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EXHIBIT 2.11
ASSET PURCHASE AGREEMENT
BY AND AMONG
NETZEE, INC.,
XXXX X. XXXXXXX COMPANY,
CONCENTREX INCORPORATED,
MECA SOFTWARE, L.L.C.
AND
MONEYSCAPE HOLDINGS, INC.
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TABLE OF CONTENTS
ARTICLE 1 THE TRANSACTION........................................................................................1
1.1 Sale and Purchase of Assets....................................................................1
1.2 Retained Assets................................................................................2
1.3 Assumed Liabilities............................................................................2
1.4 Retained Liabilities...........................................................................3
1.5 Consideration..................................................................................3
(a) Initial Closing Purchase Price........................................................3
(b) Second Closing Purchase Price.........................................................3
(c) Allocation of Purchase Price..........................................................3
(d) Prepaid Items.........................................................................3
1.6 Second Closing.................................................................................3
1.7 Certain Consents...............................................................................4
1.8 Restrictions on Securities.....................................................................4
1.9 Use of Corporate Name..........................................................................5
1.10 Allocation of Certain Items....................................................................5
(a) General...............................................................................5
(b) Workers' Compensation.................................................................5
(c) Bonuses and Deferred Compensation.....................................................6
(d) Payments..............................................................................6
ARTICLE 2 RULES OF CONSTRUCTION..................................................................................6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SELLERS..........................................................9
3.1 Organization...................................................................................9
3.2 Authority; No Violation........................................................................9
3.3 Financial Statements..........................................................................10
3.4 Broker's and Other Fees.......................................................................10
3.5 Absence of Certain Changes or Events..........................................................10
3.6 Legal Proceedings.............................................................................10
3.7 Taxes and Tax Returns.........................................................................11
3.8 Employee and Fringe Benefit Plans.............................................................11
3.9 Compliance with Applicable Laws...............................................................11
3.10 Certain Contracts.............................................................................12
3.11 Properties and Insurance......................................................................13
3.12 Environmental Matters.........................................................................13
3.13 Intellectual Property.........................................................................13
(a) Background...........................................................................13
(b) Ownership............................................................................14
(c) Absence of Claims, Etc...............................................................14
3.14 Adequacy of Technical Documentation...........................................................14
3.15 Third-Party Components in Software............................................................14
3.16 Third-Party Interests or Marketing Rights in Software.........................................14
3.17 Absence of Certain Agreements and Practices...................................................15
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3.18 Major Vendors and Customers...................................................................15
3.19 Labor Relations...............................................................................15
3.20 Year 2000 Matters.............................................................................15
3.21 Assignment Provisions.........................................................................16
3.22 Necessary Properties..........................................................................16
3.23 Securities Act Compliance.....................................................................16
3.24 Access to Information.........................................................................16
3.25 Experience; Investment........................................................................17
3.26 Tax Advice....................................................................................17
3.27 Approval of Shareholders......................................................................17
3.28 Disclosure....................................................................................17
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF NETZEE..............................................................17
4.1 Corporate Organization........................................................................17
4.2 Capitalization................................................................................18
4.3 Authority; No Violation.......................................................................18
4.4 Broker's and Other Fees.......................................................................18
4.5 Legal Proceedings.............................................................................18
4.6 SEC Reports...................................................................................19
4.7 No Material Adverse Change....................................................................19
4.8 InterCept Consent.............................................................................19
4.9 Disclosure....................................................................................19
ARTICLE 5 COVENANTS AND AGREEMENTS OF THE PARTIES...............................................................19
5.1 Conduct of Business...........................................................................19
5.2 Negative Covenants............................................................................20
5.3 No Solicitation...............................................................................21
5.4 Current Information...........................................................................21
5.5 Access to Properties and Records; Confidentiality.............................................22
5.6 Regulatory Matters; Consents; Cooperation, etc................................................22
5.7 Parties' Efforts; Further Assurances..........................................................23
5.8 Public Announcements..........................................................................23
5.9 Taxes.........................................................................................24
5.10 Disclosure Supplements........................................................................24
5.11 No Transfers..................................................................................24
5.12 Customer Contacts.............................................................................24
5.13 Additional Financial Statements...............................................................24
5.14 WARN; Severance Obligations; Hiring of Employees..............................................25
5.15 Broker Fees...................................................................................25
5.16 Appointment and Nomination of Directors.......................................................26
5.17 Cross Marketing Agreement.....................................................................26
5.18 Nasdaq Compliance.............................................................................26
5.19 Sublease of Certain Facilities................................................................26
5.20 Houston, Texas Facility and Employees.........................................................26
5.21 Intercept Documents...........................................................................27
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ARTICLE 6 CLOSING CONDITIONS....................................................................................27
6.1 Conditions to the Obligations of Netzee under this Agreement..................................27
(a) Authorizations and Regulatory Filings................................................27
(b) Suits and Proceedings................................................................27
(c) Opinion of Counsel...................................................................27
(d) Certificates.........................................................................27
(e) Xxxx of Sale; Conveyance Documents...................................................27
(f) Assignment and Assumption Agreement..................................................27
(g) Noncompetition, Nonsolicitation and Confidentiality Agreement........................28
6.2 Conditions to the Obligations of the Sellers under this Agreement.............................28
(a) Authorizations and Regulatory Filings................................................28
(b) Suits and Proceedings................................................................28
(c) Certificates.........................................................................28
(d) Assignment and Assumption Agreement..................................................28
(e) Purchase Price.......................................................................28
(f) Opinion of Counsel...................................................................28
(g) Noncompetition, Nonsolicitation and Confidentiality Agreement........................28
(h) Registration Rights Agreement........................................................28
(i) Intercept Documentation..............................................................29
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER.....................................................................29
7.1 Termination...................................................................................29
7.2 Effect of Termination.........................................................................29
7.3 Specific Performance..........................................................................30
7.4 Amendment.....................................................................................30
7.5 Extension; Waiver.............................................................................30
ARTICLE 8 INDEMNIFICATION.......................................................................................30
8.1 Indemnification by the Sellers................................................................30
8.2 Indemnification by Netzee.....................................................................31
8.3 Claims for Indemnification....................................................................31
8.4 Defense of Claim by Third Parties.............................................................32
8.5 Third Party Claim Assistance..................................................................33
8.6 Settlement of Indemnification Claims..........................................................33
8.7 Manner of Indemnification.....................................................................33
8.8 Indemnification is Exclusive Remedy...........................................................34
8.9 Certain Limitations...........................................................................34
8.10 Subrogation...................................................................................34
ARTICLE 9 MISCELLANEOUS.........................................................................................34
9.1 Expenses......................................................................................34
9.2 Notices.......................................................................................35
9.3 Parties in Interest...........................................................................35
9.4 Entire Agreement..............................................................................36
9.5 Counterparts..................................................................................36
9.6 Governing Law.................................................................................36
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9.7 Invalidity of any Part........................................................................36
9.8 Time of the Essence; Computation of Time......................................................36
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is dated and effective as
of September 29, 2000, by and among Netzee, Inc., a Georgia corporation
("NETZEE"), Xxxx X. Xxxxxxx Company, a Georgia corporation ("XXXXXXX"),
Concentrex Incorporated, an Oregon corporation ("CONCENTREX"), Meca Software,
L.L.C., a Delaware limited liability company ("MECA"), and MoneyScape Holdings,
Inc., an Oregon corporation ("MONEYSCAPE"). Xxxxxxx, Concentrex, Meca and
MoneyScape are collectively referred to herein as the "SELLERS." Netzee and the
Sellers are referred to herein as the "PARTIES."
W I T N E S S E T H :
WHEREAS, Concentrex is a wholly owned subsidiary of Xxxxxxx, MoneyScape
is a wholly owned subsidiary of Concentrex, and Meca is a wholly owned
subsidiary of Concentrex and MoneyScape; and
WHEREAS, Meca and Concentrex are engaged in providing Internet banking
and xxxx payment products and systems to financial institutions and their
customers and fulfillment services related thereto and providing service and
support for such products (collectively, the "BUSINESS") and Netzee desires to
buy, and assume certain liabilities relating to, and the Sellers desire to sell
substantially all of the assets utilized by the Business, all upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto mutually covenant and agree, with the intent to
be legally bound, as follows:
ARTICLE 1
THE TRANSACTION
1.1 SALE AND PURCHASE OF ASSETS.
(a) At the Initial Closing, the Sellers shall loan to
Netzee $5.0 million and Netzee shall deliver to the Sellers a promissory note
for $5.0 million (the "NOTE"). The "INITIAL CLOSING" shall take place
immediately following the execution of this Agreement.
(b) At the Second Closing, the Sellers shall sell and
transfer to Netzee, and Netzee shall purchase from the Sellers, all of the
Sellers' right, title and interest in and to the properties and assets primarily
used by or related to the Business, including those assets specified or
described on Schedule 1.1 (other than the Retained Assets), wherever such assets
are located and whether personal, tangible or intangible, in electronic form or
otherwise, and whether or not any such assets have any value for accounting
purposes or are carried or reflected on or specifically referred to in the
Sellers' books or the Business Financial Statements, except those assets
specifically excluded pursuant to Section 1.2, free and clear of all
Encumbrances, other than Permitted Encumbrances. The properties and assets of
the Business to be transferred
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hereunder are collectively referred to as the "PURCHASED ASSETS." Netzee assumes
no risk of loss to the Purchased Assets prior to the Second Closing.
1.2 RETAINED ASSETS. The Sellers shall retain, and the Purchased
Assets shall specifically not include, the following assets of the Sellers
(collectively, the "RETAINED ASSETS"):
(a) the consideration to be delivered to the Sellers
pursuant to this Agreement, together with the Sellers' rights under this
Agreement;
(b) all properties and assets not primarily related to or
used in the Business, including all registered and unregistered trademarks,
service marks, service names, trade styles and trade names, and all associated
goodwill, all statutory common law and registered copyrights, all patents, all
applications of any other foregoing and all trade secrets that, in each case,
are not primarily used by or related to the Business;
(c) all cash, cash equivalents, marketable securities and
other liquid assets;
(d) rights to any federal, state, local or foreign tax
refunds;
(e) any governmental permit, license or similar right
that by its terms is not transferable to Netzee;
(f) all intracompany amounts due to or from the Sellers
or any of their affiliates;
(g) all ownership and other rights with respect to any
benefit plans of the Sellers;
(h) all corporate and limited liability company minute
books and all stock and ownership interest records of the Sellers;
(i) all tax returns and related correspondence;
(j) all prepaid or deferred items with respect to
Retained Assets;
(k) all accounts receivable, notes receivable and other
receivables;
(l) all real property leases; and
(m) any contract rights that Netzee does not assume
because they are not Material Contracts or are in excess of the $200,000 limit
set forth in Section 3.10(a)(ii).
1.3 ASSUMED LIABILITIES. At the Second Closing, pursuant to an
Assignment and Assumption Agreement (the "ASSIGNMENT AND ASSUMPTION AGREEMENT")
Netzee shall assume and agree to perform and discharge only the following
specifically enumerated obligations and liabilities of the Sellers
(collectively, the "ASSUMED LIABILITIES"): (i) the liabilities and obligations
of the Sellers arising on or after the Second Closing Date under the Material
Contracts (the "ASSUMED CONTRACTS"), and (ii) those liabilities of the Sellers
specifically set
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forth on Schedule 1.3; provided, however, Netzee shall not assume any obligation
under any Assumed Liability to the extent that payments were made to the Sellers
prior to the Second Closing Date with respect to any period following the Second
Closing Date unless the Sellers have remitted the amount of such payment under
such Assumed Liability to Netzee, or that results from any default under or
breach of such Assumed Contract occurring prior to the Second Closing Date.
1.4 RETAINED LIABILITIES. Except for the Assumed Liabilities,
Netzee does not hereby assume and shall not assume or in any way undertake to
pay, perform, satisfy or discharge any liability of the Sellers (including any
liability from a Seller's failure to comply with any Environmental Laws or Tax
Laws prior to the Second Closing Date), whether existing on, before or after the
Second Closing Date or arising out of any transactions entered into, or any
state of facts existing on, prior to or after the Second Closing Date (the
"RETAINED LIABILITIES").
1.5 CONSIDERATION.
(a) Initial Closing Purchase Price. The amount loaned by
the Sellers to Netzee at the Initial Closing for the Note shall be $5.0 million
in cash by wire transfer of immediately available funds.
(b) Second Closing Purchase Price.(i) The consideration
to be paid to the Sellers at the Second Closing for the Purchased Assets shall
be paid among the Sellers as directed by Xxxxxxx prior to the Second Closing
Date and will consist of 4,400,000 shares of Netzee Common Stock (subject to
appropriate adjustment to reflect any stock dividends, stock splits, reverse
splits, recapitalizations and similar matters), which constitutes less than
twenty percent (20%) of the outstanding Netzee Common Stock as of the date of
this Agreement.
