EXHIBIT 2.2
ACQUISITION AND MERGER AGREEMENT
BY AND AMONG
INTERCEPT HOLDINGS INC.,
a Georgia corporation
INTERCEPT ACQUISITIONS II, INC.,
a Georgia corporation
And
FINET, INC.,
a Tennessee corporation
TABLE OF CONTENTS
Page
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ARTICLE 1 THE MERGER....................................................... 1
Section 1.1. Merger Transaction....................................... 1
Section 1.2. Effective Time of the Merger............................. 1
Section 1.3. Terms and Conditions; Conversion of Shares............... 1
ARTICLE 2 PURCHASE PRICE; EXCHANGE OF SHARES............................... 2
Section 2.1. Common Stock............................................. 2
Section 2.2. Exchange of Shares....................................... 2
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................... 2
Section 3.1. Authorization; Organization.............................. 2
Section 3.2. Capitalization; Structure................................ 3
Section 3.3. Financial Statements..................................... 4
Section 3.4. Undisclosed Liabilities.................................. 4
Section 3.5. Properties............................................... 5
Section 3.6. Litigation............................................... 6
Section 3.7. Intellectual Property.................................... 6
Section 3.8. Adequacy of Technical Documentation...................... 7
Section 3.9. Third-Party Components in Software....................... 7
Section 3.10. Third-Party Interests or Marketing Rights in Software.... 7
Section 3.11. Licenses................................................. 8
Section 3.12. Compliance with Laws..................................... 8
Section 3.13. Insurance................................................ 8
Section 3.14. Material Contracts....................................... 8
Section 3.15. Brokers, Finders, etc.................................... 9
Section 3.16. Taxes.................................................... 9
Section 3.17. Pension and Employee Benefit Plans....................... 10
Section 3.18. Labor and Employment Matters............................. 12
Section 3.19. Environmental Matters.................................... 13
Section 3.20. Agreements Affecting Competition......................... 13
Section 3.21. Transactions with Related Parties........................ 13
Section 3.22. Major Vendors and Customers.............................. 14
Section 3.23. Absence of Certain Commercial Practices.................. 14
Section 3.24. Accounts Receivable...................................... 14
Section 3.25. Disclosure............................................... 14
Section 3.26. Truth at Closing......................................... 15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS................... 15
Section 4.1. Ownership of Shares............................................ 15
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Section 4.2. Litigation..................................................... 15
Section 4.3. Brokers, Finders, etc................................... 15
Section 4.4. Taxes................................................... 15
Section 4.5. Securities Act Compliance............................... 15
Section 4.6. Sophistication of Shareholders.......................... 16
Section 4.7. Schedules............................................... 16
Section 4.8. Disclosure.............................................. 16
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER........................ 16
Section 5.1. Incorporation; Authorization............................ 16
Section 5.2. Litigation.............................................. 17
Section 5.3. Brokers, Finders, etc................................... 17
Section 5.4. Securities Act Compliance............................... 17
Section 5.5. Sophistication of Buyer................................. 17
Section 5.6. Disclosure.............................................. 18
ARTICLE 6 COVENANTS AND AGREEMENTS OF THE PARTIES........................ 18
Section 6.1. Access to Information................................... 18
Section 6.2. Conduct of Business..................................... 18
Section 6.3. Corporate Matters....................................... 18
Section 6.4. Employees............................................... 19
Section 6.5. New Business............................................ 19
Section 6.6. Agreements.............................................. 19
Section 6.7. Cooperation............................................. 19
Section 6.8. Customer Contacts....................................... 19
Section 6.9. No-Shop................................................. 19
Section 6.10. Tax Audits.............................................. 20
Section 6.11. Tax Returns............................................. 20
Section 6.12. Interim Financial Statements............................ 20
Section 6.13. Updating of Information................................. 20
Section 6.14. Pooling of Interests.................................... 20
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.................... 20
Section 7.1. Accuracy of Representations............................. 21
Section 7.2. Performance of Company and Shareholders................. 21
Section 7.3. No Material Changes..................................... 21
Section 7.4. Certificates of the Company and Shareholders............ 21
Section 7.5. Absence of Litigation................................... 21
Section 7.6. Corporate Approval...................................... 21
Section 7.7. Approvals............................................... 21
Section 7.8. Customer Inquiries...................................... 21
Section 7.9. Third Party Consents.................................... 22
Section 7.10. Investigations.......................................... 22
Section 7.11. Affiliates.............................................. 22
Section 7.12. Pooling Letter.......................................... 22
Section 7.13. Employment Agreements................................... 22
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Section 7.14. Salem Capital Documents................................. 22
Section 7.15. Opinion of Counsel...................................... 23
Section 7.16. Termination of Shareholders Agreement................... 23
ARTICLE 8 CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS............. 23
Section 8.1. Accuracy of Representations............................. 23
Section 8.2. Performance of Buyer.................................... 23
Section 8.3. Certificates of the Buyer and the Shareholders.......... 23
Section 8.4. Opinion of Counsel...................................... 23
Section 8.5. Absence of Litigation................................... 23
Section 8.6. Corporate Approval...................................... 24
Section 8.7. Third Party Approvals................................... 24
Section 8.8. Employment Agreements................................... 24
ARTICLE 9 CLOSING....................................................... 24
Section 9.1. Time and Place of Closing............................... 24
Section 9.2. Deliveries by the Company............................... 24
Section 9.3. Deliveries by Buyer and IAI............................. 25
Section 9.4. Post Closing Deliveries and Power of Attorney........... 25
ARTICLE 10 TERMINATION................................................... 26
Section 10.1. Termination.............................................. 26
Section 10.2. Effect of Termination................................... 26
ARTICLE 11 SURVIVAL; INDEMNIFICATION..................................... 26
Section 11.1. Survival................................................ 26
Section 11.2. Indemnification......................................... 26
Section 11.3. Procedure for Third-Party Claims........................ 27
ARTICLE 12 MISCELLANEOUS................................................. 28
Section 12.1. Counterparts............................................ 28
Section 12.2. Governing Law........................................... 28
Section 12.3. No Third-Party Beneficiaries............................ 28
Section 12.4. Joint and Several Liability............................. 29
Section 12.5. Entire Agreement........................................ 29
Section 12.6. Expenses................................................ 29
Section 12.7. Notices................................................. 29
Section 12.8. Public Announcements.................................... 30
Section 12.9. Successors and Assigns.................................. 30
Section 12.10. Headings................................................ 31
Section 12.11. Amendments and Waivers.................................. 31
Section 12.12. Invalidity of any Part.................................. 31
Section 12.13. Remedies................................................ 31
Section 12.14. Actions and Proceedings................................. 31
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ACQUISITION AND MERGER AGREEMENT
--------------------------------
THIS ACQUISITION AND MERGER AGREEMENT ("Agreement") is dated as of November
30, 1996, by and among Intercept Holdings Inc., a Georgia corporation ("Buyer"),
Intercept Acquisitions II, Inc., a Georgia corporation and a wholly owned
subsidiary of Buyer ("IAI"), FiNet, Inc., a Tennessee corporation (the
"Company"), Xxxx X. Xxxxxxx, a resident of the State of Tennessee ("England"),
Xxxx X. Xxxxx, a resident of the State of Tennessee ("Xxxxx"), and Xxxxx
XxXxxxx, a resident of the State of Tennessee ("XxXxxxx") (Xxxxxxx, Xxxxx and
XxXxxxx, each a "Shareholder" and, collectively, the "Shareholders").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, subject to the terms and conditions of this Agreement, the
Shareholders, the Company, Buyer and IAI desire and deem it in their respective
best interests that the Company be merged into IAI; and
WHEREAS, the Company's issued and outstanding capital stock currently
consists solely of 6,000 shares of Common Stock, $.01 par value per share (the
"Common Stock"); and
WHEREAS, the Shareholders own all of the outstanding shares of the Common
Stock, which constitute all of the outstanding shares of the Company's capital
stock; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
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Section 1.1. Merger Transaction. Subject to the terms and conditions
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hereof, the parties hereto agree that the Company shall be merged into IAI in
accordance with the applicable provisions of the Georgia Business Corporation
Act (the "GBCA"), and the separate existence of the Company shall thereupon
cease (such merger transaction is referred to hereinafter as the "Merger"). IAI
shall be the surviving corporation in the Merger. Subject to the terms and
conditions hereof, the parties hereto shall take all actions necessary in
accordance with applicable law and their respective Articles of Incorporation
and Bylaws to cause the Merger to be consummated.
Section 1.2. Effective Time of the Merger. The Merger shall become
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effective at the time (the "Effective Time") when the Articles of Merger (the
"Articles of Merger") in the form attached hereto as Exhibit 1.2, together with
the Plan of Merger (the "Plan of Merger") attached thereto, are executed by the
Company and IAI in accordance with the applicable provisions of the GBCA and are
duly filed with the Secretary of State of Georgia and the Secretary of State of
Tennessee, which actions shall be taken on the Closing Date.
Section 1.3. Terms and Conditions; Conversion of Shares. The effect of
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the Merger on the Articles of Incorporation, Bylaws, directors and officers of
the surviving corporation, and the manner and basis of converting the shares of
capital stock of IAI and the Company into stock or cash, shall be as set forth
in the Plan of Merger.
ARTICLE 2
PURCHASE PRICE; EXCHANGE OF SHARES
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Section 2.1. Common Stock. All of the Shareholders' 6,000 shares of
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Common Stock, together with all outstanding options to acquire Common Stock, of
the Company, shall be converted into the right to receive a total of 116,250
shares of common stock, no par value per share ("Buyer Common Stock") of Buyer.
No fractional shares of Buyer Common Stock will be issued, and fractional shares
to which each Shareholder would otherwise be entitled will be disregarded.
