those in preparation, work papers and other materials relating to Taxes, but only to the extent relating to the Company Entities or the Business), any report, schedule or other document filed or received by it pursuant to the requirements of the federal or state securities Laws, and shall use their respective reasonable efforts to cause their respective Representatives to furnish promptly such additional financial and operating data and other information, including environmental information, as to the Business as the Datatel Entities or their duly authorized Representatives, as the case may be, may reasonably request, and instruct its Representatives to cooperate with the Datatel Entities and their duly authorized Representatives in their investigation; provided, however, that the foregoing shall not permit the Datatel Entities or their duly authorized Representatives to conduct any invasive or destructive environmental sampling, testing or analysis on the property of the SunGard Entities, the Company or their Subsidiaries.
(b) Notwithstanding the foregoing, neither the SunGard Entities, the Company Entities, nor their respective Subsidiaries, as applicable, shall be required to provide any information to the extent that any such Person has reasonably determined that it is legally obligated to keep such information confidential or otherwise not to provide such information or to the extent that such access would be reasonably likely to constitute a waiver of the attorney-client privilege. Each of the Datatel Entities will, and will cause its Subsidiaries to hold, and will direct its and their Representatives to hold, any and all information received from any of the SunGard Entities, directly or indirectly, in confidence in accordance with the Confidentiality Agreement.
Section 7.9 Director and Officer Indemnification.
(a) From and after the Closing Date, Parent shall cause the Surviving Corporation to fulfill and honor in all respects the obligations of the Company to its directors and officers (and those of its Subsidiaries) accruing prior to the Closing Date pursuant to any indemnification provisions under the certificate of incorporation and bylaws (or equivalent organizational and governing documents) of the Company and its Subsidiaries as in effect on the date of this Agreement and pursuant to any indemnity agreements between the Company or its Subsidiaries and any such persons as in effect on the date of this Agreement that are identified on Section 7.9(a) of the Company Disclosure Schedules and with respect to which a copy has been provided to the Datatel Entities prior to the date hereof (the persons entitled to be indemnified pursuant to
65
such provisions, and all other current and former directors and officers of the Company and its Subsidiaries, being referred to collectively as the D&O Indemnified Parties). From and after the Closing Date through the sixth anniversary of the Closing Date, Parent shall cause the Company to maintain the provisions with respect to indemnification and exculpation from liability as set forth in the certificate of organization and bylaws (or equivalent organizational and governing documents) of the Company and its Subsidiaries as of the date of this Agreement, which provisions shall not be amended, repealed or otherwise modified during such period in any manner that would adversely affect the rights thereunder of any D&O Indemnified Party without the consent of such D&O Indemnified Party. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to directors and officers insurance claims under any policy that is or has been in existence with respect to the Company, its Subsidiaries or any of their respective directors or officers, it being understood and agreed that the indemnification provided for in this Section 7.9 is not prior to or in substitution for any such claims under such policies.
(b) Effective upon the Closing, each of the SunGard Entities, on behalf of itself and its controlled Affiliates (other than the Company Entities) and each of their respective successors and assigns (collectively, the Releasing Parties), shall be deemed to have remised, released and forever discharged all current and former directors and officers of the Company and its Subsidiaries (collectively, the D&O Released Parties) of and from any and all claims that the Releasing Parties, or any of them, now has or ever had, or hereafter can, shall or may have, for, upon or by reason of any matter against any such D&O Released Party, in each case (i) to the extent that such claim arises out of, is based upon or relates to a breach by any such D&O Released Party of his or her fiduciary duties to the Company or its Subsidiaries or their respective current or former shareholders for acts or omissions of such D&O Released Party prior to the Closing in his or her capacity as a director or officer of the Company or its Subsidiaries and (ii) to the extent Parent, the Surviving Corporation or any of their respective Subsidiaries would be obligated to indemnify the D&O Released Parties in respect of any such claim.
Section 7.10 Public Announcements. Promptly after the execution of this Agreement, the Parties will issue the press release attached hereto as Exhibit E. Subject to the immediately foregoing sentence, the SunGard Entities, the Company and the Datatel Entities shall consult with each other prior to making any press release or public announcement relating to the Transactions and shall not issue any such press release or make any such public announcement prior to such consultation and without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, except as such Party believes in good faith may be required by applicable Law, Order or by obligations pursuant to any listing agreement with any national securities exchange (in which case the Party proposing to issue such press release or make such public announcement shall use its reasonable efforts to consult in good faith with the other Party before issuing any such press release or making any such public announcement).
Section 7.11 Resignations. At or prior to the Applicable Closing, the Company shall deliver to Datatel evidence reasonably satisfactory to Datatel of the resignation of all directors of the Company Entities effective at the Effective Time (except as otherwise may be designated by Parent to SunGard Data in writing at least five (5) Business Days prior to the Closing).
66
Section 7.12 Control of Other Partys Business. Nothing contained in this Agreement shall give the Datatel Entities, directly or indirectly, the right to control or direct the Companys, its Subsidiaries or the Businesss operations prior to the Effective Time. Prior to the Effective Time, each of the Parties shall exercise and be responsible for, consistent with the terms and conditions of this Agreement and applicable Law (including the HSR Act), complete control and supervision over their respective operations, including, in the case of the SunGard Entities and the Company Entities, complete control and supervision of all programs, employees, finances and policies of the Business.
Section 7.13 Non-Solicitation and Hiring of Employees.
(a) The SunGard Entities agree that, for a period of two (2) years from and after the Closing Date, they shall not, and shall cause their Affiliates not to, without the prior written consent of Parent, directly or indirectly, solicit to hire or hire (or cause or seek to cause to leave the employ or the board of directors of Parent or its Affiliates (including the Surviving Corporation, Purchaser Company and their respective Affiliates after the Closing)), or enter into a consulting agreement with, any of the following individuals (each, a Covered Person): (x) the current or future Chief Executive Officer of Parent or Datatel, (y) the current Chief Executive Officer of the Company and (z) any current or future employee of Parent or its Affiliates who reports directly to the current or future Chief Executive Officer of Parent or Datatel or the current Chief Executive Officer of the Company.
(b) The SunGard Entities shall use their commercially reasonable efforts to cause (i) the SunGard Capital Stockholders identified on Section 7.13(b) of the SunGard Disclosure Schedules (on behalf of themselves and their affiliated investment funds) to execute and deliver prior to the Applicable Closing an agreement, pursuant to which such SunGard Capital Stockholders will agree, and (ii) each SunGard Capital Stockholder to execute and deliver prior to the Applicable Closing an agreement, pursuant to which such SunGard Capital Stockholder will agree to cause each member of the board of directors and operating committee of SunGard Capital designated by such SunGard Capital Stockholder, in the case of each of the foregoing clauses (i) and (ii), not to, directly or indirectly, solicit to hire or hire (or cause or seek to cause to leave the employ of Parent or its Affiliates (including the Surviving Corporation, Purchaser Company and their respective Affiliates after the Closing)), or enter into a consulting agreement with, any Covered Person.
(c) The Datatel Entities agree that, for a period of two (2) years from and after the Closing Date they shall not, and shall cause their Affiliates not to, without the prior written consent of SunGard Data, directly or indirectly, solicit to hire or hire (or cause or seek to cause to leave the employ of SunGard Data or its Affiliates), or enter into a consulting agreement with, (x) the current or future Chief Executive Officer of SunGard Data or (y) any current or future employee of SunGard Data or its Affiliates who reports directly to the current or future Chief Executive Officer of SunGard Data.
(d) Notwithstanding the foregoing, (i) the restrictions set forth in clauses (a), (b) and (c) of Section 7.13 shall not apply to the solicitation or hiring of employees of SunGard Data or Datatel, as applicable, or its Affiliates (A) whose employment and any material post-termination consulting arrangement have been terminated by Datatel or its Affiliates or the SunGard Entities
67
or their Affiliates, as applicable, or (B) who voluntarily terminated his or her employment or any material post-termination consulting arrangement if at the time of such solicitation or hiring at least six (6) months have elapsed since the date of such termination and the cessation of any material post-termination consulting services and (ii) the restrictions on solicitations to hire (but not the restrictions on hiring) set forth in the foregoing clauses (a), (b) and (c) of this Section 7.13 shall not apply to general solicitations (such as advertisements) for employment placed by the SunGard Entities or the Datatel Entities, as applicable, or any of their Affiliates and not specifically targeted at the employees of the Datatel Entities or SunGard Entities, respectively, or any of their Affiliates.
Section 7.14 Covenant Not To Compete.
(a) In furtherance of the Transactions, each of the SunGard Entities covenants and agree that, for a period ending on the four year anniversary of the Closing Date, the SunGard Entities will not, and will cause (1) their controlled Affiliates, (2) each holding company of SunGard Capital and SunGard Data created after the date hereof that beneficially owns 100% of SunGard Data and is beneficially owned by substantially the same Persons and in substantially the same proportion as the Persons that beneficially owned the SunGard Entities immediately before the creation of such holding company (each, a New Holding Company) and (3) each of the controlled Affiliates of each such New Holding Company (each of the SunGard Entities and the Persons set forth in the foregoing clauses (1), (2) and (3), a Restricted Person) not to, without the express prior written approval of Parent, engage, directly or indirectly, in a Competing Business or acquire beneficial ownership of any class of the outstanding equity of, or, except to customers in the course of business, provide any loan or other financial assistance to, any Person that is engaged in a Competing Business. For purposes of this Section 7.14, Competing Business shall mean the business of providing (i) enterprise resource planning software and services and (ii) administrative system software and services of the type provided by the Company as of the Applicable Closing, in the case of each of clauses (i) and (ii), to colleges and universities in the United States and such other jurisdictions in which the Business is conducted as of the Applicable Closing (for the avoidance of doubt, Competing Business shall not include (x) the provision of software and services to school districts or private schools (K-12 or the equivalent), (y) the provision of software and services of the type provided as of the date hereof by any business segment of SunGard Capital other than the Higher Education business segment of SunGard Capital and its Subsidiaries or (z) the provision by any Restricted Person of administrative system software and services to colleges and universities to the extent the provision of such service is, in the Ordinary Course of Business of such Restricted Person, incidental to the business of such Restricted Person and not primarily directed to the provision of software and services to colleges and universities. Notwithstanding the foregoing, no Restricted Person shall be precluded from (i) owning solely as a passive investment not in excess of five percent (5%) in the aggregate of any class of capital stock of any corporation if such stock is publicly traded and listed on any national exchange or quoted on the NASDAQ National Market, regardless of whether or not such corporation is engaging in a Competing Business; or (ii) purchasing and, following such purchase engaging in, any business that has a subsidiary, division, group, franchise or segment that is engaged in a Competing Business so long as, on the date of such purchase, not more than twenty-five percent (25%) of the consolidated annual revenues of such business for the most
68
recently completed fiscal year are derived from a Competing Business; provided that if, on the date of such purchase, such consolidated annual revenues derived from such Competing Business are less than $10 million, no Restricted Person shall be precluded from purchasing, and following such purchase, engaging in such Competing Business. For the avoidance of doubt, none of the provisions of this Section 7.14 shall apply to any Person or its Affiliates (other than a Restricted Person) that acquires a direct or indirect interest in the capital stock of SunGard Capital or any of its Subsidiaries.
(b) Each SunGard Entity agrees that (i) the agreements and covenants contained in this Section 7.14 are reasonable in scope and duration, an integral part of the transactions contemplated by this Agreement and by the Ancillary Agreements and necessary to protect and preserve the Surviving Corporations and the Datatel Entities legitimate business interests and to prevent any unfair advantage conferred on the SunGard Entities taking into account and in specific consideration of the undertakings and obligations of the parties under the Agreement and the other Ancillary Agreements, (ii) but for the SunGard Entities agreement to be bound by the agreements and covenants contained under this Section 7.14 the Datatel Entities would not have entered into or consummated the Transactions and (iii) that irreparable harm would result to the Surviving Corporation and the Datatel Entities as a result of a violation or breach (or potential violation or breach) by the SunGard Entities (or their Subsidiaries) of this Section 7.14, that monetary damages shall not constitute a sufficient remedy, and that the Surviving Corporation and the Datatel Entities shall have the right to apply to any Governmental Body contemplated by Section 11.5 for specific performance and/or preliminary and final injunctive relief or other relief in order to enforce or prevent any violation of the provisions of this Section 7.14, in addition to any other rights and remedies to which they are entitled at law or in equity. If a final judgment of a court of competent jurisdiction or other Governmental Body determines that any term, provision, covenant or restriction contained in this Section 7.14 is invalid or unenforceable, then the Parties agree that the court of competent jurisdiction or other Governmental Body will have the power to modify this Section 7.14 (including by reducing the scope, duration or geographic area of the term or provision, deleting specific words or phrases or replacing any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision) so as to effect the original intention of the invalid or unenforceable term or provision.
(c) The Parties agree that the amount of the Merger Consideration to be allocated to the covenants and agreements under this Section 7.14 shall equal $7,000,000.
Section 7.15 Financing.
(a) Subject to the limitations contained in Section 9.4, but notwithstanding anything else in this Agreement to the contrary, the Datatel Entities acknowledge and agree that Parents and Merger Subs obligations to consummate the Merger, and Purchaser Companys obligation to consummate the transactions contemplated by the Asset Purchase Agreement, are not conditioned upon any Datatel Entitys obtaining any financing. For the avoidance of doubt, the Datatel Entities acknowledge and agree that the existence of any conditions contained in the Financing Commitments or any commitment letter for any alternative financing or any agreement relating thereto shall not constitute, nor be construed to constitute, a condition to the
69
consummation of the Merger hereunder (except to the extent it is separately required by an express provision in this Agreement).
(b) None of the Datatel Entities shall permit any amendment or modification to be made to, or any waiver of any provision or remedy under, or replace, the Financing Commitments if such amendment, modification, waiver or replacement (x) reduces the aggregate amount of the Financing or (y) imposes new or additional conditions or otherwise expands, amends or modifies any of the conditions to the receipt of the Financing in a manner that would reasonably be expected to (I) delay or prevent the Asset Closing Date or the Closing Date, (II) make the funding of the Financing (or satisfaction of the conditions to obtaining the Financing) less likely to occur or (III) adversely impact the ability of Sophia Holding I or Datatel, as applicable, to enforce its rights against other parties to the Financing Commitments or the definitive agreements with respect thereto, and shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to arrange the Financing on the terms and conditions described in the Financing Commitments (provided that Parent may (x) modify the terms (but not the conditions) of the Debt Financing Commitments so long as such modifications would not and would not reasonably be expected to (I) reduce the aggregate amount of the Debt Financing unless the Transaction Equity Financing to be provided by the Investors is increased by a corresponding amount on substantially the same terms as provided in the Transaction Equity Financing Commitments, (II) adversely impact the ability of the applicable Datatel Entity to timely consummate the Merger or the Asset Purchase or the likelihood of consummation of the Merger or the Asset Purchase, or (III) adversely impact the ability of Parent to enforce its rights against the other parties to the Financing Commitments and (y) amend the Debt Financing Commitment to add lenders, lead arrangers, bookrunners, syndication agents or similar entities who had not executed the Debt Financing Commitment as of the date hereof; provided that, except as contemplated by the Debt Financing Commitment as in effect on the date hereof and with the prior written consent of SunGard Data (not to be unreasonably withheld or delayed), the obligations of the Financing Sources providing the Debt Financing Commitment on the date hereof will not be modified or reduced as a result of such addition), including using their reasonable best efforts to (i) maintain in effect the Financing Commitments, (ii) satisfy on a timely basis (taking into account the expected timing of the Marketing Period and the Applicable Closing) all conditions applicable to the applicable Datatel Entity to obtaining the Financing at the Applicable Closing set forth therein that are within its control, (iii) enter into definitive agreements with respect thereto on the terms and conditions contemplated by the Debt Financing Commitment or on other terms and conditions acceptable to Parent that would not adversely impact the timing or amount of the Debt Financing (and provide copies thereof to SunGard Data) and (iv) in the event that all conditions to the Debt Financing Commitment (other than the availability or funding of any of the Transaction Equity Financing) have been satisfied, cause the lenders and the other Persons providing such Debt Financing to fund the Debt Financing required to consummate the Merger and the Asset Purchase. For the avoidance of doubt, in the event that (x) all or any portion of the Debt Financing structured as high yield financing has not been consummated, (y) all of the conditions set forth in Section 8.1 and Section 8.3 and, unless the Asset Purchase Agreement has been terminated pursuant to Section 9.1(b) thereof, all of the conditions set forth in Section 8.1 and 8.3 of the Asset Purchase Agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Applicable Closing, but subject to the fulfillment or waiver of those conditions and such conditions being
70
capable of being satisfied) and (z) the bridge facilities contemplated by the Debt Financing Commitment (including any flex terms) are available on the terms and conditions described in the Debt Financing Commitment, then Parent shall cause the proceeds of such bridge financing to be used to replace such high yield financing on the date that the Applicable Closing is required to occur pursuant to Section 2.3 or Section 3.2 of the Asset Purchase Agreement, as applicable.
(c) The Datatel Entities shall as promptly as practicable notify SunGard Data of (i) any termination of any of the Financing Commitments, (ii) the receipt of any written notice or other written communication from any Financing Source with respect to any actual or alleged breach, default, termination or repudiation by any party to any of the Financing Commitments or definitive agreements related to the Financing of any provision of the Financing Commitments or definitive agreements related to the Financing or (iii) receipt of an Escrow Demand Notice (as defined in the Fee Letter). In the event Parent believes in good faith that any portion of the Debt Financing will not be available within the timing contemplated in the Debt Financing Commitment, Parent shall as promptly as practicable notify SunGard Data and shall use its reasonable best efforts to arrange to obtain alternative financing from alternative sources on terms and conditions no less favorable to Parent than those set forth in the Debt Financing Commitment as in effect prior to such alternative financing and in an amount sufficient to consummate the Transactions as promptly as practicable following the occurrence of such event. Parent shall promptly deliver to SunGard Data true and complete copies of all agreements pursuant to which any such alternative source shall have committed to provide Parent with any portion of the Debt Financing. Parent shall use its reasonable best efforts to cause the Financing Sources providing Debt Financing to fund at the Applicable Closing the Debt Financing required to consummate the Transactions contemplated if all conditions set forth in the Debt Financing Commitment have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Applicable Closing, but subject to the fulfillment or waiver of those conditions and such conditions being capable of being satisfied). For purposes of this Agreement, references to Financing and Debt Financing shall include the financing contemplated by the Financing Commitments as permitted by this Section 7.15 to be amended, modified or replaced and references to Financing Commitments and Debt Financing Commitments shall include such documents as permitted by this Section 7.15 to be amended, modified or replaced, in each case from and after such amendment, modification or replacement.
(d) Prior to the Closing, the SunGard Entities, the Company and their respective Subsidiaries shall provide to Parent and its Affiliates, and shall use their reasonable best efforts to cause the officers, employees, advisors and other Representatives of the SunGard Entities, the Company and their respective Subsidiaries to provide to Parent and its Affiliates, all cooperation that is reasonably requested by Parent in connection with the Financing, including: (i) participating in a reasonable number of meetings, presentations, road shows, drafting sessions, due diligence sessions and sessions with the Debt Financing Sources, prospective lenders, investors and ratings agencies, and reasonably cooperating with the marketing efforts of Parent and its Financing Sources, in each case in connection with the Financing; (ii) (A) using reasonable best efforts to furnish Parent and its Debt Financing Sources as promptly as practicable after the date of this Agreement with all financial and other pertinent information regarding the Company and its Subsidiaries as may be reasonably requested by Parent to (1) consummate the Debt Financings at the time the Debt Financings are to be consummated (including the applicable components of adjusted EBITDA derived from the Companys
71
financial information) and (2) in the event that the Note Escrow Closing occurs, to satisfy any disclosure obligations between the Note Escrow Closing and the Closing under the indenture governing the Notes (which disclosure requirements shall not require the provision of any type of information that is not required by paragraph 8 of Exhibit D to the Debt Financing Commitment) and (B) furnishing Parent with the Required Financial Information; (iii) assisting with the preparation of materials for rating agency presentations, offering documents, bank information memoranda and similar documents required in connection with the Financing; (iv) executing and delivering any necessary pledge and other security documents, guarantees, mortgages, other definitive financing documents and other certificates or documents as may reasonably be requested by Parent and otherwise reasonably facilitating the granting of a security interest (and perfection thereof) in collateral; (v) providing all documents and other information relating to the Company and its Subsidiaries reasonably required to enable the delivery of any customary negative assurance opinion and customary comfort letters relating to the Debt Financings and obtaining the consents of the Companys accountants for use of their reports on the audited financial statements of the Company in any materials relating to the Debt Financing; (vi) using reasonable best efforts to obtain the Companys accountants comfort letters, the legal opinions, surveys and title insurance at the expense of and as reasonably requested by Parent on behalf of the Debt Financing Sources; (vii) providing unaudited consolidated monthly financial statements of the Company (excluding footnotes) consisting of a balance sheet and income statement, to the extent the Company customarily prepares such financial statements; (viii) using commercially reasonable efforts to ensure that the Debt Financing Sources benefit from the existing lending relationships of the SunGard Entities; (ix) cooperating reasonably with the Financing Sources requests for due diligence to the extent customary and reasonable; (x) arranging for customary lien and guarantee terminations or releases, as applicable, relating to indebtedness of the SunGard Entities to be delivered at or prior to the Asset Closing; (xi) at least five (5) Business Days prior to the Closing Date, providing all documentation and other information about the Company and each of its Subsidiaries as is reasonably requested in writing by Parent at least ten (10) Business Days prior to the Closing Date in connection with the Debt Financing that relates to applicable know your customer and anti-money laundering rules and regulations including without limitation the USA PATRIOT Act; (xii) in the event that an Escrow Demand Notice (as defined in the Fee Letter) is delivered, the SunGard Entities will deliver to Parent no later than March 31, 2012 all Required Financial Information (with the Required Financial Information for purposes of this clause (xii) being determined as if all of the Debt Financing were to be marketed in April 2012 and issued and funded on May 1, 2012); and (xiii) if the Note Escrow Closing occurs, delivering to Parent on or prior to May 5, 2012, financial statements and financial data regarding the Company and its Subsidiaries, including the related managements discussion and analysis of financial condition and results of operations covering the financial periods of such financial statements, of the type and form that would be required to be included under Items 1, 2 and 3 of Part I of Form 10-Q (but excluding information required by Regulation S-X Rule 3-10) if the Company were required to file a quarterly report on Form 10-Q for the most recently ended fiscal quarter, as well as (A) components of adjusted EBITDA and (B) research and development expense, in each case derived from the financial information of the Company and its Subsidiaries, that would be included in a customary 144A offering memorandum by the Company; provided, however, that nothing herein shall require such cooperation to the extent it would interfere unreasonably with the business or operations of the Company Entities or require the disclosure of information which SunGard Data or the Company reasonably determines would
72
reasonably be expected to jeopardize the attorney-client or other similar privilege of a SunGard Entity or any of its Subsidiaries or violate any Law or any Contract to which such SunGard Entity or any of its Subsidiaries is a party; and provided, further, that the Company shall not be required to enter into or perform under any agreement with respect to the Financing that is not contingent upon the Closing or that would be effective prior to or simultaneous with the Closing (in each case other than items specified in clause (ix) relating to assets being purchased in the Asset Purchase Agreement, which the Company shall not be required to enter into or perform if they would be effective prior to the Applicable Closing). Neither the SunGard Entities nor the Company shall be required to pay any commitment or other similar fee or make any other payment (other than reasonable out of pocket costs) or provide or agree to provide any indemnity in connection with the Financing or any of the foregoing prior to the Closing. Datatel shall indemnify and hold harmless the SunGard Entities, the Company, and their respective Subsidiaries and Representatives from and against any and all liabilities, Losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with the arrangement of the Debt Financing (including actions taken at the request of Parent in accordance with this Section 7.15 other than actions pursuant to clause (x)) and any information (other than information furnished by or on behalf of the SunGard Entities, the Company or their respective Subsidiaries) utilized in connection therewith. Datatel shall, promptly upon request by SunGard Data, reimburse the SunGard Entities, the Company and their respective Subsidiaries for all documented and reasonable out of pocket costs incurred by the SunGard Entities, the Company and their respective Subsidiaries in connection with such cooperation. Without granting any of its ownership or other rights, the Company hereby consents to the use of its and its Subsidiaries logos in connection with the Debt Financing contemplated by the Debt Financing Commitment; provided that the Company shall have the right to review any documentation containing such logos prior to their use, and provided, further, that such logos are used solely in a manner that is not intended to nor reasonably likely to harm or disparage the Company or the Company Subsidiaries or the reputation or goodwill of the Company and the Company Subsidiaries.
(e) Unless the Marketing Period has ended on or prior to February 10, 2012, the Company and Datatel shall use their respective reasonable best efforts to cause their respective independent accounting firms to complete as promptly as reasonably practical their audit of the consolidated financial statements of the Company and Datatel, respectively, for the fiscal year ended December 31, 2011.
(f) Subject to Section 9.4(f), each Party acknowledges and agrees that the obligations of each Party with respect to the Financing are only as set forth in this Section 7.15, and no other provision of this Agreement or any of the Ancillary Agreements shall be deemed to expand or otherwise modify such obligations.
Section 7.16 Stockholders Consent. On the date hereof, immediately following the execution and delivery of this Agreement, (a) Seller shall execute and deliver an action by written consent, as sole stockholder of the Company, adopting this Agreement (the Company Stockholder Approval) and (b) Parent shall execute and deliver an action by written consent, as sole stockholder of Merger Sub, adopting this Agreement (the Merger Sub Stockholder Approval and together with the Company Stockholder Approval, the
73
Stockholder Approvals). Promptly (and in any event within one day) following the execution of this Agreement, Seller shall deliver to the Datatel Entities a copy of the executed Company Stockholder Approval and Parent shall deliver to the SunGard Entities a copy of the executed Merger Sub Stockholder Approval.
Section 7.17 Use of Name.
(a) For a period of 180 days after the Closing Date, the Datatel Entities, Purchaser Company and the Company Entities shall have the limited, non-transferable right to use any trademarks and Internet domain names containing the name SunGard (the SunGard Marks) (i) solely in connection with the operation of the Business in the manner operated immediately prior to the Closing Date (and subject at all times to SunGard Datas right to exercise quality control with respect to the use of the SunGard Marks and the goodwill associated therewith) and (ii) solely in the process of exhausting the existing inventory of printed purchase orders, sales invoices, marketing materials, stationery, printed forms, other documents and office and shipping supplies, and other products, equipment, and items bearing the SunGard Marks (the Existing Stock) in the Companys, Purchaser Companys or their respective Subsidiaries possession as of the Applicable Closing, after which period (x) the Datatel Entities, the Company Entities and Purchaser Company shall, at their election, either (A) remove or obliterate the SunGard Marks from the Existing Stock, or (B) cease using the Existing Stock, and (y) any and all right of the Datatel Entities, the Company Entities and Purchaser Company to use the SunGard Marks granted hereunder shall terminate immediately. Nothing in this Agreement will prohibit the Company Entities from using the words HIGHER or EDUCATION independently of any SunGard Mark or using the SunGard Marks in a non-trademark manner to describe the history of the Business or as required or permitted by Law.
(b) For a period of 180 days after the Closing Date, SunGard Data shall take commercially reasonable efforts to display on its Internet website, in the locations that previously primarily addressed the Business, a mutually-agreed statement about the Transactions and a link to an Internet website designated by the Datatel Entities.
(c) No SunGard Entity shall have any responsibility for claims by any third Person arising out of, or relating to, the use by the Datatel Entities, the Company Entities or the Purchaser Company of the SunGard Marks after the Closing Date.
Section 7.18 Restructuring.
(a) The SunGard Entities, the Company and their applicable Subsidiaries shall use commercially reasonable efforts to complete the Restructuring prior to the Applicable Closing and, to the extent any aspect thereof is not so completed, to complete such aspects as soon as reasonably practicable after the Applicable Closing; provided, however that (i) the India Subsidiary Separation (as described in Exhibit C) shall be completed prior to the Applicable Closing and (ii) the Restructuring shall be completed by the SunGard Entities and their Subsidiaries no later than the later of twelve (12) months after the date hereof and six (6) months after the Applicable Closing; provided that the SunGard Entities shall not be in breach of this Section 7.18 if it fails to complete any element of the Restructuring by such time if the failure to
74
complete such element by such time is a result of one or more Incremental Restructuring Requests (as defined in Exhibit C) in respect of such element.
(b) Notwithstanding anything to the contrary contained in this Agreement, to the extent that the consummation of any portion of the Restructuring would require any approval, consent or waiver of any Governmental Body or third party and such approval, consent or waiver shall not have been obtained prior to the Applicable Closing, following the Applicable Closing, the Parties shall use commercially reasonable efforts, and shall cooperate with each other, to obtain promptly such approval, consent or waiver. All fees and expenses with respect to obtaining such approvals, consents and waivers shall be paid by the SunGard Entities pursuant to Section 9.5.
(c) Following the Applicable Closing, in the event that any SunGard Entity or any of its Subsidiaries, or any Datatel Entity, the Surviving Corporation or any of their respective Subsidiaries determines that any asset or Liability (a) should have been contributed to, or assumed by, the Company Entities pursuant to the Restructuring but was not so contributed or assumed, the SunGard Entities shall cause any such asset or Liability to be promptly transferred to the Surviving Corporation (or its designee) or (b) should have been contributed to, or assumed by, the SunGard Entities, the Surviving Corporation shall cause any such asset or Liability to be promptly transferred to the designated SunGard Entity.
Section 7.19 Post-Closing Access to Records and Personnel.
(a) Exchange of Information. After the Closing for a period of seven years, each Party agrees to provide, or cause to be provided, to each other, as soon as reasonably practicable after written request therefor and at the requesting Partys sole expense, reasonable access (including using reasonable commercial efforts to give access to third parties possessing information), during normal business hours, to any of the other Parties employees and to any books, records, documents, files and correspondence in the possession or under the control of such Party, in each case if and to the extent relating to the Business (including the ownership and conduct of the Business by the SunGard Entities prior to the Closing) that the requesting Party reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities Laws) by a Governmental Body having jurisdiction over the requesting Party, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy Tax, audit, accounting, claims, regulatory, litigation or other similar requirements or (iii) to comply with its obligations under this Agreement and the Ancillary Agreements; provided, however, that no Party shall be required to provide access to or disclose information where such access or disclosure would violate any Law or agreement, or waive any attorney-client or other similar privilege, and each Party may redact information regarding itself or its Subsidiaries or otherwise not relating to the other Party and its Subsidiaries, and, in the event such provision of information could reasonably be expected to violate any Law or agreement or waive any attorney-client or other similar privilege, the Parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence.
(b) Financial and Other Information. After the Closing for a period of five years, each Party shall provide, or cause to be provided, as soon as reasonably practicable after written
75
request therefor, to the other Party such financial and other data and information reasonably available and in its possession (in such form as is reasonably available to it), in each case if and to the extent relating to the Business (including the ownership and conduct of the Business by the SunGard Entities prior to the Closing) as is reasonably requested by the other Party and reasonably necessary in order for such other Party to prepare required financial statements and reports or filings, including Tax Returns, to be provided to any third party or filed with any Governmental Body. For the avoidance of doubt, no later than 30 days after the end of each Relevant Fiscal Quarter (as defined below), SunGard Capital will provide to Parent all necessary accounting information with respect to inter-company transactions between the SunGard Entities (excluding the Company and its Subsidiaries) and the Company and its Subsidiaries (including allocated costs for services provided by the SunGard Entities) during the Relevant Fiscal Quarter and prior to the Closing in order to enable the expenses of such transactions to be pushed down to the Company and its Subsidiaries for purposes of the Companys GAAP financial statements. As used herein, Relevant Fiscal Quarter means (i) the fiscal quarter in which the Closing occurs and (ii) if the Closing occurs prior to the completion of the Companys GAAP financial statements for the fiscal quarter that ended most recently prior to the Closing, such preceding fiscal quarter.
(c) Ownership of Information. Any information owned by a Party that is provided to a requesting Party pursuant to this Section 7.19 shall be deemed to remain the property of the providing Party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.
