EXHIBIT 2.4
SHARE EXCHANGE AGREEMENT
BY AND AMONG
MASTERCARD INCORPORATED
AND
THE SHAREHOLDERS OF MASTERCARD/EUROPAY U.K. LIMITED
DATED AS OF
, 2002
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
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ARTICLE I EXCHANGE OF SHARES............................... 2
Section 1.1. Exchange of Shares...................... 2
Section 1.2. Closing................................. 2
ARTICLE II MEPUK REPRESENTATIONS AND WARRANTIES............ 2
Section 2.1. Organization of MEPUK................... 2
Section 2.2. Capitalization.......................... 2
Section 2.3. Subsidiaries............................ 3
Section 2.4. No Conflicts............................ 3
Section 2.5. Governmental Approvals and Filings...... 3
Section 2.6. Financial Statements.................... 3
Section 2.7. Absence of Changes...................... 3
Section 2.8. No Undisclosed Liabilities.............. 3
Section 2.9. Taxes................................... 3
Section 2.10. Legal Proceedings....................... 4
Section 2.11. Compliance With Laws and Orders......... 4
Section 2.12. Real Property........................... 4
Section 2.13. Intellectual Property Rights............ 5
Section 2.14. Licenses................................ 5
Section 2.15. Insurance............................... 5
Section 2.16. Brokers................................. 5
Section 2.17. Employee Benefit Plans.................. 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE MEPUK
SHAREHOLDERS................................... 5
Section 3.1. Organization............................ 5
Section 3.2. Authority............................... 5
Section 3.3. Title................................... 5
Section 3.4. No Conflicts............................ 6
Section 3.5. Governmental Approvals and Filings...... 6
Section 3.6. Legal Proceedings....................... 6
Section 3.7. Brokers................................. 6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MC GLOBAL AND
MCI............................................. 6
Section 4.1. Representations and Warranties.......... 6
ARTICLE V CONDITIONS TO OBLIGATIONS........................ 7
Section 5.1. Conditions to Obligations of the MEPUK
Shareholders.......................................... 7
Section 5.2. Conditions to Obligations of MC Global
and MCI............................................... 7
ARTICLE VI INDEMNIFICATION................................. 7
Section 6.1. Survival................................ 7
Section 6.2. Indemnification by the MEPUK
Shareholders.......................................... 7
ARTICLE VII MISCELLANEOUS.................................. 8
Section 7.1. Notices................................. 8
Section 7.2. Further Assurances; Post-Closing
Cooperation........................................... 8
Section 7.3. Waiver.................................. 8
Section 7.4. Amendment............................... 8
Section 7.5. No Third Party Beneficiary.............. 8
Section 7.6. No Assignment; Binding Effect........... 8
Section 7.7. Headings................................ 8
</Table>
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<Table>
<Caption>
PAGE
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Section 7.8. Consent to Jurisdiction and Service of
Process............................................... 8
Section 7.9. Governing Law........................... 9
Section 7.10. Counterparts............................ 9
ARTICLE VIII DEFINITIONS................................... 9
Section 8.1. Definitions............................. 9
</Table>
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<Table>
EXHIBIT A Share Exchange and Integration Agreement
EXHIBIT B Certificate of Incorporation of MasterCard Incorporated
EXHIBIT C Bylaws of MasterCard Incorporated
EXHIBIT D Agreement and Plan of Merger
EXHIBIT E Officers' Certificate of MEPUK
EXHIBIT F Secretary's Certificate of MEPUK
</Table>
-iii-
SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "AGREEMENT") is entered into as of
, 2002, by and among MasterCard Incorporated, a Delaware corporation
("MC GLOBAL"), the undersigned shareholders (each, a "MEPUK SHAREHOLDER" and
collectively, the "MEPUK SHAREHOLDERS") of MasterCard/Europay U.K. Limited, a
company limited by shares organized and existing under the laws of England
("MEPUK"), and MEPUK (for purposes of Section 7.11 only). Terms used herein
shall have meanings ascribed to them in the Share Exchange and Integration
Agreement by and among MC Global, MasterCard International Incorporated, a
Delaware non-stock corporation ("MCI"), and Europay International S.A., a
Belgian company limited by shares ("EPI"), as amended, modified, supplemented or
restated from time to time, dated as of , 2002 (the "INTEGRATION
AGREEMENT"), substantially in the form of Exhibit A hereto, unless otherwise
defined herein.