Section 2.2. Exchange of Shares. At the Closing (as hereinafter defined),
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the Buyer will deliver a certificate or certificates representing the shares of
Buyer Common Stock as computed pursuant to the Plan of Merger. The Shareholders
acknowledge and agree that the allocation of the Buyer Common Stock issued at
Closing shall be as set forth on Schedule 2.2 hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company hereby represents and warrants to Buyer as follows:
Section 3.1. Authorization; Organization.
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(a) This Agreement has been duly and voluntarily executed and
delivered by each of the Shareholders and the Company and constitutes, and, as
to the Company, will constitute at the Closing Date, the legal, valid and
binding obligations of each of them, enforceable in accordance with its terms.
(b) The Company has full corporate power and authority to execute and
deliver this Agreement and at the Closing Date will have full corporate power
and authority to perform its obligations hereunder and to consummate the Merger
and the other transactions provided for herein, in the Articles of Merger, the
Plan of Merger and all other documents and agreements executed in connection
herewith and therewith (collectively, the "Merger Documents"). The Board of
Directors of the Company and the Shareholders have unanimously approved the
execution, delivery and performance of this Agreement and the consummation of
the Merger and the other transactions provided for herein.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a violation, breach, default, right to accelerate or increase in
obligations under the Company's Articles of Incorporation or Bylaws, any law or
statute or any order, judgment or decree by which the Company is bound by name
or any license, lease or other agreement to which the Company is a party or by
which its assets and business may be affected.
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(d) The Company is a corporation duly organized and validly existing
and in good standing under the laws of Tennessee and has all requisite corporate
power and authority to own, lease or operate its properties and assets and to
carry on its business as now being conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
nature of property owned or leased by it or the conduct of its business requires
it to be so qualified, except where the failure to do so would not have a
material adverse effect on its business, operations, properties, assets or
condition, financial or otherwise (a "Material Adverse Effect").
(e) The Company's Articles of Incorporation, Bylaws and stock book
and, in all material respects, its minute books are complete and correct and
contain all amendments thereto to date, a record of all corporate proceedings of
the Company, and a record of all stock issuances and transfers of the Company.
(f) Except as set forth in Schedule 3.1(f), the Company has no
subsidiaries and never has had any subsidiaries, and the Company does not
conduct and never has conducted any business under any trade name or other
fictitious name.
(g) The Company is not a party to any joint venture or other similar
agreement or arrangement that involves any sharing of profits of the Company or
its assets or is similar to or competitive with the business.
(h) The Shareholders are the sole record and beneficial owners of the
shares of Common Stock, free and clear of any lien, claim, charge, mortgage,
pledge, security interest, option or other legal or equitable encumbrance of any
nature (hereinafter "Liens"). The Shareholders each have the full legal right,
power and authority to vote the shares of Common Stock.
Section 3.2. Capitalization; Structure.
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(a) The authorized capital stock of the Company consists of 100,000
shares of Common Stock, of which 6,000 shares are outstanding and no shares are
held in treasury. All of the outstanding shares of Common Stock have been duly
and validly authorized and issued, and are all fully paid and nonassessable. No
shares of the Company's capital stock have been issued in violation of any
preemptive rights, any rights of first refusal or any similar restrictions.
Other than as shown on Schedule 2.2, there are no: (i) outstanding options
(including phantom options), warrants or other rights (including preemptive
rights) of any kind relating to the sale, issuance or voting of any shares of
capital stock of the Company; (ii) securities convertible into, exchangeable for
or evidencing the right to purchase any such shares; or (iii) contracts,
commitments, agreements, understandings or arrangements of any kind relating to
the issuance or voting of such shares, any such convertible or exchangeable
securities or any such options, warrants or rights.
(b) All transactions whereby the Company repurchased, redeemed,
canceled or reacquired shares of its capital stock and the solicitation of
shareholder consents in connection with the Merger have been effected in
compliance with all applicable corporate and securities
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laws, and documentation prepared by or on behalf of the Company in connection
therewith did not include any untrue statement of any material fact or omit to
state any material fact necessary to make the statements made therein correct
and complete.
Section 3.3. Financial Statements. Attached hereto as Exhibit 3.3(a) is a
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true and complete copy of the balance sheet of the Company at September 30, 1996
(collectively, the "Financial Statements").
The Financial Statements:
(a) have been prepared from, and are in accordance with, the books and
records of the Company;
(b) fairly present the financial position, results of operations and
cash flows of the Company as of and for the periods set forth therein; and
(c) have been prepared in accordance with generally accepted
accounting principles ("GAAP") consistently applied throughout the indicated
periods (except that, in the case of the Interim Financial Statements, there are
no footnotes).
Section 3.4. Undisclosed Liabilities.
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(a) Except as disclosed in Schedule 3.4 or any other Schedule hereto,
and except as reflected, expressly reserved against or otherwise disclosed in
the Financial Statements, the Company has no material liabilities or obligations
of any nature, known or unknown (whether accrued, absolute, contingent or
otherwise).
(b) Except as set forth in Schedule 3.4, since September 30, 1996, the
Company has conducted its business only in the normal course and has not:
(i) suffered any physical damage, destruction or casualty loss
(whether or not such loss or damage shall have been covered by insurance)
which adversely affects the properties, business or prospects of the
Company, or suffered any deterioration in the operating condition of any
physical assets of the Company, normal wear and tear excepted;
(ii) incurred, created, assumed or guaranteed any liability or
obligation of any nature (whether absolute, accrued, contingent or
otherwise), except in the ordinary course of business;
(iii) increased, or made any change in any assumptions
underlying the method of calculating, any bad debt, contingency or other
reserves;
(iv) made any change in the method of valuing assets included
in the Financial Statements;
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(v) made any change in any method of accounting or keeping
its books of account or accounting practices or systems of internal
accounting controls;
(vi) paid, discharged or satisfied any liability or obligation
(whether absolute, accrued, contingent or otherwise), other than by
payment, discharge or satisfaction in the ordinary course of business;
(vii) permitted or allowed any of its assets (real, personal or
mixed, tangible or intangible) to be subjected to any Lien;
(viii) written down the value of any inventory or written off as
uncollectible any notes or accounts receivable, except for write-downs and
write-offs in the ordinary course of business;
(ix) canceled or waived any claims or rights, or sold,
transferred, distributed or otherwise disposed of any assets or properties,
except in the ordinary course of business;
(x) declared or paid any dividend or distribution on or in
respect of the Common Stock, or directly or indirectly redeemed, purchased,
or otherwise acquired any shares of its capital stock, any securities
convertible into or exchangeable for its capital stock, or any options,
warrants or other rights to purchase any of the foregoing, or authorized
the issuance of, or issued, sold or committed to sell (or granted any
options or rights to purchase) any additional shares of its capital stock,
or sold, issued or incurred any indebtedness;
(xi) experienced any strike, walkout, similar labor trouble or
other similar event; or
(xii) increased the salaries or other remuneration payable or
to become payable to, or made any advance (excluding advances for ordinary
business expenses) or loan to, any officer, director, employee or
shareholder (except normal merit increases made in the ordinary course of
business and consistent with past practice), or established, made any
increase in, or any addition to, other benefits (including, without
limitation, any Employee Plans, as hereinafter defined) to which any of
them may be entitled, or made any payments to any Employee Plan, except
payments in the ordinary course of business and consistent with past
practice, or entered into any agreement, arrangement or transaction with
any such person not in the ordinary course of business, or failed to make
any required payment under any Employee Plan.
Section 3.5. Properties. The Company has good and marketable title to, or
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holds by valid and existing lease or license, free and clear of all Liens, each
piece of real and personal property used in its business as now conducted,
except in any of the foregoing cases for such imperfections of title or Liens as
(a) are set forth in Schedule 3.5 hereof, (b) are reflected or reserved against
in the Financial Statements, (c) arise out of taxes or general or special
assessments not in default and payable without penalty or interest or (d) are of
a kind generally
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found in property of similar character and which do not have a Material Adverse
Effect. The real and personal property owned, leased or licensed by the Company
constitutes, and immediately after the Closing will constitute, all real or
personal property that is material to and necessary for the operation of its
business as currently conducted.
Section 3.6. Litigation. Except as set forth in Schedule 3.6, there are
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no suits, claims, investigations or proceedings pending or threatened against
the Company, its officers or directors in their capacities as officers or
directors, any Shareholder or any other person or entity for whom the Company
may be vicariously liable at law or in equity. The Company is not operating
under or subject to, any order, writ, injunction or decree of any court or
governmental authority in which the Company is named.
Section 3.7. Intellectual Property. The Company has developed and
---------------------
conducts an active program of licensing certain proprietary application software
products and systems to banks, credit unions and other financial institutions
for their use and provides data processing services utilizing such products and
systems (the "Software Programs"), and in connection therewith the Company has
developed certain related technical documentation and user reference manuals
(the "Documentation"). The Software Programs and the Documentation are
collectively referred to as the "Software." The Software Programs and
Documentation are listed in Schedule 3.7 hereto.
(a) Ownership. Except as set forth in Section 3.9, the Company owns
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all patents, trademarks, service marks, trade names and copyrights (including
registrations, licenses and applications pertaining thereto) and all other
proprietary information used by the Company in the conduct of its business,
including, without limitation, the Software. Schedule 3.7(a) sets forth all
patents, trademarks, service marks, trade names and copyrights owned or used by
the Company and all applications therefor and registrations thereof.
(b) Procedures for Copyright Protection. Schedule 3.7(b) sets forth
-----------------------------------
the form and placement of the proprietary legends and copyright notices
displayed in or on the Software, including screen displays. In no instance has
the eligibility of the Software for protection under copyright law been
forfeited to the public domain.