(c) Allocation of Purchase Price. The purchase price
shall be allocated as mutually agreed upon by the Parties on or before the
Second Closing Date. Each of the Parties agrees (i) that such allocation shall
be consistent with the requirements of Section 1060 of the Code and the
regulations promulgated thereunder; (ii) to complete jointly and file separately
Form 8594 with its federal income tax return consistent with such allocation for
the tax year in which the Second Closing occurs; and (iii) that it shall not
take a position on any income, transfer or gains tax return that is in any
manner inconsistent with the terms of any such allocation without the prior
written consent of each other Party, which consent shall not be unreasonably
withheld or delayed.
(d) Prepaid Items. At the Second Closing, Xxxxxxx shall
pay in cash to Netzee all of the Sellers' deferred revenue as of the Second
Closing Date with respect to the Purchased Assets or the Assumed Liabilities,
determined in accordance with generally accepted accounting principles.
1.6 SECOND CLOSING. The consummation of the purchase and sale of
the Purchased Assets and the consummation of the other transactions contemplated
hereby (other than in the respect to the Initial Closing) (the "SECOND CLOSING")
shall take place, at 10:00 a.m., local time, three (3) business days after
satisfaction of the latest to occur, or, if permissible, waiver of the
conditions set forth in Article 6, at the offices of Xxxxxxxxxx Xxxxxx & Xxxxxxx
LLP, 999
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Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000 or at such other time, date or
place as the Parties agree (the "SECOND CLOSING DATE"). The Parties shall use
their best efforts to consummate the Second Closing on or before October 31,
2000.
1.7 CERTAIN CONSENTS. Nothing in this Agreement shall be construed
as an attempt to assign any contract, agreement, permit, franchise or claim of
the Business that is by its terms or in Law nonassignable without the consent of
the other party or parties thereto, unless such consent shall have been given,
or as to which all the remedies for the enforcement thereof enjoyed by one or
more of the Sellers would not, as a matter of law, pass to Netzee as an incident
of the assignments provided for by this Agreement. In order to provide Netzee
with the full realization and value of every contract, agreement, permit,
franchise and claim of the character described in the immediately preceding
sentence and which are part of the Purchased Assets, the Sellers on and after
the Second Closing Date will, at the reasonable request of Netzee, in the name
of any of the Sellers or otherwise as Netzee shall reasonably specify, take all
commercially reasonable action (a) to assure that the rights of the Sellers
under such contracts, agreements, permits, franchises and claims shall be
preserved for the benefit of Netzee and (b) to facilitate receipt of the
consideration to be received by the Sellers under every such contract,
agreement, permit, franchise and claim, which consideration shall be held for
the benefit of, and shall be delivered to Netzee; provided, in either case, that
Netzee reasonably cooperates with the Sellers and promptly reimburses the
Sellers for all payments required to be made by the Sellers in connection
therewith. Nothing in this Section 1.7 shall in any way diminish the obligation
of the Sellers hereunder to obtain all consents and approvals and to take all
such other actions prior to or at Second Closing as are necessary to enable the
Sellers to convey or assign valid title to all the Purchased Assets to Netzee.
1.8 RESTRICTIONS ON SECURITIES.
(a) The shares of Netzee Common Stock and the Note
(collectively the "SECURITIES") to be delivered in connection with this
Agreement will be issued to the Sellers in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "SECURITIES ACT")
by reason of Section 4(2) thereof, Regulation D promulgated thereunder, or other
private offering exemptions, and similar or other exemptions under applicable
state securities laws (the "STATE ACTS"), and Netzee is relying on the
representations of the Sellers with respect to such exemptions.
(b) Each Seller understands and agrees that stop transfer
instructions with respect to any of the Securities issued by Netzee pursuant to
this Agreement will be given to Netzee's transfer agent and that there will be
placed on the certificates for such shares legends stating in substance as
follows; provided, however, that upon the request of a Seller, the second
paragraph of this legend shall be removed at any time after one year following
the Second Closing Date:
The securities represented hereby have not been registered under the
Securities Act of 1933, as amended, or any state securities laws and
may not be offered, sold, transferred or otherwise disposed of unless
registered with the United States Securities and Exchange Commission
and the securities regulatory authorities of
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applicable states or unless (1) an exemption from such registration is
available and (2) the issuer of such securities has received an opinion
of counsel reasonably satisfactory to it (both as to the opinion and
such counsel) stating that such registration is not required under the
Securities Act of 1933 and, if applicable, the laws of the State of
Georgia.
Certain rights, obligations and restrictions are imposed on the
securities represented by this certificate by an Asset Purchase
Agreement by and among Netzee, Inc., Xxxx X. Xxxxxxx Company,
Concentrex Incorporated, Meca Software, L.L.C. and MoneyScape Holdings,
Inc., and any amendments thereto, copies of which are available at the
issuer's offices. The transfer, encumbrance or other disposition of
such securities in contravention of such agreement is null and void.
Any transferee of such securities (but only as to such transfers that
are permitted by such agreement) shall be bound by such agreement.
(c) Each of the legends set forth in Section 1.8(b), as
applicable, will also be placed on any certificate representing securities
issued subsequent to the original issuance of the Securities pursuant to this
Agreement as a result of any transfer of such securities or any stock dividend,
stock split or other recapitalization as long as any of the Securities has not
been registered or transferred in such manner to justify the removal of the
legend therefrom.
1.9 USE OF CORPORATE NAME. Promptly following the Second Closing
Date, the Sellers shall:
(a) amend all necessary corporate documentation to change the
corporate name of Meca to a name that does not include "Meca Software" or any
similar derivation thereof;
(b) relinquish and assign all rights to the name "Meca Software"
and any logos, artwork or other graphic material used by the Sellers in
connection with such name, to Netzee; and
(c) cease to use the name "Meca Software" or any similar
derivations thereof, and any logos, artwork or other graphic material used by
the Sellers in connection with such name in connection with any business or
commercial purpose whatsoever.
1.10 ALLOCATION OF CERTAIN ITEMS.
(a) General. All revenues and expenses with respect to
the Purchased Assets in the operation of the Business shall be allocated between
Netzee, on the one hand, and the Sellers, on the other hand, based upon the
number of days in the relevant period before and after the Second Closing Date.
Netzee and the Sellers will estimate such amounts where appropriate and
reconcile all prorations by December 31, 2000.
(b) Workers' Compensation. Notwithstanding Section
1.10(a), pursuant to the provisions of this Agreement, the Sellers will be
responsible for and pay any and all workers' compensation claims asserted by or
with respect to any employee or former employee of the
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Sellers (or any of them) in respect of any injury or other compensable event or
occupational illness or disease which occurred or is attributable to any event,
state of facts or condition which existed or occurred in whole prior to or on
the Second Closing Date. Netzee is responsible for and will pay any and all
workers' compensation claims asserted by or with respect to any employee of the
Sellers hired by Netzee in respect of any injury or other compensable event or
occupational illness or disease which occurred or is attributable to any event,
state of facts or condition which existed or occurred solely after the Second
Closing Date. If any such injury or other compensable event or occupational
illness or disease of a person who was employed both by the Sellers prior to or
on the Second Closing Date and by Netzee after the Second Closing Date is
attributable in any part to causes occurring prior to or on the Second Closing
Date and is the basis of a workers' compensation claims asserted after the date
hereof, then liability for any such claim shall be the responsibility of the
Sellers.
(c) Bonuses and Deferred Compensation. Bonuses attributable to
calendar year 2000 payable to Second Stage Employees of the Business shall be
prorated as of the Second Closing Date among the Sellers, on the one hand, and
Netzee, on the other hand, based on the projected bonus attainment level for
calendar year 2000 as of the Second Closing Date; provided, however, the
Sellers' obligations under this Section 1.10(c) shall not exceed $215,000 in the
aggregate. Sellers shall pay all bonuses and deferred compensation owed to
Sellers' employees attributable to 1999.
(d) Payments. Appropriate cash payments by Netzee or the Sellers,
as the case may require, shall be made from time to time as soon as practicable
after the facts giving rise to the obligation for such payments are known in the
amounts necessary to give effect to the allocations provided for in this Section
1.10.
ARTICLE 2
RULES OF CONSTRUCTION
In the interpretation of this Agreement, unless otherwise
provided or the context otherwise requires:
(a) The singular includes the plural and vice versa and,
in particular (but without limiting the generality of the foregoing), any word
or expression defined in the singular has the corresponding meaning used in the
plural and vice versa;
(b) Any reference to any gender includes the other
genders;
(c) Any reference to an Article, Section, Exhibit,
clause, or Schedule is a reference to an Article, Section, Exhibit, clause, or
Schedule of this Agreement;
(d) Any reference to any agreement, instrument or other
document (i) shall include all appendices, exhibits and schedules thereto and
all agreements, documents or other writings incorporated by reference therein,
and (ii) shall be a reference to such agreement, instrument or other document as
amended, supplemented, modified, suspended, restated or novated from time to
time;
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(e) Any reference to any statute shall be construed as including
all statutory provisions consolidating, amending or replacing such statute and
all governmental regulations and rules promulgated thereunder;
(f) Any reference to "writing" includes printing, typing,
lithography and other means of reproducing words in a visible form;
(g) Any reference to a time or date or to a local time or date is
a reference to the time and date in Atlanta, Georgia and any reference to a
monetary value is in reference to United States currency (the U.S. Dollar);
(h) The headings, Article, and Section numbering contained in this
Agreement are used solely for convenience and do not constitute a part of this
Agreement, nor shall such headings and numbering be used in any manner to aid in
the construction of this Agreement;
(i) The term "AFFILIATE" of a person means another person that
directly, or indirectly through one or more intermediaries, controls or owns, is
controlled or owned by or is under common control or ownership with, such
person. As used in this definition, "control" means the power to direct the
management or affairs of a person, and "ownership" and "owns" mean the
beneficial ownership of more than 50% of the equity interests in the person;
(j) The term "AVERAGE PRICE" means the average of the per share
closing prices of Netzee Common Stock on the Nasdaq National Market for the five
(5) trading days immediately prior to the relevant date of payment or setoff;
(k) The term "CODE" means the Internal Revenue Code of 1986, as
amended, and the applicable rulings and regulations thereunder;
(l) References herein to the "SELLERS DISCLOSURE SCHEDULES" mean
the disclosure schedules, dated as of the date hereof, which have been delivered
by the Sellers to Netzee and all other documents, agreements, and other items
disclosed by the Sellers in writing to Netzee and attached to such schedules in
connection with this Agreement, and references to a numbered Sellers Disclosure
Schedule shall mean that portion of the Sellers Disclosure Schedules that refers
to the specific section or subsection of Article 3 of this Agreement;
(m) The term "DISCLOSED" means and includes, with respect to
information concerning any event, fact or circumstance, information contained in
this Agreement and the other Purchase Agreements;
(n) The term "ENCUMBRANCE" means any liability, debt, mortgage,
deed of trust, pledge, security interest, encumbrance, option, right-of first
refusal, agreement of sale, adverse claim, easement, lien, assessment,
restrictive covenant, encroachment, burden or charge of any kind or nature
whatsoever or any item similar or related to the foregoing;
(o) The term "INCLUDING" means "including, without limitation";
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(p) The term "GOVERNMENTAL AUTHORITY" means any United States
federal, state or local, or foreign, governmental, regulatory or administrative
authority, agency, department, board, investigative body or commission or any
court, tribunal, or judicial or arbitral body;
(q) The term "LIABILITY" means and includes any kind of liability,
whether absolute, accrued, contingent or otherwise;
(r) The term "KNOWLEDGE" as used (i) with respect to the Sellers
(including any references to a Seller being aware of a particular matter), means
the actual knowledge of any of the officers of Xxxxxxx or the General Manager of
the e-commerce division of Xxxxxxx, and the Sellers will be deemed to have
knowledge of any matter contained in the acquisition agreement or disclosure
schedules thereto pursuant to which Concentrex was acquired by Xxxxxxx, and (ii)
with respect to Netzee (including any reference to Netzee being aware of a
particular matter), means the actual knowledge of any of the executive officers
of Netzee;
(s) The term "MATERIAL ADVERSE EFFECT" with respect to a person
means any circumstance of, change in, or effect on the business and affairs of
such person or any of its Subsidiaries thereof that, individually or in the
aggregate with any other circumstance of change in, or effect on, the business
and affairs of such person and its Subsidiaries: (i) is materially adverse to
the business, operations, assets, liabilities, results of operations or
financial condition of such person and its Subsidiaries, taken as a whole, or
(ii) would reasonably be expected to materially adversely affect the ability of
such person and its Subsidiaries to operate or conduct its or their business and
affairs taken as a whole in the manner in which it is currently operated or
conducted or contemplated by such person to be operated or conducted;
(t) The term "PERSON" means any individual, partnership, limited
liability company, firm, corporation, association, trust, joint venture,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended;
(u) The term "SUBSIDIARY" means any corporation, partnership,
joint venture or other legal entity in which a specified person, directly or
indirectly, owns or controls the voting of at least a 50% share or other equity
interest or for which such person, directly or indirectly, acts as a general
partner or managing member;
(v) The term "THREATENED" means any act that would cause a person
reasonably to believe that the act, omission, fact or circumstance with respect
to which such word is used is likely to occur; and
(w) Each of the Parties acknowledges that it has had the
opportunity to negotiate the terms and provisions of this Agreement, with the
assistance and review of its counsel. This Agreement, therefore, shall be
construed without regard to any presumption or other rule requiring construction
against the party causing the Agreement to be drafted.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
To induce Netzee to enter into this Agreement and the other Purchase
Agreements, the Sellers hereby jointly and severally represent and warrant to
Netzee as follows:
3.1 ORGANIZATION.
(a) Xxxxxxx, Concentrex and MoneyScape are corporations
duly incorporated, validly existing and in good standing under the laws of their
respective states of incorporation. Meca is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware.
