EXHIBIT 2.1
PURCHASE AGREEMENT
(amended and restated)
among
THE INTERCEPT GROUP, INC.,
a corporation formed under the laws of the State of Georgia
and
XXXXXXX.XXX INC.,
a corporation formed under the laws of the Province of Ontario
and
XXXXXXX.XXX INC.,
a corporation formed under the laws of the State of Kansas
November 29, 2000
TABLE OF CONTENTS
Page
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SECTION 1 DEFINITIONS................................................................................. 1
SECTION 2 TERMS OF TRANSACTION........................................................................ 5
2.1 Purchase and Sale of Software and LLC Interests............................................. 5
2.2 Purchase Price.............................................................................. 5
2.3 Legending of Securities..................................................................... 5
2.4 Delivery of Disclosure Memorandum........................................................... 6
2.5 The Closing................................................................................. 6
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER AND THE COMPANY REGARDING THE LLC INTERESTS... 7
3.1 Power and Authority......................................................................... 7
3.2 Ownership of the LLC Interests.............................................................. 7
3.3 LLC Interests............................................................................... 8
3.4 Absence of Other Claims..................................................................... 8
SECTION 4 REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER AND THE COMPANY............................... 8
4.1 Organization and Authority.................................................................. 8
4.2 Compliance with Law......................................................................... 9
4.3 Financial Matters........................................................................... 9
4.4 Indebtedness................................................................................ 10
4.5 No Undisclosed Liabilities.................................................................. 10
4.6 Tax Matters................................................................................. 10
4.7 Credits..................................................................................... 11
4.8 Litigation.................................................................................. 11
4.9 Assets...................................................................................... 11
4.10 Suppliers and Customers..................................................................... 13
4.11 Trade Secret and Employment Claims.......................................................... 13
4.12 Intellectual Property....................................................................... 13
4.13 Contracts................................................................................... 14
4.14 Leases...................................................................................... 14
4.15 Permits..................................................................................... 15
4.16 Labor Matters............................................................................... 15
4.17 Employees................................................................................... 15
4.18 Employee Benefit Plans and Arrangements..................................................... 16
4.19 Environmental Matters....................................................................... 17
4.20 Events After December 31, 1999.............................................................. 18
4.21 Copies Provided to InterCept................................................................ 19
4.22 Brokers..................................................................................... 19
4.23 Adverse Information......................................................................... 19
4.24 Other Information........................................................................... 20
4.25 Assets of LLC............................................................................... 20
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4.26 Access to Information........................................................................ 20
4.27 Statements................................................................................... 20
4.28 Experience; Investment....................................................................... 20
4.29 Transfer..................................................................................... 21
4.30 Notice....................................................................................... 21
4.31 Software..................................................................................... 21
4.32 Employees.................................................................................... 22
4.33 Insurance Policies........................................................................... 22
SECTION 5 REPRESENTATIONS AND WARRANTIES OF INTERCEPT.................................................. 23
5.1 Organization and Authority................................................................... 24
5.2 Compliance with Law.......................................................................... 24
5.3 Outstanding Stock............................................................................ 24
5.4 Ontario Residents............................................................................ 24
5.5 No Undisclosed Liabilities................................................................... 25
5.6 Litigation................................................................................... 25
5.7 Regulatory Filings........................................................................... 25
5.8 Brokers...................................................................................... 25
5.9 Investment Representations.................................................................. 25
5.10 Other Information............................................................................ 25
SECTION 6 CONDUCT OF BUSINESS PRIOR TO CLOSING......................................................... 26
6.1 Financial Position........................................................................... 26
6.2 Working Capital.............................................................................. 26
6.3 Maintenance of Assets and Business........................................................... 26
6.4 Notice of Disputes........................................................................... 26
6.5 Asset Transfer............................................................................... 26
6.6 Company Financial Statements................................................................. 26
6.7 Bank Consents................................................................................ 26
6.8 No Action Without Consent.................................................................... 26
SECTION 7 COVENANTS OF THE PARTIES..................................................................... 27
7.1 Cooperation.................................................................................. 27
7.2 Access....................................................................................... 27
7.3 Interim Financials........................................................................... 28
7.4 Lease-Purchase Assets........................................................................ 28
7.5 Records...................................................................................... 28
7.6 Use of Company Name.......................................................................... 28
7.7 Expenses..................................................................................... 28
7.8 Excluded Assets.............................................................................. 29
7.9 Tax Matters.................................................................................. 29
7.10 Survival of Warranties....................................................................... 29
7.11 Indemnification.............................................................................. 29
7.12 Casualty..................................................................................... 31
7.13 Confidentiality.............................................................................. 32
7.14 Funds Received After Closing................................................................. 33
7.15 No Public Announcements...................................................................... 33
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7.16 Acquisition Proposals........................................................................ 33
7.17 Further Technology and Commercial Arrangements............................................... 33
7.18 Transition Period............................................................................ 33
7.19 Shared Facilities............................................................................ 33
7.20 Assumption of Leases......................................................................... 33
7.21 Employment................................................................................... 34
7.22 Shareholder Distribution..................................................................... 34
7.23 Non-Competition.............................................................................. 34
7.24 Share Payment................................................................................ 35
SECTION 8 CONDITIONS TO OBLIGATIONS OF SHAREHOLDER AND THE COMPANY..................................... 35
8.1 Representations, Warranties and Covenants.................................................... 36
8.2 Litigation................................................................................... 36
8.3 Opinion of Counsel to InterCept.............................................................. 36
8.4 Execution and Delivery of Documents.......................................................... 36
8.5 No Adverse Change............................................................................ 36
8.6 Required Governmental Approvals.............................................................. 36
8.7 Other Necessary Consents..................................................................... 36
8.8 Delivery of Documents........................................................................ 36
SECTION 9 CONDITIONS TO OBLIGATIONS OF INTERCEPT....................................................... 37
9.1 Representations, Warranties and Covenants.................................................... 37
9.2 Litigation................................................................................... 37
9.3 Opinion of Counsel to the Company and Shareholder............................................ 37
9.4 Execution and Delivery of Documents.......................................................... 37
9.5 No Adverse Change............................................................................ 37
9.6 Required Governmental Approvals.............................................................. 38
9.7 Other Necessary Consents..................................................................... 38
9.8 Disclosure Memorandum........................................................................ 38
9.9 Shareholder Approval......................................................................... 38
9.10 Delivery of Documents........................................................................ 38
SECTION 10 TERMINATION.................................................................................. 38
10.1 Termination.................................................................................. 38
10.2 Effect of Termination........................................................................ 39
10.3 Break-up Fee................................................................................. 39
SECTION 11 PAYMENT...................................................................................... 39
11.1 Payment...................................................................................... 39
SECTION 12 MISCELLANEOUS................................................................................ 45
12.1 Notices...................................................................................... 45
12.2 Parties Bound by Agreement; Successors and Assigns........................................... 46
12.3 Entire Agreement............................................................................. 46
12.4 Descriptive Headings......................................................................... 47
12.5 Counterparts................................................................................. 47
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12.6 Amendments and Waivers....................................................................... 47
12.7 Governing Law, Jurisdiction and Venue........................................................ 47
12.8 No Third-Party Beneficiaries................................................................. 47
12.9 Gender and Number............................................................................ 47
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PURCHASE AGREEMENT
(amended and restated)
This Purchase Agreement (amended and restated) (the "Agreement") dated
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as of November 29, 2000 is by and among XXXxxxx.xxx Inc., a corporation formed
under the laws of the Province of Ontario ("Shareholder"), XXXxxxx.xxx Inc., a
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corporation formed under the laws of the State of Kansas and a wholly-owned
subsidiary of Shareholder (the "Company"), and The InterCept Group, Inc., a
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Georgia corporation ("InterCept"). Immediately prior to the Closing (as defined
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below), the Company shall transfer the assets described in Section 4.25 to ICPT
Acquisition I, LLC, a newly created limited liability company formed under the
laws of the State of Georgia (the "LLC") and the LLC shall assume the Assumed
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Obligations (as defined below) (together, the "LLC Assignment and Assumption").
Immediately following the completion of the LLC Assignment and Assumption, the
Company will sell the LLC Interests (as defined below) to InterCept, and
Shareholder will sell the Asset Interests (as defined below) to InterCept, all
on the terms and subject to the conditions contained herein.
In consideration of the mutual representations, warranties, covenants
and agreements, and upon and subject to the terms and the conditions hereinafter
set forth in this Agreement, the parties agree as follows:
Section 1. Definitions
For purposes of this Agreement, the following terms shall have the
following meanings:
"Accounting Standards" means GAAP and where not inconsistent with GAAP,
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the prior reasonable accounting practices of the Company as specified in the
Disclosure Memorandum.
"Acquired Business" means the business conducted by the Company of
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providing outsourced core banking data processing and licensed image/item
processing services and licensing in-house core banking software to banking
financial institutions in the U.S.
"Affiliates" of a particular Person means other Persons controlled by,
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controlling, or under common control with, such Person.
"Asset Interests" is defined in Section 2.1(a).
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"Asset Transfer" means the assignment to the LLC of all of the assets
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of the Company other than the Excluded Assets on or prior to the Closing Date.
"Assumed Obligations" means all obligations to be performed under the
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Company Contracts that relate to the Acquired Business and the Company's
obligations to the Employees that occur on or after the Closing Date.
"Banks" means Canadian Imperial Bank of Commerce and Firstar Bank
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Midwest.
"Bisys Contract" means the Company Contract between the Company (as
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assigned to the Company or predecessor of the Company from Bisys, Inc.) and
United National Bank dated February 16, 1999 and expiring on February 16, 2003
that is assigned to the LLC at the Closing.
"Charter Documents" means articles of organization and operating
-----------------
agreement of the LLC or the articles of incorporation and bylaws of the Company
or Shareholder.
"Closing" means the consummation of the purchase and sale of the LLC
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Interests and the Asset Interests under the terms of this Agreement.
"Closing Date" means the date on which the Closing occurs.
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"Common Stock" means InterCept's common stock, no par value.
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"Company Contracts" means all contracts, leases, agreements,
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indentures, licenses, mortgages, commitments or binding arrangements or
relationships pursuant to which the Company is either a party or a third party
beneficiary, if any.
"Company Premises" means the real estate (including fixtures, buildings
----------------
and other improvements thereon) leased or used by the Company at the addresses
listed in the Disclosure Memorandum.
"Cross Country" means Cross Country Bank.
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"Cross Country Contract" means the Company Contract between Cross
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Country and the Company (or predecessor of the Company) dated July 1, 1996 and
expiring on July 1, 2002 that is assigned to the LLC at the Closing.
"Data Center Leases" is defined in Section 7.20.
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"Deferred Amount" is defined in Section 11.1.
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"Designated Official" initially means Xxxxx Xxxxxxxxx or Xxxx Xxxxxxx
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if Xx. Xxxxxxx provides Shareholder and the Company notice that he is to be
considered the "Designated Official."
"Disclosure Memorandum" means the memorandum signed and delivered by
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Shareholder and the Company on the Closing Date containing information required
to be disclosed under this Agreement.
"Employees" means the employees of the Company listed on Schedule 4.17.
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"Encumbrance" means any mortgage, charge (whether fixed or floating),
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security interest, pledge, claim, right of first refusal, lien (including,
without limitation any unpaid vendor's lien), option, hypothecation, title
retention or conditional sale agreement, lease, option, restriction as to
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transfer, use or possession, easement, subordination to any right of any other
person, and any other encumbrance on the absolute and unfettered use and
ownership of any asset or property.
"Environmental Law" includes any statute, law, code, regulation, order,
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notice, rule, ordinance, or any requirement, restriction, limitation, condition
or obligation contained therein, including any and all plans, orders, decrees,
judgments, and notices issued, entered, promulgated, or approved thereunder,
purporting to regulate the use, misuse, pollution or preservation of land, air
and water resources including but not limited to those purporting to regulate
building and planning, industrial buildings, plants or equipment, and health or
safety, only as such are directly related to environmental matters.
"Escrow Agent" means First Union National Bank.
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"First Capital" means First Capital Bank, Victoria, Texas.
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"First Capital Contract" means the Company Contract between First
----------------------
Capital and the Company (or predecessor of the Company) dated August 1 1998 and
expiring on July 1, 2003 that is assigned to the LLC at the Closing.
"GAAP" means generally accepted accounting principles of the United
----
States, consistently applied, as governed by all legal requirements for
financial statements.
"Hazardous Material" means any hazardous substance or any pollutant or
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contaminant defined or included as such in (or for the purposes of) any
Environmental Law.
"Interim Balance Sheet" means the unaudited balance sheet of the
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Company prepared internally by the management of the Company or under the
direction of the management of the Company dated as of September 30, 2000 that
forms part of the Interim Financial Statements.
"Interim Financial Statements" means the unaudited balance sheet of the
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Company as of September 30, 2000, and the related unaudited statements of
operations and cash flow for the nine month period then ended, prepared
internally by management of the Company or anyone under the direction of the
management of the Company.
"InterCept's Business" means the business conducted by InterCept and
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its Affiliates of providing ATM network management services, core banking
software and data processing, image/item processing, and voice/data
communications management services in the U.S.
"Lease-Purchase Assets" is defined in Section 4.9(a).
---------------------
"LLC Assignment and Assumption" is defined in the preamble of this
-----------------------------
Agreement.
"LLC Interests" means all of the equity or membership interests in the
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LLC.
"Material Company Contracts" means: (i) as at the date of this
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Agreement, all the Company Contracts under which either the Company paid
$120,000 or more during the 12 month period
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ending October 31, 2000, or the Company received $120,000 or more during the 12
month period ending October 31, 2000; and (ii) as at the Closing Date, the
Company Contracts referred to in subsection (i) above and Company Contracts that
the Shareholder reasonably determines shall result in the payment or receipt of
more than $120,000 for the 12 month period following the Closing Date.
"Permitted Encumbrance" means the Encumbrances granted by the Company
---------------------
in favor of the Banks and an Encumbrance identified as a "Permitted Encumbrance"
in the Disclosure Memorandum.
"Person" means a corporation, partnership, trust, limited liability
------
company, other business entity or an individual.
"Rule" means any law, statute, rule, regulation, order, court decision,
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judgment or decree of any federal, state, territorial, provincial or municipal
authority or body, and, when it is commonly proper to follow them,
non-compulsory recommendations of any such public authorities and bodies.
"Shareholder's Business" means the business conducted by Shareholder
----------------------
and its Affiliates of providing in-house and outsourced core banking data
processing and image/item processing services to various financial institutions
in the U.S.; and the development, implementation, installation and marketing of
in-house and outsourced Internet banking, core banking, in-branch teller, ATM
and POS device driving and network management software solutions, credit, debit
card and merchant processing services, voice/data communications management
services, network security, wealth management and portfolio management software,
healthcare and claims adjudication and related e-commerce solutions to its
customers in the U.S. and various regions of the world.
"Social" refers to employment-related obligations of the Company,
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including all actual or contingent liabilities relating to unemployment, health,
injury, death and retirement as well as any and all items of a similar nature.
