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EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
BY AND AMONG
SECURITY FIRST TECHNOLOGIES CORPORATION,
THE INDIVIDUALS IDENTIFIED ON
SCHEDULE 1 HERETO
AND
FICS GROUP N.V.
DATED AS OF MAY 16, 1999
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TABLE OF CONTENTS
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SECTION 1. PURCHASE AND SALE OF THE SHARES.....................................1
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1.1 Sale and Issuance of the Shares.........................................1
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1.2 Closing.................................................................2
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SECTION 2. STOCK OPTIONS.......................................................2
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF S1................................3
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3.1 Corporate Organization..................................................3
3.2 Capitalization..........................................................4
3.3 Authority; No Violation.................................................5
3.4 Consents and Approvals..................................................5
3.5 Financial Statements; Exchange Act Filings; Books and Records...........6
3.6 Broker's Fees...........................................................6
3.7 Absence of Certain Changes or Events....................................7
3.8 Legal Proceedings.......................................................7
3.9 Taxes and Tax Returns...................................................7
3.10 Employee Plans.........................................................9
3.11 Certain Contracts......................................................11
3.12 Environmental Matters..................................................12
3.13 Properties and Assets..................................................13
3.14 Insurance..............................................................13
3.15 Compliance with Applicable Laws........................................14
3.16 S1 Information.........................................................14
3.17 Intellectual Property..................................................14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS........................17
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4.1 Organization of Purchasers..............................................17
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4.2 Authorization of Transaction............................................17
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4.3 Non-Contravention.......................................................18
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4.4 Broker's Fees...........................................................18
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4.5 Adequate Resources......................................................19
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4.6 Investment Experience...................................................19
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4.7 Investment Intent.......................................................19
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4.8 Registration or Exemption Requirements..................................20
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4.9 No Legal, Tax or Investment Advice......................................20
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SECTION 5. ADDITIONAL AGREEMENTS...............................................20
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5.1 Lock-up Covenant........................................................20
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5.2 S1 Board of Directors...................................................20
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5.3 Compliance with Antitrust Laws..........................................21
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5.4 Regulatory Matters......................................................22
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5.5 Stockholder Meeting.....................................................24
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5.6 Legal Conditions........................................................24
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5.7 Stock Exchange Listing..................................................24
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5.8 Registration of S1 Common Stock.........................................24
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5.9 Conduct of S1's Business................................................29
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5.10 Advice of Changes......................................................30
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SECTION 6. CONDITIONS TO CLOSING...............................................30
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6.1 Conditions to Obligations of All Parties................................30
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6.2 Conditions to the Obligations of Purchasers.............................30
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6.3 Conditions to Obligations of S1.........................................31
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SECTION 7. CLOSING.............................................................32
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7.1 Deliveries by S1........................................................32
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7.2 Deliveries by Purchasers................................................32
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SECTION 8. LEGEND..............................................................33
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8.1 Endorsement.............................................................33
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8.2 Removal of Legend.......................................................34
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SECTION 9. TERMINATION.........................................................34
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9.1 Mutual Consent..........................................................34
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9.2 Other Termination.......................................................34
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9.3 Effect of Termination...................................................35
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SECTION 10. MISCELLANEOUS......................................................36
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10.1 Additional Actions and Documents.......................................36
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10.2 Expenses...............................................................36
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10.3 Notices................................................................36
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10.4 Waiver.................................................................37
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10.5 Binding Effect.........................................................38
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10.6 Entire Agreement; Amendment............................................38
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10.7 Severability...........................................................38
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10.8 Headings...............................................................38
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10.9 Governing Law..........................................................38
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10.10 Signature in Counterparts.............................................39
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10.11 No Third Party Beneficiaries..........................................39
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10.12 Assignability.........................................................39
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10.13 Parties Not Partners..................................................39
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10.14 Non-Survival of Representations and Warranties........................39
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10.15 Certain Definitions...................................................40
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement"), dated as of the 16th day of
May, 1999, is entered into by and among Security First Technologies Corporation,
a Delaware corporation ("S1"), the individuals identified on Schedule 1 hereto
(each, a "Purchaser" and collectively, "Purchasers") and FICS Group N.V., a
Belgian corporation ("FICS") (for the limited purposes set forth in Section 5
and Section 6.3(b) hereof).
WHEREAS, the Board of Directors of S1 and each Purchaser has determined
it is in their best interests, or in the best interests of their respective
companies and stockholders, to complete the transaction described in this
Agreement whereby S1 will sell and issue to each Purchaser, and each Purchaser
will subscribe for and acquire, a number of shares of S1's common stock, par
value $0.01 per share ("S1 Common Stock"), as described below.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the
sufficiency of which is hereby acknowledged, the parties mutually agree as
follows:
SECTION 1. PURCHASE AND SALE OF THE SHARES.
1.1 SALE AND ISSUANCE OF THE SHARES.
1.1(a). At the Closing (as defined below in Section 1.2(a)) and subject
to the terms and conditions of this Agreement, each Purchaser hereby subscribes
for, and agrees to purchase, for aggregate consideration (the "Transaction
Consideration") of the lower of either (i) $1,080,000,000 or (ii) the product of
(a) the stock price, as quoted on the Nasdaq Stock Market or such other national
exchange on which the S1 Common Stock is then traded, of a share of S1 Common
Stock at the close of business on the date which is three business days prior to
the date of the Closing (the "Closing Market Price") multiplied by (b)
20,000,000 (after adjustment for any stock splits, combinations or dividends or
distributions in such common stock between the date of this Agreement and the
date three business days prior to the Closing Date), an aggregate number of
shares of S1 Common Stock (such number, the "Shares") equal to the difference
between (i) 20,000,000 and (ii) the number of shares of S1 Common Stock issuable
upon exercise of the Successor Options (as defined below) to be offered by S1 to
Purchasers pursuant to Section 2 of this Agreement. The number of Shares
received by each individual Purchaser shall equal (x) the aggregate number of
the Shares multiplied by (y) the applicable percentage for such Purchaser as set
forth on Schedule A hereto. If prior to the Closing, S1 should split or combine
its common stock, or pay a dividend or other
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distribution in such common stock, then the number of Shares shall be
appropriately adjusted to reflect such split, combination, dividend or
distribution. S1 agrees to sell and issue the Shares to Purchasers at the
Closing for the Transaction Consideration. The sale and issuance of the Shares
by S1 to Purchasers is sometimes referred to herein as the "S1 Issuance."
1.1(b). The Transaction Consideration shall be payable in cash in the
amount of the Transaction Consideration.
1.2 CLOSING.
1.2(a). The closing (the "Closing") of the transaction shall take place
concurrently with the closing of the "Transaction," as defined in the certain
Share Purchase Agreement (the "Holdings Purchase Agreement"), dated as of May
16, 1999 by and among S1 Europe Holdings N.V., a Belgian corporation (naamloze
vennootschap ("N.V.")) in the process of incorporation, represented by S1,
Purchasers, and for the limited purposes stated therein, S1 and FICS.
1.2(b). The Closing shall take place on the Closing Date at 10:00 a.m.,
Washington, D.C. time, at the offices of Xxxxx & Xxxxxxx L.L.P., 000 00xx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, or at such other time and place as the
parties shall mutually agree.
SECTION 2. STOCK OPTIONS.
Upon the Closing, S1 shall offer in exchange for each option (a "FICS
Option") which is outstanding and unexercised immediately prior thereto, and
granted by FICS under the 1998 Stock Plan of FICS Group Holdings, Inc., a
Delaware corporation ("FICS Holding") (the "FICS Stock Plan"), or otherwise, an
option to purchase shares of S1 Common Stock (each, a "Successor Option") in an
amount and at an exercise price determined as provided below:
(1) a number the ("Conversion Number") of shares of S1 Common Stock
equal to (x) 20,000,000 (after adjustment for any stock splits,
combinations or dividends or distributions in the S1 Common Stock
between the date of this Agreement and the Closing) divided by (y) the
sum of 162,284.5 plus the number of shares subject to options granted by
FICS Holdings, between the date hereof and the Closing Date multiplied
by (z) the number of shares of FICS Holding subject to such FICS Option;
and
(2) The exercise price per share of S1 Common Stock under the option
immediately after the Transaction shall be equal to the exercise price
per share of FICS Subsidiary Stock under the option immediately before
the Closing divided by the Conversion Number,
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provided that such exercise price shall be rounded down to the nearest
cent.
The parties hereto understand that the number of shares of S1 Common
Stock subject to Successor Options and the price thereof shall be adjusted
appropriately for any stock splits, combinations or dividends or distributions
in the FICS capital stock, as of the date hereof. The duration and other terms
of the Successor Options immediately after the Closing shall be the same as the
corresponding terms of the FICS Options in effect immediately before the
Closing, except that all references to FICS in the FICS Stock Plan (and the
corresponding references in the option agreement documenting such FICS Option)
shall be deemed to be references to S1.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF S1.
S1 hereby makes the following representations and warranties to each
Purchaser as set forth in this Section 3, each of which is being relied upon by
each Purchaser as a material inducement to enter into and perform this
Agreement. All of the disclosure schedules of S1 referenced below and thereby
required of S1 pursuant to this Agreement, which disclosure schedules shall be
cross-referenced to the specific sections and subsections of this Agreement and
delivered herewith, are referred to herein as the "S1 Disclosure Schedule."
3.1 CORPORATE ORGANIZATION.
(a) S1 is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. S1 has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary. The Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws of S1, copies of
which have previously been made available to the Purchasers, are true, correct
and complete copies of such documents as in effect as of the date of this
Agreement.
(b) Each Subsidiary of S1 (each, a "S1 Subsidiary") and the jurisdiction
of its organization is set forth at Section 3.1(b) of the S1 Disclosure
Schedule. Each S1 Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization.
Each S1 Subsidiary has the corporate power and authority to own or lease all of
its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business in each jurisdiction
in which the nature of any material business conducted by it or the character or
location of any material properties or assets owned or leased by it makes such
licensing or qualification necessary. The charter and other corporate governance
documents of each S1 Subsidiary, copies of which have previously been delivered
to the Purchasers, are
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true, correct and complete copies of such documents as in effect as of the date
of this Agreement.