(c) Procedures for Trade Secret Protection. The Company has never
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disclosed its source code to a third party other than the consultants identified
in Schedule 3.7(c), each of which has executed a nondisclosure agreement in
favor of the Company, and discloses its source code to employees only on a need-
to-know basis in connection with the performance of their duties to the Company.
Except as described in Schedule 3.7(c), each current employee of the Company and
each former employee of the Company employed after January 1, 1994 has executed
and delivered to the Company a Non-Disclosure & Assignment Agreement
substantially in the form attached to Schedule 3.7(c). The source code and
system documentation comprising the Software have at all times been maintained
by the Company in confidence, and the Company has not taken (nor has it failed
to take) any action which would result in such source code and system
documentation not being protectable as a trade secret under applicable law.
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(d) Ownership of Software. All persons who have contributed to or
---------------------
participated in the conception and development of the Software on behalf of the
Company have been full-time employees of the Company hired to prepare such works
within the scope of employment, except for the consultants identified in
Schedule 3.7(c). Each such consultant identified in Schedule 3.7(c) has executed
and delivered to the Company a valid assignment of such consultant's rights in
works prepared by the consultant on behalf of the Company and included in the
Software. As a consequence, the Company has all ownership interests in the
Software.
(e) Absence of Claims. Except as set forth in Schedule 3.7(e), no
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claims have been asserted by any person to rights in the Software, and no valid
basis for any such claim exists. The use of the Software by the Company and its
licensees does not infringe on the rights of any person (whether arising under
copyright, trade secret, patent, unfair competition or other state or federal
laws which protect intellectual property rights). The use by the Company of the
patents, trademarks, service marks, trade names and copyrights identified in
Schedule 3.7(a) does not infringe the rights of any person, and no claim has
been asserted that the use by the Company of any of the foregoing infringes the
rights of any person. No claim has been asserted by any person to the effect
that any current or former employee of the Company has violated the provisions
of any noncompete or nondisclosure agreement with such person, or has disclosed
any proprietary information of such person to the Company or any third party.
Section 3.8. Adequacy of Technical Documentation. The Software includes
-----------------------------------
the source code, system documentation, statements of principles of operation,
and schematics for all Software Programs, as well as any pertinent commentary or
explanation that may be reasonably necessary to render such materials
understandable and usable by a trained computer programmer. The Software also
includes any program (including compilers), workbenches, tools, and higher level
language used for the development, maintenance and implementation of a Software
Program.
Section 3.9. Third-Party Components in Software. The Company has validly
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obtained the right and license to use, copy, modify and distribute any third-
party programming and materials contained in the Software pursuant to the
contracts identified in Schedule 3.9, subject to no further license fee, royalty
or other payment obligations, other than software maintenance payments
customarily associated therewith. The Software contains no other programming or
materials in which any third party may claim superior, joint or common
ownership, including any right or license. The Software does not contain
derivative works of any programming or materials not owned in their entirety by
the Company.
Section 3.10. Third-Party Interests or Marketing Rights in Software. The
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Company has not granted, transferred, or assigned any right or interest in the
Software to any person, except pursuant to the contracts identified in Schedule
3.10. There are no contracts, agreements, licenses, commitments or arrangements
in effect with respect to the marketing, distribution, licensing or promotion of
the Software by any independent salesperson, distributor, sublicensor or other
remarketer or sales organization, except as set forth in Schedule 3.10.
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Section 3.11. Licenses. The Company has all government licenses,
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consents, permits, franchises, approvals and other governmental authorizations
("Licenses") required for its business as currently conducted except where the
failure to hold, maintain or obtain such Licenses would not have a Material
Adverse Effect. No proceeding is pending or threatened seeking the revocation or
suspension of any License.
Section 3.12. Compliance with Laws. The Company's business has been
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operated and maintained in all material respects in compliance with all
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto. There is no outstanding or threatened order, writ,
injunction, or decree of any court, governmental agency, or arbitration tribunal
against Company affecting, involving, or relating to its business or assets.
Company is not in violation of any applicable federal, state, or local law,
regulation, ordinance, zoning requirement, governmental restriction, order,
judgment, or decree affecting, involving, or relating to its business or assets
except where noncompliance has no material adverse effect upon the financial
condition, operation, or prospects of the business (including under ownership by
IAI) or the Company's assets, and the Company has not received any notices of
any allegation of any such violation. The foregoing shall be deemed to include
laws and regulations relating to the patent, copyright, and trademark laws,
state trade secret and unfair competition laws of the U.S. and foreign
jurisdictions, environmental laws and to all other applicable laws, including
equal opportunity, wage and hour, and other employment matters, and antitrust
and trade regulation laws.
Section 3.13. Insurance. Schedule 3.13 lists all policies of casualty,
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liability, workers' compensation, life and other forms of insurance by which the
Company is currently insured or has been insured during the previous three years
and includes for each policy in effect the period through which premiums have
been paid. All of the policies indicated as in force in Schedule 3.13 are in
full force and effect and no notice of cancellation has been received with
respect thereto and are sufficient for compliance in all material respects with
all requirements of law and all agreements to which the Company is a party.
Section 3.14. Material Contracts. Schedule 3.14 lists the following
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agreements (including, without limitation, leases, purchase contracts and
commitments) to which the Company is a party or by which the Company or any of
its properties is bound:
(a) all contracts which involve future obligations on the part of the
Company in an aggregate amount exceeding $25,000 in the case of purchase orders
and commitments or $100,000 in the case of any other type of contract;
(b) all joint ventures, sales agency, sales representative or
distributorship, broker, franchise, license or similar contracts;
(c) all real estate leases;
(d) all notes, bonds, mortgages, security agreements, guarantees and
other agreements and instruments for or relating to any lending by the Company
in any amount
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(exclusive of advances to employees for expenses in the ordinary course of
business) or any borrowing of $100,000 or more;
(e) all powers of attorney, guarantees, suretyships or similar
agreements given by the Company; and
(f) all other written agreements to which any Shareholder is a
party.
Each contract set forth in Schedule 3.14 is valid, binding and
enforceable in accordance with its terms, and neither the Company nor any other
party to any such contract is in material breach or material default of the
express written terms of such contracts.
Section 3.15. Brokers, Finders, etc. Except as described in Schedule
---------------------
3.15, the Company has not employed any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
and the other Merger Documents who might be entitled to a fee or commission in
connection with such transactions.
Section 3.16. Taxes.
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(a) Filing of Tax Returns. The Company has timely filed with the
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appropriate taxing authorities all returns (including, without limitation,
information returns and other material information) in respect of Taxes (as
hereinafter defined) required to be filed through the date hereof. All such
returns and other information filed are complete and accurate in all material
respects.
(b) Payment of Taxes. Except as set forth in Schedule 3.16(b),
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all Taxes that are due and payable by the Company (whether or not shown on any
return) before the date hereof have been paid. To the extent required by GAAP,
an adequate reserve has been established on the Financial Statements for all
unpaid Taxes payable by the Company with respect to all periods through the date
of such Financial Statements, and the Company is not required under GAAP to
reserve for any liability for Taxes in excess of the reserves so established.
Except as described in Schedule 3.16(b), no portion of the reserve established
on the Financial Statements for Taxes reflects any contingent liability or other
potential liability for Taxes that are due and payable, or that may become due
and payable in the future, as a result of an audit, amended return or otherwise.
(c) Audit History. Except as set forth in Schedule 3.16(c):
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(i) no deficiencies for Taxes have been claimed, proposed or
assessed by any taxing or other governmental authority against the Company
which have not been paid or otherwise finally settled and resolved;
(ii) the Company has not waived the statute of limitations in
respect of any Tax or agreed to any extension of time with respect to the
assessment of any Tax; and
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(iii) the Company is not currently under audit with respect
to Taxes by any governmental authority, and no such authority in a
jurisdiction where the Company does not file Tax returns or pay Taxes has
claimed that the Company is required to file Tax returns or otherwise is
subject to taxation.
(d) Withholding Taxes. The Company has withheld and paid all Taxes
-----------------
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, shareholder or other third
party.
(e) Tax Sharing or Allocation Agreements. The Company is not a party
------------------------------------
to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement.
(f) Prior Affiliated Groups. The Company has never been a member of
-----------------------
an affiliated group of corporations, within the meaning of Section 1504 of the
Code (as hereinafter defined).
(g) Taxes. For purposes of this Agreement, "Taxes" shall mean all
-----
federal, state, local, foreign and other taxes, assessments, or other
governmental charges, including, without limitation, income, estimated income,
business, occupation, franchise, property, sales, gross receipts, excise,
employment, or withholding taxes, including interest, penalties and additions in
connection therewith.
Section 3.17. Pension and Employee Benefit Plans.
----------------------------------
(a) For purposes of this Agreement, the terms set forth below shall
have the following meanings:
(i) Code: The Internal Revenue Code of 1986, as amended,
----
together with the regulations promulgated thereunder;
(ii) Employee Plans: All plans, programs, arrangements,
--------------
practices or contracts pursuant to which the Company provides or is
obligated to provide or has within the last six years been obligated to
provide, directly or indirectly, benefits or compensation to or on behalf
of employees or former employees of the Company, whether formal or
informal, whether or not written, whether or not terminated, including but
not limited to the following:
(A) Executive Arrangements -- any bonus, incentive
compensation, stock option, deferred compensation, commission,
severance, golden parachute or other executive compensation plan,
employment contract, arrangement or practice;
(B) ERISA plans -- any Pension Plan or Welfare Plan, as
defined in Section 3 of ERISA, including but not limited to any multi-
employer plan, defined benefit pension plan, profit sharing plan,
savings or thrift plan, stock bonus plan, employee stock ownership
plan, or any plan, fund, program,
10
arrangement or practice providing for medical hospitalization,
accident, sickness, disability, severance pay or life insurance
benefits; and
(C) Other Employee Fringe Benefits -- any stock purchase,
vacation, scholarship, day care, prepaid legal services, severance
pay, or fringe benefit plan, program, arrangement, contract, or
practice;
(iii) ERISA: The Employee Retirement Income Security Act of
-----
1974, as amended, and the rulings and regulations thereunder; and
(iv) ERISA Affiliate: A corporation that is or was a member of
---------------
a controlled group of corporations with the Company or a trade or business
that is under common control with the Company or which together with the
Company is treated as a single employer, in each case within the meaning of
Section 414 of the Code.