(d) Record Retention. Except as otherwise provided herein, each Party agrees to use its reasonable commercial efforts to retain the books, records, documents, instruments, accounts, correspondence, writings, evidences of title and other papers relating to the Business, the Company and its Subsidiaries prior to the Closing (the Books and Records) in their respective possession or control for a commercially reasonable period of time, as set forth in their regular document retention policies, following the Closing Date or for such longer period as may be required by Law or as may be reasonably requested in writing by any Party or until the expiration of the relevant representation or warranty under this Agreement or the Ancillary Agreements and any related claim of indemnification related thereto. Notwithstanding the foregoing, any Party may destroy or otherwise dispose of any Books and Records not in accordance with its retention policy, provided that, prior to such destruction or disposal (i) such Party shall provide no less than 90 nor more than 120 days prior written notice to the other Party of any such proposed destruction or disposal (which notice shall specify in detail which of the Books and Records is proposed to be so destroyed or disposed of), and (ii) if a recipient of such notice shall request in writing prior to the scheduled date for such destruction or disposal that any of the information proposed to be destroyed or disposed of be delivered to such recipient, such Party proposing the destruction or disposal shall, as promptly as practicable, arrange for the delivery of such of the Books and Records as was requested by the recipient (it being understood that all reasonable out of pocket costs associated with the delivery of the requested Books and Records shall be paid by such recipient).
(e) Limitation of Liability. No Party shall have any liability to any other Party in the event that any information exchanged or provided pursuant to this Section 7.19 is found to be
76
inaccurate. No Party shall have any liability to any other Party if any information is destroyed or lost after reasonable commercial efforts by such Party to comply with the provisions of Section 7.19(d).
(f) Other Agreements Providing For Exchange of Information. The rights and obligations granted under this Section 7.19 are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information set forth in this Agreement.
(g) Production of Witnesses; Records; Cooperation. In the case of a legal or other proceeding between one Party or any of its Affiliates and a third party relating to the Business, the Company or its Subsidiaries, this Agreement or any of the Ancillary Agreements (including any matters subject to indemnification hereunder or thereunder) or the Transactions, each Party shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former (to the extent practicable), current (to the extent practicable) and future officers, employees, other personnel and agents of such Party as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available (other than materials covered by the attorney-client privilege), to the extent that any such Person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any legal, administrative or other proceeding in which the requesting Party may from time to time be involved, regardless of whether such legal, administrative or other proceeding is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all out-of-pocket costs and expenses in connection with the foregoing.
(h) Confidential Information. Nothing in this Section 7.19 shall require either Party to violate any agreement with any third parties regarding the confidentiality of confidential and proprietary information; provided, however, that in the event that any Party is required under this Section 7.19 to disclose any such information, that Party shall use commercially reasonable efforts to seek to obtain such third partys consent to the disclosure of such information and implement requisite procedures to enable the disclosure of such information.
Section 7.20 Mail Handling. After the Closing, to the extent that the Surviving Corporation and/or any of its Subsidiaries previously has received or receives any mail or packages addressed to the SunGard Entities or their Subsidiaries and delivered to the Surviving Corporation not relating to the Business, the Company or its Subsidiaries, the Surviving Corporation shall promptly deliver such mail or packages to SunGard Data. After the Closing Date, Parent or its Affiliates may deliver to SunGard Data, or SunGard Data or its Affiliates may deliver to the Surviving Corporation or its Affiliates, any checks or drafts made payable to the SunGard Entities or their respective Subsidiaries, or made payable to the Surviving Corporation or its Subsidiaries, that constitutes property of the Surviving Corporation or its Affiliates or of a SunGard Entity or its Affiliates, as the case may be, and SunGard Data or the Surviving Corporation, as the case may be, shall promptly deposit such checks or drafts, and, upon receipt of funds, reimburse the Surviving Corporation or such Affiliate or the SunGard Entity or its Affiliates within five (5) Business Days for the amounts of all such checks or drafts, or, if so requested by the other Party, endorse such checks or drafts to the Surviving Corporation or the SunGard Entity for collection. After the Closing, to the extent any SunGard Entity or its
77
Subsidiaries previously has received or receives any mail or packages addressed and delivered to such SunGard Entity or its Subsidiaries that relates to the Business, the Company or its Affiliates, SunGard Data shall promptly deliver such mail or packages to Parent. Neither Party may assert any set off, hold back, escrow or other restriction against any payment described in this Section 7.20.
Section 7.21 Confidentiality.
(a) For a period of three (3) years from and after the Closing (and indefinitely with respect to source code assigned to the Company pursuant to Section 1.1(a) of the Intellectual Property Agreement and trade secrets exclusively used by the Surviving Corporation, the SunGard Entities, the Datatel Entities or their respective Subsidiaries on the Closing Date), each of the Surviving Corporation and the Datatel Entities and each of the SunGard Entities shall, and shall cause its respective Affiliates and all of their respective Representatives to, hold in confidence all confidential information (including trade secrets) concerning, in the case of the SunGard Entities, the Business, the Datatel Entities, the Surviving Corporation and their respective Subsidiaries, and in the case of the Surviving Corporation and the Datatel Entities, the SunGard Entities and their respective Subsidiaries, to the extent that (i) any such information relating to the Business, the Surviving Corporation or its Subsidiaries was used by Seller or its Affiliates (other than the Business, the Surviving Corporation and its Subsidiaries) on or prior to the Closing Date, (ii) any such information is or becomes generally available to the public other than through the fault of any of the SunGard Entities or their respective Affiliates or Representatives or any of the Surviving Corporation, the Datatel Entities or their respective Affiliates or Representatives, as applicable, (iii) any such information is required by applicable Law, Order or a Governmental Body to be disclosed (including any report, statement, testimony or other submission to such Governmental Body) and reasonable advance written notice of such disclosure is provided to the applicable Party with respect to such confidential information to the extent permitted by applicable Law, or (iv) any such information was or becomes available to any of the SunGard Entities or their respective Affiliates or Representatives or to any of the Surviving Corporation, any of the Datatel Entities or their respective Affiliates or Representatives, as applicable, on a non-confidential basis and from a source (other than those related to SunGard Datas prior ownership of the Business, the Surviving Corporation and its Subsidiaries) that is not bound by an obligation of confidentiality with respect to such information.
(b) At the Closing, the provisions of the Confidentiality Agreement governing (i) Evaluation Materials (as defined in the Confidentiality Agreement) that relate solely to the Business, the Company or its Subsidiaries and (ii) the paragraph with respect to employee non-solicit and no hire obligations, each shall terminate and be of no further force and effect. Except as so amended at the Closing, the Confidentiality Agreement will remain in effect in accordance with its terms.
Section 7.22 Insurance Matters. Prior to the Closing, each of the SunGard Entities and the Company shall, and shall cause their respective Affiliates to, use their respective commercially reasonable efforts to cause any carriers who have underwritten insurance policies of the SunGard Entities, the Company or any of their respective Affiliates which provide insurance coverage (on an occurrence-based or claims-made basis) to the Business, the Company
78
and its Subsidiaries as of the date hereof to continue to make coverage available to the Surviving Corporation and its Subsidiaries following the Closing Date for, (i) with respect to occurrence-based insurance policies of the SunGard Entities or their Affiliates (other than the Company Entities), events or circumstances relating to the Company or its Subsidiaries that occurred or existed on or prior to the Closing that are covered by such insurance policies, and (ii) with respect to claims-made insurance policies of the SunGard Entities or their respective Affiliates (other than the Company Entities), any open claims against such insurance policies relating to Losses suffered by the Business, the Company and its Subsidiaries on or prior to the Closing (collectively clause (i) and (ii), Reimbursable Insurance Claims). The SunGard Entities agree to use commercially reasonable efforts in a manner consistent with past practices prior to the Closing to recover or pursue recovery for such Reimbursable Insurance Claims and to deliver the proceeds thereby recovered to the Company. For a period of three (3) years following the Closing (or, solely with respect to any insurance coverage that specifically applies to any Reimbursable Insurance Claims that have been submitted but remain unresolved or unpaid as of three (3) years following the Closing, such longer period until such Reimbursable Insurance Claims have been resolved and paid), the SunGard Entities shall not, and shall cause each of their respective Subsidiaries to not, release, commute, buy-back or otherwise eliminate the coverage available to the Company and its Subsidiaries under any such insurance policies. Following the Closing Date, the SunGard Entities and the Company shall cooperate with and assist each other in issuing notices of claims under such insurance policies, presenting such Reimbursable Insurance Claims for payment and collecting insurance proceeds related thereto. Without limiting the generality of the foregoing, the SunGard Entities, the Company and their respective Subsidiaries shall reasonably cooperate in order to ensure the proper and adequate defense of any litigation matter with respect to the Reimbursable Insurance Claims under any such insurance policies, including by providing access to each others relevant business records and other documents, and employees. The SunGard Entities and the Company shall use commercially reasonable efforts to avoid production of confidential information (consistent with applicable Law), and to cause all communications among employees, counsel and others representing any party to be made so as to preserve any applicable attorney-client or work-product privileges.
Section 7.23 Services in India. To the extent that the transfer of Business Employees in India as required by the Restructuring is not completed prior to the Applicable Closing, SunGard Data shall use its reasonable best efforts to complete the transfer as soon as practicable thereafter, and shall, for the period between the Applicable Closing and the completion of such transfer, provide, pursuant to the Transition Services Agreement, to the Surviving Corporation the services that are provided by such Business Employees in India prior to the Applicable Closing and that are necessary to the conduct of the Business.
Section 7.24 No Activities. Prior to the Applicable Closing, none of Sophia Holding I, Sophia Holding II, Parent, Merger Sub, Purchaser Company or Datatel shall incur any Liability nor engage in any business or activity of any type or kind whatsoever or enter into any agreement or arrangement with any Person, except in connection with the Transactions and, in the case of Datatel, of the sort contemplated by the penultimate sentence of Section 6.7.
Section 7.25 Certain Ancillary Arrangements.
79
(a) At the Applicable Closing, each of the Parties shall, and shall cause its respective Affiliates to, enter into each of the Ancillary Agreements (other than the Asset Purchase Agreement) to which such Affiliate is or is intended to be a party or bound thereby.
(b) Datatel hereby guarantees the timely performance of Parent, Purchaser Company and the Surviving Corporation of their obligations under Section 7.4(d)(ii)(C) and Section 7.4(d)(ii)(D).
Section 7.26 Release of Liens; Substitution.
(a) At the Asset Closing, the SunGard Entities shall cause all Liens on the Purchased Assets to be released upon the Asset Closing, and at the Closing, all Liens on any of the Company Common Stock and the remaining assets of the Company Entities and all guarantees, obligations and Liabilities of the Company Entities, in each case, with respect to any Indebtedness of the SunGard Entities and their Subsidiaries (other than the Company Entities) to be released or terminated upon the Closing. At the Closing, the SunGard Entities shall obtain the release of all Liens (other than Permitted Liens) on all Owned Real Property.
(b) As of the Applicable Closing, with respect to each of the outstanding letters of credit of the Company and its Subsidiaries set forth on Section 5.4(c) of the Company Disclosure Schedules, or entered into between the date hereof and the Applicable Closing in compliance with Section 7.1(b)(xvii), Parent shall cause each such outstanding letter of credit to be returned to the issuers thereof, provide to the issuer of such letter of credit a letter of credit in the same amount, on terms satisfactory to the issuers of such letters of credit, or otherwise satisfy the issuers of such letters of credit as to the disposition or retention of such letters of credit under the applicable credit facilities (e.g., cash collateralizing such obligations). In addition, SunGard Data and Parent shall enter into arrangements effective as of the Applicable Closing whereby Parent or its Affiliates would be substituted for SunGard Data or its Affiliates in any performance bonds, cash collateral, escrow requirement or similar credit support arrangements entered into by SunGard Data or its Affiliates between the date hereof and the Applicable Closing in compliance with Section 7.1(b)(xvii); provided that (x) the foregoing shall not apply to any such bond arrangement provided in respect of any Tax proceeding (including the bond arrangement listed in Section 5.4(c) of the Company Disclosure Schedules) with respect to Taxes for which the SunGard Entities are responsible under Section 7.4 and (y) any cash deposited pursuant to a bond arrangement shall be deemed not to be a Company Specified Current Asset for purposes of this Agreement or an SMS Business Specified Current Asset (as defined in the Asset Purchase Agreement) for purposes of the Asset Purchase Agreement if such cash is in respect of a bond arrangement as described in clause (x) or is distributed or transferred to a SunGard Entity or any of its Subsidiaries (other than a Company Entity).
Section 7.27 Transition Services. Prior to the Applicable Closing, each of the Parties agrees to use their respective commercially reasonable efforts to (a) take all actions reasonably necessary to enable such Party, to the extent it will be a Service Provider (as defined in the Transition Services Agreement), to begin providing on the Closing Date the SunGard Services (as defined in the Transition Services Agreement) or the HE Services (as defined in the Transition Services Agreement), as applicable, that it is obligated to perform pursuant to, and in accordance with the terms and conditions of, the Transition Services Agreement, (b) identify
80
Additional Services (as defined in the Transition Services Agreement) and (c) except as SunGard Data and Parent may otherwise agree, negotiate in good faith more detailed descriptions of the services to be provided that are set forth in Exhibit D as of the date of this Agreement.
Section 7.28 Receivables Sale Agreement. Prior to the Business Day prior to the Applicable Closing, the SunGard Entities shall take all actions necessary to cause each of the Company Entities party to the Receivables Sale Agreement, dated as of March 27, 2009, among each of the sellers party thereto, SunGard AR Financing LLC and SunGard Data (Receivables Sale Agreement) to repurchase prior to the close of business on the Business Day preceding the Applicable Closing all of the receivables sold by such Company Entity pursuant to the Receivables Sale Agreement that have not been collected or charged off as of the date of such repurchase and, concurrently with such repurchase, to (i) cease on a prospective basis to be a Seller under the Receivables Sale Agreement and (ii) cause the Liens granted pursuant to Section 2.02 of the Receivables Sale Agreement to be fully released. Any subordinated note issued to any Company Entity pursuant to the Receivables Sale Agreement will be transferred to one of the SunGard Entities or their respective Subsidiaries (other than any Company Entity) prior to the close of business on the Business Day immediately prior to the date of the Applicable Closing and, accordingly, will neither be an asset of any Company Entity as of the Applicable Closing nor included in the Purchased Assets.
ARTICLE VIII
CONDITIONS OF THE MERGER
Section 8.1 Conditions to the Obligations of Each Party. Subject to Section 8.4, the respective obligations of each Party to consummate the Merger are subject to the satisfaction on or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, by each Party to the extent permitted by applicable Law:
(a) either (i) the Asset Closing shall have occurred or (ii) the Asset Purchase Agreement shall have been terminated pursuant to Section 9.1(b) thereof;
(b) all applicable waiting periods (and any extensions thereof) under the HSR Act will have expired or otherwise been terminated;
(c) (x) no Action commenced by any Governmental Antitrust Entity located in the United States pursuant to any applicable Competition Law shall be pending before any U.S. Governmental Body wherein an unfavorable Order would (i) prevent or prohibit consummation of any of the Transactions, or (ii) cause any of the Transactions to be rescinded following consummation, and (y) no such Order shall be in effect; and
(d) no provision of any applicable Law making illegal or otherwise preventing or prohibiting the consummation of any of the Transactions shall be in effect and no temporary, preliminary or permanent Order preventing or prohibiting the consummation of any of the Transactions will be in effect.
Section 8.2 Additional Conditions to the Obligations of the SunGard Entities and the Company. Subject to Section 8.4, the obligations of the SunGard Entities and the Company to
81
consummate the Merger are subject to the satisfaction on or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, by the SunGard Entities or the Company to the extent permitted by applicable Law:
(a) (i) the representations and warranties of the Datatel Entities set forth in this Agreement and the Asset Purchase Agreement (other than those other representations and warranties that address matters as of particular dates) shall be true and correct as of the Closing Date as though then made at and as of the Closing Date (without giving effect to materiality, Datatel Material Adverse Effect, or similar phrases in the representations and warranties) and (ii) the representations and warranties of the Datatel Entities set forth in this Agreement and the Asset Purchase Agreement that address matters as of particular dates shall be true and correct as of such dates (without regard to materiality, Datatel Material Adverse Effect, or similar phrases in the representations and warranties), except where the failure of such representations and warranties referenced in the immediately preceding clauses (i) and (ii) to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Datatel Material Adverse Effect;
(b) each of the Datatel Entities shall have performed and complied in all material respects with all covenants required by this Agreement and the Asset Purchase Agreement to be performed or complied with by it at or prior to the Closing; and
(c) the SunGard Entities shall have received a certificate signed by an executive officer of each of the Datatel Entities, dated as of the Closing Date, certifying the satisfaction by the Datatel Entities of the conditions set forth in the foregoing clauses (a) and (b).
Section 8.3 Additional Conditions to the Obligations of the Datatel Entities. Subject to Section 8.4, the obligations of the Datatel Entities to consummate the Merger are subject to the satisfaction on or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part, by the Datatel Entities to the extent permitted by applicable Law:
(a) (1) (i) the representations and warranties of the SunGard Entities and the Company set forth in this Agreement and the Asset Purchase Agreement (other than (x) Section 4.1, Section 4.2, Section 5.2, Section 5.4(a), Section 5.4(b) and Section 5.5(b) (collectively, the Fundamental Representations) , Section 5.4(c) and Section 5.8(a)(ii)), (y) Section 4.1 of the Asset Purchase Agreement, and (z) those other representations and warranties that address matters as of particular dates) shall be true and correct as of the Closing Date as though then made at and as of the Closing Date (without giving effect to materiality, Business Material Adverse Effect, or similar phrases in the representations and warranties) and (ii) the representations and warranties of the SunGard Entities and the Company set forth in this Agreement and the Asset Purchase that address matters as of particular dates (other than the Fundamental Representations and the representations and warranties set forth in Section 5.4(c) and Section 4.1 of the Asset Purchase Agreement) shall be true and correct as of such dates (without regard to materiality, Business Material Adverse Effect, or similar phrases in the representations and warranties), except where the failure of such representations and warranties referenced in the immediately preceding clauses (i) and (ii) to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect; (2) the Fundamental Representations and
82
Section 4.1 of the Asset Purchase Agreement shall be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date (except for representations and warranties which address matters only as of a specific date, which representations and warranties shall continue as of the Closing Date to be true and correct in all material respects as of such specific date); (3) the representations and warranties set forth in Section 5.8(a)(ii) shall be true and correct in all respects as of the Closing Date as though then made at and as of the Closing Date and (4) the representations and warranties set forth in Section 5.4(c) shall be true and correct in all respects as of the Closing Date as though then made at and as of the Closing Date (except, in the case of this clause (4), to the extent any failure to be so true and correct would not cause a failure of the condition contained in paragraph 4 of Exhibit D to the Debt Financing Commitment and the aggregate amount of such Indebtedness as a result of such failure to be so true and correct does not exceed $5,000,000);
(b) each of the SunGard Entities and the Company shall have performed and complied in all material respects with all covenants required by this Agreement and the Asset Purchase Agreement to be performed or complied with by it at or prior to the Closing; and
(c) the Datatel Entities shall have received a certificate signed by an executive officer of each of the SunGard Entities and the Company, dated as of the Closing Date, certifying the satisfaction by the SunGard Entities and the Company of the conditions set forth in the foregoing clauses (a) and (b).
Section 8.4 Satisfaction of Conditions Upon the Occurrence of the Asset Closing. Notwithstanding anything herein to the contrary, if the Asset Closing has occurred, then (a) the sole condition to the respective obligations of the Parties to consummate the Merger is the satisfaction, on or prior to the Closing, of Section 8.1(d), and (b) each of the other conditions to the obligations of the Parties to consummate the Merger contained in Section 8.1, Section 8.2 and Section 8.3 shall be deemed to have been satisfied as of immediately before the time of the Asset Closing.
ARTICLE IX
TERMINATION, ENFORCEMENT AND EXPENSES
Section 9.1 Termination or Abandonment. Notwithstanding anything contained in this Agreement to the contrary (other than the last sentence of this Section 9.1), this Agreement may be terminated at any time prior to the Applicable Closing:
(a) by the mutual written consent of Parent and SunGard Data;
(b) by either the Parent or SunGard Data if the Applicable Closing shall not have occurred on or before August 2, 2012 (New York time) (the Outside Date); provided that the right to terminate this Agreement pursuant to Section 9.1(b) shall not be available to either Parent or SunGard Data if its failure to perform (or with respect to Parent, the failure of the Datatel Entities to perform, and with respect to SunGard Data, the failure of the SunGard Entities or the Company to perform) any of its obligations under this Agreement or the Asset Purchase Agreement required to be performed by it at or prior to
83
such date has been a substantial cause of the failure of the Applicable Closing to have occurred on or before the Outside Date;
(c) by either Parent or SunGard Data if any Law or Order by any Governmental Body that prevents or prohibits consummation of any of the Transactions shall have become final and non-appealable;
(d) by Parent, if the SunGard Entities or the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement or the Asset Purchase Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 8.3(a) or Section 8.3(b) of the Asset Purchase Agreement or Section 8.3(a) or Section 8.3(b) and (ii) (x) cannot be cured by the Outside Date or (y) if capable of being cured by the Outside Date, shall not have been cured by the earlier of the Outside Date and the 20th Business Day following receipt of written notice (which notice shall specify in reasonable detail the nature of such breach or failure and Parents intention to terminate this Agreement if such breach or failure is not cured) from Parent to SunGard Data of such breach or failure; provided, that Parent shall not have a right to terminate this Agreement pursuant to this Section 9.1(d) if any of the Datatel Entities is then in breach of any representations, warranties, covenants or other agreements contained in this Agreement or the Asset Purchase Agreement that would result in a failure of a condition set forth in Section 8.2(a) or Section 8.2(b) of the Asset Purchase Agreement or Section 8.2(a) or Section 8.2(b);
(e) by SunGard Data, if the Datatel Entities shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement or the Asset Purchase Agreement, which breach or failure to perform (i) would result in a failure of a condition set forth in Section 8.2(a) or Section 8.2(b) of the Asset Purchase Agreement or Section 8.2(a) or Section 8.2(b) and (ii) (x) cannot be cured by the Outside Date or (y) if capable of being cured by the Outside Date, shall not have been cured by the earlier of the Outside Date and the 20th Business Day following receipt of written notice (which notice shall specify in reasonable detail the nature of such breach or failure and SunGard Datas intention to terminate this Agreement if such breach or failure is not cured) from SunGard Data to Parent of such breach or failure; provided, that SunGard Data shall not have a right to terminate this Agreement pursuant to this Section 9.1(e) if any of the SunGard Entities or the Company is then in breach of any representations, warranties, covenants or other agreements contained in this Agreement or the Asset Purchase Agreement that would result in a failure of a condition set forth in Section 8.3(a) or Section 8.3(b) of the Asset Purchase Agreement or Section 8.3(a) or Section 8.3(b); or
(f) by SunGard Data if (x) in the event the Asset Purchase Agreement has not terminated pursuant to Section 9.1(b) thereof, (i) all of the closing conditions in Sections 8.1 and 8.3 of the Asset Purchase Agreement have been satisfied (other than those conditions that by their terms are to be satisfied at the Asset Closing, but such conditions must be capable of being satisfied on such termination date as if it were the date of the Asset Closing), (ii) the SunGard Entities and the Company irrevocably confirm in writing delivered to the Datatel Entities that all of the closing conditions in Sections 8.1 and 8.2 of the Asset Purchase Agreement have been satisfied (other than those conditions that by their terms are to be satisfied at the Asset Closing but such terms must be capable of being satisfied on such termination date as if it were the date of the Asset Closing) or waived and that the SunGard Entities and the Company are prepared to
84
consummate the Asset Closing and the Merger, (iii) Parent and Purchaser Company fail to consummate the Asset Closing or the Merger within two Business Days following the date the Asset Closing should have occurred pursuant to Section 3.2 of the Asset Purchase Agreement and (iv) SunGard Data and the Company were ready, willing and able to consummate the Asset Closing and the Merger during such two Business Day period or (y) in the event the Asset Purchase Agreement has terminated pursuant to Section 9.1(b) thereof, (i) all of the closing conditions in Sections 8.1 and 8.3 have been satisfied (other than those conditions that by their terms are to be satisfied at the Closing, but such conditions must be capable of being satisfied on such termination date as if it were the Closing Date), (ii) the SunGard Entities and the Company irrevocably confirm in writing delivered to the Datatel Entities that all of the closing conditions in Sections 8.1 and 8.2 have been satisfied (other than those conditions that by their terms are to be satisfied at the Closing but such terms must be capable of being satisfied on such termination date as if it were the Closing Date) or waived and that the SunGard Entities and the Company are prepared to consummate the Merger, (iii) Merger Sub fails to consummate the Merger within two Business Days following the date the Closing should have occurred pursuant to Section 2.3 and (iv) the SunGard Entities and the Company were ready, willing and able to consummate the Merger during such two Business Day period.
The Party desiring to terminate this Agreement pursuant to this Section 9.1 (other than Section 9.1(a)) will give written notice of such termination to the other Parties, specifying the provision pursuant to which such termination is effected. Notwithstanding anything to the contrary in this Agreement, if the Asset Closing has occurred, this Agreement may not be terminated other than pursuant to Section 9.1(a).
Section 9.2 Parent Termination Fee.
(a) If this Agreement is validly terminated by SunGard Data pursuant to Section 9.1(e) or Section 9.1(f), then Parent will cause Datatel to pay, and Datatel will pay, to SunGard Data an amount equal to one hundred twenty four million dollars ($124,000,000) (the Parent Termination Fee).
(b) In the event the Parent Termination Fee is payable, such fee will be paid to SunGard Data by Datatel in immediately available funds within three (3) Business Days after the date of such termination pursuant to Section 9.1(e) or Section 9.1(f). The Parties agree that in no event will Datatel be required to pay the Parent Termination Fee on more than one occasion.
(c) Each of the Datatel Entities acknowledges and agrees that the agreement contained in Section 9.2(a) is an integral part of the transactions contemplated hereby, and that without this agreement, the SunGard Entities and the Company would not enter into this Agreement or the Ancillary Agreements. Accordingly, if Datatel fails to timely pay the Parent Termination Fee when due pursuant to this Section 9.2, and, in order to obtain the payment SunGard Data commences a suit which results in a judgment against Datatel for the payment of the Parent Termination Fee pursuant to this Section 9.2, Parent will cause Datatel to pay, and Datatel shall pay, to SunGard Data its reasonable and documented costs and expenses (including reasonable and documented attorneys fees) in connection with such suit, together with interest on such amount at the prime rate of Citibank, N.A. in effect on the date such payment was required to be made through the date such payment was actually received.
85
Section 9.3 Effect of Termination.
(a) In the event of termination of this Agreement by either Parent or SunGard Data as provided in Section 9.1, this Agreement (and the Asset Purchase Agreement pursuant to Section 9.1(a) thereof) will forthwith become void and have no further force or effect, without any Liability (other than as set forth, and subject to the limitations included, in Section 9.2, Section 9.4 or this Section 9.3) on the part of the Datatel Entities, the SunGard Entities or the Company (or any Representative of any such Party); provided, however, that the provisions of the last sentence of Section 7.8(b), Section 7.10, the two penultimate sentences in Section 7.15(d), Section 9.2, Section 9.3, Section 9.4, Section 9.5 and Article XI will survive any termination hereof; provided, further, that the provisions of Section 7.24 will survive any termination pursuant to Section 9.4(e) or Section 9.4(f) (but not any other termination pursuant to Section 9.1) but solely until 91 days after the Parent Termination Fee has been paid (after which such 91st day, Section 7.24 will terminate); provided, further, that subject to the terms and limitations of this Section 9.3 and Section 9.4, nothing in this Section 9.3(a) shall relieve any party of any Liability for any willful and material breach by such Party of this Agreement prior to the Effective Time.
(b) Notwithstanding anything to the contrary in this Agreement, if the Datatel Entities fail to effect the Asset Closing when required by Section 3.2 of the Asset Purchase Agreement or the Closing when required by Section 2.3, in either case, for any or no reason or otherwise breach this Agreement or the Asset Purchase Agreement (whether willfully, intentionally, unintentionally or otherwise) prior to the Closing or fail to perform hereunder or thereunder (whether willfully, intentionally, unintentionally or otherwise) prior to the Closing, then, (i) the SunGard Entities, the Companys and their respective Affiliates sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) against the Datatel Entities, the Investors, and any of their respective former, current or future directors, officers, employees, direct or indirect equityholders, controlling persons, general or limited partners, stockholders, incorporators, Affiliates, Financing Sources, attorneys, representatives, agents, successors or assignees or any former, current or future director, officer, employee, direct or indirect equityholder, controlling person, general or limited partner, manager, member, stockholder, incorporator, Affiliate, attorney, representative, agent, successor or assignee of any of the foregoing (each a Related Party and collectively, the Related Parties) for any breach, loss or damage (SunGard Damages) shall be (x) the right of SunGard Data to terminate this Agreement and receive payment of the Parent Termination Fee pursuant to (and only to the extent expressly permitted by) Section 9.2(a) and (y) the right of the SunGard Entities and the Company to seek to enforce the obligations of the Datatel Entities and the Investors (as such term is defined in the Transaction Equity Financing Commitment) by a decree of specific performance and to seek temporary, preliminary and permanent injunctive relief to prevent breaches of such obligations as and only to the extent expressly permitted by Section 9.4, and (ii) except as provided in the immediately foregoing clause (i), none of the Related Parties will have any Liability to the SunGard Entities, the Company or any of their respective Affiliates relating to, arising out of and/or otherwise in connection with this Agreement, any of the Ancillary Agreements, the Financing Commitments or in respect of any other document or theory of law or equity or in respect of any oral representations made or alleged to be made in connection herewith or therewith, through any of the Datatel Entities or
86
otherwise, whether by or through attempted piercing of the corporate (or equivalent) veil, by or through a claim by or on behalf of any of the Datatel Entities against any other Related Party, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or other applicable Law, or otherwise. For the avoidance of doubt, while the SunGard Entities and the Company may pursue both a grant of specific performance to the extent expressly permitted by Section 9.4(b), Section 9.4(c), Section 9.4(d) and Section 9.4(e) and the payment of the Parent Termination Fee to the extent expressly permitted by Section 9.2(a), under no circumstances shall the SunGard Entities or the Company be permitted or entitled to receive both (x) a grant of specific performance to cause the Transaction Equity Financing to be funded, to consummate the Asset Closing and/or to consummate the Merger and (y) payment of the Parent Termination Fee (and/or a grant of specific performance to the extent expressly permitted by Section 9.4(e) with respect to the funding of the Termination Fee Equity Financing for the payment of the Parent Termination Fee). Upon payment of the Parent Termination Fee, none of the Related Parties shall have any further Liability to any of the SunGard Entities, the Company or any of their respective Affiliates relating to or arising out of this Agreement, any of the Ancillary Agreements, the Financing Commitments or in respect of any other agreement, document or theory of law or equity or in respect of any oral representations made or alleged to be made in connection herewith or therewith, whether at law or equity, in contract, in tort or otherwise, and none of the Related Parties shall have any further Liability to any of the SunGard Entities, the Company or any of their respective Affiliates relating to, arising out of and/or otherwise in connection with this Agreement, any of the Ancillary Agreements or any of the transactions contemplated hereby or thereby, except as otherwise expressly contemplated by (1)(A) the two penultimate sentences in Section 7.15(d), (B) the last sentence in Section 9.2(c) and (C) clause (b) of the proviso in Section 9.5 (or, in the alternative, Section 9.3 of the Asset Purchase Agreement), in each case with respect to Datatel and (2)(A) the penultimate sentence of Section 7.4(e)(i), (B) the third from last sentence of Section 7.4(h), and (C) the penultimate sentence of Section 3.1(b)(iii) of the Asset Purchase Agreement, in each case with respect to Parent.
(c) Notwithstanding anything herein to the contrary, the maximum aggregate liability of the Datatel Entities (inclusive of any payment of the Parent Termination Fee) for all SunGard Damages shall be limited to the sum of one hundred twenty four million dollars ($124,000,000) plus any amounts payable under the penultimate sentence of Section 7.4(e)(i), the third from last sentence of Section 7.4(h), the two penultimate sentences of Section 7.15(d), the last sentence of Section 9.2(c), clause (b) of the proviso in Section 9.5 (or, in the alternative, Section 9.3 of the Asset Purchase Agreement) and the penultimate sentence of Section 3.1(b)(iii) of the Asset Purchase Agreement (such sum, the Liability Limitation), and in no event shall any of the SunGard Entities, the Company or any of their respective Affiliates seek any other SunGard Damages or any other recovery, judgment or damages of any kind, including consequential, indirect, or punitive damages, against any of the Datatel Entities or any of the other Related Parties in excess of the Liability Limitation in connection with this Agreement, any of the Ancillary Agreements, any of the Financing Commitments or any of the Transactions.
Section 9.4 Enforcement.