Xxxxxxx owns all of the outstanding capital stock of Concentrex and MoneyScape,
and Concentrex and MoneyScape own all of the limited liability interests of
Meca. Each of the Sellers has the requisite power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and, except as disclosed on Sellers Disclosure Schedule 3.1(a), is
duly licensed or qualified to do business and is in good standing in each
jurisdiction in which failure to qualify would have a Material Adverse Effect on
the Business.
(b) Sellers have delivered to Netzee true and correct
copies of the Articles of Incorporation, Bylaws or other governing documents of
each of the Sellers (other than Xxxxxxx), and all amendments thereto.
3.2 AUTHORITY; NO VIOLATION.
(a) Except as disclosed on Sellers Disclosure Schedule
3.2(a) (collectively, the "SELLERS APPROVALS") and except for compliance with
the applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended (the "HSR ACT"), no consents, approvals, authorizations,
clearances or orders of, filings or registrations with or notices to
(collectively "AUTHORIZATIONS") any third party or any Governmental Authority
are necessary on behalf of the Sellers in connection with (i) the execution and
delivery by the Sellers of this Agreement and the other Purchase Agreements,
(ii) the consummation by the Sellers of the transactions contemplated hereby and
thereby and (iii) the performance of each Seller's obligations under this
Agreement and the other Purchase Agreements. Each Seller has the full power
(corporate or otherwise) and authority to execute and deliver this Agreement and
the other Purchase Agreements and to consummate the transactions contemplated
hereby and thereby in accordance with the terms hereof and thereof. The
execution and delivery of this Agreement and the other Purchase Agreements and
the consummation of the transactions contemplated hereby and thereby have been
duly and validly approved by the Board of Directors or governing body of each of
the Sellers in accordance with the Articles of Incorporation, Bylaws or other
governing documents of each Seller and with applicable Laws. Except for the
Sellers Approvals and the compliance with the HSR Act, no other proceedings on
the part of the Sellers are necessary for the Sellers to execute and deliver
this Agreement and the other Purchase Agreements to which it is a party and for
the Sellers to be bound by the terms hereof and thereof. This Agreement and the
other Purchase Agreements to which each Seller is a party have been duly and
validly executed and delivered by each Seller and constitute the valid and
binding obligations of the Sellers enforceable against the Sellers in accordance
with its and their terms, except to the extent
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that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance or similar laws in
effect that affect the enforcement of creditor's rights generally or general
principles of equity, whether considered in a proceeding at law or in equity.
(b) Neither the execution and delivery by the Sellers of this
Agreement and the other Purchase Agreements to which it is a party, nor the
consummation by the Sellers of the transactions contemplated hereby and thereby
in accordance with the other terms hereof and thereof, nor compliance by the
Sellers with any of the terms or provisions hereof or thereof, will: (i) violate
any provision of any Seller's Articles of Incorporation, Bylaws or other
governing documents; (ii) assuming that the Sellers Approvals are duly obtained
and the compliance with the HSR Act, violate any United States federal, state or
local or foreign statute, code, ordinance, rule, regulation, judgment, order,
writ, ruling, decree or injunction of any Governmental Authority (collectively,
"LAWS") applicable to the Sellers, or any of the properties or assets of the
Sellers; or (iii) assuming that the Sellers Approvals are obtained, violate,
conflict with, result in a breach of any provisions of, constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of, accelerate the performance
required by, or result in the creation of any Encumbrance upon any of the
Purchased Assets under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Sellers are a party, or by which it or any
of the Purchased Assets may be bound or affected.
3.3 FINANCIAL STATEMENTS. Sellers Disclosure Schedule 3.3
sets forth copies of the unaudited financial information of the Business for the
seven months ended July 31, 2000, and for the twelve months ended as of December
31, 1999 and 1998 ("BUSINESS FINANCIAL STATEMENTS"). The Business Financial
Statements fully and fairly present the operations of the Business in all
material respects for the periods indicated thereon, including all expenses and
accruals, but excluding selling, general and administrative expenses. Except as
set forth on Sellers Disclosure Schedule 3.3, since July 31, 2000, there has not
been any change, occurrence or circumstance that has had, individually or in the
aggregate, a Material Adverse Effect on the Business or Purchased Assets.
3.4 BROKER'S AND OTHER FEES. None of the Sellers has employed any
broker or finder or incurred any liability for any broker's or finder's fees or
commissions in connection with any of the transactions contemplated by this
Agreement and the other Purchase Agreements.
3.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
Sellers Disclosure Schedule 3.5, or as reflected in the Business Financial
Statements, the Sellers do not have Knowledge of any facts or conditions which
they reasonably believe would be likely to cause a Material Adverse Effect on
the Business or the Purchased Assets.
3.6 LEGAL PROCEEDINGS. Except as disclosed in Sellers Disclosure
Schedule 3.6, (a) none of the Sellers is a party to any, and there are no
pending or, to the Sellers' Knowledge, threatened legal, administrative,
arbitral or other proceedings, claims, actions or governmental investigations of
any nature in respect of the Business or the Purchased Assets, (b) none of the
Sellers is a party to any order, judgment or decree entered in any lawsuit or
proceeding in respect
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of the Business or the Purchased Assets, and (c) no actions, suits, demands,
notices, claims, investigations or proceedings are pending or, to the Sellers'
Knowledge, threatened against or otherwise involving, directly or indirectly,
any officer, director or employee of the Sellers (in connection with such
officer's, director's or employee's activities on behalf of the Business or that
otherwise relate, directly or indirectly to the Business or the Purchased
Assets) including without limitation any notices, demand letters or requests
from any Governmental Authority relating to such potential liabilities.
3.7 TAXES AND TAX RETURNS. Except as disclosed in Sellers
Disclosure Schedule 3.7:
(a) The Sellers have duly and timely filed (and until and
after the Second Closing Date will so file) all returns, declarations, reports,
information returns and statements required to be filed in respect of any United
States federal, state, local, or foreign Taxes in respect of the Business
("RETURNS") and have duly and timely paid (and until and after the Second
Closing Date will so pay) all such Taxes due and payable, other than Taxes which
are being contested in good faith (and disclosed by the Sellers to Netzee in
writing). As used herein, "TAX" or "TAXES" means and includes any and all taxes,
fees, levies, assessments, duties, tariffs, imposts, and other charges of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any Governmental
Authority, including, without limitation: foreign, domestic, central, local,
state or other jurisdictional taxes or other charges on or with respect to
income, estimated income, franchises, business, occupation, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and similar charges. The
Sellers have established (and until the Second Closing Date will establish) on
their books and records reserves that are adequate for the payment of all Taxes
not yet due and payable, but are incurred in respect of the Business through
such date and shall pay all such Taxes when due.
(b) There are no audits or other Governmental Authority
proceedings presently pending nor, to the Knowledge of the Sellers, any other
disputes pending with respect to, or claims asserted for, Taxes upon the
Business, nor have any of the Sellers given any currently outstanding waivers or
comparable consents regarding the application of any statute of limitations with
respect to any Taxes or Returns in respect of the Business. There are no liens
for Taxes upon the Purchased Assets, except liens for Taxes not yet due. The
Sellers have complied (and until and after the Second Closing Date will comply)
in all respects with all applicable Laws relating to the payment and withholding
of Taxes in respect of the Business.
3.8 EMPLOYEE AND FRINGE BENEFIT PLANS. There are no employee
benefit plans of any of the Sellers or any of their respective predecessors
which will become the responsibility or liability of Netzee upon or after Second
Closing or which will act as an Encumbrance upon the Business or the Purchased
Assets.
3.9 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in
Sellers Disclosure Schedule 3.9, the Sellers hold all licenses, franchises,
permits, consents and authorizations
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necessary for the lawful conduct of the Business (the "LICENSES"). No proceeding
is pending, or to the Knowledge of the Sellers threatened, seeking the
revocation or suspension of any License. In respect of the Business and except
as set forth on Sellers Disclosure Schedule 3.9, the Sellers are and have been
in compliance in all material respects with all applicable Laws, and the Sellers
have not received any notices of any allegation of any violation by the Sellers
of any Law or License.
3.10 CERTAIN CONTRACTS.
(a) Sellers Disclosure Schedule 3.10(a) lists the
following agreements that are primarily related to the Business and the
Purchased Assets (collectively, the agreements described in clauses (i) through
(vi) of this Section 3.10(a), are the "MATERIAL CONTRACTS"), including, without
limitation, leases, purchase contracts and commitments, to which any Seller is a
party or by which any Seller or any of its material properties or assets is
bound:
(i) all customer agreements;
(ii) all agreements involving an annual
commitment or payment by any party thereto of more than $25,000 individually
(and the aggregate annual commitment or payment of all agreements not listed
does not exceed $200,000 in the aggregate);
(iii) all joint venture, sales agency, sales
representative or distributorship, broker, franchise, license or similar
agreements;
(iv) all leases of personal property that are
material to the Business;
(v) all employment agreements;
(vi) all other agreements to which a Seller is a
party which are material to the Business or the Purchased Assets;
(vii) all agreements to which a Seller is a party
and another party to such agreement is or was an officer, director or 5% or
greater shareholder of a Seller or any of its affiliates; and
(viii) all other agreements to which a Seller is a
party and the breach of or default under which would reasonably be expected to
have a Material Adverse Effect on the Business or the Purchased Assets.
(b) Except as set forth on Sellers Disclosure Schedule
3.10(b), each of the Material Contracts is valid, binding and enforceable
against the applicable Seller, and to the Knowledge of the Sellers, the other
parties thereto, in accordance with its terms, and the Sellers have made
available to Netzee all customer agreements and have provided to Netzee a true
and complete copy of all other Material Contracts.
(c) Except as disclosed in Sellers Disclosure Schedule 3.10(c),
(i) neither a Seller, nor to the Knowledge of any Seller, any other party
thereto, is in default under any of the
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Material Contracts or any other agreement to which a Seller is a party which
relates to the Business; (ii) to any Seller's Knowledge, no event has occurred
which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default thereunder entitling
any party to terminate a Material Contract or other such agreement or to
otherwise claim or collect damages, the impact of which would have a Material
Adverse Effect on the Business or the Purchased Assets; and (iii) the
consummation of the transactions contemplated hereby will not result in or
permit a termination of any Material Contract.
3.11 PROPERTIES AND INSURANCE.
(a) Except as disclosed in Sellers Disclosure Schedule
3.11(a), the Sellers have good and marketable title to all of the Purchased
Assets, whether tangible or intangible, subject to no Encumbrances except
statutory liens for amounts not yet due or which are being contested in good
faith (and which have been disclosed on Sellers Disclosure Schedule 3.11(a) (the
"PERMITTED ENCUMBRANCES").
(b) Sellers Disclosure Schedule 3.11(b) contains a list
of all of the items of personal property included among the Purchased Assets
with a value of $25,000 or greater. No item of real property is included among
the Purchased Assets (other than with respect to leases of real property).
Complete and correct copies of each lease listed on Sellers Disclosure Schedule
3.11(b) and any amendments, extensions, and renewals thereof have been furnished
to Netzee. Each of the leases described on Sellers Disclosure Schedule 3.11(b)
is in full force and effect and there are no existing defaults or events of
default, real or claimed, or events which with notice or lapse of time or both
would constitute defaults. Except as described on Sellers Disclosure Schedule
3.2(a), 3.11(a) or 3.11(b), all such leases are fully assignable to Netzee
without the consent of any third party. No rights of any Seller under such
leases have been assigned or otherwise transferred as security for any
obligation of each Seller.
(c) The Purchased Assets and the Business are currently
insured by insurance policies which are in amounts adequate in the reasonable
judgment of the Sellers to protect the Business and the Purchased Assets from
significant loss. All such policies are in force and effect with premiums
thereon timely paid and no act or failure to act has accrued which caused or may
cause any such policy to be canceled or terminated.
(d) No person, other than the Sellers, is currently
entitled to possession of any of the Purchased Assets, whether owned or leased
by the Sellers.
3.12 ENVIRONMENTAL MATTERS. The operations of the Sellers in
respect of the Business and the Purchased Assets comply, and have complied, in
all material respects with all applicable Laws relating to pollution or
protection of the environment ("ENVIRONMENTAL LAWS").