3.2 CAPITALIZATION.
(a) The authorized capital stock of S1 consists of (i) 60,000,000 shares
S1 Common Stock, of which 25,428,778 shares were outstanding at May 10, 1999 and
(ii) 5,000,000 shares of serial preferred stock, par value $.01 per share ("S1
Preferred Stock"), 1,637,832 shares of which were designated as "Series A
Convertible Preferred Stock," 749,604 of which were designated as "Series B
Redeemable Convertible Preferred Stock" and 215,000 shares of which were
designated as "Series C Redeemable Convertible Preferred Stock." At May 10,
1999, 466,450 shares of Series A Convertible Preferred Stock, 749,604 shares of
Series B Redeemable Convertible Preferred Stock and 215,000 shares of Series C
Redeemable Convertible Preferred Stock were outstanding. At such date, there
were 12,353,798 shares of S1 Common Stock reserved for issuance pursuant to
employee stock options (of which options to purchase 9,607,750 shares are
currently outstanding). All of the issued and outstanding shares of S1 Common
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof, and upon issuance in accordance with the
terms hereof, the Shares will be duly authorized and validly issued, and fully
paid, nonassessable and free of preemptive rights. As of the date of this
Agreement, except as set forth above, S1 does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of S1 Common
Stock or S1 Preferred Stock or any other equity securities of S1 or any
securities presenting the right to purchase or otherwise receive any shares of
S1 Common Stock or S1 Preferred Stock, other than as set forth at Section 3.2(a)
of the S1 Disclosure Schedule.
(b) S1 owns, directly or indirectly, all of the issued and outstanding
shares of capital stock of each of the S1 Subsidiaries, free and clear of all
liens, charges, encumbrances and security interests whatsoever, and all of such
shares are duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights, with no personal liability attaching to the
ownership thereof. No S1 Subsidiary has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital stock or
any other equity security of such Subsidiary or any securities representing the
right to purchase or otherwise receive any shares of capital stock or any other
equity security of such Subsidiary.
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3.3 AUTHORITY; NO VIOLATION.
(a) S1 has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of S1. Except for the approval of the S1 Issuance as contemplated by
this Agreement by the requisite vote of S1's stockholders, no other corporate
proceedings on the part of S1 (except for matters related to setting the date,
time, place and record date for the special meeting) are necessary to approve
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by S1 and (assuming
due authorization, execution and delivery by FICS and each of the Purchasers)
will constitute a valid and binding obligation of S1, enforceable against S1 in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar law affecting creditors' rights and
remedies generally.
(b) Neither the execution and delivery of this Agreement by S1, nor the
consummation by S1 of the transactions contemplated hereby, nor compliance by S1
with any of the terms or provisions hereof or thereof, will (i) violate any
provision of the Amended and Restated Certificate of Incorporation or Amended
and Restated Bylaws of S1, or (ii) assuming that the consents and approvals
referred to in Section 3.4 are duly obtained, (x) violate any Laws (as defined
below) applicable to S1 or any of its properties or assets, or (y) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of S1 under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument or obligation to which
S1 is or will be, as the case may be, a party, or by which S1 or any of its
properties or assets may be bound or affected.
3.4 CONSENTS AND APPROVALS.
(a) Except for such filings, notices, authorizations or approvals as set
forth on Section 3.4 of the S1 Disclosure Schedule, no consents or approvals of
or filings or registrations with any court, administrative agency or commission
or other governmental authority or instrumentality (each a "Governmental
Entity") or with any third party are necessary in connection with (1) the
execution and delivery by S1 of this Agreement, and (2) the consummation by S1
of the S1 Issuance and the other transactions contemplated hereby, except for
such consents, approvals or filings the
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failure of which to obtain will not have a Material Adverse Effect (as defined
below) on the ability of S1 to consummate the transactions contemplated hereby.
(b) S1 hereby represents to Purchasers that it has no knowledge of
any reason why approval or effectiveness of any of the applications, notices or
filings referred to in Section 3.4(a) cannot be obtained or granted on a timely
basis.
3.5 FINANCIAL STATEMENTS; EXCHANGE ACT FILINGS; BOOKS AND RECORDS.
S1 has previously delivered to representatives of Purchasers true,
correct and complete copies of the consolidated balance sheets of S1 and its
Subsidiaries as of December 31 for the fiscal years 1998 and 1997 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the fiscal years 1996 through 1998, inclusive, as reported in S1's
Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed
with the SEC under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in each case accompanied by the audit report of KPMG LLP,
independent public accountants with respect to S1, and the interim financial
statements of S1 as of and for the three months ended March 31, 1998 and 1997,
as included in S1's quarterly report on Form 10-Q for the quarter ended March
31, 1999, as filed with the SEC. The financial statements referred to in this
Section 3.5 (including the related notes, where applicable) fairly present
(subject, in the case of the unaudited statements, to normal recurring audit
adjustments) the results of the consolidated operations and consolidated
financial condition of S1 and its Subsidiaries for the respective fiscal periods
or as of the respective dates therein set forth; each of such statements
(including the related notes, where applicable) comply with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto; and each of such statements (including the related notes,
where applicable) has been prepared in accordance with US GAAP consistently
applied during the periods involved, except as indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q. S1's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998 and all
subsequently filed reports under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act comply in all material respects with the appropriate requirements
for such reports under the Exchange Act, and S1 has previously delivered to FICS
true, correct and complete copies of such reports. The books and records of S1
and its Subsidiaries have been, and are being, maintained in all material
respects in accordance with US GAAP and any other applicable legal and
accounting requirements.
3.6 BROKER'S FEES.
Neither S1 nor any S1 Subsidiary nor any of their respective officers or
directors has employed any broker or finder or incurred any liability for any
broker's fees, commissions or finder's fees in connection with any of the
transactions
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contemplated by this Agreement, except that S1 has engaged, and will pay a fee
or commission to BancBoston Xxxxxxxxx Xxxxxxxx, Inc. ("BBRS") in accordance with
the terms of a letter agreement between BBRS and S1, dated April 9, 1999, a
true, complete and correct copy of which has been provided to Purchasers.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Except as disclosed in S1's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, or any other report filed under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, true, correct and complete copies
of which have previously been delivered or made available to representatives of
Purchasers, since December 31, 1998, (i) neither S1 nor any S1 Subsidiary has
incurred any material liability, except as contemplated by this Agreement or in
the ordinary course of their businesses consistent with their past practices,
and (ii) no event has occurred which has had, or is likely to have, individually
or in the aggregate, a Material Adverse Effect on S1.
(b) Since December 31, 1998, S1 and each S1 Subsidiary has carried on
its respective businesses in the ordinary and usual course consistent with past
practices.
3.8 LEGAL PROCEEDINGS.
(a) Neither S1 nor any of its Subsidiaries is a party to any, and
there are no pending or, to S1's knowledge, threatened, legal, administrative,
arbitration or other proceedings, claims, actions or governmental or regulatory
investigations of any nature against S1 or any of its Subsidiaries or which
challenge the validity of the transactions contemplated by this Agreement as to
which there is a reasonable probability of success.
(b) There is no injunction, order, judgment or decree imposed upon S1,
any of its Subsidiaries or the assets of S1 or any of its Subsidiaries.
3.9 TAXES AND TAX RETURNS.
For purposes of this Section 3.9, S1 shall include S1, each S1 Subsidiary
and each other affiliated or related corporation or entity if S1 or any S1
Subsidiary has or could have any material liability for the taxes of such
corporation or entity. S1 has duly filed all Tax Returns required to be filed by
it on or prior to the date hereof (all such returns being accurate and complete
in all material respects) and has duly paid or made provision on the financial
statements referred to in Section 3.5 hereof in accordance with United States
generally accepted accounting principles ("US GAAP") for the payment of all
material Taxes which have been incurred or are due or claimed to be due from it
by Taxing Authorities on or prior to the date hereof other than Taxes
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(a) which (x) are not yet delinquent or (y) are being contested in good faith
and set forth in Section 3.9 of the S1 Disclosure Schedule and (b) which have
not been finally determined. The charges, accruals, and reserves with respect to
Taxes on the books of S1 are adequate (as determined in accordance with US GAAP)
and are at least equal to its liability for Taxes. There exists no proposed tax
assessment against S1 except as disclosed in the S1 financial statements. No
consent to the application of Section 341(f)(2) of the Code has been filed with
respect to any property or assets held, acquired, or to be acquired by S1. All
Taxes that S1 is or was required to withhold or collect have been duly withheld
or collected and, to the extent required, have been paid to the proper
Governmental Body. All liability with respect to the Tax Returns of S1 has been
satisfied for all years to and including 1998. No Taxing Authority has notified
S1 of, or otherwise asserted, that there are any material deficiencies with
respect to the Tax Returns of S1 subsequent to 1994. There are no material
disputes pending, or claims asserted for, Taxes or assessments upon S1, nor has
S1 been requested to give any currently effective waivers extending the
statutory period of limitation applicable to any Tax Return for any period. In
addition, Tax Returns that are accurate and complete in all material respects
have been filed by S1 for all periods for which returns were due with respect to
income tax withholding with respect to wages and other income and the amounts
shown on such Tax Returns to be due and payable have been paid in full or
adequate provision therefor in accordance with US GAAP has been included by S1
in the financial statements referred to in Section 3.5. All S1 Tax Returns have
been examined by the relevant Taxing Authorities, or closed without audit by
applicable statutes of limitations, and all deficiencies proposed as a result of
such examinations have been paid or settled, for all periods before and
including the taxable year ended December 31, 1994. S1 has not consented to any
waiver or extension of any statute of limitations with respect to any Tax. S1
has provided or made available to S1 complete and correct copies of its Tax
Returns and all material correspondence and documents, if any, relating directly
or indirectly to taxes for each taxable year or other relevant period as to
which the applicable statute of limitations has not run on the date hereof. For
this purpose, "correspondence and documents" include, without limitation,
amended Tax Returns, pending claims for refunds, notices from Taxing Authorities
of proposed changes or adjustments to Taxes or Tax Returns that have not been
finally resolved, consents to assessment or collection of Taxes, acceptances of
proposed adjustments, closing agreements, rulings and determination letters and
requests therefor, and all other written communications to or from Taxing
Authorities relating to any material Tax liability of S1.
(b) For purposes of this Agreement:
"Tax" means any tax (including any income tax, capital gains tax,
value-added tax, sales tax, property tax, gift tax, or estate
tax), levy, assessment, tariff, duty (including any customs duty), deficiency,
or other fee, and any related charge or amount (including any fine, penalty,
interest, or addition to tax), imposed,
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assessed, or collected by or under the authority of any Taxing Authority or
payable pursuant to any tax-sharing agreement or any other contract relating to
the sharing or payment of any such tax, levy, assessment, tariff, duty,
deficiency, or fee.
"Tax Return" means any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed with
or submitted to, or required to be filed with or submitted to, any Taxing
Authority in connection with the determination, assessment, collection, or
payment of any Tax or in connection with the administration, implementation, or
enforcement of or compliance with any law, regulation or other legal requirement
relating to any Tax.