"Software" means the SOLV/MICROSOLV computer programs.
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"Subsidiary" means any commercial company or other business entity
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controlled by the Company or any subsidiary of the Company, including any entity
(whether or not deemed to have an independent legal personality) in which the
shareholder's liability is not limited to its contribution.
"Tax" or "Taxes" means all forms of levies, taxes, customs and other
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duties normally deemed to be of a fiscal or customs nature, including but not
limited to (a) all taxes levied, imposed or assessed under the United States
Internal Revenue Code of 1986, as amended, or any other statute, rule, ordinance
or law, in the United States or elsewhere; (b) taxes in the nature of sales tax,
consumption tax, value added tax, payroll tax, group tax, undistributed profits
tax, fringe benefits tax, recoupment tax, withholding tax, land tax, water
rates, municipal rates, stamp duties, gift duties or other state, territorial,
provincial or municipal charges or impositions levied, imposed or collected by
any governmental body; and (c) any additional tax, interest, penalty, charge,
fee or other amount
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of any kind assessed, charged or imposed in relation to the non-, late, short or
incorrect payment of the same or the failure to file any return.
"Warranty" means any representation and warranty of the Company, the
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LLC, Shareholder or InterCept, as the case may be, in this Agreement or in the
certificate referred to in Section 8.1 or 9.1, as the case may be.
Section 2. Terms of Transaction
2.1 Purchase and Sale of Software and LLC Interests. Upon the terms
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and subject to the conditions of this Agreement and immediately following the
LLC Assignment and Assumption, at the Closing:
(a) InterCept shall purchase from Shareholder, and Shareholder
shall sell and transfer to InterCept a one half, undivided, joint ownership
interest with Shareholder in and to the Software in accordance with the terms
and conditions set forth in the Software Agreement attached as Exhibit 8.8(a)
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(the "Asset Interests"); and
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(b) InterCept shall purchase from the Company and the Company
shall sell and transfer to InterCept all of the issued and outstanding LLC
Interests.
2.2 Purchase Price.
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a. The aggregate purchase price consideration payable to
Shareholder for the Asset Interests shall be (i) $23,529,945 to be paid to
Shareholder in cash or by wire transfer and (ii) 625,833 shares of Common Stock,
based on the average of the closing prices for the Common Stock for the 15
trading day period ended November 24, 2000, to be issued to Shareholder.
b. The aggregate purchase price for all of the issued and
outstanding LLC Interests shall be (i) $16,470,055 to be paid to the Company in
cash or by wire transfer and (ii) 628,109 shares of Common Stock, based on the
average of the closing prices for the Common Stock for the 15 trading day period
ended November 24, 2000, to be issued to Shareholder as nominee for the benefit
of the Company.
The 1,253,942 aggregate shares of Common Stock is sometimes referred to in this
Agreement as the "Share Portion," and the $40,000,000 aggregate cash
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consideration is sometimes referred to in this Agreement as the "Cash Portion."
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2.3 Legending of Securities.
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a. The Share Payment will be issued in a transaction exempt from
registration under the Securities Act of 1933 (the "Securities Act") by reason
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of Section 4(2) thereof, Regulation D promulgated thereunder, or other private
offering exemptions, as well as an appropriate exemption under the Canadian
National Territorial Provincial Rule. Shareholder understands and agrees that
stop transfer instructions with respect to the shares of Common Stock issued by
InterCept pursuant to this Agreement will be given to InterCept's transfer agent
and that there will be placed on the certificates for such shares a legend
stating in substance as follows:
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The transfer of the securities represented by this
certificate has not been registered under the Securities Act
of 1933. The shares may not be offered, sold, transferred or
otherwise disposed of unless the transfer is registered with
the United States Securities and Exchange Commission and the
securities regulatory authorities of applicable states or
unless an exemption from such registration is available. The
securities represented by this certificate are subject to
appropriate restrictions on transfer pursuant to a Purchase
Agreement (amended and restated) dated as of November 29,
2000 among XXXxxxx.xxx Inc., an Ontario corporation,
XXXxxxx.xxx Inc., a Kansas corporation, and The InterCept
Group, Inc., a Georgia corporation, and a Registration Rights
Agreement between XXXxxxx.xxx Inc., an Ontario corporation,
and The InterCept Group, Inc., and the provinces and
territories of Canada and may not be sold or otherwise
transferred except in accordance therewith.
b. The foregoing legend will also be placed on any certificate
representing securities issued subsequent to the original issuance of the Common
Stock pursuant to this Agreement as a result of any transfer of such shares or
any stock dividend, stock split or other recapitalization as long as the Common
Stock issued to Shareholder pursuant to this Agreement has not been transferred
in such manner to justify the removal of the legend therefrom.
c. Notwithstanding Sections 2.3(a) and 2.3(b) of this Agreement,
Shareholder may sell up to 100,000 shares of Common Stock prior to registration
to a "Qualified Institutional Buyer" as that term is defined by United States
federal securities laws, subject to Rule 144A and other customary requirements
of applicable securities laws.
2.4 Delivery of Disclosure Memorandum. Concurrent with the execution
---------------------------------
and delivery of this Agreement, Shareholder shall deliver to InterCept a draft
Disclosure Memorandum (the "Draft Disclosure Memorandum"). At least two days
before the Closing, Shareholder shall deliver the Disclosure Memorandum to
InterCept in its proposed final form.
2.5 The Closing. The Closing shall take place, subject to the
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satisfaction or waiver of the conditions set forth in this Agreement, including
the conditions contained in Sections 8 and 9 of this Agreement, at 9:00 a.m.,
December 15, 2000, in the offices of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
If the conditions to closing contained in this Agreement, including the
conditions contained in Sections 8 and 9 of this Agreement, have not been
obtained prior to 9:00 a.m. on December 15, 2000, the Closing shall take place
after such conditions have been satisfied or waived, at a time mutually agreed
upon by the parties, provided that the parties agree to use commercially
reasonable efforts to close by December 31, 2000. The parties shall use
commercially reasonable efforts with respect to the preparation and filing of
the Xxxx-Xxxxx-Xxxxxx Act application, and InterCept shall pay all application
fees associated with such application.
2.6 Effective Date. The effective date of the Closing shall be as of
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January 1, 2001.
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Section 3. Representations and Warranties of Shareholder and the Company
Regarding the LLC Interests
To induce InterCept to execute, deliver and perform this Agreement, and
in acknowledgement of InterCept's reliance on the following Warranties,
Shareholder and the Company hereby represent and warrant to InterCept as follows
as of the date hereof and as of the Closing; provided that the representations
and warranties regarding the LLC are only stated as at the Closing Date:
3.1 Power and Authority. Each of Shareholder and the Company has the
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right, power and capacity to execute, deliver and perform this Agreement and to
consummate the transactions contemplated by this Agreement (the "Contemplated
------------
Transactions"). The execution, delivery and performance of this Agreement, and
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the consummation of the Contemplated Transactions, have been duly and validly
authorized by all necessary action on the part of each of Shareholder and the
Company. Assuming the payment in full of all obligations owed to the Banks, and
subject to approvals and consents from applicable governmental authorities and
third parties in respect of the Company Contracts listed on Disclosure
Memorandum Schedule 3.1 (the "Third Party Consents"), Shareholder and the
------------ --------------------
Company have obtained all necessary consents, approvals, authorizations or
estoppels of any other Person or governmental or regulatory authority required
to be obtained to authorize and permit the Contemplated Transactions. Listed on
Disclosure Memorandum Schedule 3.1 are the Third Party Consents that must be
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obtained with respect to all Material Company Contracts. This Agreement has been
duly and validly executed and delivered by each of Shareholder and the Company
and constitutes Shareholder's and the Company's legal, valid and binding
obligation, enforceable in accordance with its terms. Assuming the payment in
full of all obligations owed to the Banks, and subject to the Third Party
Consents, the execution and delivery of this Agreement by each of Shareholder
and the Company, the consummation of the Contemplated Transactions by each of
Shareholder and the Company (including the LLC Assignment and Assumption), and
the performance of the covenants and agreements of each of Shareholder and the
Company, will not, with or without the giving of notice or the lapse of time, or
both, (i) violate or conflict with any of the provisions of the Charter
Documents of Shareholder, the LLC, or the Company; (ii) violate, conflict with
or result in a breach or default under or cause termination of any term or
condition of any mortgage, indenture, contract, license, permit, instrument,
trust document, or other agreement, document or instrument to which Shareholder
or the Company is a party or by which Shareholder or the Company or any of its
properties may be bound; (iii) violate any Rule; or (iv) result in the creation
or imposition of any Encumbrance upon any asset of the Company or the LLC.
3.2 Ownership of the LLC Interests. Subject to the security interest
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of the Banks, which shall be discharged on or before the Closing Date, the
Company owns, of record and beneficially, good, valid and marketable title to
the LLC Interests, such LLC Interests are validly issued and are free and clear
of any Encumbrances, with no defects of title whatsoever, and the Company has
full and exclusive power, right and authority to vote the LLC Interests. Other
than the LLC Interests, there are no equity or membership interests in and no
right to acquire any equity or membership interests in the LLC. Upon
consummation of the Closing, InterCept shall obtain good, valid and marketable
title to the LLC Interests, free and clear of all Encumbrances,
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with no defects of title whatsoever, and shall have full and exclusive power,
right and authority to vote and control the LLC Interests. Except as
contemplated in this Agreement, neither Shareholder nor the Company is a party
to or bound by any agreement affecting or relating to its right or obligation to
transfer or vote the LLC Interests.
3.3 LLC Interests.
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(a) The number of issued shares or other capital interests of
each of the Company and the LLC and the record holders of such shares and
capital interests are set forth in the Disclosure Memorandum. All of such shares
and interests are validly issued. All issuances, transfers or purchases of such
shares and interests have been in compliance with all applicable agreements and
all applicable Rules, and all Taxes thereon have been paid. There are no shares
or other capital interests held in the treasury of the Company or the LLC,
except that there are 140,993 previously issued shares of the Company's common
stock held in treasury.
(b) Except as set forth in the Disclosure Memorandum, no increase
in the capital of the Company or the LLC has been agreed, resolved or promised,
nor is in course, and none will be prior to Closing. No instrument or security
whatsoever which may, whether by exchange, subscription, conversion or in any
other manner, give right to share capital or voting rights as to the Company or
the LLC has been issued, resolved or promised.
3.4 Absence of Other Claims. Except as contemplated in this Agreement
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and as set forth in the Disclosure Memorandum, there is not outstanding, nor is
the Company or the LLC bound by, any subscriptions, options, preemptive rights,
warrants, agreements or rights of any character requiring the Company or the LLC
to issue or transfer any of its shares, membership interests, or other equity
interests, including any right of conversion or exchange under any outstanding
security or other instrument. There are no outstanding obligations of the
Company or the LLC to repurchase, redeem or otherwise acquire any of its
outstanding shares, membership interests, or other equity interests.
Section 4. Representations and Warranties of Shareholder and the Company
To induce InterCept to execute, deliver and perform this Agreement, and
in acknowledgement of InterCept's reliance on the following representations and
warranties, Shareholder and the Company hereby represent and warrant to
InterCept as follows as of the date hereof and as of the Closing, provided that
the representations and warranties regarding the LLC are only stated as of the
Closing Date:
4.1 Organization and Authority.
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(a) The Company is a corporation duly organized and validly
existing under the laws of the State of Kansas and has all requisite power and
authority, corporate or otherwise, to carry on and conduct its business as it is
now being conducted and to own or lease its properties and assets. As of the
Closing, the LLC is a limited liability company duly organized and validly
existing under the laws of the State of Georgia and has all requisite power and
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authority, corporate or otherwise, to carry on and conduct its business as it is
now being conducted and to own or lease its properties and assets.
(b) Except as disclosed in the Disclosure Memorandum, neither the
Company nor the LLC has been, and neither is currently, (i) subject to any
insolvency related procedure in respect of part or all of its assets, or (ii)
involuntarily liquidated.
(c) Approval by the shareholders of Shareholder is not required
to consummate the Contemplated Transactions.
(d) The Disclosure Memorandum contains a copy of the true, valid
and correct Charter Documents of the Company in effect as of the date hereof and
the LLC as of the Closing. The minute books of the Company that have previously
been delivered to InterCept are the complete, true, valid and correct records of
directors' and shareholder's meetings through and including the date hereof and,
reflect all transactions and other matters required to be reflected in such
records.
(e) The current member and managers of the LLC (if they have been
appointed or if the LLC has been formed) and the current directors and officers
of the Shareholder and directors and officers of the Company are listed in the
Disclosure Memorandum.
(f) The execution, delivery and performance of this Agreement,
and the consummation of the Contemplated Transactions, have been duly and
validly authorized by all necessary action, corporate or otherwise, on the part
of the Company and the LLC required to take such action and, subject to consent
of the Banks, will not, without the giving of notice or the lapse of time, or
both, (i) violate or conflict with any of the provisions of any Charter
Document; (ii) violate, conflict with, or result in a breach or default under or
cause termination of any term or condition of any mortgage, indenture, contract,
license, permit, instrument, trust document, or other agreement, document or
instrument to which the Company or the LLC is a party or by which the Company,
the LLC, or any of their properties may be bound; (iii) violate any Rule; or
(iv) result in the creation or imposition of any Encumbrance upon any asset of
the Company or the LLC.
4.2 Compliance With Law. Neither the Company nor the LLC has violated
-------------------
any order of any court, governmental authority, arbitration board or tribunal to
which it is or was subject, nor is either the Company or the LLC in violation of
any Rule the violation of which would have a material adverse effect on the
Company or the LLC, the Contemplated Transactions, or the Acquired Business.
4.3 Financial Matters.
-----------------
(a) The Financial Statements are true, complete, and correct in
all material respects and fairly present the financial position of the Company
as of the dates thereof and the results of their operations for the respective
periods thereof.
9
(b) The Financial Statements were prepared in accordance with
GAAP, modified as follows:
(i) The statements of operations are prepared on divisional
basis for each data center, with no allocation of corporate overhead charged to
each data center.
(ii) The statements were prepared on a pro-forma basis
reflecting the synergies associated with the lease buy-out.
(iii) The statements were prepared with no provision for
amortization of interest expense and income tax expense.
(iv) The statements were not audited and were prepared from
internally available information.
4.4 Indebtedness. The Disclosure Memorandum sets forth a complete and
------------
accurate list and description of all instruments or other documents relating to
any direct or indirect indebtedness for borrowed money of the Company or the
LLC, as well as indebtedness by way of lease-purchase arrangements, guarantees,
undertakings on which others rely in extending credit, and all conditional sales
contracts, pledges and other security arrangements with respect to personal
property used or owned by the Company or the LLC, and the Disclosure Memorandum
also sets forth which such instruments, documents, and indebtedness is being
assigned to the LLC by the Company. Except as set forth in the Disclosure
Memorandum, neither the Company nor the LLC is in default with respect to any
indebtedness. All such indebtedness described in this Section 4.4 that accrues
up to and including the Closing Date is the responsibility of the Company and
Shareholder and shall be satisfied in full by Shareholder at Closing.
