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Agreement and Plan of Merger |
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2002 |
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$80 |
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AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 23, 2002
BY AND AMONG
FIDELITY NATIONAL INFORMATION SOLUTIONS, INC.
FD ACQUISITION CORP.
FACTUAL DATA ACQUISITION CORP.
AND
FACTUAL DATA CORP.
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of July 23, 2002, by and among
Factual Data Corp., a Colorado corporation (the "Company"), Fidelity National
Information Solutions, Inc., a Delaware corporation ("FNIS"), FD Acquisition
Corp., a Colorado corporation and wholly-owned subsidiary of FNIS ("First Merger
Sub"), and Factual Data Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of FNIS ("Second Merger Sub") (the "Agreement").
RECITALS
WHEREAS, the Boards of Directors of the Company, FNIS, First Merger Sub
and Second Merger Sub each have determined that a business combination between
the Company and FNIS is advisable and in the best interests of their respective
companies and stockholders and presents an opportunity for their respective
companies to achieve long-term strategic and financial benefits, and accordingly
have agreed to effect the merger provided for herein upon the terms and subject
to the conditions set forth herein;
WHEREAS, the parties hereto intend that, in the event of a Combination
Cash and Stock Exchange (as defined below), the merger provided for herein shall
qualify for U.S. federal income tax purposes as a reorganization within the
meaning of Section 368 of the U.S. Internal Revenue Code of 1986, as amended
(together with the rules and regulations promulgated thereunder, the "Code") (a
"368 Reorganization"); and
WHEREAS, by resolutions duly adopted, the respective Boards of
Directors of the Company, FNIS, First Merger Sub and Second Merger Sub have
approved and adopted this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
(a) As used herein, the following terms have the following
meanings:
"Affiliate" means, with respect to any Person, any other
Person, directly or indirectly, controlling, controlled by, or under common
control with, such Person. For purposes of this definition, the term "Control"
(including the correlative terms "Controlling," "Controlled By" and "Under
Common Control With") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
"Average FNIS Common Share Price" means the average of the
daily closing prices of a FNIS Common Share (calculated to the nearest 0.0001)
on The Nasdaq National Market for the ten (10) consecutive trading days
immediately preceding and including the Determination Date (or, in the event
that there is no trading of FNIS Common Shares on any day during the
10-trading-day
1
<PAGE>
period, for such lesser number of days within such 10-trading-day period when
FNIS Common Shares are traded).
"Business Day" means any day other than a Saturday, Sunday or
one on which banks are authorized by law to close in Los Angeles, California.
"Company Common Share" means one share of common stock of the
Company without par value.
"Company SEC Documents" means (i) the annual report on Form
10-K of the Company (the "Company 10-K") for the fiscal year ended December 31,
2001 as amended on April 26, 2002, (ii) the quarterly report on Form 10-Q of the
Company (the "Company 10-Q") for the fiscal quarter ended March 31, 2002, and
(iii) all other reports, filings, registration statements and other documents
filed by the Company with the SEC since December 31, 2001.
"Contracts" means agreements, arrangements, commitments,
contracts, letters of intent, memoranda of understanding, promises, obligations,
rights, instruments, documents or similar understandings, whether written or
oral, formal or informal.
"Determination Date" means the date of satisfaction or, to the
extent permitted in the Agreement, waiver of, the conditions set forth in
Article X (other than conditions that by their nature are to be satisfied at the
Closing).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"FNIS Common Share" means one share of common stock of FNIS,
$0.001 par value per share.
"FNIS SEC Documents" means (i) FNIS's annual report on Form
10-K for its fiscal year ended December 31, 2001 (the "FNIS 10-K"), as amended
on April 30, 2002, (ii) FNIS's quarterly report on Form 10-Q (the "FNIS 10-Q")
for its fiscal quarter ended March 31, 2002, as amended on May 21, 2002, and
(iii) all other reports, filings, registration statements and other documents
filed by FNIS with the SEC since December 31, 2001.
"Fixed Assets" means plants, buildings, fixtures, structures,
furniture and equipment owned, leased or used by the Company or its Subsidiaries
which have an individual value of at least $10,000.
"Governmental Entity" means any federal, state, municipal or
local governmental authority, any foreign or international governmental
authority, or any court, administrative or regulatory agency or commission or
other governmental agency.
"Indemnifying Shareholder" means each of, and "Indemnifying
Shareholders" means collectively, the following Persons: J.H. Donnan, James N.
Donnan and Russell E. Donnan.