3.13 INTELLECTUAL PROPERTY.
(a) Background. The Business develops, markets and
licenses certain proprietary application software products and systems to its
end user customers and clients (the "SOFTWARE PROGRAMS"), and in connection
therewith the Business has developed certain related technical documentation and
user reference manuals (the "DOCUMENTATION"). The Software
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Programs and the Documentation are collectively referred to as the "SOFTWARE."
The Software Programs are listed on Sellers Disclosure Schedule 3.13(a).
(b) Ownership. Except as set forth in Sellers Disclosure
Schedule 3.13(b), the Sellers own all patents, trademarks, service marks, trade
names and copyrights (including registrations, licenses and applications
pertaining thereto) and all other material items of proprietary information used
in the conduct of the Business, (collectively the "INTELLECTUAL PROPERTY
RIGHTS") free and clear of all Encumbrances. Sellers Disclosure Schedule 3.13(b)
sets forth all domestic and foreign patents, trademarks, service marks, trade
names and registered copyrighted works owned by the Business and all
applications therefor and registrations thereof.
(c) Absence of Claims, Etc. Except as set forth in
Sellers Disclosure Schedule 3.13(c), to the Knowledge of Sellers, no claims have
been asserted by any person to rights in the Software, and to the Knowledge of
the Sellers, no valid basis for any such claim exists. The normal and intended
use of the Software by the Sellers and its licensees does not infringe on the
Intellectual Property Rights of any person existing on the date of this
Agreement under applicable U.S. Laws (whether arising under copyright, trade
secret, patent, unfair competition or other Laws that protect intellectual
property rights, but, with respect to patents, only as such rights exist under
patents issued on or before the date of this Agreement). The use by the Business
of the patents, trademarks, service marks, trade names and copyrights identified
in Sellers Disclosure Schedule 3.13(b) does not infringe the Intellectual
Property Rights of any person existing on the date of this Agreement under
applicable U.S. Laws, and to the Knowledge of Sellers none of the Sellers has
received a claim asserting that the use by such Seller of any of the foregoing
infringes the rights of any person. The Intellectual Property rights are all
those material rights necessary to the conduct of the Business of each of the
Sellers as presently conducted. The consummation of the transactions
contemplated hereby will not result in the loss or impairment of any of the
Intellectual Property Rights to Netzee.
3.14 ADEQUACY OF TECHNICAL DOCUMENTATION. The Software includes the
source code and system documentation for all Software Programs, as well as all
existing programmer comments for documentation and pertinent commentary or
explanation.
3.15 THIRD-PARTY COMPONENTS IN SOFTWARE. Each Seller has validly
obtained the right and license to use, copy, modify and distribute any
third-party programming and materials contained in the Software pursuant to the
contracts identified in Sellers Disclosure Schedule 3.15, subject to no further
license fee, royalty or other payment obligations not identified in Sellers
Disclosure Schedule 3.15, other than software maintenance payments customarily
associated therewith. Except as set forth in Sellers Disclosure Schedule 3.15,
the Software contains no programming or materials in which any third party is
likely to claim superior, joint or common ownership rights.
3.16 THIRD-PARTY INTERESTS OR MARKETING RIGHTS IN SOFTWARE. No
Seller has granted, transferred or assigned any right or interest in the
Software other than end user license rights in the ordinary course of the
Business to any person except pursuant to the contracts identified on Sellers
Disclosure Schedule 3.16. There are no contracts, agreements, licenses,
commitments or arrangements currently in effect with respect to the marketing,
distribution,
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licensing or promotion of the Software between any Seller and any independent
salesperson, distributor, sublicensor or other remarketer or sales organization
except as set forth on Sellers Disclosure Schedule 3.16.
3.17 ABSENCE OF CERTAIN AGREEMENTS AND PRACTICES. With respect to
the Business, and to the knowledge of the Sellers, neither the Sellers, their
respective directors, officers, employees agents, affiliates, nor any other
person acting on behalf of the Sellers, has (a) used any corporate funds for
contributions, payments, gifts or entertainment, or made any expenditures
relating to political activities to government officials or others in violation
of any applicable Laws in connection with the Business or (b) received any
unlawful contributions, payments, gifts or expenditures in connection with the
Business.
3.18 MAJOR VENDORS AND CUSTOMERS. Sellers Disclosure Schedule 3.18
sets forth a list of each licensor, developer, remarketer, distributor and
supplier of property or services to, and each licensee, end-user or customer of,
the Business, to whom a Seller paid or billed in the aggregate in excess of
$25,000 during calendar year 1999. Of those customers of the Business who were
billed over $5,000 per month based on average billing for the first six months
of calendar year 2000, only those customer contracts identified on Schedule 8.1
require consent to the transfer as a result of the transactions contemplated by
this Agreement.
3.19 LABOR RELATIONS. Except as disclosed on Sellers Disclosure
Schedule 3.19, in respect of Business, the Sellers are in material compliance
with all federal and state Laws respecting employment and employment practices,
terms and conditions of employment, wages and hours, and are not engaged in any
unfair labor or unlawful employment practice. There is no unlawful employment
practice or discrimination charge against the Sellers with respect to the
Business pending before the United States Equal Employment Opportunity
Commission ("EEOC") or any EEOC recognized state "referral agency." There is no
unfair labor practice charge or complaint against the Sellers with respect to
the Business pending before the National Labor Relations Board ("NLRB"). There
is no labor strike, dispute, slowdown or stoppage actually pending or, to the
Sellers' Knowledge, threatened against or involving or affecting the Business,
and no NLRB representation question exists respecting any of the employees of
the Business. No grievance or arbitration proceeding is pending and, to the
Sellers' Knowledge, no written claim therefor exists with respect to the
Business. There is no collective bargaining agreement that is binding with
respect to the Business. Except for any Material Contract disclosed pursuant to
Section 3.10, the Sellers, with respect to the Business, are not a party to or
bound by any employment or consulting agreement with any employee or consultant
that cannot be terminated on notice of ninety (90) or fewer days without
liability to the Sellers or that entitles such employee or consultant to retain
any specified position with respect to the Business.
3.20 YEAR 2000 MATTERS. Except as provided on Sellers Disclosure
Schedule 3.20, the Software, the Business' internal systems and internal
proprietary software and the Purchased Assets are each "MILLENNIUM COMPLIANT,"
subject to any upper and lower limits in the system design of the applicable
Software, the Business' internal systems and internal proprietary software and
the Purchased Assets. For purposes of this Agreement, "Millennium Compliant"
means: (a) the functions, calculations, and other computing processes of the
Software, the Business' internal systems and internal proprietary software and
the Purchased Assets
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(collectively, "PROCESSES") perform as designed regardless of the date in time
on which the Processes are actually performed and regardless of the dates
processed; (b) can accept, store, sort, extract, sequence, and otherwise
manipulate date inputs and date values, and return and display date values, as
designed and in a materially accurate manner, regardless of the dates used; (c)
will function without interruptions caused by the date in time on which the
Processes are actually performed or by the dates processed; (d) accepts and
responds to four digit year date input in a manner that resolves any material
ambiguities as to the century in an accurate manner; and (e) displays, prints
and provides electronic output of date information in ways that are unambiguous
as to the determination of the century; provided that all hardware, software and
firmware used in combination with the Software, the Business' internal systems
and internal proprietary software, and the Purchased Assets properly exchange
date data with it.
3.21 ASSIGNMENT PROVISIONS. Sellers Disclosure Schedule 3.21
contains a true and complete list of all agreements in effect to which a Seller
is a party and which contain any provisions which become effective or are
accelerated or contingent upon a sale of the Business or the Purchased Assets or
otherwise require any payment or performance by a Seller or any officer,
director or shareholder thereof, now or in the future, in connection with or as
a result of any of the transactions contemplated by this Agreement or any of the
other Purchase Agreements. Copies of such agreements have been previously
provided to Netzee.
3.22 NECESSARY PROPERTIES. Except for the Retained Assets, all
properties and assets occupied by, used in or necessary to the conduct of the
Business in all material respects and in a manner consistent with past practice
are included in the Purchased Assets and are being sold, transferred, assigned
and conveyed by the Sellers to Netzee pursuant to this Agreement.
3.23 SECURITIES ACT COMPLIANCE. None of the Sellers, nor any of its
Subsidiaries, owns any shares of Netzee Common Stock. Each Seller acknowledges
that none of the Securities to be delivered to such Seller pursuant to this
Agreement will, at the time of delivery, be registered under the Securities Act
or any State Acts (collectively the "SECURITIES LAWS"). Each Seller represents
and warrants that it is acquiring the Securities for investment, and not with a
view toward, or for resale in connection with, a distribution of the Securities.
Each Seller acknowledges that the Securities may not be sold, pledged,
hypothecated, disposed of, or otherwise transferred or distributed except (i)
pursuant to an effective registration statement covering such Securities under
the Securities Laws, or (ii) pursuant to an exemption from the registration
requirements of the Securities Laws.
3.24 ACCESS TO INFORMATION. Each Seller has had access to Netzee's
SEC Filings and has otherwise had access to sufficient information about Netzee
upon which to analyze the transactions contemplated by this Agreement. Each
Seller has been given the opportunity to ask questions and receive answers from
the officers of Netzee concerning the terms and conditions of the transactions
contemplated by this Agreement and the business and financial condition of
Netzee. Each Seller has had the opportunity to obtain any additional information
it deems necessary to verify the accuracy and completeness of information
provided by Netzee in connection with this Agreement and the transactions
contemplated hereby.
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3.25 EXPERIENCE; INVESTMENT. Each Seller has such knowledge and
experience in financial and business matters as to enable it (a) to utilize the
information made available to it in connection with the transactions
contemplated by this Agreement and the other Purchase Agreements, (b) to
evaluate the merits and risks associated with the acquisition of the Securities
pursuant hereto, and (c) to make an informed decision with respect thereto. Each
Seller has such business and financial experience such that Netzee could
reasonably assume it has the capacity to protect its own interests in connection
with the offer, sale and issuance of the Securities. Each Seller is financially
capable of bearing the risk of loss of any and all consideration surrendered in
exchange for the Securities, and acknowledges that an investment in the
Securities involves a high degree of risk, including a possible total loss of
investment, and that the market price of Netzee Common Stock on the Second
Closing Date may not be indicative of its future value. Each Seller represents
that it is an "ACCREDITED INVESTOR" within the meaning of Regulation D
("REGULATION D") promulgated by the Commission under the Securities Act. Each
Seller understands that the officers, directors, attorneys and other advisors of
Netzee will rely upon the representations and warranties made by it in this
Agreement in order to establish any necessary exemption from the registration
provisions of the Securities Laws.
3.26 TAX ADVICE. Each Seller has reviewed with its tax advisors
the United States federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement and the other Purchase Agreements.
Each Seller is relying solely on such advisors and not on any statements or
representations of Netzee or any of its agents, and understands that it (and not
Netzee or any other person or entity) shall be responsible for its own tax
liability that may arise as a result of the transactions contemplated by this
Agreement and the other Purchase Agreements.
3.27 APPROVAL OF SHAREHOLDERS. No approval of the Sellers or any
Subsidiaries or any of their respective shareholders is required for the
execution and delivery of this Agreement and the other Purchase Agreements or
consummation of the transactions contemplated by the Agreement or the other
Purchase Agreements which has not been obtained prior to the execution of this
Agreement.
3.28 DISCLOSURE. No representation, warranty or statement made by
any Seller in this Agreement, the other Purchase Agreements or in any document
or certificate furnished or to be furnished to Netzee pursuant to this Agreement
or the other Purchase Agreements contains or will contain any untrue or
incomplete statement or omits or will omit to state any material fact necessary
to make the statements contained herein or therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NETZEE
To induce the Sellers to enter into this Agreement and the other
Purchase Agreements, Netzee hereby represents and warrants to the Sellers as
follows:
4.1 CORPORATE ORGANIZATION. Netzee is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Georgia. Netzee has the corporate power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted.
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4.2 CAPITALIZATION. The authorized capital stock of Netzee
consists of 70,000,000 shares of common stock, without par value (the "NETZEE
COMMON STOCK"), 22,028,083 shares of which were issued and outstanding as of
September 28, 2000 and 5,000,000 shares of preferred stock, 500,000 shares of
which were issued and outstanding and designated "Series A 8% Convertible
Preferred Stock" as of September 20, 2000. Netzee contemplates exchanging such
preferred stock for Series B Preferred Stock with identical provisions except
that accrued and unpaid dividends will be paid in cash upon conversion or
liquidation. The Netzee Common Stock to be issued pursuant to this Agreement
will be duly authorized, validly issued, fully paid and non-assessable.
4.3 AUTHORITY; NO VIOLATION.
(a) Except for filings of Form D and other notices
related to the issuance of securities by Netzee, the Nasdaq notification of
listing of additional shares of Netzee Common Stock, compliance with the
applicable requirements of the HSR Act and except as identified on Netzee
Disclosure Schedule 4.3(a), no Authorizations are necessary on behalf of Netzee
in connection with (i) the execution and delivery by Netzee of this Agreement
and the other Purchase Agreements, (ii) the consummation by Netzee of the
transactions contemplated hereby and thereby and (iii) the performance of
Netzee's obligations under this Agreement and the other Purchase Agreements.