"Taxing Authority" means any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
3.10 EMPLOYEE PLANS.
(a) For purposes of this Section 3.10, S1 shall include each of its
Subsidiaries and any other entity that together with S1 would be deemed a
"single employer" within for purposes of ERISA (determined without regard to
whether such entity conducts business in the United States). Section 3.10(a) of
the S1 Disclosure Schedule sets forth a true and complete list of each U.S. Plan
and each other plan, arrangement or agreement providing benefits to the current
or former employees of S1 that S1 maintains or contributes to as of the date of
this Agreement, or that S1 has within the last six years maintained or
contributed to or under which S1 has any liability (collectively, the "S1
Plans").
(b) S1 has heretofore delivered or made available to S1 true,
correct and complete copies of each of the S1 Plans and all related documents
(other than S1 Plans established by a governmental agency or authority to which
S1 is required to contribute under applicable law), including but not limited to
(i) the actuarial report
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for such S1 Plan (if applicable) for each of the last five years, (ii) the most
recent determination letter from the IRS (if applicable) for each U.S. Plan,
(iii) the current summary plan description and any summaries of material
modification for each U.S. Plan and any corresponding document for each other S1
Plan, (iv) all annual reports for each U.S. Plan filed for the preceding five
plan years and any annual or other periodical financial information concerning
any other S1 Plan filed with any governmental agency or authority or provided to
employees or beneficiaries of such S1 Plan, (v) all agreements with fiduciaries
and service providers relating to the S1 Plan, (vi) all substantive
correspondence relating to any such S1 Plan addressed to or received from any
governmental agency or authority, (vii) all personnel, payroll, and employment
manuals and policies, (viii) a written description of any S1 Plan that is not
otherwise in writing.
(c) S1 has performed all of its obligations under all S1 Plans. S1 has
made appropriate entries in its financial records and statements for all
obligations and liabilities under the S1 Plans that have accrued but are not
due. No statement, either written or oral, has been made by S1 with regard to
any S1 Plan that was not in accordance with the S1 Plan and that could have an
adverse economic consequence to S1. S1 has no liability to the IRS, the U.S.
Pension Benefit Guaranty Corporation or to any other governmental or
quasi-governmental agency or authority with respect to any S1 Plan. No S1 Plan
is subject to Title IV of ERISA.
(d) Except as set forth at Section 3.10(d) of the S1 Disclosure Schedule,
(i) each of the S1 Plans has been operated and administered in all material
respects in compliance with applicable Laws, including, but not limited, in the
case of each U.S. Plan, to ERISA and the Code, (ii) each of the U.S. Plans
intended to be "qualified" within the meaning of Section 401 of the Code is so
qualified and S1 has received a determination letter or opinion letter from the
IRS to such effect, which letter remains in full force and effect, (iii) with
respect to each U.S. Plan that is subject to the funding requirements of ERISA
and the Code, the present value of accrued benefits under such S1 Plan, based
upon the actuarial assumptions used for funding purposes in the most recent
actuarial report prepared by such S1 Plan's actuary with respect to such S1
Plan, did not, as of its latest valuation date, exceed the then current value of
the assets of such S1 Plan allocable to such accrued benefits, (iv) no S1 Plan
provides benefits, including, without limitation, death or medical benefits
(whether or not insured), with respect to current or former employees of S1
beyond their retirement or other termination of service, other than (a) coverage
mandated by applicable Law, (b) death benefits or retirement benefits under an
S1 Plan that also provides post-retirement income, annuity or pension benefits
(including an "employee pension plan" as that term is defined in ERISA), (c)
deferred compensation benefits under an S1 Plan that are accrued as liabilities
on the books of S1 , or (d) benefits the full cost of which is borne by the
current or former employee (or his beneficiary), (v) no liability under ERISA or
any other law relating to employee
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14
benefits or employees or their beneficiaries has been incurred by S1 that has
not been satisfied in full, and no condition exists that presents a material
risk of S1 incurring a material liability thereunder, (vi) no U.S. Plan is a
"multiemployer pension plan," as such term is defined in ERISA and no other S1
Plan is maintained pursuant to any collective bargaining agreement or other
agreement with a labor union or other authorized representative of labor, (vii)
all contributions or other amounts payable by S1 with respect to each S1 Plan
and all other liabilities of each such entity with respect to each S1 Plan, in
respect of current or prior plan years have been paid or accrued in accordance
with generally accepted accounting practices and, in the case of a U.S. Plan,
ERISA and the Code, (viii) S1 and each S1 Subsidiary have not engaged in a
"prohibited transaction" as defined in ERISA or the Code in connection with
which S1 could be subject to either any material excise tax or civil penalty
assessed pursuant to ERISA or the Code, (ix) to the knowledge of S1, there are
no pending, threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any of the plans or any trusts related
thereto, (x) all S1 Plans could be terminated as of the Closing without material
liability in excess of the amount accrued therefor on the S1 financial
statements; (xi) no S1 Plan, either individually or collectively, provides for
any payment by S1 that would not be deductible for U.S. federal income tax
purposes; (xii) no "accumulated funding deficiency" as defined in ERISA or the
Code, whether or not waived, and no "unfunded current liability" as determined
under the Code exists with respect to any U.S. Plan; (xiii) no U.S. Plan has
experienced a "reportable event" (as such term is defined in ERISA and
regulations thereunder) that is not subject to an administrative or statutory
waiver from the reporting requirement.
3.11 CERTAIN CONTRACTS.
(a) Except as set forth at Section 3.11 of the S1 Disclosure
Schedule, neither S1 nor any of its Subsidiaries is a party to or bound by any
contract, arrangement or commitment (i) with respect to the employment of any
directors, officers, employees or consultants, (ii) which, upon the consummation
of the transactions contemplated by this Agreement will (either alone or upon
the occurrence of any additional acts or events) result in any payment (whether
of severance pay or otherwise), becoming due from S1 or any of its respective
Subsidiaries to any director, officer or employee thereof, (iii) which
materially restricts the conduct of any line of business by S1 or any of its
Subsidiaries, (iv) with or to a labor union or guild (including any collective
bargaining agreement) or (v) except as set forth on Section 3.11(a)(v) of the S1
Disclosure Schedule, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated by the occurrence of any of
the transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement (including as to this clause (v), any stock
option plan, stock appreciation rights plan, restricted stock plan or stock
purchase plan). Except as set forth at Section 3.11 of the S1 Disclosure
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15
Schedule, there are no employment, consulting and deferred compensation
agreements to which S1 or any of its Subsidiaries is a party. Section 3.11(a) of
the S1 Disclosure Schedule sets forth a list of all material contracts (as
defined in Item 601(b)(10) of Regulation S-K) of S1 and its Subsidiaries. Each
contract, arrangement or commitment of the type described in this Section
3.11(a), whether or not set forth in Section 3.11(a) of the S1 Disclosure
Schedule, is referred to herein as a "S1 Contract," and neither S1 nor any of
its Subsidiaries has received notice of, nor do any executive officers of such
entities know of, any violation of any S1 Contract.
(b) (i) Each S1 Contract is valid and binding and in full force and
effect, (ii) S1 and each of its Subsidiaries has in all material respects
performed all obligations required to be performed by it to date under each S1
Contract, and (iii) no event or condition exists which constitutes or, after
notice or lapse of time or both, would constitute, a material default on the
part of S1 or any of its Subsidiaries under any such S1 Contract.
3.12 ENVIRONMENTAL MATTERS.
(a) Each of S1 and the S1 Subsidiaries is in compliance in all material
respects with all applicable Laws and regulations relating to pollution or
protection of the environment (including without limitation, laws and
regulations relating to emissions, discharges, releases and threatened releases
of Hazardous Materials (as hereinafter defined)), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials;
(b) There is no suit, claim, action, proceeding, investigation or notice
pending or, to the knowledge of S1 and its Subsidiaries threatened (or past or
present actions or events that could form the basis of any such suit, claim,
action, proceeding, investigation or notice), in which S1 or any S1 Subsidiary
has been or, with respect to threatened suits, claims, actions, proceedings,
investigations or notices may be, named as a defendant (x) for alleged material
noncompliance (including by any predecessor), with any environmental law, rule
or regulation or (y) relating to any material release or threatened release into
the environment of any Hazardous Material, occurring at or on a site owned,
leased or operated by S1 or any S1 Subsidiary, or to the knowledge of S1,
relating to any material release or threatened release into the environment of
any Hazardous Material, occurring at or on a site not owned, leased or operated
by S1 or any S1 Subsidiary;
(c) To the knowledge of S1 and its Subsidiaries, during the period of
S1's or any S1 Subsidiary's ownership or operation of any of its properties,
there has not been any material release of Hazardous Materials in, on, under or
affecting any such property; and
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16
(d) For purposes of this Agreement, the term "Hazardous Material"
means any hazardous waste, petroleum product, polychlorinated biphenyl,
chemical, pollutant, contaminant, pesticide, radioactive substance, or other
toxic material, or other material or substance (in each such case, other than
small quantities of such substances in retail containers) regulated under any
applicable environmental or public health statute, law, ordinance, rule or
regulation.
3.13 PROPERTIES AND ASSETS.
Except for (a) items reflected in S1's consolidated financial statements
as of December 31, 1998 referred to in Section 3.5 hereof, (b) exceptions to
title that do not interfere materially with S1's or any S1 Subsidiary's use and
enjoyment of owned or leased real property, (c) liens for current real estate
taxes not yet delinquent, or being contested in good faith, properly reserved
against (and reflected on the financial statements referred to in Section 3.5
above), and (d) properties and assets sold or transferred in the ordinary course
of business consistent with past practices since December 31, 1998, S1 and each
S1 Subsidiary have good and, as to owned real property, marketable and insurable
title to all their properties and assets, free and clear of all liens, claims,
charges and other encumbrances. S1 and each S1 Subsidiary, as lessees, have the
right under valid and subsisting leases to occupy, use and possess all property
leased by them, and neither S1 nor any S1 Subsidiary has experienced any
material uninsured damage or destruction with respect to such properties since
December 31, 1998. All properties and assets used by S1 and each S1 Subsidiary
are in good operating condition and repair suitable for the purposes for which
they are currently utilized and comply in all material respects with all Laws
relating thereto now in effect or scheduled to come into effect. S1 and each S1
Subsidiary enjoy peaceful and undisturbed possession under all leases for the
use of all property under which they are the lessees, and all leases to which S1
or any S1 Subsidiary is a party are valid and binding obligations in accordance
with the terms thereof. Neither S1 nor any S1 Subsidiary is in material default
with respect to any such lease, and there has occurred no default by S1 or any
S1 Subsidiary or event which with the lapse of time or the giving of notice, or
both, would constitute a material default under any such lease. To the knowledge
of S1, there are no Laws, conditions of record, or other impediments which
interfere with the intended use by S1 or any S1 Subsidiary of any of the
property owned, leased, or occupied by them.