(a) The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement and the Asset Purchase Agreement were not performed in accordance with their specific terms or were otherwise breached and that any breach of this Agreement or the Asset Purchase Agreement could not be adequately compensated in all cases by monetary damages alone. Except as otherwise set forth in this Section 9.4, including the limitations set forth in Section 9.4(b), Section 9.4(c), Section 9.4(d) and Section 9.4(e), the Parties acknowledge and agree that, (i) prior to the valid termination of this Agreement pursuant
87
to Section 9.1, the Parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof and (ii) prior to the valid termination of the Asset Purchase Agreement pursuant to Section 9.1 thereof, the Parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of the Asset Purchase Agreement and to enforce specifically the terms and provisions thereof.
(b) Notwithstanding anything herein to the contrary, it is acknowledged and agreed that the SunGard Entities and the Company shall be entitled to specific performance of (x) Sophia Holding Is right to cause the Transaction Equity Financing, upon the terms and subject to the conditions set forth in the Transaction Equity Financing Commitment, to be funded at the Asset Closing and its obligation to issue to each of the Investors the Subject Equity Securities (as such term is defined in the Transaction Equity Financing Commitment), and Sophia Holding Is subsequent funding of such Transaction Equity Financing to Parent and the Purchaser Company, and (y) Parents and Purchaser Companys obligation to consummate the Asset Closing and the Closing, in the case of each of the foregoing clauses (x) and (y), only in the event that each of the following conditions has been satisfied: (i) the Asset Purchase Agreement has not terminated pursuant to Section 9.1(b) thereof, (ii) all of the conditions set forth in Section 8.1 and Section 8.3 of the Asset Purchase Agreement have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the Asset Closing, but subject to such conditions being satisfied at the Asset Closing), and Parent and Purchaser Company fail to complete the Asset Closing by the date the Asset Closing is required to have occurred pursuant to Section 3.2 of the Asset Purchase Agreement, (iii) the Debt Financing (or, if alternative financing is being used in accordance with Section 7.15, pursuant to the commitments with respect thereto) has been funded or will be funded at the Asset Closing if the Transaction Equity Financing is funded at the Asset Closing (if the Note Escrow Closing occurs, for purposes hereof the Notes will not be deemed to have been funded unless and until the proceeds of the Notes are released from escrow for purposes of funding in part the Transactions), and (iv) each of the SunGard Entities and the Company has irrevocably confirmed in a written notice delivered to the Datatel Entities and Parents sources of Debt Financing that if specific performance is granted and the Transaction Equity Financing and Debt Financing are funded, the SunGard Entities and the Company will consummate the Asset Closing and the Closing. For the avoidance of doubt, in no event shall the SunGard Entities or the Company be entitled to enforce or seek to enforce specifically Sophia Holding Is right to cause the Transaction Equity Financing to be funded at the Asset Closing or Parents and Purchaser Companys obligation to complete the Asset Closing or the Closing if the Debt Financing has not been funded (or will not be funded at the Asset Closing if the Transaction Equity Financing is funded at the Asset Closing) (if the Note Escrow Closing occurs, for purposes hereof the Notes will not be deemed to have been funded unless and until the proceeds of the Notes are released from escrow for purposes of funding in part the Transactions).
(c) Notwithstanding anything herein to the contrary other than the immediately following sentence of this Section 9.4(c), it is acknowledged and agreed that the SunGard Entities and the Company shall be entitled to specific performance of (x) Sophia Holding Is right to cause the Transaction Equity Financing, upon the terms and subject to the conditions set forth in the Transaction Equity Financing Commitment, to be funded at the Closing, and its obligation to issue to each of the Investors the Subject Equity Securities (as such term is defined
88
in the Transaction Equity Financing Commitment) and (y) Parents and Merger Subs obligation to consummate the Merger, in the case of the foregoing clauses (x) and (y), only in the event that each of the following conditions has been satisfied: (i) the Asset Purchase Agreement has terminated pursuant to Section 9.1(b) thereof, (ii) all of the conditions set forth in Section 8.1 and Section 8.3 have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to such conditions being satisfied at the Closing), and Parent and Merger Sub fail to complete the Closing by the date the Closing is required to have occurred pursuant to Section 2.3, (iii) the Debt Financing (or, if alternative financing is being used in accordance with Section 7.15, pursuant to the commitments with respect thereto) has been funded or will be funded at the Closing if the Transaction Equity Financing is funded at the Closing (if the Note Escrow Closing occurs, for purposes hereof the Notes will not be deemed to have been funded unless and until the proceeds of the Notes are released from escrow for purposes of funding in part the Transactions), and (iv) each of the SunGard Entities and the Company has irrevocably confirmed in a written notice delivered to the Datatel Entities and Parents sources of Debt Financing that if specific performance is granted and the Transaction Equity Financing and Debt Financing are funded, the SunGard Entities and the Company will consummate the Closing. Notwithstanding anything to the contrary contained in this Agreement, any of the Ancillary Agreements or the Transaction Equity Financing Commitments, if the Asset Closing has occurred, it is acknowledged and agreed that the SunGard Entities and the Company shall be entitled to specific performance of Parents and Merger Subs obligation pursuant to Section 3.6 of the Asset Purchase Agreement to contribute into the Escrow Account on the day of the Asset Closing an amount equal to the Estimated Merger Consideration and to consummate the Merger on the date the Closing is required to occur pursuant to Section 2.3 without limitation. For the avoidance of doubt, in no event shall the SunGard Entities or the Company be entitled to enforce or seek to enforce specifically Sophia Holding Is right to cause the Transaction Equity Financing to be funded at the Closing or Parents or Merger Subs obligation to complete the Merger if the Debt Financing has not been funded (or will not be funded at the Closing if the Transaction Equity Financing is funded at the Closing) (if the Note Escrow Closing occurs, for purposes hereof the Notes will not be deemed to have been funded unless and until the proceeds of the Notes are released from escrow for purposes of funding in part the Transactions).
(d) Notwithstanding anything herein to the contrary, it is acknowledged and agreed that the SunGard Entities and the Company shall be entitled to specific performance to cause Parent to enforce the terms of the Debt Financing Commitment, including by demanding Parent to file one or more lawsuits against the Debt Financing Sources to fully enforce such Debt Financing Sources obligations thereunder to fund the Debt Financing and Parents rights thereunder, only in the event that either (x) each of the following conditions has been satisfied: (i) the Asset Purchase Agreement has not terminated pursuant to Section 9.1(b) thereof, (ii) all of the conditions set forth in Section 8.1 and Section 8.3 of the Asset Purchase Agreement have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the Asset Closing, but subject to such conditions being satisfied at the Asset Closing), and Parent and Purchaser Company fail to complete the Asset Closing by the date the Asset Closing is required to have occurred pursuant to Section 3.2 of the Asset Purchase Agreement, (iii) all of the conditions to the consummation of the financing provided by the Debt Financing Commitment (or, if alternative financing is being used in accordance with Section 7.15, pursuant to the commitments with respect thereto) have been satisfied (other than those conditions that by
89
their nature are to be satisfied by actions taken at the Asset Closing, but subject to such conditions being satisfied at the Asset Closing), and (iv) each of the SunGard Entities and the Company has irrevocably confirmed in a written notice delivered to the Datatel Entities and Parents sources of Debt Financing that if specific performance is granted and the Transaction Equity Financing and Debt Financing are funded, the SunGard Entities and the Company will consummate the Asset Closing and the Closing; or (y) each of the following conditions has been satisfied: (i) the Asset Purchase Agreement has terminated pursuant to Section 9.1(b) thereof, (ii) all of the conditions set forth in Section 8.1 and Section 8.3 have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to such conditions being satisfied at the Closing), and Parent and Merger Sub fail to complete the Closing by the date the Closing is required to have occurred pursuant to Section 2.3, (iii) all of the conditions to the consummation of the financing provided by the Debt Financing Commitment (or, if alternative financing is being used in accordance with Section 7.15, pursuant to the commitments with respect thereto) have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to such conditions being satisfied at the Closing), and (iv) each of the SunGard Entities and the Company has irrevocably confirmed in a written notice delivered to the Datatel Entities and Parents sources of Debt Financing that if specific performance is granted and the Transaction Equity Financing and Debt Financing are funded, then the SunGard Entities and the Company will consummate the Closing.
(e) Notwithstanding anything herein to the contrary, it is acknowledged and agreed that the SunGard Entities and the Company shall be entitled to specific performance of Parents right to cause the Termination Fee Equity Financing to be funded only in the event that this Agreement has been validly terminated by SunGard Data pursuant to Section 9.1(e) or Section 9.1(f).
(f) Each Party hereby agrees not to raise any objections to the availability of an injunction, specific performance or other equitable relief to prevent or restrain breaches of this Agreement and the Asset Purchase Agreement by such Party, and to specifically enforce the terms and provisions of this Agreement and the Asset Purchase Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such party under this Agreement and the Asset Purchase Agreement, in each case in accordance with the terms of, and subject to the limitations set forth in, this Section 9.4. Any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically, or be granted an injunction or other equity relief with respect to, the terms and provisions of this Agreement and the Asset Purchase Agreement shall not be required to provide any bond or other security in connection with such order or injunction all in accordance with the terms of this Section 9.4.
Section 9.5 Expenses. Except as otherwise expressly provided in this Agreement and the Ancillary Agreements, each of the SunGard Entities, the Company and the Datatel Entities shall bear its own fees and expenses incurred in connection with the negotiation and execution of this Agreement, the Ancillary Agreements and each other agreement, document and instrument contemplated hereby and thereby and the consummation of the Transactions; provided, however, that (a) all reasonable and documented out-of-pocket fees and expenses of the Datatel Entities and their Subsidiaries in connection with the Restructuring shall be paid or reimbursed by
90
SunGard Data and (b) all reasonable and documented out-of-pocket fees and expenses of the SunGard Entities in connection with the transactions to be performed under the Asset Purchase Agreement shall be paid or reimbursed by the Datatel Entities (except to the extent such fees and expenses are incurred in connection with transactions that otherwise are required to occur pursuant to the Restructuring unless such fees and expenses are Excess Costs for which Parent is responsible pursuant to Exhibit C).
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnification.
(a) Following the Closing and subject to the terms and conditions of this Article X, SunGard Data shall indemnify, defend and hold harmless the Datatel Entities and their respective Affiliates (including the Surviving Corporation and its Subsidiaries), and their respective officers, directors, employees, stockholders, managers, members, partners, assigns and successors (each, a Datatel Indemnified Party) from and against, and shall compensate and reimburse each Datatel Indemnified Party for, all Losses imposed upon or incurred by such Datatel Indemnified Party (Datatel Losses), subject to Section 10.2, with respect to (i) any failure of Section 5.20 of this Agreement (including pursuant to the certificate delivered pursuant to Section 8.3(c)) to be true and correct, (ii) any failure of any other representation or warranty of the SunGard Entities or the Company set forth in this Agreement or in the certificate delivered pursuant to Section 8.3(c) to be true and correct, (iii) any breach of any covenant or agreement of the SunGard Entities or the Company contained in Section 7.1, Section 7.5(a), (f) or (g), Section 7.7, Section 7.22, Section 7.26, or Section 7.28 of this Agreement to be performed at or prior to the Closing (the Surviving Pre-Closing Covenants), (iv) any breach of any other covenant or agreement of the SunGard Entities or the Company contained herein to be performed after the Closing or (v) (A) the conduct and operation of the businesses of the SunGard Entities and their respective Subsidiaries before or following the Applicable Closing (other than the conduct of the Business by the Company and its Subsidiaries before or following the Applicable Closing), (B) any properties, assets and other rights (and any Liabilities related to such properties, assets and other rights) owned by the SunGard Entities and their respective Subsidiaries (including the Company and its Subsidiaries) prior to or at the Closing, other than (x) those properly included in the properties, assets and other rights of the Company and its Subsidiaries as of the Closing and (y) those held by any of the SunGard Entities and their respective Subsidiaries (other than the Company Entities) that are required to be transferred to the Company Entities pursuant to the Restructuring (whether or not such transfer has actually been completed) and (C) any properties, assets and other rights (and any Liabilities related to such properties, assets and other rights) held by any of the Company Entities that are required to be transferred to the SunGard Entities and their Subsidiaries (other than the Company Entities) pursuant to the Restructuring (whether or not such transfer has actually been completed). The Datatel Indemnified Parties, whether under this Agreement or pursuant to Article X of the Asset Purchase Agreement, shall not be entitled to recover more than once for the same Datatel Loss and shall not be entitled to recover any Loss if and to the extent such Loss is reflected in the calculation of Company Transaction Fees and Expenses or Closing Net Working Capital.
91
(b) Following the Closing and subject to the terms and conditions provided in this Article X, Parent shall indemnify, defend and hold harmless the SunGard Entities and their respective Affiliates, and their respective officers, directors, employees, stockholders, managers, members, partners, assigns and successors (each, a SunGard Indemnified Party) from and against, and shall compensate and reimburse each SunGard Indemnified Party for, all Losses imposed upon or incurred by such SunGard Indemnified Party (SunGard Losses), subject to Section 10.2, with respect to (i) the failure of any representation or warranty of the Datatel Entities set forth in this Agreement or in the certificate delivered pursuant to Section 8.2(c) to be true and correct or (ii) any breach of any covenant or agreement by the Datatel Entities contained herein to be performed after the Closing or (iii) except as set forth in Section 10.1(b)(iii) of the Company Disclosure Schedules, the conduct and operation of the Business by the Company or any of its Subsidiaries before the Applicable Closing or the Company, Purchaser Company or any of their respective Subsidiaries following the Applicable Closing. The SunGard Indemnified Parties, whether under this Agreement or pursuant to Article X of the Asset Purchase Agreement, shall not be entitled to recover more than once for the same SunGard Loss.
(c) Notwithstanding the foregoing, Datatel Losses and SunGard Losses shall not include, and in no event shall any Datatel Loss or SunGard Loss be recoverable under the terms of this Agreement to the extent it consists of, punitive, special or exemplary damages, except to the extent such punitive, special or exemplary damages are awarded against any Datatel Indemnified Party or SunGard Indemnified Party, as the case may be, in a third-party claim.
(d) For the avoidance of doubt, other than with respect to the Asset Purchase Agreement, this Article X shall not apply to any representation, warranty, covenant or agreement made by any SunGard Entity, the Company or any Datatel Entity contained in any Ancillary Agreement or other agreement entered into in connection with the Transactions.
Section 10.2 Certain Limitations.
(a) Notwithstanding anything contained herein to the contrary, SunGard Data shall not be obligated to indemnify Datatel Indemnified Parties for aggregate Datatel Losses under this Agreement and the Asset Purchase Agreement pursuant to Section 10.1(a) (other than Section 10.1(a)(v)) and Section 10.1(a) of the Asset Purchase Agreement in excess of an amount equal to $1,775,000,000; provided that with respect to Datatel Losses pursuant to Section 10.1(a)(i), SunGard Data shall not be obligated to indemnify the Datatel Indemnified Parties for aggregate Datatel Losses in excess of an amount equal to $177,500,000.
(b) Notwithstanding anything contained herein to the contrary, SunGard Data shall not be obligated to indemnify the Datatel Indemnified Parties under this Agreement pursuant to Section 10.1(a)(i) with respect to any individual Datatel Loss or series of related Datatel Losses of less than seventy-five thousand dollars ($75,000) (the Minimum Amount) and unless and until the aggregate Datatel Losses (excluding individual Datatel Losses or related Datatel Losses less than the Minimum Amount) subject to such indemnification collectively exceed two million dollars ($2,000,000) (the Threshold), whereupon such indemnification shall be made by SunGard
92
Data only with respect to the amount of such Datatel Losses (excluding individual Datatel Losses or related Datatel Losses less than the Minimum Amount) in excess of the Threshold.
(c) The representations and warranties of the SunGard Entities, the Company and the Datatel Entities contained in Articles IV, V and VI of this Agreement shall not survive the Closing; provided that (i) the Fundamental Representations and the representations and warranties set forth in Sections 5.1 and 6.1 shall survive indefinitely, (ii) solely for purposes of Section 7.4(d)(i)(D), the representations and warranties set forth in Section 5.9 shall survive until sixty (60) days after the expiration of the applicable statute of limitations, and (iii) the representations and warranties set forth in Section 5.4(c), Section 5.20 and Section 5.21 shall survive until the one year anniversary of the Closing. The covenants and agreements contained in this Agreement shall not survive the Closing; provided that (i) the covenants and agreements contained in the Surviving Pre-Closing Covenants shall survive until the one year anniversary of the Closing and (ii) the covenants and agreements contained in this Agreement and the Asset Purchase Agreement to be performed after the Closing shall survive until the date or dates explicitly specified therein or, if not so specified, until performed in accordance with their terms.
(d) The obligations to indemnify and hold harmless a Party pursuant to Section 10.1(a) (other than Section 10.1(a)(v)) or Section 10.1(b) (other than Section 10.1(b)(iii)) shall terminate when the applicable representation, warranty or covenant terminates pursuant to Section 10.2(c); provided, however, that such obligations to indemnify and hold harmless shall not terminate with respect to any item as to which the SunGard Indemnified Party or Datatel Indemnified Party, as the case may be, to be indemnified (each, an Indemnified Party) shall have, before the expiration of the applicable survival period, previously made a claim by delivering a written notice (stating in reasonable detail the basis of such claim) to the Indemnifying Party.
Section 10.3 Procedures for Third Party Claims.
(a) Third Party Claims. Promptly (but in no event later than ten (10) days) after the receipt by any Indemnified Party of a notice of any Action by any third party that may be subject to indemnification under this Article X, such Indemnified Party shall give written notice of such Action to the indemnifying Party hereunder (the Indemnifying Party), stating in reasonable detail the nature and basis of each claim made in the Action and, to the extent known, the amount thereof along with copies of the relevant documents received by the Indemnified Party evidencing the Action and the basis for indemnification sought. Failure of the Indemnified Party to give such notice shall not relieve the Indemnifying Party from liability on account of this indemnification, except if and only to the extent that the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party shall have the right to assume the defense of the Indemnified Party against the third party claim upon written notice to the Indemnified Party delivered within thirty (30) days after receipt of the particular notice from the Indemnified Party; provided, however, that the Indemnifying Party shall not have the right to assume the defense of the third party claim if it (w) seeks as a remedy the imposition of an equitable remedy that is binding upon any Datatel Entity or any of its Affiliates (including the Surviving Corporation or its Subsidiaries), (x) involves alleged criminal liabilities of the Indemnified Party or any of its Affiliates, (y) is subject to indemnification pursuant to Section 10.1(a)(i) and the amount at issue in such claim (together with all pending and previously
93
resolved claims subject to indemnification pursuant to Section 10.1(a)(i)) is less than the Threshold or (z) is subject to a limitation set forth in Section 10.2(a) and the amount at issue in such claim (together with all other pending and previously resolved claims subject to the same limitation set forth in Section 10.2(a) as such claim) that would not be subject to indemnification pursuant to this Article X as a result of the application of such limitation set forth in Section 10.2(a) is greater than the amount at issue that would be subject to indemnification after application of such limitation set forth in Section 10.2(a). So long as the Indemnifying Party has assumed the defense of, and diligently defends, the third party claim in accordance herewith and notified the Indemnified Party in writing thereof, (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the third party claim, (provided, however, that the Indemnifying Party shall pay all reasonable costs and expenses of counsel for the Indemnified Party (A) after such time as the Indemnified Party has notified the Indemnifying Party of such third party claim and prior to such time as the Indemnifying Party has notified the Indemnified Party that it has assumed the defense of such third party claim or (B) if both the Indemnifying Party and the Indemnified Party are named parties to the proceedings and the Indemnified Party shall have concluded in good faith, based on advice from counsel, that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or the availability to the Indemnified Party of one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect thereof; provided, further, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties), (ii) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to the third party claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed) and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the third party claim (other than a judgment or settlement that (A) is on exclusively monetary terms with such monetary amounts paid by the Indemnifying Party concurrently with the effectiveness of the settlement, (B) does not involve any finding or admission of violation of Law or admission of wrongdoing by the Indemnified Party, and (C) provides a complete and unconditional release of, or dismissal with prejudice of, all claims against any Indemnified Party potentially affected by such third party claim for all matters that were or could have been asserted in connection with such claim) without the prior written consent of the Indemnified Party (not to be unreasonably withheld, conditioned or delayed). Whether or not the Indemnifying Party shall have assumed the defense, such Indemnifying Party shall not be obligated to indemnify and hold harmless the Indemnified Party hereunder for any settlement entered into without the Indemnifying Partys prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, the provisions of this Section 10.3(a) shall not apply to any Tax Claim, which shall be governed solely by Section 7.4.
(b) Procedures for Other Claims. An Indemnified Party shall promptly notify the Indemnifying Party in writing of any pending or threatened claim or demand (other than a third party claim) that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement, describing in reasonable detail, to the extent known by the Indemnified Party, the facts and circumstances with respect to the subject matter of such claim; provided, however, that the failure to provide such notice shall not release any Indemnifying Party from any of its obligations under this Agreement except to the extent such
94
Indemnifying Party is materially prejudiced by such failure. In the event the Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to this Section 10.3(b), the Indemnifying Party shall notify the Indemnified Party within thirty (30) days following their receipt of such notice if the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement. If the Indemnifying Party does not so notify the Indemnified Party, the claim specified by the Indemnified Party in such notice shall be conclusively deemed to be a liability of the Indemnifying Party under this Agreement, and the Indemnifying Party shall pay, subject to the limitations identified in this Agreement, if applicable, the amount of such liability to the Indemnified Party on demand or, in the case of any notice in which the amount of the claim (or any portion of the claim) is estimated, on such later date when the amount of such claim (or such portion of such claim) becomes finally determined. If the Indemnifying Party disputes all or a portion of the claim from an Indemnified Party, the Indemnifying Party and the Indemnified Party shall use good faith efforts to resolve such dispute. If such dispute is not resolved within 30 days following the delivery by the Indemnifying Party of its notice of dispute, the Indemnifying Party and the Indemnified Party shall each have the right to submit such dispute to a court of competent jurisdiction in accordance with the provisions of Section 11.5.
(c) Treatment of Indemnification Payments; Insurance Recoveries; Tax Benefit. Any payment made pursuant to the indemnification obligations arising under this Agreement (including Section 7.4) shall be treated as an adjustment to the Merger Consideration or Purchase Price, as applicable and shall be (i) increased to reflect any net Tax cost to the Indemnified Party arising from receipt of the indemnity payment (grossed up for such increase) and (ii) reduced to reflect any reduction in Tax as a result of an indemnified Loss at the time such reduction is actually realized by the Indemnified Party (determined on a with-and-without basis and by assuming any Tax benefit item in respect of the Loss will be used after any other Tax benefit item otherwise available to the Indemnified Party, provided however that any Tax benefits arising in respect of Parents indemnity obligations under Section 7.4(d)(ii)(C) or Section 7.4(d)(ii)(D) shall be taken immediately into account in determining the net Tax cost pursuant to (i)). Any indemnity payment under this Agreement shall be decreased by any amounts actually recovered by the Indemnified Party under third party insurance policies with respect to such Loss (net of the expenses incurred in procuring such recovery and any premiums or other chargebacks paid by such Indemnified Party under the relevant insurance policy and any Taxes imposed on the proceeds of such policy). Each Party agrees (i) to use all reasonable efforts to recover all available insurance proceeds and (ii) to the extent that any indemnity payment under this Agreement has been paid by the Indemnifying Party to the Indemnified Party prior to the recovery by the Indemnified Party of such insurance proceeds, to promptly pay to the Indemnifying Party such amounts actually recovered by the Indemnified Party.
Section 10.4 Remedies Exclusive; Mitigation. Following the Closing, with the exception of remedies based on fraud, the remedies set forth in this Article X and Section 7.4 and Article X of the Asset Purchase Agreement shall constitute the sole and exclusive remedy for money damages and shall be in lieu of any other remedies for money damages that may be available to the Indemnified Parties under any other agreement or pursuant to any statutory or common law with respect to any Losses of any kind or nature incurred directly or indirectly resulting from or arising out of this Agreement or the Asset Purchase Agreement (it being understood that nothing in this Section 10.4 or elsewhere in this Agreement or the Asset
95
Purchase Agreement shall affect the Parties rights (a) to specific performance and other non-monetary equitable remedies with respect to the covenants referred to in this Agreement and the Asset Purchase Agreement to be performed after the Asset Closing and the Closing or (b) under any of the other Ancillary Agreements (other than the Asset Purchase Agreement)). Each Party shall, and shall cause its Affiliates to, use commercially reasonable efforts to mitigate and minimize its Losses that are indemnifiable hereunder. Each of the Parties hereby waives any provision of any applicable Law to the extent that it would limit or restrict the agreements contained in this Section 10.4.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 Notices. All notices, requests, claims, demands and other communications under this Agreement will be in writing and will be deemed given if and when delivered personally or sent by overnight courier (providing proof of delivery) to the Parties at the following addresses (or at such address for a Party as will be specified by like notice):
(a) if to the SunGard Entities, to:
SunGard Capital Corp.
680 East Swedesford Road,
Wayne, PA 19087
Attention: General Counsel
Facsimile No.: (610) 687-3725
with a copy to:
Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022
Attention: Clare OBrien
Facsimile No.: (646) 848-8966
(b) if to the Company, to:
SunGard Higher Education Inc.
4 Country View Road
Malvern, PA19355
Attention: John Milana, CFO
Facsimile No.: (610) 578-5330
If prior to the Closing, with a copy to:
Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022
Attention: Clare OBrien
96
Facsimile No.: (646) 848-8966
If following the Closing, with a copy to:
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
Attention: Richard Capelouto
Chad Skinner
Facsimile No.: (650) 251-5002
(c) if to Datatel, to:
Datatel Parent Corp.
4375 Fair Lakes Court
Fairfax, VA 22033
Attention: John Speer III
Facsimile No.: (703) 968-6299
with a copy to:
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
Attention: Richard Capelouto
Chad Skinner
Facsimile No.: (650) 251-5002
(d) if to any of the other Datatel Entities, to:
c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, CA 94111
Attention: Arrie Park
Facsimile No.: (415) 788-0176
with a copy to:
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
Attention: Richard Capelouto
Chad Skinner
Facsimile No.: (650) 251-5002
97
Section 11.2 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or by an electronic scan delivered by electronic mail), all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each Party and delivered to the other Parties, it being understood that all the Parties need not sign the same counterpart.
Section 11.3 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the Ancillary Agreements (including the Exhibits and the Schedules hereto and thereto), together with the Confidentiality Agreement, constitutes the entire agreement among the Parties hereto and supersedes any prior understandings, agreements or representations by or among the Parties hereto, written or oral, to the extent they related in any way to the subject matter hereof. This Agreement will not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns, other than: (a) Section 7.9, Section 9.3(b) and Section 9.3(c) (which will be for the benefit of the Persons (including, with respect to Section 9.3(b) and Section 9.3(c), the Financing Sources) set forth therein, and any such Persons will have the rights provided for therein); (b) Section 11.5 and Section 11.6 (which shall be for the benefit of, among others, the Financing Sources, and the Financing Sources, among others, will have the rights provided for therein); (c) Article X (which shall be for the benefit of the Datatel Indemnified Parties and the SunGard Indemnified Parties, and the Datatel Indemnified Parties and the SunGard Indemnified Parties will have the rights provide for therein); and (d) this Article XI in respect of the Sections set forth under the foregoing clauses (a), (b) and (c).
Section 11.4 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement will be assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, except that each of the Datatel Entities may assign, in its sole discretion, any or all of its rights, interests or obligations under this Agreement to any one or more of their Affiliates (it being understood that, for purposes of this Section 11.4, Datatel and its Subsidiaries shall be deemed to be Affiliates of each of the other Datatel Entities); provided that no such assignment will relieve the assigning Party from any of its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
Section 11.5 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York without giving effect to the principles of conflicts of law thereof or of any other jurisdiction which would require the application of any other States laws (provided that the Merger shall be governed by the DGCL). Each of the Parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, the Financing Commitments or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of
98
or relating to this Agreement, the Asset Purchase Agreement, the Financing Commitments or the transactions contemplated hereby or thereby in any New York State or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other matter provided by law. Each of the Parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth in Section 11.1 shall be effective service of process for any suit, action or proceeding brought in any such court. Each of the Parties hereto agrees that that the submissions, waivers and agreements in this Section 11.5 shall extend to any action or proceeding that involves any Financing Source.
Section 11.6 Waiver of Jury Trial. Each of the Parties hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement, the Ancillary Agreements, the Financing Commitments or the transactions contemplated hereby and thereby, including the Merger and the Financing. Each of the Parties (a) certifies that no Representative, agent or attorney of any other Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver, (b) acknowledges that it and the other Parties have been induced to enter into this Agreement, the Ancillary Agreements and the Merger, as applicable, by, among other things, the mutual waivers and certifications in this Section 11.6 and (c) agrees that such waivers and certifications shall extend to the Financing Sources.
Section 11.7 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms of such illegal, invalid or unenforceable provision as may be possible; provided that the Parties intend that the remedies and limitations thereon (including provisions that payment of the Parent Termination Fee be the exclusive remedy for the recipient thereof as provided under Section 9.3(b), except for the right of the SunGard Entities and the Company to seek an injunction, specific performance or other equitable relief pursuant to, and only to the extent expressly permitted by, Section 9.4) contained in Article IX to be construed as an integral provision of this Agreement and that such remedies and limitations shall not be severable in any manner that increases a partys liability or obligations hereunder or under the Financing Commitments.
Section 11.8 Headings. Headings of the Articles and Sections of this Agreement are for convenience of the Parties only, and will be given no substantive or interpretive effect whatsoever.
Section 11.9 Amendment. This Agreement may be amended by the Parties at any time before or after the Stockholder Approvals; provided, however, that after the Stockholder
99
Approvals there shall not be made any amendment that by Law requires further approval by the stockholders of the Company or Merger Sub without the further approval of such stockholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.
Section 11.10 Extension; Waiver. At any time prior to the Effective Time, the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing, signed on behalf of such Party. The failure of any Party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.
Section 11.11 Non-Recourse. This Agreement may only be enforced against, and any claim or clause of action based upon, arising out of, or related to this Agreement may only be brought against the entities that are expressly named as Parties hereto and then only with respect to the specific obligations set forth herein with respect to such Party. No past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of any Party or any assignee of the foregoing shall have any Liability for any obligations or Liabilities of any Party under this Agreement or the Ancillary Agreements or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the Transactions or in respect of any oral representations made or alleged to be made in connection herewith or therewith.
Section 11.12 Interpretation. Words herein in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires. The terms hereof, herein, and herewith and words of similar import herein (or in any Ancillary Agreement) shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) taken as a whole (including all of the schedules and exhibits hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified. The terms either and or are not exclusive and the word including and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) means including, without limitation, References to $ or otherwise to dollar amounts refer to the lawful currency of the United States. Unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to the date hereof, the date of this Agreement, hereby and hereupon and words of similar import shall all be references to August 4, 2011 (or the date of which the relevant Ancillary Agreement is first entered into, as the case may be) regardless of any amendment or restatement hereof (or thereof). The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.
100
[SIGNATURE PAGES FOLLOW]
101
IN WITNESS WHEREOF, the SunGard Entities, the Company and the Datatel Entities have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.
