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EXHIBIT 2.13
ASSET PURCHASE AGREEMENT
By and Between
NETZEE, INC.
(A Georgia Corporation)
And
HOMECOM COMMUNICATIONS, INC.
(A Delaware Corporation)
Dated as of
March 15, 2001
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TABLE OF CONTENTS
Page
SECTION 1. SALE AND PURCHASE......................................................................................6
SECTION 2. ASSUMPTION OF CONTRACTS BY THE PURCHASER...............................................................6
SECTION 3. PURCHASE PRICE AND PAYMENT.............................................................................7
(a) Generally.......................................................................................7
(b) Delayed Payment.................................................................................7
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER...............................................................7
(a) Corporate Existence.............................................................................7
(b) Corporate Power; Authorization; Enforceable Obligations.........................................7
(c) No Conflict.....................................................................................7
(d) Required Government Consents....................................................................7
(e) Required Contract Consents......................................................................8
(f) Assigned Contracts..............................................................................8
(g) Title to Assets.................................................................................8
(h) Condition of Equipment; Adequacy of Assets......................................................8
(i) Intellectual Property...........................................................................8
(i) Ownership..............................................................................8
(ii) Procedures for Copyright Protection....................................................8
(iii) Procedures for Trade Secret Protection.................................................8
(iv) Ownership of Software..................................................................9
(v) Absence of Claims......................................................................9
(vi) Adequacy of Technical Documentation....................................................9
(vii) Third-Party Components in Software.....................................................9
(viii) Third-Party Interests or Marketing Rights in Software..................................9
(j) Litigation......................................................................................9
(k) Court Orders, Decrees, and Laws.................................................................9
(l) Broker's or Finder's Fees......................................................................10
(m) No Fraudulent Transfer.........................................................................10
(n) Access to Information..........................................................................10
(o) Disclosure.....................................................................................10
SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................................10
(a) Corporate Existence............................................................................11
(b) Corporate Power; Authorization; Enforceable Obligations........................................11
(c) No Conflict; Consents..........................................................................11
SECTION 6. CONDITIONS TO CLOSING.................................................................................11
(a) Conditions to Seller's Obligations.............................................................11
(b) Conditions to Purchaser's Obligations..........................................................11
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SECTION 7. CLOSING...............................................................................................12
(a) Closing........................................................................................12
(b) Actions at Closing.............................................................................12
(i) Copies of Consents....................................................................12
(ii) Conveyance Instruments................................................................12
(iii) Assumption Agreements.................................................................12
(iv) Certificates..........................................................................12
(v) Legal Opinions........................................................................12
(vi) Other.................................................................................12
(c) Delivery of Purchase Price.....................................................................12
SECTION 8. COVENANTS OF SELLER AND PURCHASER.....................................................................12
(a) Allocation of Purchase Price...................................................................12
(b) Maintenance of Books and Records...............................................................12
(c) Mail, Etc......................................................................................13
(d) Covenant Not to Compete........................................................................13
(e) Injunctive Relief..............................................................................13
(f) Certain Consents...............................................................................13
(g) Best Efforts; Further Assurances; Cooperation..................................................13
(h) Transition.....................................................................................13
(i) No Transfer or Encumbrance.....................................................................13
SECTION 9. INDEMNIFICATION.......................................................................................13
(a) Indemnification by Seller......................................................................13
(i) Breach of Representation, Warranty or Obligation......................................14
(ii) Excluded Liabilities..................................................................14
(iii) Failure to Obtain Consents............................................................14
(iv) Violations of Fraudulent Conveyance Laws..............................................14
(v) Title to Assets.......................................................................14
(vi) Incidental Matters....................................................................14
(b) Indemnification by Purchaser...................................................................14
(c) Notice of Claim................................................................................14
(d) Defense........................................................................................14
(e) Offset.........................................................................................14
(f) Time of Assertion..............................................................................14
(g) Arbitration....................................................................................15
(h) Indemnification Exclusive Remedy...............................................................15
(i) Limitation on Indemnification..................................................................15
SECTION 10. MISCELLANEOUS........................................................................................15
(a) Sales, Transfer and Documentary Taxes, etc.....................................................15
(b) Expenses.......................................................................................15
(c) Entire Agreement; Assignment...................................................................15
(d) Waiver.........................................................................................15
(e) Notices........................................................................................15
(f) Georgia Law to Govern..........................................................................17