4.5 No Undisclosed Liabilities. Except as and to the extent reflected
--------------------------
and adequately reserved against on the Interim Balance Sheet or as shown in the
Disclosure Memorandum, as of the date hereof, neither the Company nor the LLC
has any liabilities or obligations whatsoever, whether accrued, absolute,
contingent or otherwise.
4.6 Tax Matters.
-----------
(a) Tax Reserves. The amount of the Company's liabilities for
------------
unpaid Taxes for all periods ending on or before the date of this Agreement do
not, in the aggregate, exceed the amount of the current liability accruals for
Taxes with respect to the Company, as such accruals are reflected in the Interim
Balance Sheet; and the amount of the Company's liability for unpaid Taxes for
all periods ending on or before the Closing does not, in the aggregate, exceed
the amount of the current liability accruals for Taxes as shown on the Interim
Balance Sheet for the Company.
(b) Tax and Social Returns. The Company has correctly and timely
----------------------
(i) filed all Tax and Social returns required to be filed in the manner required
by Tax and Social authorities, (ii) responded to information requested by said
authorities and (iii) made all Tax and Social payments at due dates.
10
(c) Other Matters. Except as set forth in the Disclosure Memorandum:
-------------
(i) the Company is not subject to income tax in countries other than those where
it is registered; (ii) if the Company is established in a country where value
added tax is applicable, the Company is duly registered as an entity subject to
such Tax; (iii) expenses already incurred or which the Company is required to
incur in the ordinary course of its business are deductible from its ordinary
income; (iv) the Company has not entered into any transaction which could be
disregarded or recharacterized for Tax or Social purposes on the grounds that it
aimed at the avoidance of Tax or Social obligations; (v) the Company is not the
subject matter of any inquiry, investigation or audit relating to Tax or Social
matters and has not been informed of any proposed audit; and (vi) the Company
(a) has no assets whose tax basis is lower than book value, and (b) would not,
in the event of reorganization, divestiture or otherwise, incur a Tax which
could not have been anticipated by the mere review of the Financial Statements
as of the respective balance sheet dates.
(d) Tax and Social Audits. The Disclosure Memorandum sets forth the
---------------------
conclusions of any Tax or Social audit or reassessment made during any period
not yet completely time barred by applicable statutes of limitation.
(e) Returns Furnished. The Disclosure Memorandum contains true and
-----------------
complete copies of (i) income tax audit reports, statements of deficiencies or
audit response letters relating to Taxes, if any, and (ii) all tax returns for
the Company for all periods since January 1, 1997.
(f) Tax Basis and Tax Attributes. The Disclosure Memorandum contains
----------------------------
an accurate and complete description of the Company's tax basis in its assets.
4.7 Credits. After the Closing and except as disclosed in the Disclosure
-------
Memorandum, credits granted to customers for services provided by the Company or
the LLC before the Closing will not exceed $10,000 in the aggregate whether or
not such returns are in the ordinary course of business. Shareholder agrees to
reimburse InterCept, on a monthly basis, for the credits in the amount of
$36,115 (as disclosed in Disclosure Memorandum Schedule 4.7) that have been
provided to Woodforest National Bank pursuant to the Material Company Contract
between Woodforest National Bank and the Company that is assigned to the LLC
when earned by Woodforest.
4.8 Litigation. Except as set forth in the Disclosure Memorandum, there is
----------
no action, suit, investigation or proceeding pending or, to the best knowledge
of the Company or Shareholder, threatened against or affecting the Company, the
LLC, the Acquired Business, or the assets of the Company or the LLC before any
court or by or before any governmental body or arbitration board or tribunal,
nor, to the best knowledge of the Company or Shareholder, is there a basis for
any such action, suit, investigation or proceeding.
4.9 Assets.
------
11
(a) Description. The Disclosure Memorandum sets forth a general
-----------
description and the location of all personal property and leasehold improvements
that will be assigned to the LLC at the Closing and the assets that are subject
to lease-purchase arrangements (the "Lease-Purchase Assets"). Disclosure
---------------------
Memorandum Schedule 7.8 sets forth the assets that are being retained by the
------------
Company. The assets set forth on Disclosure Memorandum Schedules 4.9 and 7.7 and
---------------------
the Lease-Purchase Assets are all of the assets of the Company.
(b) Title. As of the date of this Agreement, the Company has good,
-----
valid and marketable title to all of its assets, free and clear of any and all
Encumbrances other than the Permitted Encumbrances, and as of the Closing Date
the LLC shall have good, valid and marketable title to all of the Company's
assets, other than the Excluded Assets and the Lease-Purchase Assets, free and
clear of any and all Encumbrances other than the Permitted Encumbrances. As of a
date no later than 180 days after the Closing Date, and assuming the LLC does
not grant any encumbrance or transfer of its interest in the Lease-Purchase
Assets, the LLC shall have good, valid and marketable title to all of the Lease-
Purchase Assets, free and clear of any and all Encumbrances. After the Closing,
no Permitted Encumbrance will interfere with the conduct of the Acquired
Business as presently conducted by the Company. As of the date of this
Agreement, the Company owns all the personal property reflected on the Interim
Balance Sheet, and as of the Closing Date the LLC shall own all the personal
property reflected on the Interim Balance Sheet, other than the Excluded Assets.
(c) Possession. As of the date of this Agreement, all tangible assets
----------
of the Company are on the Company Premises, in its possession and control, and
as of the Closing Date all such tangible assets other than the Excluded Assets
shall have been assigned to the LLC and be in the LLC's possession and control.
Except as described in the Disclosure Memorandum and subject to the security
interests of the Banks, no one else has any right, title or interest in any
property or asset now used or proposed to be used by the Company in the Acquired
Business.
(d) All Necessary Assets. The assets of the Company other than the
--------------------
Excluded Assets, together with the Asset Interests and the licensed image/item
processing technology assigned to the LLC, are all the assets necessary for the
conduct of the Acquired Business after the Closing in the same manner as it has
been conducted since January 1, 1999 and as presently conducted and all such
assets (other than the Excluded Assets) are in the possession of the Company as
of the date of this Agreement and shall be in the possession of and owned by the
LLC as of the Closing Date.
(e) Condition. The assets of the Company that constitute tangible
---------
personal property (other than the Excluded Assets, and collectively, the
"Company Properties") are in good condition and repair, in satisfactory working
------------------
order, and are suitable for their respective present uses. To the best knowledge
of the Company or Shareholder, the premises leased by the Company are
structurally sound with no known defects.
(f) Compliance. The Company Properties and the existing and prior
----------
uses thereof are in compliance in all material respects with all applicable
Rules.
(g) Real Property. The Company does not own any real property.
-------------
12
(h) No Subsidiaries or Interests in Other Persons. Except as set
---------------------------------------------
forth in the Disclosure Memorandum, neither the Company nor the LLC has any
Subsidiaries nor owns, either legally or beneficially, directly or indirectly,
any participating interest in any corporation, partnership, limited liability
company, trust, joint venture, association or other commercial company or
business entity.
4.10 Suppliers and Customers. The Disclosure Memorandum contains a list
-----------------------
of each supplier of goods or services to the Company to whom the Company paid in
the aggregate more than $120,000 during the 12-month period ended October 31,
2000, together with the amount paid during such period. The Disclosure
Memorandum contains a list of each customer of the Company to whom the Company
billed in the aggregate more than $120,000 during the 12-month period ended
October 31, 2000, together with the amount billed during this period. Except as
set forth in the Disclosure Memorandum, there are no significant disputes
between the Company (or any of the Company's employees or representatives) and
any of the Company's significant suppliers, customers or others having business
with the Company. Neither the consummation of the Contemplated Transactions, nor
any other event, including the passage of time, will have any material adverse
effect on the business relationship of the Company or, following the Asset
Transfer, the LLC, with any such supplier or customer.
4.11 Trade Secret and Employment Claims. To the best knowledge of the
----------------------------------
Company or Shareholder, no third party has claimed that the Company, the LLC, or
Shareholder, or any director, officer, manager, employee or agent of the
Company, the LLC, or Shareholder, in respect of activities on behalf of the
Company or the LLC or in respect of the operations of the Acquired Business to
date has (i) violated any of the terms or conditions of any employment contract
with a third party, (ii) infringed any patent, trademark or copyright of a third
party, (iii) disclosed or used any trade secrets or proprietary information or
documentation of such third party, or (iv) interfered in the employment
relationship between a third party and any of his or its employees; nor has any
such violation, disclosure, use or interference occurred.
4.12 Intellectual Property.
---------------------
(a) Neither the Company nor the LLC has infringed upon any patent,
service xxxx, trade name, trademark, copyright, trade secret or other
intellectual property belonging to any other Person; and neither the Company nor
the LLC has agreed to indemnify any Person for or against any infringement of or
by the intellectual property set forth in the Disclosure Memorandum. To the best
knowledge of the Company and Shareholder, no person is infringing upon any of
the Company's or the LLC's patents, patent applications, trade names,
trademarks, service marks, trademark and service xxxx registrations, licenses,
copyrights, computer software or other intellectual property.
(b) The SOLV/MICROSOLV computer programs and the licensed
image/items processing technology are the only material computer software
required to conduct the Acquired Business as presently conducted by the Company.
13
4.13 Contracts. The Disclosure Memorandum sets forth a list of all
---------
Company Contracts relating to the Acquired Business that involve the payment or
receipt of more than $120,000 annually. Except as set forth in the Disclosure
Memorandum:
(a) Each of such Company Contracts is in full force and effect and
constitutes a binding obligation of all parties thereto, enforceable in
accordance with its terms; the officers of the Company have not received oral or
written notice of the termination of any such Company Contract, no such Company
Contract has been canceled or otherwise terminated, and there is no threat to do
so; furthermore, no employee of the Company has received written notice of the
cancellation or termination of any Company Contract.
(b) There are no existing defaults or events of default, real or
claimed, or existing events (including the Asset Transfer and the sale of the
LLC Interests) which with notice or lapse of time or both would constitute
defaults under any such Company Contract.
(c) Except for the Lenexa, Kansas lease for the premises located
on College Boulevard in Lenexa, Kansas, which is not part of the Acquired
Business, there are no Company Contracts relating to the Acquired Business or
the assets of the Company or the LLC with Shareholder or any member, manager,
director or officer of Shareholder, the Company, or the LLC, or with any person
related to any such person or with any company or other organization in which
Shareholder, the Company, or the LLC, or any director or officer of Shareholder,
the Company, or the LLC or anyone related to any such person, has a direct or
indirect financial interest.
(d) Neither the Company, the LLC, nor Shareholder is subject to
any contract or agreement: (i) that contains covenants limiting the freedom of
the Company or the LLC to compete in any line of business in any geographic
area; (ii) that requires the Company or the LLC to share any profits, or
requiring any payments or other distributions based on profits, revenues or cash
flows; (iii) pursuant to which third parties have been provided with products
that can be returned to the Company or the LLC in the event they are not sold
and which could involve products valued at $25,000 or more (invoice price) in
the aggregate; or (iv) that has had or, assuming that the LLC complies with its
obligations thereunder, may in the future have a material adverse effect upon
the business, earnings, financial condition, or prospects of the Company or the
LLC.
4.14 Leases. The Disclosure Memorandum contains a complete and accurate
------
list of all leases (including any capital leases) and lease-purchase
arrangements that relate to the Acquired Business pursuant to which the Company
or the LLC leases real or personal property from others and which (i) require
the Company or the LLC to pay more than $120,000 in any single year, or (ii)
provide for a purchase option for a price of more than $50,000. The Company's or
LLC's possession of such property has not been disturbed, nor has any claim been
asserted against the Company or the LLC adverse to its rights in such leasehold
interests. All Company Premises are listed in the Disclosure Memorandum. All
leases that are required to be capitalized by the Accounting Standards have been
so accounted for in the Interim Financial Statements, and such leases are
identified as capital leases in the Disclosure Memorandum.
14
4.15 Permits. As of the date of this Agreement, the Company holds free
-------
and clear all permits, licenses, franchises and authorizations from governmental
and regulatory authorities as are necessary to conduct the Acquired Business
(the "Company Permits"), all of which Company Permits are listed in the
---------------
Disclosure Memorandum, and Shareholder knows of no reason why the LLC could not
obtain the same permits, licenses, franchises and authorizations from
governmental and regulatory authorities as the Company Permits. No event,
including the LLC Assignment and Assumption, has occurred or is expected to
occur that allows (nor after notice or lapse of time or both would allow)
revocation or termination of any Company Permit or would result in any other
impairment of the rights of the holder of any Company Permit.
4.16 Labor Matters.
-------------
(a) The Company and the LLC are in compliance with all Rules
respecting employment and employment practices, terms and conditions of
employment, wages and hours.
(b) Neither the Company nor the LLC is nor has been engaged in any
unfair labor practice, and no unfair labor practice complaints against the
Company or the LLC are pending before the National Labor Relations Board or
similar authority. There are no labor strikes or other labor trouble actually
pending, being threatened against, or affecting the Company or the LLC or the
Acquired Business; relations between management and labor are amicable; and
there have not been, nor are there presently, any attempts or plans to organize
the Company's or the LLC's employees.
(c) There is no agreement, arrangement or understanding between
the Company and any trade union, any representative of any trade union or any
bargaining unit in respect of any of the Employees.
4.17 Employees.
---------
(a) The Disclosure Memorandum sets forth as to each Employee: his
or her name, the location of employment, the date on which he or she was hired,
the basic weekly or hourly rate of pay (separately listing any bonus), a true
and correct estimate of each of the Employee's accrued sick leave entitlement up
to the Closing Date, a true and correct estimate of each of the Employee's
accrued vacation up to the Closing Date, and a true and correct estimate of all
other benefits, including sales commissions accrued, actually or contingently
accruing to any Employee as of the Closing Date.
(b) The Disclosure Memorandum sets forth as to each officer or
other manager of the Company, the information described in subsection (a) above,
as well as the current compensation rate (salary, bonus, commission or other)
for each such person.
(c) All the items described in the preceding subsections (a) and
(b) have been accrued as liabilities of the Company as at the Closing Date, and
shall be the responsibility of Shareholder and the Company to satisfy in full as
of the Closing Date.
15
(d) Except as set forth in the Disclosure Memorandum, neither the
Company nor the LLC has entered into any agreement with any Employee, for a
fixed term or otherwise.
(e) Since December 31, 1999, all Employees have received normal
raises (subject to normal performance criteria), no Employee has received an
abnormal raise, and all remuneration for shift, weekend and/or casual work has
been negotiated and agreed upon with the applicable employees on a case-by-case
basis.
(f) During the last two years no significant accident or injury to
an employee has occurred at the Company Premises.
(g) To the best knowledge of the Company or Shareholder, each
Employee will become an employee of the LLC, and no Employee will voluntarily
leave the LLC in connection with the Asset Transfer or the transfer of the LLC
Interests to InterCept hereunder.
(h) The Company has made available to InterCept all employment
records for each Employee.
