EXHIBIT 10.1
STOCK PURCHASE AGREEMENT II
BY AND AMONG
SECURITY FIRST TECHNOLOGIES CORPORATION,
THE INDIVIDUALS AND ENTITIES
WHO ARE SIGNATORIES HERETO
AND
FICS GROUP N.V.
DATED AS OF SEPTEMBER 21, 1999
TABLE OF CONTENTS
Page
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SECTION 1. PURCHASE AND SALE OF THE SHARES....................................................1
1.1 Sale and Issuance of the Initial Shares...............................................1
1.2 Stock Purchase........................................................................2
1.3 First Closing.........................................................................2
1.4 Second Closing........................................................................3
1.5 Third Closing.........................................................................3
SECTION 2. STOCK OPTIONS......................................................................3
2.1 Successor Options.....................................................................3
2.2 Additional Options....................................................................4
SECTION 3. REPRESENTATIONS AND WARRANTIES OF S1...............................................4
3.1 Corporate Organization................................................................4
3.2 Capitalization........................................................................5
3.3 Authority; No Violation...............................................................6
3.4 Consents and Approvals................................................................7
3.5 Financial Statements; Exchange Act Filings; Books and Records.........................7
3.6 Broker's Fees.........................................................................8
3.7 Absence of Certain Changes or Events..................................................8
3.8 Legal Proceedings.....................................................................8
3.9 Taxes and Tax Returns.................................................................9
3.10 Employee Plans........................................................................10
3.11 Certain Contracts.....................................................................12
3.12 Environmental Matters.................................................................13
3.13 Properties and Assets.................................................................14
3.14 Insurance.............................................................................15
3.15 Compliance with Applicable Laws.......................................................15
3.16 S1 Information........................................................................15
3.17 Intellectual Property.................................................................15
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.......................................18
4.1 Organization of Purchasers............................................................18
4.2 Authorization of Transaction..........................................................18
4.3 Non-Contravention.....................................................................19
4.4 Broker's Fees.........................................................................20
4.5 Adequate Resources....................................................................20
4.6 No Legal, Tax or Investment Advice....................................................20
4.7 Status of Purchasers..................................................................20
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SECTION 5. ADDITIONAL AGREEMENTS..............................................................20
5.1 Lock-up Covenant......................................................................20
5.2 S1 Board of Directors.................................................................21
5.3 Compliance with Antitrust Laws........................................................21
5.4 Regulatory Matters....................................................................22
5.5 Stockholder Meeting...................................................................23
5.6 Legal Conditions......................................................................24
5.7 Stock Exchange Listing................................................................24
5.8 Registration of S1 Common Stock.......................................................24
5.9 Resale of Akkermans'S1 Common Stock...................................................25
5.10 Registration Proceedings..............................................................25
5.11 Conduct of S1's Business..............................................................29
5.12 Advice of Changes.....................................................................29
5.13 Joinder of Additional Purchasers......................................................30
SECTION 6. CONDITIONS TO FIRST CLOSING........................................................30
6.1 Conditions to Obligations of All Parties..............................................30
6.2 Conditions to the Obligations of Purchasers...........................................30
6.3 Conditions to Obligations of S1.......................................................31
SECTION 7. CLOSINGS...........................................................................32
7.1 Deliveries by S1......................................................................32
7.2 Deliveries by Purchasers..............................................................33
SECTION 8. LEGEND.............................................................................34
8.1 Endorsement...........................................................................34
8.2 Removal of Legend.....................................................................35
SECTION 9. TERMINATION........................................................................36
9.1 Mutual Consent........................................................................36
9.2 Other Termination.....................................................................36
9.3 Effect of Termination.................................................................37
SECTION 10. MISCELLANEOUS......................................................................37
10.1 Additional Actions and Documents......................................................37
10.2 Expenses..............................................................................37
10.3 Notices...............................................................................37
10.4 Waiver.39
10.5 Binding Effect........................................................................39
10.6 Entire Agreement; Amendment...........................................................39
10.7 Severability..........................................................................39
10.8 Headings..............................................................................39
10.9 Governing Law.........................................................................40
10.10 Signature in Counterparts.............................................................40
10.11 No Third Party Beneficiaries..........................................................40
10.12 Assignability.........................................................................40
10.13 Parties Not Partners..................................................................41
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10.14 Non-Survival of Representations and Warranties........................................41
10.15 Certain Definitions...................................................................41
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STOCK PURCHASE AGREEMENT II
This Stock Purchase Agreement II (this "Agreement"), dated as
of the 21st day of September, 1999, is entered into by and among Security First
Technologies Corporation, a Delaware corporation ("S1"), the individuals and
entities who are signatories hereto, and as may be joined by other individuals
and entities from time to time, (each, a "Purchaser" and collectively,
"Purchasers") and FICS Group N.V., a Belgian corporation ("FICS") (for the
limited purposes set forth in Section 5 and Section 6.3(b) hereof).
WHEREAS, the parties hereto and other individuals had
previously entered into that certain Stock Purchase Agreement, dated as of May
16, 1999, by and among S1, the individuals identified on Schedule 1 thereto (the
"Former Purchasers"), and FICS for the limited purposes stated therein (the
"Former Agreement");
WHEREAS, pursuant to Section 9.1 of the Former Agreement the
parties thereto have terminated the Former Agreement as confirmed by that
certain letter agreement from S1 to the Former Purchasers and FICS, dated as of
even date herewith;
WHEREAS, the Board of Directors of S1 and each Purchaser have
determined that it is in their best interests, or in the best interests of their
respective companies and stockholders, as the case may be, to complete the
transaction described in this Agreement whereby S1 will sell and issue to each
Purchaser, and each Purchaser will subscribe for and acquire, a number of shares
of S1's common stock, par value $0.01 per share ("S1 Common Stock") and a number
of options to purchase shares of S1 Common Stock, as described below.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
SECTION 1. PURCHASE AND SALE OF THE SHARES.
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1.1 SALE AND ISSUANCE OF THE INITIAL SHARES.
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1.1(a) At the First Closing (as defined at Section 1.3 hereof)
and subject to the terms and conditions of this Agreement, each Purchaser hereby
subscribes for, and agrees to purchase the "Initial Shares" for aggregate
consideration (the "Initial Share Consideration") equal to the product of (i)
$35.75
multiplied by (ii) the number of Initial Shares (after adjustment for any stock
splits, combinations or dividends or distributions in such common stock between
the date of this Agreement and the date immediately prior to the First Closing).
As to each Purchaser, "Initial Shares" shall mean 10,000,000 multiplied by the
percentage (the "Purchaser Ratio") set forth across from each Purchaser's name
on Schedule 1 hereto. S1 agrees to sell and issue the Initial Shares to the
Purchasers at the First Closing for the Initial Share Consideration subject to
the terms of this Agreement.
1.1(b). The Initial Share Consideration shall be payable in
cash, a xxxx of exchange issued by S1 Holdings or in any other form reasonably
acceptable to S1.
1.2 STOCK PURCHASE.
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1.2(a) Upon the Second Closing, the Purchasers shall purchase
from S1 and S1 agrees to sell to the Purchasers that number of shares of S1
Common Stock equal to (i) the "2000 Earn-out Payment" (as such term is defined
in that certain Share Purchase Agreement II, dated of even date herewith, by and
among S1 Europe Holdings N.V., a Belgian corporation (naamloze vennootschap
("N.V.")) and a subsidiary of S1, the Purchasers, and for the limited purposes
stated therein, S1 and FICS (the "Holdings Purchase Agreement")), divided by
(ii) $35.75 (the "2000 Shares").
1.2(b) Upon the Third Closing, the Purchasers shall purchase
from S1 and S1 agrees to sell to the Purchasers that number of shares of S1
Common Stock equal to (i) the "2001 Earn-out Payment" (as such term is defined
in the Holdings Purchase Agreement), divided by (ii) $35.75 (the "2001 Shares").
1.2(c) In the event S1 should split or combine the S1 Common
Stock, or pay any dividend or other distribution on all of its common stock in
such common stock, then the dollar amount set forth in clause (ii) in each of
paragraphs 1.2(a) and (b) above shall be appropriately adjusted to reflect such
split, combination, dividend or distribution.
1.3 FIRST CLOSING.
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1.3(a). The First Closing shall take place concurrently with
the closing of the "Transaction," as defined in the Holdings Purchase Agreement.
1.3(b). On the date of the First Closing (the "First Closing
Date"), the First Closing shall take place at 10:00 a.m., Washington, D.C. time,
at the offices of Xxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, or at such other time and place as the parties shall mutually agree.
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1.4 SECOND CLOSING.
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1.4(a). The Second Closing shall take place concurrently with
the "Second Payment Date" as defined in the Holdings Purchase Agreement.
1.4(b). On the date of the Second Closing (the "Second Closing
Date"), the Second Closing shall take place at 10:00 a.m., Washington, D.C.
time, at the offices of Xxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, or at such other time and place as the parties shall
mutually agree.
1.5 THIRD CLOSING.
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1.5(a). The Third Closing shall take place concurrently with
the "Third Payment Date" as defined in the Holdings Purchase Agreement.
1.5(b). On the date of the Third Closing (the "Third Closing
Date"), the Third Closing shall take place at 10:00 a.m., Washington, D.C. time,
at the offices of Xxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, or at such other time and place as the parties shall mutually agree.
SECTION 2. STOCK OPTIONS.
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2.1 SUCCESSOR OPTIONS.
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Upon the First Closing, S1 shall offer in exchange for each
option (a "FICS Option") which is outstanding and unexercised immediately prior
thereto, and granted by FICS under the 1998 Stock Plan of FICS Group Holdings,
Inc., a Delaware corporation ("FICS Holdings") (the "FICS Stock Plan"), or
otherwise, an option to purchase shares of S1 Common Stock (each, a "Successor
Option") in an amount and at an exercise price determined as provided below:
(1) The number of Successor Options to be granted shall
be equal to (a) 98.905896 (the "Conversion Number")
multiplied by (b) the number of shares of FICS
Holdings subject to FICS Options; provided that such
Conversion Number shall be adjusted for any stock
splits, combinations or dividends or distributions of
the S1 Common Stock between the date hereof and the
First Closing; and
(2) The exercise price for each of the Successor Options
shall be equal to the exercise price per share of
FICS Subsidiary Stock under the option immediately
before the First Closing divided by the Conversion
Number, provided that such exercise price shall be
rounded down to the nearest cent.
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The parties hereto understand that the number of shares of S1 Common Stock
subject to Successor Options and the price thereof shall be adjusted
appropriately for any stock splits, combinations or dividends or distributions
in the FICS capital stock, as of the date hereof. The duration and other terms
of the Successor Options immediately after the First Closing shall be the same
as the corresponding terms of the FICS Options in effect immediately before the
First Closing, except that all references to FICS in the FICS Stock Plan (and
the corresponding references in the option agreement documenting such FICS
Option) shall be deemed to be references to S1.