3.14 INSURANCE.
The existing insurance carried by S1 and S1 Subsidiaries is and will
continue to be, in respect of the nature of the risks insured against and the
amount of coverage provided, substantially similar in kind and amount to that
customarily carried by parties similarly situated who own properties and engage
in businesses substantially similar to that of S1 and the S1 Subsidiaries, and
is sufficient for compliance by S1
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17
and the S1 Subsidiaries with all requirements of Law and agreements to which S1
or any of the S1 Subsidiaries is subject or is party.
3.15 COMPLIANCE WITH APPLICABLE LAWS.
Each of S1 and any S1 Subsidiary has complied in all material respects
with all Laws applicable to it or to the operation of its business. Neither S1
nor any S1 Subsidiary has received any notice of any material alleged or
threatened claim, violation, or liability under any such Laws that has not
heretofore been cured and for which there is any remaining liability.
3.16 S1 INFORMATION.
The information relating to S1 and each S1 Subsidiary to be provided by
S1 to be contained in the S1 Proxy Statement (as defined below) will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances in which
they are made, not misleading.
3.17 INTELLECTUAL PROPERTY.
Except, in each case, as set forth in Section 3.17 of the S1
Disclosure Schedule:
(a) (i) S1 and its Subsidiaries own, free and clear of liens, orders
and arbitration awards, or are licensed or otherwise possess valid and
enforceable rights to use all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, schematics, technology, know-how,
trade secrets, ideas, algorithms, processes, Software (as defined below), and
tangible or intangible proprietary information or material ("Intellectual
Property") that are used in the business of S1 and its Subsidiaries. "Software"
means any and all (i) computer programs and applications, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, (ii) databases and compilations, including any and
all data and collections of data, whether machine readable or otherwise, (iii)
descriptions, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing, (iv) the technology supporting any Internet
site(s) operated by or on behalf of S1 or any of its Subsidiaries, and (v) all
documentation, including user manuals and training materials, relating to any of
the foregoing.
(ii) Except as would not be materially adverse to the business of
S1 or its Subsidiaries, S1 and its Subsidiaries have taken reasonable steps to
protect their Intellectual Property. There is no litigation pending or, to the
knowledge of S1 and its Subsidiaries, threatened or any written claim from any
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18
person challenging the ownership, use, validity or enforceability of any
Intellectual Property, nor is there any basis for the assertion of any such
claim or challenge.
(iii) No material patent, trademark, service xxxx, copyright, trade
secret, computer software or other intellectual property right other than the
Intellectual Property set forth on Schedule 3.17 is necessary to conduct the
businesses of S1 and its Subsidiaries as presently conducted.
(b) Schedule 3.17 lists all (i) patents, patent applications, registered
and unregistered trademarks, trade names and service marks and registered
copyrights, owned by S1 included in the Intellectual Property, including the
jurisdictions in which each such item of Intellectual Property right has been
issued or registered or in which any application for such issuance and
registration has been filed, (ii) material licenses, sublicenses and other
agreements as to which S1 and its Subsidiaries are a party and pursuant to which
any person is authorized to use any Intellectual Property, and (iii) licenses,
sublicenses and other agreements as to which S1 and its Subsidiaries are a party
and pursuant to which S1 and its Subsidiaries are authorized to use any third
party patents, trademarks or copyrights, including Software ("Third Party
Intellectual Property Rights") which are incorporated in, are or form a part of
any S1 or Subsidiary product.
(c) (i) To the knowledge of S1 and its Subsidiaries, there is no
unauthorized use, disclosure, infringement or misappropriation of any
Intellectual Property rights of S1 or its Subsidiaries, any trade secret
material to S1 or its Subsidiaries, or any Intellectual Property right of any
third party to the extent licensed by or through S1 or its Subsidiaries, by any
employee of S1 or any S1 Subsidiary or third party for whom S1 is responsible.
Except as set forth in Schedule 3.17, there are no royalties, fees or other
payments payable by S1 or its Subsidiaries to any person by reason of the
ownership, use, sale or disposition of Intellectual Property.
(ii) To the knowledge of S1 and its Subsidiaries, there has been no
prior use of S1's registered trademarks by any third party which would confer
upon said third party superior rights in such trademarks. S1 and its
Subsidiaries have taken reasonable steps to adequately police the trademarks
against third party infringement, and the material trademarks registered in the
United States have been continuously used in the form appearing in, and in
connection with the goods and services listed in, their respective registration
certificates or any amendment, supplement or office action related thereto.
(d) S1 and its Subsidiaries are not, nor will they be as a result of the
execution and delivery of this Agreement or the performance of their obligations
under this Agreement, in breach of any material license, sublicense or other
agreement relating to the Intellectual Property or Third Party Intellectual
Property Rights, and the execution and delivery of this Agreement or the
performance of the
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19
obligations under this Agreement by S1 and its Subsidiaries will not result in
the loss or impairment of, or give rise to any right of any third party to
terminate, any of S1's or any of its Subsidiaries' rights to own any of its
Intellectual Property or their respective rights under any material license
agreements, nor require the consent of any Governmental Entity or third party in
respect of any such Intellectual Property.
(e) S1 and its Subsidiaries (i) have no knowledge (including knowledge of
any litigation pending or threatened or any written claim from any person) or
reason to believe that the conduct of their businesses infringe any patent,
trademark, service xxxx, copyright, trade secret or other proprietary right of
any third party; and (ii) have not advised any third party that such third party
may be infringing any Intellectual Property or breaching any license or
agreement involving Intellectual Property and have not brought or threatened any
claim against such third party for such conduct.
(f) The Software owned or purported to be owned by S1 or any of its
Subsidiaries, was either (i) developed by employees of S1 or any of its
Subsidiaries within the scope of their employment; (ii) developed by independent
contractors or consultants who have assigned their rights to S1 or any of its
Subsidiaries pursuant to written agreements; or (iii) otherwise acquired by S1
or its Subsidiary from a third party.
(g) All employees and independent contractors and consultants of S1 and
its Subsidiaries have executed and delivered to S1 or its Subsidiaries, as the
case may be, agreements regarding the protection of proprietary information and
the assignment to S1 or its Subsidiaries of any Intellectual Property arising
from services performed for S1 or its Subsidiaries by such persons.
(h) S1 and its Subsidiaries have obtained or entered into written
agreements with their employees and with third parties, in transactions deemed
appropriate, in connection with the disclosure to, or use or appropriation by,
employees and third parties, of trade secret or proprietary information owned by
S1 and its Subsidiaries and not otherwise protected by a patent, a patent
application, copyright, trademark, or other registration or legal scheme ("S1
Confidential Information"), and do not know of any situation involving such
employee or third party use, disclosure or appropriation of S1 Confidential
Information where the lack of such a written agreement is likely to result in
any Material Adverse Effect. Except as set forth in Schedule 3.17(h) of the S1
Disclosure Schedule, neither S1 nor any of its Subsidiaries have furnished the
source code of any of their Software products to any third party, deposited any
such source code in escrow, or otherwise provided access to such source code to
any third party.
(i) Except as would not be materially adverse to the business of S1 or
its Subsidiaries, S1 and its Subsidiaries have taken reasonable steps with the
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20
intent of ensuring that their products (including existing products and
technology and products and technology currently under development) will, when
used in accordance with associated documentation on a specified platform or
platforms, be capable upon installation of accurately processing, providing, and
receiving date data from, into, and between the twentieth and twenty-first
centuries, including the years 1999 and 2000, and making leap-year calculations,
provided that all other non-S1 or S1 Subsidiary products (e.g., hardware,
software and firmware) used in or in combination with S1's or its Subsidiaries'
products, properly exchange data with S1's and its Subsidiaries products.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
Each of the Purchasers severally and not jointly hereby makes the
following representations and warranties to S1 as set forth in this Section 4,
each of which is being relied upon by S1 as a material inducement to enter into
and perform this Agreement. All of the disclosure schedules of the Purchasers
referenced below and thereby required of the Purchasers pursuant to this
Agreement, which disclosure schedules shall be cross-referenced to the specific
sections and subsections of this Agreement and delivered herewith, are referred
to herein as the "Purchasers' Disclosure Schedule."
4.1 ORGANIZATION OF PURCHASERS.
Such Purchaser not a natural person is duly organized and validly
existing under the laws of the jurisdiction of its formation.
4.2 AUTHORIZATION OF TRANSACTION.
(a) If such Purchaser is not a natural person, such Purchaser has full
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite action on the part of such Purchaser and no other proceedings
on the part of such Purchaser are necessary to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by such Purchaser and (assuming due authorization, execution and
delivery by S1 and FICS of this Agreement) will constitute a valid and legally
binding obligation of such Purchaser, enforceable in accordance with its terms,
except as enforcement may be limited by general principles of equity, whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally. Except as set
forth in Section 4.2(a) of the Purchasers' Disclosure Schedule, no Purchaser
need give any notice to, make any filing with, or obtain any authorization,
consent, or approval of
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21
any government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
(b) Such Purchaser acknowledges that he, she or it has read this
Agreement and has been provided with, or been granted access to, all information
necessary to make his or her decision to execute this Agreement. Such Purchaser
acknowledges that his, her or its signature on this Agreement shall be deemed
his, her or its written consent to the execution of this Agreement and to the
consummation of all of the transactions contemplated by this Agreement, except
for such consents, approvals or filings the failure of which to obtain will not
have a Material Adverse Effect on the ability of such Purchaser to consummate
the transactions contemplated hereby.
4.3 NON-CONTRAVENTION.
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (A) assuming that the
consents and approvals referred to in Section 4.2(a) are duly obtained, (x)
violate any Laws applicable to such Purchaser or any of its properties or
assets, or (y) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the respective
properties or assets of such Purchaser under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which such Purchaser is or
will be, as the case may be, a party, or by which such Purchaser or any of its
properties or assets may be bound or affected or (B) if such Purchaser is not a
natural person, violate any provisions of its organizational documents.
4.4 BROKER'S FEES.
Except for the fee payable to Credit Suisse First Boston ("CSFB") in
accordance with the terms of a letter agreement between CSFB and FICS, dated
May 16, 1999, such Purchaser has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement nor has such Purchaser created any such liability
or obligation which, upon consummation of the transactions contemplated by this
Agreement or the Transaction, will become an obligation of S1 or any subsidiary.
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4.5 ADEQUATE RESOURCES.
Each Purchaser will have, at the time of Closing, sufficient cash or
other resources to perform its obligations hereunder.
4.6 INVESTMENT EXPERIENCE.
Such Purchaser is aware of S1's business affairs and financial condition
and has had access to and has acquired sufficient information about S1 to reach
an informed and knowledgeable decision to acquire the Shares. Such Purchaser has
such business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Shares. Such
Purchaser is able to bear the economic risk of holding the Shares for an
indefinite period, including the loss of such Purchaser's entire investment. The
Shares were not offered or sold to such Purchaser by any form of general
solicitation or advertising.