4.18 Employee Benefit Plans and Arrangements.
---------------------------------------
(a) List of Plans and Obligations. The Disclosure Memorandum sets
-----------------------------
forth a complete and accurate list and description of all plans, arrangements,
agreements, commitments, promises and other obligations of the Company or the
LLC, including but not limited to pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
sick leave without compensation, bonus and other incentive plans, every medical,
vision, dental and other health plan, every life insurance plan and every other
written or unwritten employee program, arrangement, agreement or understanding,
commitment or method of contribution or compensation, whether formal or
informal, whether funded or unfunded and other obligations under which the
Company or the LLC has been, is or will be obligated to provide benefits to any
current or former Employee, retiree, director, independent contractor,
shareholder, officer, consultant or other beneficiary, or dependent, spouse or
other family member or beneficiary of such Employee, retiree, director,
independent contractor, shareholder, officer, consultant or other beneficiary,
of the Company or the LLC whether during their employment with the Company or
the LLC or after the termination of such employment (the "Plans" and the
-----
"Beneficiaries", respectively).
-------------
(b) Compliance. All of the Plans have been maintained, funded and
----------
administered in compliance, in all respects, with all Rules, including but not
limited to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Internal Revenue Code of 1986, as amended, and all
-----
regulations and rulings related thereto. There are no penalties, interest or
Taxes related to the Plans due to any federal or state authority.
(c) No Liabilities or Obligations. Except as reflected on the
-----------------------------
Interim Balance Sheet, or as otherwise set forth on the Disclosure Memorandum,
neither the Company nor the LLC has any liabilities or obligations to any
Beneficiaries, governmental authorities or any other
16
parties arising out of or relating to the Plans. All obligations pursuant to the
Plans are the obligation of Shareholder.
(d) No Payments. The consummation of the Contemplated Transactions
-----------
will not (i) entitle any Beneficiary to any severance pay, unemployment
compensation or any other payment contingent upon a change in control or
ownership of the Company, the LLC, or either of their assets or (ii) accelerate
the time of payment or vesting or increase the amount of any compensation or
benefit due to any Beneficiary.
(e) No Multi-Employer Plans. None of the Plans is a multi-employer
-----------------------
plan, as defined in Section 3(37) of ERISA.
4.19 Environmental Matters.
---------------------
(a) Neither the Company, the LLC, nor Shareholder has been at any
time in, and no condition or event has occurred in relation to the Acquired
Business which with notice or the passage of time or both would constitute a,
violation or contravention of any Environmental Law or any licenses, approvals,
consents, permissions or permits issued under any Environmental Law.
(b) The Company Premises are not contaminated nor are they in such
condition as to justify or lead any government or semi-government body to issue
any notice, direction or order requiring clean-up, decontamination, remedial
action or making good under any Environmental Law.
(c) There are no circumstances whatsoever affecting the Company
Premises or the Acquired Business or operations conducted by or on behalf of the
Company or the LLC in connection with the Acquired Business which may give rise
to a claim by any third party arising from property damage or personal injury or
death caused by any Hazardous Material of whatever nature caused or contributed
to in whole or in part by the Company or the LLC or the Company Premises, or the
operations or business of the Company or the LLC.
(d) Except as set forth in the Disclosure Memorandum: (i) there
are no Hazardous Materials in, on or under the Company Premises; (ii) there are
no current and there have not been any past releases of Hazardous Materials from
or onto the Company Premises that are or were subject to regulation under any
Environmental Law, or that may make the Company, the LLC, or InterCept subject
to an action under any Rule, or liable in tort or under a common law public or
private nuisance action; and (iii) the Company Premises and all activities
conducted thereon have complied with all applicable Environmental Laws. Neither
the Company, the LLC, nor anyone related to the Company or the LLC, directly or
indirectly, has indemnified any other party with respect to transportation,
storage or use of Hazardous Materials.
(e) Neither the Company nor the LLC is obligated to obtain any
license or other authorization from any governmental, local or other relevant
authorities or agencies under the Environmental Laws in relation to the carrying
on of the Acquired Business.
17
(f) Except as set forth in the Disclosure Memorandum, to the best
knowledge of Shareholder, no building or other improvement on the Company
Premises contains any asbestos-containing materials.
(g) Except as set forth in the Disclosure Memorandum, to the best
knowledge of Shareholder, the Company Premises do not contain any PCBs in any
form.
4.20 Events After December 31, 1999. Except as set forth in the
------------------------------
Disclosure Memorandum, since December 31, 1999, the Company has conducted its
business only in the ordinary course, consistent with reasonable past practices
and the Company has not:
(a) suffered any property or casualty loss, or waived any right;
(b) except as provided to InterCept prior to the date of this
Agreement, made any changes in the compensation of, or paid any bonus to, or
modified any contractual arrangement with, any director, officer or employee, or
increased (or announced any increase in) any bonus, insurance, pension or other
employee benefit plan, payment or arrangement, or entered into or amended any
employment, consulting, severance or similar agreement;
(c) except as provided to InterCept prior to the date of this
Agreement, made any changes in other employee compensation, or paid any other
bonus, except in the ordinary course of business and consistent with reasonable
past practice;
(d) lost a major customer or vendor, suffered a deterioration in
any of its other significant relationships, or experienced any other material
adverse change in any aspect of the Acquired Business or in its prospects;
(e) made any sales on terms (including but not limited to
discounts, extended payment terms and other incentives) inconsistent with
reasonable prior practices;
(f) realized an asset or reduced a liability related to a
transaction with a customer or supplier that was not authorized by the customer
or supplier;
(g) failed to maintain the annual financial statements of the
Company and its related books of account in accordance with the Accounting
Standards;
(h) sold, assigned, transferred or encumbered any of its assets or
affected the carrying value of any its liabilities, including without limitation
any commercial agreements, or entered into any arrangement to purchase assets
and/or assume liabilities (except in each case as required in the ordinary
course of business);
(i) paid, discharged, satisfied or renewed any claim, liability or
obligation other than payment in the ordinary course of business and consistent
with reasonable past practice;
18
(j) made any distribution or declared or paid any dividends to any
shareholder, received any capital contribution, or redeemed, purchased or
otherwise acquired any shares;
(k) except for inter-company working capital requirements, made
any payment of cash or any transfer of other assets, to any shareholder or
Affiliate thereof, or paid, loaned, advanced, sold, transferred or leased any
asset to any employee, except for normal compensation involving salary and
benefits;
(l) failed to maintain its material assets and fulfill all
material contractual obligations in accordance with their respective terms;
(m) failed to manage working capital components (including cash,
receivables, other current assets, trade payables and other current liabilities)
in a fashion consistent with reasonable past practice, including failing to sell
inventory and other property in an orderly and prudent manner or failing to make
all budgeted and other normal capital expenditures, repairs, improvements and
dispositions;
(n) failed to use commercially reasonable efforts to increase its
sales in a profitable manner, enhance its financial position, address market
changes, preserve its business, keep available the services of its present
employees, and preserve the goodwill of its customers, suppliers and others
having business relations with it; or
(o) agreed to take any action described in this Section 4.20.
4.21 Copies Provided to InterCept. Except for copies that do not exist
----------------------------
or cannot be located using commercially reasonable efforts, the Company has
given InterCept true, correct and complete copies of each of the contracts,
agreements, instruments and other documents listed in the Disclosure Memorandum.
The Company will use commercially reasonable efforts to provide InterCept true,
correct and complete copies of each of the Company Contracts prior to Closing.
4.22 Brokers. No broker or finder has acted on behalf of the Company, the
-------
LLC, or Shareholder in connection with this Agreement and the Contemplated
Transactions, and neither the Company, the LLC, nor Shareholder has made any
other agreement to pay any agent, finder, broker or any other representative any
fee or commission in the nature of a finder's or originator's fee arising out of
or in connection with the subject matter of this Agreement; provided that, if
such an agreement to pay has been made, any obligations of the Company, the LLC,
or Shareholder thereunder shall be the sole obligation of Shareholder; provided
further, InterCept shall pay Xxxxxxxxx Xxxxxxxx a fee of upon the execution of
this Agreement and upon the closing of the Contemplated Transactions.
4.23 Adverse Information. The Company and Shareholder have disclosed to
-------------------
InterCept all significant conditions, facts or circumstances that have occurred
since November 1998 that have had or reasonably could be expected to have a
material adverse effect on the value of the assets of the Company or the LLC or
the value of the Acquired Business to InterCept.
19
4.24 Other Information. No representation or warranty made by Shareholder
-----------------
or the Company in this Agreement, the Disclosure Memorandum or any other
document or instrument furnished to InterCept in connection with the
Contemplated Transactions contains any untrue statement or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading.
4.25 Assets of LLC. Disclosure Memorandum Schedule 4.9(a) contains a
------------- ---------------
true, complete and correct list of all assets being assigned to the LLC. The
lists of Customer Contracts, Data Center Leases and Rental Contracts-Non Buyout
included in Disclosure Memorandum Schedule 4.9(a) are all the Company Contracts
---------------
being assumed by the LLC from the Company.
4.26 Access to Information. The Company and Shareholder acknowledge and
---------------------
represent that all documents, records, and books pertaining to InterCept
requested by the Company or Shareholder have been made available for inspection
by the Company and Shareholder. The Company, Shareholder and their advisors have
had an opportunity to ask questions of and receive answers from the officers of
InterCept concerning the terms and conditions of the offering of the Common
Stock and to obtain additional information from the officers of InterCept. All
such questions have been answered to the full satisfaction of the Company and
Shareholder. Specifically, and without limitation, the Company and Shareholder
acknowledge that InterCept has in the past provided significant funding to
Netzee, Inc. and may continue to do so for the foreseeable future.
4.27 Statements. The Company and Shareholder acknowledge that, from time
----------
to time, persons not authorized by InterCept may make statements about
InterCept, in writing or otherwise, that may purport to contain information
about InterCept, including in newspaper articles, internet chat rooms and other
publications and communications, and that such statements may have been and may
be materially incorrect or misleading. The Company and Shareholder agree that
neither InterCept nor any of its Affiliates or representatives has made any
representation or warranty as to the accuracy or completeness of any such
information or statements. Furthermore, the Company and Shareholder have not
relied, and will not rely, upon any such statements in making any investment
decision in connection with the Common Stock; rather, the only representations
or statements that the Company and Shareholder have relied upon or will rely
upon are those made by InterCept in this Agreement.
4.28 Experience; Investment. The Company and Shareholder have such
----------------------
knowledge and experience in financial and business matters as to enable the
Company and Shareholder (a) to utilize the information made available to them in
connection with the offering of the Common Stock, (b) to evaluate the merits and
risks associated with a purchase of the Common Stock, and (c) to make an
informed decision with respect thereto. The Company's and Shareholder's business
and financial experience is such that InterCept could reasonably assume that the
Company and Shareholder have the capacity to protect their own interests in
connection with the offer, sale and issuance of the Common Stock. The Company
and Shareholder are financially capable of bearing the risk of loss of any and
all consideration paid for the Common Stock, and acknowledge that an investment
in the Common Stock involves a high degree of risk, and the
20
consideration for the Common Stock has been determined by negotiation between
InterCept and the Company and Shareholder and may not be indicative of the
future value of the securities. The Company and Shareholder are acquiring the
Common Stock for the Company's account, and not with a view to, or for sale in
connection with, any distribution thereof. The Company and Shareholder
understand that the Common Stock has not been registered under the Securities
Act, or any state securities laws, by reason of specific exemptions from the
registration provisions of the Securities Act and such laws that may depend
upon, among other things, the bona fide nature of the Company's and
Shareholder's investment intent as expressed herein. Each of the Company and
Shareholder is an "accredited investor" within the meaning of Regulation D
promulgated by the Securities and Exchange Commission (the "SEC") under the
---
Securities Act. The Company and Shareholder acknowledge that InterCept and its
officers, directors, and other Affiliates will rely upon the representations and
warranties made by the Company and Shareholder in this Agreement in order to
establish an exemption from the registration requirements of the Securities Act
and applicable state securities laws and that InterCept shall place legends on
the Common Stock and stop transfer instructions on its books to reflect that the
Common Stock has not been registered under the Securities Act and applicable
state laws.
4.29 Transfer. Shareholder will not transfer any Common Stock without
--------
registration under the Securities Act and applicable state securities laws
unless the transfer is exempt from registration under the Securities Act and
such laws and is made in compliance with the restrictive legends to be placed on
the Common Stock; and in the case of any exemption, Shareholder may only
transfer the Common Stock if InterCept has received an opinion of counsel
reasonably satisfactory to InterCept that such transaction does not require
registration of the Common Stock.
4.30 Notice. Shareholder agrees to provide InterCept written notice within
------
two business days following receipt of oral or written notice from any
shareholder of Shareholder threatening a suit, investigation, action or other
proceeding of the nature described in Section 9.2.
4.31 Software.
--------
(a) Shareholder represents and warrants that it owns all right, title,
and interest, including copyright, in and to that certain computer program,
including all past and current versions and releases thereof, in the Asset
Interests and that all personnel, including employees, agents, consultants and
contractors, who have contributed to or participated in the conception and
development of the Asset Interests either (1) have been party to a for-hire
relationship with Shareholder that has accorded Shareholder full, effective and
exclusive original ownership of all tangible and intangible property thereby
arising with respect to the Asset Interests or (2) have executed appropriate
instruments of assignment in favor of Shareholder as assignee that have conveyed
to Shareholder full, effective, and exclusive ownership of all tangible and
intangible property thereby arising with respect to the Asset Interests.
Shareholder further represents and warrants that the Asset Interests contain no
software components in which any third party may claim superior or joint
ownership and that no part of the Asset Interests is a derivative work of any
other software programs not owned in their entirety by Shareholder.
(b) Shareholder represents and warrants that Shareholder has granted
use rights in the Asset Interests in the United States to third parties solely
through Shareholder's or
21
the Company's outsourced core banking services and pursuant to certain
nonexclusive End-User Agreements that will be listed in an attachment to the
Software Agreement. Shareholder represents and warrants that each End-User
Agreement that is in effect grants the licensee thereunder solely the
nonexclusive right and license to use the Asset Interests, for internal purposes
only, on a single central processing unit; that each End-User Agreement provides
only for rendering of services (including warranty coverage, maintenance, and
support) that, to the extent required to have been performed as of the Effective
Date, have been performed in full.
(c) Shareholder represents and warrants that it has legal power to
extend the rights granted by Shareholder to InterCept in this Agreement with
respect to the Asset Interests and that it has not made and will not make any
commitments to others inconsistent with or in derogation of such rights. Subject
to the security interests granted in favor of the Banks, Shareholder furthermore
represents and warrants that no consent, approval or withholding of objection is
required from any third party or governmental authority with respect to the
entering into or performance of this Agreement.