SunGard Capital Corp. | ||
By: | /s/ Richard C. Tarbox | |
Name: Richard C. Tarbox | ||
Title: Vice President | ||
SunGard Data Systems Inc. | ||
By: | /s/ Richard C. Tarbox | |
Name: Richard C. Tarbox | ||
Title: Senior Vice President Corporate Development | ||
SunGard Investment Ventures LLC | ||
By: | /s/ Richard C. Tarbox | |
Name: Richard C. Tarbox | ||
Title: Vice President | ||
SunGard Higher Education Inc. | ||
By: | /s/ Richard C. Tarbox | |
Name: Richard C. Tarbox | ||
Title: Vice President |
[Signature Page to Agreement and Plan of Merger]
SOPHIA HOLDING I, L.P. | ||
By: | SOPHIA HOLDING I GP, LLC, its general partner | |
By: | HELLMAN & FRIEDMAN CAPITAL PARTNERS VI (PARALLEL), L.P., its managing member | |
By: | HELLMAN & FRIEDMAN INVESTORS VI, L.P., its general partner | |
By: | HELLMAN & FRIEDMAN LLC, its general partner |
By: | /S/ ANUPAM MISHRA | |
Name: Anupam Mishra | ||
Title: Managing Director |
SOPHIA HOLDING II, L.P. | ||
By: | SOPHIA HOLDING II GP, LLC, its general partner | |
By: | SOPHIA HOLDING I, L.P., its managing member | |
By: | SOPHIA HOLDING I GP, LLC, its general partner | |
By: | HELLMAN & FRIEDMAN CAPITAL PARTNERS VI (PARALLEL), L.P., its managing member | |
By: | HELLMAN & FRIEDMAN INVESTORS VI, L.P., its general partner | |
By: | HELLMAN & FRIEDMAN LLC, its general partner |
By: | /S/ ANUPAM MISHRA | |
Name: Anupam Mishra | ||
Title: Managing Director |
[Signature Page to Agreement and Plan of Merger]
SOPHIA, L.P. | ||
By: | SOPHIA HOLDING II GP, LLC, its general partner | |
By: | SOPHIA HOLDING I, L.P., its managing member | |
By: | SOPHIA HOLDING I GP, LLC, its general partner | |
By: | HELLMAN & FRIEDMAN CAPITAL PARTNERS VI (PARALLEL), L.P., its managing member | |
By: | HELLMAN & FRIEDMAN INVESTORS VI, L.P., its general partner | |
By: | HELLMAN & FRIEDMAN LLC, its general partner |
By: | /S/ ANUPAM MISHRA | |
Name: Anupam Mishra | ||
Title: Managing Director |
SOPHIA PURCHASER COMPANY, L.P. | ||
By: | SOPHIA HOLDING II GP, LLC, its general partner | |
By: | SOPHIA HOLDING I, L.P., its managing member | |
By: | SOPHIA HOLDING I GP, LLC, its general partner | |
By: | HELLMAN & FRIEDMAN CAPITAL PARTNERS VI (PARALLEL), L.P., its managing member | |
By: | HELLMAN & FRIEDMAN INVESTORS VI, L.P., its general partner | |
By: | HELLMAN & FRIEDMAN LLC, its general partner |
By: | /S/ ANUPAM MISHRA | |
Name: Anupam Mishra | ||
Title: Managing Director |
[Signature Page to Agreement and Plan of Merger]
SOPHIA HE MERGER SUB, INC. | ||
By: | /S/ ANUPAM MISHRA | |
Name: Anupam Mishra | ||
Title: Managing Director |
[Signature Page to Agreement and Plan of Merger]
DATATEL PARENT CORP. | ||
By: | /S/ KEVIN M. BOYCE | |
Name: Kevin M. Boyce | ||
Title: Chief Financial Officer |
[Signature Page to Agreement and Plan of Merger]
Exhibit 2.2
ASSET PURCHASE AGREEMENT
among
SUNGARD DATA SYSTEMS INC.,
SUNGARD HIGHER EDUCATION INC.,
SOPHIA, L.P.
and
SOPHIA PURCHASER COMPANY, L.P.
Dated as of August 4, 2011
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINED TERMS |
2 | |||||
1.1 |
Defined Terms |
2 | ||||
1.2 |
Terms Defined Elsewhere in this Agreement |
11 | ||||
ARTICLE II SALE OF ASSETS AND ASSUMPTION OF LIABILITIES |
13 | |||||
2.1 |
Asset Purchase |
13 | ||||
2.2 |
Assumed Liabilities; Excluded Liabilities |
15 | ||||
2.3 |
Transfer of Purchased Assets and Assumed Liabilities |
16 | ||||
2.4 |
Approvals and Consents |
17 | ||||
2.5 |
Novation and Assignment |
17 | ||||
ARTICLE III PURCHASE PRICE AND ASSET CLOSING |
18 | |||||
3.1 |
Purchase Price |
18 | ||||
3.2 |
Asset Closing Date |
20 | ||||
3.3 |
Purchaser Obligations |
20 | ||||
3.4 |
Company Obligations |
21 | ||||
3.5 |
Payment and Distribution of Estimated Purchase Price |
21 | ||||
3.6 |
Escrow Funding of Estimated Merger Consideration |
22 | ||||
3.7 |
Post-Closing Purchase Price Adjustment |
22 | ||||
3.8 |
Allocation of Purchase Price |
23 | ||||
3.9 |
Accounting Advisors |
24 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SUNGARD DATA |
25 | |||||
4.1 |
Organization and Good Standing; Authority |
25 | ||||
4.2 |
Conflicts; Consents of Third Parties |
25 | ||||
4.3 |
Litigation |
26 | ||||
ARTICLE V REPRESENTATIONS OF THE SELLER PARTIES |
26 | |||||
5.1 |
Organization and Good Standing |
26 | ||||
5.2 |
Authorization of Agreement |
27 | ||||
5.3 |
Conflicts; Consents of Third Parties |
27 | ||||
5.4 |
Absence of Certain Developments |
28 | ||||
5.5 |
Taxes |
28 | ||||
5.6 |
Real Property Leases |
29 | ||||
5.7 |
Intellectual Property |
29 | ||||
5.8 |
Material Contracts |
31 | ||||
5.9 |
Employee Benefit Plans |
32 | ||||
5.10 |
Labor |
34 | ||||
5.11 |
Litigation |
35 | ||||
5.12 |
Compliance with Laws; Permits |
35 | ||||
5.13 |
Environmental Matters |
35 | ||||
5.14 |
Insurance |
36 | ||||
5.15 |
Assets; Title |
36 |
i
5.16 |
No Other Representations or Warranties; Schedules |
36 | ||||
ARTICLE VI REPRESENTATIONS OF PURCHASER PARTIES | 37 | |||||
6.1 |
Organization and Good Standing |
37 | ||||
6.2 |
Conflicts; Consents of Third Parties |
38 | ||||
6.3 |
Brokers or Finders |
38 | ||||
6.4 |
Financing |
38 | ||||
6.5 |
No Prior Activities |
40 | ||||
6.6 |
No Other Representations or Warranties; Schedules |
40 | ||||
ARTICLE VII ADDITIONAL AGREEMENTS OF PURCHASER PARTIES AND SELLER PARTIES | 40 | |||||
7.1 |
Conduct of the SMS Business Prior to the Closing |
40 | ||||
7.2 |
Efforts |
43 | ||||
7.3 |
No Solicitation |
43 | ||||
7.4 |
Identification of Assets and Liabilities |
43 | ||||
7.5 |
Employee Matters |
44 | ||||
7.6 |
Access |
47 | ||||
7.7 |
Public Announcements |
47 | ||||
7.8 |
Control of Other Partys Business |
48 | ||||
7.9 |
Use of Name |
48 | ||||
7.10 |
Post-Closing Access to Records and Personnel |
48 | ||||
7.11 |
Mail Handling |
50 | ||||
7.12 |
Confidentiality |
51 | ||||
7.13 |
Tax Matters |
51 | ||||
7.14 |
Certain Agreements |
52 | ||||
7.15 |
Ancillary Asset Agreements and Escrow Agreement |
52 | ||||
ARTICLE VIII CONDITIONS TO ASSET CLOSING |
52 | |||||
8.1 |
Conditions to the Obligations of Each Party |
52 | ||||
8.2 |
Additional Conditions to the Obligations of the Seller Parties |
53 | ||||
8.3 |
Additional Conditions to the Obligations of the Purchaser Parties |
53 | ||||
ARTICLE IX TERMINATION AND EXPENSES | 55 | |||||
9.1 |
Termination Event |
55 | ||||
9.2 |
Effect of Termination |
55 | ||||
9.3 |
Expenses |
55 | ||||
ARTICLE X INDEMNIFICATION |
56 | |||||
10.1 |
Indemnification |
56 | ||||
10.2 |
Certain Limitations |
57 | ||||
10.3 |
Procedures for Third Party Claims |
57 | ||||
10.4 |
Remedies Exclusive; Mitigation |
59 | ||||
ARTICLE XI GENERAL PROVISIONS | 60 | |||||
11.1 |
Remedies and Enforcement |
60 | ||||
11.2 |
Notices |
60 |
ii
11.3 |
Counterparts |
61 | ||||
11.4 |
Entire Agreement; No Third-Party Beneficiaries |
62 | ||||
11.5 |
Assignment |
62 | ||||
11.6 |
Governing Law |
62 | ||||
11.7 |
Waiver of Jury Trial |
63 | ||||
11.8 |
Severability |
63 | ||||
11.9 |
Headings |
63 | ||||
11.10 |
Amendment |
63 | ||||
11.11 |
Extension; Waiver |
63 | ||||
11.12 |
Non-Recourse |
63 | ||||
11.13 |
Interpretation |
64 |
EXHIBIT A |
SMS Closing Net Working Capital | |||
EXHIBIT B |
Form of Press Release | |||
SunGard Disclosure Schedules Company Disclosure Schedules Datatel Disclosure Schedules |
iii
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated as of August 4, 2011 (the Agreement), among SunGard Data Systems Inc., a Delaware corporation (SunGard Data), SunGard Higher Education Inc., a Delaware corporation and wholly owned subsidiary of SunGard Data (the Company, and each of the Company and SunGard Data, a Seller Party, and the Company and SunGard Data, collectively, the Seller Parties), Sophia, L.P., a Delaware limited partnership (Parent), and Sophia Purchaser Company, L.P., a Delaware limited partnership and wholly owned subsidiary of Parent (Purchaser, and together with Parent, the Purchaser Parties, and the Seller Parties together with the Purchaser Parties, the Parties).
W I T N E S S E T H:
WHEREAS, the Company and certain direct and indirect Subsidiaries of the Company are engaged in, among other things, the SMS Business (as defined herein);
WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, Purchaser, through itself and one or more of its direct or indirect Subsidiaries, desires to purchase and assume, and the Company, through itself and one or more of its direct or indirect Subsidiaries, desires to sell, transfer and assign the Purchased Assets and Assumed Liabilities of the SMS Business to Purchaser and one or more of its Subsidiaries, upon the terms and subject to the conditions specified in this Agreement; and
WHEREAS, concurrent with the execution of this Agreement, as an inducement to the Seller Parties willingness to enter into this Agreement and incur the obligations set forth herein, the Parties, Datatel Parent Corp., a Delaware corporation (Datatel), and certain of their respective Affiliates have entered into an Agreement and Plan of Merger, dated as of the date hereof (as it may be amended from time to time in accordance with its terms, the Merger Agreement) pursuant to which, upon the terms and subject to the conditions set forth therein, Sophia HE Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent, will merge with and into the Company, with the Company being the surviving corporation of such merger and becoming a wholly owned subsidiary of Parent (the Merger).
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINED TERMS
1.1 Defined Terms. When used in this Agreement, the following terms shall have the respective meanings specified therefor below (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
Acquisition Alternative shall mean, other than the transactions contemplated by this Agreement and the Ancillary Agreements, any merger, consolidation, stock exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the SMS Business or any of the Company Entities, or with respect to any purchase of at least 10% of the assets of the HE Business, taken as a whole, or with respect to the purchase of any capital stock or other equity interests of any of the Company Entities.
Action shall mean any action, claim, arbitration, proceeding, litigation or suit (whether civil, criminal or administrative) commenced, brought or heard by or before any Governmental Body.
Affiliate has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act; provided, however, that (a) none of the Seller Parties shall be considered an Affiliate of any of the SunGard Capital Stockholders or any portfolio company in which any of such stockholders or any of their respective investment fund Affiliates have made a debt or equity investment (or vice versa) and (b) none of the Purchaser Parties shall be considered an Affiliate of any of the stockholders of Datatel or partners of Sophia Holding I (as defined in the Merger Agreement) or any portfolio company in which any of such stockholders or limited partners or any of their respective investment fund Affiliates have made a debt or equity investment (or vice versa).
Ancillary Agreements shall mean, collectively, (a) the Transition Services Agreement, (b) the Merger Agreement, and (c) the Intellectual Property Agreement.
Asset Purchase shall mean the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities pursuant to this Agreement.
Automatic Transferred SMS Employees shall mean those SMS Employees where local employment Laws, including but not limited to the Transfer Regulations, provide for an automatic transfer of employees upon the transfer of a business as a going concern and such transfer occurs by operation of Law.
Business Day shall mean any day, other than a Saturday, Sunday or one on which banks are authorized by Law to close in New York, New York.
Business Material Adverse Effect shall mean (i) a material and adverse effect on the business, assets, liabilities, results of operations or financial condition of (x) the Company and its Subsidiaries (taken as a whole) or (y) the HE Business, or (ii) an effect that prevents or materially delays the SunGard Entities or the Company from performing their material obligations under this Agreement and the Ancillary Agreements, in each case, other than an
2
effect if and to the extent resulting from an Excluded Matter. Excluded Matter means any one or more of the following, either alone or in combination with each other: (A) the effect of any change that generally affects the industry in which the HE Business, the Company and its Subsidiaries operate; (B) general legal, regulatory or political conditions (or changes therein), or changes generally affecting the economy or the credit, debt, financial or capital markets, in each case, in the United States or other jurisdictions, including changes in interest or exchange rates; (C) the effect of any change arising in connection with natural disasters or acts of nature, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (D) the negotiation, execution, announcement or pendency of this Agreement and the Merger Agreement or the consummation of the transactions contemplated hereby and thereby, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, financing sources, employees, revenue and profitability; (E) any increase in the cost or availability of financing necessary for the Datatel Entities to consummate the transactions contemplated hereby and by the Merger Agreement; (F) the effect of any changes in applicable Laws or accounting rules; (G) the failure by the Company or the HE Business to meet any estimates, projections or budgets (provided, however, that, except as otherwise provided in clauses (A), (B), (C), (D), (E), (F) and (H) of this definition, the underlying causes of such failure may be taken into account in determining whether a Business Material Adverse Effect has occurred); or (H) any circumstance, change or effect that results from any action taken that is required by this Agreement or the failure to take any action expressly prohibited by this Agreement; provided, however, that any effect, event, change, occurrence or circumstance referred to in any of clauses (A), (B), (C) and (F) shall be taken into account for purposes of such clause only to the extent such effect, event, change, occurrence or circumstance does not adversely affect the HE Business or the Company and its Subsidiaries, taken as a whole, in a materially disproportionate manner relative to other participants in the industry in which the HE Business, the Company and its Subsidiaries operate. In connection with determining whether Section 8.3(a) has been satisfied, the exception set forth in clause (D) shall not apply with respect to Section 4.2, Section 5.3 or Section 5.9(f).
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
Code shall mean the U.S. Internal Revenue Code of 1986, as amended.
Company Subsidiaries shall mean the direct and indirect Subsidiaries of the Company.
Competition Laws shall mean the HSR Act (and any similar Law enforced by any Governmental Antitrust Entity regarding preacquisition notifications for the purpose of competition reviews), the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other statutes, rules, regulations, orders, decrees, administrative or judicial doctrines or other Laws of any Governmental Body that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition or restraint of trade.
3
Confidentiality Agreement shall mean the Confidentiality Agreement, dated as of March 8, 2011, by and between SunGard Data and Datatel, Inc., as amended as of March 8, 2011 and June 6, 2011 and from time to time thereafter.
Contract shall mean any written or oral agreement, arrangement, authorization, sale order, purchase order, open bid, commitment, contract, indenture, mortgage, note, instrument, evidence of indebtedness, real estate or other lease, loan, license, obligation, restriction, memorandum of understanding, letter of intent, covenant, or undertaking of any kind or character, or other document to which any Person is a party or that is binding on any Person or its capital stock, assets or business, in each case, whether express or implied, but in each case, only to the extent legally binding, and including all amendments, modifications and supplements thereto and waivers and consents thereunder.
Datatel Entities shall have the meaning set forth in the Merger Agreement.
Datatel Material Adverse Effect shall mean an effect that prevents or materially delays any of the Datatel Entities from performing their material obligations under this Agreement and the Ancillary Agreements.
DGCL shall mean the General Corporation Law of the State of Delaware, as amended.
Environmental Law shall mean any applicable Law relating to the protection of the environment, protection of human health as it relates to any harmful or deleterious substances or protection of natural resources, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.) the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), and the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), as each has been amended and the regulations promulgated pursuant thereto.
ERISA Affiliate shall mean, with respect to any Person, any other Person or any trade or business, whether or not incorporated, that, together with such first Person would be deemed a single employer within the meaning of Section 4001(b) of ERISA.
Escrow Account shall mean the escrow account established pursuant to the Escrow Agreement.
Escrow Agent shall mean J.P. Morgan or such other escrow agent of national standing to which SunGard Data and Parent agree.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Fair Market Value shall mean the fair market value of the Purchased Assets based on the amount that would be paid for the Purchased Assets in an arms-length transaction by a
4
willing buyer to an unaffiliated willing seller neither of which is acting under duress or any compulsion to buy or to sell.
Financial Statements shall have the meaning set forth in the Merger Agreement.
Financing Sources shall mean the Persons that have committed to provide or otherwise entered into agreements in connection with the Financing Commitments or alternative financings in connection with the transactions contemplated hereby and by the Merger Agreement, including the parties named in Section 6.4 and any joinder agreements, indentures or credit agreements entered into pursuant thereto or relating thereto together with their Affiliates, officers, directors, employees and representatives involved in the Financing and their successors and assigns.
GAAP shall mean generally accepted accounting principles of the United States, as in effect from time to time.
Governmental Antitrust Entity shall mean any Governmental Body with jurisdiction over enforcement of any applicable Competition Law.
Governmental Body shall mean any government or governmental or regulatory body thereof, or political subdivision thereof, whether foreign, European Union or other supra-national, national, federal, regional, state or local or any agency, instrumentality or authority thereof, or any court or arbitrator.
HE Business shall mean the business of providing software and technology services to colleges and universities, as conducted on the Closing Date (as defined in the Merger Agreement) by the business segment of SunGard Capital and its Subsidiaries identified as the Higher Education business in SunGard Datas Form 10-K and financial statements for the year ended December 31, 2010, with the exception that the Business does not include the provision of software and technology services to school districts or private schools (K-12 or equivalent).
HE Business Employee shall have the same meaning as Business Employee in the Merger Agreement.
HE Software shall mean the software and technology solutions (including Banner and PowerCAMPUS) developed, licensed and sold by the HE Business to colleges and universities.
HSR Act shall mean the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder.
Indebtedness shall mean, with respect to any Person, (a) indebtedness of such Person for money borrowed, (b) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, (c) all obligations of the type referred to in clauses (a) or (b) of other Persons for the payment of which such first Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations, (d) any capitalized lease obligations, (e) any amounts payable as a result of terminating any interest rate swap, currency swap, forward currency or interest rate contracts or other interest rate or currency hedging arrangements and (f)
5
all outstanding reimbursement obligations in respect of drawn letters of credit issued for the account of, or on behalf of, such Person.
Independent Accountant shall mean KPMG LLP or such other firm of independent accountants of national standing to which Parent and SunGard Data agree.
Independent Appraiser shall mean Duff & Phelps or such other firm of independent appraisers of national standing selected by the Parties.
Intellectual Property shall mean all worldwide intellectual property or industrial property rights, including those associated with all: (i) patents and patent applications, including continuations, divisionals, continuations-in-part, reissues or reexaminations and patents issuing thereon (collectively, Patents), (ii) trademarks, service marks, trade dress, logos, corporate names, trade names and Internet domain names, together with the goodwill associated with any of the foregoing, and all applications and registrations therefor (collectively, Marks), (iii) copyrights and copyrightable works, including copyrights in Software, and registrations and applications therefor (collectively, Copyrights), and (iv) confidential and proprietary information, trade secrets, discoveries, concepts, research and development, algorithms, know-how, formulae, inventions (whether or not patentable), processes, techniques, technical data, designs, drawings, specifications, and customer lists (collectively, Trade Secrets).
Intellectual Property Agreement shall mean the Intellectual Property Agreement between SunGard Data and the Company in the form attached as Exhibit B to the Merger Agreement, with such changes as SunGard Data and Parent may agree.
IRS shall mean the U.S. Internal Revenue Service.
IRS Ruling shall mean a letter ruling from the IRS to be obtained in accordance with Section 7.4(h) of the Merger Agreement, in form and substance reasonably satisfactory to the SunGard Entities and Parent and upon which the SunGard Entities and Parent can rely, to the effect that (i) the Company and, if applicable, any lower-tier Company Entity, will recognize gain on the sale of the SMS Business to Purchaser Company, which gain will be included in the consolidated taxable income of SunGard Capital; (ii) for purposes of calculating SunGard Datas gain or loss in respect of the shares of Company Common Stock as a result of the Merger, prior to the Merger SunGard Datas tax basis in the stock of the Company will be increased to reflect the gain recognized by the Company and, if applicable, any other lower-tier Company Entity on the sale of the SMS Business to Purchaser Company, and will be reduced to reflect the distribution of the net cash proceeds from the sale of the SMS Business to Seller (as defined in the Merger Agreement) pursuant to Treas. Reg. § 1.1502-32(b)(3)(i), (iii) and (v); (iii) the Merger will not be treated as a qualified stock purchase within the meaning of Section 338(d)(3) of the Code, so the consistency rules of Section 338(e) of the Code and Treas. Reg. § 1.338-8 will not apply to cause Parent to take a carryover basis in the SMS Business assets; and (iv) if applicable, the treatment of a conversion of a lower tier corporate Company Entity to a limited liability company as a liquidation under Section 332 of the Code. For the avoidance of doubt,
6
the IRS Ruling will not be reasonably satisfactory if the IRS Ruling includes any caveats or limitations on either partys ability to rely on the above rulings.
IRS Submissions shall have the meaning set forth in the Merger Agreement.
Knowledge shall mean the actual knowledge of the persons listed on Section 1.1 of the Company Disclosure Schedules.
Law shall mean any federal, state, county, local, provincial, municipal or other U.S. or foreign constitution, code, law (including common law), ordinance, regulation, reporting or licensing requirement, rule, plan, or statute applicable to a Person or its assets, liabilities, or business, including those promulgated, interpreted or enforced by any Governmental Body.
Liability means any debt, liability or obligation (whether direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due).
Lien shall mean any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option to purchase, right of first refusal, easement, servitude or transfer restriction. It is understood that Lien does not include any license, covenant not to sue or similar right granted by the Company Entities with respect to any Intellectual Property.
Losses means any and all losses, damages, liabilities, costs (including reasonable out-of-pocket costs of investigation) and expenses, including interest, penalties, settlement costs, judgments, awards, fines, costs of mitigation, court costs and fees (including reasonable attorneys fees and expenses).
Maintenance shall mean the provision of maintenance and maintenance-related support services (such as, by way of example and not limitation, defect corrections, web and telephone-based support regarding functionality and capability, and regulatory updates) for the HE Software. For the avoidance of doubt, Maintenance does not include implementation, training and other such services provided by the professional services and managed services practice groups of the SMS Business.
Maintenance Agreement shall mean, in each case after taking into account the effects of, and assuming the completion of, the Restructuring, any customer, distributor or reseller Contract or third party/partner maintenance Contract, in each case to the extent it relates to the provision of Maintenance with respect to HE Software to which the Company or any of its Subsidiaries is a party, including all rights of renewal thereunder. For the avoidance of doubt, Maintenance Agreement does not include any Contract to the extent it applies to the SMS Business, including each SMS Agreement.
Maintenance Business shall mean the business conducted by the HE Business with respect to the provision of Maintenance.
Materials of Environmental Concern shall mean any material, substance or waste characterized or regulated under Environmental Laws as hazardous, toxic, radioactive or a pollutant, contaminant, or terms of similar import, including gasoline or petroleum (including crude oil or any fraction thereof) or petroleum product, polychlorinated biphenyl,
7
asbestos or asbestos-containing material, urea-formaldehyde insulation, radioactive material or toxic mold.
Maximum Gain shall mean $850,000,000.
Order shall mean any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Body of competent jurisdiction.
Ordinary Course of Business means, with respect to any Person, the ordinary course of business of such Person consistent with past practice.
Permit shall mean any approval, authorization, consent, license, permit, easement, variance, exception, order or certificate of a Governmental Body.
Permitted Liens shall mean (i) all defects, exceptions, restrictions, easements, rights of way, covenants, conditions, encumbrances and other similar matters disclosed in policies of title insurance delivered or made available to Parent prior to the date hereof, (ii) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings, provided an appropriate reserve is established therefor to the extent required by GAAP, (iii) mechanics, carriers, workers, repairers, landlords and similar Liens, (iv) zoning, building codes, entitlement and other land use and environmental regulations by any Governmental Body, none of which materially and adversely impact the current use and operation of the affected property, (v) title of a lessor under a capital or operating lease, (vi) with respect to the Owned Real Property (as defined in the Merger Agreement) (A) non-monetary real property Liens of public record and (B) matters that would be identified by a survey of the Owned Real Property and (vii) such other Liens that do not materially and adversely impact the current use and operation of the affected property.
Person shall mean any natural person, firm, business trust, trust, association, corporation, partnership, limited liability company, joint venture, company, unincorporated entity or Governmental Body.
Registered shall mean issued by, registered or filed with, renewed by or the subject of a pending application before any Governmental Body or Internet domain name registrar.
Representative shall mean, with respect to any Person, any officer, director, principal, partner, manager, member, attorney, accountant, agent, employee, consultant, financial advisor, Financing Source or other authorized representative of such Person.
Restructuring shall mean the transactions described in Exhibit C to the Merger Agreement.
SMS Agreement shall mean, in each case after taking into account the effects of, and assuming the completion of, the Restructuring, any customer, distributor or reseller Contract or third party/partner software license Contract, in each case to which the Company or any of its Subsidiaries is a party, to the extent it relates to (a) the development, licensing and/or sale of HE Software, (b) the provision of managed services as conducted by the HE Business and (c) the
8
provision of professional services as conducted by the HE Business. For the avoidance of doubt, SMS Agreement does not include any Maintenance Agreement.
SMS Business shall mean the business conducted by the HE Business with respect to (a) the development, licensing and sale of HE Software, (b) the provision of managed services as conducted by the HE Business and (c) the provision of professional services as conducted by the HE Business. For the avoidance of doubt, the SMS Business includes all of the business conducted by the HE Business other than the Maintenance Business.
SMS Business Specified Current Assets shall mean the assets of the SMS Business identified on Exhibit A as SMS Business Specified Current Assets.
SMS Business Specified Current Liabilities shall mean the liabilities of the SMS Business identified on Exhibit A as SMS Business Specified Current Liabilities.
SMS Closing Net Working Capital shall mean SMS Business Specified Current Assets minus SMS Business Specified Current Liabilities, in each case, as of the close of business on the Business Day immediately prior to the Asset Closing Date and as determined in accordance with Exhibit A. For the avoidance of doubt, SMS Closing Net Working Capital shall not include Taxes.
SMS Employee shall mean each HE Business Employee who is engaged in the conduct of the SMS Business, other than any HE Business Employee who SunGard Data and Parent have mutually agreed is not an SMS Employee.
SMS Estimated Net Working Capital shall mean SunGard Datas good faith estimate of the SMS Closing Net Working Capital.
SMS Target Net Working Capital shall mean the amount indentified in Exhibit A.
Software shall mean 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.
Subsidiary of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of the issued and outstanding capital stock or other equity interests having ordinary voting power to elect a majority of the board of directors of such corporation or other governing body of a non-corporate Person is at the time directly or indirectly owned or controlled by such Person and one or more of its other Subsidiaries or by one or more of such Persons other Subsidiaries. The term Subsidiary shall include all Subsidiaries of any Subsidiary.
SunGard Capital shall mean SunGard Capital Corp., a Delaware corporation.
9
SunGard Capital Stockholder shall mean any Person, together with its Affiliates, holding 5% or more of the shares of capital stock of SunGard Capital outstanding on the date hereof or any of their respective successors or assigns (for the avoidance of doubt, SunGard Capital Stockholder includes any Affiliates of Bain Capital LLC, the Blackstone Group, L.P., Goldman Sachs & Co., Kohlberg Kravis Roberts & Co., L.P. Providence Equity Partners Inc., Silver Lake Management, L.L.C. and TPG Capital, L.P. that hold any shares of capital stock of SunGard Capital at any time).
SunGard Entities shall have the meaning set forth in the Merger Agreement.
Taxes shall mean any and all U.S. federal, state, and local and any and all non-U.S. taxes, assessments, duties, impositions, levies and other governmental charges and liabilities in the nature of taxes, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, gains, franchise, withholding, payroll, recapture, employment, excise, unemployment, insurance, social security, business license, occupation, business organization, stamp, environmental and property taxes, whether disputed or not, together with all interest, penalties and additions imposed by any taxing authority with respect to such amounts. For purposes of this Agreement, Taxes also includes any obligations under any agreements or arrangements with any Person with respect to the liability for, or sharing of, Taxes (including pursuant to Section 1.1502-6 of the Treasury Regulations or comparable provisions of state, local or foreign Tax Law), other than agreements or arrangements entered into in the ordinary course as arms-length commercial agreements or arrangements that do not relate primarily to Taxes, such as loan or leasing agreements, and including any liability for Taxes as a transferee or successor.
Tax Return shall mean all returns, declarations, reports, estimates, information returns and statements required to be filed with a taxing authority in respect of any Taxes and any schedules or attachments thereto.
Transactions shall mean, collectively, the transactions contemplated by this Agreement and the Ancillary Agreements.
Transfer Tax shall mean any transfer, filing, recordation, ad valorem, value added, bulk sales, use, stamp duties, excise, license or similar tax, fee or charge imposed by any taxing authority upon the sale, transfer or assignment of real, personal, tangible or intangible property or any interest therein, or upon the recording of any such sale, transfer or assignment, together with any interest, additions to tax or penalties in respect thereof, in respect of the transactions contemplated by this Agreement, but not including Transfer Taxes in respect of the Restructuring (other than Transfer Taxes in respect of the Restructuring that are Excess Costs for which Parent is responsible pursuant to Exhibit C to the Merger Agreement).
Transition Services Agreement shall mean the Transition Services Agreement among the Company, Purchaser and SunGard Data in the form attached as Exhibit D to the Merger Agreement.
Treasury Regulations shall mean the income tax regulations, including temporary and proposed regulations, promulgated under the Code by the U.S. Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
10
Transfer Regulations means the Transfer of Undertakings (Protection of Employment) Regulations 2006 pursuant to The Acquired Rights Directive (Directive No. 77/187/EEC) and the legislation and regulations of any nation implementing such regulations.
1.2 Terms Defined Elsewhere in this Agreement.
Agreement | Preamble | |
Allocation Schedule | Section 3.8(a) | |
Ancillary Asset Agreements | Section 2.3 | |
Appraisal Report | Section 3.1(b)(iii) | |
Asset Closing | Section 3.2 | |
Asset Closing Date | Section 3.2 | |
Asset Objection Notice | Section 3.7(a) | |
Asset Objection Period | Section 3.7(a) | |
Asset Post-Closing Calculation Objection | Section 3.7(a) | |
Asset Post-Closing Statement | Section 3.7(a) | |
Assumed Contracts | Section 2.1(a)(v) | |
Assumed Liabilities | Section 2.2(a) | |
Base Purchase Price | Section 3.1(a) | |
Books and Records | Section 7.10(d) | |
Capped Datatel Losses | Section 10.2(a) | |
Collective Bargaining Agreement | Section 7.5(c) | |
Company | Preamble | |
Company Benefit Plan | Section 5.9(a) | |
Company Charter Documents | Section 5.1 | |
Company Disclosure Schedules | ARTICLE V | |
Company Entities | Section 5.1 | |
Company SMS Registered Intellectual Property | Section 5.7(a) | |
Copyrights | Definition of Intellectual Property | |
Datatel | Recitals | |
Datatel Indemnified Party | Section 10.1(a) | |
Datatel Losses | Section 10.1(a) | |
Debt Financing | Section 6.4 | |
Debt Financing Commitment | Section 6.4 | |
Debt Financing Sources | Section 6.4 | |
Disclosure Schedules | ARTICLE VI | |
Dividend | Section 3.5(b) | |
ERISA | Section 5.9(a) | |
Escrow Agreement | Section 7.15 | |
Estimated Purchase Price | Section 3.5(a) | |
Excluded Assets | Section 2.1(b) | |
Excluded Liabilities | Section 2.2(b) | |
Excluded Matter | Definition of Business Material Adverse Effect | |
Existing Stock | Section 7.9 | |
Financing | Section 6.4 | |
Financing Commitments | Section 6.4 | |
Fundamental Representations | Section 8.3(a) |
11
Indemnified Party | Section 10.2(c) | |
Indemnifying Party | Section 10.3(a) | |
Investors | Section 6.4 | |
Managed Services Contracts | Section 5.8(a)(ii) | |
Marks | Definition of Intellectual Property | |
Material Contracts | Section 5.8(a) | |
Material In-Bound License Agreements | Section 5.7(i) | |
Material Out-Bound License Agreements | Section 5.7(j) | |
Merger | Recitals | |
Merger Agreement | Recitals | |
Merger Agreement Remedies | Section 11.1 | |
Offer Date | Section 7.5(b) | |
Ordinary Course Material Contract | Section 7.1(a)(x) | |
Parent | Preamble | |
Parties | Preamble | |
Patents | Definition of Intellectual Property | |
Pension Plan | Section 5.9(d) | |
Purchase Price | Section 3.1(a) | |
Purchase Price Excess | Section 3.7(d)(i) | |
Purchase Price Shortfall | Section 3.7(d)(ii) | |
Purchased Assets | Section 2.1(a) | |
Purchaser | Preamble | |
Purchaser Disclosure Schedules | ARTICLE VI | |
Purchaser Parties | Preamble | |
Real Property Lease | Section 5.6 | |
Real Property Leases | Section 5.6 | |
Seller Parties | Preamble | |
Seller Party | Preamble | |
Specified Open Source Licenses | Section 5.7(h) | |
SunGard Benefit Plan | Section 5.9(a) | |
SunGard Data | Preamble | |
SunGard Disclosure Schedules | ARTICLE IV | |
SunGard Indemnified Party | Section 10.1(b) | |
SunGard Losses | Section 10.1(b) | |
SunGard Marks | Section 7.9 | |
Termination Fee Equity Financing | Section 6.4 | |
Termination Fee Equity Financing Commitment | Section 6.4 | |
Trade Secrets | Definition of Intellectual Property | |
Transaction Equity Financing | Section 6.4 | |
Transaction Equity Financing Commitment | Section 6.4 | |
Transaction Financing | Section 6.4 | |
Transaction Financing Commitments | Section 6.4 | |
Transferred Business Intellectual Property | Section 2.1(a)(vi) | |
Transferred SMS Employee | Section 7.5(b) | |
USPTO | Section 2.5(c) | |
WARN | Section 7.5(g) |
12
ARTICLE II
SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Asset Purchase.