2.2 ADDITIONAL OPTIONS.
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Upon the First Closing, or as soon as possible thereafter, S1
shall grant a number of options to purchase shares of S1 Common Stock (each, an
"Additional Option") to such individuals as designated by Michel Akkermans
("Akkermans") in consultation with S1. The aggregate number of such grants shall
not exceed (a) 4,000,000 (after adjustment for any stock splits, combinations or
dividends or distributions in the S1 Common Stock between the date of this
Agreement and the First Closing) minus (b) the number of Successor Options to be
granted pursuant to Section 2.1 hereof. Each Additional Option shall have an
exercise price not less than the stock price, as quoted on the Nasdaq Stock
Market or such other national exchange on which the S1 Common Stock is then
traded, of a share of S1 Common Stock at the close of business on the last
business day prior to the date of such grant.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF S1.
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S1 hereby makes the following representations and warranties
to each Purchaser as set forth in this Section 3, each of which is being relied
upon by each Purchaser as a material inducement to enter into and perform this
Agreement. All of the disclosure schedules of S1 referenced below and thereby
required of S1 pursuant to this Agreement, which disclosure schedules shall be
cross-referenced to the specific sections and subsections of this Agreement and
delivered herewith, are referred to herein as the "S1 Disclosure Schedule."
3.1 CORPORATE ORGANIZATION.
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(a) S1 is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. S1 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, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary.
The Amended and Restated Certificate of Incorporation and
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Amended and Restated Bylaws of S1, copies of which have previously been made
available to the Purchasers, are true, correct and complete copies of such
documents as in effect as of the date of this Agreement.
(b) Each Subsidiary of S1 (each, a "S1 Subsidiary") and the
jurisdiction of its organization is set forth at Section 3.1(b) of the S1
Disclosure Schedule. Except as set forth at Section 3.1(b) of the S1 Disclosure
Schedule, each S1 Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization.
Each S1 Subsidiary 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, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of any material business conducted by it or the character or
location of any material properties or assets owned or leased by it makes such
licensing or qualification necessary. The charter and other corporate governance
documents of each S1 Subsidiary, copies of which have previously been delivered
to the Purchasers, are true, correct and complete copies of such documents as in
effect as of the date of this Agreement.
3.2 CAPITALIZATION.
(a) The authorized capital stock of S1 consists of (i)
350,000,000 shares S1 Common Stock, of which 27,674,239 shares were outstanding
at August 31, 1999 and (ii) 25,000,000 shares of serial preferred stock, par
value $.01 per share ("S1 Preferred Stock"), 1,637,832 shares of which were
designated as "Series A Convertible Preferred Stock," 749,064 of which were
designated as "Series B Redeemable Convertible Preferred Stock" and 215,000
shares of which were designated as "Series C Redeemable Convertible Preferred
Stock." At August 30, 1999, 391,450 shares of Series A Convertible Preferred
Stock, 749,064 shares of Series B Redeemable Convertible Preferred Stock and
215,000 shares of Series C Redeemable Convertible Preferred Stock were
outstanding. At such date, there were 13,953,024 shares of S1 Common Stock
reserved for issuance pursuant to employee stock options (of which options to
purchase 8,960,912 shares are currently outstanding). All of the issued and
outstanding shares of S1 Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof, and upon issuance in
accordance with the terms hereof, the Initial Shares will be duly authorized and
validly issued, and fully paid, nonassessable and free of preemptive rights. As
of the date of this Agreement, except as set forth above, S1 does not have and
is not bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of S1 Common Stock or S1 Preferred Stock or any other equity
securities of S1 or any securities presenting the right to purchase or otherwise
receive any shares of S1 Common Stock or S1 Preferred Stock, other than as set
forth at Section 3.2(a) of the S1 Disclosure Schedule.
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(b) S1 owns, directly or indirectly, all of the issued and
outstanding shares of capital stock of each of the S1 Subsidiaries, free and
clear of all liens, charges, encumbrances and security interests whatsoever, and
all of such shares are duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. No S1 Subsidiary has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of capital
stock or any other equity security of such Subsidiary or any securities
representing the right to purchase or otherwise receive any shares of capital
stock or any other equity security of such Subsidiary.
3.3 AUTHORITY; NO VIOLATION.
(a) S1 has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
Board of Directors of S1. Except for the approval of the S1 Issuance as
contemplated by this Agreement by the requisite vote of S1's stockholders, no
other corporate proceedings on the part of S1 (except for matters related to
setting the date, time, place and record date for the special meeting) are
necessary to approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by S1 and (assuming due authorization, execution and delivery by FICS
and each of the Purchasers) will constitute a valid and binding obligation of
S1, enforceable against S1 in accordance with its terms, except as enforcement
may be limited by general principles of equity whether applied in a court of law
or a court of equity and by bankruptcy, insolvency and similar law affecting
creditors' rights and remedies generally.
(b) Neither the execution and delivery of this Agreement by
S1, nor the consummation by S1 of the transactions contemplated hereby, nor
compliance by S1 with any of the terms or provisions hereof or thereof, will (i)
violate any provision of the Amended and Restated Certificate of Incorporation
or Amended and Restated Bylaws of S1, or (ii) assuming that the consents and
approvals referred to in Section 3.4 are duly obtained, (x) violate any Laws (as
defined below) applicable to S1 or any of its properties or assets, or (y)
violate, conflict with, result in a breach of any provision of or the loss of
any benefit under, 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 or a right of termination or cancellation under, accelerate the performance
required by, or result in the creation of any lien, pledge, security interest,
charge or other encumbrance upon any of the respective properties or assets of
S1 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
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which S1 is or will be, as the case may be, a party, or by which S1 or any of
its properties or assets may be bound or affected.
3.4 CONSENTS AND APPROVALS.
No consents or approvals of or filings or registrations with
any court, administrative agency or commission or other governmental authority
or instrumentality (each a "Governmental Entity") or with any third party are
necessary in connection with (1) the execution and delivery by S1 of this
Agreement, and (2) the consummation by S1 of the S1 Issuance and the other
transactions contemplated hereby, except for such consents, approvals or filings
the failure of which to obtain will not have a Material Adverse Effect (as
defined below) on the ability of S1 to consummate the transactions contemplated
hereby.
3.5 FINANCIAL STATEMENTS; EXCHANGE ACT FILINGS; BOOKS AND RECORDS.
S1 has previously delivered to representatives of Purchasers true,
correct and complete copies of the consolidated balance sheets of S1 and its
Subsidiaries as of December 31 for the fiscal years 1998 and 1997 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the fiscal years 1996 through 1998, inclusive, as reported in S1's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in each case accompanied by the audit report of KPMG LLP,
independent public accountants with respect to S1, and the interim financial
statements of S1 as of and for the six months ended June 30, 1999 and 1998, as
included in S1's quarterly report on Form 10-Q for the quarter ended June 30,
1999, as filed with the SEC, and the financial statements of S1 as of and for
the month ended July 31, 1999 and 1998. The financial statements referred to in
this Section 3.5 (including the related notes, where applicable) fairly present
(subject, in the case of the unaudited statements, to normal recurring audit
adjustments) the results of the consolidated operations and consolidated
financial condition of S1 and its Subsidiaries for the respective fiscal periods
or as of the respective dates therein set forth; each of such statements
(including the related notes, where applicable) comply with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto; and each of such statements (including the related notes,
where applicable) has been prepared in accordance with U.S. GAAP consistently
applied during the periods involved, except as indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q. S1's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 and all
subsequently filed reports under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act comply in all material respects with the appropriate requirements
for such reports under the Exchange Act, and S1 has previously delivered to FICS
true, correct and complete copies of such reports. The books and records of S1
and its Subsidiaries
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have been, and are being, maintained in all material respects in accordance with
U.S. GAAP and any other applicable legal and accounting requirements.
3.6 BROKER'S FEES.
Neither S1 nor any S1 Subsidiary nor any of their respective officers
or directors has employed any broker or finder or incurred any liability for any
broker's fees, commissions or finder's fees in connection with any of the
transactions contemplated by this Agreement, except that S1 has engaged, and
will pay a fee or commission to BancBoston Xxxxxxxxx Xxxxxxxx, Inc. ("BBRS") in
accordance with the terms of a letter agreement between BBRS and S1, dated April
9, 1999, a true, complete and correct copy of which has been provided to
Purchasers.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in S1's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, or any other report filed under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, true, correct and
complete copies of which have previously been delivered or made available to
representatives of Purchasers, since December 31, 1998, (i) neither S1 nor any
S1 Subsidiary has incurred any material liability, except as contemplated by
this Agreement or in the ordinary course of their businesses consistent with
their past practices, and (ii) no event has occurred which has had, or is likely
to have, individually or in the aggregate, a Material Adverse Effect on S1.
(b) Since December 31, 1998, S1 and each S1 Subsidiary has
carried on its respective businesses in the ordinary and usual course consistent
with past practices.
3.8 LEGAL PROCEEDINGS.
(a) Neither S1 nor any of its Subsidiaries is a party to any,
and there are no pending or, to S1's knowledge, threatened, legal,
administrative, arbitration or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against S1 or any of its
Subsidiaries or which challenge the validity of the transactions contemplated by
this Agreement as to which there is a reasonable probability of success.
(b) There is no injunction, order, judgment or decree imposed
upon S1, any of its Subsidiaries or the assets of S1 or any of its Subsidiaries.
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3.9 TAXES AND TAX RETURNS.
For purposes of this Section 3.9, S1 shall include S1, each S1
Subsidiary and each other affiliated or related corporation or entity if S1 or
any S1 Subsidiary has or could have any material liability for the taxes of such
corporation or entity. S1 has duly filed all Tax Returns required to be filed by
it on or prior to the date hereof (all such returns being accurate and complete
in all material respects) and has duly paid or made provision on the financial
statements referred to in Section 3.5 hereof in accordance with United States
generally accepted accounting principles ("U.S. GAAP") for the payment of all
material Taxes which have been incurred or are due or claimed to be due from it
by Taxing Authorities on or prior to the date hereof other than Taxes (a) which
(x) are not yet delinquent or (y) are being contested in good faith and set
forth in Section 3.9 of the S1 Disclosure Schedule and (b) which have not been
finally determined. The charges, accruals, and reserves with respect to Taxes on
the books of S1 are adequate (as determined in accordance with U.S. GAAP) and
are at least equal to its liability for Taxes. There exists no proposed tax
assessment against S1 except as disclosed in the S1 financial statements. No
consent to the application of Section 341(f)(2) of the Code has been filed with
respect to any property or assets held, acquired, or to be acquired by S1. All
Taxes that S1 is or was required to withhold or collect have been duly withheld
or collected and, to the extent required, have been paid to the proper
Governmental Body. All liability with respect to the Tax Returns of S1 has been
satisfied for all years to and including 1998. No Taxing Authority has notified
S1 of, or otherwise asserted, that there are any material deficiencies with
respect to the Tax Returns of S1 subsequent to 1994. There are no material
disputes pending, or claims asserted for, Taxes or assessments upon S1, nor has
S1 been requested to give any currently effective waivers extending the
statutory period of limitation applicable to any Tax Return for any period. In
addition, Tax Returns that are accurate and complete in all material respects
have been filed by S1 for all periods for which returns were due with respect to
income tax withholding with respect to wages and other income and the amounts
shown on such Tax Returns to be due and payable have been paid in full or
adequate provision therefor in accordance with U.S. GAAP has been included by S1
in the financial statements referred to in Section 3.5. All S1 Tax Returns have
been examined by the relevant Taxing Authorities, or closed without audit by
applicable statutes of limitations, and all deficiencies proposed as a result of
such examinations have been paid or settled, for all periods before and
including the taxable year ended December 31, 1994. S1 has not consented to any
waiver or extension of any statute of limitations with respect to any Tax. S1
has provided or made available to S1 complete and correct copies of its Tax
Returns and all material correspondence and documents, if any, relating directly
or indirectly to taxes for each taxable year or other relevant period as to
which the applicable statute of limitations has not run on the date hereof. For
this purpose, "correspondence and documents" include, without limitation,
amended Tax Returns, pending claims for refunds, notices from Taxing Authorities
of proposed changes or adjustments to Taxes or Tax Returns
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that have not been finally resolved, consents to assessment or collection of
Taxes, acceptances of proposed adjustments, closing agreements, rulings and
determination letters and requests therefor, and all other written
communications to or from Taxing Authorities relating to any material Tax
liability of S1.