(d) Shareholder represents and warrants that there are no actions,
suits or proceedings, pending or threatened, relating to Shareholder's ownership
and/or exploitation of the Asset Interests and that there are no actions, suits
or proceedings that will have a material adverse effect on Shareholder's ability
to fulfill its obligations under this Agreement. Shareholder represents and
warrants that InterCept's distribution and use of the Asset Interests in
accordance with the Agreement will not infringe any patent, trademark, copyright
or other proprietary right of any third party.
(e) Shareholder shall submit a registration application to register
its copyright in the Asset Interests with the United States Copyright Office
prior to the Closing Date.
4.32 Employees. The employees designated by InterCept pursuant to Section
---------
7.21 shall be employees of the LLC as of the Closing Date.
4.33 Insurance Policies. The Disclosure Memorandum sets forth a complete
------------------
and accurate list and description of all insurance policies in force naming the
Company, or any employees thereof in their capacity as such, as an insured or
beneficiary or as a loss payable payee, or for which the Company has paid or is
obligated to pay all or part of the premiums. As of the Closing Date, all such
insurance policies will be assigned to the LLC (if requested by InterCept), and
the LLC has replaced the Company as loss payable payee on each such policy.
Neither the Company nor the LLC has received notice of any pending or threatened
termination or premium increase (retroactive or otherwise) with respect thereto,
and the Company and the LLC are in compliance with all conditions contained
therein. There have been no lapses (whether cured or not) in the coverage
provided under the insurance policies, referenced herein and as set forth in the
Disclosure Memorandum.
4.34 Intention. Neither the Company nor Shareholder has entered into this
---------
Agreement or agreed to complete the Contemplated Transactions with the actual
intent to hinder, delay, or defraud any creditor.
22
4.35 Value of Assets. Each of the Company and Shareholder has received
---------------
reasonably equivalent value in exchange for the obligations to be undertaken
pursuant to the Contemplated Transactions. Giving effect to the Contemplated
Transactions, the fair market value of the Company's assets exceeds the
Company's total liabilities, whether accrued, absolute, contingent or otherwise.
Giving effect to the Contemplated Transactions, the fair market value of
Shareholder's assets exceeds Shareholder's total liabilities, whether accrued,
absolute, contingent or otherwise. The Company's assets do not and, immediately
following the Contemplated Transactions, will not, constitute unreasonably small
capital to carry out the Company's business as conducted or as proposed to be
conducted. Shareholder's assets do not and, immediately following the
Contemplated Transactions, will not, constitute unreasonably small capital to
carry out Shareholder's business as conducted or as proposed to be conducted.
4.36 Debt. The Company does not intend to, and does not believe that it
----
will, incur debt or liabilities (including contingent liabilities and other
commitments) beyond its ability to pay such debt or liabilities as they mature.
Shareholder does not intend to, and does not believe that it will, incur debt or
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt or liabilities as they mature.
4.37 No Bankruptcy. Except as set forth in the Disclosure Memorandum, no
-------------
petition in bankruptcy has been filed against either the Company, Shareholder or
any Affiliate of either of them during the last seven years, and neither the
Company, Shareholder nor any Affiliate of either of them in the last seven years
has ever made an assignment for the benefit of creditors or taken advantage of
any insolvency act for the benefit of debtors. Neither the Company, Shareholder
nor any Affiliate of either of them is contemplating the filing of a petition by
it under any state or federal bankruptcy or insolvency laws. Neither the Company
nor Shareholder has any knowledge of any person contemplating the filing of any
such petition against it or an Affiliate.
4.38 Business. Upon the Closing of the Contemplated Transactions, except
--------
for existing obligations pursuant its EC Street software contracts retained by
the Company, the Company has no plans to sell, license, or service any products
or services.
4.39 Payables. Disclosure Memorandum Schedule 4.39 contains a current
-------- -------------
listing of the accounts payable of the Company that is true and correct in all
material respects.
4.40 Final Financials. Except as set forth in the Disclosure Memorandum or
----------------
arising in the ordinary course of business, there shall have been no material
change in the Final Financials from their date to the date of Closing.
Section 5. Representations and Warranties of InterCept
To induce Shareholder and the Company to execute, deliver and perform this
Agreement, and in acknowledgement of Shareholder's and the Company's reliance on
the following Warranties, InterCept hereby and represents and warrants to
Shareholder and Company as follows as of the date hereof and as of the Closing:
23
5.1 Organization and Authority.
--------------------------
(a) InterCept is a publicly traded corporation trading on the Nasdaq
Stock Market, and, to InterCept's best knowledge, is not in default with respect
to any of Nasdaq's listing requirements. InterCept is a corporation duly
organized and validly existing under the laws of the State of Georgia and has
all requisite power and authority, corporate or otherwise, to carry on and
conduct its business as it is now being conducted and to own or lease its
properties and assets.
(b) InterCept has not been and is not now (i) subject to any
insolvency related procedure in respect of part or all of its assets, or (ii)
involuntarily liquidated.
(c) The execution, delivery and performance of this Agreement, and the
consummation of the Contemplated Transactions, have been duly and validly
authorized by all necessary action, corporate or otherwise, on the part of
InterCept required to take such action and will not, with the giving of notice
or the lapse of time, or both (i) violate or conflict with any of the provisions
of any its Charter Document; (ii) violate, conflict with or result in a breach
or default under or cause termination of any term or condition of any mortgage,
indenture, contract, license, permit, instrument, trust document, or other
agreement, document or instrument to which InterCept is a party or by which
InterCept or any of its properties may be bound; (iii) violate any Rule; or (iv)
result in the creation or imposition of any Encumbrance upon any asset of
InterCept.
5.2 Compliance With Law. InterCept has not violated any order of any
-------------------
court, governmental authority, arbitration board or tribunal to which it is or
was subject, nor is InterCept in violation of any Rule the violation of which
would have a material adverse effect on InterCept, the Contemplated
Transactions, or InterCept's Business. This Agreement has been duly and validly
executed and delivered by InterCept and constitutes InterCept's legal, valid and
binding obligation, enforceable in accordance with its terms. Except for
approval and consents from applicable governmental authorities, First Union Bank
and InterCept's Board of Directors (which approval has been obtained), InterCept
is not required to obtain the consent, approval, authorization or estoppel of
any other Person to authorize and permit the Contemplated Transactions.
5.3 Outstanding Stock. The authorized capital of InterCept consists of
-----------------
50,000,000 shares of Common Stock, of which 13,197,273 shares are issued and
outstanding, and 1,000,000 shares of preferred stock, none of which are issued
and outstanding. InterCept has and will continue to have at all times until the
Closing Date a sufficient number of authorized but unissued shares of Common
Stock to be able to issue the Share Payment to Shareholder. The Share Payment
when issued pursuant to the terms hereof will be duly authorized, validly issued
and outstanding, fully paid and non-assessable and shall constitute less than
10% of the issued and outstanding Common Stock.
5.4 Ontario Residents. At the time of the issue of the Share Payment,
-----------------
after giving effect to the issue of the Share Payment, persons or companies
whose last address was in
24
Ontario, as shown on the books of Intercept maintained by InterCept's transfer
agent, and who held Common Stock:
(a) will not represent in number more than 10 percent of the total
number of holders of Common Stock; and
(b) will not hold more than 10 percent of the outstanding Common
Stock.
5.5 No Undisclosed Liabilities. Except as and to the extent reflected
--------------------------
and adequately reserved against on InterCept's financial statements filed in its
Form 10-Q for the three months ended September 30, 2000, as of the date thereof,
InterCept had no material liabilities or obligations whatsoever, whether
accrued, absolute, contingent or otherwise. Since the date of this Agreement,
InterCept has not incurred any material liability or obligation whatsoever,
except for liabilities and obligations incurred by InterCept in the ordinary
course of its business consistent with reasonable past practice.
5.6 Litigation There is no action, suit, investigation or proceeding
----------
pending or, to InterCept's best knowledge, threatened against or affecting
InterCept or the assets of InterCept before any court or by or before any
governmental body or arbitration board or tribunal that would have a material
adverse affect on InterCept's Business as a whole, nor, to the best knowledge of
InterCept, is there a basis for any such action, suit, investigation or
proceeding.
5.7 Regulatory Filings. No final registration statement, prospectus,
------------------
report, proxy statement or other document filed with the SEC pursuant to the
Securities Act or Securities Exchange Act, as of the time of filing, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading as of the date of filing. InterCept has filed all documents required
to be filed with the SEC on a timely basis. InterCept is a reporting issuer
within the meaning of the Securities Act of Ontario. InterCept is not required
to be listed on the Toronto Stock Exchange.
5.8 Brokers. No broker or finder has acted on behalf of InterCept in
-------
connection with this Agreement and the Contemplated Transactions, and InterCept
has not made any other agreement to pay any agent, finder, broker or any other
representative any fee or commission in the nature of a finder's or originator's
fee arising out of or in connection with the subject matter of this Agreement;
provided, InterCept shall pay Xxxxxxxxx Xxxxxxxx a fee of upon the execution of
this Agreement and upon the closing of the Contemplated Transactions.
5.9 Investment Representations. InterCept has had the opportunity to
--------------------------
ask questions of and receive answers from Shareholder and to obtain additional
information concerning the Company that InterCept deems relevant with respect to
the purchase of the LLC Interests contemplated in this Agreement.
5.10 Other Information. No representation or warranty made by InterCept
-----------------
in this Agreement or any other document or instrument furnished to Shareholder
in connection with the
25
Contemplated Transactions, contains any untrue statement or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading.
Section 6. Conduct of Business Prior to Closing
Pending the Closing and the completion of the Contemplated Transactions,
Shareholder will insure the Company operates and conducts the Acquired Business
diligently and only in accordance with reasonable prior practices. Pursuant
thereto and not in limitation of the foregoing:
6.1 Financial Position. Shareholder and the Company agree to use their
------------------
commercially reasonable efforts to enhance the Company's financial position, and
use commercially reasonable efforts to increase the Company's sales in a
profitable manner.
6.2 Working Capital. Shareholder and the Company shall manage the
---------------
Company's working capital in a manner consistent with reasonable past practices.
6.3 Maintenance of Assets and Business. The Company shall maintain its
----------------------------------
assets in their present state of repair (ordinary wear and tear excepted), shall
use its commercially reasonable efforts to keep available the services of its
employees, continue to fulfill its contractual obligations in accordance with
their respective terms, and preserve the goodwill, if any, of its business and
relationships with the customers, licensors, suppliers, distributors and brokers
with whom it has business relations. The Company shall continue to operate its
business in the fashion it was operated in prior to the date of this Agreement.
6.4 Notice of Disputes. Shareholder shall promptly advise the Designated
------------------
Official of the details of any disputes, claims, actions, suits or proceedings
pertaining to or which might otherwise materially and adversely affecting the
Acquired Business, affairs, assets or contracts.
6.5 Asset Transfer. On or prior to the Closing, the Company shall have
--------------
granted good, valid and marketable title to its assets (other than the Excluded
Assets) to the LLC and shall have retained or satisfied in full all liabilities
of the Company (other than the Assumed Obligations and post-Closing obligations
contained in this Agreement).
6.6 Company Financial Statements. Following the Closing, Shareholder
----------------------------
shall use its commercially reasonable efforts, including without limitation,
making Shareholder's accounting personnel available to assist in the audit of
the financial statements of the Company and/or the LLC as required by the SEC.
6.7 Bank Consents. Shareholder agrees to use its best efforts to obtain
-------------
the Bank Consents, including without limitation, agreeing to pay, if required,
any indebtedness owed by the Company, Shareholder or the LLC to the Banks as of
the Closing Date.
6.8 No Action Without Consent. The Company agrees to consult with the
-------------------------
Designated Official in writing with respect to any material agreement,
arrangement or divestiture of the Company or the LLC. Neither the Company nor
the LLC shall take any of the following actions after the date of this Agreement
without the prior written consent of the Designated Official:
26
(a) dispose of any assets of the Company or the LLC except for assets
with a value of less than $500,000 that are disposed of in the ordinary course
of business consistent with reasonable past practices;
(b) subject any asset of the Company or the LLC to an Encumb rance,
except as paid off at Closing;
(c) purchase or commit to purchase any capital asset except in the
ordinary course of business consistent with reasonable past practices;
(d) enter into or modify any contractual arrangement with directors,
officers, managers, employees or consultants, except as provided in the ordinary
course of business;
(e) increase or announce any increase of any salaries, wages or
benefits for directors, officers, managers or employees (except as required in
the ordinary course of business; such as anniversary date salary or wage
increases consistent with reasonable past practice), or hire, commit to hire or
terminate any employee;
(f) amend any of its Charter Documents; and
(g) issue, sell or repurchase any of its membership interests, capital
stock, or other equity interests (collectively, "Ownership Interests"), or make
-------------------
any change in its issued and outstanding Ownership Interests, or issue any
warrant, option or other right to purchase any Ownership Interests or any
security convertible into any Ownership Interests, or redeem, purchase or
otherwise acquire any Ownership Interests, or declare or pay any dividends or
make any other distribution with respect to its Ownership Interests.
Section 7. Covenants of the Parties
7.1 Cooperation. The Company and Shareholder, on the one hand, and
-----------
InterCept, on the other hand, shall cooperate fully with each other and their
respective employees, legal counsel, accountants and other representatives and
advisers in connection with the steps required to be taken as part of their
respective obligations under this Agreement; and shall, at any time and from
time to time after the Closing, upon the request of the other, do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney, receipts, acknowledgments, acceptances and assurances as may
be reasonably required to satisfy and perform the obligations of such party
hereunder, and to allow InterCept to operate the Acquired Business after Closing
in substantially the same the manner in which it was operated before the
Closing. After the Closing, InterCept shall cause the LLC to perform and satisfy
the Assumed Obligations.
7.2 Access. Prior to the Closing, the Company shall (i) provide InterCept
------
and its designees (officers, counsel, accountants, actuaries, and other
authorized representatives) with such information as InterCept may from time to
time reasonably request with respect to the Company and the LLC and the
Contemplated Transactions; (ii) provide InterCept and its
27
designees complete access to the books, records, offices, personnel, counsel,
accountants and actuaries of the Company and the LLC during the Company's normal
business hours as InterCept or its designees may from time to time request; and
(iii) permit InterCept and its designees to make such inspections of the Company
Premises and Company Properties during the Company's normal business hours as
InterCept may from time to time request. No such investigation shall limit or
modify in any way the obligations of the Company or Shareholder with respect to
any breach, inaccuracy or untruth of its representations, warranties, covenants
or agreements contained herein.
7.3 Interim Financials. On the business day prior to the Closing Date, the
------------------
Company shall deliver to InterCept a financial report prepared internally by
management and dated as of and for the period ending on October 31, 2000 (the
"Final Financials") including such information as is included in the Interim
----------------
Financial Statements and that includes, without limitation, an unaudited balance
sheet, statement of income, and cash flow statement for the period ending on
that date. Shareholder represents and warrants that as of that date the Final
Financials will be true, complete, and correct in all material respects and
fairly present the financial position of the Company as of the date thereof and
the results of operations of the Company for the period thereof.