RECITALS
WHEREAS, MCI operates a global payments system that supports a family of
proprietary brands including the MasterCard(R) and Cirrus(R) brands;
WHEREAS, EPI operates a European payments system that supports a family of
proprietary brands including the Eurocard(R), ec eurocheque(R) and ec Picto(R)
brands;
WHEREAS, MCI and EPI jointly operate a global payments system that supports
the Maestro(R) brand;
WHEREAS, MCI and EPI are parties to an Alliance Agreement, dated as of
November 14, 1996 (the "ALLIANCE AGREEMENT"), and a Maestro Agreement, dated as
of June 19, 1997 (the "MAESTRO AGREEMENT"), under which EPI was delegated
certain authority to manage the licensing of MCI's brands and Maestro(R) brands,
respectively, to European financial institutions;
WHEREAS, the Board of Directors of MCI and the Board of Directors of EPI
have each approved a transaction in which the business, assets and operations of
MCI and EPI will be combined into a single global enterprise, the parent of
which will be known as "MasterCard Incorporated," and immediately thereafter,
the Alliance Agreement and the Maestro Agreement will be terminated;
WHEREAS, each MEPUK Shareholder owns the number of ordinary shares of L1
each in MEPUK, set forth on the signature page hereof (the "MEPUK SHARES");
WHEREAS, the certificate of incorporation and the bylaws of MC Global, as
they will be in effect at the time of Closing, are attached in the form of
Exhibit B and Exhibit C hereto, respectively;
WHEREAS, in accordance with the terms of the Agreement and Plan of Merger
attached in the form of Exhibit D hereto, the existing Principal Membership
Interests in MCI will be converted (the "CONVERSION") into Class A membership
interests in MCI and shares of class A common stock, par value $.01 per share,
of MC Global (the "MC GLOBAL CLASS A STOCK") and class B common stock, par value
$.01 per share, of MC Global (the "MC GLOBAL CLASS B STOCK"), in an amount that
is proportionate to each Principal Member's existing equity interest in MCI; and
WHEREAS, in accordance with the terms of the Integration Agreement,
immediately following the Conversion, the MEPUK Shareholders will exchange (the
"MEPUK SHARE EXCHANGE") their MEPUK Shares for an aggregate of 4,728,565 shares
of MC Global Class A Stock and 900,679 shares of MC Global Class B Stock which,
when taken together with the shares of MC Global Class A Stock and MC Global
Class B Stock received by or for the benefit of the European members of MCI in
the Conversion and the shareholders of EPI (other than MCI and MEPUK) in the EPI
Share Exchange (as defined in the Integration Agreement), constitutes 33 1/3% of
the total outstanding MC Global Class A Stock and 33 1/3% of the total
outstanding MC Global Class B Stock;
WHEREAS, for United States federal income tax purposes, the parties intend
that the transactions contemplated by this Agreement and the related documents,
including (i) the Conversion, pursuant to which, in substance, the principal
members, association members and travelers cheque members of MCI will
effectively transfer to MC Global the equity rights associated with their
membership interests, in the form of a Class B membership interest in MCI, and
retain the contractual rights as licensees associated with their existing
membership interests in the form of Class A membership interests in MCI and
their existing license agreements in MCI, (ii) the Share Exchange (as defined in
the Integration Agreement) and (iii) the reallocations of shares of MC Global
Class A Stock and MC Global Class B Stock among the shareholders of MC Global,
shall together constitute an integrated series of transactions consisting solely
of transfers of property to MC Global in exchange for shares of MC Global Class
A Stock and MC Global Class B Stock described in Section 351(a) of the Internal
Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE OF SHARES
Section 1.1. Exchange of Shares. As of the Closing, and simultaneously
with the EPI Share Exchange and immediately following the Conversion:
(a) National Westminster Bank Plc immediately followed by the other
MEPUK Shareholders will transfer to MC Global with full title guarantee the
MEPUK Shares, free and clear of any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of
any kind, or any conditional sale contract, title retention contract or
other contract to give any of the foregoing (each, a "LIEN"), by delivering
to MC Global a certificate or certificates representing the MEPUK Shares
together with a duly executed stock transfer form endorsed in blank; and
(b) MC Global will issue to National Westminster Bank Plc and each of
the other MEPUK Shareholders the number of shares of MC Global Class A
Stock and the number of shares of MC Global Class B Stock set out in
Schedule 1.1(b).