Netzee has the full corporate power and authority to execute and deliver this
Agreement and the other Purchase Agreements to which it is a party and the
consummation by Netzee of the other transactions contemplated hereby and thereby
in accordance with the terms hereof and thereof. This Agreement and the other
Purchase Agreements have been duly and validly executed and delivered by Netzee
and constitute the valid and binding obligations of Netzee enforceable against
Netzee in accordance with its and their terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium reorganization, fraudulent conveyance or similar laws in effect that
affect the enforcement of creditor's rights generally or general principles of
equity, whether considered in a proceeding at law or in equity. No approval by
the shareholders of Netzee is required in connection with the consummation of
the transactions contemplated by this Agreement.
(b) Neither the execution and delivery of this Agreement
and the other Purchase Agreements to which it is a party by Netzee, nor the
consummation by Netzee of the transactions contemplated hereby and thereby in
accordance with the terms hereof and thereof, nor compliance by Netzee with any
of the terms or provisions hereof and thereof, will (i) violate any provision of
Netzee's Articles of Incorporation or Bylaws, or (ii) except for compliance with
the applicable requirements of the HSR Act, violate any Laws applicable to
Netzee or any of its properties or assets.
4.4 BROKER'S AND OTHER FEES. Other than The Xxxxxxxx-Xxxxxxxx
Company, LLC, Netzee has not employed any broker or finder or incurred any
liability for any broker's or finder's fees or commissions in connection with
any of the transactions contemplated by this Agreement.
4.5 LEGAL PROCEEDINGS. No litigation is pending or, to the
Knowledge of Netzee, threatened against or affecting Netzee in connection with
any of the transactions contemplated
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by this Agreement or the other Purchase Agreements to which Netzee is a party
which may affect Netzee's ability to perform its obligations hereunder or
thereunder. There is presently no outstanding judgment, decree or order of any
Governmental Authority against or affecting Netzee in connection with the
transactions contemplated by this Agreement or the other Purchase Agreements to
which Netzee is a party.
4.6 SEC REPORTS. Netzee is a "reporting issuer" and has a class of
securities registered under Section 12(g) of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"). Netzee has made all filings with the SEC
that it has been required to make under the Securities Act and the Exchange Act
(the "SEC FILINGS"). None of the reports contained in such SEC Filings, as of
their respective dates (or if amended or superseded by subsequent filing, on the
dates of such filings), contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Netzee contained in such SEC Filings and
reports were prepared in accordance with GAAP consistently applied through the
periods covered thereby (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q promulgated by the SEC) and present fairly, in all material respects,
the financial condition of Netzee as of the indicated dates and the results of
operations of Netzee for the indicated periods.
4.7 NO MATERIAL ADVERSE CHANGE. Since June 30, 2000, other than as
disclosed by Netzee in any SEC Filings or in this Agreement, there has been no,
nor has there been any event or occurrence which may reasonably be expected to
result in a, material adverse change in the business, financial condition or
results of operations of Netzee.
4.8 INTERCEPT CONSENT. The InterCept Group, Inc. ("INTERCEPT") has
consented under its credit facility with Netzee to the transactions contemplated
by this Agrement.
4.9 DISCLOSURE. No representation, warranty or statement made by
Netzee in this Agreement, the other Purchase Agreements or in any document or
certificate furnished to the Sellers pursuant to this Agreement or the other
Purchase Agreements contains or will contain any untrue or incomplete statement
or omits or will omit to state any material fact necessary to make the
statements herein or therein not misleading.
ARTICLE 5
COVENANTS AND AGREEMENTS OF THE PARTIES
5.1 CONDUCT OF BUSINESS. From the date hereof to the Second
Closing Date, the Sellers shall conduct the Business only in the ordinary course
and consistent with past practice, except for transactions permitted hereunder
or with the prior written consent of Netzee, which shall not be unreasonably
withheld. Without limiting the generality of the foregoing, in respect of
matters primarily relating to the Business, each of the Sellers shall use all
commercially reasonable efforts to:
(a) maintain all of the tangible Purchased Assets in good
operating condition, ordinary wear and tear excepted, and maintain the
protection of all intellectual property included in the Purchased Assets in
substantially the same standing as exists on the date hereof;
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(b) continue performance in the ordinary course of its
obligations under the Material Contracts;
(c) preserve its business organization intact, use all
commercially reasonable efforts to keep available its present officers and
employees and preserve its present relationships with suppliers, customers and
others having business relationships with it; and
(d) maintain its existing insurance, subject to
variations in amount required by the ordinary operations of the Business.
5.2 NEGATIVE COVENANTS. From the date hereof to the Second
Closing Date, except as otherwise approved by Netzee in writing (which shall not
be unreasonably withheld), or as permitted or required by this Agreement, the
Sellers, in respect of matters primarily relating to the Business, will not:
(a) grant any severance or termination pay to, or enter
into or amend any employment or severance agreement with, any of its officers or
employees whose employment is primarily related to the Business; adopt any new
employee benefit plan or arrangement of any type; or award any increase in
compensation or benefits to its officers or employees whose employment is
primarily related to the Business except for increases and bonuses in the
ordinary course of business and consistent with past practices and policies;
(b) sell or dispose of any Purchased Assets other than in
the ordinary course of business consistent with past practices;
(c) permit or allow any of the Purchased Assets to become
subject to any Encumbrance, except for Permitted Encumbrances;
(d) incur, create, assume or guarantee any liabilities
which would become Assumed Liabilities or act as an Encumbrance (except for
Permitted Encumbrances) upon the Purchased Assets except in the ordinary course
of business and as would not be material;
(e) declare, file or permit to be filed any voluntary
bankruptcy, receivership, insolvency or other similar proceeding or petition
with any Governmental Authority with respect to the Business;
(f) fail to perform its material obligations under any
Material Contract (except those being contested in good faith) or enter into,
assume or amend any agreement that would be a Material Contract other than
agreements entered into in the ordinary course of business;
(g) take any action that results in (i) a Material
Adverse Effect on the Business or (ii) any of its representations and warranties
contained in Article 3 not being true and correct in any material respect at the
Second Closing Date, or that would cause any of the conditions to the Second
Closing not to be satisfied;
(h) directly or indirectly agree to do any of the
foregoing; or
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(i) acquire any shares of Netzee Common Stock.
5.3 NO SOLICITATION. From the date hereof to the Second Closing
Date or the earlier termination of this Agreement in accordance with its terms:
(a) neither any of the Sellers nor any of their
Subsidiaries or other affiliates, nor any of its or their directors, officers,
employees, representatives or other agents (together with the Sellers,
collectively, the "SELLERS AFFILIATES") shall, directly or indirectly, (i) enter
into any agreement (or agree to do so), or solicit, initiate or knowingly
encourage the invitation of inquiries or proposals or offers from any person
(other than Netzee or its directors, officers, employees, representatives and
agents) concerning: (A) any sale of assets or transfer of liabilities of any of
the Sellers Affiliates with respect to the Business or the Purchased Assets
(other than any such sale or transfer in the ordinary course of business); (B)
any issuance, purchase or sale of capital stock or debt or other securities of
any of the Sellers Affiliates with respect to the Business or the Purchased
Assets; or (C) any merger, consolidation, restructuring, recapitalization or
other significant transaction involving any of the Sellers Affiliates with
respect to the Business or the Purchased Assets which would prevent or delay the
consummation of the transactions contemplated by this Agreement; or (ii) provide
any confidential information to, participate in discussions or negotiations
relating to any such transaction with, or otherwise cooperate with or assist or
participate in any effort to take such action by any person or entity (other
than Netzee or its directors, officers, shareholders, employees, representatives
and agents) with respect to the Business or the Purchased Assets. The Sellers
shall promptly advise Netzee if any such inquiry, offer or proposal is made or
received by any of the Sellers Affiliates after the date hereof; and
(b) the Sellers will promptly cease and cause to be
terminated any existing activities, discussions or negotiations with any persons
conducted heretofore with respect to any of the foregoing, and the Sellers will
take the necessary steps to inform the individuals or entities referred to above
of the obligations undertaken in this Section 5.3.
5.4 CURRENT INFORMATION. During the period from the date of this
Agreement to the Second Closing Date or the earlier termination of this
Agreement in accordance with its terms:
(a) Upon the reasonable request of Netzee, the Sellers
will cause one or more of the Sellers' representatives to confer with
representatives of Netzee regarding its business, operations, properties, assets
and financial condition with respect to the Business or the Purchased Assets.
Upon the reasonable request of Xxxxxxx, Netzee will cause one or more of
Netzee's representatives to confer with representatives of Xxxxxxx regarding its
business, operations, properties, assets and financial condition.
(b) Each of the Parties will cause one or more of its
representatives to confer with representatives of the other Parties regarding
matters relating to the completion of the transactions contemplated herein.
(c) Each of the Parties will notify the other Parties as
soon as practicable after any determination or discovery by it of any fact or
circumstance relating to any other Party which it has discovered through the
course of investigation and which represents, or is
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reasonably likely to represent, a material breach of any covenant or agreement
of such Party or which has or is reasonably likely to have a Material Adverse
Effect on Netzee, the Business or the Purchased Assets.
5.5 ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) Each Seller, in respect of the Business shall permit
Netzee and its representatives reasonable access to its properties and shall
disclose and make available to Netzee and its representatives all books, papers
and records and information relating to its assets, properties, operations,
obligations and liabilities, including, but not limited to, all books of account
(including the general ledger), tax records, minute books of directors' and
shareholders' meetings, organizational documents, agreements, filings with any
Governmental Authority, accountants' work papers, litigation files, plans
affecting employees, and any other records and information in which Netzee and
its representatives may have a reasonable interest; which in any case are
primarily related to the Business or the Purchased Assets provided that such
investigation shall be reasonably related to the transactions contemplated by
this Agreement and shall not interfere unnecessarily with the normal business
operations of the Sellers.
(b) Netzee shall disclose and make available to Xxxxxxx
and its representatives such information relating to Netzee's business,
operations, properties, assets and financial condition and any other information
in which Xxxxxxx and its representatives may have a reasonable interest,
provided such investigations shall not interfere unnecessarily with the normal
business operations of Netzee.
(c) For a period of four (4) years from the date hereof,
all information (whether written or oral and whether received before or after
the date this Agreement is signed) provided by any Party to any other Party in
connection with the transactions contemplated by this Agreement (the
"CONFIDENTIAL INFORMATION") will be treated as confidential and will not be
disclosed by the recipient to any third party unless the disclosing Party
reasonably believes that such disclosure is required by applicable Law or court
process or as may be necessary or appropriate in connection with the enforcement
of this Agreement. However, the term "Confidential Information" shall not
include any information (i) that was already in the recipient's possession prior
to the date hereof, (ii) that was then generally known to the public or (iii)
that has been made generally available to the public after the date hereof other
than through a breach of this provision by the recipient.
5.6 REGULATORY MATTERS; CONSENTS; COOPERATION, ETC.
(a) Each of the Parties shall promptly make
their respective filings under applicable Laws to obtain any required approval
of any federal, state or local governmental agency or regulatory body with
jurisdiction over the transactions contemplated hereby, including all filings
required by the HSR Act.
(b) Each of the Parties will promptly furnish
each other with copies of written communications received by them or any of
their respective Subsidiaries from, or delivered by any of the foregoing to, any
Governmental Authorities in respect of the transactions contemplated hereby.
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(c) As soon as practicable following the date hereof,
each of the Parties will use its commercially reasonable efforts to obtain all
consents, waivers and other Authorizations under any of its or its Subsidiaries'
agreements and contracts (other than customer contracts and agreements),
licenses or leases required to be obtained by such Party in connection with the
consummation of the transactions contemplated hereby, including without
limitation the agreements, contracts and leases set forth on Sellers Disclosure
Schedule 3.2(a).
(d) Effective as of the Second Closing Date, each Seller
shall cause all mail and other communications, moneys, checks and other
instruments of payment relating to the Purchased Assets, the Assumed Liabilities
or the Business (other than with respect to the Retained Assets) to be delivered
by it or forwarded to such mailing address as Netzee shall provide to the
Sellers, or, if no such address has been provided, to Netzee in accordance with
the provisions of Section 9.2(a). Each Seller hereby authorizes Netzee from and
after the Second Closing Date to receive and open all mail and other
communications relating to the Business received by Netzee, and to act with
respect to such communications in such manner as Netzee may elect if such
communications related to the Purchased Assets, the Assumed Liabilities or the
Business (other than with respect to the Retained Assets), or, if such
communications do not so relate, to forward the same promptly to Xxxxxxx in
accordance with the provisions of Section 9.2(b).
(e) Effective immediately after the Second Closing Date,
Netzee and its designees shall have the right to use the invoices, logos,
artwork and other similar printed materials bearing or including the name "Meca
Software" in connection with the operation of the Purchased Assets and the
Business, in such manner as to be determined in Netzee's sole discretion.
