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EXHIBIT 2.1.1
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 (this "AMENDMENT") to the Asset Purchase Agreement
is dated and effective as of November 10, 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, Netzee and the Sellers entered into an Asset Purchase
Agreement dated and effective as of September 29, 2000 (the "ASSET PURCHASE
AGREEMENT"), pursuant to which Netzee will buy substantially all of the assets
and assume certain of the liabilities relating to, and the Sellers will sell
substantially all of the assets utilized by, the Business, upon the terms and
conditions set forth in the Asset Purchase Agreement. The Parties now desire to
amend the Asset Purchase Agreement in certain respects.
NOW, THEREFORE, for and in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto agree, with the intent to be legally bound, as
follows:
1. DEFINED TERMS. All capitalized terms used herein shall have the
same meanings ascribed to them in the Asset Purchase Agreement.
2. AMENDMENT TO ASSET PURCHASE AGREEMENT
a. Section 1.5(c) of the Asset Purchase Agreement is amended by
deleting the first sentence of Section 1.5(c) in its entirety and by inserting
in lieu thereof the following:
The purchase price shall be allocated as mutually agreed upon by the
Parties on or before December 31, 2000.
b. Section 1.5(d) of the Asset Purchase Agreement is amended by
deleting Section 1.5(d) in its entirety and by inserting in lieu thereof the
following:
(d) Prepaid Items. On or before December 31, 2000, Xxxxxxx shall
pay in cash to Netzee all of the Sellers' deferred revenue as of
October 31, 2000 with respect to the Purchased Assets or the Assumed
Liabilities, determined in accordance with generally accepted
accounting principles, less
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those costs that are attributable to the employment of the Leased
Employees paid by Xxxxxxx for periods after October 31, 2000 to
employees of Sellers leased to Netzee pursuant to the Netzee Employee
Lease Agreement dated the date hereof, for use in the Business;
provided, however, if the amounts paid by Xxxxxxx pursuant to the
Netzee Employee Lease Agreement exceed the amount of Sellers' deferred
revenue described above, Netzee will pay Xxxxxxx, in cash, the
difference between such amounts on or before such date.
c. Section 1.6 of the Asset Purchase Agreement is amended by deleting
Section 1.6 in its entirety and by inserting in lieu thereof the following:
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 respect of the Initial Closing)
(the "SECOND CLOSING") shall take place at 10:00 a.m., local time, on
November 10, 2000, at the offices of Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or at such other
time, date or place as the Parties agree (the "SECOND CLOSING DATE").
For accounting purposes and for purposes of Sections 1.5(d), 1.10(a)
and 1.10(c) only, the Parties shall treat the purchase and sale of the
Purchased Assets contemplated by the Second Closing as effective as of
the close of business on October 31, 2000; for all other purposes, the
Parties shall treat such purchase and sale effective as of the Second
Closing Date.
d. Section 5.14 of the Asset Purchase Agreement is amended by deleting
the phrase (i) "the Second Closing" wherever it appears and replacing them with
the words "the close of business on November 29, 2000" and (ii) "the Second
Closing Date" in Section 5.14(c) and replacing it with the words "the close of
business on November 29, 2000."
e. Section 5.16 of the Asset Purchase Agreement is amended by deleting
Section 5.16 in its entirety and by inserting in lieu thereof the following:
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. Netzee shall cause one person
designated by Xxxxxxx to be appointed to Netzee's Board of Directors
as a "Class II" director (the "CLASS II DIRECTOR") until the next
election of directors in 2001. Netzee shall provide in Netzee's proxy
statement for its 2001 and 2004 annual meetings of shareholders (and
any interim shareholders meetings where the Class II Director stands
for election) for the nomination of the Class II Director designee of
Xxxxxxx to serve as a director of Netzee for a three year term. Netzee
shall cause one person designated by Xxxxxxx to be appointed to
Netzee's Board of Directors as a "Class III" director (the "CLASS III
DIRECTOR") until the next election of directors in
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2001. Netzee shall provide in Netzee's proxy statement for its 2001
annual meeting of shareholders for the nomination of the Class III
Director designee of Xxxxxxx to serve as a director of Netzee until
the 2002 annual meeting of shareholders, which is the next annual
meeting of shareholders at which all "Class III" directors of Netzee
stand for election. Netzee shall also provide in Netzee's proxy
statement for its 2002 and 2005 annual meetings of shareholders (and
any interim shareholders meetings where the Class III Director stands
for election) for the nomination of the Class III Director designee of
Xxxxxxx to serve as a director of Netzee for a three year term.