Section 1.2. Closing. The exchange of MEPUK Shares for MC Global Class A
Stock and MC Global Class B Stock shall take place at the offices of Clifford
Chance Rogers & Wells LLP, 200 Park Avenue, New York, New York 10166 (or such
other place as the parties may agree in writing) at 10:00 a.m. local time on
, 2002 (the "CLOSING").
ARTICLE II
MEPUK REPRESENTATIONS AND WARRANTIES
The MEPUK Shareholders jointly and severally represent and warrant to MC
Global and MCI as to the matters set forth below:
Section 2.1. Organization of MEPUK. MEPUK is a company limited by shares
duly organized and validly existing under the laws of England and has all
requisite corporate power and authority to own, use and lease its Assets and
Properties (as defined herein) and to conduct its business as and to the extent
presently conducted. The name of each director and officer of MEPUK on the date
hereof, and the position with MEPUK held by each, are listed in Section 2.1 of
the Disclosure Schedule. Prior to the execution of this Agreement, MEPUK has
delivered to MC Global true and complete copies of the memorandum and articles
of association of MEPUK as in effect on the date hereof.
Section 2.2. Capitalization. The authorized capital stock of MEPUK
consists of 2,000 ordinary shares, of which 1,900 have been issued and are
outstanding. The MEPUK Shares, which constitute all of the issued and
outstanding shares of capital stock of MEPUK, are owned by the MEPUK
Shareholders in the amounts set forth on the signature pages hereof. The MEPUK
Shares have been duly authorized and validly issued and are fully paid and
nonassessable. Except for this Agreement, there are no outstanding Options with
respect to MEPUK.
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Section 2.3. Subsidiaries. MEPUK does not have, and has never had, any
Subsidiary.
Section 2.4. No Conflicts. The execution and delivery by MEPUK of this
Agreement do not, and the performance by MEPUK of its obligations under this
Agreement and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the memorandum and articles of
association of MEPUK;
(b) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to MEPUK or any of its Assets and
Properties; or
(c) except as disclosed in Section 2.4 of the Disclosure Schedule, (i)
conflict with or result in a violation or breach of, (ii) constitute (with
or without notice or lapse of time or both) a default under, (iii) require
MEPUK to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, (iv)
result in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (v) result in or give
to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under or (vi) result in the
creation or imposition of any Lien upon any Assets and Properties of MEPUK
under, any Contract or License to which MEPUK is a party or by which any of
its Assets and Properties is bound, except where the occurrence of any
circumstance specified in clauses (i) through (vi) above would not have a
material adverse effect on the Business or Condition of MEPUK.
Section 2.5. Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of MEPUK is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
Section 2.6. Financial Statements. Prior to the execution of this
Agreement, MEPUK has delivered or caused to be delivered to MC Global true and
complete copies of the audited balance sheets of MEPUK as of December 31, 1998,
December 31, 1999 and December 31, 2000, and the related audited statements of
operations and shareholders' equity for each of the financial years then ended,
together with a true and correct copy of the report on such audited information
for the years ended 1998, 1999 and 2000 by KPMG UK, MEPUK's independent
accountants for the periods identified, and all letters from such accountants
with respect to the results of such audits.
Except as set forth in the notes thereto, all such financial statements were
prepared in accordance with U.K. GAAP and fairly present the financial condition
and results of operations of MEPUK as of the respective dates of them and for
the respective periods covered by them.
Section 2.7. Absence of Changes. Except for the execution and delivery of
this Agreement and the transactions to take place pursuant hereto on the Closing
Date or as disclosed in Section 2.7 of the Disclosure Schedule, since the last
day of the most recent fiscal quarter of MEPUK for which Financial Statements
are delivered to MC Global, there has not been any material adverse change, or
any event or development which, individually or together with other such events,
could reasonably be expected to result in a material adverse change in the
Business or Condition of MEPUK.
Section 2.8. No Undisclosed Liabilities. Except as reflected or reserved
against in the balance sheet included in the Financial Statements for the most
recent fiscal year of MEPUK delivered to MC Global pursuant to Section 2.6 (the
"MEPUK AUDITED FINANCIAL STATEMENTS"), or in the notes thereto or as disclosed
in Section 2.8 of the Disclosure Schedule, (i) there are no Liabilities against,
relating to or affecting MEPUK or any of its Assets and Properties and (ii) no
payments shall be due to any Person pursuant to any agreement, whether written
or oral, as a result of the acquisition by MC Global of the MEPUK Shares in the
share exchange contemplated herein.