(b) Schedule 3.17 lists or describes all Employee Plans maintained or
contributed to by the Company pursuant to which the Company provides benefits or
compensation to or on behalf of employees or former employees of the Company.
The Company has no ERISA Affiliates.
(c) Each Employee Plan (and related trust or funding vehicle, if any)
has at all times been administered and maintained in accordance with its terms
and the applicable law including, without limitation, the filing of Forms 5500
and all other applicable reports.
(d) Except to the extent set forth in Schedule 3.17, to the extent any
Employee Plan is subject to approval by any governmental agency, such Employee
Plan has received such approval and such approval is current.
(e) The Company is not subject to, and no facts exist which could
subject the Company to, any liability whatsoever which is directly or indirectly
related to any Employee Plan, including, but not limited to, liability for
benefits payments or related claims (other than the ordinary claims by
participants or beneficiaries which have been made for benefits called for under
the terms of such Employee Plans), any liability for any Tax or related penalty
under the Code, or liability for any damages or penalties arising under Title I
or Title IV of ERISA.
(f) No Employee Plan has engaged in or been a party to any "prohibited
transaction" (as defined in ERISA or the Code), and the Company has not
incurred, and does not reasonably expect to incur, any liability under Chapter
43 of the Code or Section 502 of ERISA with respect to any Employee Plan.
(g) Except as set forth in Schedule 3.17, no ERISA Welfare Plan
provides benefits to former employees of the Company, other than continuation
coverage required by Section 4980B of the Code and Section 601 of ERISA.
(h) There are no pending or threatened claims, suits or other
proceedings with respect to any Employee Plan other than the ordinary claims by
participants or beneficiaries
11
which have been made for benefits called for under the terms of such Employee
Plans and which will be paid under such Employee Plans in the ordinary course.
(i) There is no requirement that the Buyer or IAI make any further
contributions to any Employee Plan after the Closing Date, and each Employee
Plan which provides benefits to or on behalf of employees or former employees of
the Company may be terminated by IAI or Buyer in its sole discretion on or after
the Closing Date without liability of any kind or description whatsoever to IAI,
Buyer, or any other person, entity or governmental agency.
(j) The Company is not a party to or obligated under any agreement,
plan, contract or other arrangements that will result, separately or in the
aggregate, in the payment of any "excess parachute payment" within the meaning
of Section 28OG of the Code.
Section 3.18. Labor and Employment Matters. Except to the extent set
----------------------------
forth in Schedule 3.18:
(a) the Company is not a party to any collective bargaining
agreements;
(b) the Company is in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health and is
not engaged in any unfair labor or unfair employment practices;
(c) there is no unfair labor practice, charge or complaint or any
other matter against or involving the Company pending or threatened before the
National Labor Relations Board or any court of law;
(d) there is no labor strike, dispute, slowdown or stoppage actually
pending or threatened against the Company, and the Company has not experienced
any organized work stoppage, organizational drive or other labor difficulty
since its inception;
(e) there are no charges, investigations, administrative proceedings
or formal complaints of discrimination (including discrimination based upon sex,
age, marital status, race, national origin, sexual preference, handicap or
veteran status) pending or threatened before the Equal Employment Opportunity
Commission or any federal, state or local agency or court against the Company,
and no basis for any such claim exists; and
(f) there are no citations, investigations, administrative proceedings
or formal complaints of violations of local, state or federal occupational
safety and health laws pending or threatened before the Occupational Safety and
Health Review Commission or any federal, state or local agency or court against
the Company.
(g) Schedule 3.18(g) lists all employment, consulting, loan-out,
retainer or other contracts or agreements involving any person employed by the
Company as an employee or independent contractor to which the Company is a party
or by which it is bound. The
12
Company is not and no other party to any such agreement or contract is in
default with respect to any material term or condition thereof (including the
making of contributions and recording services therefor), nor has any event
occurred which through the passage of time or the giving of notice, or both,
would constitute a default thereunder or would cause the acceleration of any
obligation of any party thereto.
(h) Schedule 3.18(h) lists the names and current compensation levels
of all employees and consultants of the Company.
Section 3.19. Environmental Matters.
---------------------
(a) The operations of the Company comply, and have complied, in all
respects with all applicable environmental laws.
(b) The Company has obtained all environmental, health and safety
permits, approvals, licenses and other authorizations necessary for the
operation of the Company's business, all of which are valid and in good standing
and are not subject to any modification or revocation proceeding, and the
Company is in compliance in all respects with all terms and conditions thereof.
(c) The Company has not received any written notice of any pending or
threatened investigation, proceeding or claim to the effect that it is or may be
liable to any person, or responsible or potentially responsible for the costs of
any remedial or removal action or other cleanup costs, as a result of
noncompliance with any applicable environmental laws or arising out of the
presence, generation, storage or disposal of hazardous waste, including
liability under the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, or any state superfund law, and there is no past or
present action, activity, condition or circumstance that could be expected to
give rise to any such liability on the part of the Company to any person, or for
any such cleanup costs.
Section 3.20. Agreements Affecting Competition. Except as set forth in
--------------------------------
Schedule 3.20, the Company is neither a party to nor bound by any agreement
which presently restricts or precludes the Company or any present or future
affiliate of the Company from conducting any business anywhere in the world, or
upon the occurrence of any event, the giving of notice or the passage of time,
by its terms would have such an effect.
Section 3.21. Transactions with Related Parties. Except as set forth in
---------------------------------
Schedule 3.21 or in connection with customary transactions in the ordinary
course of business, no officer, director or shareholder of the Company:
(a) owes money to the Company;
(b) has any claim against the Company;
(c) has any interest in any property or assets used by the Company in
its business;
13
(d) has any benefits which are contingent on the transactions
contemplated by this Agreement, other than as stated herein;
(e) has any agreement with the Company that is not terminable by the
Company without penalty or notice;
(f) has any agreement providing severance benefits or other benefits
(which are conditioned upon a change of control) after the termination of
employment of such employee regardless of the reason for such termination of
employment; or
(g) has any agreement or plan, any of the benefits of which will be
increased, vested or accelerated by the occurrence of any of the transactions
contemplated by this Agreement.
Section 3.22. Major Vendors and Customers. Schedule 3.22 sets forth a
---------------------------
list of each licensor, developer, remarketer, distributor and supplier of
property or services to, and each licensee, end-user or customer of, the
Company, to whom the Company paid or billed in the aggregate in excess of
$30,000 during calendar year 1995 or 1996.
Section 3.23. Absence of Certain Commercial Practices. Since January 1,
---------------------------------------
1993, neither the Company, any of its directors, officers, agents, affiliates or
employees, nor any other person acting on behalf of the Company has (a) given or
agreed to give any gift or similar benefit having a value of $1,000 or more to
any customer, supplier or governmental employee or official or any other person,
for the purpose of directly or indirectly furthering the business of the
Company, (b) used any corporate funds for contributions, payments, gifts or
entertainment, or made any expenditures relating to political activities to
government officials or others in violation of any applicable laws, or (c)
received any unlawful contributions, payments, gifts or expenditures in
connection with the business of the Company.
Section 3.24. Accounts Receivable. Schedule 3.24 is a complete and
-------------------
accurate schedule of the accounts receivable of the Company as of September 30,
1996, as reflected in the balance sheet as of that date, included in the
Financial Statements, together with an accurate aging of these accounts. These
accounts receivable, and all accounts receivable of the Company created after
that date, arose from valid transactions in the ordinary course of business and
will be good and collectible at the recorded amounts thereof. No portion of the
accounts receivable is subject to counterclaim or setoff.
Section 3.25. Disclosure. No representation, warranty, or statement made
----------
by the Company in this Agreement or in any document or certificate furnished or
to be furnished to Buyer or IAI pursuant to this Agreement contains or will
contain any untrue or incomplete statement or omits or will omit to state any
fact necessary to make the statements contained herein or therein not
misleading. All facts known or reasonably available to the Company that are
material to the financial condition, operation, or prospects of the Company's
business and assets have been disclosed to Buyer and IAI.
14
Section 3.26. Truth at Closing. All of the representations, warranties,
----------------
and agreements of the Company contained in this Article 3 shall be true and
correct and in full force and effect on and as of the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
----------------------------------------------
The Shareholders hereby represent and warrant to Buyer as follows:
Section 4.1. Ownership of Shares. The Shareholders are the sole record
-------------------
and beneficial owners of all outstanding shares of Common Stock, free and clear
of any Liens. The Shareholders each have the full legal right, capacity, power
and authority to vote the shares of Common Stock.
Section 4.2. Litigation. Except as set forth in Schedule 3.6, there are
----------
no suits, claims, investigations or proceedings pending or, to the knowledge of
each Shareholder, threatened against the Company or any of the Shareholders and
no Shareholder is subject to any writ, order, judgment, injunction or decree of
any court or governmental authority that has or may have a Material Adverse
Effect on the Company or its successors.
Section 4.3. Brokers, Finders, etc. Except as described in Schedule 3.15,
---------------------
no Shareholder has employed any broker, finder, consultant or other intermediary
in connection with transactions contemplated by this Agreement and the other
Merger Documents who might be entitled to a fee or commission in connection with
such transactions.