7.4 Lease-Purchase Assets. Shareholder and the Company shall be jointly and
---------------------
severally liable to pay all monthly Lease or other payments due under the
Lease-Purchase Assets, until Shareholder or the Company has paid in full for the
Lease-Purchase Assets. Shareholder and the Company represent and warrant that
all amounts due pursuant to the Lease-Purchase Assets shall be paid in full as
of a date no later than 180 days following the Closing Date, so that as of a
date no later than 180 days after the Closing Date, and assuming the LLC does
not grant any encumbrance or transfer of its interest in the Lease-Purchase
Assets, the LLC shall have good, valid and marketable title to all of the
Lease-Purchase Assets, free and clear of any and all Encumbrances.
7.5 Records. Shareholder shall provide to InterCept, as soon as is
-------
reasonably practicable after the Closing, copies of any and all files, records
or other data in its possession or under its control in respect of or relating
to the day to day operations of the Acquired Business.
7.6 Use of Company Name. InterCept shall not change the name of the LLC
-------------------
to a name that is substantially similar to "XXXxxxx.xxx Inc." or "EC-
xxxxxx.xxx".
7.7 Expenses. Subject to Section 2.5 with respect to the application fee
--------
for Xxxx-Xxxxx-Xxxxxx consent, whether or not the expenses are incurred before
or after the Closing, each of the expenses incurred by InterCept, the Company
and Shareholder in connection with the authorization, preparation, execution and
performance of this Agreement or the Asset Transfer, including without
limitation all fees, commissions, and expenses of agents, representatives,
counsel, accountants, investment bankers, brokers and finders, shall be paid by
the party that incurred such expenses, provided that Shareholder shall be
responsible for all such expenses incurred by the Company that accrued on or
prior to the Closing Date. Without limiting the generality of the foregoing,
Shareholder shall be responsible for any expenses of the Company
28
accrued up to and including the Closing Date, including but not limited to
expenses related to agents, representatives, counsel, accountants, investment
bankers, brokers or finders.
7.8 Excluded Assets. InterCept expressly acknowledges and confirms that,
---------------
prior to Closing, the assets of the Company listed on Disclosure Memorandum
Schedule 7.8 (the "Excluded Assets") may be transferred by the Company to
------------ ---------------
Shareholder or to such other entity as Shareholder may direct.
7.9 Tax Matters.
-----------
(a) InterCept and the LLC shall file and control any returns required
to be filed by the LLC after the Closing Date.
(b) Shareholder, on the one hand, and InterCept, on the other hand,
agree to give prompt notice to each other of any proposed adjustment to Taxes
for periods during all or part of which Shareholder or the Company owned the
Acquired Business. Shareholder and InterCept shall cooperate with each other in
the conduct of any Tax audit or other proceedings involving the Company or the
LLC in respect of such periods. In connection with any such audit or other
proceeding InterCept, upon Shareholder's request and at its expense, shall
provide Shareholder copies of all notices, correspondence, demands, assessments
and other documents generated in connection with such audit or other proceeding,
all of which information shall remain subject to Section 7.13 below. Shareholder
shall also have the right to discuss the status of such audit or other
proceeding with InterCept's representatives and, with the prior written consent
of InterCept, with the applicable taxing authorities involved. All of such
activities by Shareholder shall be conducted in a manner so as not to adversely
impact the best interests of the LLC.
(c) Shareholder on the one hand, and InterCept, on the other hand,
agree to furnish or cause to be furnished to each other, upon request, such
information and assistance (including access to books and records) relating to
the Company or the LLC as is reasonably necessary for the preparation of any
return, claim for refund or audit, and the prosecution or defense of any claim,
suit or proceeding relating to any proposed adjustment.
(d) The parties agree that they will treat the valuation of the shares
issued to Shareholder under this Agreement consistently for tax purposes. The
parties shall agree upon an allocation of the total consideration paid for the
U.S. assets comprising the Acquired Business so that each may file the
appropriate Tax returns.
7.10 Survival of Warranties. The respective representations and warranties
----------------------
of the Company, the LLC and Shareholder and InterCept under this Agreement shall
not merge, but will survive the Closing for a period of two years.
7.11 Indemnification.
---------------
(a) By Shareholder and the Company. For a period of two years
------------------------------
following the Closing Date, Shareholder and the Company shall jointly and
severally indemnify, reimburse and hold harmless InterCept, its Affiliates and
any successor or assigns (the "Indemnified Persons")
-------------------
29
for any and all direct or indirect claims, losses, liabilities (actual or
contingent), damages (including special and consequential damages), costs
(including court costs) and expenses (including all attorneys' and accountants'
fees and expenses) (hereinafter a "Loss" or "Losses"), as a result of or in
---- ------
connection with (i) any breach, inaccuracy or untruth of any Warranty or
covenant by Shareholder or the Company contained in this Agreement, whether such
breach, inaccuracy or untruth exists or is made on the date of this Agreement or
as of the Closing, (ii) any litigation, mediation or arbitration involving the
Company, the LLC, Shareholder or the Acquired Business arising from actions
taken or facts existing before the Closing, (iii) any act or omission of the
Company, the LLC, or Shareholder constituting or causing non-compliance on or
after the date hereof with any requirement of applicable Rules, if such act or
omission occurred or arose prior to the Closing; or (iv) any fees, commissions
or expenses of any broker or finder engaged by the Company, the LLC, or
Shareholder in connection with the Contemplated Transactions, provided that
InterCept shall be responsible for any fee paid to Xxxxxxxxx Xxxxxxxx in
connection with this Agreement and provided further that Shareholder and the
Company shall be responsible for any fee paid to National Bank Financial in
connection with this Agreement. Specifically and without limitation, Shareholder
and the Company shall jointly and severally indemnify, reimburse and hold
harmless the Indemnified Persons for any and all Losses due to the failure of
Shareholder (i) to obtain the approval of the shareholders of Shareholder with
respect to the Contemplated Transactions and (ii) to cause the Company to be
liquidated, wound up and dissolved as required under Section 7.26.
(b) By InterCept. For a period of two years following the Closing
------------
Date, InterCept shall indemnify, reimburse and hold harmless Shareholder, its
Affiliates and any successor or assigns (the "SLM Indemnified Persons") for any
-----------------------
and all direct or indirect claims, losses, liabilities (actual or contingent),
damages (including special and consequential damages), costs (including court
costs) and expenses (including all attorneys' and accountants' fees and
expenses) (hereinafter "a Loss" or "Losses"), as a result of or in connection
------ ------
with (i) any breach, inaccuracy or untruth of any Warranty or covenant by
InterCept, whether such breach, inaccuracy or untruth exists or is made on the
date of this Agreement or as of the Closing, or (ii) any fees, commissions or
expenses of any broker or finder engaged by InterCept.
(c) Limitations on Amount. Neither Shareholder, the Company nor
---------------------
InterCept shall have liability (for indemnification or otherwise) to the other
with respect to the matters described in this Section 7.11 unless and until the
total of all damages incurred by either party with respect to such matters
exceeds $700,000, provided, however, that the foregoing limitation shall not
apply to (i) damages payable for Losses, if any, (x) referred to in the last
sentence of Section 7.11(a), (y) arising out of a misrepresentation in Section
4.39 or (z) arising out of a breach of the covenant set forth in Sections 7.25;
or (ii) any matter specifically covered in the Escrow Agreement, which shall be
handled instead as provided in the Escrow Agreement. The maximum exposure and
liability of Shareholder and the Company under the indemnity set forth in this
Section 7.11 shall be restricted to the Escrow Shares, provided that the
limitation on the amount of damages payable for the Losses, if any, referred to
in the last sentence of Section 7.11(a) and for Losses arising out of a
misrepresentation in Section 4.39 shall be $70,000,000 and shall not be
restricted to the Escrow Shares. The maximum exposure and liability of InterCept
to the SLM Indemnified Persons under this indemnity clause shall be restricted
to $1,800,000. However, the provisions of this Section 7.11(c) will not apply to
a fraudulent or
30
intentional breach by any party of any representation or warranty. The
indemnification obligations of Shareholder, the Company and Intercept shall be
subject to the survival limitations set forth in Section 7.10, after which time,
if no Losses have been asserted against a party, then that party shall have no
further liability hereunder.
(d) Notification. Shareholder and InterCept hereby undertake to
------------
notify the other without delay of the occurrence of any event which constitutes
or may with the passage of time constitute an event entitling any Indemnified
Person or SLM Indemnified Person to indemnification under this Section.
(e) Notice of Claim. To seek indemnification hereunder, an
---------------
Indemnified Person or SLM Indemnified Person shall notify Shareholder or
InterCept, as the case may be, of any claim for indemnification, specifying in
reasonable detail the nature of the Loss and the amount or an estimate of the
amount thereof.
(f) Litigation Assumption. The party against whom indemnity is
---------------------
being sought by the Indemnified Person or SLM Indemnified Person, as the case
may be, shall have the right to assume the litigation, defense and settlement,
as the case may be, of a purported Loss which arises from a claim from a third
party and the Indemnified Person or the SLM Indemnified Person shall co-operate
with the party in such litigation, defense and settlement, as the case may be.
(g) No Prejudice. Nothing herein shall prevent an Indemnified
------------
Person from making a claim for a Loss hereunder notwithstanding its knowledge of
the Loss or possibility of the Loss on or prior to the Closing Date, subject to
the good faith obligations of the parties.
7.12 Casualty. Shareholder shall bear the risk of any loss or damage or
--------
destruction to any of the assets of the Company or the LLC from fire or other
casualty or cause at all times prior to the Closing. Upon the occurrence of any
loss or damage to any significant portion of such assets as a result of fire,
casualty, or other causes prior to the Closing, Shareholder shall immediately
notify InterCept of the same in writing, stating with particularity the extent
of loss or damage incurred, the cause thereof, if known, and the extent to which
restoration, replacement, and repair of such assets lost or destroyed will be
reimbursed under any insurance policy with respect thereto. InterCept shall have
the option, but not the obligation, exercisable within 15 days after receipt of
such notice from Shareholder to:
(a) Postpone the Closing until such time as such assets have been
completely repaired, replaced, or restored;
(b) Elect to consummate the Closing and accept such assets in
their "then" condition, in which event the Company shall assign to InterCept all
rights under any insurance claim covering the loss and pay over to InterCept any
proceeds under any such insurance policy theretofore received by the Company
with respect thereto; or
(c) If in the opinion of InterCept, the loss or damage adversely
affects the Acquired Business or the assets taken as a whole, then InterCept may
terminate this Agreement,
31
whereupon this Agreement shall be of no further force or effect and neither the
Company, Shareholder, nor InterCept shall have any further rights, duties, or
obligations hereunder.
7.13 Confidentiality.
---------------
(a) The Company and Shareholder on one hand and InterCept on the
other hand shall hold in confidence all Confidential Information (as defined
below) about the other and shall not make any copies of, distribute, or use any
such Confidential Information except as necessary to prepare for the completion
of the Contemplated Transactions. After the Closing, neither the Company nor
Shareholder on one hand nor InterCept on the other hand shall make any
unauthorized disclosure of Confidential Information about the other. Each such
party, upon the first request in writing from the other, shall return to the
other all Confidential Information in its possession, without retaining any
copies thereof. Notwithstanding the foregoing, either party may disclose
Confidential Information to the extent disclosure is mandated by the legal
requirements of either party, the Toronto Stock Exchange, the Nasdaq Stock
Market, or the SEC, as well as to professional advisors, directors and senior
executives as necessary. This Agreement may also be disclosed to third parties
if reasonably necessary to secure consents or approvals to consummate the
Contemplated Transactions. The parties will cooperate to draft a press release
for the announcement of this Agreement as soon as possible after the execution
of this Agreement by all parties.
(b) As used in this Section 7.13: (i) "Confidential Information"
------------------------
means all information relating to the Acquired Business, InterCept's Business
(current or future), any InterCept Affiliate, Shareholder's Business (current or
future) or any Shareholder's Affiliate, which information is reasonably regarded
as confidential or being information not in the public domain including, without
limitation: all Inventions; technical data; research and development
information; business records, information and notes; products; "know-how";
Trade Secrets; engineering or other data; designs, specifications, processes and
formulae; manufacturing or planning procedures, techniques or information;
marketing plans, strategies and forecasts; business and product development
plans, strategies and forecasts; financial statements, budgets, prices, costs
and financial projections; accounting procedures or financial information; names
and details of consumers, customers, suppliers and agents; employee details.
"Trade Secrets" means any information of the Company, the LLC, Shareholder,
-------------
InterCept or an Affiliate of any of them (including but not limited to technical
or non-technical data, a formula, a pattern, a compilation, a program, a device,
a method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers) which
(x) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use, and (y) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
"Invention" means any invention, drawing, design, model, contrivance, structure,
---------
specification, improvement, discovery, creation, idea, concept, formula, process
and other work or contribution however developed, created, made discovered or
conceived, and whether or not patented or patentable (whether by renewal or
otherwise), protected by copyright, or otherwise protected or capable of
protection by law anywhere.
32
7.14 Funds Received After Closing. Any and all funds received by
----------------------------
Shareholder or the Company after Closing in respect of the Acquired Business
pursuant to obligations owed to InterCept that arise after the Closing shall be
remitted to InterCept immediately upon receipt, except for funds that
Shareholder is entitled to retain as its accounts receivable, it being
understood by both parties that Shareholder is entitled to receive all accounts
receivable of the Company accruing prior to the Closing and InterCept is
entitled to receive all accounts receivable of the Acquired Business accruing on
the Closing Date and thereafter.
7.15 No Public Announcements. Except as provided in Section 7.13(a),
-----------------------
prior to Closing, without the prior written consent of the other parties,
neither InterCept, Shareholder, the LLC, nor the Company shall make any press
release or other public disclosure, or make any statement to any customer,
supplier, employee or other person with regard to the Contemplated Transactions,
except as required by law. After Closing, without the prior written consent of
each other, neither InterCept nor Shareholder or the Company shall make any
press release or other public disclosure, or make any statement to any customer,
supplier, employee or other person with regard to the Contemplated Transactions,
except as required by law.
7.16 Acquisition Proposals. Prior to the Closing or termination of this
---------------------
Agreement, Shareholder shall not, and shall not permit the Company, the LLC, or
any officer, director, employee or agent of the Company, the LLC, or any
Affiliate of such parties (a) to solicit, initiate or encourage submission of
proposals or offers, or accept any offers, from any person relating to any
acquisition or purchase of all or a material amount of the assets of, or any
equity interest in, or any merger, consolidation or business combination with,
the Company or the LLC (an "Acquisition Proposal"), or (b) to participate in any
--------------------
discussions or negotiations regarding, or furnish to any other person any
information with respect to, or otherwise cooperate in any way with or assist,
facilitate or encourage any Acquisition Proposal by any other Person.
7.17 Further Technology and Commercial Arrangements. Shareholder and
----------------------------------------------
InterCept agree to use commercially reasonable efforts to develop technology and
commercial arrangements between themselves and to the extent possible, their
respective subsidiaries, XX-xxxxxx.xxx Inc. and Netzee, Inc., to enhance their
respective growth and anticipated profitability after the closing of the
Contemplated Transactions.