Section 2.9. Taxes.
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(a) MEPUK has filed all Tax Returns required to be filed by applicable
Law, maintained all documents and records relating to Taxes as are required
to be made or provided or maintained by it and has complied in all respects
with all legislation relating to Taxes applicable to it. All Tax Returns
were in all respects (and, as to Tax Returns not filed as of the date
hereof, will be) true, complete and correct and filed on a timely basis. No
claim has ever been made by an authority of a jurisdiction where MEPUK does
not file Tax Returns that it is or may be subject to taxation by that
jurisdiction.
(b) MEPUK has, within the time and in the manner prescribed by law,
paid (and until the Closing Date will pay within the time and in the manner
prescribed by law) all Taxes that are due and payable.
(c) MEPUK has established (and until the Closing Date will maintain)
on its Books and Records reserves adequate to pay all Taxes not yet due and
payable in accordance with U.K. GAAP that are reflected in the MEPUK
Audited Financial Statements to the extent required.
(d) There are no Tax Liens upon the assets of MEPUK except Liens for
Taxes not yet due.
(e) Except as disclosed in Section 2.9 of the Disclosure Schedule, no
audits or other administrative proceedings or court proceedings are
presently pending with regard to any Taxes or Tax Returns of MEPUK, and no
Tax Authority has notified MEPUK that it intends to investigate its Tax
affairs.
(f) MEPUK has complied (and until the Closing Date will comply) in all
respects with the provisions of applicable law relating to the payment and
withholding of Taxes, and has, within the time and in the manner prescribed by
law, withheld and paid over to the proper Governmental or Regulatory Authority
all amounts required in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party.
Section 2.10. Legal Proceedings. Except as disclosed in Section 2.10 of
the Disclosure Schedule (with paragraph references corresponding to those set
forth below):
(a) there are no Actions or Proceedings pending or, to the knowledge
of MEPUK, threatened against, relating to or affecting MEPUK or any of its
Assets and Properties which (i) could reasonably be expected to result in
the issuance of an Order restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by
this Agreement or otherwise result in a material diminution of the benefits
contemplated by this Agreement to MC Global and MCI, or (ii) if determined
adversely, could reasonably be expected to result in (x) any injunction or
other equitable relief against MEPUK that would interfere in any material
respect with its business or operations or (y) Losses by MEPUK;
(b) there are no facts or circumstances known to MEPUK that could
reasonably be expected to give rise to any Action or Proceeding that would
be required to be disclosed pursuant to clause (a) above; and
(c) there are no Orders outstanding against MEPUK.
Prior to the execution of this Agreement, MEPUK delivered or caused to be
delivered to MC Global all responses of counsel for MEPUK to auditors'
requests for information delivered in connection with the Financial
Statements (together with any updates provided by such counsel) regarding
Actions or Proceedings pending or threatened against, relating to or
affecting MEPUK.
Section 2.11. Compliance With Laws and Orders. MEPUK is not, nor has at
any time within the last five years been, or has received any notice that it is
or has at any time within the last five years been, in violation of or in
default under, in any material respect, any Law or Order applicable to MEPUK or
any of its Assets and Properties.
Section 2.12. Real Property.
(a) MEPUK does not own any freehold interest in real property.
(b) MEPUK has a valid and subsisting leasehold estate in and the right to
quiet enjoyment of the real properties leased by it as lessee for the full term
of the lease thereof. Each lease referred to in paragraph (b) is
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a legal, valid and binding agreement, enforceable in accordance with its terms,
of MEPUK and of each other Person that is a party thereto and there is no, and
MEPUK has not received notice of any, default (or any condition or event which,
after notice or lapse of time or both, would constitute a default) thereunder.
(c) No tenant or other party in possession of any of MEPUK's owned real
properties has any right to purchase, or holds any right of first refusal to
purchase, such properties.
Section 2.13. Intellectual Property Rights. Section 2.13 of the Disclosure
Schedule contains a list of trademarks, trade names, trademark registrations and
applications, and service marks that are material to the business of MEPUK.
MEPUK, as indicated, owns the entire right, title and interest including,
without limitation, the right to use and license the same. MEPUK has the right
to use any software it uses which is material to the running of its business.