(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Asset Closing, the Company shall, and shall cause its Subsidiaries to, sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall, and/or shall cause its Subsidiaries to, purchase, acquire and accept from the Company and its Subsidiaries, free and clear of all Liens other than Permitted Liens, all of the Companys and such Subsidiaries respective right, title and interest in and to the following assets and all of the goodwill associated therewith (in each case after taking into account the effects of, and assuming the completion of, the Restructuring), as the same shall exist on the Asset Closing Date (collectively, the Purchased Assets):
(i) the Owned Real Property (as defined in the Merger Agreement) and any fixtures, machinery, equipment and tangible personal property attached to or located on the Owned Real Property that relate to or are used or held for use in connection with the SMS Business;
(ii) all inventories (including raw materials, purchased goods, parts, containers, recycled materials, work in process, supplies, finished goods and demo and consignment inventory) on the books of the Company or its Subsidiaries;
(iii) all lists of current, former and prospective customers, suppliers, resellers and vendors, customers files, credit information, parts lists, business correspondence, business lists, brochures, manuals, sales literature, promotional literature and other selling, advertising and marketing materials and all other similar assets and rights related to the conduct of the SMS Business;
(iv) all of the machinery, equipment, tools, spare parts, all transportation and office equipment, computers, furniture, furnishings, vehicles, and other fixed assets and personal property owned by the Company and its Subsidiaries and related to, used or held for use in connection with the SMS Business (including any and all hard drives, disks, diskettes, tapes or other tangible media), and in the case of any such items which are leased or licensed by the Company or its Subsidiaries, the Companys and such Subsidiaries leasehold or license interest therein;
(v) all Contracts to which any of the Company or its Subsidiaries are a party to the extent they are related to the SMS Business, including the SMS Agreements (collectively, the Assumed Contracts);
(vi) all Intellectual Property owned by the Company and its Subsidiaries and that is related to the SMS Business and was used, is used or is held for use in the SMS Business
13
(the Transferred Business Intellectual Property);
(vii) all information technology systems, network or telecommunications equipment and software, desktop computer software, accounting, finance and database software, general software development and control systems, and tools, environments and other general information technology functionality, in each case that is used in the operation of the SMS Business;
(viii) all Permits used in the SMS Business;
(ix) all accounts receivable, notes receivable and other rights to payment of the Company or any of its Subsidiaries to the extent related to the SMS Business, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, and any claim, remedy or other right related to any of the foregoing;
(x) all deposits to the extent made by the Company or its Subsidiaries in connection with the SMS Business, and any claim, remedy or other right related to any of the foregoing, in each case to the extent associated with Assumed Contracts or other Purchased Assets, or related to other Assumed Liabilities;
(xi) all prepaid assets paid by the Company or its Subsidiaries to the extent in connection with the SMS Business, and any claim, remedy or other right related to any of the foregoing, in each case to the extent associated with Assumed Contracts or other Purchased Assets, or related to Assumed Liabilities;
(xii) all causes of action, claims, demands, rights (including rights under or pursuant to warranties, representations and guarantees made by suppliers, manufacturers or contractors) and privileges against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate that relate to events or breaches occurring on or prior to the Asset Closing Date which relate to the SMS Business, Purchased Assets or Assumed Liabilities;
(xiii) all financial and other books and all other documents, microfilm and business records (other than Tax Returns) and correspondence, wherever located, related to the SMS Business, the Purchased Assets or the Assumed Liabilities;
(xiv) personnel records for each Transferred SMS Employee (subject to the prior consent of such Transferred SMS Employee to the extent such consent is required by applicable Law in connection with the transfer of such personnel records of such Transferred SMS Employee); and
(xv) all other assets of the Company and its Subsidiaries that relate to, or are used in the conduct of, the SMS Business, are not Excluded Assets and are not of a category or type described in the foregoing clauses of this Section 2.1(a).
(b) The Seller Parties and the Purchaser Parties expressly understand and agree that the following assets and all of the goodwill associated therewith (in each case after taking into account the effects of, and assuming the completion of, the Restructuring), as the same shall exist
14
on the Asset Closing Date shall be excluded from the Purchased Assets (the Excluded Assets):
(i) all capital stock or other equity interests in any Person;
(ii) all rights arising from Excluded Liabilities; and
(iii) the Maintenance Agreements;
(iv) all accounts receivable, notes receivable and other rights to payment of the Company or any of its Subsidiaries to the extent related to the Maintenance Business, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, and any claim, remedy or other right related to any of the foregoing;
(v) all deposits to the extent made by the Company or its Subsidiaries to the extent related to the Maintenance Business, and any claim, remedy or other right related to any of the foregoing, in each case to the extent associated with the Maintenance Business;
(vi) all prepaid assets paid by the Company or its Subsidiaries to the extent in related to the Maintenance Business, and any claim, remedy or other right related to any of the foregoing, in each case to the extent associated with the Maintenance Business;
(vii) all causes of action, claims, demands, rights (including rights under or pursuant to warranties, representations and guarantees made by suppliers, manufacturers or contractors) and privileges against third parties, whether liquidated or unliquidated, fixed or contingent, choate or inchoate that relate to events or breaches occurring on or prior to the Asset Closing Date which relate to the Maintenance Agreements;
(viii) all other assets of the Company and its Subsidiaries that relate exclusively to, or are used exclusively in the conduct of, the Maintenance Business; and
(ix) any assets that are excluded from the Purchased Assets pursuant to Section 3.1(c).
2.2 Assumed Liabilities; Excluded Liabilities.
(a) Upon the terms and subject to the conditions set forth in this Agreement, at the Asset Closing, Purchaser shall assume, pay, perform and discharge when due the following Liabilities of the Company and its Subsidiaries (in each case after taking into account the effects of, and assuming the completion of, the Restructuring), other than the Excluded Liabilities (the Assumed Liabilities):
(i) all Liabilities of the Company and its Subsidiaries arising on, prior to or after the Asset Closing Date under the Assumed Contracts;
(ii) all Liabilities arising on, prior to or after the Asset Closing Date for any infringement or alleged infringement with respect to the SMS Business of the rights of any other Person relating to Intellectual Property;
15
(iii) all accounts payable due to third parties to the extent incurred in connection with the operation of the SMS Business;
(iv) any Transfer Taxes;
(v) all Liabilities to the extent arising out of or relating to the Purchased Assets;
(vi) all Liabilities arising out of, relating to or incurred in connection with the operation of the SMS Business.
(b) Any other provision of this Agreement notwithstanding, Purchaser shall not be obligated to assume, pay, perform, discharge or be responsible for any of the following Liabilities of the Company or any of its Subsidiaries (in each case after taking into account the effects of, and assuming the completion of, the Restructuring) (collectively, the Excluded Liabilities):
(i) any Liability to the extent arising out of or relating to any Excluded Asset;
(ii) any Liability for Taxes of the Company or any of its Subsidiaries other than Taxes for which Purchaser is liable pursuant to Section 7.13(a) of this Agreement;
(iii) all accounts payable due to third parties to the extent incurred in connection with the operation of the Maintenance Business;
(iv) all Liabilities arising on, prior to or after the Asset Closing under the Maintenance Agreements; and
(v) all other Liabilities to the extent arising out of or relating to or incurred in connection with the Maintenance Business, including the operation of the Maintenance Business on, prior to or after the Asset Closing Date.
2.3 Transfer of Purchased Assets and Assumed Liabilities. The Purchased Assets shall be sold, conveyed, transferred, assigned and delivered, and the Assumed Liabilities shall be assumed, pursuant to transfer and assumption agreements and such other instruments in such form as may be necessary or appropriate to effect a conveyance of the Purchased Assets and an assumption of the Assumed Liabilities in the jurisdictions in which such transfers and assumptions are to be made. Such transfer and assumption agreements shall be jointly prepared by the Parties and shall include (i) a bill of sale in customary form to be agreed to by the Parties prior to the Asset Closing, (ii) an assignment and assumption agreement in customary form to be agreed to by the Parties prior to the Asset Closing, (iii) local asset transfer agreements for each jurisdiction other than the United States in which Purchased Assets or Assumed Liabilities are located in customary forms to be agreed to by the Parties prior to the Asset Closing and reflecting such terms as are required by local Law, and/or (iv) assignments of Intellectual Property in customary form to be agreed to by the Parties prior to the Asset Closing and (v) such other agreements as may reasonably be required to effect the purchase and assignment of the Purchased Assets and Assumed Liabilities (collectively, clauses (i)(v), the Ancillary Asset Agreements) and shall be executed no
16
later than at or as of the Asset Closing by the Company and/or one or more of its Subsidiaries, as appropriate, and Purchaser or one of its Subsidiaries.
2.4 Approvals and Consents.
(a) Notwithstanding anything to the contrary contained in this Agreement, and subject to the provisions of Section 2.5, to the extent that the sale, conveyance, transfer, assignment or delivery or attempted sale, conveyance, transfer, assignment or delivery to Purchaser of any Purchased Asset would result in a violation of any applicable Law, would require any consent or waiver of any Governmental Body or third party and such consent or waiver shall not have been obtained prior to the Asset Closing, this Agreement shall not constitute a sale, conveyance, transfer, assignment or delivery, or an attempted sale, conveyance, transfer, assignment or delivery thereof if any of the foregoing would constitute a breach of applicable Law, any Contract or the rights of any third party; provided, however, that, subject to the satisfaction or waiver of the conditions contained in ARTICLE VIII, the Asset Closing shall occur notwithstanding the foregoing without any adjustment to the Purchase Price on account of such required authorization. Following the Asset Closing, the Company and Purchaser shall use commercially reasonable efforts, and shall cooperate with each other, to obtain promptly such consent or waiver; provided, further, that the Company, Purchaser nor any of their respective Subsidiaries shall be required to pay any consideration therefor. Once such consent or waiver is obtained, the Company shall, or shall cause its Subsidiaries to, sell, assign, transfer, convey and license such Purchased Asset to Purchaser for no additional consideration.
(b) To the extent that any Purchased Asset cannot be provided to Purchaser following the Asset Closing pursuant to this Section 2.4, Purchaser and the Company shall use commercially reasonable efforts to enter into such arrangements (including subleasing, sublicensing or subcontracting) to provide to each other the economic (taking into account Tax costs and benefits) and, to the extent permitted under applicable Law, operational equivalent of obtaining such consent or waiver and the performance by Purchaser of its obligations thereunder. To the extent permitted under applicable Law, the Company and its Subsidiaries shall hold in trust for and pay to Purchaser promptly upon receipt thereof, such Purchased Assets and all income, proceeds and other monies received by the Company and its Subsidiaries to the extent related to any such Purchased Asset in connection with the arrangements under this Section 2.4. The Company and its Subsidiaries shall be permitted to set off against such amounts all direct costs associated with the retention and maintenance of such Purchased Assets. Nothing in this Section 2.4 applies to any consent or waiver required under any Competition Laws, which consents and waivers shall be governed exclusively by Section 7.6 of the Merger Agreement.
2.5 Novation and Assignment.
(a) Each of the Company and Purchaser shall, and shall cause their respective Subsidiaries to, use commercially reasonable efforts to obtain or to cause to be obtained any consent, substitution or amendment required to novate (including with respect to any federal governmental contract) or assign all rights and obligations under Assumed Contracts and other obligations or liabilities of any nature whatsoever that constitute the Assumed Liabilities or to obtain in writing the unconditional release of all parties to such arrangements, so that, in any case, Purchaser will be solely responsible for such rights and Assumed Liabilities from and after
17
the Asset Closing Date, provided, however, that no Party nor any of its Subsidiaries shall be obligated to pay any consideration therefor to any third party from whom such consents, substitutions and amendments are requested.
(b) If either the Company or its Subsidiaries is unable to obtain, or to cause to be obtained, any such required consent, release, substitution or amendment, (i) the Company shall, or shall cause its Subsidiaries to, continue to be bound by such Assumed Contracts and other obligations and, (ii) unless not permitted by the terms thereof or applicable Law, Purchaser shall, as agent or subcontractor for the Company or such Subsidiary, pay, perform and discharge fully, or cause to be paid, transferred or discharged, all the obligations or other Liabilities of the Company or such Subsidiary thereunder from and after the Asset Closing Date (except to the extent expressly otherwise provided herein). The Company shall, without further consideration, pay and remit, or cause to be paid or remitted, to Purchaser promptly all money, rights and other consideration received by it or its Subsidiaries in respect of such performance. If and when any such consent, approval, release, substitution or amendment shall be obtained or such agreement, lease, license or other rights or obligations shall otherwise become assignable or able to be novated, the Company shall, or shall cause such Subsidiary to, thereafter assign, or cause to be assigned, all its rights, obligations and other liabilities thereunder to Purchaser without receipt of further consideration and Purchaser shall, without the payment of any further consideration, assume such rights and obligations.
(c) To the extent reasonably required in order to perfect the Companys or any of its Subsidiarys chain of title to the Registered Transferred Business Intellectual Property as recorded at the United States Patent and Trademark Office (the USPTO), the United States Copyright Office, any domain name registrar, or a corresponding office of the foregoing in a foreign country, upon Purchasers reasonable request the Seller Parties shall, and shall cause their applicable Affiliates to, use commercially reasonable efforts (but not including payment or the transfer of other consideration to any third party) to provide, obtain, or cause to be obtained, documents sufficient to evidence and record the chain of title conferring ownership of such Registered Transferred Business Intellectual Property in the Purchaser or an entity designated by Purchaser in a form suitable for recordation with the USPTO, the United States Copyright Office, any domain name registrar, or a corresponding office in a foreign country, and to provide said documents to the Purchaser for filing and recordation by it, or, in the sole discretion of the Company, to record, or to cause to be recorded, said documents.
ARTICLE III
PURCHASE PRICE AND ASSET CLOSING
3.1 Purchase Price.
(a) The purchase price in respect of the purchase and sale transactions hereunder shall be (i) an amount in cash equal to the sum of the following (such amount, the Purchase Price): (x) $750,000,000 (as adjusted by Section 3.1(b), the Base Purchase Price), plus (y) the amount (if any) by which the SMS Closing Net Working Capital is greater than the SMS Target Net
18
Working Capital, minus (z) the amount (if any) by which the SMS Closing Net Working Capital is less than the SMS Target Net Working Capital and (ii) the assumption of the Assumed Liabilities.
(b) The Base Purchase Price shall be adjusted so as to equal the Fair Market Value (reduced by taking into account the Assumed Liabilities), which shall be determined as follows:
(i) Promptly after the date hereof, SunGard Data and Parent shall retain the Independent Appraiser to determine the Fair Market Value. The Independent Appraiser shall be directed to promptly, and in any event no later than thirty (30) Business Days after the date hereof, render its preliminary written determination of the Fair Market Value. The report setting forth such preliminary determination shall (i) be prepared without regard to Section 3.1(c), (ii) be prepared based on financial information provided by Parent and SunGard Data and (iii) be in form and substance reasonably satisfactory to SunGard Data and Parent, and shall contain such supplemental documentation and preliminary analyses as reasonably requested by either Party.
(ii) SunGard Data and Parent shall enter into a customary engagement letter with, and to the extent necessary each Party to this Agreement will waive, and use commercially reasonable efforts to cause its controlling Affiliates to waive, any conflicts with, the Independent Appraiser at the time the Independent Appraiser is retained and shall cooperate with the Independent Appraiser in connection with its determination pursuant to this Section 3.1(b). Each Party shall furnish to the Independent Appraiser such information and documents as such Party deems relevant and such other information and documents as may be requested by the Independent Appraiser with copies being given to the other such Party substantially simultaneously. The Independent Appraiser may, at its discretion, conduct one or more conferences and meetings concerning the valuation and each such Party shall have the right to present additional documents, materials and other information and to have present its Representatives. No Party or its Representatives shall be permitted to engage in any ex parte communications with the Independent Appraiser.
(iii) The Independent Appraiser shall be directed to promptly, and in any event no later than fifteen (15) Business Days prior to the Asset Closing Date, render its final determination in writing of the Fair Market Value (the Appraisal Report) upon which each Party shall be able to rely. The Appraisal Report shall be set forth in a written statement delivered to each of SunGard Data and Parent, and the final determination of Fair Market Value set forth in the Appraisal Report shall constitute the Base Purchase Price and shall be final and binding on all Parties absent manifest error. The costs related to having the Independent Appraiser determine the Fair Market Value shall be borne by Parent, and Parent shall reimburse SunGard Data for any reasonable and documented out of pocket costs incurred by any Seller Party in connection with preparing or obtaining the determination under Sections 3.1(b)(i), (ii) and (iii). The Appraisal Report shall be in form and substance reasonably satisfactory to SunGard Data and Parent, and shall contain such supplemental documentation and analyses as reasonably requested by either Party.
19
(c) If, without regard to this Section 3.1(c), based on the Fair Market Value pursuant to either the preliminary determination of the Independent Appraiser delivered pursuant to Section 3.1(b)(i) or a draft of the Appraisal Report to be delivered pursuant to Section 3.1(b)(iii), the total gain for U.S. Federal income tax purposes projected to be recognized by the Company in respect of the sale of the Purchased Assets (after taking into account the Base Purchase Price, adjustments to the Purchase Price, the amount of Assumed Liabilities and any deductions allowed, or increases in the tax basis of the Purchased Assets, on account of the Assumed Liabilities) exceeds the Maximum Gain, then the Purchaser Parties, in consultation with the Independent Appraiser, shall select in good faith a portion of the Purchased Assets not to be included among the Purchased Assets with an aggregate value such that the total gain projected to be recognized after excluding such assets from the Purchased Assets does not exceed the Maximum Gain based upon the Appraisal Report delivered by the Independent Appraiser pursuant to Section 3.1(b)(iii). The determination of the Purchaser Parties as to the Purchased Assets not to be included shall be subject to the review and consent of SunGard Data, which consent shall not be unreasonably withheld, delayed or conditioned. For purposes of this Section 3.1(c), the value of Purchased Assets shall be equal to the Fair Market Value determined under the Appraisal Report pursuant to Sections 3.1(b)(iii).
(d) SunGard Data and Parent shall promptly notify each other if it (or, in the case of Parent, the Company or Purchaser) is notified by any taxing authority that such taxing authority disagrees with the appraisal pursuant to this Section 3.1 or if the sale and purchase of the Purchased Assets becomes the subject of an audit, and thereafter, each shall keep the other Party reasonably informed about such audit or any subsequent administrative or judicial proceeding.
3.2 Asset Closing Date. Unless this Agreement shall have been terminated pursuant to ARTICLE IX hereof, subject to the satisfaction of the conditions set forth in ARTICLE VIII (or the waiver thereof by the Party entitled to waive any such condition), the closing of the Asset Purchase (the Asset Closing) will take place at 9:00 a.m. (Eastern Time), at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017 and in such other places as are necessary to effect the transactions to be consummated at the Asset Closing, on the later of (a) the third Business Day after satisfaction or waiver of each condition to the Asset Closing set forth in ARTICLE VIII (other than those conditions that by their terms are to be satisfied at the Asset Closing, but subject to the satisfaction or waiver of such conditions at the Asset Closing) and (b) the earlier of (i) a date during the Marketing Period (as defined in the Merger Agreement) to be specified by Parent on no fewer than three Business Days notice to SunGard Data (it being understood that such date may be conditioned upon the simultaneous completion of Parents debt financing for the Transactions) and (ii) the final day of the Marketing Period, or such other place and time or on such other date as Parent and SunGard Data may mutually determine (the date on which the Asset Closing actually occurs is referred to as the Asset Closing Date).
3.3 Purchaser Obligations. At the Asset Closing, Purchaser shall, or shall cause one or more of its Subsidiaries to, (x) deliver the Estimated Purchase Price to the Company as provided in Section 3.5 and (y) execute and deliver to the Company the following in such form and substance as are reasonably acceptable to SunGard Data:
20
(a) the certificate described in Section 8.2(c);
(b) such instruments of conveyance with respect to the Purchased Assets and Assumed Liabilities as are referred to in Section 2.3; and
(c) such other documents and instruments as counsel for Parent and SunGard Data mutually agree to be reasonably necessary to consummate the transactions described herein.
3.4 Company Obligations. At the Asset Closing, the Company shall execute and deliver to Purchaser, and the Company shall cause such of its Subsidiaries as are party thereto to execute and deliver to Purchaser, the following in such form and substance as are reasonably acceptable to Purchaser:
(a) the certificate described in Section 8.3(c);
(b) such instruments of conveyance with respect to the Purchased Assets and Assumed Liabilities as are referred to in Section 2.3;
(c) a duly executed certificate, in the form of section 1.1445-2(b)(2)(iv)(B) of the Treasury Regulations, certifying that the Company is not a foreign person for U.S. federal income tax purposes and the Companys U.S. taxpayer identification number; and
(d) such other documents and instruments as counsel for Parent and SunGard Data mutually agree to be reasonably necessary to consummate the transactions described herein.
3.5 Payment and Distribution of Estimated Purchase Price.
(a) No later than two (2) Business Days before the Asset Closing Date, SunGard Data shall deliver to Parent SunGard Datas calculation of the SMS Estimated Net Working Capital and the Estimated Purchase Price, with reasonable supporting detail as to such calculation. The Estimated Purchase Price shall mean an amount equal to the sum of the following: (i) the Base Purchase Price plus (ii) the amount (if any) by which the SMS Estimated Net Working Capital is greater than the SMS Target Net Working Capital, minus (iii) the amount (if any) by which the SMS Estimated Net Working Capital is less than the SMS Target Net Working Capital.
(b) On the Asset Closing Date, Purchaser shall pay to the Company the Estimated Purchase Price in United States dollars in immediately available federal funds to such bank account or accounts as shall be designated in writing by the Company no later than the second Business Day prior to the Asset Closing. Immediately after receipt of the Estimated Purchase Price, prior to the close of business on the Asset Closing Date, the Company shall declare, pay and distribute a dividend in respect of all of its issued and outstanding shares of capital stock in the aggregate amount equal to the following (the Dividend): (i) the Estimated Purchase Price and (ii) the right to receive any payment from Purchaser contemplated by Section 3.7(d)(i) (subject to the obligation to make any payment to Purchaser contemplated by Section 3.7(d)(ii)).
21
3.6 Escrow Funding of Estimated Merger Consideration. At the Asset Closing, Parent shall deliver, or shall cause to be delivered, to the Escrow Agent an amount equal to the Estimated Merger Consideration (as defined in the Merger Agreement) in United States dollars in immediately available federal funds to be held in the Escrow Account in accordance with the terms of the Escrow Agreement.
3.7 Post-Closing Purchase Price Adjustment.
(a) As promptly as practicable, but in no event later than ninety (90) days following the Asset Closing Date, Parent shall prepare and deliver to SunGard Data a statement (the Asset Post-Closing Statement), certified by the chief financial officer of Parent and accompanied by reasonable supporting detail, setting forth the SMS Closing Net Working Capital and the Purchase Price, including, in each case, the calculation thereof in reasonable detail. The calculations set forth in the Asset Post-Closing Statement shall be final and binding on all Parties unless SunGard Data gives Parent written notice of its objections thereto (an Asset Objection Notice), with reasonable supporting detail as to each such objection (each, an Asset Post-Closing Calculation Objection), within forty-five (45) days after receipt of the Asset Post-Closing Statement (the Asset Objection Period). In the event SunGard Data fails to give Parent an Asset Objection Notice prior to the expiration of the Asset Objection Period or otherwise earlier notifies Parent in writing that SunGard Data has no objections to the calculations set forth in the Asset Post-Closing Statement, the Asset Post-Closing Statement shall be deemed final and binding on all Parties hereto, and all payments to be made in accordance with Section 3.7(d) shall be derived therefrom. Any component of the calculations set forth in the Asset Post-Closing Statement that is not the subject of a timely delivered Asset Objection Notice by SunGard Data shall be final and binding on all Parties except to the extent such component could be affected by other components of the calculations set forth in the Asset Post-Closing Statement. Throughout the period following the Asset Closing Date until the components of the calculations set forth in the Asset Post-Closing Statement are deemed final and binding pursuant to this Section 3.7, subject to Section 7.12, Parent shall permit SunGard Data and its Representatives reasonable access (with the right to make copies), during business hours upon reasonable advance notice, to the financial books and records of Parent and its Subsidiaries for the purposes of the review and objection right contemplated herein.
(b) Parent and SunGard Data shall use reasonable efforts to resolve any dispute arising under Section 3.7(a); provided, that if such Parties are unable to do so within thirty (30) days following SunGard Datas delivery to Parent of an Asset Objection Notice, then by notice from either such Party to the other such Party, the disagreement with respect to such Asset Post-Closing Calculation Objections may be submitted for resolution to the Independent Accountant. If a dispute is submitted to the Independent Accountant for resolution, Parent and SunGard Data shall enter into a customary engagement letter with, and to the extent necessary each Party to this Agreement will waive and cause its controlling Affiliates to waive any conflicts with, the Independent Accountant at the time such dispute is submitted to the Independent Accountant and shall cooperate with the Independent Accountant in connection with its determination pursuant to this Section 3.7. Within ten (10) days after the Independent Accountant has been retained, each
22
such Party shall furnish, at its own expense, to the Independent Accountant and the other party a written statement of its positions with respect to each matter in dispute. Within five (5) Business Days after the expiration of such ten (10) day period, each such Party may deliver to the Independent Accountant and to each other its response to the others position on each matter in dispute. With each submission, each such Party may also furnish to the Independent Accountant such other information and documents as it deems relevant or such information and documents as may be requested by the Independent Accountant with copies being given to the other such Party substantially simultaneously. The Independent Accountant may, at its discretion, conduct a conference concerning the disagreement and each such Party shall have the right to present additional documents, materials and other information and to have present its Representatives. No Party or its Representatives shall be permitted to engage in any ex parte communications with the Independent Accountant.
(c) The Independent Accountant shall be directed to promptly, and in any event within thirty (30) days after its appointment pursuant to Section 3.7(b), render its decision on the disputed Asset Post-Closing Calculation Objections. The Independent Accountants determination as to each Asset Post-Closing Calculation Objection in dispute shall be set forth in a written statement delivered to each such Party, which shall include the Independent Accountants determination as to the calculation of the disputed Asset Post-Closing Calculation Objections, all of which shall be final and binding on all Parties absent manifest error. In resolving any disputed Asset Post-Closing Calculation Objection, the Independent Accountant may not assign a value to such Asset Post-Closing Calculation Objection greater than the greatest value for such Asset Post-Closing Calculation Objection claimed by Parent in its Asset Post-Closing Statement or by SunGard Data in its Asset Objection Notice or less than the lowest value for such item claimed by Parent in its Asset Post-Closing Statement or by SunGard Data in its Asset Objection Notice. The fees and expenses of the Independent Accountant pursuant to this Section 3.7 shall be shared one half by Parent and one half by SunGard Data.
(d) Upon the later of (x) the date that the Asset Post-Closing Statement becomes final and binding in all respects pursuant to this Section 3.7 and (y) the date that the Post-Closing Statement (as defined in the Merger Agreement) becomes final and binding in all respects pursuant to Section 3.4 of the Merger Agreement:
(i) if the amount of the Purchase Price exceeds the amount of the Estimated Purchase Price (such excess, the Purchase Price Excess), then within five (5) Business Days after such date Purchaser shall pay, or cause to be paid, an amount in cash by wire transfer to SunGard Data (in accordance with Section 3.5(b)(ii) in respect of the Dividend) equal to the Purchase Price Excess; or
(ii) if the amount of the Estimated Purchase Price exceeds the Purchase Price (such excess, the Purchase Price Shortfall), then within five (5) Business Days after such date SunGard Data (in accordance with Section 3.5(b)(ii) in return of the Dividend) shall pay, or cause to be paid, an amount in cash by wire transfer to Purchaser equal to the Purchase Price Shortfall.
3.8 Allocation of Purchase Price Among Purchased Assets.
23
(a) The Seller Parties and Purchaser Parties agree to allocate the Purchase Price among the Purchased Assets for U.S. federal, State and local income Tax purposes in accordance with an allocation schedule (the Allocation Schedule) prepared jointly by SunGard Data and Parent in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder. SunGard Data and Parent agree to cooperate with each other in the preparation of, and to negotiate in good faith to resolve any dispute with respect to, the Allocation Schedule; provided, however, that in the event that SunGard Data and Parent cannot reach agreement with respect to the Allocation Schedule within thirty (30) days after the Asset Closing Date, the Independent Accountant shall prepare the Allocation Schedule. The costs related to having the Independent Accountant prepare the Allocation Schedule shall be borne by Parent.
(b) The Purchaser Parties and the Seller Parties shall be bound by such Allocation Schedule and shall file, according to Section 1060 of the Code, all returns (including, without limitation, filing Form 8594) and reports with respect to the transactions contemplated by this Agreement (including, without limitation, all U.S. federal, state and local Tax Returns) on the basis of such allocation. In addition, the Purchaser Parties and the Seller Parties shall act in accordance with the Allocation Schedule in the course of any Tax audit, Tax review or Tax litigation relating thereto, and take no position and cause their Affiliates to take no position inconsistent with the Allocation Schedule for income Tax purposes, including U.S. federal and state income Tax and foreign income Tax, unless otherwise required pursuant to a determination within the meaning of Section 1313(a) of the Code (or similar provision under state, local or foreign Law). SunGard Data and Parent shall promptly notify each other if it (or, in the case of Parent, the Company or Purchaser) is notified by any taxing authority that such taxing authority disagrees with the allocation of the Purchase Price pursuant to this Section 3.8 or if the sale and purchase of the Purchased Assets becomes the subject of an audit, and thereafter, each shall keep the other Party reasonably informed about such audit or any subsequent administrative or judicial proceeding.
3.9 Accounting Advisors.
(a) The Parties agree that Parent, Purchaser and any of their Affiliates may engage Deloitte LLP and its Affiliates to advise or represent them in connection with the determination of the Base Purchase Price, the Asset Post-Closing Statement and the Allocation Schedule and the matters addressed by Sections 3.1(b), 3.7 and 3.8. Each Party will enter into such waivers, indemnities and other agreements as Deloitte LLP or its Affiliates shall reasonably require to permit Deloitte LLP and each of its Affiliates to provide such advice or representation.
(b) The Parties agree that SunGard Data and any of its Affiliates may engage PricewaterhouseCoopers LLP and its Affiliates to advise or represent them in connection with the determination of the Base Purchase Price, the Asset Post-Closing Statement and the Allocation Schedule and the matters addressed by Sections 3.1(b), 3.7 and 3.8. Each Party will enter into such waivers, indemnities and other agreements as PricewaterhouseCoopers LLP or its Affiliates shall reasonably require to permit PricewaterhouseCoopers LLP and each of its Affiliates to provide such advice or representation.