Section 4.4. Taxes. Each Shareholder has timely filed with the
-----
appropriate taxing authorities all returns, information returns and other
material information required to be filed through the date hereof. All such
returns and other information filed are complete and accurate on all material
respects. All Taxes that are due and payable by the Shareholders before the
date hereof have been paid.
Section 4.5. Securities Act Compliance. The Shareholders each acknowledge
-------------------------
and agree that none of the shares of Buyer Common Stock to be delivered to the
Shareholders pursuant to this Agreement will, at the time of delivery, be
registered under the federal Securities Act of 1933 (the "Act") or any other
federal or state securities laws (together with the Act, collectively, the
"Securities Acts"). Each Shareholder hereby represents and warrants to the
Buyer that such Shareholder is acquiring the Buyer Common Stock for investment
and not with a view toward, or for resale in connection with, a distribution of
the Buyer Common Stock. The Shareholders acknowledge that the Buyer Common
Stock may be sold, pledged, hypothecated, disposed of, or otherwise transferred
or distributed only (i) pursuant to registration of the under the Securities
Acts, or (ii) pursuant to an exemption from the registration requirements of the
Securities Acts, and in the case of exemption, only if the Shareholder delivers
to Buyer a legal opinion, in form and substance satisfactory to Buyer and
Buyer's legal counsel, stating that an exemption from the registration
requirements of the Securities Acts is
15
available. Certificates representing the Buyer Common Stock shall bear a legend
setting forth the restrictions on transfer set forth in this Section.
Section 4.6. Sophistication of Shareholders. At and as of the Closing,
------------------------------
each Shareholder will deliver to Buyer a Shareholder Investment Representation
Certificate in the form attached hereto as Schedule 4.6, if the statements
contained therein are true. If any Shareholder is not able to execute and
deliver such Certificate, Buyer shall not be obligated to consummate the
transactions contemplated herein.
Section 4.7. Schedules. Where the Schedules to this Agreement require
---------
information about the Shareholders, such information is true, accurate and
complete in all material respects.
Section 4.8. Disclosure. No representation, warranty, or statement made by
----------
the Shareholders in this Agreement, the other Merger Documents, or any document
or certificate furnished or to be furnished to Buyer or IAI pursuant hereto or
thereto contains or will contain any untrue or incomplete statement or omits or
will omit to state any fact necessary to make the statements contained herein or
therein not misleading. All facts known or reasonably available to the
Shareholders that are material to the financial condition, operation or
prospects of the Company's business and assets have been disclosed by the
Shareholders to Buyer and IAI. All representations, warranties and agreements
of the Shareholders contained in this Article 4 shall be true and correct and in
full force and effect on and as of the Closing Date.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to the Company as follows:
Section 5.1. Incorporation; Authorization.
----------------------------
(a) Buyer is a corporation duly incorporated, validly existing and in
good standing under the laws of Georgia. IAI is a corporation duly
incorporated, validly existing and in good standing under the laws of Georgia.
(b) Buyer and IAI each has full corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
(c) The execution and delivery of this Agreement by Buyer and IAI, the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate proceedings on the part of Buyer and IAI.
(d) This Agreement has been duly executed and delivered by Buyer and
IAI and constitutes the legal, valid and binding obligations of each of them,
enforceable in accordance with its terms.
16
(e) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a violation, breach, default, right to accelerate or increase in
obligations under the Articles of Incorporation or Bylaws of Buyer and IAI, any
law or statute or any order, judgment or decree by which either of them is bound
or any license, lease or other agreement to which either of them is a party or
by which its respective assets and business may be affected.
(f) Upon issuance thereof in accordance with the terms of this
Agreement and the other Merger Documents, the shares of Buyer Common Stock to be
delivered to the Shareholders at Closing and upon exercise of options granted
pursuant to the Merger Documents shall be duly and validly authorized, issued
and fully paid and nonassessable.
Section 5.2. Litigation. There is no claim, action, proceeding or
----------
investigation pending or, to the knowledge of Buyer, threatened, nor is there
any writ, order, decree or injunction that calls into question the Buyer's or
IAI's authority or right to enter into this Agreement and consummate the
transactions contemplated hereby, or would otherwise prevent or delay the
transactions contemplated by this Agreement. Neither the Buyer nor IAI has
received notice of any suit, claim or proceeding against the Buyer, IAI or their
officers or directors in their capacity as officers or directors or notice that
they are subject to any writ, order, injunction or decree of any court or
governmental authority with jurisdiction over the Buyer and IAI.
Section 5.3. Brokers, Finders, etc. Except as set forth on Schedule 3.15,
---------------------
neither Buyer nor IAI has employed any broker, finder, consultant or other
intermediary in connection with the transactions contemplated by this Agreement
who might be entitled to a fee or commission in connection with such
transactions.
Section 5.4. Securities Act Compliance. Buyer acknowledges that none of
-------------------------
the shares of the Company's Common Stock to be delivered to Buyer pursuant to
this Agreement will, at the time of delivery, be registered under the Securities
Acts. Buyer represents and warrants that Buyer is acquiring the Company's
Common Stock for investment, and not with a view toward, or for resale in
connection with, a distribution of the Common Stock. Buyer acknowledges that
the Company's Common Stock may be sold, pledged, hypothecated, disposed of, or
otherwise transferred or distributed only (i) pursuant to registration of the
Company Common Stock under the Securities Acts, or (ii) pursuant to an exemption
from the registration requirements of the Securities Acts.
Section 5.5. Sophistication of Buyer. As of the Closing, Buyer shall
-----------------------
deliver to the Company a Buyer's Investment Representation Certificate in the
form attached hereto as Schedule 5.5.
Section 5.6. Disclosure. No representation or warranty of Buyer in this
----------
Agreement, nor any financial statements or other written statements or
certificates furnished to the Company or the Shareholders in connection with the
transactions contemplated by this Agreement, contain or as of the Closing Date
will contain, any untrue statement of a material fact, or omit or as of the
Closing Date will omit to state a material fact necessary to make the statements
herein or therein not misleading.
17
ARTICLE 6
COVENANTS AND AGREEMENTS OF THE PARTIES
---------------------------------------
Section 6.1. Access to Information. The Buyer and its counsel,
---------------------
accountants and other representatives shall have full access during normal
business hours to all properties, books, accounts, records, personnel contracts,
and documents of or relating to the Company, and the Company shall furnish or
cause to be furnished to the Buyer and its representatives all data and
information concerning the business, finances and properties of the Company.
Buyer shall make available its executive officers for interviews by the
Shareholders or their representatives.
Section 6.2. Conduct of Business. Between the date hereof and the Closing
-------------------
Date, the Company shall conduct its business diligently and in the ordinary
course, consistent with past practice. Without limiting the generality of the
foregoing, the Company will use commercially reasonable efforts to:
(a) maintain its status in good standing in all jurisdictions in which
it is required to be qualified or registered to conduct its business;
(b) maintain all of its tangible assets in good operating condition
and maintain the protection of all intellectual property in substantially the
same standing as exists on the date hereof;
(c) continue performance in the ordinary course of its obligations
under its contracts and agreements;
(d) preserve its business organization intact, keep available its
present officers and employees, and preserve its present relationships with
suppliers, customers and others having business relationships with it; and
(e) maintain its existing insurance, subject to variations in amount
required by the ordinary operations of its business.
Section 6.3. Corporate Matters. The Company will not (a) amend its
-----------------
Articles of Incorporation or Bylaws, (b) issue any shares of its capital stock,
or (c) issue or create any warrants, obligations, subscriptions, options,
convertible securities, or other commitments under which any additional shares
of its capital stock of any class might be directly or indirectly authorized or
issued.
Section 6.4. Employees. Except as consented to in writing by the Buyer,
---------
the Company will not grant any increase in salaries to any officer, employee,
sales agent or representative, or alter or increase benefits payable to any such
person under any Employee Plan or other contract or commitment, other than in
the ordinary course of business.
Section 6.5. New Business. The Company will not, without the Buyer's
------------
written consent:
18
(a) incur or consent to the incurrence of any single obligation or
other liability in excess of $25,000 except for inventory and supplies purchased
in the ordinary course of business consistent with past practices;
(b) consent to any Lien on any of its assets, except as set forth in
Schedule 6.5; or
(c) sell or otherwise dispose of any of its assets, except in the
ordinary course of business.
Section 6.6. Agreements. The Company will not modify, amend, cancel or
----------
terminate any of its existing contracts or agreements with any party named in
Schedule 3.22, or agree to do any of those acts, except in the ordinary course
of business.
Section 6.7. Cooperation. The parties agree (i) to cooperate with each
-----------
other to determine whether any filings (including the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended) (the "HSR Act") are required to
be made or consents required to be obtained in any jurisdiction in connection
with the consummation of the transactions contemplated hereby and to make any
such filings promptly and to obtain in a timely manner any such consents; and
(ii) to use all commercially reasonable efforts to obtain promptly the
satisfaction of the conditions to the Closing of the transactions contemplated
herein. The parties shall furnish to each other and to their counsel all such
information as may be reasonably required in order to effectuate the foregoing.
Section 6.8. Customer Contacts. The Company shall permit the Buyer to
-----------------
conduct a survey or otherwise inquire of certain or all of the Company's key
customers, as selected by the Buyer, regarding the relationship between such
customer and the Company and the impact of a change in control on such
relationship. The Company shall assist the Buyer in making such survey or
inquiries and shall have the right to have a representative of its choice
participate therein. Buyer shall complete such survey within twenty (20) days
from the date this Agreement is executed by all parties hereto.