5.7 PARTIES' EFFORTS; FURTHER ASSURANCES. Subject to the other
provisions in this Agreement, the Parties shall in good faith perform their
obligations under this Agreement and the other Purchase Agreements before, at
and after the Second Closing Date, and shall each use all commercially
reasonable efforts to do, or cause to be done, all things necessary, proper or
advisable to obtain all Authorizations and satisfy all conditions to the
obligations of the Parties under this Agreement and the other Purchase
Agreements and to cause the transactions contemplated by this Agreement and the
other Purchase Agreement to be carried out promptly in accordance with the terms
hereof and thereof and shall cooperate fully with each other and their
respective officers, directors, employees, agents, counsel, accountants and
other designees in connection with any steps required to be taken as part of
their respective obligations under this Agreement and the other Purchase
Agreements. Upon the execution of this Agreement and thereafter, each Party
shall take such actions and execute and deliver such documents as may be
reasonably requested by the other Party in order to consummate the transactions
contemplated by this Agreement and the other Purchase Agreements.
5.8 PUBLIC ANNOUNCEMENTS. Prior to the Second Closing Date, no
Party shall make any public announcement regarding any aspect of this Agreement
or make a press release announcing the Second Closing or file a Form 8-K without
the other Parties' prior written consent (with Xxxxxxx consenting on behalf of
the other Sellers), provided that nothing in this Section 5.8 shall be deemed to
prohibit any Party from making any disclosure which its counsel
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deems necessary in order to satisfy such Party's disclosure obligations imposed
by Law or Governmental Authority.
5.9 TAXES.
(a) Any sales taxes, real property transfer or gains
taxes, recording fees or any other taxes payable as a result of the transactions
contemplated by this Agreement (other than any federal, state, local or foreign
taxes measured by or based upon income or gains imposed upon Netzee) will be
paid by the Sellers. The Parties will cooperate in the preparation, execution
and filing of all returns, questionnaires, applications or other documents
regarding any sales, use, transfer, value added, stock transfer and stamp taxes,
any transfer, recording, registration and other fees and any similar taxes which
become payable in connection with the transactions contemplated hereby that are
required or permitted to be filed on or before the Second Closing Date.
(b) The Parties hereby waive compliance by the Parties
with the bulk sales laws and any other similar laws in any applicable
jurisdiction in respect of the transactions contemplated by this Agreement
(collectively, the "BULK SALES LAWS").
5.10 DISCLOSURE SUPPLEMENTS. From time to time prior to the Second
Closing Date, the Sellers will promptly notify Netzee of any inaccuracy in the
Sellers Disclosure Schedules delivered pursuant hereto including, without
limitation, any matter which, if existing, occurring or known at the date of
this Agreement, would have been required to be set forth or described in such
Schedule or which is necessary to correct any information in such Schedule that
has been rendered inaccurate. Notwithstanding the foregoing, no such
notification shall be deemed to amend the Sellers Disclosure Schedules or shall
be deemed to be part hereof unless agreed to by Netzee.
5.11 NO TRANSFERS. The Sellers shall not transfer, assign, convey
or otherwise dispose of any of the Securities or any rights with respect to the
Securities for a period of 12 months commencing upon the date of receipt of the
Securities, except the Sellers may transfer the Securities among the Sellers in
transactions in accordance with the Securities Act and applicable State Acts.
5.12 CUSTOMER CONTACTS. The Sellers shall permit Netzee to conduct
a survey or otherwise inquire of certain or all of the Business' key customers,
as selected by Netzee, regarding the relationship between such customer and the
Sellers and the impact of a change in control on such relationship. The Sellers
shall assist Netzee in making such survey or inquiries and shall have the right
to have a representative of its choice participate therein.
5.13 ADDITIONAL FINANCIAL STATEMENTS. After the Second Closing
Date, the Sellers will assist Netzee in the timely preparation of audited
financial statements of the Business and pro forma financial statements that
meet the requirements of the SEC for filing under Form 8-K, and will designate
appropriate personnel for such assistance on a commercially reasonable basis.
Netzee shall pay the first $75,000 of the fees and expenses of Netzee's
accounting firm in connection with such financial statements, and Netzee, on the
one hand, and the Sellers, on the
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other hand, shall share equally the fees and expenses of Netzee's accounting
firm in excess of $75,000.
5.14 WARN; SEVERANCE OBLIGATIONS; HIRING OF EMPLOYEES.
(a) Netzee and Xxxxxxx have agreed as to the employees of the
Business whose employment with the Sellers is to be terminated before the Second
Closing Date (collectively, the "FIRST STAGE EMPLOYEES") and Sellers shall
terminate the First Stage Employees as soon as administratively feasible after
the Initial Closing. Except as contemplated by Section 5.20, as of the Second
Closing, the Sellers shall terminate all other employees of the Business
(collectively, the "SECOND STAGE EMPLOYEES"). The Sellers shall be responsible
for giving any notice that may be required by the Worker Adjustment and
Retraining Notification Act as a result of the transactions contemplated by this
Agreement, as to layoffs or facility closings ordered or taken before, on or as
of the Second Closing. In addition to the foregoing, the Sellers shall be
responsible for and shall pay all amounts owed to Xxxxxxxx Xxxxxxx pursuant to
her employment agreement with any Seller, or otherwise, arising out of the
transactions contemplated by this Agreement or otherwise arising on or prior to
the Second Closing Date.
(b) Immediately after the Second Closing, Netzee shall offer to
employ all of the Second Stage Employees at the same compensation and, where
practicable, comparable job descriptions. Netzee shall be responsible for giving
any notice that may be required by the Worker Adjustment and Retraining
Notification Act, as a result of layoffs or facility closings ordered or taken
after the Second Closing with respect to the Second Stage Employees hired by
Netzee. Sellers shall be responsible for all severance, termination and similar
payments for all First Stage Employees, and all Second Stage Employees who do
not accept Netzee's offer of employment, and any severance and termination
payments which arise as a result of the termination by Sellers of any Second
Stage Employee. Netzee shall be responsible for all severance, termination and
similar payments for all Second Stage Employees hired by Netzee which arise out
of their subsequent termination.
(c) With respect to Second Stage Employees who shall be employed
by Netzee after the Second Closing Date, (i) the Sellers shall timely provide
Netzee all information relating to each such employee as Netzee may reasonably
require in connection with Netzee's employment of such persons; including
initial employment dates, reemployment dates, hours of service, compensation and
tax withholding history in a form that will be usable by Netzee, and (ii) Netzee
will permit each such employee to participate in Netzee's employee benefit plans
and programs from time to time in effect and on such terms and conditions as
provided by such plans and programs, and Netzee shall give each such employee
full credit for service with the Business for purposes of eligibility to
participate in and the payment of benefits under such benefit plans, subject in
each case to the terms of the plans and applicable Law.
5.15 BROKER FEES. Each Party shall be responsible for the payment
of any fees, commissions, or other expenses incurred by or owed to any broker or
representative hired or retained by such Party.
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5.16 APPOINTMENT AND NOMINATION OF DIRECTORS. On or prior to the
Second Closing Date, the number of directors of Netzee's Board of Directors
shall be increased by two and Netzee shall appoint the persons designated by
Xxxxxxx to serve on Netzee's Board of Directors until the next election of
directors. In addition, Netzee shall provide in Netzee's proxy statement for its
2001 and 2004 annual meetings of shareholders (and any interim shareholders
meetings where such directors stand for election) for the nomination of
Harland's director nominees to serve as directors of Netzee to serve for three
year terms. Notwithstanding the foregoing, Netzee shall only be required to
nominate both directors selected by Xxxxxxx at the 2004 annual shareholders
meeting if Xxxxxxx (or its affiliates) owns at least 10% of the outstanding
shares of Netzee Common Stock, and shall only be required to nominate one such
person selected by Xxxxxxx if Xxxxxxx owns less than 10% but at least 5% of the
outstanding shares of Netzee Common Stock. In addition, one of the directors
designated by Xxxxxxx and as specified by Xxxxxxx shall also serve on the
compensation committee of Netzee's Board of Directors and the executive
committee, if one is established.
5.17 CROSS MARKETING AGREEMENT. Promptly following the Second
Closing Date, the Parties shall work together in good faith to develop a Cross
Marketing Agreement reasonably acceptable to the Parties.
5.18 NASDAQ COMPLIANCE. The Parties will cause the transactions
contemplated by this Agreement to be conducted in accordance with the rules of
the Nasdaq National Market.
5.19 SUBLEASE OF CERTAIN FACILITIES.
(a) Portland, Oregon Facility. From and after the Second Closing,
Netzee shall sublease from Concentrex, and Concentrex shall sublease to Netzee,
an entire floor of Concentrex's facility in Portland, Oregon. Netzee shall pay
to Concentrex rent in the amount of $20,000 per month for such space, and
Concentrex shall be responsible for all taxes, utilities and other expenses
associated with such facility. Netzee may terminate the sublease by providing
Concentrex ninety (90) days' written notice. Concentrex may terminate the
sublease only upon the expiration of the current term or early termination of
the underlying lease upon which the sublease is based; provided that Netzee
receives ninety (90) days' prior notice of any such early termination.
(b) Trumbull, Connecticut Facility. From and after the Second
Closing, Netzee shall sublease from Meca, and Meca shall sublease to Netzee
Meca's facility in Trumbull, Connecticut. Netzee shall pay to Meca rent in the
amount of $50,000 per month for such space, and Meca shall be responsible for
all taxes, utilities and other expenses associated with such facility. Either
Netzee or Xxxxxxx may terminate the sublease by providing the other ninety (90)
days' written notice.
5.20 HOUSTON, TEXAS FACILITY AND EMPLOYEES. From and after the
Second Closing and until December 31, 2000, Concentrex shall maintain its
Houston, Texas facility, including the employment of the personnel associated
with such facility, in accordance with its normal business practices. Netzee and
Concentrex shall as soon as reasonably possible after the Second Closing Date
enter into a mutually satisfactory employee leasing agreement pursuant to which
Netzee shall lease from Concentrex certain personnel, on a full-time basis, at a
contract rate of
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$70.00 per employee per hour located in the Houston, Texas facility for a period
not to extend past December 31, 2000, subject to earlier termination at the
option of Netzee.
5.21 INTERCEPT DOCUMENTS. Netzee shall use commercially reasonable
efforts to finalize, execute and deliver as soon as practicable all documents
necessary or appropriate in connection with the agreed terms of the Note as set
forth on Exhibit A.
ARTICLE 6
CLOSING CONDITIONS
6.1 CONDITIONS TO THE OBLIGATIONS OF NETZEE UNDER THIS AGREEMENT.
The obligations of Netzee under this Agreement shall be further subject to the
satisfaction or waiver, at or prior to the Second Closing Date, of the following
conditions:
(a) Authorizations and Regulatory Filings. All necessary
Authorizations of Governmental Authorities, including the expiration or early
termination of the waiting period under the HSR Act, required to be obtained to
consummate the transactions contemplated by this Agreement and the other
Purchase Agreements shall have been obtained. All conditions required to be
satisfied by the Sellers with respect to such Authorizations prior to the Second
Closing Date by the terms of such Authorizations shall have been satisfied.
(b) Suits and Proceedings. The consummation of the
transactions contemplated by this Agreement and other Purchase Agreements will
not violate the provisions of any injunction, order, judgment, decree or Law
applicable or effective with respect to the Sellers or their officers and
directors. No suit or proceeding shall have been instituted by or, to the
Knowledge of Netzee, shall have been threatened by any Governmental Authority,
and not subsequently withdrawn, dismissed or otherwise eliminated, which seeks
(i) to prohibit, restrict or delay consummation of the transactions contemplated
hereby or to limit in any material respect the right of Netzee to acquire the
Business or any of the Purchased Assets, or (ii) to subject a Seller or its
directors or officers to material liability on the ground that it or they have
breached any Law or otherwise acted improperly in relation to the transactions
contemplated by this Agreement.
(c) Opinion of Counsel. Netzee shall have received an
opinion of counsel to the Sellers, dated the Second Closing Date, in the form
set forth on Exhibit B.
(d) Certificates. The Sellers shall have furnished Netzee
with certificates in substantially the form attached hereto as Exhibit C.
(e) Xxxx of Sale; Conveyance Documents. The Sellers shall
have executed and delivered to Netzee the Bills of Sale in substantially the
form attached hereto as Exhibit D, and appropriate transfer documents for
particular intellectual property rights.
(f) Assignment and Assumption Agreement. The Sellers
shall have executed and delivered to Netzee assignment and assumption agreements
in substantially the form attached hereto as Exhibit E whereby Sellers shall
assign and Netzee shall assume certain liabilities related to the Business.
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(g) Noncompetition, Nonsolicitation and Confidentiality
Agreement. The Sellers shall each have executed and delivered to Netzee a
Noncompetition, Nonsolicitation and Confidentiality Agreement substantially in
the form attached hereto as Exhibit F.