7.18 Transition Period. Shareholder agrees to provide InterCept with
-----------------
general assistance related to transitioning accounting, finance, human resources
and other functions related to the Company or the LLC from Shareholder to
InterCept.
7.19 Shared Facilities. In addition, Shareholder and InterCept agree to
-----------------
work in good faith to share the facilities with Shareholder being obligated for
substantially all of the costs of the premises retained by Shareholder in
Lenexa, Kansas so that InterCept may have sufficient space to locate the
headquarters of the operation of the LLC, for up to one year, if necessary.
7.20 Assumption of Leases. InterCept, Shareholder and the Company
--------------------
acknowledge that the Company operates its 10 data centers in the leased premises
as set forth on Schedule 7.20 and that these leases (the "Data Center Leases")
------------- ------------------
shall be assigned to the LLC in the Asset Transfer and the obligations
thereunder shall be Assumed Obligations.
33
7.21 Employment. Prior to Closing, InterCept shall consult with
----------
Shareholder and designate for employment by the LLC such data center and head
office employees as it deems appropriate, in its sole discretion, to operate the
Acquired Business.
7.22 Shareholder Distribution. Shareholder agrees to distribute to its
------------------------
shareholders, within five business days after the execution of the Agreement,
Shareholder's press release as approved by InterCept along with a cover letter
acceptable to InterCept, if Shareholder desires to use a cover letter.
7.23 Non-Competition.
---------------
(a) Shareholder agrees that, to induce InterCept to consummate the
Contemplated Transactions, subject to and effective upon the Closing,
Shareholder shall not, for a period of two years after the termination of the
Software Agreement: (i) engage directly or indirectly in any Competitive
Business (as defined below) anywhere in the Restricted Territory (as defined
below), whether such engagement be as an employer, officer, director, owner,
investor, employee, partner, consultant or other participant in any Competitive
Business except for an investment in a public company that does not constitute
more than five percent of the outstanding shares of such public company; (ii)
solicit or accept Competitive Business anywhere in the Restricted Territory from
anyone who is or becomes an active or prospective customer of InterCept or its
Affiliates or who was an active or prospective customer of the Company at or
prior to the Closing Date; (iii) solicit for employment or hire any employee of
the LLC, InterCept or its Affiliates or, without the prior written consent of
InterCept, hire any former employee of the LLC, InterCept or its Affiliates; or
(iv) attempt to do any of the things (or directly or indirectly assist anyone
else in doing or attempting to do any of the things) specified in subsections
(i), (ii) or (iii) above.
(b) As used in this Section 7.23:
(i) "Competitive Business" means the business of:
--------------------
a. providing outsourced core banking data
processing to banking financial institutions;
b. licensing in-house core banking software to
banking financial institutions with aggregate assets of less than $1
billion. For the purposes of this Section 7.23, a banking financial
institution's aggregate assets will be determined by the banking
financial institution's most recent balance sheet for the fiscal year
end as of the date that the proposed relationship is initiated,
excluding its Affiliates and controlled entities; and
c. image/item processing services to banking
financial institutions; and
(ii) "Restricted Territory" means the entire United
--------------------
States.
34
(c) Notwithstanding any other term in this Agreement, this Section
7.23 shall not be effective and binding on Shareholder until the Closing.
(d) With the exception of (i) customers with which Shareholder
currently has agreements in place to provide ATM driving services; (ii)
Woodforest National Banks; and (iii) banking financial institutions with over $1
billion in assets, Shareholder shall not offer ATM driving services to the
existing customers of the Acquired Business; notwithstanding, if the financial
institution requests a specific party to do business with it, Shareholder and
InterCept shall work together to accommodate that request.
7.24 Share Payment. The parties acknowledge that, immediately following
-------------
the Closing, all or a portion of the beneficial interest in the Share Payment
shall be transferred by the Company to Shareholder in satisfaction of
indebtedness owed by the Company to Shareholder.
7.25 Settlement of Net Deferred Revenue and Prepaid Expenses. Shareholder
-------------------------------------------------------
and InterCept covenant that they will adjust the Cash Portion after closing as
described in this Section 7.25. Shareholder will deliver to InterCept, not later
than March 31, 2001, an audited balance sheet of the Company as of December 31,
2000. Based on that audited balance sheet, Shareholder shall pay InterCept an
amount equal to (x) the sum of deferred revenue related to contracts not yet
performed and all prepayments by customers for postage and similar items, minus
(y) prepaid assets. If (y) is greater than (x), however, InterCept shall pay
Shareholder the amount by which (y) is greater than (x). The foregoing
obligation shall not be subject to the provisions of this Agreement regarding
limitations of liability, indemnification rights and the amounts thereof, and
the failure of either party to pay the full amount of the appropriate adjustment
shall be a Loss for which the other party shall be entitled to indemnification.
7.26 Dissolution of the Company After Closing. Shareholder and the
----------------------------------------
Company jointly and severally covenant that they will cause the Company to be
liquidated, wound up and dissolved under the applicable Kansas corporation
statutes not later than 180 days after the Closing Date.
7.27 Payables. Shareholder and the Company jointly and severally covenant
--------
that they will cause the amounts set forth on Disclosure Memorandum Schedule
--------
4.39 to be paid immediately at Closing, except for amounts owed to Bisys and
----
amounts owed with respect to the Lease-Purchase Assets.
7.28 Valley View. Shareholder and the Company jointly and severally
-----------
covenant that they will indemnify LLC without provision for minimum amounts
otherwise contained in this Agreement for any losses incurred by the LLC due to
the Company's failure to obtain the consent of Valley View Bank with respect to
the Company's assignment of its contract with Valley View Bank to LLC.
Section 8. Conditions to Obligations of Shareholder and the Company
The obligations of Shareholder and the Company to consummate the sale of
the Asset Interests and the LLC Interests, respectively, hereunder shall be
subject to the satisfaction (or waiver
35
by Shareholder and the Company) at or prior to the Closing Date of each of the
following conditions:
8.1 Representations, Warranties and Covenants. Each of the
-----------------------------------------
representations and warranties of InterCept contained in this Agreement shall be
true in all respects as of the time of the Closing with the same force and
effect as though made at that time; InterCept shall have performed and complied
in all respects with the respective covenants and agreements set forth herein to
be performed or complied with by it at or before the Closing; and InterCept
shall have delivered to Shareholder a certificate, signed by an authorized
signing officer on behalf of InterCept to all such effects.
8.2 Litigation. No suit, investigation, action or other proceeding shall
----------
be pending or overtly threatened before any court or governmental agency, which
has resulted in the restraint or prohibition of Shareholder or the Company from
consummating the Contemplated Transactions, or in the reasonable opinion of
counsel for Shareholder or the Company could result in the obtaining of material
damages or other relief from Shareholder or the Company, in connection with this
Agreement or the consummation of the Contemplated Transactions.
8.3 Opinion of Counsel to InterCept. Shareholder shall have received
-------------------------------
from counsel to InterCept an opinion letter or opinion letters reasonably
acceptable to Shareholder.
8.4 Execution and Delivery of Documents. InterCept shall have executed
-----------------------------------
and delivered all the documents required by this Agreement; and all other
agreements, certificates, and other documents delivered by InterCept to the
Company and Shareholder hereunder shall be in form and substance satisfactory to
counsel for the Company and Shareholder.
8.5 No Adverse Change. InterCept shall not have suffered any material
-----------------
adverse change since the date of this Agreement in its business, prospects,
financial condition, working capital, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves or operations, it being specifically
understood by Shareholder that a drop in InterCept's stock price itself shall
not be deemed a material adverse change in InterCept's business, prospects,
financial condition, working capital, assets, liabilities (absolute, accrued,
contingent or otherwise), reserves or operations.
8.6 Required Governmental Approvals. All governmental authorizations,
-------------------------------
consents, and approvals necessary for the valid consummation of the Contemplated
Transactions have been obtained and shall be in full force and effect. All
applicable governmental pre-acquisition filing, information furnishing, and
waiting period requirements shall have been met or such compliance shall have
been waived by the governmental authority having authority to grant such
waivers.
8.7 Other Necessary Consents. Shareholder and the Company shall have
------------------------
obtained all consents, approvals, and estoppels listed in the Disclosure
Memorandum.
8.8 Delivery of Documents. InterCept shall have delivered or caused to
---------------------
be delivered to Shareholder all of the following agreements:
36
(a) Software Agreement in the form attached hereto as Exhibit
-------
8.8(a);
------
(b) Escrow Agreement in the form attached hereto as Exhibit
-------
8.8(b);
------
(c) Registration Rights Agreement in the form attached hereto as
Exhibit 8.8(c); and
--------------
(d) Gowlings Escrow Agreement in the form attached hereto as
Exhibit 11.1(a)(iii).
--------------------
Section 9. Conditions to Obligations of InterCept
The obligations of InterCept to be performed hereunder shall be subject to
the satisfaction (or waiver by InterCept) at or before the Closing of each of
the following conditions:
9.1 Representations, Warranties and Covenants. Each of the
-----------------------------------------
representations and warranties of Shareholder and the Company contained in this
Agreement shall be true in all respects as of the time of the Closing with the
same force and effect as though made at that time; the Company and Shareholder
shall have performed and complied in all respects with the respective covenants
and agreements set forth herein to be performed or complied with by them at or
before the Closing; and the Company and Shareholder shall have delivered to
InterCept a certificate, in each case signed by one of its authorized signing
officers, to all such effects.
9.2 Litigation. No suit, investigation, action or other proceeding shall
----------
be pending or overtly threatened before any court or governmental agency, which
has resulted in the restraint or prohibition of InterCept from consummating the
Contemplated Transactions, or in the reasonable opinion of counsel for InterCept
could result in the obtaining of material damages or other relief from
InterCept, in connection with this Agreement or the consummation of the
Contemplated Transactions.
9.3 Opinions of Counsel to the Company and Shareholder. InterCept shall
--------------------------------------------------
have received from counsel to Shareholder an opinion letter or opinion letters
reasonably acceptable to InterCept.
9.4 Execution and Delivery of Documents. The Company and Shareholder
-----------------------------------
shall have executed and delivered all the documents required herein; and all
other agreements, certificates, and other documents delivered by the Company and
Shareholder to InterCept hereunder shall be in form and substance satisfactory
to counsel for InterCept.
9.5 No Adverse Change. The Company shall not have suffered any material
-----------------
adverse change since the date of this Agreement, and the LLC shall not have
suffered any material adverse change since the date of its formation, in its
business, prospects, financial condition, working capital, assets, liabilities
(absolute, accrued, contingent or otherwise), reserves or operations, including
in each case any material adverse change reflected or which should be
37
reflected in the final Disclosure Memorandum or the Final Financials.
9.6 Required Governmental Approvals. All governmental authorizations,
-------------------------------
consents, and approvals necessary for the valid consummation of the Contemplated
Transactions shall have been obtained and shall be in full force and effect. All
applicable governmental pre-acquisition filing, information furnishing, and
waiting period requirements shall have been met or such compliance shall have
been waived by the governmental authority having authority to grant such
waivers.
9.7 Other Necessary Consents. Shareholder and the Company shall have
------------------------
obtained all consents, approvals, and estoppels necessary for the consummation
of the Contemplated Transactions, including those listed in the Disclosure
Memorandum.
9.8 Disclosure Memorandum. The Disclosure Memorandum on Closing or the
---------------------
Final Financials shall not disclose any material adverse matter that impacts on
the Acquired Business, as a whole, that was not disclosed in the Draft
Disclosure Memorandum.
9.9 Shareholder Approval. Shareholder agrees that it will submit this
--------------------
Agreement to the shareholders of Shareholder for approval, if requested by
InterCept (after consultation with Shareholder) after Shareholder has received a
notice of the type described in Section 4.30.
9.10 Delivery of Documents. The Company and Shareholder shall have
---------------------
delivered or caused to be delivered to InterCept all of the following
agreements:
(a) Software Agreement in the form attached hereto as Exhibit
-------
8.8(a);
------
(b) Escrow Agreement in the form attached hereto as Exhibit
-------
8.8(b);
------
(c) Registration Rights Agreement in the form attached hereto as
Exhibit 8.8(c); and
--------------
(d) Gowlings Escrow Agreement in the form attached hereto as
Exhibit 11.1(a)(iii).
--------------------
Section 10. Termination
10.1 Termination. Notwithstanding any other provision of this Agreement,
-----------
this Agreement may be terminated and the Contemplated Transactions abandoned at
any time prior to the Effective Time:
(a) by mutual consent of InterCept and Shareholder;
(b) by either party (provided that the terminating party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a material breach by the
other party of any representation, warranty,
38
covenant or agreement contained in this Agreement which cannot be or has not
been cured within 10 days after the giving of written notice to the breaching
party of such breach;
(c) by either party (provided that the terminating party is not
then in material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event any consent of any
regulatory authority required for consummation of the Contemplated Transactions
shall have been denied by final nonappealable` action of such authority or if
any action taken by such authority is not appealed within the time limit for
appeal;
(d) by either party in the event that the Contemplated
Transactions shall not have been consummated by January 31, 2001, if the failure
to consummate the Contemplated Transactions on or before such date is not caused
by any breach of this Agreement by the party electing to terminate pursuant to
this Section 10.1(d).
10.2 Effect of Termination. In the event of the termination and
---------------------
abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect, except that (i) Section 7.13, this Section 10.2
and Section 10.3 shall survive termination.
10.3 Break-up Fee. If Shareholder terminates this Agreement pursuant to
------------
Section 10.1(b) in the event of a material breach by InterCept as provided
therein, InterCept shall immediately pay Shareholder $2,000,000 in cash. If
InterCept terminates this Agreement pursuant to Section 10.1(b) in the event of
a material breach by Shareholder or the Company as provided therein, Shareholder
or the Company shall immediately pay InterCept $2,000,000 in cash. The parties
acknowledge and agree that the amount of the break-up fee set forth in this
Section 10.3 shall be the exclusive remedy at law of Shareholder and the
Company, on one hand, and InterCept, on the other hand, for any claim arising
out of any termination of this Agreement or the failure to close the
Contemplated Transactions.