24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SUNGARD DATA
Except as set forth on the disclosure schedules delivered by SunGard Data to the Purchaser Parties prior to the execution of this Agreement (the SunGard Disclosure Schedules) (it being understood and agreed that each item in a particular section of the SunGard Disclosure Schedules applies to the corresponding section hereof and to any other section as to which its relevance is reasonably apparent on the face of such item), SunGard Data represents and warrants to the Purchaser Parties as follows:
4.1 Organization and Good Standing; Authority. SunGard Data is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. SunGard Data has all requisite power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the Transactions have been duly authorized by all requisite corporate action on behalf of SunGard Data. This Agreement and the Merger Agreement has been, and each of the other Ancillary Agreements will be at or prior to the Asset Closing, duly and validly executed and delivered by SunGard Data and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) each of this Agreement and the Merger Agreement constitutes, and each other Ancillary Agreement when so executed and delivered will constitute, the legal, valid and binding obligations of SunGard Data, enforceable against SunGard Data in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
4.2 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by SunGard Data of this Agreement or the Ancillary Agreements, the consummation of the Transactions, or compliance by SunGard Data with any of the provisions hereof or thereof will (i) conflict with or violate any provision of the certificate of incorporation and bylaws or comparable organizational and governing documents of SunGard Data, (ii) conflict with, result in any breach or violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under or require a consent or waiver under, require the payment of a penalty or increased Liabilities or fees or the loss of a benefit under or result in the imposition of any Lien under, any provision of any Contract or Permit to which SunGard Data is a party or by which any of its properties, rights or assets are bound or (iii) violate any Order or, assuming compliance with the requirements set forth in Section 4.2(b), any Law applicable to SunGard Data or by which any of the properties, rights or assets are bound, except in the case of clauses (ii) and (iii), for such matters that individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
25
(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of SunGard Data in connection with the execution and delivery of this Agreement or any Ancillary Agreement or the compliance by SunGard Data with any of the provisions hereof or thereof, or the consummation of the Transactions, except for (i) compliance with the applicable requirements of the HSR Act and any other Competition Laws, (ii) the filing of the Certificate of Merger (as defined in the Merger Agreement) with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which SunGard Data is qualified to do business, and (iii) the IRS Submissions and the IRS Ruling, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations or filings that, individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
4.3 Litigation. There are no Actions pending or, to the Knowledge of the Company, threatened against SunGard Data or any of its Subsidiaries (other than the Company Entities) before any Governmental Body, that relate to the SMS Business and that, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect. SunGard Data is not subject to any Orders that relate to the SMS Business except to the extent the same, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
ARTICLE V
REPRESENTATIONS OF THE SELLER PARTIES
Except as set forth on the disclosure schedules delivered by the Company to the Purchaser Parties prior to the execution of this Agreement (the Company Disclosure Schedules) (it being understood and agreed that each item in a particular section of the Company Disclosure Schedules applies to the corresponding section hereof and to any other section as to which its relevance is reasonably apparent on the face of such item), the Seller Parties, jointly and severally, represent and warrant to the Purchaser Parties as follows and in each case (other than Section 5.3) after giving effect to the Restructuring (unless otherwise expressly indicated):
5.1 Organization and Good Standing. Each of the Company and its Subsidiaries (the Company Entities) is duly organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation or formation and has all requisite corporate or equivalent power and authority to own, lease and operate its properties and to carry on the SMS Business (to the extent such Company Entity carries on the SMS Business) as now conducted. Each of the Company Entities is duly qualified or authorized to do business as a foreign entity and is in good standing under the laws of each jurisdiction in which it owns or leases real property and each other jurisdiction in which the conduct of the SMS Business or the ownership of its properties requires such qualification or authorization, except where the failure to be so qualified, authorized or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Business Material Adverse Effect. The Company has made available to Parent prior to the date hereof a true and complete copy of its certificate of incorporation and bylaws, each as amended to date (the Company Charter Documents), and each such instrument is
26
in full force and effect and no other organizational documents are applicable to or binding upon the Company. The Company is not in violation in any material respect of any of the provisions of the Company Charter Documents.
5.2 Authorization of Agreement. The Company and each of the other Company Entities has all requisite power and authority to execute and deliver this Agreement and each of the Ancillary Agreements to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the Ancillary Agreements and the consummation of Transactions have been duly authorized by all requisite corporate or equivalent action on behalf of each Company Entity, except for obtaining the written consent of Seller (as defined in the Merger Agreement), as the sole stockholder of the Company, in accordance with Section 228 of the DGCL. Each of this Agreement and the Merger Agreement has been, and each of the other Ancillary Agreements will be at or prior to the Asset Closing, duly and validly executed and delivered by the applicable Company Entities, and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) each of this Agreement and the Merger Agreement constitutes, and each other Ancillary Agreement when so executed and delivered will constitute, the legal, valid and binding obligations of the applicable Company Entities, enforceable against it in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
5.3 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Company of this Agreement and by any Company Entity, as applicable, of any Ancillary Agreement, the consummation of the Transactions (including the Restructuring and the Merger) or compliance by the Company Entities with any of the provisions hereof or thereof will (i) conflict with or violate any provision of the certificate of incorporation and bylaws or comparable organizational documents of the Company or any Company Subsidiary; (ii) conflict with, result in any breach or violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under, or require a consent or waiver under, require the payment of a penalty or increased Liabilities or fees or the loss of a benefit under or result in the imposition of any Lien under, any provision of any Contract or Permit to which the Company or any Company Subsidiary is a party or which may be transferred or assigned to a Company Entity pursuant to the Restructuring or by which any of the properties or assets of the SMS Business are bound; (iii) violate any Order applicable to the SMS Business, the Company or any Company Subsidiary or by which any of the properties or assets of the SMS Business are bound; or (iv) assuming compliance with the requirements set forth in Section 5.3(b), violate any applicable Law, except in the case of clauses (ii) through (iv), for such matters that individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of the SMS Business or the Company or any Company Subsidiary in connection with the execution and delivery of this Agreement or the Ancillary Agreements or the compliance by the Company
27
Entities with any of the provisions hereof or thereof, or the consummation of the Transactions, except for (i) compliance with the applicable requirements of the HSR Act and any other Competition Laws, (ii) the filing of the Certificate of Merger (as defined in the Merger Agreement) with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which any Company Entity is qualified to do business and (iii) the IRS Submissions and the IRS Ruling, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations or filings that, individually or in the aggregate, would not reasonably be expected to have a Business Material Adverse Effect.
5.4 Absence of Certain Developments. Since June 30, 2011 through the date hereof, (i) none of the Company Entities or, to the extent related to the SMS Business and solely with respect to clause (B), SunGard Data or any of its Subsidiaries (A) has incurred any Indebtedness, (B) (1) has granted, or is committed to grant, salary or wage increases or any increase in or addition to any other compensation or benefits to SMS Employees (except in the case of employees that are not officers, increases in salary, wages or incentive compensation in the Ordinary Course of Business), (2) has made any loan or advance of money or other property to any of the SMS Employees (other than routine advances to employees for business expenses in the Ordinary Course of Business in an amount not exceeding $25,000 at any time to any individual employee), or (3) has granted or promised to grant any equity or equity-based awards to any SMS Employees except in the Ordinary Course of Business, (C) has changed its methods of keeping of its books of account or accounting practices, except as required by GAAP, (D) except in the Ordinary Course of Business, has materially changed or modified its existing credit, collection and payment policies, procedures and practices (including any material acceleration in the collection of receivables or material delay in the payment of payables) or (E) has agreed or committed to do any of the foregoing, and (ii) to the extent related to the SMS Business, none of the Company Entities or SunGard Data or any of its other Subsidiaries has waived or released any of its rights with respect to its business, assets (tangible or intangible) or Permits or permitted any of such rights to lapse, except where such waiver, release or permission, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.
5.5 Taxes. Except to the extent that, individually or in the aggregate, it has not had and would not reasonably be expected to have a Business Material Adverse Effect:
(a) All material Tax Returns relating to the Purchased Assets or to the SMS Business that are required by applicable Laws to be filed with any taxing authority have duly and timely been filed, and such Tax Returns are complete and accurate in all material respects.
(b) All material Taxes that are due and payable to any taxing authority relating to any Purchased Asset or to the SMS Business have been paid or remitted to the appropriate taxing authority, other than those Taxes being contested in good faith through appropriate proceedings for which provision has been made in accordance with GAAP on the Financial Statements.
(c) All Taxes relating to the Purchased Assets or to the SMS Business that are due with respect to any completed and settled audit, examination or deficiency litigation with any taxing authority have been paid in full. There is no audit, examination, deficiency or refund litigation pending with respect to any Taxes relating to any Purchased Asset or to the SMS
28
Business and no taxing authority has given written notice of the commencement of (or its intent to commence) any audit, examination or deficiency litigation with respect to any such Taxes.
(d) There are no outstanding assessments, claims or deficiencies for any Taxes relating to any Purchased Asset or to the SMS Business that have been proposed, asserted or assessed by any taxing authority, in each case in writing.
(e) There are no Liens as a result of any unpaid Taxes upon any of the Purchased Assets (other than Permitted Liens).
(f) This Section 5.5 and Section 5.9 contain the sole and exclusive representations and warranties of the Seller Parties regarding Tax matters.
5.6 Real Property Leases. Section 5.6 of the Company Disclosure Schedules sets forth a complete list of all leases and subleases of real property to or by the Company or a Subsidiary involving annual payments in excess of $100,000 as of the date hereof (individually, a Real Property Lease and collectively, the Real Property Leases).
5.7 Intellectual Property.
(a) Section 5.7 of the Company Disclosure Schedules sets forth an accurate and complete list of all issued Patents, pending Patent applications, registered Marks, pending applications for registration of Marks, registered Copyrights, and Internet domain names owned by the Company or any Company Subsidiary and used in the SMS Business as of the date hereof (the foregoing being, collectively, the Company SMS Registered Intellectual Property). Section 5.7(a) of the Company Disclosure Schedules lists (x) the record owner of each such item of Company SMS Registered Intellectual Property and (y) the jurisdictions in which each such item of Company SMS Registered Intellectual Property has been issued or registered or in which each such application for issuance or registration of such item of Company SMS Registered Intellectual Property has been filed.
(b) All material Intellectual Property owned by the Company or a Company Subsidiary used in the SMS Business will, as of the Closing, be owned free and clear of all Liens (except for Permitted Liens).
(c) To the Knowledge of the Company, the conduct of the SMS Business of the Company and the Company Subsidiaries (including the products and services of the SMS Business as provided by the Company and the Company Subsidiaries) does not infringe, violate or constitute misappropriation of any Intellectual Property of any third Person except for such infringements, violations and misappropriations that, individually or in the aggregate, would not have a Business Material Adverse Effect.
(d) To the Knowledge of the Company, no third Person is infringing, violating, or misappropriating any material Intellectual Property owned by the Company or any Company Subsidiary.
29
(e) There is no Action pending or, to the Knowledge of the Company, threatened in writing, against SunGard Data or its Subsidiaries (including the Company Entities) alleging that the conduct of the SMS Business has, during the three (3) year period prior to the date of this Agreement, infringed, violated or misappropriated, or is infringing or violating any Intellectual Property rights of any third Person.
(f) There are no Orders to which the Seller Parties or any of their Subsidiaries is a party or, to the Knowledge of the Company, by which any Company Entity is bound, that restricts the Companys or the Company Subsidiaries rights to use any material Intellectual Property used in the SMS Business.
(g) No material Trade Secret of the SMS Business has, to the Knowledge of the Company, been disclosed by the Seller Parties or any of their Subsidiaries (including the Company Entities) to any third Person other than pursuant to a written nondisclosure agreement restricting the disclosure and use of such Trade Secrets. The Seller Parties and their Subsidiaries (including the Company Entities) have taken commercially reasonable security measures to protect the confidentiality of the material Trade Secrets of the SMS Business. The Seller Parties and their Subsidiaries (including the Company Entities) have in place and take commercially reasonable efforts to enforce a practice whereby all of their respective officers, employees, consultants and contractors that may develop material Intellectual Property of the SMS Business execute confidentiality and Intellectual Property assignment and/or employees rights agreements with SunGard Data, the Company or a Company Subsidiary.
(h) Except as set forth on Section 5.7(h)(i) of the Company Disclosure Schedules or as, individually or in the aggregate, has not had and would not have a Business Material Adverse Effect, no Company Entity, SunGard Data or any of its other Subsidiaries has incorporated any open source, freeware, shareware or other Software code having similar licensing restrictions or distribution models in any Software of the SMS Business that would require the public distribution, contribution, licensing or public disclosure of the proprietary source code of the SMS Business or impose limitations on the Company Entities right to require payments in connection therewith (such licenses, Specified Open Source Licenses). Section 5.7(h)(ii) of the Company Disclosure Schedules sets forth as of the date hereof a list of all license agreements for all Open Source Software (as defined in the Intellectual Property Agreement) provided by SunGard Data as part of the IAF and the IPP (each as defined in the Intellectual Property Agreement) pursuant to the Intellectual Property Agreement.
(i) Section 5.7(i) of the Company Disclosure Schedules sets forth a complete and accurate list of all Contracts of the SMS Business or to which the Company or any Company Subsidiary is a party, and pursuant to which the Company or any Company Subsidiary is granted the right to use any third Persons Intellectual Property (excluding licenses pertaining to off-the-shelf commercially available Software used pursuant to shrink-wrap or click-through license agreements for a license fee of no more than $100,000 in the aggregate per Software product) that (i) is material to the functionality of any currently released commercial product, or for the performance of any currently provided service, of the Company or any Company Subsidiary and cannot be replaced in a reasonable period of time, at a reasonable cost, with other Intellectual Property that does not materially change the functionality of such product or the ability to
30
provide such service or (ii) is material to the operation of the SMS Business and cannot be replaced in a reasonable period of time, at a reasonable cost, with other Intellectual Property (the foregoing being, collectively, the Material In-Bound License Agreements).
(j) Section 5.7(j) of the Company Disclosure Schedules sets forth a complete and accurate list of all Contracts of the SMS Business or to which the Company or any Company Subsidiary is a party, and pursuant to which the Company or any Company Subsidiary has granted to any third Person the right to use any material Intellectual Property of the SMS Business, the Company or any Company Subsidiary, other than non-exclusive licenses entered into in the Ordinary Course of Business (the Material Out-Bound License Agreements).
(k) Except as set forth on Section 5.7(k) of the Company Disclosure Schedules and except as, individually or in the aggregate, has not had or would not have a Business Material Adverse Effect, (i) the Company and its Subsidiaries have taken commercially reasonable steps to protect the confidentiality and security of their Software, systems, networks and internet sites from any unauthorized use, access, interruption or modification by third parties, and (ii) the Company and its Subsidiaries have complied with their own policies with respect to the privacy of all their customers and any of their personally identifiable information, and, to the Knowledge of the Company, no written claims have been asserted or threatened in writing against the Company or any of its Subsidiaries by any Person alleging a violation of any of the foregoing.
5.8 Material Contracts.
(a) Section 5.8 of the Company Disclosure Schedules sets forth all of the following Contracts of the SMS Business as of the date hereof (collectively and together with those Contracts set forth on Section 5.6 of the Company Disclosure Schedules, the Material In-Bound License Agreements and the Material Out-Bound License Agreements, the Material Contracts):
(i) each Contract with any labor union or association representing any SMS Employee;
(ii) each Contract relating to the sale of any of the assets of, or the provisions of any services by, the SMS Business other than the sale or provision of goods and services in the Ordinary Course of Business, for consideration in excess of $500,000 or the equivalent in other currencies during the twelve-month period ending on the date hereof and each of the ten (10) Contracts for the provision of managed services (Managed Services Contracts) that generated the highest amount of revenues in 2010 for the SMS Business from Managed Services Contracts;
(iii) each Contract relating to the acquisition or disposition by the SMS Business or the Company or any of its Subsidiaries of any business, division or product line or the capital stock of any other Person, in each case (A) entered into during the three-year period ending on the date hereof and for consideration in excess of $500,000 or the equivalent in other
31
currencies or (B) pursuant to which any material Liabilities or obligations of the SMS Business remain outstanding;
(iv) each Contract (A) containing a covenant expressly limiting the freedom of the SMS Business to engage in any business with any Person or in any geographic area or to compete with any Person or limiting the ability of the SMS Business to incur Indebtedness or to create Liens, (B) containing most favored nation or similar provisions in favor of any customer or other counterparty to the SMS Business that involves a payment to be made to the Company in excess of $500,000 or (C) obligating the SMS Business to purchase or otherwise obtain any product or service exclusively from a single party or sell any product or service exclusively to a single party;
(v) each Contract creating a Lien (other than Permitted Liens) upon any assets (including any Lien placed on the Companys or any of the SMS Business Intellectual Property), other than purchase money security interests in connection with the acquisition of equipment in the Ordinary Course of Business; and
(vi) each Contract creating or governing a partnership, limited liability company, joint venture or similar arrangement.
(b) True and correct copies of each Material Contract have been made available to Parent prior to the date hereof. Each Material Contract is a valid and binding agreement of the relevant Company Entity, as the case may be, and, to the Companys Knowledge, the other parties thereto, in each case enforceable in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws affecting generally the enforcement of creditors rights and subject to general principles of equity), except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect. The Company or its Subsidiaries that are parties to the Material Contracts and, to the Knowledge of the Company, each of the other parties thereto, have performed all obligations required to be performed by them under, and are not in breach of, default or violation under, any of such Material Contracts and no event has occurred that with notice or lapse of time, or both, would constitute such a default, except where such noncompliance, breach, default or violation has not had and would not reasonably be expected to have, individually or in the aggregate, a Business Material Adverse Effect. None of the Seller Parties or any of their Subsidiaries has received written notice of any default or event that with notice or lapse of time, or both, would constitute a default under any Material Contract, except for any such defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Business Material Adverse Effect.
5.9 Employee Benefit Plans.
(a) (i) Section 5.9(a)(i) of the Company Disclosure Schedules contains a list of each material employee benefit plan (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA)), including multiemployer plans within the meaning of Section 3(37) of ERISA, and all stock purchase, stock option, severance, employment, change of control, bonus, incentive or deferred compensation, employee loan, collective bargaining, and each other material employee
32
benefit plan, program or arrangement (whether or not subject to ERISA) under which any current or former employee, director or consultant of the Company or any of its Subsidiaries, with respect to the SMS Business, has any right to benefits and which is contributed to, sponsored or maintained by the Seller Parties, SunGard Capital or any of their respective Subsidiaries or under which the Company Entities, whether directly or by reason of their affiliation with any ERISA Affiliate, has any material liability, in each case as of the date hereof (each, a SunGard Benefit Plan), and (ii) Section 5.9(a)(ii) of the Company Disclosure Schedules contains a list of each SunGard Benefit Plan that is solely sponsored by the Company or a Company Subsidiary as of the date hereof (each, a Company Benefit Plan).
(b) With respect to each Company Benefit Plan, SunGard Data has made available to the Purchaser Parties copies of the following, to the extent applicable: (i) the plan document and any related trust agreement, (ii) the most recent IRS determination letter, (iii) the most recent summary plan description, and (iv) for the most recent plan year, the IRS Form 5500.
(c) Each Company Benefit Plan has been maintained, funded and administered in all material respects in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and other applicable Laws. Each Company Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS, and, to the Knowledge of the Company, no event or circumstance has occurred or failed to occur that would reasonably be expected to cause the loss of such qualification. No condition exists that would reasonably be expected to subject the Company Entities, either directly or by reason of their affiliation with any member of their Controlled Group (defined as any organization which is a member of a controlled group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code), to any material tax, fine, lien or penalty or other material liability imposed by ERISA, the Code or other applicable laws, rules, and regulations in connection with any employee benefit plan (within the meaning of Section 3(3) of ERISA). To the Knowledge of the Company, no nonexempt prohibited transaction (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has occurred with respect to any SunGard Benefit Plan that would reasonably be expected to subject the Company Entities to any material liability. None of the Company Entities has incurred any current or projected material liability in respect of post-employment or post-retirement health, medical or life insurance benefits for any SMS Employee or former employee, director or consultant of the Company Entities, except as required to avoid an excise tax under Section 4980B of the Code or as may be required under any other applicable Law.
(d) Neither the Company Entities nor any of their ERISA Affiliates, sponsors, maintains or contributes to or has any obligation to contribute to, or at any time during the preceding six years, has sponsored, maintained or contributed to or had any obligation to contribute to, any retirement plan subject to Title IV or Section 302 of ERISA or Section 412 of the Code (including a multiemployer plan within the meaning of Section 3(37) of ERISA) or any other defined benefit pension plan (a Pension Plan) and neither the Company Entities nor any of their ERISA Affiliates has any material liability under any Pension Plan that could reasonably be expected to become a liability of the Datatel Entities and their Affiliates.
33
(e) With respect to any Company Benefit Plan, (i) no actions, suits or claims (other than routine claims for benefits in the Ordinary Course of Business) are pending or, to the Knowledge of the Company, threatened that would result in a material Liability to the Company Entities, (ii) to the Knowledge of the Company, no facts or circumstances exist that would reasonably be expected to give rise to any such actions, suits or claims, and (iii) to the Knowledge of the Company, no administrative investigation, audit or other administrative proceeding by the Department of Labor, the IRS or any other Governmental Bodies are pending, in progress or threatened that, if adversely determined, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect.
(f) Neither the execution, delivery or performance of this Agreement nor the consummation of the Transactions (whether alone or in connection with any other events(s)) will (i) accelerate the vesting or increase benefits or the amount payable under any SunGard Benefit Plan, (ii) cause any of the Company Entities to record additional compensation expense on its income statement with respect to any outstanding stock option or other equity-based award or (iii) result in payments under any of the SunGard Benefit Plans (1) which would not be deductible under Section 280G of the Code, or (2) which would result in any excise tax on any SMS Employee under Section 4999 of the Code or any other comparable Law.
(g) Except with respect to any employment agreement or other bilateral Contract with any current or former SMS Employee, to the extent permitted by applicable Law, each Company Benefit Plan is amendable and terminable unilaterally by the Company or its successor, at any time without liability to the Company (or its successor) and its Affiliates as a result thereof.
(h) This Section 5.9 and Section 5.4 represent the sole and exclusive representations and warranties of the Company regarding employee benefit matters.
5.10 Labor.
(a) None of the Company Entities is, with respect to the SMS Business or any of the SMS Employees, (i) a party to, or bound by, or presently negotiating, any collective bargaining agreement, contract or other arrangement or understanding with a labor union or a labor organization or (ii) obligated to inform or consult any works council or similar entity with respect to the Transactions.
(b) There are no current (i) strikes, work stoppages, work slowdowns or lockouts pending or, to the Knowledge of the Company, threatened against or involving any of the Company Entities, or (ii) unfair labor practice charges, grievances or complaints pending or, to the Knowledge of the Company, threatened by or on behalf of any SMS Employee or group of SMS Employees of the Company Entities. To the Knowledge of the Company, there are no investigations, inquiries or proceedings before the U.S. National Labor Relations Board, the U.S. Equal Employment Opportunity Commission, the U.S. Department of Labor, the U.S. Department of Justice, the U.S. Occupational Health and Safety Administration or any other Governmental Body with respect to or relating to the terms and conditions of employment of the SMS Employees.
34
5.11 Litigation. There are no Actions pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of their respective executive officers relating to the SMS Business before any Governmental Body, that, if adversely determined, individually or in the aggregate, have had or would reasonably be expected to have a Business Material Adverse Effect. None of the Company Entities or the SMS Business is subject to any Order except to the extent the same, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
5.12 Compliance with Laws; Permits.
(a) To the extent related to the SMS Business, the Company Entities and SunGard Data and its other Subsidiaries are in compliance with all Laws of any Governmental Body applicable to the SMS Business, except where the failure to be in compliance, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect. To the extent related to the SMS Business, the Company Entities and SunGard Data and its other Subsidiaries have not received any written notice of or been charged with the violation of any such Laws, except where such violation, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect.
(b) The Company Entities currently have all Permits that are required for the operation of the SMS Business, except where the failure to have such Permits, individually or in the aggregate, has not had and would not have a Business Material Adverse Effect. None of the Company Entities is in default or violation (and no event has occurred that, with notice or the lapse of time or both, would constitute a default or violation) of any term, condition or provision of any material Permit to which it is a party, except where such default or violation, individually or in the aggregate, has not had and would not have a Business Material Adverse Effect.
5.13 Environmental Matters.
(a) Except, individually and in the aggregate, as has not had and would not reasonably be expected to have a Business Material Adverse Effect:
(i) to the extent related to the SMS Business, the Company Entities and SunGard Data and its other Subsidiaries are, and have been since December 31, 2007, in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with all Permits required under applicable Environmental Laws to operate the SMS Business;
(ii) to the extent related to the SMS Business, neither the Company Entities nor SunGard Data or any of its other Subsidiaries is the subject of any outstanding Order or Contract with any Governmental Body pursuant to any Environmental Laws or concerning any Materials of Environmental Concern that imposes obligations on the SMS Business, and, to the Knowledge of the Company, no other Person is the subject of any such Order or Contract that would reasonably be expected to adversely affect the SMS Business;
(iii) to the extent related to the SMS Business, neither the Company Entities nor SunGard Data or any of its other Subsidiaries is subject to any pending Actions or, to the Knowledge of the Company, threatened Actions alleging noncompliance with or potential
35
Liability under Environmental Laws, and, to the Knowledge of the Company, no other Person is the subject of any such Action that would reasonably be expected to adversely affect the SMS Business;
(iv) to the Knowledge of the Company, to the extent related to the SMS Business, there are no investigations of the businesses of the Company Entities, SunGard Data or any of its other Subsidiaries, or of currently or previously owned, operated or leased property of the Company Entities, SunGard Data or any of its other Subsidiaries, pending or threatened that would reasonably be expected to result in the SMS Business incurring any Liabilities under Environmental Laws or concerning Materials of Environmental Concern; and
(v) to the Knowledge of the Company, Materials of Environmental Concern are not present at, on, in or under any property currently or formerly owned or leased by the Company or any of its Subsidiaries for the SMS Business use or otherwise used by or for the SMS Business, or at any other location (including any property used for the treatment, storage or disposal of wastes generated by the SMS Business), in a condition or under circumstances that would reasonably be expected to result in material Liability to the Company or any of its Subsidiaries as a result of any Environmental Law.
(b) The Company has made available to Parent prior to the date hereof true and correct copies of all material studies, audits, assessments or other similar documents, concerning compliance with, or liability or obligations under, any Environmental Laws affecting the SMS Business, to the extent such documents are in the possession or under the reasonable control of SunGard Data or any of its Subsidiaries (including any Company Entity).
This Section 5.13 constitutes the sole and exclusive representation and warranty with respect to Environmental Laws and any and all environmental and natural resource matters.
5.14 Insurance. Section 5.14 of the Company Disclosure Schedules lists as of the date hereof all material insurance policies held by the Company Entities or by SunGard Data or its other Subsidiaries for the benefit of the SMS Business, including all directors and officers and corporate liability insurance policy or policies provided for directors and officers of the Company Entities, each of which is in full force and effect, and neither SunGard Data nor any of its Subsidiaries (including any Company Entity) is in material default with respect to any of its obligations under any of such insurance policies. To the Knowledge of the Company, (i) there is no threatened termination of any of such policies and (ii) there is no material claim pending regarding the SMS Business or the Company or any of its Subsidiaries under any of such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies.
5.15 Assets; Title. The Company and the Company Subsidiaries have good, valid and marketable title to the Purchased Assets free and clear of any material Liens, other than Permitted Liens.
5.16 No Other Representations or Warranties; Schedules. Except for the representations and warranties contained in ARTICLE IV and this ARTICLE V (each as modified by the Schedules hereto) and Articles IV and V of the Merger Agreement, neither the
36
Seller Parties nor any other Person makes any other express or implied representation or warranty with respect to the Company, the Company Subsidiaries, the Purchased Assets, the Assumed Liabilities, the SMS Business or the transactions contemplated by this Agreement or the Merger Agreement, and the Seller Parties disclaim any other representations or warranties, whether made by the Seller Parties or any of their respective Affiliates, officers, directors, employees, agents or representatives. Except for the representations and warranties contained in ARTICLE IV and this ARTICLE V (each as modified by the Schedules hereto) and Articles IV and V of the Merger Agreement, the Seller Parties hereby disclaim all liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Purchaser Parties or their respective Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Purchaser Parties by any director, officer, employee, agent, consultant, or representative of the Seller Parties or any of their respective Affiliates). None of the Seller Parties makes any representations or warranties to the Purchaser Parties regarding the probable success or profitability of the Company or any of its Subsidiaries.
ARTICLE VI
REPRESENTATIONS OF PURCHASER PARTIES
Except as set forth on the disclosure schedules delivered by the Purchaser Parties to the Seller Parties prior to the execution of this Agreement (the Purchaser Disclosure Schedules, and together with the SunGard Disclosure Schedules and the Company Disclosure Schedules, the Disclosure Schedules) (it being understood and agreed that each item in a particular section of the Purchaser Disclosure Schedules applies to the corresponding section hereof and to any other section as to which its relevance is reasonably apparent on the face of such item), the Purchaser Parties, jointly and severally, hereby represent and warrant to the Seller Parties that:
6.1 Organization and Good Standing. Each Purchaser Party is duly organized, validly existing and in good standing under the Laws of the State of Delaware. Each Purchaser Party has all requisite limited partnership power and authority, in each case to execute and deliver this Agreement and each Ancillary Agreement to which it is a party and to consummate the Transactions. The execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the Transactions have been duly authorized by all requisite limited partnership or equivalent action on behalf of each Purchaser Party. This Agreement and the Merger Agreement has been, and each of the other Ancillary Agreements to which it is a party will be at or prior to the Asset Closing, duly and validly executed and delivered by each of the Purchaser Parties and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) each of this Agreement and the Merger Agreement constitutes, and each other Ancillary Agreement when so executed and delivered will constitute, the legal, valid and binding obligations of each Purchaser Party, enforceable against each Purchaser Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of
37
commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).
6.2 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Purchaser Parties of this Agreement or the Ancillary Agreements, the consummation of the Transactions, or compliance by the Purchaser Parties with any of the provisions hereof or thereof will (i) conflict with or violate any provision of the certificate of incorporation and bylaws or comparable organizational and governing documents of any Purchaser Party or any of its Subsidiaries, (ii) conflict with, result in any breach or violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under or require a consent or waiver under, any Contract or Permit to which any Purchaser Party or any of its Subsidiaries, is a party or by which any of its properties, rights or assets is bound or (iii) violate any Order or, assuming compliance with the requirements set forth in Section 6.2(b), any Law, applicable to any Purchaser Party or any of its Subsidiaries or by which any of its properties, rights or assets are bound, except in the case of clauses (ii) through (iii), for such matters that, individually or in the aggregate, would not reasonably be expected to have a Datatel Material Adverse Effect.
(b) No material consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Governmental Body is required on the part of any Purchaser Party or any of its Subsidiaries in connection with the execution and delivery of this Agreement or the Ancillary Agreements or the compliance by the Purchaser Parties with any of the provisions hereof or thereof, or the consummation of the Transactions, except for (i) compliance with the applicable requirements of the HSR Act and any other Competition Laws, (ii) the filing of the Certificate of Merger (as defined in the Merger Agreement) with the Secretary of State of the State of Delaware and appropriate documents with the relevant authorities of other states in which any Purchaser Party is qualified to do business, and (iii) the IRS Submissions and the IRS Ruling, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations or filings that, individually or in the aggregate, would not reasonably be expected to have a Datatel Material Adverse Effect.
6.3 Brokers or Finders. No Person has acted, directly or indirectly, as a broker, finder or financial advisor for any of the Purchaser Parties in connection with the transactions contemplated by this Agreement.