6.2 CONDITIONS TO THE OBLIGATIONS OF THE SELLERS UNDER THIS
AGREEMENT. The obligations of the Sellers under this Agreement shall be further
subject to the satisfaction or waiver, at or prior to the Second Closing Date,
of the following conditions:
(a) Authorizations and Regulatory Filings. All necessary
Authorizations of Governmental Authorities, including the expiration or early
termination of the waiting period under the HSR Act, required to be obtained by
Netzee to consummate the transactions contemplated by this Agreement and the
other Purchase Agreements shall have been obtained. All conditions required to
be satisfied by Netzee prior to the Second Closing Date by the terms of such
Authorizations shall have been satisfied.
(b) Suits and Proceedings. The consummation of the
transactions contemplated by this Agreement and other Purchase Agreements will
not violate the provisions of any injunction, order, judgment, decree or Law
applicable or effective with respect to Netzee, or the officers and directors of
Netzee. No suit or proceeding shall have been instituted by or, to the Knowledge
of the Sellers, shall have been threatened by any Governmental Authority, and
not subsequently withdrawn, dismissed or otherwise eliminated, which seeks (i)
to prohibit, restrict or delay consummation of the transactions contemplated
hereby or to limit in any material respect the right of the Sellers to sell the
Business or the Purchased Assets, or (ii) to subject the Sellers or their
respective directors or officers to material liability on the ground that they
have breached any Law or otherwise acted improperly in relation to the
transactions contemplated by this Agreement.
(c) Certificates. Netzee shall have furnished the Sellers
with such certificates in substantially the form attached hereto as Exhibit G.
(d) Assignment and Assumption Agreement. Netzee shall
have executed and delivered to the Sellers the Assignment and Assumption
Agreement.
(e) Purchase Price. Netzee shall have delivered to the
Sellers the Securities.
(f) Opinion of Counsel. The Sellers shall have received
an opinion of counsel to Netzee, dated the Second Closing Date, in the form set
for on Exhibit H.
(g) Noncompetition, Nonsolicitation and Confidentiality
Agreement. Netzee shall have executed and delivered to the Sellers the
Noncompetition, Nonsolicitation and Confidentiality Agreement substantially in
the form attached hereto as Exhibit F.
(h) Registration Rights Agreement. Netzee shall have
executed and delivered to the Sellers a Registration Rights Agreement in
accordance with the terms set forth on Exhibit I.
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(i) Intercept Documentation. Netzee and Intercept shall
have executed and delivered to Xxxxxxx the documents contemplated by Section
5.21 in form reasonably acceptable to Xxxxxxx.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION. This Agreement may be terminated prior to the
Second Closing Date as follows:
(a) by mutual written consent of Netzee and Xxxxxxx;
(b) by Netzee or Xxxxxxx, if the Second Closing shall not
have occurred on or prior to November 30, 2000; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any Party whose action or failure to act has been a principal cause
of or resulted in the failure of the transactions contemplated by this Agreement
to occur on or before such date and such action or failure to act constitutes a
willful and material breach of this Agreement;
(c) by Netzee, if the representations or warranties of
the Sellers contained in this Agreement shall not have been true or shall have
been incorrect (in each case as of the date hereof) in such a manner that if the
Second Closing occurred, Netzee would suffer Indemnifiable Damages in excess of
$3,375,000;
(d) by Netzee, if there has been an intentional, willful
and continuous material breach of any material covenant, agreement or obligation
by a Seller hereunder which has not been remedied after ten (10) days' notice,
and which, if the Second Closing were to occur, would result in a substantial
and material injury to the business and operations of Netzee taken as a whole;
(e) by Xxxxxxx, if there has been an intentional, willful
and continuous material breach of any material covenant, agreement or obligation
by Netzee hereunder which has not been remedied after ten (10) days' notice, and
which, if the Second Closing were to occur, would result in a substantial and
material injury to the business and operations of Sellers taken as a whole;
(f) by Netzee, if any of the conditions set forth in
Section 6.1 is not satisfied and is no longer capable of being satisfied; or
(g) by Xxxxxxx, if any of the conditions set forth in
Section 6.2 is not satisfied and is no longer capable of being satisfied.
7.2 EFFECT OF TERMINATION.
(a) If any Party terminates and abandons this Agreement
pursuant to Section 7.1, this Agreement, other than Section 5.5(b), this Section
7.2, Section 7.3, Article 8, and Section 9.1 (each of which shall survive
termination), shall forthwith become void and have no
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effect, without any liability on the part of any Party or its officers,
directors or shareholders; provided, however, that nothing contained in this
Section 7.2 shall relieve any Party from any liability for any breach of this
Agreement.
(b) If this Agreement is terminated for any reason prior
to the Second Closing, Netzee shall promptly pay to the Sellers $5 million in
cash plus accrued interest on the Note by wire transfer of immediately available
funds and the Sellers shall promptly transfer and deliver to Netzee the Note
marked "cancelled."
7.3 SPECIFIC PERFORMANCE. The Parties acknowledge that the rights
of each Party to consummate the transactions contemplated hereby are special,
unique, and of extraordinary character, and that, in the event any Party either
violates or fails or refuses to perform any covenant made by it herein, the
other Party will be without adequate remedy at law. Each Party agrees,
therefore, that in the event that it violates, fails or refuses to perform any
covenant or agreement made by it herein, the other Party, so long as it is not
in breach hereof, may, in addition to the remedies at law, institute and
prosecute an action in a court of competent jurisdiction to enforce specific
performance of such covenant or agreement or seek any other equitable relief.
7.4 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of the Parties hereto.
7.5 EXTENSION; WAIVER. The Parties may, at any time prior to the
Second Closing Date, (a) extend the time for the performance of any of the
obligations or other requirements herein; (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant thereto; or (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of any Party to any
extension or waiver shall be valid only if it is set forth in an instrument in
writing signed on behalf of the Party against whom the waiver is sought to be
enforced and shall apply only to the specific condition, representation or
warranty identified by the writing as being waived, extended or modified.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY THE SELLERS. Subject to the terms of this
Article 8, if the Second Closing occurs, the Sellers shall jointly and severally
indemnify, defend, save and hold harmless Netzee and each of its Subsidiaries,
predecessors, successors, directors, officers, employees, agents,
representatives and assigns (collectively, the "NETZEE INDEMNIFIED PARTIES"),
from and against any claims, losses, damages, liabilities, demands, assessments,
judgments, costs and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses), together with interest and
penalties, if any, awarded by court order or otherwise agreed to (collectively,
"INDEMNIFIABLE DAMAGES"), suffered by the Netzee Indemnified Parties that arise
out of or result from any of the following (whether or not a third party
initiates the proceeding or claim giving rise to such Indemnifiable Damages):
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(a) any breach of any of the representations, warranties,
covenants or agreements made by any of the Sellers in this Agreement or in the
other Purchase Agreements; or
(b) any breach of any representation, warranty, covenant
or agreement in a document or certificate delivered by any of the Sellers at the
Second Closing;
(c) any Retained Liability;
(d) subject to the limitations set forth in Section 8.9
as if this Section 8.1(d) were a representation and warranty of the Sellers, any
customer identified on Schedule 8.1 terminating its agreement relating to the
Business based upon a failure to consent to transfer of the agreement to Netzee
within sixty (60) days of the Second Closing Date, in which case the
Indemnifiable Damages shall equal the expected revenues for the applicable
termination notice period set forth in the agreement; or
(e) the failure of any of the Sellers to comply with any
Bulk Sales Law.
8.2 INDEMNIFICATION BY NETZEE. Subject to the terms of this
Article 8, Netzee shall indemnify, defend, save and hold harmless the Sellers
and each of their respective Subsidiaries, predecessors, successors, directors,
officers, employees, agents, representatives and assigns (collectively, the
"SELLER INDEMNIFIED PARTIES") from and against any Indemnifiable Damages
suffered by any of the Sellers that arise out of or result from any of the
following (whether or not a third party initiates the proceeding or claim giving
rise to such Indemnifiable Damages):
(a) any breach of any of the representations, warranties,
covenants or agreements made by Netzee in this Agreement or in the other
Purchase Agreements; or
(b) any breach of any representation, warranty, covenant
or agreement in a document or certificate delivered by Netzee at the Second
Closing; or
(c) any Assumed Liability.
8.3 CLAIMS FOR INDEMNIFICATION. The representations, warranties,
covenants and agreements of the Parties in this Agreement shall survive the
Second Closing, and the representations and warranties of the Parties shall
remain in full force and effect until March 31, 2002 (the "CLAIMS PERIOD");
provided, however, that the representations and warranties set forth in Sections
3.7, 3.11(a) and 3.12 shall survive until expiration of any applicable statute
of limitations (including any extensions thereof) which would preclude assertion
of claims for matters existing on or prior to the date of this Agreement. The
Party seeking indemnification (the "INDEMNIFIED PARTY") shall give the Party
from whom indemnification is sought (the "INDEMNIFYING PARTY") a written notice
("NOTICE OF CLAIM") within thirty (30) days of the discovery of any
Indemnifiable Damage in respect of which the right to indemnification contained
in this Article 8 may be claimed; provided, however, that the failure to give
such notice within such thirty (30) day period shall not result in the waiver or
loss of any right to bring such claim hereunder after such period unless, and
only to the extent that, the Indemnifying Party is actually prejudiced by such
failure. Any Notice of Claim shall also be delivered to the Escrow
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Agent. Any Notice of Claim shall set forth the representations, warranties,
covenants and agreements with respect to which the claim is made, the facts
giving rise to an alleged basis for the claim and the amount of liability
asserted or anticipated to be asserted by reason of the claim.
8.4 DEFENSE OF CLAIM BY THIRD PARTIES.
(a) Promptly after receipt by an Indemnified Party of
notice by a third party of any complaint or the commencement of any audit,
investigation, action or proceeding with respect to which such Indemnified Party
may be entitled to receive payment from an Indemnifying Party for any
Indemnifiable Damages, such Indemnified Party will notify the Indemnifying
Party, promptly following the Indemnified Party's receipt of such complaint or
of notice of the commencement of such audit, investigation, action or
proceeding; provided, however, that the failure to so notify the Indemnifying
Party will relieve the Indemnifying Party from liability under this Agreement
with respect to such claim only if, and only to the extent that, such failure to
notify the Indemnifying Party results in the forfeiture by the Indemnifying
Party of rights and defenses otherwise available to the Indemnifying Party with
respect to such claim. The Indemnifying Party will have the right, upon written
notice delivered to the Indemnified Party within ten (10) days of its receipt of
such notice to assume full responsibility for any Indemnifiable Damages
resulting from such audit, investigation, action or proceeding, to assume the
defense of such audit, investigation, action or proceeding, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of the fees and disbursements of such counsel. In the event, however,
that the Indemnifying Party declines or fails to assume the defense of the
audit, investigation, action or proceeding on the terms provided above or to
employ counsel reasonably satisfactory to the Indemnified Party, in either case
within such ten (10) day period, then such Indemnified Party may employ counsel
to represent or defend it in any such audit, investigation, action or proceeding
and the Indemnifying Party will pay the reasonable fees and disbursements of
such counsel as incurred; provided, however, that the Indemnifying Party will
not be required to pay the fees and disbursements of more than one (i) counsel
for all Indemnified Parties in any jurisdiction in any single audit,
investigation, action or proceeding. In any audit, investigation, action or
proceeding with respect to which indemnification is being sought hereunder, the
Indemnified Party or the Indemnifying Party, whichever is not assuming the
defense of such action, will have the right to participate in such matter and to
retain its own counsel at such Party's own expense. The Indemnifying Party or
the Indemnified Party, as the case may be, will at all times use reasonable
efforts to keep the Indemnifying Party or the Indemnified Party, as the case may
be, reasonably apprised of the status of the defense of any matter the defense
of which they are maintaining and to cooperate in good faith with each other
with respect to the defense of any such matter.
(b) No Indemnified Party may settle or compromise any
claim or consent to the entry of any judgment with respect to which
indemnification is being sought hereunder without the prior written consent of
the Indemnifying Party, unless (i) the Indemnifying Party fails to assume and
maintain the defense of such claim pursuant to Section 8.4(a) or (ii) such
settlement, compromise or consent includes an unconditional release of the
Indemnifying Party from all liability arising out of such claim. An Indemnifying
Party may not, without the prior written consent of the Indemnified Party,
settle or compromise any claim or consent to the entry of any judgment with
respect to which indemnification is being sought hereunder unless (i) such
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settlement, compromise or consent includes an unconditional release of the
Indemnified Party from all liability arising out of such claim, (ii) does not
contain any admission or statement suggesting any wrongdoing or liability on
behalf of the Indemnified Party and (iii) does not contain any equitable order,
judgment or term which in any manner affects, restrains or interferes with the
business of the Indemnified Party or any of the Indemnified Party's affiliates.
8.5 THIRD PARTY CLAIM ASSISTANCE. From time to time after the
Second Closing, Netzee and the Sellers shall provide or cause their appropriate
employees or representatives to provide each other with information or data in
connection with the handling and defense of any third party claim or litigation
(including counterclaims filed by the parties) in respect to which a Party may
be required to indemnify other Parties under this Agreement. The Party or
Parties receiving such information or data shall reimburse the other Parties for
all of its reasonable costs and expenses in providing these services, including,
without limitation, (a) all out of pocket, travel and similar expenses incurred
by their personnel in rendering these services; and (b) all fees and expenses
for services performed by third parties engaged by or at the request of such
other Parties.