Section 2.14. Licenses. MEPUK owns or validly holds all Licenses that are
material to its business or operations. Each such License is valid, binding and
in full force and effect; and MEPUK is not, or has not received any notice that
it is, in default (or with the giving of notice or lapse of time or both, would
be in default) under any such License.
Section 2.15. Insurance. The material insurance policies that insure the
business, operations or employees of MEPUK are in full force and effect, and are
in amounts and have coverages that are reasonable and customary for Persons
engaged in businesses and operations and having Assets and Properties similar to
MEPUK.
Section 2.16. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the MEPUK Shareholders
and MEPUK directly with MC Global and MCI without the intervention of any Person
on behalf of MEPUK in such manner as to give rise to any valid claim by any
Person against MC Global, MCI or MEPUK for a finder's fee, brokerage commission
or similar payment.
Section 2.17. Employee Benefit Plans. MEPUK does not maintain any employee
benefit plans for the benefit of its employees.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE MEPUK SHAREHOLDERS
Each of the undersigned MEPUK Shareholders hereby represents and warrants
severally, and not jointly and severally, to MC Global and MCI as to the matters
set forth below:
Section 3.1. Organization. It is duly organized, validly existing under
the laws of its jurisdiction of organization and has all requisite power and
authority to own, use and lease its assets and properties and to conduct its
business as and to the extent presently conducted.
Section 3.2. Authority. It has all requisite power and legal capacity to
execute and deliver this Agreement. Its execution, delivery and performance of
this Agreement have been duly and validly authorized by all necessary corporate
and shareholder action. This Agreement has been duly and validly executed and
delivered by such MEPUK Shareholder and constitutes a valid and legally binding
obligation of such MEPUK Shareholder enforceable against such MEPUK Shareholder
in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws relating to or affecting creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
Section 3.3. Title. It is the sole owner of the MEPUK Shares identified on
its signature page hereof as being owned by such MEPUK Shareholder. Upon the
delivery to MC Global at the Closing of a certificate or certificates
representing the MEPUK Shares owned by such MEPUK Shareholder in the manner set
forth in Article I, such MEPUK Shareholder will convey to MC Global, good and
marketable title to the MEPUK Shares held by such MEPUK Shareholder, in each
case free and clear of all Liens.
5
Section 3.4. No Conflicts. The execution and delivery by such MEPUK
Shareholder of this Agreement, do not, and the performance by such MEPUK
Shareholder of its obligations under this Agreement will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the memorandum and articles of
association (or other comparable charter documents) of such MEPUK
Shareholder;
(b) conflict with or result in a violation or breach of any term or
provision of any statute, order, rule or regulation of any government body
or regulatory authority having jurisdiction over such MEPUK Shareholder; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, (iii) require it to obtain any consent, approval or action of, make
any filing with or give any notice to any person as a result or under the
terms of, (iv) result in or give to any person any right of termination,
cancellation, acceleration or modification in or with respect to, (v)
result in or give to any person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under or (vi)
result in the creation or imposition of any Lien upon any assets and
properties of such MEPUK Shareholder under, any contract or license to
which it is a party or by which any of its assets and properties is bound.
Section 3.5. Governmental Approvals and Filings. Except as disclosed in
Section 3.5 of the Disclosure Schedule, no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part of
such MEPUK Shareholder is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby or thereby.
Section 3.6. Legal Proceedings. Except as disclosed in Section 3.6 of the
Disclosure Schedule (with paragraph references corresponding to those set forth
below):
(a) there are no Actions or Proceedings pending or, to its knowledge
threatened against, relating to or affecting such MEPUK Shareholder or any
of their respective Assets and Properties which could reasonably be
expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or otherwise result in a
material diminution of the benefits contemplated by this Agreement to MC
Global and MCI; and
(b) there are no facts or circumstances known to such MEPUK
Shareholder that could reasonably be expected to give rise to any Action or
Proceeding that would be required to be disclosed pursuant to clause (a)
above.
Section 3.7. Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the MEPUK Shareholders
and MEPUK directly with MC Global and MCI without the intervention of any Person
on behalf of such MEPUK Shareholder in such manner as to give rise to any valid
claim by any Person against MC Global, MCI or such MEPUK Shareholder for a
finder's fee, brokerage commission or similar payment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MC GLOBAL AND MCI
Section 4.1. Representations and Warranties. The MEPUK Shareholders shall
benefit from, and be subject to the conditions of, the representations and
warranties of MC Global and MCI set forth in Article III of the Integration
Agreement as though such representations and warranties were made in this
Agreement.