6.4 Financing. Parent has delivered to the Company true and complete copies of: (i) the executed commitment letter, dated as of August 4, 2011 between Parent, Bank of America, N.A., Merrill Lynch, Pierce Fenner & Smith Incorporated, Barclays Bank PLC, Barclays Capital, the investment banking division of Barclays Bank, Citigroup Global Markets Inc., Credit Suisse AG, Credit Suisse Securities (USA) LLC, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC (collectively, the Debt Financing Sources) and excerpts of those portions of the Fee Letter (as defined in the Merger Agreement) and any other executed fee letter and engagement letter associated therewith that contain any conditions to funding or flex provisions or other provisions (excluding provisions related solely to fees and economic terms (other than covenants) agreed to by the parties) regarding the terms and conditions of the financing to be provided by such commitment
38
letter (such commitment letter, including all exhibits, schedules, annexes and amendments thereto and each such fee letter and engagement letter, collectively, (the Debt Financing Commitment), pursuant to which, upon the terms and subject to the conditions set forth therein, the Debt Financing Sources have agreed to lend the amounts set forth therein (the Debt Financing) for the purpose of funding the Transactions; (ii) the executed equity commitment letter, dated as of August 4, 2011 among Sophia Holding I (as defined in the Merger Agreement) and Hellman & Friedman Capital Partners VI, L.P. and the other parties thereto (collectively, the Investors) (the Transaction Equity Financing Commitment and together with the Debt Financing Commitment, the Transaction Financing Commitments), pursuant to which, upon the terms and subject to the conditions set forth therein, each of the Investors has committed to invest the cash amount set forth therein (the Transaction Equity Financing and together with the Debt Financing, the Transaction Financing); and (iii) the executed equity commitment letter, dated as of August 4, 2011 among Datatel and the Investors (the Termination Fee Equity Financing Commitment and together with the Transaction Financing Commitments, the Financing Commitments), pursuant to which, upon the terms and subject to the conditions set forth therein, each of the Investors has committed to invest the cash amount set forth therein (the Termination Fee Equity Financing and together with the Transaction Financing, the Financing). None of the Financing Commitments have been amended or modified prior to the date of this Agreement, and, as of the date hereof, the respective commitments contained in the Financing Commitments have not been withdrawn, terminated or rescinded in any respect. As of the date hereof, there are no other agreements, side letters or arrangements to which Parent or Merger Sub is a party relating to any of the Financing Commitments that could affect the availability of the Financing. As of the date hereof, the Financing Commitments are in full force and effect and constitute the legal, valid and binding obligations of each of Parent and, to the knowledge of Parent, the other parties thereto. There are no conditions precedent related to the funding of the full net proceeds of the Financing (including any market flex provisions) other than as expressly set forth in the Financing Commitments. Assuming the satisfaction of the conditions set forth in Section 8.3(a) and Section 8.3(b) or Section 8.3(a) and Section 8.3(b) of the Merger Agreement, as applicable, the aggregate proceeds to be disbursed pursuant to the agreements contemplated by the Transaction Financing Commitments, in the aggregate and together with the available cash, cash equivalents and marketable securities of Datatel and its Subsidiaries, will be sufficient for Parent and the Surviving Corporation (as defined in the Merger Agreement) to pay the Merger Consideration (as defined in the Merger Agreement), Purchaser Company to pay the Purchase Price, Datatel and each of its Subsidiaries to refinance their outstanding Indebtedness that is required by its terms to be refinanced in connection with the consummation of the Transactions and the Datatel Entities and their respective Subsidiaries to pay the fees and expenses of the Datatel Entities and the SunGard Entities (to the extent reimbursable under Section 7.15 of the Merger Agreement) related to the foregoing. As of the date hereof, no event has occurred which would result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would become a default) by
39
Parent under any of the Financing Commitments, and neither Sophia Holding I nor Datatel has any reason to believe that any of the conditions to any of the Financing will not be satisfied or that the Financing will not be available to Sophia Holding I or Datatel, as applicable, on the Asset Closing Date or, in the case of the Termination Fee Equity Financing, on the date the Parent Termination Fee (as defined in the Merger Agreement) is payable in accordance with Section 9.2(b) of the Merger Agreement. The Datatel Entities have fully paid all commitment fees or other fees required to be paid on or prior to the date hereof pursuant to the Financing Commitments. Except as otherwise contemplated by Section 9.4 of the Merger Agreement, the obligations of the Datatel Entities under this Agreement and the Merger Agreement are not subject to any conditions regarding their ability to obtain financing for the Transactions.
6.5 No Prior Activities. Except for obligations incurred in connection with its incorporation or organization or the negotiation and consummation of this Agreement and the Ancillary Agreements and the Transactions, Purchaser has not incurred any obligation or Liability nor engaged in any business or activity of any type or kind whatsoever or entered into any Contract with any Person.
6.6 No Other Representations or Warranties; Schedules. Except for the representations and warranties contained in this ARTICLE VI (as modified by the Purchaser Disclosure Schedules) and Article VI of the Merger Agreement, neither the Purchaser Parties nor any other Person makes any other express or implied representation or warranty with respect to the Purchaser Parties, their respective Subsidiaries or the Transactions contemplated by this Agreement or the Merger Agreement, and each Purchaser Party disclaims any other representations or warranties, whether made by the Purchaser Parties or any of their respective Affiliates or Representatives. Except for the representations and warranties contained in this ARTICLE VI (as modified by the Purchaser Disclosure Schedules) and Article VI of the Merger Agreement, the Purchaser Parties hereby disclaim all Liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Seller Parties or their respective Affiliates or Representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Seller Parties or any of their respective Affiliates or Representatives by any Representative of the Purchaser Parties or any of their Affiliates).
ARTICLE VII
ADDITIONAL AGREEMENTS OF PURCHASER PARTIES AND SELLER PARTIES
7.1 Conduct of the SMS Business Prior to the Closing.
(a) Prior to the Asset Closing, except (i) as set forth on Section 7.1(a) of the SunGard Disclosure Schedules or Section 7.1(a) of the Company Disclosure Schedules, as applicable, (ii) as required by applicable Law, (iii) as otherwise expressly contemplated by this Agreement and the Ancillary Agreements (including the Merger Agreement and the Restructuring contemplated thereby) or (iv) with the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned), each of the Seller Parties (with respect to the SMS Business only) and the Company shall not, and shall not permit their respective Subsidiaries to:
40
(i) except as required as of the date of this Agreement by the terms of any SunGard Benefit Plan or Company Benefit Plan (or as required by the terms of any plan, program or arrangement entered into in accordance with this Section 7.1(a) which, if in effect as of the date of this Agreement, would be a SunGard Benefit Plan or a Company Benefit Plan), (A) increase the annual level of compensation of any SMS Employee (except increases in salaries and wages in the Ordinary Course of Business), (B) except in the Ordinary Course of Business, grant any bonus, equity or equity-based compensation, benefit or other direct or indirect compensation to any SMS Employee, (C) except in the Ordinary Course of Business, increase the coverage or benefits available under any (or create any new), or accelerate the timing of payments or vesting under any, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other SunGard Benefit Plan or Company Benefit Plan or otherwise modify or amend or terminate any such SunGard Benefit Plan or Company Benefit Plan, (D) except entering into offer letters and non-competition agreements with new employees in the Ordinary Course of Business and entering into employment agreements with non-U.S., non-senior management employees in the Ordinary Course of Business, enter into any employment, deferred compensation, non-competition or similar agreement (or amend any such agreement) involving any SMS Employee that would be a SunGard Benefit Plan or Company Benefit Plan if it were in existence as of the date of this Agreement, or (E) except for immaterial amounts paid in the Ordinary Course of Business to SMS Business Employees terminating employment prior to the Asset Closing in exchange for customary general releases of claims, grant any severance or termination compensation or increase the coverage or benefits available under any (or create any new), or accelerate the timing of payments or vesting under any, severance pay or termination pay;
(ii) acquire any material properties or assets or sell, assign, license, transfer, convey, lease or otherwise dispose of any of the material properties or assets of the SMS Business (except sales and non-exclusive licenses of products and services in the Ordinary Course of Business or the disposal of obsolete or worthless assets);
(iii) make any loan, advance or capital contribution to or investment in any Person (other than (A) loans, advances or capital contributions to or investments in wholly-owned Company Subsidiaries and (B) routine advances to SMS Employees for business expenses in the Ordinary Course of Business in an amount not exceeding $25,000 at any time to any individual SMS Employee);
(iv) other than in the Ordinary Course of Business, cancel or compromise any material debt or claim or waive or release any material right of the SMS Business or permit any such right to lapse;
(v) initiate, compromise or settle any Action (other than in connection with the enforcement of the Companys rights under this Agreement and the Ancillary Agreements) other than settlements of any claims against the SMS Business in respect of Taxes or solely for money damages in excess of $500,000 payable prior to the close of business on the Business Day immediately prior to the date of the Asset Closing;
41
(vi) enter into, modify or terminate any labor or collective bargaining agreement or, through negotiations or otherwise, make any commitment or incur any Liability to any labor organizations;
(vii) enter into or agree to enter into any merger or consolidation with any corporation or other entity, or acquire the securities or any division, business or all or substantially all of the assets of any other Person, in each case, involving the expenditure, or potential expenditure, of more than $100,000 individually or $500,000 in the aggregate;
(viii) (A) sell, assign, transfer or convey to any Person, including to any SunGard Entity or any of its Subsidiaries (other than the Company Entities), or otherwise dispose of any of the material Intellectual Property owned by the Company and its Subsidiaries, (B) grant any licenses under any Intellectual Property owned by the Company and its Subsidiaries (other than non-exclusive licenses granted in the Ordinary Course of Business) or enter into any Specified Open Source Licenses, or (C) make any contributions of Intellectual Property to the IAF or any contributions of source code to the IPP (as such terms are defined in the Intellectual Property Agreement);
(ix) enter into any joint venture, general or limited partnership agreement, limited liability company agreement or other similar agreement;
(x) (A) enter into any new Contract that would be a Material Contract (other than pursuant to clause (ii) of such definition (each, an Ordinary Course Material Contract)) if entered into on or prior to the date hereof or, except as required by their terms, terminate or amend or modify any Material Contract (other than an Ordinary Course Material Contract) or any such new Contract or (B) enter into any new Contract that would be an Ordinary Course Material Contract or terminate, amend or modify any Ordinary Course Material Contract or any such new Contract, except in each case pursuant to this clause (B), in the Ordinary Course of Business;
(xi) other than with respect to notice rights that do not provide any additional rights to any other Person or subject the SMS Business or any of assets of the SMS Business to any additional obligations, liabilities or Liens, enter into any Contract that would be material to the SMS Business, taken as a whole, with any Person that provides such Person rights or entitlements in connection with a change of control of the SMS Business;
(xii) transfer any SMS Employee to SunGard Data or any of its Affiliates (other than the Company and the Company Subsidiaries) or transfer any employee (other than a SMS Employee) of SunGard Data or any of its Affiliates to the Company or any of the Company Subsidiaries;
(xiii) except in the Ordinary Course of Business, materially change or modify any credit, collection and payment policies, procedures or practices (including any material acceleration in the collection of receivables or material delay in the payment of payables); or
(xiv) agree or commit to do anything prohibited by this Section 7.1(a).
42
7.2 Efforts. Subject to the terms and conditions herein provided and without limiting the obligations of any Party to the extent a higher standard of efforts is expressly provided for in this Agreement with respect to any specific action or matter, each of the Parties agrees to use commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done as promptly as practicable, all things necessary, proper and advisable under applicable Laws to consummate and make effective as promptly as practicable the transactions contemplated by this Agreement and the Ancillary Agreements, including cooperating with one another and using all commercially reasonable efforts to prepare all necessary documentation to effect all necessary filings and to obtain all consents, waivers and approvals necessary to consummate the transactions contemplated by this Agreement and the Ancillary Agreements (including the Merger and the Restructuring contemplated by the Merger Agreement), including the consents and approvals referred to in Section 4.2, Section 5.3 and Section 6.2 (or the Disclosure Schedules thereto); provided, however, that (a) no Party shall be obligated to pay any consideration to any third party from whom any such consent, waiver or approval is requested and (b) the prior written consent of Parent shall be required with respect to any amendment or modification to, or termination of, any Assumed Contract in connection with obtaining any such consent, waiver or approval that is adverse in any material respect to the Purchaser Parties, the Company or any of their respective Subsidiaries. At the Asset Closing, the Seller Parties or their respective Subsidiaries (as appropriate) will, and from time to time after the Asset Closing, the Company or its Subsidiaries will, execute and deliver such further instruments of conveyance, transfer and assignment and take such other action, at Purchasers sole expense, as Purchaser may reasonably require to more effectively convey and transfer to Purchaser any of the Purchased Assets, and Purchaser will execute and deliver such further instruments and take such other action, at the Companys sole expense, as the Company or its Subsidiaries may reasonably require to have Purchaser more effectively assume the Assumed Liabilities.
7.3 No Solicitation. Except as set forth on Section 7.3 of the SunGard Disclosure Schedules, each of the Seller Parties agrees that after the date hereof until the earlier of the Asset Closing or the termination of this Agreement in accordance with its terms, it shall not, and it shall cause its Subsidiaries, officers, directors and senior employees and the members of the operating committee of SunGard Capital, and shall use its reasonable best efforts to cause the SunGard Capital Stockholders and their respective officers, directors and senior employees and the investment bankers of any of the foregoing Persons, not to, directly or indirectly: (a) solicit, initiate, or knowingly facilitate the submission of any proposal for an Acquisition Alternative, (b) participate in any negotiations regarding, or furnish to any Person any information with respect to, any Acquisition Alternative, or (c) enter into any agreement with respect to any Acquisition Alternative. Without limiting the generality of the foregoing, each of the Seller Parties shall, and shall cause its Subsidiaries, officers, directors and senior employees and the members of the operating committee of SunGard Capital to, and shall use its reasonable best efforts to cause the SunGard Capital Stockholders and their respective officers, directors and senior employees and the investment bankers of any of the foregoing Persons to, immediately cease and cause to be terminated any existing activities, including discussions or negotiations with any Person, conducted prior to the date hereof with respect to any Acquisition Alternative.
7.4 Identification of Assets and Liabilities. Without limiting Section 7.6, the Seller Parties and the Purchaser Parties, throughout the period prior to the earlier of the Asset Closing or the termination of this Agreement, agree to reasonably cooperate with and assist each other
43
and their respective Representatives in connection with the identification of assets of the Seller Parties and their Subsidiaries that constitute Purchased Assets, Liabilities of the Seller Parties and their Subsidiaries that constitute Assumed Liabilities and HE Business Employees who are SMS Employees.
7.5 Employee Matters.
(a) Automatic Transferred SMS Employees shall automatically become employees of Purchaser at 11:59 p.m. on the Asset Closing Date in accordance with applicable local employment Laws.
(b) No later than ten (10) Business Days prior to the Asset Closing Date, Purchaser shall make an offer of employment to each of the SMS Employees (the date such offer of employment is made, the Offer Date), which offer of employment will (i) be for the employment of such SMS Employee by Purchaser to commence at 11:59 p.m. on the Asset Closing Date, (ii) expire at 11:59 p.m. on the fifth (5th) Business Day prior to the Asset Closing or such earlier date as Purchaser shall reasonably determine, (iii) be on terms and conditions of employment consistent with this Section 7.5 and contingent upon the Asset Closing, and (iv) be subject to each such SMS Employee having executed and delivered to Purchaser a non-disclosure agreement and other employment related documents customarily required by Purchaser with respect to its employees, including acceptance of an employment offer letter in the form provided by Purchaser to such SMS Employee. Each SMS Employee who accepts Purchasers offer of employment and commences employment with Purchaser, and each Automatic Transferred SMS Employee, shall be referred to herein as a Transferred SMS Employee. Effective as of the Asset Closing Date, the Seller Parties shall waive, and shall cause their respective Affiliates to waive, any covenants not to compete, confidentiality provisions or other similar restrictions that may be applicable to Transferred SMS Employees but only to the extent such covenants, provisions or restrictions relate to the HE Business and would prohibit the Transferred SMS Employees from accepting employment with Purchaser or continuing in such employment without violating any such covenants, provisions or restrictions. The Seller Parties shall not, and shall cause their Affiliates not to, engage in any activity intended to discourage any SMS Employee from accepting the offer of employment from Purchaser, and the Seller Parties shall not, and shall cause their Affiliates not to, offer employment to any SMS Employee with any business of the Seller Parties or any of their Affiliates (other than the SMS Business) between the date hereof and the Asset Closing Date. The Seller Parties shall reasonably cooperate with Purchaser to facilitate the logistics of Purchasers communication with SMS Employees for the purposes of communicating employment offers pursuant to this Section 7.5 (b) and for discussing SMS Employees employment with Purchaser. For purposes of this Section 7.5, Purchaser shall mean Purchaser or any Affiliate of Purchaser at which the Transferred SMS Employees will be employed following the Asset Closing.
(c) Only to the extent SMS Employees are covered by the collective bargaining agreement between the Company and Local 1723/TUCA Chapter, Council 47, American Federation of State, County and Municipal Employees, AFL-CIO, effective July 1, 2010 through June 30, 2013 (the Collective Bargaining Agreement) the Purchaser Parties agree that, effective at the Asset Closing, Purchaser
44
shall assume and be bound by the Collective Bargaining Agreement with respect to the applicable SMS Employees and shall provide employee benefits to the covered SMS Employees in accordance with the terms of the Collective Bargaining Agreement or, to the extent necessary and permissible under the Collective Bargaining Agreement, shall provide substantially equivalent benefits.
(d) The Company shall not establish, maintain or assume any benefit plan on behalf of the SMS Employees as of the Asset Closing, and the Company shall not assume or be deemed to assume any Liabilities or obligations related to or with respect to any SunGard Benefit Plan as of the Asset Closing.
(e) Subject to Section 7.5(e) of the Company Disclosure Schedules, for a period of at least one year following the Asset Closing, the Purchaser Parties shall provide, or cause their Subsidiaries or the Company to provide, to Transferred SMS Employees, other than SMS Employees covered by the Collective Bargaining Agreement, bonus and commission opportunity, base wages and salaries and employee benefits and fringe benefits under plans, programs and arrangements (other than equity-based plans) that are at least as favorable as the bonus and commission opportunities, base wages and salaries and employee benefits and fringe benefits provided by Datatel, Inc. to similarly situated employees of Datatel, Inc. For greater certainty, Purchaser shall be under no obligation to retain any Company Benefit Plan following the Asset Closing, other than as required by applicable Law.
(f) To the extent that service is relevant for purposes of eligibility or vesting (other than benefit accrual under a defined benefit plan and vesting pursuant to equity incentive plans) under any Datatel Benefit Plan (as defined in the Merger Agreement) or any other employee benefit or fringe benefit plan, program or arrangement established or maintained by the Purchaser Parties after the Asset Closing for the benefit of Transferred SMS Employees, such plan, program or arrangement shall credit Transferred SMS Employees for service on or prior to the Asset Closing with SunGard Data or its Affiliates, as the case may be, to the same extent credited for such purposes under the comparable plan, program or arrangement immediately prior to the Asset Closing. For greater certainty, no service by a Transferred SMS Employee need be recognized to the extent that such recognition would result in any duplication of benefits, or to the extent that such service was not recognized under the corresponding SunGard Benefit Plan, and no such service need be recognized for benefit accrual purposes in any Datatel Benefit Plan that constitutes a defined benefit pension plan in which such Transferred SMS Employees may be eligible to participate after the Asset Closing. Following the Asset Closing, the Purchaser Parties shall cause each employee welfare plan (as defined in Section 3(1) of ERISA) covering Transferred SMS Employees (i) to reduce each such eligible employees (and his or her eligible dependents) annual deductible limits under such plans for the plan year in which the Asset Closing occurs to the extent deductible expenses were incurred and recognized for comparable purposes under the comparable SunGard Benefit Plan immediately prior to the Asset Closing, and (ii) to the extent waived under the SunGard Benefit Plans, to waive any pre-existing condition limitations or exclusions that do not apply to such employees immediately prior to the Asset Closing. On or prior to the Asset Closing Date, the SunGard Entities shall exercise commercially reasonable efforts to deliver to Purchaser information relating to the expenses incurred by the Transferred SMS Employees that count against annual deductible limits and co-payments limits of the employee welfare plans covering Transferred SMS Employees.
45
Nothing in this Section 7.5(f) shall obligate the Purchaser Parties to provide any benefit under any Datatel Benefit Plan that is a welfare benefit plan that it did not provide under such plan as of the Asset Closing Date.
(g) Purchaser shall be responsible for any obligation with respect to the Transferred SMS Employees under the Worker Adjustment Retraining and Notification Act of 1988 and any applicable state or local equivalent arising or accruing after the Asset Closing Date (collectively, WARN). The Seller Parties shall be responsible for any such obligation arising or accruing on or before the Asset Closing Date. The Parties hereto agree to cooperate in good faith to determine whether any notification may be required under WARN as a result of the transactions contemplated by this Agreement.
(h) The Seller Parties shall be responsible for the administration of and shall retain any and all obligations and liabilities for COBRA continuation coverage with respect to the Transferred SMS Employees and their dependents and beneficiaries for qualifying events occurring prior to and including the date on which the Transferred SMS Employee becomes a Transferred SMS Employee (for purposes of clarity, to the extent such Transferred SMS Employees are covered under an employee benefit plan providing for such COBRA continuation benefits), and Purchaser shall be responsible for all obligations and liabilities for COBRA continuation coverage for Transferred SMS Employees and their dependents and beneficiaries with respect to qualifying events occurring after the date on which the Transferred SMS Employee becomes a Transferred SMS Employee (for purposes of clarity, to the extent such Transferred SMS Employees are covered under an employee benefit plan providing for COBRA continuation benefits).
(i) Each Transferred SMS Employee will be credited by Purchaser with all accrued but unused vacation (including, without limitation, any accrued long service leave) as of the Asset Closing Date under the vacation policy of the Seller Parties applicable to such Transferred SMS Employee, and the Seller Parties shall have no liability with respect thereto after the Asset Closing Date.
(j) Except as is expressly provided in this Section 7.5 or in the Merger Agreement, any Liabilities relating to or at any time arising under or in connection with any employee benefit plan (as defined in Section 3(3) of ERISA), or any other benefit plan, program, agreement or arrangement at any time maintained, sponsored or contributed or required to be contributed to by the Seller Parties or any of their Affiliates, or with respect to which the Seller Parties or any of their Affiliates has any Liability, and any Liabilities arising out of, relating to or incurred in connection with the employment or service by, or termination from employment or service with, the Seller Parties or any of their Affiliates of any SMS Employee (including any Transferred SMS Employee), including any and all Liabilities pertaining to any salary or wages, vacation pay, bonuses or any other type of compensation or benefits, shall remain the Liability of the Seller Parties and their Affiliates.
(k) The Purchaser Parties and the Seller Parties acknowledge and agree that provisions contained in this Section 7.5 with respect to Transferred SMS Employees are included for the sole benefit of Purchaser Parties and the Seller Parties, and that nothing in this Agreement, whether express or implied, shall create any third party beneficiary or other rights (i)
46
in any other person, including any Transferred SMS Employees, any current or former participant in any SunGard Benefit Plan, or, in each case, any dependent or beneficiary thereof, or (ii) to continued employment with the Purchaser Parties and the Seller Parties, or any of their respective Subsidiaries or Affiliates.
7.6 Access.
(a) Subject to applicable Law and in accordance with the Confidentiality Agreement, upon reasonable notice, each of the Seller Parties, with respect to the SMS Business only, shall, throughout the period prior to the earlier of the Asset Closing or the termination of this Agreement, afford to the Purchaser Parties and their duly authorized Representatives reasonable access to its officers, employees, consultants and representatives and, during normal business hours, in a manner that does not unreasonably interfere with the SMS Business, to its and its Subsidiaries and the Company Subsidiaries officers, properties, Contracts, books, records (including Tax Returns filed and those in preparation, work papers and other materials relating to Taxes, but only to the extent relating to the SMS Business), any report, schedule or other document filed or received by it pursuant to the requirements of the federal or state securities Laws, and shall use their respective reasonable efforts to cause their respective Representatives to furnish promptly such additional financial and operating data and other information, including environmental information, as to the SMS Business as the Purchaser Parties or their duly authorized Representatives, as the case may be, may reasonably request, and instruct its Representatives to cooperate with the Purchaser Parties and their duly authorized Representatives in their investigation; provided, however, that the foregoing shall not permit the Purchaser Parties or their duly authorized Representatives to conduct any invasive or destructive environmental sampling, testing or analysis on the property of the Seller Parties or their Subsidiaries.
(b) Notwithstanding the foregoing, neither the Seller Parties nor their respective Subsidiaries, as applicable, shall be required to provide any information to the extent that any such Person has reasonably determined that it is legally obligated to keep such information confidential or otherwise not to provide such information or to the extent that such access would be reasonably likely to constitute a waiver of the attorney-client privilege. Each of the Purchaser Parties will, and will cause its Subsidiaries to hold, and will direct its and their Representatives to hold, any and all information received from any of the Seller Parties, directly or indirectly, in confidence in accordance with the Confidentiality Agreement.
7.7 Public Announcements. Promptly after the execution of this Agreement, the Parties will issue the press release attached hereto as Exhibit B. Subject to the immediately foregoing sentence, the Seller Parties and the Purchaser Parties shall consult with each other prior to making any press release or public announcement relating to the Transactions and shall not issue any such press release or make any such public announcement prior to such consultation and without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, except as such Party believes in good faith may be required by applicable Law, Order or by obligations pursuant to any listing agreement with any national securities exchange, in which case the Party proposing to issue such press release or make such public announcement shall use its reasonable efforts to consult in good faith with the other Party before issuing any such press release or making any such public announcement.
47
7.8 Control of Other Partys Business. Nothing contained in this Agreement shall give the Purchaser Parties, directly or indirectly, the right to control or direct the Companys, its Subsidiaries or the SMS Businesss operations prior to the Asset Closing. Prior to the Asset Closing, each of the Parties shall exercise and be responsible for, consistent with the terms and conditions of this Agreement and applicable Law (including the HSR Act), complete control and supervision over their respective operations, including, in the case of the Seller Parties and their Subsidiaries, complete control and supervision of all programs, employees, finances and policies of the SMS Business.
7.9 Use of Name.
(a) For a period of 180 days after the Asset Closing Date, the Purchaser Parties shall have the limited, non-transferable right to use any trademarks and Internet domain names containing the name SunGard (the SunGard Marks) (i) solely in connection with the operation of the SMS Business in the manner operated immediately prior to the Asset Closing Date (and subject at all times to SunGard Datas right to exercise quality control with respect to the use of the SunGard Marks and the goodwill associated therewith) and (ii) solely in the process of exhausting the existing inventory of printed purchase orders, sales invoices, marketing materials, stationery, printed forms, other documents and office and shipping supplies, and other products, equipment, and items bearing the SunGard Marks (the Existing Stock) in the Companys, Purchasers or their respective Subsidiaries possession as of the Asset Closing, after which period (x) the Purchaser Parties shall, at their election, either (A) remove or obliterate the SunGard Marks from the Existing Stock or (B) cease using the Existing Stock, and (y) any and all right of the Purchaser Parties to use the SunGard Marks granted hereunder shall terminate immediately. Nothing in this Agreement will prohibit the Purchaser Parties from using the words HIGHER or EDUCATION independently of any SunGard Mark or using the SunGard Marks in a non-trademark manner to describe the history of the SMS Business or as required or permitted by Law.
(b) No SunGard Entity shall have any responsibility for claims by any third Person arising out of, or relating to, the use by the Purchaser Parties of the SunGard Marks after the Asset Closing Date.
7.10 Post-Closing Access to Records and Personnel.
(a) Exchange of Information. After the Asset Closing for a period of seven years, each Party agrees to provide, or cause to be provided, to each other, as soon as reasonably practicable after written request therefor and at the requesting Partys sole expense, reasonable access (including using reasonable commercial efforts to give access to third parties possessing information), during normal business hours, to any of the other Parties employees and to any books, records, documents, files and correspondence in the possession or under the control of such Party, in each case if and to the extent relating to the SMS Business (including the ownership and conduct of the SMS Business by SunGard Data or its Subsidiaries prior to the Asset Closing) that the requesting Party reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting Party (including under applicable securities Laws) by a Governmental Body having jurisdiction over the requesting
48
Party, (ii) for use in any other judicial, regulatory, administrative or other proceeding or in order to satisfy Tax, audit, accounting, claims, regulatory, litigation or other similar requirements or (iii) to comply with its obligations under this Agreement and the Ancillary Agreements; provided, however, that no Party shall be required to provide access to or disclose information where such access or disclosure would violate any Law or agreement, or waive any attorney-client or other similar privilege, and each Party may redact information regarding itself or its Subsidiaries or otherwise not relating to the other Party and its Subsidiaries, and, in the event such provision of information could reasonably be expected to violate any Law or agreement or waive any attorney-client or other similar privilege, the Parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence.
(b) Financial and Other Information. After the Asset Closing for a period of five years, each Party shall provide, or cause to be provided, as soon as reasonably practicable after written request therefor, to the other Party such financial and other data and information reasonably available and in its possession (in such form as is reasonably available to it), in each case if and to the extent relating to the SMS Business or the business of SunGard Data or its Subsidiaries, as applicable, as is reasonably requested by the other Party and reasonably necessary in order for such other Party to prepare required financial statements and reports or filings, including Tax Returns, to be provided to any third party or filed with any Governmental Body.
(c) Ownership of Information. Any information owned by a Party that is provided to a requesting Party pursuant to this Section 7.10 shall be deemed to remain the property of the providing Party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.
(d) Record Retention. Except as otherwise provided herein, each Party agrees to use its reasonable commercial efforts to retain the books, records, documents, instruments, accounts, correspondence, writings, evidences of title and other papers relating to the SMS Business, the Company and its Subsidiaries prior to the Asset Closing (the Books and Records) in their respective possession or control for a commercially reasonable period of time, as set forth in their regular document retention policies, following the Asset Closing Date or for such longer period as may be required by Law or as may be reasonably requested in writing by any Party, or until the expiration of the relevant representation or warranty under this Agreement or the Ancillary Agreements and any related claim of indemnification related thereto. Notwithstanding the foregoing, any Party may destroy or otherwise dispose of any Books and Records not in accordance with its retention policy, provided that, prior to such destruction or disposal (i) such Party shall provide no less than 90 nor more than 120 days prior written notice to the other Party of any such proposed destruction or disposal (which notice shall specify in detail which of the Books and Records is proposed to be so destroyed or disposed of), and (ii) if a recipient of such notice shall request in writing prior to the scheduled date for such destruction or disposal that any of the information proposed to be destroyed or disposed of be delivered to such recipient, such Party proposing the destruction or disposal shall, as promptly as practicable, arrange for the delivery of such of the Books and Records as was requested by the recipient (it being understood that all reasonable out of pocket
49
costs associated with the delivery of the requested Books and Records shall be paid by such recipient).
(e) Limitation of Liability. No Party shall have any liability to any other Party in the event that any information exchanged or provided pursuant to this Section 7.10 is found to be inaccurate. No Party shall have any liability to any other Party if any information is destroyed or lost after reasonable commercial efforts by such Party to comply with the provisions of Section 7.10(d).
(f) Other Agreements Providing For Exchange of Information. The rights and obligations granted under this Section 7.10 are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information set forth in this Agreement.
(g) Production of Witnesses; Records; Cooperation. In the case of a legal or other proceeding between one Party or any of its Affiliates and a third party relating to the SMS Business, the Company or its Subsidiaries, this Agreement or any of the Ancillary Agreements (including any matters subject to indemnification hereunder or thereunder) or the Transactions, each Party shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former (to the extent practicable), current (to the extent practicable) and future officers, employees, other personnel and agents of such Party as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available (other than materials covered by the attorney-client privilege), to the extent that any such Person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any legal, administrative or other proceeding in which the requesting Party may from time to time be involved, regardless of whether such legal, administrative or other proceeding is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all out-of-pocket costs and expenses in connection with the foregoing.
(h) Confidential Information. Nothing in this Section 7.10 shall require either Party to violate any agreement with any third parties regarding the confidentiality of confidential and proprietary information; provided, however, that in the event that any Party is required under this Section 7.10 to disclose any such information, that Party shall use commercially reasonable efforts to seek to obtain such third partys consent to the disclosure of such information and implement requisite procedures to enable the disclosure of such information.
7.11 Mail Handling. After the Asset Closing, to the extent that the Company and/or any of its Subsidiaries previously has received, or the Company, Purchaser or any of their respective Subsidiaries receives any mail or packages addressed to SunGard Data or its Subsidiaries and delivered to the Company, Purchaser or any of their respective Subsidiaries not relating to the SMS Business, the Maintenance Business, the Company or its Subsidiaries, the Purchaser or the Company shall promptly deliver such mail or packages to SunGard Data. After the Asset Closing Date, Parent or its Affiliates may deliver to SunGard Data, or SunGard Data or its Affiliates may deliver to Purchaser or its Affiliates, any checks or drafts made payable to SunGard Data or its Subsidiaries, or made payable to Purchaser or its Subsidiaries, as the case may be, that constitutes property of Purchaser or its Affiliates or of SunGard Data or its
50
Affiliates, as the case may be, and SunGard Data, or Purchaser, as the case may be, shall promptly deposit such checks or drafts, and, upon receipt of funds, reimburse the Purchaser or such Affiliate or SunGard Data or its Affiliates within five (5) Business Days for the amounts of all such checks or drafts, or, if so requested by the other Party, endorse such checks or drafts to Purchaser or SunGard Data for collection. After the Asset Closing, to the extent SunGard Data or its Subsidiaries previously has received or receives any mail or packages addressed and delivered to SunGard Data or its Subsidiaries that relates to the SMS Business, the Maintenance Business, the Company or its Affiliates, SunGard Data shall promptly deliver such mail or packages to Parent. Neither Party may assert any set off, hold back, escrow or other restriction against any payment described in this Section 7.11.