Section 11. Payment
11.1 Payment. In consideration of the sale and transfer to InterCept of
-------
the Asset Interests and the LLC Interests:
a. At the Closing, InterCept shall pay the Cash Portion as
follows:
(i) InterCept shall pay $23,529,945 to or as directed by
Shareholder;
(ii) InterCept shall pay to the Company an amount equal to
$16,470,055 minus the Deferred Amount to or as directed by the Company; and
(iii) $2,500,000 of the Cash Payment (the "Deferred Amount")
---------------
shall be set aside in escrow in a trust account for 90 days to be maintained by
Shareholder's counsel, Gowling Xxxxxxx & Xxxxxxxxx LLP ("Gowlings"), and used by
--------
Shareholder at the direction of the Designated Official or either Xxxxx Xxxxx,
Dev Misir or Xxxxxx Xxxxxxx on behalf of Shareholder (the "SLM Official") to
------------
satisfy in full any general or unknown contingencies of the Company (other than
any contingencies related to Excluded Assets) or the LLC as of the Closing
39
Date, or arising due to circumstances prior to the Closing Date, in the manner
set forth below. At the Closing, the parties and Gowlings shall enter into an
escrow agreement substantially in the form attached as Exhibit 11.1(a)(iii) (the
--------------------
"Gowlings Escrow Agreement") which will provide substantially as follows:
-------------------------
a. either the Designated Official or the SLM Official may
give notice to Gowlings of any payment for less than $5,000, without notice to
the other party;
b. after consulting with the SLM Official, the Designated
Official may give notice to Gowlings of any payment between $5,000 and $10,000,
inclusive, with concurrent notice to Shareholder;
c. the SLM Official may give notice to Gowlings of any
payment for less than $100,000 without notice to InterCept or the Designated
Official; or
d. after consulting with the Designated Official, the SLM
Official may give notice to Gowlings of any payment of $100,000 or more, with
concurrent notice to InterCept;
whereupon, Gowlings shall promptly remit the payment. Gowlings shall have the
ability to act as counsel for Shareholder even if there is a dispute pursuant to
the Gowlings Escrow Agreement.
b. At or after the Closing, as applicable, InterCept shall deliver
the Share Portion as follows:
(i) by issuing to Shareholder at the Closing 609,682 shares
of Common Stock;
(ii) by issuing at the Closing (A) 16,151 shares of Common
Stock to Shareholder and (B) 242,237 shares of Common Stock to Shareholder as
nominee for the benefit of the Company; the aggregate amount of 258,388 shares
(the "Escrow Shares") of Common Stock will be held by the Escrow Agent pursuant
-------------
to an escrow agreement substantially in the form attached hereto as Exhibit
-------
8.8(b); and
------
(iii) by issuing as provided in this clause (iii) 385,872
shares of Common Stock constituting part of the Share Portion, which shares
shall be earned by and issued to Shareholder, as nominee for the Company,
subject to the terms and conditions set forth below:
a. Upon receipt of payment to InterCept from Bisys or
Shareholder in the amount of $480,000 pursuant to the Bisys Contract for monthly
processing for the three months ended March 31, 2001, which payment must be
received by InterCept no later than 30 days following March 31, 2001, InterCept
shall issue Shareholder 18,239 shares of Common Stock;
b. Upon receipt of payment to InterCept from Bisys or
Shareholder in the amount of $480,000 pursuant to the Bisys Contract for monthly
processing for
40
the three months ended June 30, 2001, which payment must be received by
InterCept no later than 30 days following June 30, 2001, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
c. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended September 30, 2001, which payment must be received by
InterCept no later than 30 days following September 30, 2001, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
d. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended December 31, 2001, which payment must be received by
InterCept no later than 30 days following December 31, 2001, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
e. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended March 31, 2002, which payment must be received by
InterCept no later than 30 days following March 31, 2002, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
f. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended June 30, 2002, which payment must be received by
InterCept no later than 30 days following June 30, 2002, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
g. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended September 30, 2002, which payment must be received by
InterCept no later than 30 days following September 30, 2002, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
h. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended December 31, 2002, which payment must be received by
InterCept no later than 30 days following December 31, 2002, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
i. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended March 31, 2003, which payment must be received by
InterCept no later than 30 days following March 31, 2003, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
41
j. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended June 30, 2003, which payment must be received by
InterCept no later than 30 days following June 30, 2003, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
k. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended September 30, 2003, which payment must be received by
InterCept no later than 30 days following September 30, 2003, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
l. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended December 31, 2003, which payment must be received by
InterCept no later than 30 days following December 31, 2003, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
m. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended March 31, 2004, which payment must be received by
InterCept no later than 30 days following March 31, 2004, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
n. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended June 30, 2004, which payment must be received by
InterCept no later than 30 days following June 30, 2004, InterCept shall issue
Shareholder 18,239 shares of Common Stock;
o. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended September 30, 2004, which payment must be received by
InterCept no later than 30 days following September 30, 2004, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
p. Upon receipt of payment to InterCept from Bisys or Shareholder
in the amount of $480,000 pursuant to the Bisys Contract for monthly processing
for the three months ended December 31, 2004, which payment must be received by
InterCept no later than 30 days following December 31, 2004, InterCept shall
issue Shareholder 18,239 shares of Common Stock;
q. Notwithstanding the foregoing, in the event the actual amount
received by InterCept pursuant to the Bisys Contract (the "Actual Amount") for
-------------
monthly processing for any three month period as specified in Sections
11.1(b)(iii)a. through 11.1(b)(iii)p. is less than the $480,000, then InterCept
shall issue Shareholder shares of its
42
Common Stock for such three month period equal to the product of: (a) 18,239
shares of common stock, and (b) the quotient of the Actual Amount divided by
$480,000.
r. Upon receipt of payment to InterCept from Cross Country or
Shareholder in the amount of $255,000 pursuant to the Cross Country Contract for
monthly processing for the three months ended March 31, 2001, which payment must
be received by InterCept no later than 30 days following March 31, 2001,
InterCept shall issue Shareholder 9,689 shares of Common Stock;
s. Upon receipt of payment to InterCept from Cross Country or
Shareholder in the amount of $255,000 pursuant to the Cross Country Contract for
monthly processing for the three months ended June 30, 2001, which payment must
be received by InterCept no later than 30 days following June 30, 2001,
InterCept shall issue Shareholder 9,689 shares of Common Stock;
t. Upon receipt of payment to InterCept from Cross Country or
Shareholder in the amount of $255,000 pursuant to the Cross Country Contract for
monthly processing for the three months ended September 30, 2001, which payment
must be received by InterCept no later than 30 days following September 30,
2001, InterCept shall issue Shareholder 9,689 shares of Common Stock;
u. Upon receipt of payment to InterCept from Cross Country or
Shareholder in the amount of $255,000 pursuant to the Cross Country Contract for
monthly processing for the three months ended December 31, 2001, which payment
must be received by InterCept no later than 30 days following December 31, 2001,
InterCept shall issue Shareholder 9,689 shares of Common Stock; and
v. Upon receipt of payment to InterCept from Cross Country or
Shareholder in the amount of $255,000 pursuant to the Cross Country Contract for
monthly processing for the three months ended March 31, 2002, which payment must
be received by InterCept no later than 30 days following March 31, 2002,
InterCept shall issue Shareholder 9,692 shares of Common Stock.
w. Notwithstanding the foregoing, in the event the actual amount
received by InterCept pursuant to the Cross Country Contract (the "Cross Actual
------------
Amount") for monthly processing for any three month period as specified in
------
Sections 11.1(b)(iii)r. through 11.1(b)(iii)v. is less than the $255,000, then
InterCept shall issue Shareholder shares of its Common Stock for such three
month period equal to the product of: (a) 9,689 shares of Common Stock, and (b)
the quotient of the Cross Actual Amount divided by $255,000.
x. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended March 31, 2001, which payment must
be received by InterCept no later than 30 days following March 31, 2001,
InterCept shall issue Shareholder 4,560 shares of Common Stock;
43
y. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended June 30, 2001, which payment must
be received by InterCept no later than 30 days following June 30, 2001,
InterCept shall issue Shareholder 4,560 shares of Common Stock;
z. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended September 30, 2001, which payment
must be received by InterCept no later than 30 days following September 30,
2001, InterCept shall issue Shareholder 4,560 shares of Common Stock;
aa. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended December 31, 2001, which payment
must be received by InterCept no later than 30 days following December 31, 2001,
InterCept shall issue Shareholder 4,560 shares of Common Stock; and
bb. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended March 31, 2002, which payment must
be received by InterCept no later than 30 days following March 31, 2002,
InterCept shall issue Shareholder 4,560 shares of Common Stock;
cc. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended June 30, 2002, which payment must
be received by InterCept no later than 30 days following June 30, 2002,
InterCept shall issue Shareholder 4,560 shares of Common Stock;
dd. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended September 30, 2002, which payment
must be received by InterCept no later than 30 days following September 30,
2002, InterCept shall issue Shareholder 4,560 shares of Common Stock;
ee. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended December 31, 2002, which payment
must be received by InterCept no later than 30 days following December 31, 2002,
InterCept shall issue Shareholder 4,560 shares of Common Stock;
ff. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended March 31, 2003, which payment must
be received by
44
InterCept no later than 30 days following March 31, 2003, InterCept shall issue
Shareholder 4,560 shares of Common Stock,
gg. Upon receipt of payment to InterCept from First Capital or
Shareholder in the amount of $120,000 pursuant to the First Capital Contract for
monthly processing for the three months ended June 30, 2003, which payment must
be received by InterCept no later than 30 days following June 30, 2003,
InterCept shall issue Shareholder 4,560 shares of Common Stock,
hh. Notwithstanding the foregoing, in the event the actual
amount received by InterCept pursuant to the First Capital Contract (the "First
-----
Capital Actual Amount") for monthly processing for any three month period as
---------------------
specified in Sections 11.1(b)(iii)x. through 11.1(b)(iii)gg. is less than the
$120,000, then InterCept shall issue Shareholder shares of its Common Stock for
such three month period equal to the product of: (a) 4,560 shares of Common
Stock, and (b) the quotient of the First Capital Actual Amount divided by
$120,000.
(c) If InterCept receives an amount less than that denoted in
Sections 11.1(b)(iii)a. through 11.1(b)(iii)p., Sections 11.1(b)(iii)r. through
11.1(b)(iii)v. and Sections 11.1(b)(iii)x. through 11.1(b)(iii)hh. resulting in
the issue of fewer shares of Common Stock than denoted therein, then InterCept,
if so requested by Shareholder, will consult with Shareholder regarding the
assignment to Shareholder of InterCept's rights in and to the shortfall so that
Shareholder can collect the shortfall for its own account.
At the Closing, InterCept and Shareholder shall deliver to the Escrow
Agent an Escrow Agreement in the form of Exhibit 8.8(b) hereto (the "Escrow
------------- ------
Agreement") which shall provide for the escrow of the Escrow Shares. While the
---------
Escrow Shares are held by the Escrow Agent under the terms of the Escrow
Agreement, Shareholder shall be entitled to vote the Escrow Shares as provided
in the Escrow Agreement. Dividends, distributions and other proceeds, if any,
paid with respect to the Escrow Shares during the escrow period shall be held in
escrow and disbursed in accordance with the Escrow Agreement. The Escrow Shares
shall be used to satisfy indemnification obligations of Shareholder and the
Company, if any, pursuant to Section 7.11 of this Agreement, to assure that the
LLC obtains good, valid and marketable title to the Lease-Purchase Assets, free
and clear of any and all Permitted Encumbrances, as of a date no later than 180
days after the Closing Date in accordance with the Escrow Agreement and to
assure that the Company is liquidated, wound up and dissolved as of a date no
later than 180 days after the Closing Date.
Section 12. Miscellaneous
12.1 Notices. All notices, requests, demands, consents and other
-------
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by overnight courier or express
mail service or by postage pre-paid certified or registered mail, return receipt
requested (the return receipt constituting prima facie evidence of the giving of
such notice, request, demand or other communication), by personal delivery, or
by
45
fax with confirmation of receipt to the following address or such other address
of which a party subsequently may give notice to all the other parties:
To the Company
or Shareholder: XXXxxxx.xxx Inc.
0 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Dev Misir and Xxxxxx Xxxxxxx
Fax No. (000) 000-0000
With a copy to:
Gowling, Xxxxxxx & Xxxxxxxxx LLP
Suite 0000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxx X. Xxxx
Fax No. (000) 000-0000
To InterCept: The InterCept Group, Inc.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx and Xxxxx X.
Xxxxxxxxx
Fax: (000) 000-0000
and
---
Xxxxxx Xxxxxxx Xxxxx & Scarborough,
L.L.P.
First Union Building, Suite 1400
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
12.2 Parties Bound by Agreement; Successors and Assigns. The terms,
--------------------------------------------------
conditions and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and the respective successors and permitted
assigns thereof. Neither Shareholder, the Company, nor InterCept may assign
their rights, duties or obligations hereunder or any part thereof to any other
Person, without the prior written consent of the other party.
12.3 Entire Agreement. This Agreement, the Disclosure Memorandum and
----------------
all other certificates, schedules and other documents delivered pursuant to this
Agreement constitute the entire agreement between the parties with respect to
the Contemplated Transactions, and supersede and are in full substitution of any
and all prior agreements and understandings written or oral between the parties
relating to such transactions, including without limitation the original
46
Purchase Agreement between the parties hereto dated as of, and delivered on,
November 29, 2000 (the "Original Agreement") and the original Disclosure
------------------
Memorandum and all other certificates, schedules and other documents delivered
pursuant to the Original Agreement. This Agreement amends and restates the
Original Agreement in its entirety. Any provision in the Original Agreement, as
so amended and restated, that conflicts with this Agreement shall be deemed to
be superseded in its entirety and of no effect, and in such event the provisions
of this Agreement shall control.
12.4 Descriptive Headings. The descriptive headings of the Sections
--------------------
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
12.5 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. Receipt of a facsimile version of an executed
signature page by a party to this Agreement shall constitute satisfactory
evidence of execution of this Agreement by such party.
12.6 Amendments and Waivers. No modification, termination, extension,
----------------------
renewal or waiver of any provision of this Agreement shall be binding upon a
party unless made in writing and signed by such party. A waiver on one occasion
shall not be construed as a waiver of any right on any future occasion. No delay
or omission by a party in exercising any of its rights hereunder shall operate
as a waiver of such rights.
12.7 Governing Law, Jurisdiction and Venue. This Agreement is executed
-------------------------------------
by InterCept in, and shall be construed in accordance with and governed by the
laws of the State of Georgia, without regard to its conflict of law principles.
Shareholder consents to exclusive jurisdiction by the state and federal courts
sitting in Xxxxxx County in the State of Georgia.
12.8 No Third-Party Beneficiaries. With the exception of the parties to
----------------------------
this Agreement and the Indemnified Parties, there shall exist no right of any
person to claim a beneficial interest in this Agreement or any rights accruing
by virtue of this Agreement.
12.9 Gender and Number. Where the context requires, the use of a
-----------------
pronoun of one gender or the neuter is to be deemed to include a pronoun of the
appropriate gender, singular words are to be deemed to include the plural, and
vice versa.
Each of the parties hereto has caused this Agreement to be duly
executed on its behalf as of the date indicated on the first page hereof and
this Agreement has been delivered on January 4, 2001.
47
INTERCEPT:
---------
THE INTERCEPT GROUP, INC., a Georgia corporation
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: CFO
SHAREHOLDER:
-----------
XXXXXXX.XXX INC., a corporation formed under the laws of the Province of Ontario
By: /s/ Dev. Misir
-----------------
Name: Dev. Misir
Title: EVP
THE COMPANY:
-----------
XXXXXXX.XXX INC., a Kansas corporation
By: /s/ Dev. Misir
-----------------
Name: Dev. Misir
Title: EVP
48