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ARTICLE V
CONDITIONS TO OBLIGATIONS
Section 5.1. Conditions to Obligations of the MEPUK Shareholders. The
obligations of the MEPUK Shareholders hereunder are subject to the fulfillment,
at or before the Closing, of all of the conditions to the obligations of EPI set
forth in Article VI of the Integration Agreement, except for the consummation of
the transactions contemplated hereunder.
Section 5.2. Conditions to Obligations of MC Global and MCI. The
obligations of MC Global and MCI hereunder are subject to the fulfillment, at or
before the Closing, of each of the following conditions (all or any of which may
be waived in writing in whole or in part by MC Global and MCI in their sole
discretion):
(a) Integration Agreement. All of the conditions to the obligations
of MC Global and MCI set forth in Article V of the Integration Agreement,
except for the consummation of the transactions contemplated hereunder.
(b) Representations and Warranties. Each of the representations and
warranties made by the MEPUK Shareholders in this Agreement (other than
those made as of a specified date earlier than the Closing Date) shall be
true and correct in all material respects (except that representations and
warranties that are qualified as to materiality or as to absence of
material adverse effect will be true and correct in all respects) on and as
of the Closing Date as though such representation or warranty was made on
and as of the Closing Date, and any representation or warranty made as of a
specified date earlier than the Closing Date shall have been true and
correct in all material respects (except that representations and
warranties that are qualified as to materiality or as to absence of
material adverse effect will be true and correct in all respects) on and as
of such earlier date.
(c) No Assets and Liabilities. MEPUK shall not have any assets and
liabilities, other than the EPI Shares it owns. MEPUK shall afford MCI and
MC Global, their counsel and their accountants, during normal business
hours, reasonable access to the books, records and other data relating to
MEPUK and its Subsidiaries in its possession so that MC Global and MCI may
confirm that this condition has been satisfied.
(d) Officers' Certificates. MEPUK shall have delivered to MC Global a
certificate, dated the Closing Date and executed by its Chairman of the
Board, its President or any Executive or Senior Vice President or Managing
Director, substantially in the form and to the effect of Exhibit E or
hereto, as applicable, and a certificate, dated the Closing Date and
executed by its Secretary, substantially in the form and to the effect of
Exhibit F hereto.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Survival. Articles II, III and IV hereof shall survive until
the third anniversary of the first day of the first fiscal quarter beginning
after the Closing.
Section 6.2. Indemnification by the MEPUK Shareholders. The MEPUK
Shareholders shall, jointly and severally, indemnify MC Global, MCI and each of
their respective officers, directors, employees, agents and affiliates in
respect of, and hold each of them harmless from and against, any and all losses,
claims, damages, liabilities and expenses suffered, incurred, assumed or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to (a) any breach of the representations and
warranties and covenants set forth in Articles II and VII hereof, (b) any
liability of MEPUK that relates to in any way the period up to and including the
Closing Date and (c) any loss, claim, damage, liability or action (private or
governmental) against MEPUK that arises in connection with the exemption review
by the Office of Fair Trading (the "OFT") of the agreement among the MEPUK
members relating to certain fees (namely, the multilateral interchange fee and
the multilateral service fee) in their UK Domestic Rules (the "OFT REVIEW"). The
MEPUK Shareholders shall, severally and not jointly and severally, indemnify MC
Global,
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MCI and each of their respective officers, directors, employees, agents and
affiliates in respect of, and hold each of them harmless from and against, any
and all losses, claims, damages, liabilities and expenses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to any breach of the representations and
warranties set forth in Article III hereof.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or mailed (first class postage prepaid), if to MC Global or
MCI, to 2000 Purchase Street, Purchase, New York 10577-2509, Attention: General
Counsel or, if to the MEPUK Shareholders, to the address set forth below the
signature of the MEPUK Shareholders or such other address as may be specified by
the MEPUK Shareholders in writing.