4.7 INVESTMENT INTENT.
Such Purchaser is purchasing the Shares for its own account as principal,
for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, within the
meaning of the Securities Act of 1933 as amended (the "Securities Act"). Such
Purchaser understands that its acquisition of the Shares has not been registered
under the Securities Act or registered or qualified under any state securities
law in reliance on specific exemptions therefrom, which exemptions may depend
upon, among other things, the bona fide nature of such Purchaser's investment
intent as expressed herein.
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4.8 REGISTRATION OR EXEMPTION REQUIREMENTS.
Such Purchaser further acknowledges and understands that the Shares may
be required to be held indefinitely, and they may not be resold or otherwise
transferred except in a transaction registered under the Securities Act or where
an exemption from such registration is available. Such Purchaser understands
that the certificate(s) evidencing the Shares will be imprinted with a legend
that prohibits the transfer of the Shares unless (a) they are registered or such
registration is not required, and (b) if the transfer is pursuant to an
exemption from registration other than Rule 144 promulgated under the Securities
Act and, if S1 shall so request in writing, an opinion of counsel satisfactory
to S1 is obtained to the effect that the transaction is so exempt and in
compliance with applicable state law.
4.9 NO LEGAL, TAX OR INVESTMENT ADVICE.
Such Purchaser understands that nothing in this Agreement or any other
materials presented to such Purchaser in connection with the purchase and sale
of the Shares or the Transaction constitutes legal, tax or investment advice.
Such Purchaser has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with its
purchase of the Shares.
SECTION 5. ADDITIONAL AGREEMENTS.
5.1 LOCK-UP COVENANT.
During the period beginning on the Closing and ending on the date 180
days after the Closing, except as contemplated by paragraph 5.8(a), the Majority
Purchasers (as defined in Section 5.9 below) covenant that they will not,
without the prior written consent of S1, offer, sell or otherwise dispose of,
directly or indirectly, any capital stock of S1 which Purchasers may own
directly, indirectly or beneficially; provided, however, that any such Purchaser
may transfer some or all of the Shares to a corporation, partnership or other
legal entity controlled by such Purchaser if such transferee agrees in writing
to hold any Shares received subject to the provisions of this Agreement and to
transfer such Shares back to such Purchaser if such transferee ceases to be
controlled by such Purchaser.
5.2 S1 BOARD OF DIRECTORS.
5.2(a). Effective upon the Closing, S1 shall have adopted a resolution
pursuant to Section 3.2 of its Amended and Restated Bylaws to increase the size
of its Board of Directors by at least four members to an aggregate size of no
more than 11
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members, and shall thereupon invite four individuals, designated by Michel
Akkermans ("Akkermans"), to serve as additional members (the "FICS Members") of
the Board of Directors of S1 to serve for a term expiring at the third
successive annual meeting following the Closing; provided, however, that S1
shall have no obligation to invite any FICS Member to serve on S1's Board if
such person is not a member in good standing of the FICS Board of Directors
immediately prior to the Closing. For purposes of this Section 5.2, the members
of the S1 Board of Directors immediately prior to the Closing are referred to as
the "S1 Members." In addition, S1 shall have amended its Amended and Restated
Bylaws to provide that for the three-year period beginning upon the Closing, the
nominating committee for additional members of the Board of Directors shall
consist of Xxxxx X. Xxxxx III ("Xxxxx") and Akkermans, acting together, unless
such additional member is to replace a FICS Member, in which case the nominating
committee shall consist of the remaining FICS Members only, and unless (except
as provided in paragraph 5.2(b) below) such additional member is to replace an
S1 Member, in which case the nominating committee shall consist of the remaining
S1 Members only. Any person elected as a member of the S1 Board of Directors to
replace an S1 Member or a FICS Member shall thereupon be deemed to be an S1
Member or a FICS Member, as the case may be.
5.2(b). The parties intend that two S1 Members will tender their
resignations from the S1 Board of Directors, such resignations to take effect no
later than the second anniversary of the Closing. Notwithstanding paragraph
5.2(a), Xxxxx and Akkermans shall use their good faith efforts to nominate for
appointment two mutually acceptable individuals to fill such vacancies by no
later than the second anniversary of the Closing. If Akkermans and Xxxxx fail to
agree to nominate two individuals to serve as such replacement directors on or
before the second anniversary of the Closing, the parties intend such slots to
remain vacant until after the taking of the action described in paragraph
5.2(c).
5.2(c). The parties agree that at the first regularly scheduled meeting
of the S1 Board of Directors following the second anniversary of the Closing,
the directors then in office will consider and vote upon a resolution that
Akkermans be elected to the position of Chief Executive Officer of S1.
5.2(d). The parties agree that, as of the date of the Closing, Akkermans
shall be appointed to hold the offices of President and Chairman of the Board of
Directors of S1.
5.3 COMPLIANCE WITH ANTITRUST LAWS.
Each of FICS, the Purchasers and S1 shall make all filings of any
applications, notices or other documents required under applicable antitrust
Laws and use its reasonable best efforts to resolve objections, if any, which
may be
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asserted with respect to the transactions contemplated by this Agreement or the
Transaction under antitrust laws, including, without limitation, the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). In the event a suit is threatened or instituted challenging the
transactions contemplated by this Agreement or the Transaction as violative of
antitrust laws, each of the Purchasers and S1 shall use its reasonable best
efforts to avoid the filing of, or resist or resolve such suit. The Purchasers
and S1 shall use their reasonable best efforts to take such action as may be
required: (a) by the Antitrust Division of the Department of Justice or the
Federal Trade Commission in order to resolve such objections as either of them
may have to the transactions contemplated by this Agreement or the Transaction
under antitrust laws, or (b) by any federal or state court of the United States,
in any suit brought by a private party or Governmental Entity challenging the
transactions contemplated by this Agreement or the Transaction as violative of
antitrust laws, in order to avoid the entry of, or to effect the dissolution of,
any injunction, temporary restraining order, or other order which has the effect
of preventing the consummation of the transactions contemplated by this
Agreement or the Transaction. Reasonable best efforts shall not include, among
other things and to the extent S1 so desires, the willingness of S1 to accept an
order agreeing to the divestiture, or the holding separate, of any assets of
FICS or S1.
5.4 REGULATORY MATTERS.
5.4(a). Upon the execution and delivery of this Agreement, S1 and the
Purchasers shall promptly cause to be prepared and filed with the SEC the S1
Proxy Statement for soliciting the approval of this Agreement and the S1
Issuance by the stockholders of S1. The S1 Proxy Statement can be included in a
registration statement on Form S-4 prepared in connection with the Agreement and
Plan of Merger by and among S1, Sahara Strategy Corporation and Edify
Corporation dated as of May 16, 1999. S1 shall use its reasonable best efforts
to have the S1 Proxy Statement cleared for use by the SEC as soon as possible
after the filing. The parties shall cooperate in responding to and considering
any questions or comments from the SEC staff regarding the information contained
in the S1 Proxy Statement. If at any time after the S1 Proxy Statement is filed
with the SEC, and prior to the date of the Closing, any event relating to FICS
is discovered by the Purchasers which should be set forth in an amendment of,
or a supplement to, the S1 Proxy Statement, the Purchasers shall promptly
inform S1, and shall furnish S1 with all necessary information relating to such
event whereupon S1 shall promptly cause an appropriate amendment to the S1
Proxy Statement to be filed with the SEC. S1 (if prior to the meeting of
stockholders pursuant to Section 4.5 hereof) shall take all necessary action as
promptly as practicable to permit an appropriate amendment or supplement to be
transmitted to its stockholders entitled to vote at such meeting. If at any
time after the S1 Proxy Statement is filed with the SEC, and prior to the date
of the Closing, any event relating to S1 is discovered by S1 which should be
set forth in an
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amendment of, or a supplement to, the S1 Proxy Statement, S1 shall promptly
inform the Purchasers, and S1 shall promptly cause an appropriate amendment to
the Proxy Statement to be filed with the SEC. S1 (if prior to the meeting of
stockholders pursuant to Section 4.5 hereof) shall take all necessary action as
promptly as practicable to permit an appropriate amendment or supplement to be
transmitted to its stockholders entitled to vote at such meeting.
5.4(b). The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement. S1 and the Purchasers shall have the right to review in advance, and
to the extent practicable each will consult the other on, in each case subject
to applicable laws relating to the exchange of information, all the information
relating to S1 or the Purchasers, as the case may be, which appears in any
filing made with, or written materials submitted to, any third party or any
Governmental Entity in connection with the transactions contemplated by this
Agreement; provided, however, that nothing contained herein shall be deemed to
provide either party with a right to review any information provided to any
Governmental Entity on a confidential basis in connection with the transactions
contemplated hereby; and further provided that S1 and Akkermans shall mutually
agree on any such information regarding the structure or purpose of the
structure of the transactions contemplated by this Agreement and the Holdings
Purchase Agreement prior to its appearance. In exercising the foregoing right,
each of the parties hereto shall act reasonably and as promptly as practicable.
The parties hereto agree that they will consult with each other with respect to
the obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Entities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
apprised of the status of matters relating to contemplation of the transactions
contemplated herein.
5.4(c). The Purchasers shall, upon request, furnish S1 with all
information concerning FICS and its directors, officers and stockholders and
such other matters as may be reasonably necessary or advisable in connection
with the S1 Proxy Statement or any other statement, filing, notice or
application made by or on behalf of S1 to any Governmental Entity in connection
with the transactions contemplated by this Agreement or the Transaction.
5.4(d). S1 and the Purchasers shall promptly advise each other upon
receiving any communication from any Governmental Entity whose consent or
approval is required for consummation of the transactions contemplated by this
Agreement which causes such party to believe that there is a reasonable
likelihood that any Requisite Regulatory Approval (defined in the Holdings
Purchase
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27
Agreement) will not be obtained or that the receipt of any such approval will be
materially delayed.
5.5 STOCKHOLDER MEETING.
S1 shall take all steps necessary to duly call, give notice of, convene
and hold a meeting of its stockholders within 45 days after the S1 Proxy
Statement is approved by the SEC for use for the purpose of voting upon the
approval of this Agreement and the S1 Issuance. Management and the Board of
Directors of S1 shall recommend approval of each of this Agreement, the S1
Issuance and the Transaction.