(b) For purposes of this Agreement:
"Tax" means any tax (including any income tax, capital gains
tax, value-added tax, sales tax, property tax, gift tax, or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency, or other fee,
and any related charge or amount (including any fine, penalty, interest, or
addition to tax), imposed, assessed, or collected by or under the authority of
any Taxing Authority or payable pursuant to any tax-sharing agreement or any
other contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency, or fee.
"Tax Return" means any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Taxing Authority in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with any law,
regulation or other legal requirement relating to any Tax.
"Taxing Authority" means any:
(a) nation, state, county, city, town, village,
district, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or
other government;
(c) governmental or quasi-governmental authority of
any nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
3.10 EMPLOYEE PLANS.
(a) For purposes of this Section 3.10, S1 shall include each
of its Subsidiaries and any other entity that together with S1 would be deemed a
"single employer" within for purposes of ERISA (determined without regard to
whether such
-10-
entity conducts business in the United States). Section 3.10 of the S1
Disclosure Schedule sets forth a true and complete list of each U.S. Plan and
each other plan, arrangement or agreement providing benefits to the current or
former employees of S1 that S1 maintains or contributes to as of the date of
this Agreement, or that S1 has within the last six years maintained or
contributed to or under which S1 has any liability (collectively, the "S1
Plans").
(b) S1 has heretofore delivered or made available to S1 true,
correct and complete copies of each of the S1 Plans and all related documents
(other than S1 Plans established by a governmental agency or authority to which
S1 is required to contribute under applicable law), including but not limited to
(i) the actuarial report for such S1 Plan (if applicable) for each of the last
five years, (ii) the most recent determination letter from the IRS (if
applicable) for each U.S. Plan, (iii) the current summary plan description and
any summaries of material modification for each U.S. Plan and any corresponding
document for each other S1 Plan, (iv) all annual reports for each U.S. Plan
filed for the preceding five plan years and any annual or other periodical
financial information concerning any other S1 Plan filed with any governmental
agency or authority or provided to employees or beneficiaries of such S1 Plan,
(v) all agreements with fiduciaries and service providers relating to the S1
Plan, (vi) all substantive correspondence relating to any such S1 Plan addressed
to or received from any governmental agency or authority, (vii) all personnel,
payroll, and employment manuals and policies, (viii) a written description of
any S1 Plan that is not otherwise in writing.
(c) S1 has performed all of its obligations under all S1
Plans. S1 has made appropriate entries in its financial records and statements
for all obligations and liabilities under the S1 Plans that have accrued but are
not due. No statement, either written or oral, has been made by S1 with regard
to any S1 Plan that was not in accordance with the S1 Plan and that could have
an adverse economic consequence to S1. S1 has no liability to the IRS, the U.S.
Pension Benefit Guaranty Corporation or to any other governmental or
quasi-governmental agency or authority with respect to any S1 Plan. No S1 Plan
is subject to Title IV of ERISA.
(d) Except as set forth at Section 3.10 of the S1 Disclosure
Schedule, (i) each of the S1 Plans has been operated and administered in all
material respects in compliance with applicable Laws, including, but not
limited, in the case of each U.S. Plan, to ERISA and the Code, (ii) each of the
U.S. Plans intended to be "qualified" within the meaning of Section 401 of the
Code is so qualified and S1 has received a determination letter or opinion
letter from the IRS to such effect, which letter remains in full force and
effect, (iii) with respect to each U.S. Plan that is subject to the funding
requirements of ERISA and the Code, the present value of accrued benefits under
such S1 Plan, based upon the actuarial assumptions used for funding purposes in
the most recent actuarial report prepared by such S1 Plan's
-11-
actuary with respect to such S1 Plan, did not, as of its latest valuation date,
exceed the then current value of the assets of such S1 Plan allocable to such
accrued benefits, (iv) no S1 Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured), with respect to
current or former employees of S1 beyond their retirement or other termination
of service, other than (a) coverage mandated by applicable Law, (b) death
benefits or retirement benefits under an S1 Plan that also provides
post-retirement income, annuity or pension benefits (including an "employee
pension plan" as that term is defined in ERISA), (c) deferred compensation
benefits under an S1 Plan that are accrued as liabilities on the books of S1 ,
or (d) benefits the full cost of which is borne by the current or former
employee (or his beneficiary), (v) no liability under ERISA or any other law
relating to employee benefits or employees or their beneficiaries has been
incurred by S1 that has not been satisfied in full, and no condition exists that
presents a material risk of S1 incurring a material liability thereunder, (vi)
no U.S. Plan is a "multiemployer pension plan," as such term is defined in ERISA
and no other S1 Plan is maintained pursuant to any collective bargaining
agreement or other agreement with a labor union or other authorized
representative of labor, (vii) all contributions or other amounts payable by S1
with respect to each S1 Plan and all other liabilities of each such entity with
respect to each S1 Plan, in respect of current or prior plan years have been
paid or accrued in accordance with generally accepted accounting practices and,
in the case of a U.S. Plan, ERISA and the Code, (viii) S1 and each S1 Subsidiary
have not engaged in a "prohibited transaction" as defined in ERISA or the Code
in connection with which S1 could be subject to either any material excise tax
or civil penalty assessed pursuant to ERISA or the Code, (ix) to the knowledge
of S1, there are no pending, threatened or anticipated claims (other than
routine claims for benefits) by, on behalf of or against any of the plans or any
trusts related thereto, (x) all S1 Plans could be terminated as of the First
Closing without material liability in excess of the amount accrued therefor on
the S1 financial statements; (xi) no S1 Plan, either individually or
collectively, provides for any payment by S1 that would not be deductible for
U.S. federal income tax purposes; (xii) no "accumulated funding deficiency" as
defined in ERISA or the Code, whether or not waived, and no "unfunded current
liability" as determined under the Code exists with respect to any U.S. Plan;
(xiii) no U.S. Plan has experienced a "reportable event" (as such term is
defined in ERISA and regulations thereunder) that is not subject to an
administrative or statutory waiver from the reporting requirement.
3.11 CERTAIN CONTRACTS.
(a) Except as set forth at Section 3.11(a) of the S1
Disclosure Schedule, neither S1 nor any of its Subsidiaries is a party to or
bound by any contract, arrangement or commitment (i) with respect to the
employment of any directors, officers, employees or consultants, (ii) which,
upon the consummation of the transactions contemplated by this Agreement will
(either alone or upon the occurrence of any additional acts or events) result in
any payment (whether of
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severance pay or otherwise), becoming due from S1 or any of its respective
Subsidiaries to any director, officer or employee thereof, (iii) which
materially restricts the conduct of any line of business by S1 or any of its
Subsidiaries, (iv) with or to a labor union or guild (including any collective
bargaining agreement) or (v) except as set forth on Section 3.11(a) of the S1
Disclosure Schedule, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated by the occurrence of any of
the transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement (including as to this clause (v), any stock
option plan, stock appreciation rights plan, restricted stock plan or stock
purchase plan). Except as set forth at Section 3.11(a) of the S1 Disclosure
Schedule, there are no employment, consulting and deferred compensation
agreements to which S1 or any of its Subsidiaries is a party. Section 3.11(a) of
the S1 Disclosure Schedule sets forth a list of all material contracts (as
defined in Item 601(b)(10) of Regulation S-K) of S1 and its Subsidiaries. Each
contract, arrangement or commitment of the type described in this Section
3.11(a), whether or not set forth in Section 3.11(a) of the S1 Disclosure
Schedule, is referred to herein as a "S1 Contract," and neither S1 nor any of
its Subsidiaries has received notice of, nor do any executive officers of such
entities know of, any violation of any S1 Contract.
(b) (i) Each S1 Contract is valid and binding and in full
force and effect, (ii) S1 and each of its Subsidiaries has in all material
respects performed all obligations required to be performed by it to date under
each S1 Contract, and (iii) no event or condition exists which constitutes or,
after notice or lapse of time or both, would constitute, a material default on
the part of S1 or any of its Subsidiaries under any such S1 Contract.
3.12 ENVIRONMENTAL MATTERS.
(a) Each of S1 and the S1 Subsidiaries is in compliance in all
material respects with all applicable Laws and regulations relating to pollution
or protection of the environment (including without limitation, laws and
regulations relating to emissions, discharges, releases and threatened releases
of Hazardous Materials (as hereinafter defined)), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials;
(b) There is no suit, claim, action, proceeding, investigation
or notice pending or, to the knowledge of S1 and its Subsidiaries threatened (or
past or present actions or events that could form the basis of any such suit,
claim, action, proceeding, investigation or notice), in which S1 or any S1
Subsidiary has been or, with respect to threatened suits, claims, actions,
proceedings, investigations or notices may be, named as a defendant (x) for
alleged material noncompliance (including by any predecessor), with any
environmental law, rule or regulation or (y) relating to any
-13-
material release or threatened release into the environment of any Hazardous
Material, occurring at or on a site owned, leased or operated by S1 or any S1
Subsidiary, or to the knowledge of S1, relating to any material release or
threatened release into the environment of any Hazardous Material, occurring at
or on a site not owned, leased or operated by S1 or any S1 Subsidiary;
(c) To the knowledge of S1 and its Subsidiaries, during the
period of S1's or any S1 Subsidiary's ownership or operation of any of its
properties, there has not been any material release of Hazardous Materials in,
on, under or affecting any such property; and
(d) For purposes of this Agreement, the term "Hazardous
Material" means any hazardous waste, petroleum product, polychlorinated
biphenyl, chemical, pollutant, contaminant, pesticide, radioactive substance, or
other toxic material, or other material or substance (in each such case, other
than small quantities of such substances in retail containers) regulated under
any applicable environmental or public health statute, law, ordinance, rule or
regulation.