Notwithstanding the foregoing provisions of this Section 5.16, Netzee
shall be required to nominate both the Class II Director selected by
Xxxxxxx at the 2004 annual shareholders meeting, and the Class III
Director selected by Xxxxxxx at the 2005 annual shareholders meeting,
only if Xxxxxxx (or its affiliates), at the time of such nomination,
owns at least 10% of the outstanding shares of Netzee Common Stock;
and Netzee shall be required to nominate only the Class II Director
selected by Xxxxxxx at the 2004 annual shareholders meeting if
Xxxxxxx, at the time of such nomination, owns less than 10% but at
least 5% of the outstanding shares of Netzee Common Stock. In
addition, either the Class II Director or Class III Director
designated by Xxxxxxx and as specified by Xxxxxxx shall be appointed
at or before the first meeting of the Board of Directors of Netzee
following the Second Closing Date to serve on the compensation
committee of Netzee's Board of Directors and the executive committee,
if one is established, during the tenure of such director.
f. The Asset Purchase Agreement is amended to insert a new Section
5.22 which shall read as follows:
5.22 DIVISION OF SOFTWARE; ETC.
(a) Software. The Parties recognize that certain components,
modules and items of software and source code utilized by the
Business, some of which are described in an October 27, 2000
memorandum entitled "Xxxxxxx - Netzee Transaction Disposition of
Intellectual Property" (each a "SOFTWARE COMPONENT") may also be
utilized by one or more of the Sellers in respect of their other
business operations. The Parties acknowledge that the Sellers have
licensed from third party vendors the object code of certain Software
Components, which upon Sellers' information and belief are generally
available for purchase, license or acquisition through the appropriate
vendor. Also, the Sellers may have developed or own certain Software
Components. Promptly following the Second Closing Date, the Parties
shall determine (i) which Software Components are exclusively utilized
by the Business and not by any of the other business operations of the
Sellers, and the Sellers shall execute documents reasonably necessary
to assign the ownership or license of such Software Components to
Netzee at no
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cost; and (ii) which Software Components are used both by the Business
and by one or more of the Sellers' other business operations and which
Party shall be the licensee or owner of such Software Components (and
if it is used primarily in the Business, Netzee shall be the owner or
primary licensee), and the non-owning or non-licensed Parties which
also utilize such Software Components shall be granted a perpetual,
royalty-free, non-exclusive and non-transferable license or
sub-license (as the case may be) on terms and conditions mutually
satisfactory to the Parties and the third-party licensors, as
appropriate, including (in the event ownership of certain Software
Components is transferred) the right to modify and amend such Software
Components in accordance with the needs of the subsequent owner
without the obligation to supply such modification and amendments to
the prior owner. Until such determinations are made and licenses or
assignments of ownership are executed, as between Sellers and Netzee,
Netzee shall be able to use free of charge all Software Components
necessary for the Business solely for internal use, and each Party
which currently maintains or supports a Software Component shall
continue to maintain and support such Software Component at such
Party's sole cost and expense. In connection with the transactions
contemplated under this Section 5.22 and to the extent of each
Parties' continued use of the Software Components, the Parties will in
any event comply with all third party licenses of the Software
Components. Xxxxxxx shall be responsible for any commercially
reasonable transfer fees paid to third parties by Netzee in obtaining
licenses consistent with the Business' current use in respect of third
party licensed Software Components primarily utilized by the Business
(relative to the applicable Seller's use) for which the current
license cannot be assigned or sublicensed without a transfer fee or
other similar payment to Netzee consistent with its current use by the
Business.
(b) Retained Assets. If any Retained Assets described in Section
1.2(b) are necessary for the conduct of the Business in a manner
consistent with past practice, the Parties will work together to
implement an equitable arrangement to make them available to Netzee,
and at no cost to Netzee if it does not cost Sellers to do so;
provided, that the foregoing shall not apply to (i) the Software
Components which are dealt with in Section 5.22(a) or (ii) the
physical infrastructure needed for Netzee to utilize the space in the
Portland, Oregon facility (the "PORTLAND INFRASTRUCTURE"). On or
before December 31, 2000, or promptly upon Netzee incurring the costs
if after December 31, 2000, Xxxxxxx will reimburse Netzee for fifty
percent (50%) of Netzee's costs for the Portland Infrastructure, other
than build out, up to a maximum payment by Xxxxxxx of $40,000.
3. NO OTHER EFFECT. Except as expressly modified by this Amendment, the
Asset Purchase Agreement shall remain in full force and effect pursuant to its
terms.
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4. MISCELLANEOUS.
(a) Captions; Certain Definitions. Titles and captions of or
in this Amendment are inserted only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this Amendment or
the intent of any of its provisions.
(b) Controlling Law. This Amendment shall be governed by and
be construed and enforced in accordance with the laws of the United States of
America and the State of Georgia, excluding choice of law principles.
(c) Counterparts. This Amendment 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 Amendment 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 Amendment.
[Signatures begin on the following page.]
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IN WITNESS WHEREOF, Netzee and the Sellers have caused this Amendment
to be executed by their duly authorized officers as of the day and year first
above written.
NETZEE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Senior Executive Vice President and
Chief Financial Officer
XXXX X. XXXXXXX COMPANY
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President
CONCENTREX INCORPORATED
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President
MECA SOFTWARE, L.L.C.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President
MONEYSCAPE HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President
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