5.6 LEGAL CONDITIONS.
Each of S1 and the Purchasers shall use their reasonable best efforts (a)
to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
with respect to the transactions contemplated by this Agreement or the
Transaction and, subject to the conditions set forth in Section 6 hereof, to
consummate the transactions contemplated by this Agreement and (b) to obtain
(and to cooperate with the other party to obtain) any consent, authorization,
order or approval of, or any exemption by, any Governmental Entity and any other
third party which is required to be obtained by the Purchasers or S1 in
connection with transactions contemplated by this Agreement or the Transaction.
5.7 STOCK EXCHANGE LISTING.
S1 shall cause the Shares to be approved for quotation on the Nasdaq
Stock Market National Market System ("Nasdaq") (or such other exchange on which
the S1 Common Stock has become listed, or approved for listing) prior to
Closing.
5.8 REGISTRATION OF S1 COMMON STOCK.
5.8(a). S1 shall file as soon as practicable after the date the S1 Proxy
Statement is cleared for use (unless S1 shall then be required to restate
financial statements or otherwise provide pro forma financial data, in which
case S1 shall file as soon as reasonably practicable) a registration statement
on an appropriate form (the "Akkermans Registration Statement") with the SEC and
use its commercially reasonable efforts to cause the Akkermans Registration
Statement to be declared effective upon the Closing (or such later date as
Akkermans may request) to effect the registration under the Securities Act of
the Akkermans Registration Statement for the resale by Akkermans of such amount
of shares of S1 Common Stock as determined by Akkermans no later than the day
before Closing, but in no event greater than an amount of shares the net
proceeds from the sale of which (after
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giving effect to underwriting fees, expenses, commissions and discounts) equal
(i) (x) 0.18 multiplied by (y) the Closing Market Price (as defined in Section
1.1(a) above), multiplied by (z) the number of shares of S1 Common Stock he
beneficially acquires pursuant to this Agreement and the transactions
contemplated hereby, plus (ii) $15,000,000, on customary terms and under then
prevailing market conditions, at a per share offering price to the public as
determined by S1 in its reasonable judgment to be fair and adequate to
Akkermans. The Akkermans Registration Statement may, in S1's sole and absolute
discretion, also provide for the issuance by S1 of a number of newly issued
shares of S1 Common Stock in a primary offering as well as shares of other
selling stockholders, if any. S1 may elect to conduct an underwritten offering,
in its sole and absolute discretion, whether or not it desires to make a primary
offering. S1 agrees to consult with Akkermans and reasonably consider his views
with respect to the selection of the underwriter to be used in connection with
the offering to be made pursuant to the prospectus constituting a part of the
Akkermans Registration Statement. Of the Purchasers, only Akkermans shall be
permitted to participate in the offering of S1 Common Stock provided for by the
Akkermans Registration Statement contemplated by this paragraph 5.8(a). S1 shall
use its commercially reasonable efforts to keep the Akkermans Registration
Statement effective for 30 days after Closing or such shorter time as necessary
for the sale of shares registered thereunder.
5.8(b). S1 shall file and cause to be declared effective promptly
following the Closing a registration statement on Form S-3 or another
appropriate form for secondary offerings pursuant to Rule 415 promulgated under
the Securities Act, registering for resale on a delayed or continuous basis all
of the Shares (other than shares sold by Akkermans pursuant to paragraph 5.8(a))
issued pursuant to this Agreement and all of the shares of S1 Common Stock
issuable upon exercise by Purchasers of Successor Options (such registration
statement, the "Resale Registration Statement"). S1 shall use its reasonable
best efforts to keep this Resale Registration Statement effective for no less
than one year following Closing.
5.8(c). S1 shall conduct all registration proceedings in accordance with
the following:
(1) S1 shall use its commercially reasonable efforts, but shall
not be required, to conduct an underwritten offering.
(2) If, after it becomes effective, such registration statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental authority, such registration shall not be
deemed to have been effected unless such stop order, injunction or other order
shall have been subsequently vacated or removed.
(3) S1 shall have no obligation to include S1 Common Stock owned
by a Purchaser in a registration statement unless and until such Purchaser
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has furnished S1 with all information and statements about or pertaining to such
Purchaser in such reasonable detail and on such timely basis as is reasonably
deemed by S1 to be necessary or appropriate for the preparation of the
registration statement.
(4) S1 shall, subject to the other provisions of this Section 5.8:
(A) use its commercially reasonable efforts to cause the registration
statement to become effective as soon as practicable after the filing thereof;
(B) prepare and file with the SEC as promptly as is reasonably
practicable (and in any event within 60 days after such amendment or supplement
becomes necessary) such amendments and supplements to the registration statement
contained therein as may be necessary to keep such registration statement
effective for the respective periods specified or until each Purchaser has
completed the distribution described in such registration statement, whichever
occurs first;
(C) furnish to Purchasers such number of copies of such registration
statement, each amendment and supplement thereto as they may reasonably request;
(D) use its commercially reasonable efforts to register or qualify
such shares under the state blue sky or securities or banking laws ("Blue Sky
Laws") of such jurisdictions as Purchasers reasonably request (and to keep such
registrations and qualifications effective for a period of no less than one year
following Closing, or until Purchasers have completed the distribution of such
shares, whichever occurs first), and to do any and all other acts and things
that may be reasonably necessary or advisable to enable such Purchasers to
consummate the disposition of such shares in such jurisdictions; provided,
however, that S1 will not be required to do any of the following: (i) qualify
generally to do business in any jurisdiction where it would not be required but
for this Section 5.8, (ii) subject itself to taxation in any such jurisdiction,
or (iii) file any general consent to service of process in any such
jurisdiction;
(E) promptly notify Purchasers at any time during the period that S1
is required to keep the registration statement effective, of the occurrence of
any event as a result of which such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the statements
therein in the light of the circumstances under which they were made, not
misleading, and prepare a supplement or amendment to the registration statement
so that, as thereafter delivered to the purchasers of such shares, the
registration statement will not contain an untrue statement of a material fact
or
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omit to state any fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(F) use commercially reasonable efforts to cause all such shares to be
listed on Nasdaq or such other national exchange on which S1 Common Stock shall
then be listed; and
(G) provide a transfer agent and registrar (if S1 does not already
have such an agent) for all such shares not later than the effective date of
such registration statement.
(5) If, pursuant to this Section 5.8, S1 Common Stock owned by a
Purchaser is included in a registration statement, then such Purchaser shall pay
all transfer taxes, if any, relating to the sale of its S1 Common Stock, the
fees and expenses of its own counsel, and its pro rata portion of any
underwriting discounts or commissions or the equivalent thereof.
(6) Except for the fees and expenses specified in paragraph (5) of this
Section 5.8(c) and except as provided this paragraph (6), S1 shall pay all
expenses incident to the registration and to S1's performance of or compliance
with this Agreement, including, without limitation, all SEC registration and
filing fees, fees and expenses of compliance with Blue Sky Laws, underwriting
discounts, fees, and expenses (other than a Purchaser's pro rata portion of any
underwriting discounts or commissions or the equivalent thereof), printing
expenses, messenger and delivery expenses, and fees and expenses of counsel for
S1 and all independent certified public accountants and other persons retained
by S1.
(7) In the event that any shares of S1 Common Stock owned by a Purchaser
are sold by means of a registration statement pursuant to this Section 5.8, such
Purchaser (for the purposes of this paragraph (7), the "Indemnifying Person")
agrees to indemnify and hold harmless S1, each of S1's officers and directors,
and each person, if any, who controls or may control S1 within the meaning of
the Securities Act (for the purposes of this paragraph (7), S1, its officers and
directors, and any such other persons being referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs, and expenses, including, without limitation, interest,
penalties, and reasonable attorneys' fees and disbursements, asserted against,
resulting to, imposed upon, or incurred by such Indemnified Person, directly or
indirectly (collectively, referred to for purposes of this paragraph (vii) and
the corresponding provision of paragraph (viii) below in the singular as a
"Claim" and in the plural as "Claims"), based upon, arising out of, or resulting
from any untrue statement of a material fact contained in the registration
statement or any omission to state therein a material fact necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not
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31
misleading, to the extent that such Claim is based upon, arises out of or
results from any untrue statement or omission based upon information furnished
to S1 by such Purchaser in a written document provided by such Purchaser for use
in connection with the Registration Statement; provided that such Purchaser will
not be liable in any such case to the extent that any such Claim arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement in reliance upon or in
conformity with written information furnished to such Purchaser by S1 or an
underwriter in connection with the registration statement specifically for use
in the preparation thereof.
(8) S1 (for the purposes of this paragraph (8), the "Indemnifying
Person") agrees to indemnify and hold harmless such Purchaser and any
underwriters participating in the distribution of S1 Common Stock pursuant to a
registration statement (for the purposes of this paragraph (8), such Purchaser
and any such other persons also being referred to individually as an
"Indemnified Person" and collectively as "Indemnified Persons") from and against
all Claims based upon, arising out of, or resulting from any untrue statement of
a material fact contained in the registration statement or any omission to state
therein a material fact necessary in order to make the statement made therein,
in the light of the circumstances under which they were made, not misleading,
provided that S1 will not be liable in any such case to the extent that any such
Claim arises out of or results from any untrue statement or omission based upon
information furnished to S1 by such Purchaser in a written document provided by
such Purchaser for use in connection with the registration statement.
(9) The indemnification set forth herein shall be in addition to any
liability S1 or such Purchaser may otherwise have in connection with any
registration of S1 Common Stock. Within a reasonable time after receiving
definitive notice of any Claim in respect of which an Indemnified Person may
seek indemnification under this Section 5.8(c), such Indemnified Person shall
submit written notice thereof to such Indemnifying Person. The failure of the
Indemnified Person so to notify the Indemnifying Person of any such Claim shall
not relieve the Indemnifying Person from any liability it may have hereunder
except to the extent that (a) such liability was caused or increased by such
omission, or (b) the ability of the Indemnifying Person to reduce such liability
was materially adversely affected by such omission. In addition, the omission of
the Indemnified Person so to notify the Indemnifying Person of any such Claim
shall not relieve the Indemnifying Person from any liability it may have
otherwise than hereunder. The Indemnifying Person shall have the right to
undertake, by counsel or representatives of its own choosing, the defense,
compromise, or settlement (without admitting liability of the Indemnifying
Person) of any such Claim asserted, such defense, compromise, or settlement to
be undertaken at the expense and risk of the Indemnifying Person, and the
Indemnified Person shall have the right to engage separate counsel, at its
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own expense, which counsel for the Indemnifying Person shall keep informed and
consult with in a reasonable manner. In the event the Indemnifying Person shall
fail to undertake such defense by its own representatives, the Indemnifying
Person shall give prompt written notice of such election to the Indemnified
Person, and the Indemnified Person shall undertake the defense, compromise, or
settlement (without admitting liability of the Indemnified Person) thereof on
behalf of and for the account and risk of the Indemnifying Person by counsel or
other representatives designated by the Indemnified Person. In the event that
any Claim shall arise out of a transaction or cover any period or periods
wherein S1 and such Purchaser shall each be liable hereunder for part of the
liability or obligation arising therefrom, then the parties shall, each choosing
its own counsel and bearing its own expenses, defend such Claim, and no
settlement or compromise of such Claim may be made without the joint consent or
approval of S1 and such Purchaser. Notwithstanding the foregoing, no
Indemnifying Person shall be obligated hereunder with respect to amounts paid in
settlement of any Claim if such settlement is effected without the consent of
such Indemnifying Person (which consent shall not be unreasonably withheld).