3.13 PROPERTIES AND ASSETS.
Except for (a) items reflected in S1's consolidated financial
statements as of December 31, 1998 referred to in Section 3.5 hereof, (b)
exceptions to title that do not interfere materially with S1's or any S1
Subsidiary's use and enjoyment of owned or leased real property, (c) liens for
current real estate taxes not yet delinquent, or being contested in good faith,
properly reserved against (and reflected on the financial statements referred to
in Section 3.5 above), and (d) properties and assets sold or transferred in the
ordinary course of business consistent with past practices since December 31,
1998, S1 and each S1 Subsidiary have good and, as to owned real property,
marketable and insurable title to all their properties and assets, free and
clear of all liens, claims, charges and other encumbrances. S1 and each S1
Subsidiary, as lessees, have the right under valid and subsisting leases to
occupy, use and possess all property leased by them, and neither S1 nor any S1
Subsidiary has experienced any material uninsured damage or destruction with
respect to such properties since December 31, 1998. All properties and assets
used by S1 and each S1 Subsidiary are in good operating condition and repair
suitable for the purposes for which they are currently utilized and comply in
all material respects with all Laws relating thereto now in effect or scheduled
to come into effect. S1 and each S1 Subsidiary enjoy peaceful and undisturbed
possession under all leases for the use of all property under which they are the
lessees, and all leases to which S1 or any S1 Subsidiary is a party are valid
and binding obligations in accordance with the terms thereof. Neither S1 nor any
S1 Subsidiary is in material default with respect to any such lease, and there
has occurred no default by S1 or any S1 Subsidiary or event which with the lapse
of time or the giving of notice, or both, would constitute a material default
under any such lease. To the knowledge of S1, there are no Laws,
-14-
conditions of record, or other impediments which interfere with the intended use
by S1 or any S1 Subsidiary of any of the property owned, leased, or occupied by
them.
3.14 INSURANCE.
The existing insurance carried by S1 and S1 Subsidiaries is and will
continue to be, in respect of the nature of the risks insured against and the
amount of coverage provided, substantially similar in kind and amount to that
customarily carried by parties similarly situated who own properties and engage
in businesses substantially similar to that of S1 and the S1 Subsidiaries, and
is sufficient for compliance by S1 and the S1 Subsidiaries with all requirements
of Law and agreements to which S1 or any of the S1 Subsidiaries is subject or is
party.
3.15 COMPLIANCE WITH APPLICABLE LAWS.
Each of S1 and any S1 Subsidiary has complied in all material respects
with all Laws applicable to it or to the operation of its business. Neither S1
nor any S1 Subsidiary has received any notice of any material alleged or
threatened claim, violation, or liability under any such Laws that has not
heretofore been cured and for which there is any remaining liability.
3.16 S1 INFORMATION.
The information relating to S1 and each S1 Subsidiary to be provided by
S1 to be contained in the S1 Proxy Statement (as defined below) will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading.
3.17 INTELLECTUAL PROPERTY.
Except, in each case, as set forth in Section 3.17 of the S1
Disclosure Schedule:
(a) (i) S1 and its Subsidiaries own, free and clear of liens,
orders and arbitration awards, or are licensed or otherwise possess valid and
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, schematics, technology, know-how,
trade secrets, ideas, algorithms, processes, Software (as defined below), and
tangible or intangible proprietary information or material ("Intellectual
Property") that are used in the business of S1 and its Subsidiaries. "Software"
means any and all (i) computer programs and applications, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, (ii) databases and compilations, including any and
all data and collections of data,
-15-
whether machine readable or otherwise, (iii) descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing,
(iv) the technology supporting any Internet site(s) operated by or on behalf of
S1 or any of its Subsidiaries, and (v) all documentation, including user manuals
and training materials, relating to any of the foregoing.
(ii) Except as would not be materially adverse to the
business of S1 or its Subsidiaries, S1 and its Subsidiaries have taken
reasonable steps to protect their Intellectual Property. There is no litigation
pending or, to the knowledge of S1 and its Subsidiaries, threatened or any
written claim from any person challenging the ownership, use, validity or
enforceability of any Intellectual Property, nor is there any basis for the
assertion of any such claim or challenge.
(iii) No material patent, trademark, service xxxx,
copyright, trade secret, computer software or other intellectual property right
other than the Intellectual Property set forth on Section 3.17 of the S1
Disclosure Schedule is necessary to conduct the businesses of S1 and its
Subsidiaries as presently conducted.
(b) Section 3.17 of the S1 Disclosure Schedule lists all (i)
patents, patent applications, registered and unregistered trademarks, trade
names and service marks and registered copyrights, owned by S1 included in the
Intellectual Property, including the jurisdictions in which each such item of
Intellectual Property right has been issued or registered or in which any
application for such issuance and registration has been filed, (ii) material
licenses, sublicenses and other agreements as to which S1 and its Subsidiaries
are a party and pursuant to which any person is authorized to use any
Intellectual Property, and (iii) licenses, sublicenses and other agreements as
to which S1 and its Subsidiaries are a party and pursuant to which S1 and its
Subsidiaries are authorized to use any third party patents, trademarks or
copyrights, including Software ("Third Party Intellectual Property Rights")
which are incorporated in, are or form a part of any S1 or Subsidiary product.
(c) (i) To the knowledge of S1 and its Subsidiaries, there is
no unauthorized use, disclosure, infringement or misappropriation of any
Intellectual Property rights of S1 or its Subsidiaries, any trade secret
material to S1 or its Subsidiaries, or any Intellectual Property right of any
third party to the extent licensed by or through S1 or its Subsidiaries, by any
employee of S1 or any S1 Subsidiary or third party for whom S1 is responsible.
Except as set forth in Section 3.17 of the S1 Disclosure Schedule, there are no
royalties, fees or other payments payable by S1 or its Subsidiaries to any
person by reason of the ownership, use, sale or disposition of Intellectual
Property.
(ii) To the knowledge of S1 and its Subsidiaries,
there has been no prior use of S1's registered trademarks by any third party
which would confer upon said third party superior rights in such trademarks. S1
and its
-16-
Subsidiaries have taken reasonable steps to adequately police the trademarks
against third party infringement, and the material trademarks registered in the
United States have been continuously used in the form appearing in, and in
connection with the goods and services listed in, their respective registration
certificates or any amendment, supplement or office action related thereto.
(d) S1 and its Subsidiaries are not, nor will they be as a
result of the execution and delivery of this Agreement or the performance of
their obligations under this Agreement, in breach of any material license,
sublicense or other agreement relating to the Intellectual Property or Third
Party Intellectual Property Rights, and the execution and delivery of this
Agreement or the performance of the obligations under this Agreement by S1 and
its Subsidiaries will not result in the loss or impairment of, or give rise to
any right of any third party to terminate, any of S1's or any of its
Subsidiaries' rights to own any of its Intellectual Property or their respective
rights under any material license agreements, nor require the consent of any
Governmental Entity or third party in respect of any such Intellectual Property.
(e) S1 and its Subsidiaries (i) have no knowledge (including
knowledge of any litigation pending or threatened or any written claim from any
person) or reason to believe that the conduct of their businesses infringe any
patent, trademark, service xxxx, copyright, trade secret or other proprietary
right of any third party; and (ii) have not advised any third party that such
third party may be infringing any Intellectual Property or breaching any license
or agreement involving Intellectual Property and have not brought or threatened
any claim against such third party for such conduct.
(f) The Software owned or purported to be owned by S1 or any
of its Subsidiaries, was either (i) developed by employees of S1 or any of its
Subsidiaries within the scope of their employment; (ii) developed by independent
contractors or consultants who have assigned their rights to S1 or any of its
Subsidiaries pursuant to written agreements; or (iii) otherwise acquired by S1
or its Subsidiary from a third party.
(g) All employees and independent contractors and consultants
of S1 and its Subsidiaries have executed and delivered to S1 or its
Subsidiaries, as the case may be, agreements regarding the protection of
proprietary information and the assignment to S1 or its Subsidiaries of any
Intellectual Property arising from services performed for S1 or its Subsidiaries
by such persons.
(h) S1 and its Subsidiaries have obtained or entered into
written agreements with their employees and with third parties, in transactions
deemed appropriate, in connection with the disclosure to, or use or
appropriation by, employees and third parties, of trade secret or proprietary
information owned by S1 and its Subsidiaries and not otherwise protected by a
patent, a patent application,
-17-
copyright, trademark, or other registration or legal scheme ("S1 Confidential
Information"), and do not know of any situation involving such employee or third
party use, disclosure or appropriation of S1 Confidential Information where the
lack of such a written agreement is likely to result in any Material Adverse
Effect. Except as set forth in Section 3.17 of the S1 Disclosure Schedule,
neither S1 nor any of its Subsidiaries have furnished the source code of any of
their Software products to any third party, deposited any such source code in
escrow, or otherwise provided access to such source code to any third party.
(i) Except as would not be materially adverse to the business
of S1 or its Subsidiaries, S1 and its Subsidiaries have taken reasonable steps
with the intent of ensuring that their products (including existing products and
technology and products and technology currently under development) will, when
used in accordance with associated documentation on a specified platform or
platforms, be capable upon installation of accurately processing, providing, and
receiving date data from, into, and between the twentieth and twenty-first
centuries, including the years 1999 and 2000, and making leap-year calculations,
provided that all other non-S1 or S1 Subsidiary products (e.g., hardware,
software and firmware) used in or in combination with S1's or its Subsidiaries'
products, properly exchange data with S1's and its Subsidiaries products.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
---------------------------------------------
Each of the Purchasers severally and not jointly hereby makes
the following representations and warranties to S1 as set forth in this Section
4 each of which is being relied upon by S1 as a material inducement to enter
into and perform this Agreement. All of the disclosure schedules of the
Purchasers referenced below and thereby required of the Purchasers pursuant to
this Agreement, which disclosure schedules shall be cross-referenced to the
specific sections and subsections of this Agreement and delivered herewith, are
referred to herein as the "Purchasers' Disclosure Schedule."
4.1 ORGANIZATION OF PURCHASERS.
---------------------------
Such Purchaser not a natural person is duly organized and
validly existing under the laws of the jurisdiction of its formation.
4.2 AUTHORIZATION OF TRANSACTION.
-----------------------------
(a) If such Purchaser is not a natural person, such Purchaser
has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized
-18-
by all requisite action on the part of such Purchaser and no other proceedings
on the part of such Purchaser are necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by such Purchaser and (assuming due authorization, execution and
delivery by S1 and FICS of this Agreement) will constitute a valid and legally
binding obligation of such Purchaser, enforceable in accordance with its terms,
except as enforcement may be limited by general principles of equity, whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally. Except as set
forth in Section 4.2(a) of the Purchasers' Disclosure Schedule, no Purchaser
need give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(b) Such Purchaser acknowledges that he, she or it has read
this Agreement and has been provided with, or been granted access to, all
information necessary to make his or her decision to execute this Agreement.