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together will all of the goodwill
associated therewith, (iii) copyrights (registered and unregistered) and
copyrightable works
2
<PAGE>
and registrations and applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer software,
data, data bases and documentation thereof, (vi) trade secrets and other
confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial and marketing plans and
customer and supplier lists and information), (vii) other intellectual property
rights, (viii) Internet URLs, and (ix) copies and tangible embodiments thereof
(in whatever form or medium).
"Knowledge" (and all correlative terms) as to FNIS or the
Company means the actual knowledge of the executive officers or senior
management identified on Section 1.1 of FNIS's or the Company Disclosure
Schedule, respectively, and as to each other Person, means the actual knowledge
of that Person.
"Law" means all laws, statutes and ordinances and all
regulations, rules and other pronouncements of Governmental Entities having the
effect of law of the United States, any foreign country or any foreign or
domestic state, province, commonwealth, city, country, municipality, territory,
protectorate, possession or similar instrumentality or any Governmental Entity
thereof.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset; provided, however, that the term "Lien" shall not include (i) liens for
water and sewer charges and taxes not yet due and payable or being contested in
good faith (and for which adequate accruals or reserves have been established by
the Company or FNIS, as the case may be) and (ii) mechanics', carriers',
workers', repairers', materialmen's, warehousemen's and other similar liens
arising or incurred in the ordinary course of business.
"Material Adverse Effect" means a material adverse effect on
the financial condition, business or results of operations of a Person and its
Subsidiaries, taken as a whole, other than (x) effects caused by (i) changes in
general economic or securities markets conditions, (ii) changes in interest rate
levels, (iii) changes that affect the real estate services industry, (iv) (A) in
the case of the Company, the identity of FNIS as the acquiror of the Company or
the conduct of FNIS with respect to the transactions contemplated by this
Agreement prior to the Effective Time, or (B) in the case of FNIS, the identity
of the Company as the acquired party or the conduct of the Company with respect
to the transactions contemplated by this Agreement prior to the Effective Time,
or (v) the public announcement of the transactions contemplated by this
Agreement. "FNIS Material Adverse Effect" means a Material Adverse Effect in
respect of FNIS and its Subsidiaries, taken as a whole, and "Company Material
Adverse Effect" means a Material Adverse Effect in respect of the Company and
its Subsidiaries, taken as a whole.
"Maximum Cash Amount" means an amount determined by FNIS in
consultation with its tax advisers that will not adversely affect the treatment
of the Double Merger (as defined herein) as a tax free reorganization within the
meaning of Section 368 of the Code.
"Merger Share" means a Company Common Share outstanding
immediately prior to the Effective Time (other than Dissenting Shares (as
hereinafter defined) and other than shares to be cancelled in accordance with
Section 3.1(a) hereof).
3
<PAGE>
"Merger Sub Share" means one share of common stock of First
Merger Sub, without par value.
"Option Exchange Ratio" means a fraction, (i) the numerator of
which is Thirteen Dollars and Seventy-Five Cents ($13.75) and (ii) the
denominator of which is the Average FNIS Common Share Price.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity, quality and frequency) of the relevant Person and its Subsidiaries in
the industry in which the relevant Person and its Subsidiaries does business.
"Per Share Cash Consideration" means any amount of cash
determined by FNIS, in its sole discretion, provided such amount shall not be
less than $3.4375 or greater than $6.875.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Entity.
"Principal Shareholders" means each and all of the following
Persons: J.H. Donnan, James N. Donnan, Todd A. Neiberger, Russell E. Donnan,
Robert J. Terry, Abdul H. Rajput, Daniel G. Helle, J. Barton Goodwin, Marcia R.
Donnan, CIVC Fund L.P. and BCI Growth V, L.P.
"Proposal" means any offer or proposal, indication of interest
(by public announcement or otherwise), or inquiry with respect to the Company's
willingness to receive or discuss an offer or proposal.
"Proxy Statement/Prospectus" means the proxy
statement/prospectus including the Registration Statement and the proxy
statement for the shareholders of the Company, together with any amendments or
supplements thereto.
"Registration Statement" means the Registration Statement on
Form S-4 registering under the Securities Act the FNIS Common Shares issuable in
connection with the First Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Stock Exchange Ratio" means a fraction, (i) the numerator of
which is equal to Thirteen Dollars and Seventy-Five Cents ($13.75) minus the Per
Share Cash Consideration and (ii) the denominator of which is the Average FNIS
Common Share Price (calculated to the nearest 0.0001).