Section 6.9. No-Shop. From and after the date hereof, the Company and the
-------
Shareholders shall not, and shall use their best efforts to cause the Company's
officers, directors, employees, agents and representatives not to, directly or
indirectly, encourage, solicit, engage in discussions with, or provide any
information to any person or group (other than Buyer) concerning any sale or
other disposition of all or any substantial part of the Company. The Company
shall promptly communicate to Buyer any inquiries or communications concerning
any such transaction that it or any of its executive officers may receive or of
which it or any such person may become aware.
Section 6.10. Tax Audits. The Shareholders agree to obtain the consent of
----------
Buyer prior to settling any Tax audit or other examination which relates to
periods ending prior to the Closing Date, which consent will not be unreasonably
withheld.
19
Section 6.11. Tax Returns. The Buyer will have the responsibility for the
-----------
preparation and filing of all Tax returns, and payment of all Taxes, for the
taxable period ending on the Closing Date. The Shareholders will have the
responsibility for the preparation and filing of all Tax returns and payment of
all Taxes for any taxable period ending prior to the Closing Date and the
payment of any associated interest and penalties for any amounts due for any
such period.
Section 6.12. Interim Financial Statements. As promptly as practicable
----------------------------
after each month-end or quarter-end, as the case may be, from the date of this
Agreement to the Closing Date, the Company shall deliver to Buyer and IAI all
monthly and quarterly financial reports in the form that it customarily prepares
for its internal purposes concerning itself or its business.
Section 6.13. Updating of Information. From the date of this Agreement to
-----------------------
the Closing Date, the Company shall deliver revised or supplementary schedules
to this Agreement, containing accurate information as of the Closing Date, in
order to enable Buyer and IAI to confirm the accuracy of the representations and
warranties set forth in Article 3 of this Agreement and otherwise to give full
effect to the provisions of this Agreement. Such revised or supplementary
schedules shall not modify or be deemed part of this Agreement unless agreed by
Buyer and IAI in writing with reference to the specific schedules to be so
treated. Provided that the Schedules prepared as of the date of this Agreement
are true and correct when submitted for inclusion herein, the foregoing
obligation to furnish updated information shall apply to such Schedules only
insofar as material events or changes occur such as to make the contents of such
schedules unreliable or misleading.
Section 6.14. Pooling of Interests. Each party shall use its respective
--------------------
best efforts to cause the Merger to qualify for pooling-of-interests accounting
treatment.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
-------------------------------------------
The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction, at or before the Closing, of all
the conditions set forth below. The Buyer may waive any or all of these
conditions in whole or in part without prior notice; provided, however, that
-------- -------
except to the extent, if any, that such waiver constitutes an election of
remedies under Georgia law, no such waiver of a condition shall constitute a
waiver by the Buyer of any of its other rights or remedies, at law or in equity,
if the Company or the Shareholders shall be in default of any of their
representations, warranties or covenants under this Agreement.
Section 7.1. Accuracy of Representations. The representations and
---------------------------
warranties of the Company and the Shareholders in this Agreement or any Schedule
hereto or in any written statement delivered by them at or prior to the Closing
to the Buyer under this Agreement shall be true in all material respects as of
the date hereof and on and as of the Closing Date as though made at that time.
20
Section 7.2. Performance of Company and Shareholders. The Company and the
---------------------------------------
Shareholders shall have performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement to be performed or complied
with by them on or before the Closing Date.
Section 7.3. No Material Changes. During the period from March 31, 1996
-------------------
to the Closing Date, there shall not have been any material adverse change in
the financial condition or the results of operations of the Company, and the
Company shall not have sustained any material loss or damage to its assets,
whether or not insured, that materially affects its ability to conduct a
material part of its business.
Section 7.4. Certificates of the Company and Shareholders. The Buyer
--------------------------------------------
shall have received certificates, dated the Closing Date, signed by the
Shareholders (and as to Section 7.3 only, the Company's principal financial
officer), certifying that the conditions specified in Sections 7.1, 7.2 and 7.3
have been fulfilled. The Buyer shall have received certificates, dated the
Closing Date, signed by each of the Shareholders, as required pursuant to
Section 4.6.
Section 7.5. Absence of Litigation. No action, suit or proceeding (other
---------------------
than consideration of any filing under the HSR Act) before any court,
governmental body or authority, other than routine regulatory and tax
inspections, audits and reviews, pertaining to the transactions contemplated by
this Agreement or its consummation, shall have been instituted or threatened.
Section 7.6. Corporate Approval. The execution and delivery of this
------------------
Agreement by the Company, and the performance of its covenants and obligations
hereunder, shall have been duly authorized by the Company's Board of Directors
and the Shareholders, and the Buyer shall have received copies of all
resolutions pertaining to those authorizations, certified by the Secretary of
the Company.
Section 7.7. Approvals. This Agreement and the transactions contemplated
---------
hereby shall have received all approvals, consents, authorizations and waivers
from governmental and regulatory agencies and other third parties (including
lenders and lessors) required to consummate the transactions contemplated hereby
(including the expiration of any applicable waiting period under the HSR Act),
which, either individually or in the aggregate, if not obtained would have a
Material Adverse Effect.
Section 7.8. Customer Inquiries. The Buyer shall be reasonably satisfied
------------------
with the results of its inquiries of the Company's customers with respect to the
impact of a change in control on their relationship with the Company.
Section 7.9. Third Party Consents. The Buyer shall have received
--------------------
consents, in form satisfactory to it, to the transactions contemplated by this
Agreement from the parties listed in Schedule 7.9 hereto.
Section 7.10. Investigations. Neither any investigation of the Company by
--------------
Buyer or IAI, nor the Schedules hereto, nor any other document delivered to
Buyer or IAI as
21
contemplated by this Agreement, shall have revealed any facts or circumstances
that, in the judgment of Buyer or IAI, reflect in a material adverse way on the
Company's assets, business, operations, or prospects.
Section 7.11. Affiliates. Simultaneous with the execution and delivery
----------
of this Agreement, the Company and the Shareholder's shall deliver to Buyer
copies of letter agreements, each substantially in the form of Exhibit 7.11,
executed by the Shareholders and all other directors, executive officers and by
any other person who is an "affiliate" for purposes of the 1933 Act (for
purposes of qualifying for pooling-of-interests accounting treatment) of the
Company and any other person who is an "affiliate" (for purposes of the 1933 Act
and for purposes of qualifying for pooling-of-interests accounting treatment as
described below) providing that such person will not sell, pledge, transfer or
otherwise dispose of any shares of the Common Stock held by such "affiliate" and
the shares of Buyer Common Stock to be received by such "affiliate" in the
Merger: (a) in the case of shares of Buyer Common Stock only, except in
compliance with the applicable provisions of the 1933 Act and the rules and
regulations thereunder; and (b) during the periods during which any such sale,
pledge, transfer or other disposition would, under generally accepted accounting
principles or the rules, regulations or interpretations of the SEC, disqualify
the Merger for pooling-of-interest accounting treatment, except as permitted by
Staff Accounting Bulletin No. 76 issued by the SEC. The certificates of Buyer
Common Stock issued to "affiliates" of the Company will bear an appropriate
legend reflecting the foregoing. The parties understand that such periods in
general encompass the period commencing 30 days prior to the Merger and ending
at the time of the publication of financial results covering at least 30 days of
combined operations of Buyer and the Company within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies.
Section 7.12. Pooling Letter. Buyer shall have received a letter, in form
--------------
and substance satisfactory to Buyer, dated as of the date of the Effective Time
from Xxxxxx Xxxxxx Xxxxx, LLP, its independent certified public accountants, to
the effect that the Merger will qualify for pooling-of-interests accounting
treatment.
Section 7.13. Employment Agreements. At or prior to Closing, each of the
---------------------
Shareholders shall have entered into Employment Agreements substantially in the
form attached hereto as Exhibit 7.13, the effectiveness of which shall be
expressly contingent upon the occurrence of Closing.
Section 7.14. Salem Capital Documents. Salem Capital Corporation shall
-----------------------
execute and deliver to Buyer all such instruments, documents, certificates and
agreements as Buyer or its counsel may require in connection with this Agreement
and the other Merger Documents.
Section 7.15. Opinion of Counsel. The Buyer shall have received an
------------------
opinion, dated the Closing Date, from Baker, Donelson, Bearman & Xxxxxxxx,
counsel for the Company, substantially in the form attached hereto as Schedule
7.15.
Section 7.16. Termination of Shareholders Agreement. The Shareholders and
-------------------------------------
the Company shall waive all rights pursuant to and shall terminate the
Shareholders Agreement dated
22
June 21, 1996 by and among the Shareholders of the Company in accordance with
Section 9.08 thereof, and such Shareholders Agreement shall be of no further
force or effect.
ARTICLE 8
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS
-------------------------------------------------
The obligations of the Company and the Shareholders to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, at
or before the Closing, of all the conditions set forth below. The Company and
the Shareholders may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
-------- -------
shall constitute a waiver by the Company or the Shareholders of any of their
other rights or remedies, at law or at equity, if the Buyer shall be in default
of any of its representations, warranties or covenants under this Agreement.
Section 8.1. Accuracy of Representations. The representations and
---------------------------
warranties by the Buyer in this Agreement or in any written statement delivered
to the Company under this Agreement shall be true in all material respects as of
the date hereof and on and as of the Closing Date as though made at that time.
Section 8.2. Performance of Buyer. The Buyer shall have performed,
--------------------
satisfied and complied with all covenants, agreements and conditions required by
this Agreement to be performed or complied with by it on or before the Closing
Date.
Section 8.3. Certificates of the Buyer and the Shareholders. The Company
----------------------------------------------
shall have received a certificate, dated the Closing Date, signed by the Buyer's
president or vice president and its secretary or assistant secretary, certifying
that the conditions specified in Sections 8.1 and 8.2 have been fulfilled. The
Company shall have received a certificate, dated the Closing Date, signed by
Buyer, as required pursuant to Section 5.5.