7.12 Confidentiality. For a period of three (3) years from and after the Asset Closing (and indefinitely with respect to source code assigned to the Company pursuant to Section 1.1(a) of the Intellectual Property Agreement and trade secrets exclusively used by the Company, SunGard Data, or their respective Subsidiaries on the Asset Closing Date), each of the Company and the Purchaser Parties and SunGard Data shall, and shall cause its respective Affiliates and all of their respective Representatives to, hold in confidence, all confidential information (including trade secrets) concerning, in the case of SunGard Data, the SMS Business, the Purchaser Parties, the Company and their respective Subsidiaries, and in the case of the Company and the Purchaser Parties, SunGard Data and its Subsidiaries, except to the extent that (i) any such information relating to the SMS Business, the Company or its Subsidiaries was used by Seller (as defined in the Merger Agreement) or its Affiliates (other than the SMS Business, the Company and its Subsidiaries) on or prior to the Asset Closing Date, (ii) any such information is or becomes generally available to the public other than through the fault of any of SunGard Data or its Affiliates or Representatives or any of the Company, the Purchaser Parties or their respective Affiliates or Representatives, as applicable, (iii) any such information is required by applicable Law, Order or a Governmental Body to be disclosed (including any report, statement, testimony or other submission to such Governmental Body) and reasonable advance written notice of such disclosure is provided to the applicable Party with respect to such confidential information to the extent permitted by applicable Law, or (iv) any such information was or becomes available to any of SunGard Data or its Affiliates or Representatives or to any of the Company, any of the Purchaser Parties or their respective Affiliates or Representatives, as applicable, on a non-confidential basis and from a source (other than those related to SunGard Datas prior ownership of the SMS Business, the Company and its Subsidiaries) that is not bound by an obligation of confidentiality with respect to such information.
7.13 Tax Matters.
51
(a) Parent and Purchaser shall, on a joint and several basis, be liable for, and shall indemnify and hold harmless each of the Seller Parties against, any Transfer Tax. SunGard Data, the Company and Parent shall cooperate with each other in the provision of any information or preparation of any documentation that may be necessary or useful for obtaining any available mitigation, reduction or exemption from any Transfer Taxes and shall each use their reasonable best efforts to minimize the incurrence of Transfer Taxes.
(b) Each Party agrees that, if the IRS Ruling is obtained, such Party will treat the Transactions contemplated under this Agreement for U.S. federal, State, foreign and local income tax purposes in accordance and consistent with the IRS Ruling.
7.14 Certain Agreements. At the Asset Closing, each of the Parties shall, and shall cause its Affiliates to, enter into each of the Ancillary Agreements (other than the Merger Agreement) and Ancillary Asset Agreements to which such Affiliate is or is intended to be a party or bound thereby and SunGard Data and Parent shall enter into the Escrow Agreement.
7.15 Ancillary Asset Agreements and Escrow Agreement. Between the date hereof and the Asset Closing, (a) each of the Parties shall negotiate in good faith each of the forms of the Ancillary Asset Agreements, and (b) each of SunGard Data and Parent shall negotiate in good faith a customary escrow agreement that is reasonably acceptable to each of SunGard Data, Parent and the Escrow Agent (the Escrow Agreement) pursuant to which, at the Asset Closing, the Estimated Merger Consideration (as defined in the Merger Agreement) will be delivered to the Escrow Agent for deposit into the Escrow Account pursuant to Section 3.6 and will be released from such Escrow Account at the Closing (as defined in the Merger Agreement) to Seller (as defined in the Merger Agreement) without further instruction from SunGard Data or Parent unless the condition set forth in Section 8.1(d) of the Merger Agreement has not been satisfied.
ARTICLE VIII
CONDITIONS TO ASSET CLOSING
8.1 Conditions to the Obligations of Each Party. The respective obligations of each Party to consummate the Asset Purchase are subject to the satisfaction on or prior to the Asset Closing of the following conditions, any or all of which may be waived, in whole or in part, by each Party to the extent permitted by applicable Law:
(a) all applicable waiting periods (and any extensions thereof) under the HSR Act will have expired or otherwise been terminated;
(b) (x) no Action commenced by any Governmental Antitrust Entity located in the United States pursuant to any applicable Competition Law shall be pending before any U.S. Governmental Body wherein an unfavorable Order would (i) prevent or prohibit consummation of any of the Transactions, or (ii) cause any of the Transactions to be rescinded following consummation, and (y) no such Order shall be in effect;
52
(c) no provision of any applicable Law making illegal or otherwise preventing or prohibiting the consummation of any of the Transactions shall be in effect and no temporary, preliminary or permanent Order preventing or prohibiting the consummation of any of the Transactions will be in effect;
(d) the Appraisal Report shall have been received by each of SunGard Data and Parent and, based on the Fair Market Value (after giving effect to any portion of the Purchased Assets to be excluded from this Agreement pursuant to Section 3.1(c)), the total gain for U.S. Federal income tax purposes projected to be recognized by the Company in respect of the sale of the Purchased Assets (after taking into account the Base Purchase Price, adjustments to the Purchase Price, the amount of Assumed Liabilities and any deductions allowed, or increases in the tax basis of the Purchased Assets, on account of the Assumed Liabilities) does not exceed the Maximum Gain; and
(e) the IRS Ruling shall have been received by each of SunGard Data and Parent, and shall not have been withdrawn or revoked in whole or in part.
8.2 Additional Conditions to the Obligations of the Seller Parties. The obligation of the Seller Parties to consummate the Asset Purchase is subject to the satisfaction on or prior to the Asset Closing of the following conditions, any or all of which may be waived, in whole or in part, by the Seller Parties to the extent permitted by applicable Law:
(a) (i) the representations and warranties of the Datatel Entities set forth in this Agreement and the Merger Agreement (other than those other representations and warranties that address matters as of particular dates) shall be true and correct as of the Asset Closing Date as though then made at and as of the Asset Closing Date (without giving effect to materiality, Datatel Material Adverse Effect, or similar phrases in the representations and warranties) and (ii) the representations and warranties of the Datatel Entities set forth in this Agreement and the Merger Agreement that address matters as of particular dates shall be true and correct as of such dates (without regard to materiality, Datatel Material Adverse Effect, or similar phrases in the representations and warranties), except where the failure of such representations and warranties referenced in the immediately preceding clauses (i) and (ii) to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Datatel Material Adverse Effect;
(b) each of the Datatel Entities shall have performed and complied in all material respects with all covenants required by the Merger Agreement and this Agreement to be performed or complied with by it at or prior to the Asset Closing; and
(c) the SunGard Entities shall have received a certificate signed by an executive officer of each of the Datatel Entities, dated as of the Asset Closing Date, certifying the satisfaction by the Datatel Entities of the conditions set forth in the foregoing clauses (a) and (b).
8.3 Additional Conditions to the Obligations of the Purchaser Parties. The obligation of Parent and Purchaser to consummate the Asset Purchase is subject to the satisfaction on or prior to the Asset Closing of the following conditions, any or all of which may be waived, in whole or in part, by Purchaser and Parent to the extent permitted by applicable Law:
53
(a) (1) (i) the representations and warranties of the SunGard Entities and the Company set forth in this Agreement and the Merger Agreement (other than (x) Section 4.1, (y) Section 4.1, Section 4.2, Section 5.2, Section 5.4(a), Section 5.4(b) and Section 5.5(b) (collectively the Fundamental Representations), Section 5.4(c) and Section 5.8(a)(ii) of the Merger Agreement and (z) those other representations and warranties that address matters as of particular dates) shall be true and correct as of the Asset Closing Date as though then made at and as of the Asset Closing Date (without giving effect to materiality, Business Material Adverse Effect, or similar phrases in the representations and warranties) and (ii) the representations and warranties of the SunGard Entities and the Company set forth in this Agreement and the Merger Agreement that address matters as of particular dates (other than the Fundamental Representations and the representations and warranties set forth in Section 4.1 and Section 5.4(c) and Section 5.8(a)(ii) of the Merger Agreement) shall be true and correct as of such dates (without regard to materiality, Business Material Adverse Effect, or similar phrases in the representations and warranties), except where the failure of such representations and warranties referenced in the immediately preceding clauses (i) and (ii) to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Business Material Adverse Effect; (2) the Fundamental Representations and Section 4.1 shall be true and correct in all material respects as of the Asset Closing Date as though made at and as of the Asset Closing Date (except for representations and warranties which address matters only as of a specific date, which representations and warranties shall continue as of the Asset Closing Date to be true and correct in all material respects as of such specific date); (3) the representations and warranties set forth in Section 5.8(a)(ii) of the Merger Agreement shall be true and correct in all respects as of the Asset Closing Date as though then made at and as of the Asset Closing Date and (4) the representations and warranties set forth in Section 5.4(c) of the Merger Agreement shall be true and correct in all respects as of the Asset Closing Date as though then made at and as of the Asset Closing Date (except, in the case of this clause 4, to the extent any failure to be so true and correct would not cause a failure of the condition contained in paragraph 4 of Exhibit D to the Debt Financing Commitment and the aggregate amount of such Indebtedness as a result of such failure to be so true and correct does not exceed $5,000,000);
(b) each of the SunGard Entities and the Company shall have performed and complied in all material respects with all covenants required by the Merger Agreement and this Agreement to be performed or complied with by it at or prior to the Asset Closing; and
(c) the Datatel Entities shall have received a certificate signed by an executive officer of each of the SunGard Entities and the Company, dated as of the Asset Closing Date, certifying the satisfaction by the SunGard Entities and the Company of the conditions set forth in the foregoing clauses (a) and (b).
54
ARTICLE IX
TERMINATION AND EXPENSES
9.1 Termination Event.
(a) This Agreement shall automatically terminate in the event the Merger Agreement is terminated in accordance with its terms.
(b) This Agreement (x) shall automatically terminate if either Parent or SunGard Data has not waived satisfaction of the condition set forth in Section 8.1(d) or Section 8.1(e), on or before the date on which the last of the following conditions has been satisfied: (i) at least 180 days have elapsed since the date of this Agreement; (ii) all of the conditions set forth in Section 8.1, Section 8.2 and Section 8.3 have been satisfied or waived (other than (a) the conditions set forth in Sections 8.1(d) and 8.1(e) and (b) those conditions that by their nature are to be satisfied by actions taken at the Asset Closing, but such conditions must be capable of being satisfied on such termination date as if it were the Asset Closing Date); and (iii) the Asset Closing otherwise would be required to occur pursuant to Section 3.2 of this Agreement but for the failure of one or both of the conditions set forth in Sections 8.1(d) and 8.1(e) to be satisfied or (y) shall immediately terminate upon the delivery of any written notice by Parent to SunGard Data that expressly references this Section 9.1(b)(y) and states that Parent is exercising its right to terminate this Agreement pursuant to this Section 9.1(b)(y).
9.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 9.1, this Agreement will forthwith become void and have no further force or effect, without any Liability (other than as set forth, and subject to the limitations included, in Section 9.2, Section 9.3 and Section 9.4 of the Merger Agreement) on the part of any Seller Party or Purchaser Party (or any Representative of any such Party); provided that, subject to Section 11.1 and the terms and limitations of Section 9.3 and Section 9.4 of the Merger Agreement, nothing in this Section 9.2 shall relieve any party of any Liability for any willful and material breach by such Party of this Agreement prior to the Asset Closing.
9.3 Expenses. Except as otherwise expressly provided in this Agreement and the Ancillary Agreements, each of the Seller Parties and each of the Purchaser Parties shall bear its own fees and expenses incurred in connection with the negotiation and execution of this Agreement, the Ancillary Agreements, the Ancillary Asset Agreements and each other agreement, document and instrument contemplated hereby and thereby and the consummation of the Transactions; provided, however, that (a) all reasonable and documented out-of-pocket fees and expenses of the Datatel Entities and their Subsidiaries in connection with the Restructuring shall be paid or reimbursed by SunGard Data and (b) all reasonable and documented out-of-pocket fees and expenses of the SunGard Entities in connection with the transactions to be performed under this Agreement shall be paid or reimbursed by the Datatel Entities (except to the extent such fees and expenses are incurred in connection with transactions that otherwise are required to occur pursuant to the Restructuring unless such fees and expenses are Excess Costs (as defined in the Merger Agreement) for which Parent is responsible pursuant to Exhibit C of the Merger Agreement).
55
ARTICLE X
INDEMNIFICATION
10.1 Indemnification.
(a) Following the Asset Closing and subject to the terms and conditions of this ARTICLE X, SunGard Data shall indemnify, defend and hold harmless the Purchaser Parties and their respective Affiliates (including the Company and its Subsidiaries), and their respective officers, directors, employees, stockholders, managers, members, partners, assigns and successors (each, a Datatel Indemnified Party) from and against, and shall compensate and reimburse each Datatel Indemnified Party for, all Losses imposed upon or incurred by such Datatel Indemnified Party (Datatel Losses), subject to Section 10.2, with respect to (i) any failure of any representation or warranty of the Seller Parties set forth in this Agreement (except for the representations and warranties with respect to Taxes) or in the certificate delivered pursuant to Section 8.3(c) of this Agreement to be true and correct or (ii) any breach of any covenant or agreement of the Seller Parties contained herein to be performed after the Asset Closing. The Datatel Indemnified Parties, whether under this Agreement or pursuant to Article X of the Merger Agreement, shall not be entitled to recover more than once for the same Datatel Loss and shall not be entitled to recover any Loss if and to the extent such Loss is reflected in the calculation of Company Transaction Fees and Expenses (as defined in the Merger Agreement) or SMS Closing Net Working Capital.
(b) Following the Asset Closing and subject to the terms and conditions provided in this ARTICLE X, Parent shall indemnify, defend and hold harmless SunGard Data and its Affiliates, and their respective officers, directors, employees, stockholders, managers, members, partners, assigns and successors (each, a SunGard Indemnified Party) from and against, and shall compensate and reimburse each SunGard Indemnified Party for, all Losses imposed upon or incurred by such SunGard Indemnified Party (SunGard Losses), subject to Section 10.2, with respect to (i) the failure of any representation or warranty of the Purchaser Parties set forth in this Agreement or in the certificate delivered pursuant to Section 8.2(c) of this Agreement to be true and correct or (ii) any breach of any covenant or agreement by the Purchaser Parties contained herein to be performed after the Asset Closing. The SunGard Indemnified Parties, whether under this Agreement or pursuant to Article X of the Merger Agreement, shall not be entitled to recover more than once for the same SunGard Loss.
(c) Notwithstanding the foregoing, Datatel Losses and SunGard Losses shall not include, and in no event shall any Datatel Loss or SunGard Loss be recoverable under the terms of this Agreement to the extent it consists of, punitive, special or exemplary damages, except to the extent such punitive, special or exemplary damages are awarded against any Datatel Indemnified Party or SunGard Indemnified Party, as the case may be, in a third-party claim.
(d) For the avoidance of doubt, other than with respect to the Merger Agreement, this ARTICLE X shall not apply to any representation, warranty, covenant or agreement made by any
56
SunGard Party, the Company or any Purchaser Party contained in any Ancillary Agreement or other agreement entered into in connection with the Transactions.
(e) Parent and Purchaser shall reimburse and indemnify SunGard Data and any of its Affiliates for, and hold them harmless against, any reasonable and documented out-of-pocket costs paid in connection with the Appraisal Report, the IRS Submissions, any audit by any Tax authority or any administrative or judicial proceeding in respect of the determination or allocation of the Purchase Price, the sale of the Purchased Assets or any other Transaction pursuant to this Agreement.
10.2 Certain Limitations.
(a) Notwithstanding anything contained herein to the contrary, SunGard Data shall not be obligated to indemnify Datatel Indemnified Parties for aggregate Capped Datatel Losses in excess of an amount equal to $1,775,000,000. Capped Datatel Losses means all Datatel Losses under this Agreement pursuant to Section 10.1(a) of this Agreement and all Datatel Losses (as defined in the Merger Agreement) under the Merger Agreement pursuant to Sections 10.1(a)(i), 10.1(a)(ii), 10.1(a)(iii) and 10.1(a)(iv) of the Merger Agreement.
(b) The representations and warranties of the Seller Parties and the Purchaser Parties contained in ARTICLE IV, ARTICLE V and ARTICLE VI of this Agreement shall not survive the Asset Closing; provided that the representations and warranties set forth in Sections 4.1, 5.1 and Section 6.1 shall survive indefinitely. The covenants and agreements contained in this Agreement shall not survive the Asset Closing; provided that the covenants and agreements contained in this Agreement to be performed after the Asset Closing shall survive until the date or dates explicitly specified therein or, if not so specified, until performed in accordance with their terms.
(c) The obligations to indemnify and hold harmless a Party pursuant to Sections 10.1(a) and 10.1(b) shall terminate when the applicable representation, warranty or covenant terminates pursuant to Section 10.2(b); provided, however, that such obligations to indemnify and hold harmless shall not terminate with respect to any item as to which the SunGard Indemnified Party or Datatel Indemnified Party, as the case may be, to be indemnified (each, an Indemnified Party) shall have, before the expiration of the applicable survival period, previously made a claim by delivering a written notice (stating in reasonable detail the basis of such claim) to the Indemnifying Party.
(d) Notwithstanding anything to the contrary in this Agreement, the obligations of Parent to reimburse, indemnify and hold harmless SunGard Data and its Affiliates pursuant to Section 10.1(e) shall survive indefinitely, including upon a termination of this Agreement.
10.3 Procedures for Third Party Claims.
(a) Third Party Claims. Promptly (but in no event later than ten (10) days) after the receipt by any Indemnified Party of a notice of any Action by any third party that may be subject to indemnification under this ARTICLE X, such Indemnified Party shall give written notice of such Action to the indemnifying Party hereunder (the Indemnifying Party),
57
stating in reasonable detail the nature and basis of each claim made in the Action and, to the extent known, the amount thereof along with copies of the relevant documents received by the Indemnified Party evidencing the Action and the basis for indemnification sought. Failure of the Indemnified Party to give such notice shall not relieve the Indemnifying Party from liability on account of this indemnification, except if and only to the extent that the Indemnifying Party is materially prejudiced thereby. The Indemnifying Party shall have the right to assume the defense of the Indemnified Party against the third party claim upon written notice to the Indemnified Party delivered within thirty (30) days after receipt of the particular notice from the Indemnified Party; provided, however, that the Indemnifying Party shall not have the right to assume the defense of the third party claim if it (x) seeks as a remedy the imposition of an equitable remedy that is binding upon any Purchaser Party or any of its Affiliates (including the Company or its Subsidiaries), (y) involves alleged criminal liabilities of the Indemnified Party or any of its Affiliates or (z) is subject to a limitation set forth in Section 10.2(a) and the amount at issue in such claim (together with all other pending and previously resolved claims subject to the same limitation set forth in Section 10.2(a) as such claim) that would not be subject to indemnification pursuant to this Article X as a result of the application of such limitation set forth in Section 10.2(a) is greater than the amount at issue that would be subject to indemnification after application of such limitation set forth in Section 10.2(a). So long as the Indemnifying Party has assumed the defense of, and diligently defends, the third party claim in accordance herewith and notified the Indemnified Party in writing thereof, (i) the Indemnified Party may retain separate co counsel at its sole cost and expense and participate in the defense of the third party claim, (provided, however, that the Indemnifying Party shall pay all reasonable costs and expenses of counsel for the Indemnified Party (A) after such time as the Indemnified Party has notified the Indemnifying Party of such third party claim and prior to such time as the Indemnifying Party has notified the Indemnified Party that it has assumed the defense of such third party claim or (B) if both the Indemnifying Party and the Indemnified Party are named parties to the proceedings and the Indemnified Party shall have concluded in good faith, based on advice from counsel, that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or the availability to the Indemnified Party of one or more defenses or counterclaims that are inconsistent with one or more of those that may be available to the Indemnifying Party in respect thereof; provided, further, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties), (ii) the Indemnified Party shall not file any papers or consent to the entry of any judgment or enter into any settlement with respect to the third party claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld, conditioned or delayed) and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the third party claim (other than a judgment or settlement that (A) is on exclusively monetary terms with such monetary amounts paid by the Indemnifying Party concurrently with the effectiveness of the settlement, (B) does not involve any finding or admission of violation of Law or admission of wrongdoing by the Indemnified Party, and (C) provides a complete and unconditional release of, or dismissal with prejudice of, all claims against any Indemnified Party potentially affected by such third party claim for all matters that were or could have been asserted in connection with such claim) without the prior written consent of the Indemnified Party (not to be unreasonably withheld, conditioned or delayed). Whether or not the Indemnifying Party shall have assumed the defense, such Indemnifying Party shall not be obligated to indemnify and hold harmless the
58
Indemnified Party hereunder for any settlement entered into without the Indemnifying Partys prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
(b) Procedures for Other Claims. An Indemnified Party shall promptly notify the Indemnifying Party in writing of any pending or threatened claim or demand (other than a third party claim) that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement, describing in reasonable detail, to the extent known by the Indemnified Party, the facts and circumstances with respect to the subject matter of such claim; provided, however, that the failure to provide such notice shall not release any Indemnifying Party from any of its obligations under this Agreement except to the extent such Indemnifying Party is materially prejudiced by such failure. In the event the Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to this Section 10.3(b), the Indemnifying Party shall notify the Indemnified Party within thirty (30) days following their receipt of such notice if the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement. If the Indemnifying Party does not so notify the Indemnified Party, the claim specified by the Indemnified Party in such notice shall be conclusively deemed to be a liability of the Indemnifying Party under this Agreement, and the Indemnifying Party shall pay, subject to the limitations identified in this Agreement, if applicable, the amount of such liability to the Indemnified Party on demand or, in the case of any notice in which the amount of the claim (or any portion of the claim) is estimated, on such later date when the amount of such claim (or such portion of such claim) becomes finally determined. If the Indemnifying Party disputes all or a portion of the claim from an Indemnified Party, the Indemnifying Party and the Indemnified Party shall use good faith efforts to resolve such dispute. If such dispute is not resolved within 30 days following the delivery by the Indemnifying Party of its notice of dispute, the Indemnifying Party and the Indemnified Party shall each have the right to submit such dispute to a court of competent jurisdiction in accordance with the provisions of Section 11.6.
(c) Treatment of Indemnification Payments; Insurance Recoveries. Any payment made pursuant to the indemnification obligations arising under this Agreement shall be treated as an adjustment to the Purchase Price. Any indemnity payment under this Agreement shall be decreased by any amounts actually recovered by the Indemnified Party under third party insurance policies with respect to such Loss (net of the expenses incurred in procuring such recovery and any premiums or other chargebacks paid by such Indemnified Party under the relevant insurance policy and any Taxes imposed on the proceeds of such policy). Each Party agrees (i) to use all reasonable efforts to recover all available insurance proceeds and (ii) to the extent that any indemnity payment under this Agreement has been paid by the Indemnifying Party to the Indemnified Party prior to the recovery by the Indemnified Party of such insurance proceeds, to promptly pay to the Indemnifying Party such amounts actually recovered by the Indemnified Party.
10.4 Remedies Exclusive; Mitigation. Following the Asset Closing, with the exception of remedies based on fraud, the remedies set forth in this ARTICLE X and Article X and Section 7.4 of the Merger Agreement shall constitute the sole and exclusive remedy for money damages and shall be in lieu of any other remedies for money damages that may be available to the Indemnified Parties under any other agreement or pursuant to any statutory or common law with respect to any Losses of any kind or nature incurred directly or indirectly resulting from or
59
arising out of this Agreement or the Merger Agreement (it being understood that nothing in this Section 10.4 or elsewhere in this Agreement or the Merger Agreement shall affect the Parties rights (a) to specific performance and other non-monetary equitable remedies with respect to the covenants referred to in this Agreement and the Merger Agreement to be performed after the Asset Closing or (b) under any of the other Ancillary Agreements (other than the Merger Agreement)). Each Party shall, and shall cause its Affiliates to, use commercially reasonable efforts to mitigate and minimize its Losses that are indemnifiable hereunder. Each of the Parties hereby waives any provision of any applicable Law to the extent that it would limit or restrict the agreements contained in this Section 10.4.
ARTICLE XI
GENERAL PROVISIONS
11.1 Remedies and Enforcement. Notwithstanding anything to the contrary in this Agreement, each of the Parties (a) acknowledges and agrees that the sole and exclusive remedies (whether at law, in equity, in contract, in tort or otherwise) prior to the Asset Closing relating to, arising out of and/or otherwise in connection with this Agreement, the Merger Agreement, the Financing Commitments and the transactions contemplated hereby and thereby are those set forth in, but subject to the limitations in, Article IX of the Merger Agreement (the Merger Agreement Remedies), (b) irrevocably and unconditionally waives its right to seek any remedy (whether at law, in equity, in contract, in tort or otherwise) prior to the Asset Closing relating to, arising out of and/or otherwise in connection with this Agreement, the Merger Agreement, the Financing Commitments and the transactions contemplated hereby and thereby other than the Merger Agreement Remedies and (c) acknowledges and agrees that prior to the Asset Closing, this Agreement, the Merger Agreement, the Financing Commitments and the transactions contemplated hereby and thereby may be enforced solely in accordance with, and subject to the limitations set forth in, Section 9.4 of the Merger Agreement.
11.2 Notices. All notices, requests, claims, demands and other communications under this Agreement will be in writing and will be deemed given if and when delivered personally or sent by overnight courier (providing proof of delivery) to the Parties at the following addresses (or at such address for a Party as will be specified by like notice):
(a) if to SunGard Data or, prior to the Closing (as defined in the Merger Agreement), the Company, to:
SunGard Data Systems Inc.
680 East Swedesford Road,
Wayne, PA 19087
Attention: General Counsel
Facsimile No.: (610) 687-3725
with a copy to:
Shearman & Sterling LLP
60
599 Lexington Avenue
New York, NY 10022
Attention: Clare OBrien
Facsimile No.: (646) 848-8966
(b) if to the Purchaser Parties, to:
c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, CA 94111
Attention: Arrie Park
Facsimile No.: (415) 788-0176
with a copy to:
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
Attention: Richard Capelouto
Chad Skinner
Facsimile No.: (650) 251-5002
(c) if, after the Closing, to the Company, to:
SunGard Higher Education Inc.
4 Country View Road
Malvern, PA19355
Attention: John Milana, CFO
Facsimile No.: (610) 578-5330
with a copy to:
Simpson Thacher & Bartlett LLP
2550 Hanover Street
Palo Alto, CA 94304
Attention: Richard Capelouto
Chad Skinner
Facsimile No.: (650) 251-5002
11.3 Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or by an electronic scan delivered by electronic mail), all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each Party and delivered to the other Parties, it being understood that all the Parties need not sign the same counterpart.
61
11.4 Entire Agreement; No Third-Party Beneficiaries. This Agreement and the Ancillary Agreements (including the Exhibits and the Schedules hereto and thereto), together with the Confidentiality Agreement, constitutes the entire agreement among the Parties hereto and supersedes any prior understandings, agreements or representations by or among the Parties hereto, written or oral, to the extent they related in any way to the subject matter hereof. This Agreement will not confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns, other than: (a) Section 11.1, Section 11.6, and Section 11.7 (which shall be for the benefit of, among others, the Financing Sources, and the Financing Sources, among others, will have the rights provided for therein); (b) Article X (which shall be for the benefit of the Datatel Indemnified Parties and the SunGard Indemnified Parties, and the Datatel Indemnified Parties and the SunGard Indemnified Parties will have the rights provided for therein); and (c) this ARTICLE XI in respect of the Sections set forth under the foregoing clauses (a) and (b).
11.5 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement will be assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties, which consent shall not be unreasonably withheld, except that each of the Purchaser Parties may assign, in its sole discretion, any or all of its rights, interests or obligations under this Agreement to any one or more of their Affiliates; provided that no such assignment will relieve the assigning Party from any of its obligations hereunder. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and assigns.
11.6 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of New York without giving effect to the principles of conflicts of law thereof or of any other jurisdiction which would require the application of any other States laws. Each of the Parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, the Merger Agreement, the Financing Commitments or the transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, the Merger Agreement, the Financing Commitments or the transactions contemplated hereby or thereby in any New York State or in any such Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other matter provided by law. Each of the Parties hereto agrees that service of process, summons, notice or document by registered mail addressed to you or us at the addresses set forth in Section 11.2 shall be effective service of process for any suit, action or proceeding brought in any such court. Each of the Parties hereto agrees that that the submissions, waivers and agreements in this Section 11.6 shall extend to any action or proceeding that involves any Financing Source.
62
11.7 Waiver of Jury Trial. Each of the Parties hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement, the Ancillary Agreements, the Financing Commitments or the transactions contemplated hereby and thereby, including the Merger and the Financing. Each of the Parties (a) certifies that no Representative, agent or attorney of any other Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver, (b) acknowledges that it and the other Parties have been induced to enter into this Agreement, , the Ancillary Agreements and the Merger, as applicable, by, among other things, the mutual waivers and certifications in this Section 11.7 and (c) agrees that such waivers and certifications shall extend to the Financing Sources.
11.8 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms of such illegal, invalid or unenforceable provision as may be possible; provided that the Parties intend that the remedies and limitations thereon contained in Section 11.1 to be construed as an integral provision of this Agreement and that such remedies and limitations shall not be severable in any manner that increases a partys liability or obligations hereunder or under the Financing Commitments.
11.9 Headings. Headings of the Articles and Sections of this Agreement are for convenience of the Parties only, and will be given no substantive or interpretive effect whatsoever.
11.10 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.
11.11 Extension; Waiver. At any time prior to the Asset Closing, the Parties may (a) extend the time for the performance of any of the obligations or other acts of the other Parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement or (c) waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing, signed on behalf of such Party. The failure of any Party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.
11.12 Non-Recourse. This Agreement may only be enforced against, and any claim or clause of action based upon, arising out of, or related to this Agreement may only be brought against the entities that are expressly named as Parties hereto and then only with respect to the specific obligations set forth herein with respect to such Party. No past, present or future director, officer, employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney or representative of any Party or any assignee of the foregoing shall have any Liability for any
63
obligations or Liabilities of any Party under this Agreement or the Ancillary Agreements or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the Transactions or in respect of any oral representations made or alleged to be made in connection herewith or therewith.
11.13 Interpretation. Words herein in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires. The term material shall, unless otherwise stated, mean material in relation to the HE Business, taken as a whole. The terms hereof, herein, and herewith and words of similar import herein (or in any Ancillary Agreement) shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) taken as a whole (including all of the schedules and exhibits hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified. The terms either and or are not exclusive and the word including and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) means including, without limitation. References to $ or otherwise to dollar amounts refer to the lawful currency of the United States. Unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to the date hereof, the date of this Agreement, hereby and hereupon and words of similar import shall all be references to August 4, 2011 (or the date of which the relevant Ancillary Agreement is first entered into, as the case may be) regardless of any amendment or restatement hereof (or thereof). The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.
[SIGNATURE PAGES FOLLOW]
64
IN WITNESS WHEREOF, the Parties have caused this Asset Purchase Agreement to be duly executed as of the date first above written.
SUNGARD DATA SYSTEMS INC. | ||
By: | /s/ Richard C. Tarbox | |
Name: Richard C. Tarbox | ||
Title: Senior Vice President Corporate Development | ||
SUNGARD HIGHER EDUCATION INC. | ||
By: | /s/ Richard C. Tarbox | |
Name: Richard C. Tarbox | ||
Title: Vice President |
[Signature Page to Asset Purchase Agreement]
SOPHIA, L.P. | ||||
By: |
SOPHIA HOLDING II GP, LLC, its general partner | |||
By: |
SOPHIA HOLDING I, L.P., its managing member | |||
By: |
SOPHIA HOLDING I GP, LLC, its general partner | |||
By: |
HELLMAN & FRIEDMAN CAPITAL PARTNERS VI (PARALLEL), L.P., its managing member | |||
By: |
HELLMAN & FRIEDMAN INVESTORS VI, L.P., its general partner | |||
By: |
HELLMAN & FRIEDMAN LLC, its general partner | |||
By: |
/s/ ANUPAM MISHRA | |||
Name: |
Anupam Mishra | |||
Title: |
Managing Director | |||
SOPHIA PURCHASER COMPANY, L.P. | ||||
By: |
SOPHIA HOLDING II GP, LLC, its general partner | |||
By: |
SOPHIA HOLDING I, L.P., its managing member | |||
By: | SOPHIA HOLDING I GP, LLC, its general partner | |||
By: |
HELLMAN & FRIEDMAN CAPITAL PARTNERS VI (PARALLEL), L.P., its managing member | |||
By: |
HELLMAN & FRIEDMAN INVESTORS VI, L.P., its general partner | |||
By: |
HELLMAN & FRIEDMAN LLC, its general partner | |||
By: |
/s/ ANUPAM MISHRA | |||
Name: |
Anupam Mishra | |||
Title: |
Managing Director |
[Signature Page to Asset Purchase Agreement]