Such Purchaser acknowledges that his, her or its signature on this Agreement
shall be deemed his, her or its written consent to the execution of this
Agreement and to the consummation of all of the transactions contemplated by
this Agreement, except for such consents, approvals or filings the failure of
which to obtain will not have a Material Adverse Effect on the ability of such
Purchaser to consummate the transactions contemplated hereby.
4.3 NON-CONTRAVENTION.
------------------
Neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will (A) assuming that
the consents and approvals referred to in Section 4.2(a) are duly obtained, (x)
violate any Laws applicable to such Purchaser or any of its properties or
assets, or (y) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, 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 or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the respective
properties or assets of such Purchaser 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 such Purchaser is or
will be, as the case may be, a party, or by which such Purchaser or any of its
properties or assets may be bound or affected or (B) if such Purchaser is not a
natural person, violate any provisions of its organizational documents.
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4.4 BROKER'S FEES.
--------------
Except for the fee payable to Credit Suisse First Boston
("CSFB") in accordance with the terms of a letter agreement between CSFB and
FICS, dated May 16, 1999, such Purchaser has no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement nor has such Purchaser created any
such liability or obligation which, upon consummation of the transactions
contemplated by this Agreement or the Transaction, will become an obligation of
S1 or any subsidiary.
4.5 ADEQUATE RESOURCES.
-------------------
Such Purchaser will have, at the time of the First Closing,
the Second Closing and the Third Closing, sufficient cash or other resources to
perform its obligations hereunder.
4.6 NO LEGAL, TAX OR INVESTMENT ADVICE.
-----------------------------------
Such Purchaser understands that nothing in this Agreement or
any other materials presented to such Purchaser in connection with the purchase
and sale of the Initial Shares, the 2000 Earn-out Shares, the 2001 Earn-out
Shares or the Transaction constitutes legal, tax or investment advice. Such
Purchaser has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Initial Shares.
4.7 STATUS OF PURCHASERS.
---------------------
Each of the Purchasers who are original signatories to this
Agreement not including any Purchasers joined to this Agreement pursuant to
Section 5.13 hereof represent that as of the date hereof, such Purchaser is a
director, executive officer or other affiliate of FICS.
SECTION 5. ADDITIONAL AGREEMENTS.
----------------------
5.1 LOCK-UP COVENANT.
-----------------
During the period beginning on the First Closing and ending on
the date 180 days after the First Closing, each of the Akkermans, Pamica N.V.,
General Atlantic Partners 20, L.P., GAP Coinvestment Partners, L.P., or General
Atlantic Partners 52, L.P., covenant that they will not, without the prior
written consent of S1, offer, sell or otherwise dispose of, directly or
indirectly, any capital stock of S1 which Purchasers may own directly,
indirectly or beneficially; provided, however,
-20-
that any such Purchaser may transfer some or all of the Initial Shares to a
corporation, partnership or other legal entity controlled by such Purchaser if
such transferee agrees in writing to hold any Initial Shares received subject to
the provisions of this Agreement and to transfer such Initial Shares back to
such Purchaser if such transferee ceases to be controlled by such Purchaser.
5.2 S1 BOARD OF DIRECTORS.
----------------------
5.2(a). Effective upon the First Closing, S1 shall have
adopted a resolution pursuant to Section 3.2 of its Amended and Restated Bylaws
to increase the size of its Board of Directors by at least two members, and
shall thereupon invite Akkermans and one other individual designated by
Akkermans to serve as an additional member (the "FICS Members") of the Board of
Directors of S1 to serve for a term expiring at the third successive annual
meeting following the First Closing; provided, however, that S1 shall have no
obligation to invite any FICS Member to serve on S1's Board if such person is
not a member in good standing of the FICS Board of Directors immediately prior
to the First Closing. In addition, S1 shall have amended its Amended and
Restated Bylaws to provide that for a period of two years following the First
Closing, the nominating committee for vacancies or additional members shall
consist of all members of the Board of Directors.
5.2(b). The parties agree that, as of the date of the First
Closing, Akkermans shall be appointed to hold the offices of President and
Chairman of the Board of Directors of S1, each with the duties and
responsibilities specified in the Amended and Restated Bylaws of S1.
5.3 COMPLIANCE WITH ANTITRUST LAWS.
-------------------------------
Each of FICS, the Purchasers and S1 shall make all filings of
any applications, notices or other documents required under applicable antitrust
Laws and use its reasonable best efforts to resolve objections, if any, which
may be asserted with respect to the transactions contemplated by this Agreement
or the Transaction under antitrust laws, including, without limitation, the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). In the event a suit is threatened or instituted challenging the
transactions contemplated by this Agreement or the Transaction as violative of
antitrust laws, each of the Purchasers and S1 shall use its reasonable best
efforts to avoid the filing of, or resist or resolve such suit. The Purchasers
and S1 shall use their reasonable best efforts to take such action as may be
required: (a) by the Antitrust Division of the Department of Justice or the
Federal Trade Commission in order to resolve such objections as either of them
may have to the transactions contemplated by this Agreement or the Transaction
under antitrust laws, or (b) by any federal or state court of the United States,
in any suit brought by a private party or Governmental Entity challenging the
transactions contemplated by this Agreement or the
-21-
Transaction as violative of antitrust laws, in order to avoid the entry of, or
to effect the dissolution of, any injunction, temporary restraining order, or
other order which has the effect of preventing the consummation of the
transactions contemplated by this Agreement or the Transaction. Reasonable best
efforts shall not include, among other things and to the extent S1 so desires,
the willingness of S1 to accept an order agreeing to the divestiture, or the
holding separate, of any assets of FICS or S1.
5.4 REGULATORY MATTERS.
-------------------
5.4(a). Upon the execution and delivery of this Agreement, S1
and the Purchasers shall promptly cause to be prepared and filed with the SEC a
proxy statement and prospectus (the "S1 Proxy Statement") for soliciting the
approval of this Agreement and the S1 Issuance by the stockholders of S1. The S1
Proxy Statement may be included in a registration statement on an appropriate
registration form prepared pursuant to Section 5.8 hereof. S1 shall use its
reasonable best efforts to have the S1 Proxy Statement cleared for use by the
SEC as soon as possible after the filing. The parties shall cooperate in
responding to and considering any questions or comments from the SEC staff
regarding the information contained in the S1 Proxy Statement. If at any time
after the S1 Proxy Statement is filed with the SEC, and prior to the date of the
First Closing, any event relating to FICS is discovered by the Purchasers which
should be set forth in an amendment of, or a supplement to, the S1 Proxy
Statement, the Purchasers shall promptly inform S1, and shall furnish S1 with
all necessary information relating to such event whereupon S1 shall promptly
cause an appropriate amendment to the S1 Proxy Statement to be filed with the
SEC. S1 (if prior to the meeting of stockholders pursuant to Section 4.5 hereof)
shall take all necessary action as promptly as practicable to permit an
appropriate amendment or supplement to be transmitted to its stockholders
entitled to vote at such meeting. If at any time after the S1 Proxy Statement is
filed with the SEC, and prior to the date of the First Closing, any event
relating to S1 is discovered by S1 which should be set forth in an amendment of,
or a supplement to, the S1 Proxy Statement, S1 shall promptly inform the
Purchasers, and S1 shall promptly cause an appropriate amendment to the Proxy
Statement to be filed with the SEC. S1 (if prior to the meeting of stockholders
pursuant to Section 4.5 hereof) shall take all necessary action as promptly as
practicable to permit an appropriate amendment or supplement to be transmitted
to its stockholders entitled to vote at such meeting.
5.4(b). The parties hereto shall cooperate with each other and
use their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement. S1 and the Purchasers shall have the right to review in advance, and
to the extent practicable each will consult the other
-22-
on, in each case subject to applicable laws relating to the exchange of
information, all the information relating to S1 or the Purchasers, as the case
may be, which appears in any filing made with, or written materials submitted
to, any third party or any Governmental Entity in connection with the
transactions contemplated by this Agreement; provided, however, that nothing
contained herein shall be deemed to provide either party with a right to review
any information provided to any Governmental Entity on a confidential basis in
connection with the transactions contemplated hereby; and further provided that
S1 and Akkermans shall mutually agree on any such information regarding the
structure or purpose of the structure of the transactions contemplated by this
Agreement and the Holdings Purchase Agreement prior to its appearance. In
exercising the foregoing right, each of the parties hereto shall act reasonably
and as promptly as practicable. The parties hereto agree that they will consult
with each other with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other apprised of the status of matters
relating to contemplation of the transactions contemplated herein.
5.4(c). The Purchasers shall, upon request, furnish S1 with
all information concerning FICS and its directors, officers and stockholders and
such other matters as may be reasonably necessary or advisable in connection
with the S1 Proxy Statement or any other statement, filing, notice or
application made by or on behalf of S1 to any Governmental Entity in connection
with the transactions contemplated by this Agreement or the Transaction.
5.4(d). S1 and the Purchasers shall promptly advise each other
upon receiving any communication from any Governmental Entity whose consent or
approval is required for consummation of the transactions contemplated by this
Agreement which causes such party to believe that there is a reasonable
likelihood that any Requisite Regulatory Approval (as defined in the Holdings
Purchase Agreement) will not be obtained or that the receipt of any such
approval will be materially delayed.
5.5 STOCKHOLDER MEETING.
--------------------
S1 shall take all steps necessary to duly call, give notice
of, convene and hold a meeting of its stockholders within 45 days after the S1
Proxy Statement is approved by the SEC for use for the purpose of voting upon
the approval of this Agreement and the S1 Issuance. Management and the Board of
Directors of S1 shall recommend approval of each of this Agreement, the S1
Issuance and the Transaction.
-23-
5.6 LEGAL CONDITIONS.
-----------------
Each of S1 and the Purchasers shall use their reasonable best
efforts (a) to take, or cause to be taken, all actions necessary, proper or
advisable to comply promptly with all legal requirements which may be imposed on
such party with respect to the transactions contemplated by this Agreement or
the Transaction and, subject to the conditions set forth in Section 6 hereof, to
consummate the transactions contemplated by this Agreement and (b) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity and any other
third party which is required to be obtained by the Purchasers or S1 in
connection with transactions contemplated by this Agreement or the Transaction.
5.7 STOCK EXCHANGE LISTING.
-----------------------
S1 shall cause the Initial Shares, the 2000 Shares and the
2001 Shares to be approved for quotation on the Nasdaq Stock Market National
Market System ("Nasdaq") (or such other exchange on which the S1 Common Stock
has become listed, or approved for listing) prior to the First Closing.