Section 8.4. Opinion of Counsel. The Company shall have received an
------------------
opinion, dated the Closing Date, from Xxxxxx Xxxxxxx Xxxxx & Scarborough,
L.L.P., counsel for Buyer, substantially in the form attached as Schedule 8.4
hereto.
Section 8.5. Absence of Litigation. No action, suit or proceeding (other
---------------------
than consideration of any filing under the HSR Act) before any court,
governmental body or authority, other than routine regulatory and tax
inspections, audits and reviews, pertaining to the transactions contemplated by
this Agreement or its consummation, shall have been instituted or threatened.
Section 8.6. Corporate Approval. The execution and delivery of this
------------------
Agreement by the Buyer and IAI and the performance of their respective covenants
and obligations hereunder, shall have been duly authorized by the Board of
Directors of Buyer and IAI, and the Company shall have received copies of all
resolutions pertaining to these authorizations, certified by their respective
corporate secretaries.
23
Section 8.7. Third Party Approvals. This Agreement and the transactions
---------------------
contemplated hereby shall have received all approvals, consents, authorizations
and waivers from governmental and regulatory agencies required to consummate the
transactions (including the expiration of any applicable waiting period under
the HSR Act), which, either individually or in the aggregate, if not obtained
would have a Material Adverse Effect on the financial condition, results of
operation or business of Buyer or the Company.
Section 8.8. Employment Agreements. At or prior to Closing, each of the
---------------------
Shareholders shall have entered into Employment Agreements substantially in the
form attached hereto as Exhibit 7.13, the effectiveness of which shall be
expressly contingent upon the occurrence of Closing.
ARTICLE 9
CLOSING
-------
Section 9.1. Time and Place of Closing. The closing ("Closing") of the
-------------------------
transactions contemplated hereunder shall take place as soon as practicable
after execution and delivery of this Agreement on such date as the parties shall
agree, but in no event later than December 17, 1996 ("Closing Date"), and
effective as of the Effective Time. The Closing shall take place at the offices
of Buyer, 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000 at 10:00
a.m., Eastern Daylight Time, on the Closing Date.
Section 9.2. Deliveries by the Company. At the Closing, the Company shall
-------------------------
deliver to Buyer:
(a) stock certificates evidencing all of the shares of Common Stock,
canceled or duly endorsed in blank or with stock powers endorsed in blank;
(b) Articles of Incorporation of the Company, certified by the
Secretary of State of the State of Tennessee, and a true and correct copy of the
Bylaws of the Company, certified as of the Closing Date by the Secretary of the
Company;
(c) good standing certificates relating to the Company from the State
of Tennessee and each other jurisdiction in which the Company is qualified to
conduct business;
(d) the corporate seal and all stock ledgers and minute books of the
Company in existence as of the Closing, accompanied by a certificate of the
Secretary of the Company certifying that the stock ledgers and minutes books
are, to the best of his information and belief, true, correct and complete as of
the Closing Date;
(e) the Merger Documents, including the Articles of Merger and Plan of
Merger, duly executed by the Company;
24
(f) a Secretary's Certificate attesting to the incumbency of the
officers of the Company executing this Agreement and the other certificates and
agreements delivered by the Company at the Closing; and
(g) the documents and instruments referred to in Article 7 and Article
8 hereof.
Section 9.3. Deliveries by Buyer and IAI. At the Closing, Buyer and IAI
---------------------------
shall deliver to the Company:
(a) a Secretary's Certificate attesting to the incumbency of the
officers of Buyer and IAI executing this Agreement and the other certificates
and agreements delivered by Buyer and IAI at the Closing;
(b) resolutions of the Board of Directors of Buyer (if applicable) and
IAI authorizing the execution and delivery of this Agreement and the performance
of the transactions contemplated hereby, certified by the Secretary of Buyer and
IAI, respectively;
(c) the Merger Documents, including the Articles of Merger and Plan of
Merger, duly executed by IAI;
(d) certificates representing the shares of Buyer Common Stock
issuable pursuant to Section 2.1, registered in the names of each of the
Shareholders; and
(e) the documents and instruments referred to in Article 7 and Article
8 hereof.
Section 9.4. Post Closing Deliveries and Power of Attorney. The
---------------------------------------------
Shareholders and Buyer agree that, from time to time after the Closing, each of
them will execute and deliver such further instruments of conveyance and
transfer and take such other action as may be necessary to carry out the
purposes and intent of this Agreement. Each Shareholder absolutely and
irrevocably appoints Buyer as his true and lawful agent and attorney-in-fact,
with full power of substitution, in the name of such Shareholder, to execute and
do all such assurances, acts and things which such Shareholder has covenanted
and agreed to do under this Agreement but which such Shareholder has failed to
execute or do within three (3) days of Buyer's request therefor, including but
not limited to executing, on behalf of such Shareholder, such transfer or
conveyance documents and other agreements that Buyer may deem proper in and for
the exercise of any such powers, authorities or discretion. This Power of
Attorney grants to Buyer, as agent for each Shareholder, all powers granted to
agents and attorneys-in-fact generally under applicable law. Each Shareholder
hereby ratifies and confirms and agrees to ratify and confirm whatever lawful
acts Buyer shall do in the exercise of the power of attorney granted to Buyer
hereby, which power of attorney shall be deemed to be coupled with an interest,
is irrevocable and shall survive the disability, incapacity or incompetency of
each Shareholder.
25
ARTICLE 10
TERMINATION
-----------
Section 10.1. Termination. Notwithstanding anything herein to the
-----------
contrary, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of the Company and Buyer;
(b) by the party not in breach in the event of a material breach of
this Agreement by the Company or the Shareholders on the one hand or Buyer on
the other hand, which is not cured within ten days after written notice thereof;
or
(c) by either the Company or Buyer if the Closing has not occurred
prior to December 17, 1996.
Section 10.2. Effect of Termination. If this Agreement is terminated
---------------------
as provided above, this Agreement shall become void and be of no further force
or effect, and no party shall have any further liability to any other party
hereunder as a result of such termination.
ARTICLE 11
SURVIVAL; INDEMNIFICATION
-------------------------
Section 11.1. Survival. The parties' respective representations and
--------
warranties contained in this Agreement will survive execution and delivery of
this Agreement and Closing and shall remain in full force and effect until
December 31, 1998; provided, however, that the representations and warranties
-------- -------
set forth in Sections 3.1 and 3.2 shall survive the Closing for a period of five
years from the Closing Date; and provided, further, that the representations and
-------- -------
warranties set forth in Section 3.16 and Section 4.4 shall survive until
expiration of any applicable statute of limitations (including any extensions
thereof) which will preclude assertion of Tax claims against the Company and its
successors for matters existing on or prior to the Closing Date. Any claim made
or notice of a claim given as to any breach or alleged breach of a
representation or warranty shall extend the applicable survival period set forth
above until such claim has been resolved and satisfied by agreement of the
parties or by the entry of a final, non-appealable judgment of a court having
jurisdiction over such claim.
Section 11.2. Indemnification.
---------------
(a) Indemnification by Shareholders. Subject to the terms of this
-------------------------------
Article 11, Shareholders hereby, jointly and severally, covenant and agree to
indemnify, defend, save and hold harmless Buyer, IAI and the Company and their
respective officers, directors, employees, agents, affiliates or any of their
respective successors, assigns or personal representatives (collectively, the
"Buyer Indemnified Parties"), from and against any demands, claims, actions,
losses, damages, deficiencies, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' and accountants' fees and expenses),
together with interest and penalties,
26
if any, awarded by court order or otherwise agreed to (collectively,
"Indemnifiable Damages"), suffered by the Buyer Indemnified Parties which arise
out of or result from:
(i) any misrepresentation in or breach of any of the
representations, warranties or covenants made by Shareholders in this
Agreement;
(ii) any misrepresentation in a document, certificate or
affidavit delivered by the Shareholders at the Closing;
(iii) any guaranty or other material liability of the Company
not otherwise disclosed hereunder or in any Schedule hereto;
(iv) the assertion of any claim by any Shareholder or any other
person or entity arising out of consummation of the transactions
contemplated by this Agreement; or
(v) any claim alleging misconduct of, by or under the control
of the Company which is criminal or of a grossly negligent character that
is attributable to events occurring prior to the Closing.
(b) Indemnification by Buyer. Subject to the terms of this Article
------------------------
11, Buyer covenants and agrees to indemnify and hold harmless the Shareholders
from and against any Indemnifiable Damages suffered by them which arise out of
or result from:
(i) any misrepresentation in or breach of any of the
representations, warranties or covenants made by Buyer in this Agreement;
or
(ii) any misrepresentation in a document, certificate or
affidavit delivered by Buyer at the Closing.
Section 11.3. Procedure for Third-Party Claims.
--------------------------------
(a) Promptly after obtaining knowledge of any claim or demand which
has given rise to, or could reasonably give rise to, a claim for indemnification
hereunder, the party seeking indemnification shall give written notice of such
claim ("Notice of Claim") to the other party. The Notice of Claim shall set
forth a brief description of the facts giving rise to such claim and the amount
(or a reasonable estimate) of the liability, loss, damage or expense suffered,
or which may be suffered, by the party seeking indemnification, and shall be
accompanied by all documentation in the case of a third-party claim against the
indemnified party.