Section 7.2. Further Assurances; Post-Closing Cooperation. The parties
agree that after the Closing, they will cooperate with each other and provide
each other with such documents, instruments, materials and information and take
such other actions as each of them may reasonably request in order to (i) ensure
that any Assets and Properties of MEPUK, other than the EPI Shares it owns, that
exist as of the Closing Date (according to UK GAAP), will be transferred in
accordance with the instruction of the MEPUK Shareholders, (ii) put MC Global
and MCI in actual possession and operating control of MEPUK and the EPI Shares,
(iii) deliver or cause to be delivered to MC Global true and complete copies of
the audited balance sheets of MEPUK as of December 31, 2001 and the related
audited statements of operations and shareholders' equity for the financial year
ended December 31, 2001 as soon as such statements become available, and (iv)
cause the OFT to substitute a new entity to be formed by the MEPUK Shareholders
in place of MEPUK with respect to the OFT Review.
Section 7.3. Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
Section 7.4. Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
Section 7.5. No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other person other
than any person entitled to indemnity under Article VI.
Section 7.6. No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void. Subject to the foregoing, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
Section 7.7. Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
Section 7.8. Consent to Jurisdiction and Service of Process. Each of the
undersigned MEPUK Shareholders hereby irrevocably appoints Sullivan & Cromwell,
at its office at 125 Broad Street, New York, New York 10004, its lawful agent
and attorney to accept and acknowledge service of any and all process against it
in any action, suit or proceeding arising in connection with this Agreement and
upon whom such process may be served, with the same effect as if such party were
a resident of the State of New York and had been lawfully served with such
process in such jurisdiction, and waives all claims of error by reason of such
service, provided that in the case of any service upon such agent and attorney,
the party effecting such service
8
shall also deliver a copy thereof to the MEPUK Shareholders, as applicable, at
the address and in the manner specified in Section 7.1. The MEPUK Shareholders
will enter into such agreements with such agents as may be necessary to
constitute and continue the appointment of such agents hereunder. In the event
that such agent and attorney resigns or otherwise becomes incapable of acting as
such, the MEPUK Shareholders will appoint a successor agent and attorney in New
York, New York, reasonably satisfactory to MC Global, with like powers. Each
party to this Agreement hereby irrevocably submits to the exclusive jurisdiction
of the United States District Court for the Southern District of New York or any
court of the State of New York located in the County of New York in any such
action, suit or proceeding, and agrees that any such action, suit or proceeding
shall be brought only in such court (and waives any objection based on forum non
conveniens or any other objection to venue therein).
Section 7.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflicts of law principles.
Section 7.10. Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
Section 7.11. Waiver of Preemptive Rights. MEPUK hereby waives its
preemptive rights under the bylaws of EPI with respect to the direct or indirect
exchange or sale of EPI Shares by any shareholder of EPI in connection with any
of the transactions contemplated by the Integration Agreement.
ARTICLE VIII
DEFINITIONS
Section 8.1. Definitions. As used in this Agreement, the following defined
terms shall have the meanings indicated below:
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"ASSETS AND PROPERTIES" of any Person means all assets and properties
of every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the
goodwill related thereto, operated, owned or leased by such Person,
including, without limitation, cash, cash equivalents, securities, accounts
and notes receivable, chattel paper, documents, instruments, general
intangibles, real estate, equipment, inventory, goods and intellectual
property rights.
"BUSINESS OR CONDITION" means with respect to any Person, the
business, condition (financial or otherwise), results of operations, Assets
and Properties and prospects of that person and its Subsidiaries taken as a
whole.
"CONTRACT" means any agreement, lease, evidence of Indebtedness,
mortgage, indenture, security agreement or other contract (whether written
or oral).
"FINANCIAL STATEMENTS" means the financial statements of MEPUK
delivered to MC Global pursuant to Section 2.6.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other
instrumentality of any country, state, county, city or other political
subdivision.
"LAWS" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision or of any Governmental or Regulatory Authority.
"LIABILITIES" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
9
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"LIENS" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind,
or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any
shares of capital stock of such Person or any security of any kind
convertible into or exchangeable or exercisable for any shares of capital
stock of such Person or (ii) receive any benefits or rights similar to any
rights enjoyed by or accruing to the holder of shares of capital stock of
such Person, including any rights to participate in the equity, income or
election of directors or officers of such Person.
"ORDER" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"PERMITTED LIEN" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with U.S. GAAP
or U.K. GAAP, as applicable, (ii) any statutory Lien arising in the
ordinary course of business by operation of Law with respect to a Liability
that is not yet due or delinquent and (iii) any minor imperfection of title
or similar Lien which individually or in the aggregate with other such
Liens does not materially impair the value of the property subject to such
Lien or the use of such property in the conduct of the business of MEPUK.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, proprietorship, other business organization, trust,
union, association or Governmental or Regulatory Authority.