"Subsidiary" when used with respect to any Person, means any
other Person, whether incorporated or unincorporated, of which (i) more than 50%
of the securities or other ownership interests or (ii) securities or other
interests having by their terms ordinary voting power to elect more than 50% of
the board of directors or others performing similar functions with respect to
such corporation or other organization, is directly owned or controlled by such
Person or by any one or more of its Subsidiaries.
4
<PAGE>
"Superior Proposal" means a bona fide written Takeover
Proposal made by a Person (or group of Persons) other than FNIS or its
Subsidiaries (i) on terms which the Company's Board of Directors by a majority
vote determines in good faith (after consultation with its independent financial
advisors and outside legal counsel) would result in a transaction, if
consummated, that is more favorable to the Company and the Company's
shareholders, from a financial point of view (taking into account, among other
things, all legal, financial, regulatory and other aspects of the Proposal,
including conditions to consummation) than the transactions contemplated hereby,
such that the Company's Board of Directors is obligated to accept such proposal
in order to comply with its fiduciary duties under applicable law and (ii) for
which any required financing is irrevocably committed in writing executed by the
Person providing such financing or, in the good faith determination of a
majority of the Board of Directors of the Company, such Person is reasonably
capable of providing such financing.
"Takeover" means, other than by FNIS or its Subsidiaries, (i)
a tender or exchange offer for 50% or more of the equity of the Company, (ii) a
merger, reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries as a result of which the Company's
shareholders prior to such transaction (by virtue of their ownership of Company
Common Shares) in the aggregate own less than 50% of the voting securities of
the entity surviving or resulting from such transaction (or the ultimate parent
entity thereof), or (iii) a sale, lease, exchange, transfer or other disposition
of at least 50% of the assets of the Company and its Subsidiaries, taken as a
whole, in a single transaction or a series of related transactions.
"Takeover Proposal" means any unsolicited Proposal for a
Takeover.
"Tax" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs, ad valorem, duties, capital stock, franchise, profits
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
<Table>
<Caption>
Terms Section
----- -------
<S> <C>
368 Reorganization Recitals
All Cash Consideration Section 3.1(b)(i)
Articles of Incorporation Section 2.3
Articles of First Merger Section 2.2(a)
Average FNIS Common Share Price Section 1.1(a)
Basket Amount Section 12.2(a)
Burdensome Condition Section 9.1
CBCA Section 2.1(a)
Certificate of Incorporation Section 2.3
Certificate of Second Merger Section 2.2(a)
Closing Section 2.2(b)
Code Recitals
Combination Cash and Stock Exchange Section 3.1(b)(ii)
</Table>
5
<PAGE>
<Table>
<Caption>
Terms Section
----- -------
<S> <C>
Company Preamble
Company 10-K Section 1.1(a)
Company 10-Q Section 1.1(a)
Company Employee Plans Section 4.15(a)
Company Financial Statements Section 4.8
Company Option Section 3.5(a)
Company Recommendation Section 7.2
Company Returns Section 4.14(a)
Company Securities Section 4.5(b)
Company Shareholder Approval Section 4.31(a)
Company Shareholders Meeting Section 7.2
Competing Transaction Section 7.3(a)
Confidentiality Agreement Section 7.3(a)
Damages Section 12.1
DGCL Section 2.1(b)
Dissenting Shares Section 3.6(a)
Double Merger Section 2.1(b)
Effective Time Section 2.2(a)
End Date Section 11.1(b)(i)
Environmental Laws Section 4.20(b)
ERISA Section 4.15(a)
Estimated Dissenters' Payment Section 3.1(e)
Exchange Agent Section 3.4(a)
Exchange Fund Section 3.4(a)
First Merger Section 2.1(a)
First Merger Sub Recital
First Surviving Corporation Section 2.1(a)
First Surviving Corporation Bylaws Section 2.3
FNIS Preamble
FNIS 10-Ks Section 1.1(a)
FNIS 10-Q Section 1.1(a)
FNIS Financial Statements Section 5.10
FNIS Option Section 3.5(a)
FNIS Securities Section 5.8(b)
GAAP Section 4.8
HSR Act Section 4.3
Indemnified Parties Section 12.1
Indemnifying Shareholders Section 1.1(a)
Knowledge Section 1.1(a)
Option Conditions Section 4.5
Principal Shareholders Section 1.1(a)
Restricted Stock Agreement Section 7.5
Second Merger Section 2.1(b)
Second Merger Sub Preamble
Second Surviving Corporation Section 2.1(b)
Second Surviving Corporation Bylaws Section 2.3
Subsequent Causal Event or Circumstance Section 11.1(d)(ii)
Superior Proposal Section 1.1(a)
</Table>
6
<PAGE>
<Table>
<Caption>
Terms Section
----- -------
<S> <C>
Takeover Section 1.1(a)
Takeover Proposal Section 1.1(a)
Termination Fee Section 11.3(c)
Voting Agreement Section 7.4
</Table>
ARTICLE II
THE MERGER
Section 2.1 The Merger.