5.8 REGISTRATION OF S1 COMMON STOCK.
--------------------------------
Upon the execution and delivery of this Agreement, S1 and FICS
(as to information to be included therein pertaining to FICS) shall promptly
cause to be prepared and filed with the SEC a registration statement of S1 on
Form S-4, including the Proxy Statement/Prospectus (the "Registration
Statement") for the purpose of registering the S1 Common Stock (including the
2000 Shares and the 2001 Shares) to be issued pursuant to this Agreement, and
for soliciting the approval of this Agreement by the stockholders of S1. S1 and
FICS shall use their reasonable best efforts to have the Registration Statement
declared effective by the SEC as soon as possible after the filing. The parties
shall each promptly notify the other upon the receipt of any comments from the
SEC or its staff, or any other governmental officials, supply each other with
all such correspondence with any Governmental Entity other than confidential
information, and cooperate in responding to and considering any questions or
comments from the SEC staff regarding the information contained in the
Registration Statement. If at any time after the Registration Statement is filed
with the SEC, and prior to the First Closing, any event relating to S1 or FICS
is discovered by such party which should be set forth in an amendment of, or a
supplement to, the Registration Statement, including the Prospectus/Proxy
Statement, such party shall promptly inform the other, and shall furnish all
necessary information relating to such event whereupon the appropriate party
shall promptly cause an appropriate amendment to the Registration Statement or
supplement to the Prospectus/Proxy Statement to be filed with the SEC. Upon the
effectiveness of such amendment or supplement, the parties (if prior to the
meeting of stockholders pursuant to Section
-24-
5.5 hereof) will take all necessary action as promptly as practicable to permit
an appropriate amendment or supplement to be transmitted to the S1 stockholders
entitled to vote at such meeting. S1 shall also use reasonable efforts to obtain
all necessary state securities law or "Blue Sky" permits and approvals required
to carry out the transactions contemplated by this Agreement. Each party shall
furnish all information as may be reasonably requested by the other in
connection with any such action.
5.9 RESALE OF AKKERMANS' S1 COMMON STOCK.
-------------------------------------
Prior to the First Closing, S1 shall either (i) file a
registration statement on an appropriate form (the "Akkermans Registration
Statement") with the SEC and use its commercially reasonable efforts to cause
the Akkermans Registration Statement to be declared effective upon the First
Closing (or such later date as Akkermans may request) to effect the registration
under the Securities Act of 1933 as amended (the "Securities Act") of the
Akkermans Registration Statement for the resale by Akkermans of such amount of
shares of S1 Common Stock as determined by Akkermans not later than the day
before the First Closing, but in no event greater than an amount of shares (the
"Resale Shares") the net proceeds from the sale of which (after giving effect to
underwriting fees, expenses, commissions and discounts) shall be equal to (A)
(x) 0.18 multiplied by (y) $35.75, multiplied by (z) the number of shares of S1
Common Stock he beneficially acquires in the First Closing pursuant to this
Agreement, plus (B) $15,000,000, on customary terms and under then prevailing
market conditions, at a per share offering price as determined by S1 in its
reasonable judgment to be fair and adequate to Akkermans, or (ii) make
arrangements for Akkermans to sell the Resale Shares pursuant to an exemption
from registration under the Securities Act with the same net proceeds as set
forth in subsection (i) of this paragraph and on substantially similar terms to
those specified in subsection (i) of this paragraph, including without
limitation the per share offering price.
5.10 REGISTRATION PROCEEDINGS.
-------------------------
S1 shall conduct all registration proceedings pursuant to this
Agreement in accordance with the following:
(1) S1 shall use its commercially reasonable efforts,
but shall not be required, to conduct an underwritten offering.
(2) If, after it becomes effective, such registration
statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental authority, such registration
shall not be deemed to have been effected unless such stop order, injunction or
other order shall have been subsequently vacated or removed.
-25-
(3) S1 shall, subject to the other relevant
provisions of this Agreement:
(A) use its commercially reasonable efforts to
cause the registration statement to become ffective as soon as practicable after
the filing thereof;
(B) prepare and file with the SEC as promptly as
is reasonably practicable (and in any event ithin 60 days after such amendment
or supplement becomes necessary) such amendments and supplements to the
registration statement contained therein as may be necessary to keep such
registration statement effective for the respective periods specified or until
each Purchaser has completed the distribution described in such registration
statement, whichever occurs first;
(C) furnish to Purchasers such number of copies
of such registration statement, each mendment and supplement thereto as they may
reasonably request;
(D) use its commercially reasonable efforts to
register or qualify such shares under the state blue sky or securities or
banking laws ("Blue Sky Laws") of such jurisdictions as Purchasers reasonably
request (and to keep such registrations and qualifications effective for a
period of no less than one year following the First Closing, or until Purchasers
have completed the distribution of such shares, whichever occurs first), and to
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Purchasers to consummate the disposition of such shares
in such jurisdictions; provided, however, that S1 will not be required to do any
of the following: (i) qualify generally to do business in any jurisdiction where
it would not be required but for this Section 5.10, (ii) subject itself to
taxation in any such jurisdiction, or (iii) file any general consent to service
of process in any such jurisdiction;
(E) promptly notify Purchasers at any time
during the period that S1 is required to keep the registration statement
effective, of the occurrence of any event as a result of which such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, and prepare a supplement or amendment to
the registration statement so that, as thereafter delivered to the purchasers of
such shares, the registration statement will not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
-26-
(F) use commercially reasonable efforts to cause
all such shares to be listed on Nasdaq or such other national exchange on which
S1 Common Stock shall then be listed; and
(G) provide a transfer agent and registrar (if
S1 does not already have such an agent) for all such shares not later than the
effective date of such registration statement.
(4) If, pursuant to this Section 5.10, S1 Common
Stock owned by a Purchaser is included in a registration statement, then such
Purchaser shall pay all transfer taxes, if any, relating to the sale of its S1
Common Stock, the fees and expenses of its own counsel, and its pro rata portion
of any underwriting discounts or commissions or the equivalent thereof.
(5) Except for the fees and expenses specified in
paragraph (4) of this Section 5.10 and except as provided this paragraph (5), S1
shall pay all expenses incident to the registration and to S1's performance of
or compliance with this Agreement, including, without limitation, all SEC
registration and filing fees, fees and expenses of compliance with Blue Sky
Laws, underwriting discounts, fees, and expenses (other than a Purchaser's pro
rata portion of any underwriting discounts or commissions or the equivalent
thereof), printing expenses, messenger and delivery expenses, and fees and
expenses of counsel for S1 and all independent certified public accountants and
other persons retained by S1.
(6) Each Purchaser (for the purposes of this
paragraph (6), the "Indemnifying Person") agrees to indemnify and hold harmless
S1, each of S1's officers and directors, and each person, if any, who controls
or may control S1 within the meaning of the Securities Act (for the purposes of
this paragraph (6), S1, its officers and directors, and any such other persons
being referred to individually as an "Indemnified Person" and collectively as
"Indemnified Persons") from and against all demands, claims, actions or causes
of action, assessments, losses, damages, liabilities, costs, and expenses,
including, without limitation, interest, penalties, and reasonable attorneys'
fees and disbursements, asserted against, resulting to, imposed upon, or
incurred by such Indemnified Person, directly or indirectly (collectively,
referred to for purposes of this paragraph (vii) and the corresponding provision
of paragraph (viii) below in the singular as a "Claim" and in the plural as
"Claims"), based upon, arising out of, or resulting from any untrue statement of
a material fact contained in the registration statement or any omission to state
therein a material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading, to
the extent that such Claim is based upon, arises out of or results from any
untrue statement or omission based upon information furnished to S1 by such
Purchaser in a written document provided by such Purchaser for use in connection
with the Registration Statement; provided that such Purchaser will not
-27-
be liable in any such case to the extent that any such Claim arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement in reliance upon or in
conformity with written information furnished to such Purchaser by S1 or an
underwriter in connection with the registration statement specifically for use
in the preparation thereof.
(7) S1 (for the purposes of this paragraph (7), the
"Indemnifying Person") agrees to indemnify and old harmless the Purchasers and
any underwriters participating in the distribution of S1 Common Stock pursuant
to a registration statement (for the purposes of this paragraph (7), the
Purchasers and any such other persons also being referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
all Claims based upon, arising out of, or resulting from any untrue statement of
a material fact contained in the registration statement or any omission to state
therein a material fact necessary in order to make the statement made therein,
in the light of the circumstances under which they were made, not misleading,
provided that S1 will not be liable in any such case to the extent that any such
Claim arises out of or results from any untrue statement or omission based upon
information furnished to S1 by any Purchaser in a written document provided by
such Purchaser for use in connection with the registration statement.
(8) The indemnification set forth herein shall be in
addition to any liability S1 or any Purchaser may otherwise have in connection
with any registration of S1 Common Stock. Within a reasonable time after
receiving definitive notice of any Claim in respect of which an Indemnified
Person may seek indemnification under this Section 5.10, such Indemnified Person
shall submit written notice thereof to such Indemnifying Person. The failure of
the Indemnified Person so to notify the Indemnifying Person of any such Claim
shall not relieve the Indemnifying Person from any liability it may have
hereunder except to the extent that (a) such liability was caused or increased
by such omission, or (b) the ability of the Indemnifying Person to reduce such
liability was materially adversely affected by such omission. In addition, the
omission of the Indemnified Person so to notify the Indemnifying Person of any
such Claim shall not relieve the Indemnifying Person from any liability it may
have otherwise than hereunder. The Indemnifying Person shall have the right to
undertake, by counsel or representatives of its own choosing, the defense,
compromise, or settlement (without admitting liability of the Indemnifying
Person) of any such Claim asserted, such defense, compromise, or settlement to
be undertaken at the expense and risk of the Indemnifying Person, and the
Indemnified Person shall have the right to engage separate counsel, at its own
expense, which counsel for the Indemnifying Person shall keep informed and
consult with in a reasonable manner. In the event the Indemnifying Person shall
fail to undertake such defense by its own representatives, the Indemnifying
Person shall give prompt written notice of such election to the Indemnified
Person, and the
-28-
Indemnified Person shall undertake the defense, compromise, or settlement
(without admitting liability of the Indemnified Person) thereof on behalf of and
for the account and risk of the Indemnifying Person by counsel or other
representatives designated by the Indemnified Person. In the event that any
Claim shall arise out of a transaction or cover any period or periods wherein S1
and any Purchaser shall each be liable hereunder for part of the liability or
obligation arising therefrom, then the parties shall, each choosing its own
counsel and bearing its own expenses, defend such Claim, and no settlement or
compromise of such Claim may be made without the joint consent or approval of S1
and such Purchaser. Notwithstanding the foregoing, no Indemnifying Person shall
be obligated hereunder with respect to amounts paid in settlement of any Claim
if such settlement is effected without the consent of such Indemnifying Person
(which consent shall not be unreasonably withheld).
(9) If the indemnification provided for in this
Section 5.10 is held by a court of competent jurisdiction to be unavailable to
an Indemnified Party (as defined in either paragraph (6) or (7)) with respect to
any Claim, then such Purchaser or S1, as applicable and as the case may be (each
an "Indemnifying Party"), in lieu of indemnifying an Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such Claim in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions
which resulted in such claim.