"SUBSIDIARY" means any Person in which any other Person directly or
indirectly through one or more Subsidiaries or otherwise, beneficially owns
more than 50% of either the equity interests or the voting control. Unless
the context otherwise requires, all references herein to a "Subsidiary"
mean a Subsidiary of MEPUK.
"TAX AUTHORITY" means the U.K. Inland Revenue and any country, state,
local, foreign or other Governmental or Regulatory Authority charged by law
with the administration or collection of any Tax.
"TAX RETURN" means a report, return, notification or other information
required to be supplied to a Governmental or Regulatory Authority with
respect to Taxes.
"TAXES" means any national, state, county, local or foreign taxes,
charges, surcharges, fees, levies, or other assessments, including all net
income, gross income, sales and use, value added, ad valorem, transfer,
gains, profits, excise, franchise, real and personal property, gross
receipt, capital stock, production, business and occupation, disability,
employment, payroll, license, estimated, stamp, duties, imposts, severance
or withholding taxes or charges imposed by any government entity, and
includes any interest and penalties (civil or criminal) on or additions to
any such taxes and any expenses incurred in connection with the
determination, settlement or litigation of any Tax liability.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Share Exchange
Agreement as of the date first above written.
MASTERCARD INCORPORATED
By:
------------------------------------
Name:
Title:
MASTERCARD/EUROPAY U.K. LIMITED
By:
------------------------------------
Name:
Title:
11
ABBEY NATIONAL plc
By:
--------------------------------------
Name:
Title:
Address:
Abbey National House
2 Triton Square
Regent's Place
London NW1 3AN
England
No. of Shares: 2
12
AIB GROUP (UK) plc
By:
--------------------------------------
Name:
Title:
Address:
4 Queens Square
Belfast BT1 3DJ
Republic of Ireland
No. of Shares: 2
13
ALLIANCE & LEICESTER plc
By:
--------------------------------------
Name:
Title:
Address:
Carlton Park
Narborough
Leicester LE9 5XX
England
No. of Shares: 26
14
BANK OF IRELAND
By:
--------------------------------------
Name:
Title:
Address:
Lower Baggot Street
Dublin 2
Republic of Ireland
No. of Shares: 6
15
BANK OF SCOTLAND
By:
--------------------------------------
Name:
Title:
Address:
The Mound
Edinburgh EH1 1YZ
Scotland
No. of Shares: 72
BARCLAYS BANK plc
By:
--------------------------------------
Name:
Title:
Address:
54 Lombard Street
London EC3P 3AH
England
No. of Shares: 274
16
HFC BANK plc
By:
--------------------------------------
Name:
Title:
Address:
North Street
Winkfield, Windsor
Berkshire SL4 4TD
England
No. of Shares: 116
17
HSBC BANK plc
By:
--------------------------------------
Name:
Title:
Address:
27-32 Poultry
London EC2P 2BX
England
No. of Shares: 306
18
LLOYDS TSB BANK plc
By:
--------------------------------------
Name:
Title:
Address:
71 Lombard Street
London EC3P 3BS
England
No. of Shares: 218
19
MBNA EUROPE BANK LIMITED
By:
--------------------------------------
Name:
Title:
Address:
Chester Business Park
Chester CH4 9FB
England
No. of Shares: 58
20
MORGAN STANLEY DEAN WITTER BANK
LIMITED
By:
--------------------------------------
Name:
Title:
Address:
25 Cabot Square
Canary Wharf
London E14 4QA
England
No. of Shares: 2
21
NATIONAL AUSTRALIA GROUP EUROPE
LIMITED
By:
--------------------------------------
Name:
Title:
Address:
88 Wood Street
London EC2V 7QQ
England
No. of Shares: 36
22
NATIONAL WESTMINSTER BANK PLC
By:
--------------------------------------
Name:
Title:
Address:
135 Bishopsgate
London EC2M 3UR
England
No. of Shares: 640
23
THE ROYAL BANK OF SCOTLAND PLC
By:
--------------------------------------
Name:
Title:
Address:
36 St. Andrew Square
Edinburgh EH2 2YE
Scotland
No. of Shares: 142
24