(a) At the Effective Time, First Merger Sub shall be merged
(the "First Merger") with and into the Company in accordance with the terms and
conditions of this Agreement and of the Colorado Business Corporation Act (the
"CBCA"). Immediately following the First Merger, the separate existence of First
Merger Sub shall cease, and the Company shall be the surviving corporation (the
"First Surviving Corporation"), and shall succeed to and assume all the rights
and obligations of the Company and First Merger Sub in accordance with the CBCA.
(b) In the event that FNIS elects the Combination Cash and
Stock Exchange under Section 3.1(b) below, following the First Merger, as part
of the same plan of reorganization and within three (3) Business Days following
the First Merger, or as soon thereafter as practicable, the First Surviving
Corporation shall be merged (the "Second Merger") with and into the Second
Merger Sub in accordance with the terms and conditions of this Agreement and of
the Delaware General Corporations Law (the "DGCL") and the CBCA, as applicable.
Immediately following the Second Merger, the separate corporate existence of the
First Surviving Corporation shall cease and the Second Merger Sub shall continue
as the surviving corporation, (the "Second Surviving Corporation"), and shall
succeed to and assume all the rights and obligations of the First Surviving
Corporation and Second Merger Sub in accordance with the DGCL (the "Double
Merger").
Section 2.2 Closing; Effective Time.
(a) Not later than the second Business Day after the
Determination Date, and subject to the satisfaction of any condition that by its
nature is to be satisfied at the Closing, the Company and First Merger Sub will
file articles of merger (the "Articles of First Merger") with the Secretary of
State of the State of Colorado and make all other filings or recordings required
by the CBCA in connection with the First Merger, and, in the event of a Double
Merger, within three (3) Business Days after the Effective Time or as soon as
practicable thereafter, the First Surviving Corporation and the Second Merger
Sub will file a certificate of merger (the "Certificate of Second Merger") with
the Secretary of State of the State of Delaware and make all other filings or
recordings required by the DGCL and/or CBCA in connection with the Second
Merger. The term "Effective Time" means the date and time of the filing of the
Articles of First Merger with the Secretary of State of the State of Colorado
(or such later time as may be agreed to by each of the parties hereto and
specified in the Articles of First Merger in accordance with the CBCA).
(b) The closing of the First Merger (the "Closing"), and, in
the event of a Double Merger, of the Second Merger, shall be held at the offices
of Stradling Yocca Carlson & Rauth, 660 Newport Center Drive, Suite 1600,
Newport Beach, California (or such other place as agreed by the parties) at
10:00 a.m. California time on a date or dates to be specified by the parties,
which, in the case of the First Merger, shall be no later than the second
Business Day after the Determination Date,
7
<PAGE>
unless the parties hereto agree to another date or time, and, in the case of the
Second Merger, shall be no later than the third Business Day following the
Effective Time or as soon as practicable thereafter.
Section 2.3 Certificate of Incorporation and By-laws of the Surviving
Corporations. In the case of the First Merger, the articles of incorporation of
the Company, as in effect immediately prior to the Effective Time, shall be the
articles of incorporation of the First Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law (as so amended, the
"Articles of Incorporation"), and, in the event of a Double Merger, the
certificate of incorporation of the Second Merger Sub, as in effect immediately
prior to the effective time of the Second Merger, shall be the certificate of
incorporation of the Second Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law (as so amended, the
"Certificate of Incorporation"). The by-laws of the Company, as in effect
immediately prior to the Effective Time, shall be the by-laws of the First
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law (as so amended, the "First Surviving Corporation By-laws"),
and in the event of a Double Merger, the by-laws of the Second Merger Sub, as in
effect immediately prior to the effective time of the Second Merger, shall be
the by-laws of the Second Surviving Corporation until thereafter changed or
amended as provided therein or by applicable law (as so amended, the "Second
Surviving Corporation By-laws").