8.6 SETTLEMENT OF INDEMNIFICATION CLAIMS. If a recipient of a
Notice of Claim desires to dispute such claim, it shall, within thirty (30) days
after receipt of the Notice of Claim, give counter-notice, setting forth the
basis for disputing such claim, to Netzee, on the one hand, or to Xxxxxxx, on
the other hand, as the case may be. If such counter-notice is not given to the
Party to which such counter-notice is required to be given within such thirty
(30) day period, or if Netzee, on the one hand, or Xxxxxxx, on the other hand,
as the case may be, acknowledges liability for indemnification, then the amount
claimed shall be promptly satisfied as provided in Section 8.7. If, within
thirty (30) days after the receipt of counter-notice by Netzee, on the one hand,
or Xxxxxxx, on the other hand, as the case may be, Xxxxxxx and Netzee shall not
have reached agreement as to the claim in question, then the Party disputing the
claim shall satisfy any undisputed amount as specified in Section 8.7 and the
disputed amount of the claim of indemnification shall be submitted to and
settled by arbitration in accordance with the then prevailing commercial
arbitration rules of the American Arbitration Association. Such arbitration
shall be held in the Atlanta, Georgia area before a panel of three (3)
arbitrators, one selected by each of Netzee, on the one hand, and Xxxxxxx, on
the other hand, and the third selected by mutual agreement of Netzee and
Xxxxxxx, and all of whom shall be independent and impartial under the rules of
the American Arbitration Association. The decision of the arbitrators shall be
final and binding as to any matter submitted under this Agreement. To the extent
the decision of the arbitrators is that a Party shall be indemnified hereunder,
the amount shall be satisfied as provided in Section 8.7. Judgment upon any
award rendered by the arbitrators may be entered in any court of competent
jurisdiction.
8.7 MANNER OF INDEMNIFICATION.
(a) Where any of the Sellers are obligated to indemnify
the Netzee Indemnified Parties under Section 8.1 after the Second Closing Date,
such indemnity obligation shall be satisfied: (i) first, by fifty percent (50%)
cancellation of outstanding principal of the Note and fifty percent (50%) in
Netzee Common Stock held by Sellers, (ii) second, upon the exhaustion of the
Note, fifty percent (50%) in cash and fifty percent (50%) in Netzee Common
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Stock held by the Sellers, and (iii) third, upon the exhaustion of Netzee Common
Stock held by the Sellers, by the Sellers solely in cash. Netzee Common Stock
shall be valued at the Average Price.
(b) Where Netzee is obligated to indemnify the Seller
Indemnified Parties under Section 8.2 after the Second Closing Date, such
indemnity obligation shall be satisfied by payment of cash or delivery of a
certified check in the amount of the indemnity obligation.
8.8 INDEMNIFICATION IS EXCLUSIVE REMEDY. In the absence of fraud,
and except for non-monetary equitable relief, if the Second Closing occurs,
indemnification pursuant to this Article 8 shall be the sole and exclusive
remedy of the parties for any breach of any representation or warranty contained
in this Agreement.
8.9 CERTAIN LIMITATIONS. Notwithstanding the foregoing in this
Article 8, the indemnification obligations of the Parties shall not be affected
by any investigation made by the Parties hereto prior to the date hereof and
shall be subject to the following limitations.
(a) Except as provided in Section 8.9(c), no
indemnification shall be made for breaches of representations and warranties
pursuant to this Article 8 until the total Indemnifiable Damages for which the
Sellers, on the one hand, and Netzee, on the other hand, would be liable exceeds
$400,000, in which event the Indemnifying Party shall be obligated to indemnify
to the extent the amount such Indemnifiable Damages exceed $400,000.
(b) Except as provided in Section 8.9(c), no
indemnification shall be made for breaches of representation and warranties
pursuant to this Article 8 to the extent Indemnifiable Damages to be paid by the
Sellers, on the one hand, or by Netzee, on the other hand, exceeds $4.5 million.
(c) The limitations set forth in Sections 8.9(a) and (b)
shall not apply to Indemnifiable Damages arising out of fraud, intentional
breaches, or Section 3.7, 3.11(a) or 3.12; and by their terms do not apply to
Sections 8.1(c) and (e) and Section 8.2(c).
8.10 SUBROGATION. Upon payment in full of any Indemnifiable
Damages, whether such payment is effected by set-off or otherwise, or the
payment of any judgment or settlement with respect to a third party claim, the
Indemnifying Party shall be subrogated to the extent of such payment to the
rights of the Indemnified Party against any person with respect to the subject
matter of such Indemnifiable Damages or third party claim.
ARTICLE 9
MISCELLANEOUS
9.1 EXPENSES. Except as otherwise expressly stated herein, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including legal and accounting fees and
expenses) shall be borne by the Party incurring such costs and expenses and
shall be paid by such Party prior to or on the Second Closing Date.
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9.2 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or by reputable overnight or express courier, sent by registered or
certified mail, postage prepaid, or by telefax (with subsequent delivery via one
of the two previous methods) as follows:
(a) If to Netzee, to:
0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telefax: (000) 000-0000
Copy (which shall not constitute notice) to:
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Telefax: (000) 000-0000
(b) If to the Sellers, to:
Xxxx X. Xxxxxxx Company
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telefax: (000) 000-0000
Copy (which shall not constitute notice) to:
King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxx
Telefax: (000) 000-0000
or such other addresses and telefax numbers as shall be furnished in writing by
any Party, and any such notice or communications shall be deemed to have been
given as of the next succeeding business day after the date actually sent via
overnight or express courier, five days after mailed and upon telefax
confirmation of receipt.
9.3 PARTIES IN INTEREST. This Agreement shall be binding on and
shall inure to the benefit of the Parties hereto, and their respective
successors, representatives and assigns. This Agreement (and the rights and
interests herein) may not be assigned by any Party without the written consent
of the other Parties, which consent shall not be unreasonably withheld;
provided,
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however, Netzee may assign its interests herein to (a) an entity controlling,
controlled by or under common control with Netzee or (b) a purchaser or
transferee of all or substantially all of the business or assets of Netzee,
whether by sale of stock or assets, merger or otherwise. Any attempted
assignment in contravention of the foregoing shall be null and void. Nothing in
this Agreement is intended to confer, expressly or by implication, upon any
other person or entity any rights or remedies under or by reason of this
Agreement.
9.4 ENTIRE AGREEMENT. This Agreement, which includes the
disclosure schedules and Exhibits, and the other documents, agreements,
certificates and instruments executed and delivered pursuant to or in connection
with this Agreement (collectively, the "PURCHASE AGREEMENTS"), contains the
entire agreement among the Parties with respect to the transactions contemplated
by this Agreement and supersedes all prior negotiations, arrangements or
understandings, written or oral, with respect thereto.
9.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, and each of which shall
constitute one and the same agreement. Any Party may deliver an executed copy of
this Agreement and any documents contemplated hereby by facsimile transmission
to another Party, and such delivery shall have the same force and effect as any
other delivery of a manually signed copy of this Agreement or of such other
documents.
9.6 GOVERNING LAW.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the United States of America and the State of
Georgia, excluding choice of law principles.
(b) Netzee and the Sellers consent to the exclusive
jurisdiction and venue of the courts of any county in the State of Georgia and
the United States Federal District Courts of Georgia, in any judicial proceeding
brought to enforce this Agreement and agree that any forum other than the State
of Georgia is an inconvenient forum and that a lawsuit (or non-compulsory
counterclaim) brought in a court of any jurisdiction other than the State of
Georgia should be forthwith dismissed or transferred to a court located in the
State of Georgia.
9.7 INVALIDITY OF ANY PART. If any provision or part of this
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement and shall be construed as if such invalid,
illegal or unenforceable provision or part thereof had never been contained
herein, but only to the extent of its invalidity, illegality, or
unenforceability. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible.
9.8 TIME OF THE ESSENCE; COMPUTATION OF TIME. Time is of the
essence of each and every provision of this Agreement. Whenever the last day for
the exercise of any right or the discharge of any duty under this Agreement
shall fall upon Saturday, Sunday or a federal, public
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or legal holiday, the Party having such right or duty shall have until 5:00 p.m.
on the next succeeding regular business day to exercise such right or to
discharge such duty.
[Signatures begin on the following page.]
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43
IN WITNESS WHEREOF, Netzee and the Sellers have caused this Agreement
to be executed by their duly authorized officers as of the day and year first
above written.
NETZEE, INC.
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Xxxxxxx X. Xxxxxxxx
Senior Executive Vice President and
Chief Financial Officer
XXXX X. XXXXXXX COMPANY
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
CONCENTREX INCORPORATED
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
MECA SOFTWARE, L.L.C.
By: /s/ XXXX X. XXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
MONEYSCAPE HOLDINGS, INC.
By: /s/ XXXX X. XXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
44
SCHEDULES
Schedule 1.1 - Purchased Assets
Schedule 1.3 - Assumed Liabilities
Schedule 3.1(a) - Organization
Schedule 3.2(a) - Sellers' Approvals
Schedule 3.3 - Financial Statements
Schedule 3.5 - Absence of Certain Changes or Events
Schedule 3.6 - Legal Proceedings
Schedule 3.7 - Taxes and Tax Returns
Schedule 3.9 - Compliance with Applicable Laws
Schedule 3.10(a) - Material Contracts
Schedule 3.10(b) - Non-Binding Material Contracts
Schedule 3.10(c) - Material Contracts in Default
Schedule 3.11(a) - Encumbrances
Schedule 3.11(b) - Personal Property
Schedule 3.13(a) - Software
Schedule 3.13(b) - Intellectual Property Rights
Schedule 3.13(c) - Claims to Software
Schedule 3.15 - Third Party Components in Software
Schedule 3.16 - Third Party Interests or Marketing Rights in Software
Schedule 3.18 - Major Vendors and Customers
Schedule 3.19 - Labor Relations
Schedule 3.20 - Year 2000 Matters
Schedule 3.21 - Assignment Provisions
Schedule 4.3(a) - Necessary Authorizations
Schedule 8.1 - Significant Customers
45
EXHIBITS
Exhibit A - Terms of the Note
Exhibit B - Opinion of Sellers' Counsel
Exhibit C - Form of Certificate Required of Sellers
Exhibit D - Form of Xxxx of Sale
Exhibit E - Form of Assignment and Assumption Agreement
Exhibit F - Form of Noncompetition, Nonsolicitation and Confidentiality
Agreement
Exhibit G - Form of Certificate Required of Netzee
Exhibit H - Form of Opinion of Netzee's Counsel
Exhibit I - Summary of Registration Rights Terms
46
DEFINED TERMS
Accredited Investor.....................................................17
affiliate................................................................7
Agreement................................................................1
Assignment and Assumption Agreement......................................2
Assumed Contracts........................................................2
Assumed Liabilities......................................................2
Authorizations...........................................................9
Average Price............................................................7
Bulk Sales Laws.........................................................24
Business.................................................................1
Business Financial Statements...........................................10
Claims Period...........................................................31
Code.....................................................................7
Concentrex...............................................................1
Confidential Information................................................22
disclosed................................................................7
Documentation...........................................................13
EEOC....................................................................15
Encumbrance..............................................................7
Environmental Laws......................................................13
Exchange Act............................................................18
First Stage Employees...................................................24
Governmental Authority...................................................7
Xxxxxxx..................................................................1
HSR Act..................................................................9
including................................................................7
Indemnifiable Damages...................................................30
Indemnified Party.......................................................31
Indemnifying Party......................................................31
Initial Closing..........................................................1
Intercept...............................................................19
Knowledge................................................................8
Laws....................................................................10
liability................................................................8
Licenses................................................................11
Material Adverse Effect..................................................8
Material Contracts......................................................12
Meca.....................................................................1
Millennium Compliant....................................................15
Moneyscape...............................................................1
Netzee...................................................................1
Netzee Common Stock.....................................................17
Netzee Indemnified Parties..............................................30
NLRB....................................................................15
47
Note.....................................................................1
Notice of Claim.........................................................31
Parties..................................................................1
Permitted Encumbrances..................................................13
person...................................................................8
Processes...............................................................15
Purchase Agreements.....................................................35
Purchased Assets.........................................................2
Regulation D............................................................17
Retained Assets..........................................................2
Retained Liabilities.....................................................3
Returns.................................................................11
SEC Filings.............................................................18
Second Closing...........................................................3
Second Closing Date......................................................4
Second Stage Employees..................................................24
Securities...............................................................4
Securities Act...........................................................4
Securities Laws.........................................................16
Seller Indemnified Parties..............................................31
Sellers..................................................................1
Sellers Affiliates......................................................20
Sellers Approvals........................................................9
Sellers Disclosure Schedules.............................................7
Software................................................................13
Software Programs.......................................................13
State Acts...............................................................4
Subsidiary...............................................................8
Tax.....................................................................11
Taxes...................................................................11
threatened...............................................................8