(g) No Benefit to Others...........................................................................17
(h) Headings; Gender; Certain Definitions..........................................................17
(i) Schedules and Exhibits.........................................................................17
(j) Severability...................................................................................17
(k) Counterparts...................................................................................17
(l) Assistance of Counsel..........................................................................17
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(m) Time of the Essence............................................................................17
(n) Actions and Proceedings........................................................................17
(o) Execution by Facsimile.........................................................................17
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Schedules
1(a) -- Intellectual Property
1(b) -- Contracts
1(c) -- Equipment
3(b) -- Contracts - Revenues
4(d) -- Required Government Consents
4(e) -- Required Contract Consents
4(i)(i) -- Intellectual Property - Ownership
4(i)(ii) -- Intellectual Property - Procedures for Copyright Protection
4(i)(iii) -- Intellectual Property - Procedures for Trade Secret Protection
4(i)(iv) -- Intellectual Property - Ownership of Software
4(i)(v) -- Intellectual Property - Absence of Claims
4(i)(vii) -- Intellectual Property - Third Party Components in Software
4(i)(viii) -- Intellectual Property - Third-Party Interests or Marketing Rights in Software
4(j) -- Litigation
8(a) -- Allocation of Purchase Price
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Defined Terms
Agreement.......................................................................6
Assets..........................................................................6
Business........................................................................6
Claim..........................................................................14
Claimant.......................................................................14
Closing........................................................................12
Closing Date...................................................................12
Closing Payment.................................................................7
Contracts.......................................................................6
Delayed Payment.................................................................7
Documentation...................................................................8
Equipment.......................................................................6
Governmental Authorities........................................................8
Intellectual Property...........................................................6
Laws............................................................................7
Litigation......................................................................9
Loss...........................................................................13
Losses.........................................................................13
Material Adverse Effect.........................................................7
Obligor........................................................................14
Purchase Price..................................................................7
Purchaser.......................................................................6
Purchaser Documents............................................................11
Purchaser Group................................................................13
Required Contract Consents......................................................8
Required Government Consents....................................................7
Required Notice................................................................14
Seller..........................................................................6
Seller Documents................................................................7
Seller Group...................................................................14
Software........................................................................8
Software Programs...............................................................8
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and entered
into as of the 15th day of March, 2001, by and between Netzee, Inc., a Georgia
corporation (the "PURCHASER") and HomeCom Communications, Inc., a Delaware
corporation (the "SELLER").
RECITALS
The Seller is engaged in the business of developing and marketing
Internet banking and targeted-marketing software applications, products and
services to financial institutions and their customers (the "BUSINESS").
The Purchaser desires to purchase, and the Seller desires to sell, all
of the assets of Seller associated with the Business, and Seller desires to
assign, and Purchaser desires to assume, certain contracts of Seller related to
the Business, all upon the terms and conditions and subject to the limited
exceptions set forth herein.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements of the parties hereinafter set forth, the
parties hereto, intending to be legally bound, do hereby agree as follows:
SECTION 1.
SALE AND PURCHASE
Upon the terms and subject to the conditions of this Agreement,
Purchaser shall purchase, accept, and acquire from Seller, and Seller shall
sell, transfer, assign, convey, and deliver to Purchaser, at the Closing (as
defined in Section 7(a)), all right, title, and interest in and to the following
assets of Seller:
(a) The intellectual property identified in Schedule 1(a) (the
"INTELLECTUAL PROPERTY").
(b) The contracts identified in Schedule 1(b) (the "CONTRACTS").
(c) The equipment currently being used to service and maintain the
Contracts and operate the Business and, in addition, the equipment identified in
Schedule 1(c) (the "EQUIPMENT", and together with the Intellectual Property and
the Contracts, the "ASSETS").
SECTION 2.
ASSUMPTION OF CONTRACTS BY THE PURCHASER
From and after the Closing, Purchaser shall assume and be responsible
for only the obligations and liabilities of Seller relating to the Contracts
identified in Schedule 1(b); provided, however, that Purchaser does not thereby
assume any liability or obligation of Seller relating to acts or omissions of
Seller in the performance of such Contracts prior to the Closing Date. Purchaser
shall assume no other liability or obligation of Seller. Seller does not assume
any liability or obligation of Purchaser relating to acts or omissions of
Purchaser in the performance of the Contracts subsequent to the Closing Date.
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SECTION 3.
PURCHASE PRICE AND PAYMENT
(a) GENERALLY. The total consideration to be paid to Seller for the
sale, transfer and conveyance of the Assets and the covenant not to compete in
Section 8(d) shall consist of (i) $275,000 paid in cash at the Closing by wire
transfer of immediately available funds to an account designated in writing by
Seller no less than two business days prior to the Closing (the "Closing
Payment"); and (ii) the Delayed Payment described in Section 3(b) (the "Delayed
Payment", and together with the Closing Payment, the "Purchase Price").
(b) DELAYED PAYMENT. The Delayed Payment shall be an amount equal to
the revenues attributable to the Contracts for the month of January 2001
multiplied by twelve. The revenues attributable to each Contract for the month
of January 2001 and for the calendar year 2000 are set forth in Schedule 3(b).
The Delayed Payment shall be paid with respect to each Contract as follows:
(i) Within five business days after the later to occur of (A)
the Closing or (B) the receipt by Purchaser of a written consent to
assignment to Purchaser of such Contract, and any other consent
necessary with respect to such Contract, in each case reasonably
acceptable to Purchaser, Purchaser shall pay Seller 100% of the Delayed
Payment for such Contract. If any consent necessary for any Contract is
not received by Purchaser on or before December 31, 2001, Purchaser
shall have no obligation to make the Delayed Payment for such Contract.