(b) Upon receiving the Notice of Claim, the indemnifying party shall
resist, settle or otherwise dispose of such claim in such manner as it shall
deem appropriate, including the employment of counsel, and shall be responsible
for the payment of all settlements, judgments, costs and expenses, including the
reasonable fees and expenses of any counsel retained. The indemnified party
shall have the right to employ separate counsel in any such
27
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the indemnified party's expense unless:
(i) the employment has been specifically authorized by the
indemnifying party in writing;
(ii) the indemnifying party has improperly failed to assume the
defense and employ counsel; or
(iii) the named parties to any action (including any impleaded
parties) include the Buyer and/or the Company and the Shareholders, and the
indemnified party has been advised by such counsel that representation of
Buyer and/or the Company and Shareholders by the same counsel would be
inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them (in which case, if the
indemnified party notifies the indemnifying party in writing that the
indemnified party elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall have neither the right nor
the obligation to assume the defense of such action on behalf of the
indemnified party).
(c) The party seeking indemnification shall comply with the foregoing
procedure for each claim arising hereunder, whether or not the amount of such
claims exceeds any minimum amount. The indemnified party shall cooperate with
the indemnifying party in defending any such claim and provide any books,
records, information or testimony requested, which is in the hands of or under
the control of the indemnified party or obtainable by the indemnified party
without unreasonable expense.
ARTICLE 12
MISCELLANEOUS
-------------
Section 12.1. Counterparts. This Agreement may be executed in two or more
------------
counterparts and may be delivered via facsimile, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and delivered
(including via facsimile) to the other parties.
Section 12.2. Governing Law. This Agreement and the Merger Documents
-------------
shall be governed by and construed in accordance with the laws of the State of
Georgia without reference to the choice of law principles thereof.
Section 12.3. No Third-Party Beneficiaries. Nothing in this Agreement or
----------------------------
any other Merger Documents is intended, nor shall it be construed, to confer any
rights or benefits upon any person (including, but not limited to, any employee
or former employee of the Company) other than Shareholders, Buyer, IAI and Buyer
Indemnified Parties, and their successors and assigns, and no other person not a
party hereto shall have any rights or remedies hereunder.
Section 12.4. Joint and Several Liability. All obligations and
---------------------------
liabilities of the Shareholders hereunder shall be joint and several.
28
Section 12.5. Entire Agreement. This Agreement and the Merger Documents
----------------
and the Schedules and Exhibits hereto and thereto, contain the entire agreement
between the parties with respect to the subject matter hereof, and there are no
agreements, understandings, representations or warranties between the parties
other than those set forth or referred to herein. The parties hereto
acknowledge that each party and its counsel have participated in the negotiation
and approval of this Agreement and the other Merger Documents. This Agreement
and the other Merger Documents shall be construed without regard to any
presumption or other rule requiring construction against the party causing the
Agreement and the other Merger Documents to be drafted. If any provision of
this Agreement and the other Merger Documents requires that action be taken on
or before a particular date that falls on a day that is not a business day, the
time for the taking of such action shall automatically be postponed until the
next following business day.
Section 12.6. Expenses. All legal, accounting and other costs and
--------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.
Section 12.7. Notices. All notices hereunder shall be sufficiently given
-------
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service, or to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as follows:
To the Shareholders:
Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
and
Xxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000
and
Xxxxx XxXxxxx
000 Xxxxxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
29
To the Company:
FiNet, Inc.
000 Xxxxxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxx
Baker, Donelson, Xxxxxxx & Xxxxxxxx
Xxxxx 0000, Xxxxxxxxx Xxxx Center
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
To Buyer and IAI:
Intercept Holdings Inc.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxx
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Section 12.8. Public Announcements. No party hereto shall make any public
--------------------
announcement or other public disclosure regarding this Agreement or its terms
without the consent of the other (which consent shall not be unreasonably
withheld) except to the extent that such disclosure is required by applicable
law. Notwithstanding the foregoing, the parties may communicate with their
respective employees, customers, suppliers, creditors, shareholders and relevant
governmental agencies as may be necessary and appropriate in connection with the
implementation and consummation of the terms of this Agreement. In addition,
the parties shall cooperate and coordinate with one another on the form and
substance of any press release announcing the execution and delivery of this
Agreement or relating to this Agreement prior to Closing.
30
Section 12.9. Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the parties hereto and their respective
successors, personal representatives and permitted assigns; provided, however,
except as expressly contemplated hereunder, no party hereto will assign its
rights or delegate its obligations under this Agreement without the express
written consent of the other parties hereto; provided further, that Buyer may,
at its election, assign its rights under this Agreement in whole to any wholly
owned subsidiary of Buyer so long as the representations and warranties of Buyer
made herein are equally true of such assignee, and provided that such assignment
shall not relieve Buyer of liability hereunder. Any attempted assignment made
without the requisite approval shall be null and void.
Section 12.10. Headings. The section and article headings contained in
--------
this Agreement are inserted for convenience and reference only and will not
affect the meaning or interpretation of this Agreement.
Section 12.11. Amendments and Waivers. No amendment, modification, or
----------------------
alteration of the terms or provisions of this Agreement or any other Merger
Documents shall be binding unless the same shall be in writing and duly executed
by the parties hereto. Any of the terms or conditions of this Agreement may be
waived in writing at any time by the party that is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed
to or shall constitute a waiver of any other provision hereof (whether or not
similar).
Section 12.12. Invalidity of any Part. In any provision or part of this
----------------------
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement and shall be construed as if such invalid,
illegal or unenforceable provision or part thereof had never been contained
herein, but only to the extent of its invalidity, illegality, or
unenforceability.
Section 12.13. Remedies. Each of the parties acknowledges that money
--------
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by any
court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
Section 12.14. Actions and Proceedings. The Company and each Shareholder
-----------------------
consent to the exclusive jurisdiction and venue of the courts of any county in
the State of Georgia and the United States District Court for any District of
Georgia in any action or judicial proceeding brought to enforce, construe or
interpret this Agreement or any other Merger Documents. The Company and each
Shareholder agree that any forum other than the State of Georgia is an
inconvenient forum and that a suit (or non-compulsory counterclaim) brought by
the Company and/or any Shareholder against Buyer, IAI or any Buyer Indemnified
Party in a court of any state other than the State of Georgia should be
forthwith dismissed or transferred to a court located in the State of Georgia.
31
IN WITNESS WHEREOF, this Acquisition and Merger Agreement has been executed
by each of the parties as of the date first above written.
Witness: Intercept Holdings Inc.
/s/ April X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
----------------------- -----------------------------
Xxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
Witness: Intercept Acquisitions II, Inc.
/s/ April X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
----------------------- -----------------------------
Xxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
Witness: FiNet, Inc.
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
----------------------- -----------------------------
Xxxx X. Xxxxxxx, President
32
Shareholders
State of Tennessee /s/ Xxxx X. Xxxxxxx
-------------------------------- -------------------------------
Xxxx X. Xxxxxxx
County of Davidson
-------------------------------
The foregoing instrument was
acknowledged before me this 14th day of
December, 1996, by Xxxx X. Xxxxxxx.
Witness my hand and official seal.
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Title of Officer
My commission expires: May 23, 1998
-------------------
State of Tennessee /s/ Xxxx X. Xxxxx
------------------------ -------------------------------
Xxxx X. Xxxxx
County of Davidson
-----------------------
The foregoing instrument was
acknowledged before me this 14th day of
December, 1996, by Xxxx X. Xxxxx.
Witness my hand and official seal.
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Title of Officer
My commission expires: May 23, 1998
-----------------
33
State of Tennessee /s/ Xxxxx XxXxxxx
------------------------------ -------------------------------
Xxxxx XxXxxxx
County of Davidson
-----------------------------
The foregoing instrument was
acknowledged before me this 14th day of
December, 1996, by Xxxxx XxXxxxx.
Witness my hand and official seal.
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Title of Officer
My commission expires: May 23, 1998
--------------------
34
Index to Exhibits and Schedules
Exhibit 1.2 Form of Articles of Merger
Exhibit 3.3(a) Finet, Inc. Balance Sheet
Exhibit 7.11 Form of Finet, Inc. Affiliate Letter
Exhibit 7.13 Form of Employment Agreement
Schedule 2.2 Allocation of Buyer Common Stock
Schedule 3.1(f) Company Subsidiaries, Trade Name or Other Fictitious Names
Schedule 3.4 Liabilities
Schedule 3.5 Liens
Schedule 3.6 Litigation and Other Proceedings
Schedule 3.7 Software Programs and Documentation
Schedule 3.7(a) Patents, Trademarks, Service Marks, Tradenames and Copyrights
owned or used by the Company and all applications therefor
and registrations thereof
Schedule 3.7(b) Form and placement of the proprietary legends and copyright
notices displayed in or on the Software
Schedule 3.7(c) Form Non-Disclosure & Assignment Agreement; list of employees
and consultants
Schedule 3.7(e) Claims in Software
Schedule 3.9 Software Contracts
Schedule 3.10 Third Party Interests in Software
Schedule 3.13 Casualty, liability, workers' compensation, life and other
forms of insurance
Schedule 3.14 Material Contracts
Schedule 3.15 Brokers, Finders and Consultants
Schedule 3.16(b) Payment of Taxes
Schedule 3.16(c) Audit History
Schedule 3.17 Employee Plans
Schedule 3.18 Labor and Employment Matters
Schedule 3.18(g) Employment, consulting, loan-out, retainer or other contracts
or agreements
Schedule 3.18(h) Names and Compensation Levels of all Employees and
Consultants
Schedule 3.20 Competition Matters
Schedule 3.21 Transactions with Related Parties
Schedule 3.22 List of Distributors, Suppliers, Etc.
Schedule 3.24 Accounts Receivable
Schedule 4.6 Form of Shareholder Investment Representation Certificate
Schedule 5.5 Form of Buyer Investment Representation Certificate
Schedule 6.5 Consent Liens
Schedule 7.9 Third Party Consents
Schedule 7.15 Form of Opinion of Counsel to Finet, Inc. to be delivered to
Intercept at the effective time
Schedule 8.4 Form of Opinion of Counsel to Intercept to be delivered to
Finet at the effective time