(10) If the indemnification provided for in this Section 5.8(c) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party (as defined in either paragraph (7) or (8)) with respect to any Claim,
then such Purchaser or S1, as applicable and as the case may be (each an
"Indemnifying Party"), in lieu of indemnifying an Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Claim in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and of the Indemnified
Party on the other in connection with the statements or omissions which resulted
in such claim.
5.9 CONDUCT OF S1'S BUSINESS.
During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Closing, except with
respect to (i) the certain Agreement and Plan of Merger dated as of May 16, 1999
by and among S1, Sahara Strategy Corporation and Edify Corporation, and (ii) the
certain Stock Purchase and Option Agreement dated as of May 16, 1999 by and
between S1 and Intuit Inc., prior to entering into any such agreement S1 agrees
to consult with Akkermans, General Atlantic Partners 20, L.P., GAP Coinvestment
Partners, L.P., General Atlantic Partners 52, L.P. and GIMV N.V. (together, the
"Majority Purchasers") and reasonably consider their views with respect to any
transactions having a value over $50,000,000 in which S1 proposes to engage.
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5.10 ADVICE OF CHANGES.
S1 and the Purchasers shall promptly advise the other party of any change
or event that, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect on it or to cause or constitute a
material breach of any of its representations, warranties or covenants contained
herein. From time to time prior to the Closing Date, each party will promptly
supplement or amend its disclosure schedule delivered in connection with the
execution of this Agreement to reflect any matter which, if existing, occurring
or known at the date of this Agreement, would have been required to be set forth
or described in such disclosure schedule or which is necessary to correct any
information in such disclosure schedule which has been rendered inaccurate
thereby. No supplement or amendment to such disclosure schedule shall have any
effect for the purpose of determining satisfaction of the conditions set forth
in Sections 6.2(a) or 6.3(a) hereof, as the case may be.
SECTION 6. CONDITIONS TO CLOSING.
6.1 CONDITIONS TO OBLIGATIONS OF ALL PARTIES.
The obligations of each party to consummate the transactions contemplated
by this Agreement are subject to the satisfaction, on or before the date of the
Closing, of each of the following conditions precedent:
6.1(a). Termination. Neither this Agreement nor the Holdings Purchase
Agreement shall have been terminated in accordance with its terms.
6.1(b). No Governmental Action. No action or proceeding by or before any
governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which is reasonably
expected to restrain, prohibit or invalidate the transactions contemplated by
this Agreement or to affect adversely the financial condition and business
prospects of S1.
6.2 CONDITIONS TO THE OBLIGATIONS OF PURCHASERS.
The obligations of Purchasers to purchase the Shares as contemplated by
this Agreement are subject to the satisfaction, on or before the date of the
Closing, of each of the following conditions precedent, any one or more of which
(other than those in Sections 6.2(d) and 6.2(e)) may be waived by the written
consent of the Majority Purchasers and which, as to those in Sections 6.2(d) and
6.2(e), may be waived by the written consent of Akkermans:
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6.2(a). Representations and Warranties. The representations and
warranties of S1 contained in this Agreement shall be true, correct and complete
in all material respects when made and shall be true and correct on the date of
the Closing, with the same force and effect as if made on the date of the
Closing.
6.2(b). Compliance with Covenants. S1 shall have in all material respects
performed all obligations and agreements and complied with all covenants
contained in this Agreement to be performed and complied with by S1 on or prior
to the date of the Closing.
6.2(c) Registrations of S1 Directors. S1 shall have received letters of
resignation from two of its incumbent directors, such resignations to take
effect prior to the second anniversary of the Closing.
6.2(d) Registration Statement. The Akkermans Registration Statement shall
be able to be declared effective by the SEC, subject only to completion of the
Closing (and the action of the SEC thereafter to declare said Registration
Statement effective).
6.2(e) Akkermans Underwriting Agreement. At the Closing, an underwriting
agreement in reasonable and customary form shall have been prepared and executed
by S1 and the lead underwriter for the offering of S1 Common Stock described in
the prospectus constituting a part of the Akkermans Registration Statement, and
shall be ready for use upon execution by Akkermans.
6.2(f) Transaction. The Transaction contemplated by the Holdings Purchase
Agreement shall have been consummated.
6.3 CONDITIONS TO OBLIGATIONS OF S1.
The obligations of S1 to sell the Shares as contemplated by this
Agreement are subject to the satisfaction, on or before the date of the Closing,
of each of the following conditions precedent, any one or more of which may be
waived by S1, in its sole and absolute discretion:
6.3(a). Representations and Warranties. The representations and
warranties of Purchasers contained in this Agreement shall be true, correct and
complete in all material respects when made and shall be true and correct as of
the date of the Closing with the same force and effect as if made on the date of
the Closing.
6.3(b). Compliance with Covenants. Purchasers and FICS shall have in all
material respects performed all obligations and agreements and complied with all
covenants contained in this Agreement to be performed and complied with by it on
or prior to the date of the Closing.
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SECTION 7. CLOSING.
7.1 DELIVERIES BY S1.
At the Closing, S1 shall deliver to Purchasers the following:
(1) Certificates registered in Purchasers' names, representing
all of the Shares in the amounts set forth in Section 1.1 above.
(2) A copy of the resolutions of the Board of Directors of S1, as
certified as of the Closing Date by the Secretary or other appropriate officer
of S1, as being true, correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this Agreement by S1, the
authorization, sale, issuance and delivery of the Shares, and the performance of
S1's obligations hereunder.
(3) A certificate of S1 signed by an authorized officer of S1
certifying that the representations and warranties of S1 made herein are true,
complete and correct in all material respects as of the date of this Agreement
and are true and correct as of the date of the Closing, and S1 has in all
material respects performed all obligations and agreements and complied with all
covenants required to be performed or complied with by S1 on or prior to the
Closing.
(4) Successor Options and related option agreements for each
option delivered pursuant to Section 2 above.
(5) Such other certificates, instruments or documents as
Purchasers may reasonably request in order to effect and document the
transactions contemplated hereby.
(6) An update of S1's Disclosure Schedule reflecting any change
required as if the Agreement were being executed as of the date of the Closing.
7.2 DELIVERIES BY PURCHASERS.
At the Closing, Purchasers shall deliver to S1 the following:
(1) The Transaction Consideration, in the form determined
pursuant to Section 1.1(b) hereof.
(2) A certificate of each Purchaser signed by such Purchaser or
an authorized officer of such Purchaser certifying that the representations and
warranties of such Purchaser made herein are true, complete and correct in all
material respects as of the date of this Agreement and are true and correct as
of the
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36
date of the Closing, and such Purchaser has in all material respects performed
all obligations and agreements and complied with all covenants required to be
performed or complied with by Purchaser on or prior to the Closing.
(3) If the Purchaser is not a natural person, a copy of the
resolutions or other corporate documentation, certified by the Secretary of such
Purchaser as being true, correct and complete and then in full force and effect,
authorizing the execution, delivery and performance by Purchaser of this
Agreement, Purchaser's obligations hereunder and the Transaction.
(4) Such other certificates, instruments or documents as S1 may
reasonably request in order to effect and document the transaction contemplated
hereby.
(5) An update of the Purchasers' Disclosure Schedule reflecting
any change required as if the Agreement were being executed as of the date of
the Closing.
SECTION 8. LEGEND.
8.1 ENDORSEMENT.
Each certificate representing the Shares shall bear the first
paragraph of the following legend (in addition to any legend required by
applicable state securities laws) and certificates representing the Shares
delivered to the Purchasers identified on Schedule 5.1 shall bear, in addition,
the second paragraph of the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR
ANY OTHER FEDERAL OR STATE SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND ANY OTHER APPLICABLE FEDERAL
SECURITIES LAWS COVERING SUCH SECURITIES OR S1 RECEIVES AN OPINION OF
COUNSEL IN FORM REASONABLY SATISFACTORY TO S1 THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
ADDITIONALLY, THE TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN THE STOCK
PURCHASE AGREEMENT DATED MAY 16, 1999 (THE
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"AGREEMENT") BETWEEN S1 AND THE ORIGINAL PURCHASER, AND NO TRANSFER OF
SHARES SHALL BE VALID OR EFFECTIVE ABSENT COMPLIANCE WITH SUCH
RESTRICTIONS. ALL SUBSEQUENT HOLDERS OF THIS CERTIFICATE WILL HAVE
AGREED TO BE BOUND BY CERTAIN OF THE TERMS OF THE AGREEMENT. COPIES OF
THE AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
REGISTERED HOLDER OF THIS CERTIFICATE TO THE SECRETARY OF S1.
8.2 REMOVAL OF LEGEND.
The first paragraph of the legend endorsed on a stock certificate
pursuant to Section 8.1 of this Agreement, insofar as it relates to registration
under the Securities Act, shall be removed and S1 shall issue a certificate
without such legend to the holder of such Shares, if such Shares are registered
under applicable federal securities laws and a prospectus meeting the
requirements of the rules and regulations of the SEC is available or if such
holder provides to S1 an opinion of counsel to such holder reasonably
satisfactory to S1, to the effect that a public sale, transfer or assignment of
such Shares may be made without registration and without compliance with any
restrictions. The second paragraph of the legend endorsed on a stock certificate
pursuant to Section 8.1 of this Agreement, insofar as it relates to additional
restrictions specified in this Agreement, shall be removed upon the expiration
of the six-month lock-up period described in Section 5.1.
SECTION 9. TERMINATION.
9.1 MUTUAL CONSENT.
The parties may terminate this Agreement at any time by mutual written
agreement.
9.2 OTHER TERMINATION.
S1 or the Majority Purchasers may terminate this Agreement by giving
notice (a "Termination Notice") to the other parties at the time designated in
this Section or, in the absence of such designation, at any time up to and
including the date of the Closing, if any one or more of the following shall
have occurred and be continuing:
9.2(a). Termination By Any Party. Any party may terminate this
Agreement under any one or more of the following circumstances:
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(1) at any time after termination of the Holdings Purchase
Agreement in accordance with its terms;
(2) a court or other governmental authority of competent
jurisdiction shall have issued an order, writ, injunction or decree or shall
have taken any other action permanently restraining or otherwise prohibiting the
purchase of the Shares contemplated hereby and such order, writ, injunction,
decree or other action shall have become final and nonappealable.