5.11 CONDUCT OF S1'S BUSINESS.
-------------------------
During the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the First
Closing, except with respect to (i) the certain Agreement and Plan of Merger
dated as of May 16, 1999 by and among S1, Sahara Strategy Corporation and Edify
Corporation, and (ii) the certain Stock Purchase and Option Agreement dated as
of May 16, 1999 by and between S1 and Intuit Inc., prior to entering into any
such agreement S1 agrees to consult with the Purchasers and reasonably consider
their views with respect to any transactions having a value over $50,000,000 in
which S1 proposes to engage.
5.12 ADVICE OF CHANGES.
------------------
S1 and the Purchasers shall promptly advise the other party of
any change or event that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect on it or to cause or
constitute a material breach of any of its representations, warranties or
covenants contained herein. From time to time prior to the First Closing Date,
each party will promptly supplement or amend its disclosure schedule delivered
in connection with the execution of this Agreement to reflect any matter which,
if existing, occurring or known at the date of
-29-
this Agreement, would have been required to be set forth or described in such
disclosure schedule or which is necessary to correct any information in such
disclosure schedule which has been rendered inaccurate thereby. No supplement or
amendment to such disclosure schedule shall have any effect for the purpose of
determining satisfaction of the conditions set forth in Sections 6.2(a) or
6.3(a) hereof, as the case may be.
5.13 JOINDER OF ADDITIONAL PURCHASERS.
---------------------------------
Prior to the First Closing, S1 hereby agrees to send, at the
same time and in the same manner as to the S1 stockholders, a copy of the S1
Proxy Statement and a copy of this Agreement to each of the FICS shareholders
who is not an original signatory to this Agreement. Prior to the First Closing,
S1 and the Purchasers hereby agree that such individuals shall be offered the
opportunity to join this Agreement as an additional Purchaser by indicating
acceptance of the terms of this Agreement by a writing signed by such individual
stating that such individual (i) has read the S1 Proxy Statement and this
Agreement, (ii) fully understands this risks involved in proceeding with the
transaction contemplated by this Agreement, and (iii) agrees to join this
Agreement as a Purchaser.
SECTION 6. CONDITIONS TO FIRST CLOSING.
----------------------------
6.1 CONDITIONS TO OBLIGATIONS OF ALL PARTIES.
-----------------------------------------
The obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before the
date of the First Closing, of each of the following conditions precedent:
6.1(a). Termination. Neither this Agreement nor the Holdings
Purchase Agreement shall have been terminated in accordance with its terms.
6.1(b). No Governmental Action. No action or proceeding by or
before any governmental authority shall have been instituted or threatened (and
not subsequently dismissed, settled or otherwise terminated) which is reasonably
expected to restrain, prohibit or invalidate the transactions contemplated by
this Agreement or to affect adversely the financial condition and business
prospects of S1.
6.2 CONDITIONS TO THE OBLIGATIONS OF PURCHASERS.
--------------------------------------------
The obligations of Purchasers to purchase the Initial Shares
as contemplated by this Agreement are subject to the satisfaction, on or before
the
-30-
date of the First Closing, of each of the following conditions precedent, any
one or more of which may be waived by the written consent of the Purchasers:
6.2(a). Representations and Warranties. The representations
and warranties of S1 contained in this Agreement shall be true, correct and
complete in all material respects when made and shall be true and correct on the
date of the First Closing, with the same force and effect as if made on the date
of the First Closing.
6.2(b). Compliance with Covenants. S1 shall have in all
material respects performed all obligations and agreements and complied with all
covenants contained in this Agreement to be performed and complied with by S1 on
or prior to the date of the First Closing.
6.2(c). Akkermans Resale Agreement. At the First Closing,
either (i) the Akkermans Registration Statement shall be able to be declared
effective by the SEC, subject only to completion of the Closing (and the action
of the SEC thereafter to declare said Registration Statement effective) and an
underwriting agreement in reasonable and customary form shall have been prepared
and executed by S1 and the lead underwriter for the offering of S1 Common Stock
described in the prospectus constituting a part of the Akkermans Registration
Statement, and shall be ready for use upon execution by Akkermans, or (ii)
arrangements shall have been made for Akkermans to sell the Resale Shares
pursuant to an exemption from registration under the Securities Act on
substantially similar terms to those specified in subsection (i) of Section 5.9
hereof, including without limitation the per share offering price.
6.2(d) Transaction. The Transaction contemplated by the
Holdings Purchase Agreement shall have been consummated.
6.2(e) Registration Statement. The Registration Statement
shall have been declared effective and no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
Securities Act.
6.3 CONDITIONS TO OBLIGATIONS OF S1.
--------------------------------
The obligations of S1 to sell the Initial Shares as
contemplated by this Agreement are subject to the satisfaction, on or before the
date of the First Closing, of each of the following conditions precedent, any
one or more of which may be waived by S1, in its sole and absolute discretion:
6.3(a). Representations and Warranties. The representations
and warranties of Purchasers contained in this Agreement shall be true, correct
and complete in all material respects when made and shall be true and correct as
of the
-31-
date of the First Closing with the same force and effect as if made on the date
of the First Closing.
6.3(b). Compliance with Covenants. Purchasers and FICS shall
have in all material respects performed all obligations and agreements and
complied with all covenants contained in this Agreement to be performed and
complied with by it on or prior to the date of the First Closing.
SECTION 7. CLOSINGS.
---------
7.1 DELIVERIES BY S1.
-----------------
7.1(a). At the First Closing, S1 shall deliver to Purchasers
the following:
(1) Certificates registered in Purchasers' names,
representing all of the Initial Shares in the mounts set forth in Section 1.1
above.
(2) A copy of the resolutions of the Board of
Directors of S1, as certified as of the First Closing Date by the Secretary or
other appropriate officer of S1, as being true, correct and complete and then in
full force and effect, authorizing the execution, delivery and performance of
this Agreement by S1, the authorization, sale, issuance and delivery of the
Initial Shares, and the performance of S1's obligations hereunder.
(3) A certificate of S1 signed by an authorized
officer of S1 certifying that the representations and warranties of S1 made
herein are true, complete and correct in all material respects as of the date of
this Agreement and are true and correct as of the date of the First Closing, and
S1 has in all material respects performed all obligations and agreements and
complied with all covenants required to be performed or complied with by S1 on
or prior to the First Closing.
(4) Successor Options and related option agreements
for each option delivered pursuant to Section 2.1 above.
(5) Additional Options and related option agreements
for each option delivered pursuant to Section 2.2 above.
(6) Such other certificates, instruments or documents
as Purchasers may reasonably request in order to effect and document the
transactions contemplated hereby.
-32-
(7) An update of S1's Disclosure Schedule reflecting
any change required as if the Agreement were being executed as of the date of
the First Closing.
7.1(b) At the Second Closing, S1 shall deliver to Purchasers
the following:
(1) Certificates registered in Purchasers' names,
representing all of the 2000 Earn-out Shares in the amounts set forth in Section
1.2 above.
(2) Such other certificates, instruments or documents
as Purchasers may reasonably request in order to ffect and document the
transactions contemplated hereby.
7.1(c) At the Third Closing, S1 shall deliver to Purchasers
the following:
(1) Certificates registered in Purchasers' names,
representing all of the 2001 Earn-out Shares in the amounts set forth in Section
1.2 above.
(2) Such other certificates, instruments or documents
as Purchasers may reasonably request in order to effect and document the
transactions contemplated hereby.
7.2 DELIVERIES BY PURCHASERS.
-------------------------
7.2(a). At the First Closing, the Purchasers shall deliver to
S1 the following:
(1) The Initial Share Consideration, in the form
determined pursuant to Section 1.1(b) hereof.
(2) A certificate of each Purchaser signed by such
Purchaser or an authorized officer of such Purchaser certifying that the
representations and warranties of such Purchaser made herein are true, complete
and correct in all material respects as of the date of this Agreement and are
true and correct as of the date of the First Closing, and such Purchaser has in
all material respects performed all obligations and agreements and complied with
all covenants required to be performed or complied with by Purchaser on or prior
to the First Closing.
(3) If the Purchaser is not a natural person, a copy
of the resolutions or other corporate documentation, certified by the Secretary
of such Purchaser as being true, correct and complete and then in full force and
effect, authorizing the execution, delivery and performance by Purchaser of this
Agreement, Purchaser's obligations hereunder and the Transaction.
-33-
(4) Such other certificates, instruments or documents
as S1 may reasonably request in order to effect nd document the transaction
contemplated hereby.
(5) An update of the Purchasers' Disclosure Schedule
reflecting any change required as if the Agreement were being executed as of the
date of the First Closing.
7.2(b). At the Second Closing, the Purchasers shall deliver to
S1 the following:
(1) The 2000 Earn-out Consideration, in the form
determined pursuant to Section 1.3(c) hereof.
(2) Such other certificates, instruments or documents
as S1 may reasonably request in order to effect and document the transaction
contemplated hereby.
7.2(c). At the Third Closing, the Purchasers shall deliver to
S1 the following:
(1) The 2001 Earn-out Consideration, in the form
determined pursuant to Section 1.3(c) hereof.
(2) Such other certificates, instruments or documents
as S1 may reasonably request in order to effect and document the transaction
contemplated hereby.
SECTION 8. LEGEND.
-------
8.1 ENDORSEMENT.
------------
8.1(a) Certificates representing the Initial Shares delivered
to the Purchasers subject to the lock-up period specified in Section 5.1, shall
bear the following legend (in addition to the legends specified by Sections
8.1(b) and 8.1(c) hereof, if applicable, and any legend required by applicable
state securities laws):
THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN THE STOCK PURCHASE
AGREEMENT II DATED SEPTEMBER 21, 1999 (THE "AGREEMENT") BETWEEN S1
AND THE ORIGINAL PURCHASER, AND NO TRANSFER OF SHARES SHALL BE VALID
OR EFFECTIVE ABSENT COMPLIANCE WITH SUCH RESTRICTIONS. ALL SUBSEQUENT
HOLDERS OF THIS
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CERTIFICATE WILL HAVE AGREED TO BE BOUND BY CERTAIN OF THE TERMS OF
THE AGREEMENT. COPIES OF THE AGREEMENT MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE REGISTERED HOLDER OF THIS CERTIFICATE TO
THE SECRETARY OF S1.
8.1(b) Certificates representing the Initial Shares delivered
to each of Akkermans, Pamica N.V., General Atlantic Partners 20, L.P., GAP
Coinvestment Partners, L.P., General Atlantic Partners 52, L.P., and GIMV N.V.
shall bear the following legend (in addition to the legends specified by
Sections 8.1(a) and 8.1(c) hereof, if applicable, and any legend required by
applicable state securities laws):
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. UNTIL SEPTEMBER 21, 2000, THE SECURITIES REPRESENTED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH SUCH RULE OR UNLESS
AND UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933.