Section 2.4 Directors and Officers of the Surviving Corporations. From
and after the Effective Time, the directors of the First Surviving Corporation
shall be the persons who were the directors of First Merger Sub immediately
prior to the Effective Time, and the officers of the First Surviving Corporation
shall be the persons who were the officers of the First Merger Sub immediately
prior to the Effective Time. In the event of a Double Merger, from and after the
effective time of the Second Merger, the directors of the Second Surviving
Corporation shall be the persons who were the directors of Second Merger Sub
immediately prior to the effective time of the Second Merger, and the officers
of the Second Surviving Corporation shall be the persons who were the officers
of the Second Merger Sub immediately prior to the effective time of the Second
Merger. Said directors and officers of the First Surviving Corporation and the
Second Surviving Corporation shall hold office for the term specified in, and
subject to the provisions contained in, the Articles of Incorporation and First
Surviving Corporation By-Laws, with respect to the First Surviving Corporation,
and Certificate of Incorporation and Second Surviving Corporation By-laws, with
respect to the Second Surviving Corporation, and applicable law. If, at or after
the Effective Time, a vacancy shall exist on the Board of Directors or in any of
the offices of the First Surviving Corporation, such vacancy shall be filled in
the manner provided in the Articles of Incorporation and the First Surviving
Corporation By-laws. If, at or after the effective time of the Second Merger, a
vacancy shall exist on the Board of Directors or in any of the offices of the
Second Surviving Corporation, such vacancy shall be filled in the manner
provided in the Certificate of Incorporation and the Second Surviving
Corporation By-laws.
ARTICLE III
CONVERSION OF SECURITIES AND RELATED MATTERS
Section 3.1 Conversion of Company Capital Stock. At the Effective Time,
by virtue of the First Merger:
(a) Each Company Common Share held by the Company as treasury
stock or owned by FNIS or any of its Subsidiaries immediately prior to the
Effective Time shall be cancelled, and no payment shall be made in respect
thereof.
8
<PAGE>
(b) Subject to Section 3.1(e) and Section 3.6 hereof, each
Merger Share shall be cancelled and, at the Effective Time, shall be converted
into the right to receive, at the election of FNIS (which election, including
the determined amount of the Per Share Cash Consideration, shall be applicable
to all Merger Shares), either: (i) cash of Thirteen Dollars and Seventy-Five
Cents ($13.75) (Section 3.1(b)(i) shall be referred to herein as the "All Cash
Consideration"), or (ii) the Per Share Cash Consideration and a number of FNIS
Common Shares equal to the Stock Exchange Ratio (Section 3.1(b)(ii) shall be
referred to herein as the "Combination Cash and Stock Exchange").
(c) Each Merger Sub Share issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of common stock, without par
value, of the First Surviving Corporation, and the First Surviving Corporation
shall be a wholly owned subsidiary of FNIS. Each stock certificate of First
Merger Sub evidencing ownership of any such shares shall continue to evidence
ownership of such shares of capital stock of the First Surviving Corporation.
(d) Notwithstanding anything to the contrary in this Section
3.1, in the event that the Average FNIS Common Share Price is less than
twenty-five dollars ($25.00), FNIS shall have the option, in the event of a
Combination Cash and Stock Exchange, to (i) close the First Merger at the
Average FNIS Common Share Price or (ii) terminate this Agreement pursuant to
Section 11.1(d)(iv).
(e) Notwithstanding any other provision in this Agreement, in
the event of a Combination Cash and Stock Exchange, the total amount of cash
consideration to be paid by FNIS plus any cash paid to holders of Dissenting
Shares shall in no event exceed the Maximum Cash Amount. In the event of a
Combination Cash and Stock Exchange, and if and to the extent there are
Dissenting Shares pursuant to which, based on FNIS's estimate in Section
3.1(e)(i) below, the total amount of cash consideration paid by FNIS would
exceed the Maximum Cash Amount, the following adjustments shall be made (such
that the aggregate consideration payable by FNIS under Section 3.1(b) and
pursuant to the appraisal rights of Dissenting Shares under Section 3.6 shall be
no greater than the aggregate consideration otherwise payable under Section
3.1(b) were there no Dissenting Shares):
(i) FNIS shall estimate the maximum aggregate amount
(the "Estimated Dissenters' Payment") payable to holders of the Dissenting
Shares under Section 3.6 and the Per Share Cash Consideration shall be reduced
by an amount equal to (A) (1) the Estimated Dissenters' Payment minus (2) the
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