9.2(b). Termination By Majority Purchasers. Majority Purchasers may
terminate this Agreement
(1) on the date of the Closing, if any condition precedent set
forth in Sections 6.1 or 6.2 shall not have been satisfied;
(2) at any time prior to or on the date of the Closing, if S1
engages in any transaction (i) in which S1 proposes to issue, deliver or sell,
or authorize or propose the issuance, delivery or sale of, a number of shares of
voting capital stock greater than 50% of its shares of its outstanding shares of
voting capital stock, (ii) involving or contemplating the acquisition or
purchase of more than 50% of any class or series of capital stock, or 50% of the
assets of S1, (iii) any lease or sale transaction out of the ordinary course of
business of more than 50% of the assets of S1, or (iv) any liquidation or
dissolution of S1, without obtaining the prior written consent of the Majority
Purchasers (which consent shall not be unreasonably withheld); and
(3) provided that the Majority Purchasers are not then in breach
of any representation, warranty, covenant or other agreement contained herein
that, individually or in the aggregate, would give S1 the right to terminate
this Agreement, if there shall have been a breach of any of the representations
or warranties set forth in this Agreement on the part of S1, if such breach,
individually or in the aggregate, has had or is likely to have a Material
Adverse Effect on S1, and such breach shall not have been cured within 30 days
following receipt by the S1 of written notice of such breach from the Majority
Purchasers or such breach, by its nature, cannot be cured prior to the Closing
9.2(c). Termination By S1. S1 may terminate this Agreement on the date of
the Closing, if any condition precedent set forth in Sections 6.1 or 6.3 shall
not have been satisfied.
9.3 EFFECT OF TERMINATION.
Termination of this Agreement pursuant to this Section shall not relieve
any party of any liability for a default or other breach, default or
nonperformance under this Agreement. Notwithstanding the foregoing, no party
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hereto shall be liable for consequential or punitive damages in connection with
such termination.
SECTION 10. MISCELLANEOUS.
10.1 ADDITIONAL ACTIONS AND DOCUMENTS.
Each of the parties hereto agrees that it will, at any time, prior to, at
or after the Closing, take or cause to be taken such further actions, and
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments (including export license applications) as may
be necessary or reasonably requested in connection with the consummation of the
purchase and sale contemplated by this Agreement or in order to fully effectuate
the purposes, terms and conditions of this Agreement.
10.2 EXPENSES.
Except as specified in Section 5.8, each party hereto shall pay its own
expenses incurred in connection with this Agreement and in the preparation for
and consummation of the transactions contemplated hereby.
10.3 NOTICES.
All notices, demands, requests, or other communications which may be or
are required to be given or made by any party to any other party pursuant to
this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, or delivered by overnight air courier, addressed as follows:
(i) if to S1:
Security First Technologies Corporation
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn.: President
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn.: Xxxxxx X. Xxxxx, Esq.
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and
Xxxxx & Xxxxxxx L.L.P.
Xxxxxx xxx Xxxx 00
0000 Xxxxxxxx, Xxxxxxx
Attn.: Xxxxx V. S. Xxxx, Esq.
(b) if to FICS, to:
FICS Group X.X.
Xxxxxxxxxxxxx 00
0000 Xxxxxxxx, Xxxxxxx
Attn.: Xxxxxx Xxxxxxxx, Chief Financial Officer
with a copy (which shall not constitute notice) to:
Brown, Rudnick, Freed & Gesmer
Stanmore House
00-00 Xx. Xxxxx'x Xxxxxx
Xxxxxx XX0X 0XX, Xxxxxxx
Attn.: Xxxxxxxx X. Xxxx, Esq.
Colin Xxxx Xxxxxxx, Esq.
(c) if to any Purchaser, to the address set forth
opposite such Purchaser's name on Schedule 1
attached hereto.
or such other address as the addressee may indicate by written notice to the
other parties. Each notice, demand, request, or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, or the affidavit of messenger being
deemed conclusive but not exclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.
10.4 WAIVER.
No waiver by any party of any failure or refusal of any other party to
comply with its obligations under this Agreement shall be deemed a waiver of any
other or subsequent failure or refusal to so comply by such other party. No
waiver shall be valid unless in writing signed by the party to be charged and
only to the extent therein set forth.
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10.5 BINDING EFFECT.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
10.6 ENTIRE AGREEMENT; AMENDMENT.
This Agreement, including the other instruments and documents referred to
herein or delivered pursuant hereto, contains the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior oral
or written agreements, commitments or understandings with respect to such
matters. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification or discharge is sought.
10.7 SEVERABILITY.
If any part of any provision of this Agreement shall be invalid or
unenforceable under applicable law, such part shall be ineffective to the extent
of such invalidity or unenforceability only, without in any way affecting the
remaining parts of such provisions or the remaining provisions of said
Agreement.
10.8 HEADINGS.
The headings of the sections and subsections contained in this Agreement
are inserted for convenience only and do not form a part or affect the meaning,
construction or scope thereof.
10.9 GOVERNING LAW.
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto, shall be governed by and construed under
and in accordance with the laws of the State of Delaware, excluding the choice
of law rules thereof.
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10.10 SIGNATURE IN COUNTERPARTS.
This Agreement may be executed in separate counterparts, none of which
need contain the signatures of all parties, each of which shall be deemed to be
an original, and all of which taken together constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
10.11 NO THIRD PARTY BENEFICIARIES.
Except as expressly provided herein, this Agreement is made and entered
into for the sole protection and benefit of the parties hereto, and no other
person or entity shall have any right of action hereon, right to claim any right
or benefit from the terms contained herein or be deemed a third party
beneficiary hereunder.
10.12 ASSIGNABILITY.
All terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective transferees,
successors and assigns; provided, however, that neither this Agreement nor any
rights, privileges, duties and obligations of the parties hereto may be assigned
or delegated by any party hereto without the prior written consent of all the
parties to this Agreement and any such purported or attempted assignment shall
be null and void ab initio and of no force or effect provided, further that a
Purchaser may assign this Agreement, including rights, privileges, duties and
obligations hereunder to any affiliate of such Purchaser which is wholly or
substantially owned directly or indirectly by such Purchaser so long as such
assignment does not in any way materially delay or otherwise materially
adversely impact the ability of the parties hereto to effect the transactions
contemplated hereby.
10.13 PARTIES NOT PARTNERS.
Nothing contained in this Agreement shall constitute any party as a
partner with, agent for or principal of any one or more of the other parties or
their successors and assigns.
10.14 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
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survive the Closing, except for those covenants and agreements contained herein
and therein which by their terms apply in whole or in part after the Closing.
10.15 CERTAIN DEFINITIONS.
References to "$" in this Agreement are to United States dollars. In
addition to any other definitions contained in this Agreement, the following
words, terms and phrases shall have the following meanings when used in this
Agreement.
"Affiliated Person": any director, officer or 5% or greater shareholder,
spouse or other person living in the same household of such director, officer or
shareholder, or any company, partnership or trust in which any of the foregoing
persons is an officer, 5% or greater shareholder, general partner or 5% or
greater trust beneficiary.
"knowledge": with respect to any entity, refers to the knowledge of such
entity's directors and officers in the ordinary course of their duties in such
positions.
"Laws": any and all statutes, laws, ordinances, rules, regulations,
orders, permits, judgments, injunctions, decrees, case law and other rules of
law enacted, promulgated or issued by any Governmental Entity.
"Material Adverse Effect": with respect to S1, means a condition, event,
change or occurrence that is reasonably likely to have a material adverse effect
upon (A) the financial condition, results of operations, business or properties
of the relevant entity (other than as a result of changes in laws or regulations
or accounting rules of general applicability or interpretations thereof), or ,
or (B) the ability of the relevant entity to perform its obligations under, and
to consummate the transactions contemplated by, this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
SECURITY FIRST TECHNOLOGIES CORPORATION
By: /s/ XXXXX X. XXXXX III
----------------------------------------------
Name: Xxxxx X. Xxxxx III
Title: Chairman and Chief Executive Officer
THE PURCHASERS
/s/ MICHEL AKKERMANS
--------------------------------------------------------
Name: Michel Akkermans
/s/ PAMICA N.V.
--------------------------------------------------------
Name: Pamica N.V.
Represented by:
/s/ GENERAL ATLANTIC PARTNERS 20, L.P.
--------------------------------------------------------
Name: General Atlantic Partners 20, L.P.
Represented by:
/s/ GENERAL ATLANTIC PARTNERS 52, L.P.
--------------------------------------------------------
Name: General Atlantic Partners 52, L.P.
Represented by:
/s/ GAP CO INVESTMENT PARTNERS, L.P.
--------------------------------------------------------
Name: GAP CO Investment Partners, L.P.
Represented by:
/s/ GIMV N.V.
--------------------------------------------------------
Name: GIMV N.V.
Represented by:
45
/s/ GUY MOONS
--------------------------------------------------------
Name: Guy Moons
/s/ XXXXXXX XXXXXXXX
--------------------------------------------------------
Name: Xxxxxxx Xxxxxxxx
/s/ XXXXXX XXX XXXXXX
--------------------------------------------------------
Name: Xxxxxx Xxx Xxxxxx
/s/ XXXXXX QUAEYHAEGENS
--------------------------------------------------------
Name: Xxxxxx Quaeyhaegens
/s/ GOORT GELTEN
--------------------------------------------------------
Name: Goort Gelten
/s/ LOEK VAN DeN XXXX
--------------------------------------------------------
Name: Loek Van den Xxxx
/s/ UNICO PORTFOLIO, LTD.
--------------------------------------------------------
Name: Unico Portfolio, Ltd.
Represented by:
/s/ XXXXXXXX XXXXX
--------------------------------------------------------
Name: Xxxxxxxx Xxxxx
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FICS GROUP N.V.
(for the limited purposes set forth herein)
By: /s/ XXXXXX SIPWICZ
---------------------------------------------
Name: Xxxxxx Sipwicz
Title: Chief Financial Officer
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Schedule 1
The Purchasers:
1. Michel Akkermans
2. Pamica N.V.
3. General Atlantic Partners 20, L.P.
4. General Atlantic Partners 52, L.P.
5. GAP CO Investment Partners, L.P.
6. GIMV N.V.
7. Guy Moons
8. Xxxxxxx Xxxxxxxx
9. Xxxxxx Xxx Xxxxxx
10. Xxxxxx Quaeyhaegens
11. Goort Gelten
12. Loek Van den Xxxx
13. Unico Portfolio, Ltd.
14. Xxxxxxxx Xxxxx
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