8.1(c) Certificates representing the Initial Shares and the
Earn-out Shares delivered to the FICS Members shall bear the following legend
(in addition to the legends specified by Sections 8.1(a) and 8.1(b) hereof, if
applicable, and any legend required by applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNLESS S1 HAS
RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
8.2 REMOVAL OF LEGEND.
------------------
For each stock certificate that has been endorsed with the
legend pursuant to Section 8.1(a) hereof, insofar as it relates to restrictions
specified in this Agreement, such paragraph shall be removed upon the expiration
of the six-month lock-up period described in Section 5.1.
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SECTION 9. TERMINATION.
------------
9.1 MUTUAL CONSENT.
---------------
S1 and the Purchasers may terminate this Agreement at any time
by mutual written agreement.
9.2 OTHER TERMINATION.
------------------
S1 or the Purchasers may terminate this Agreement by giving
notice (a "Termination Notice") to the other parties at the time designated in
this Section or, in the absence of such designation, at any time up to and
including the date of the First Closing, if any one or more of the following
shall have occurred and be continuing:
9.2(a). Termination By Any Party. Any party may terminate this
Agreement under any one or more of the following circumstances:
(1) at any time after termination of the Holdings
Purchase Agreement in accordance with its terms;
(2) a court or other governmental authority of
competent jurisdiction shall have issued an order, rit, injunction or decree or
shall have taken any other action permanently restraining or otherwise
prohibiting the purchase of the Initial Shares contemplated hereby and such
order, writ, injunction, decree or other action shall have become final and
nonappealable.
9.2(b). Termination By the Purchasers. The Purchasers may
terminate this Agreement
(1) on the date of the First Closing, if any
condition precedent set forth in Sections 6.1 or 6.2 shall not have been
satisfied;
(2) at any time prior to or on the date of the First
Closing, if S1 engages in any transaction (i) in which S1 proposes to issue,
deliver or sell, or authorize or propose the issuance, delivery or sale of, a
number of shares of voting capital stock greater than 50% of its shares of its
outstanding shares of voting capital stock, (ii) involving or contemplating the
acquisition or purchase of more than 50% of any class or series of capital
stock, or 50% of the assets of S1, (iii) any lease or sale transaction out of
the ordinary course of business of more than 50% of the assets of S1, or (iv)
any liquidation or dissolution of S1, without obtaining the prior written
consent of the Purchasers (which consent shall not be unreasonably withheld);
and
(3) provided that the Purchasers are not then in
breach of any representation, warranty, covenant or other agreement contained
herein that,
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individually or in the aggregate, would give S1 the right to terminate this
Agreement, if there shall have been a breach of any of the representations or
warranties set forth in this Agreement on the part of S1, if such breach,
individually or in the aggregate, has had or is likely to have a Material
Adverse Effect on S1, and such breach shall not have been cured within 30 days
following receipt by the S1 of written notice of such breach from the Purchasers
or such breach, by its nature, cannot be cured prior to the First Closing
9.2(c). Termination By S1. S1 may terminate this Agreement on
the date of the First Closing, if any condition precedent set forth in Sections
6.1 or 6.3 shall not have been satisfied.
9.3 EFFECT OF TERMINATION.
----------------------
Termination of this Agreement pursuant to this Section shall
not relieve any party of any liability for a default or other breach, default or
nonperformance under this Agreement. Notwithstanding the foregoing, no party
hereto shall be liable for consequential or punitive damages in connection with
such termination.
SECTION 10. MISCELLANEOUS.
--------------
10.1 ADDITIONAL ACTIONS AND DOCUMENTS.
---------------------------------
Each of the parties hereto agrees that it will, at any time,
prior to, at or after the Third Closing, take or cause to be taken such further
actions, and execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments (including export license
applications) as may be necessary or reasonably requested in connection with the
consummation of the purchase and sale contemplated by this Agreement or in order
to fully effectuate the purposes, terms and conditions of this Agreement.
10.2 EXPENSES.
---------
Each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and consummation of
the transactions contemplated hereby.
10.3 NOTICES.
--------
All notices, demands, requests, or other communications which
may be or are required to be given or made by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered,
mailed by first-class
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registered or certified mail, return receipt requested, postage prepaid, or
delivered by overnight air courier, addressed as follows:
(i) if to S1:
Security First Technologies Corporation
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn.: President
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn.: Xxxxxx X. Xxxxx, Esq.
and
Xxxxx & Xxxxxxx L.L.P.
Xxxxxx xxx Xxxx 00
0000 Xxxxxxxx, Xxxxxxx
Attn.: Xxxxx V. S. Xxxx, Esq.
(b) if to FICS, to:
FICS Group X.X.
Xxxxxxxxxxxxx 00
0000 Xxxxxxxx, Xxxxxxx
Attn.: Xxxxxx Xxxxxxxx, Chief Financial Officer
with a copy (which shall not constitute notice) to:
Brown, Rudnick, Freed & Gesmer
Stanmore House
00-00 Xx. Xxxxx'x Xxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Attn.: Xxxxxxxx X. Xxxx, Esq.
Colin Xxxx Xxxxxxx, Esq.
(c) if to any Purchaser, to the address set forth
opposite such Purchaser's name on Schedule 1 attached
hereto.
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or such other address as the addressee may indicate by written notice to the
other parties. Each notice, demand, request, or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, or the affidavit of messenger being
deemed conclusive but not exclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.
10.4 WAIVER.
-------
No waiver by any party of any failure or refusal of any other
party to comply with its obligations under this Agreement shall be deemed a
waiver of any other or subsequent failure or refusal to so comply by such other
party. No waiver shall be valid unless in writing signed by the party to be
charged and only to the extent therein set forth.
10.5 BINDING EFFECT.
---------------
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
10.6 ENTIRE AGREEMENT; AMENDMENT.
----------------------------
This Agreement, including the other instruments and documents
referred to herein or delivered pursuant hereto, contains the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior oral or written agreements, commitments or understandings with respect to
such matters. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification or discharge is sought.
10.7 SEVERABILITY.
-------------
If any part of any provision of this Agreement shall be
invalid or unenforceable under applicable law, such part shall be ineffective to
the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of such provisions or the remaining provisions of
said Agreement.
10.8 HEADINGS.
---------
The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
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10.9 GOVERNING LAW.
--------------
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed under and in accordance with the laws of the State of Delaware,
excluding the choice of law rules thereof.
10.10 SIGNATURE IN COUNTERPARTS.
--------------------------
This Agreement may be executed in separate counterparts, none
of which need contain the signatures of all parties, each of which shall be
deemed to be an original, and all of which taken together constitute one and the
same instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
10.11 NO THIRD PARTY BENEFICIARIES.
-----------------------------
Except as expressly provided herein, this Agreement is made
and entered into for the sole protection and benefit of the parties hereto, and
no other person or entity shall have any right of action hereon, right to claim
any right or benefit from the terms contained herein or be deemed a third party
beneficiary hereunder.
10.12 ASSIGNABILITY.
--------------
All terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto, and their respective
transferees, successors and assigns; provided, however, that neither this
Agreement nor any rights, privileges, duties and obligations of the parties
hereto may be assigned or delegated by any party hereto without the prior
written consent of all the parties to this Agreement and any such purported or
attempted assignment shall be null and void ab initio and of no force or effect
provided, further that a Purchaser may assign this Agreement, including rights,
privileges, duties and obligations hereunder to any affiliate of such Purchaser
which is wholly or substantially owned directly or indirectly by such Purchaser
so long as such assignment does not in any way materially delay or otherwise
materially adversely impact the ability of the parties hereto to effect the
transactions contemplated hereby.
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10.13 PARTIES NOT PARTNERS.
---------------------
Nothing contained in this Agreement shall constitute any party
as a partner with, agent for or principal of any one or more of the other
parties or their successors and assigns
10.14 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
-----------------------------------------------
None of the representations, warranties, covenants and
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the First Closing, except for those covenants and
agreements contained herein and therein which by their terms apply in whole or
in part after the First Closing.
10.15 CERTAIN DEFINITIONS.
--------------------
References to "$" in this Agreement are to United States dollars. In
addition to any other definitions contained in this Agreement, the following
words, terms and phrases shall have the following meanings when used in this
Agreement.
"Affiliated Person": any director, officer or 5% or greater
shareholder, spouse or other person living in the same household of such
director, officer or shareholder, or any company, partnership or trust in which
any of the foregoing persons is an officer, 5% or greater shareholder, general
partner or 5% or greater trust beneficiary.
"knowledge": with respect to any entity, refers to the knowledge of
such entity's directors and officers in the ordinary course of their duties in
such positions.
"Laws": any and all statutes, laws, ordinances, rules, regulations,
orders, permits, judgments, injunctions, decrees, case law and other rules of
law enacted, promulgated or issued by any Governmental Entity.
"Material Adverse Effect": with respect to S1, means a condition,
event, change or occurrence that is reasonably likely to have a material adverse
effect upon (A) the financial condition, results of operations, business or
properties of the relevant entity (other than as a result of changes in laws or
regulations or accounting rules of general applicability or interpretations
thereof), or (B) the ability of the relevant entity to perform its obligations
under, and to consummate the transactions contemplated by, this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above written.
SECURITY FIRST TECHNOLOGIES
CORPORATION
By: /s/ Xxxxx X. Xxxxx III
------------------------------------
Name: Xxxxx X. Xxxxx III
Title: Chairman and Chief Executive Officer
THE PURCHASERS:
/s/ MICHEL AKKERMANS
--------------------------------------
MICHEL AKKERMANS
PAMICA N.V.
By: /s/
--------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 20, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC, its General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: A Managing Member
GENERAL ATLANTIC PARTNERS 52, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC, its General Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: A General Partner
GIMV N.V.
By: /s/
--------------------------------
Name:
Title:
--------------------------------------
GUY MOONS
--------------------------------------
XXXXXX XXX XXXXXX
--------------------------------------
XXXXXX QUAEYHAEGENS
/s/ XXXXXXX XXXXXXXX
--------------------------------------
XXXXXXX XXXXXXXX
/s/ GOORT GELTEN
--------------------------------------
GOORT GELTEN
/s/ LOEK VAN DEN XXXX
--------------------------------------
LOEK VAN DEN XXXX
/s/ XXXXXXXX XXXXX
--------------------------------------
XXXXXXXX XXXXX
UNICO PORTFOLIO LTD.
By: /s/
--------------------------------
Name:
Title:
FICS GROUP N.V.
(for the limited purposes set forth herein)
By: /s/
--------------------------------
Name:
Title:
Schedule 1
----------
PURCHASER PERCENTAGE
--------- ----------
Michel Akkermans 43.40
PAMICA N.V. 17.05
General Atlantic Partners 20, L.P. 23.99
GAP Coinvestment Partners, L.P. 3.41
General Atlantic Partners 00, X.X. .00
XXXX N.V. 6.34
Guy Moons .27
Xxxxxx Xxx Xxxxxx .00
Xxxxxx Quaeyhaegens .14
Xxxxxxx Xxxxxxxx .14
Goort Gelten 1.71
Xxxxxxxxx Xxxxx .34
Loek van den Xxxx .92
UNICO PORTFOLIO Ltd. 1.71
TOTAL 100.00%