(ii) The payments made pursuant to this Section 3(b) shall be
made by wire transfer of immediately available funds to the account
designated by Seller pursuant to Section 3(a), unless Seller has
designated a different account and provided Purchaser with written
notice thereof.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
(a) CORPORATE EXISTENCE. Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
Seller has the corporate power and authority to conduct its business and to own
and lease all of its properties and assets and is duly qualified or licensed to
do business and is in good standing under the laws of each jurisdiction where
such qualification is required, except where the failure to be so qualified
would not have a material adverse effect on the Assets or the Business
(financial or otherwise) (a "Material Adverse Effect").
(b) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Seller
has the corporate power and authority to execute and deliver this Agreement and
the other agreements and instruments to be executed and delivered by it in
connection with the transactions contemplated hereby and thereby and to perform
its respective obligations hereunder and thereunder (this Agreement and such
other agreements and instruments collectively the "Seller Documents"). Seller
has taken all necessary corporate action, and without limiting the foregoing, no
approval of the stockholders of Seller is required under the Delaware General
Corporation Law, to authorize the execution and delivery of this Agreement and
the other Seller Documents and the consummation of the transactions contemplated
hereby and thereby. This Agreement is, and the other Seller Documents will be,
the legal, valid, and binding obligations of Seller, enforceable in accordance
with their terms, except as such enforcement may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect and by general principles of equity.
(c) NO CONFLICT. The execution and delivery of this Agreement and the
other Seller Documents will not (i) violate any foreign, federal, state, or
local law, regulation, ordinance, zoning requirement, governmental restriction,
order, judgment, or decree (collectively, "Laws") applicable to Seller or the
Assets or the Business, (ii) violate or conflict with any provision of the
certificate of incorporation or bylaws, or (iii) conflict with, result in the
breach of, or constitute a default under any mortgage, indenture, license,
instrument, trust, contract, agreement, or other commitment or arrangement to
which Seller is a party or by which Seller or any of the Assets or the Business
are bound.
(d) REQUIRED GOVERNMENT CONSENTS. Except for (i) the filing or
recording of instruments of conveyance, transfer, or assignment required by
federal copyright, patent, or trademark laws or the laws of the U.S. and
non-U.S. jurisdictions and states in which the Assets are located; and (ii) the
further exceptions disclosed in Schedule 4(d) (the foregoing items (i) and (ii)
being referred to herein as the "Required Government Consents"), no
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approval, authorization, certification, consent, permission, license, or permit
to or from, or notice, filing, or recording to or with, U.S. or non-U.S.,
federal, state, or local governmental authorities ("Governmental Authorities")
is necessary for the execution and delivery of this Agreement and the other
Seller Documents or the consummation by Seller of the transactions contemplated
hereby or thereby, or the ownership and use of the Assets or operation of the
Business (including by Purchaser, assuming such ownership, use and operation is
substantially the same as the ownership, and use and operation by Seller).
(e) REQUIRED CONTRACT CONSENTS. Except as disclosed in Schedule 4(e)
(such scheduled items being referred to herein as the "Required Contract
Consents"), no approval, authorization, consent, permission, or waiver to or
from, or notice, filing, or recording to or with, any person (other than the
Required Government Consents) is necessary for (i) the execution and delivery of
this Agreement and the other Seller Documents or the consummation by Seller of
the transactions contemplated hereby or thereby; (ii) the transfer and
assignment to Purchaser at the Closing of the Assets; or (iii) the ownership and
use of the Assets or operation of the Business (including by Purchaser, assuming
such ownership, use and operation is substantially the same as the ownership,
use and operation by Seller).
(f) ASSIGNED CONTRACTS. The Contracts are valid, binding, and
enforceable in accordance with their terms and are in full force and effect.
Subject to obtaining the consent of the other party thereto as specified on
Schedule 3(b), the continuation, validity and effectiveness of all the Contracts
under the current terms thereof will in no way be affected, altered or impaired
by the consummation of the transactions contemplated by this Agreement. There
are no existing defaults by Seller under the Contracts and, to the best
knowledge of Seller, no act, event, or omission has occurred that, whether with
or without notice, lapse of time, or both, would constitute a default
thereunder. Seller has received no notice of, and has no knowledge of, any
pending or threatened early termination or cancellation of any Contract. The
amounts disclosed in Schedule 3(b) accurately present the revenues attributable
to the Contracts for the month of January 2001 and for the calendar year 2000.
(g) TITLE TO ASSETS. Purchaser at the Closing shall obtain good and
marketable title to all of the Assets free and clear of all title defects,
liens, restrictions, claims, charges, security interests, or other encumbrances
of any nature whatsoever.
(h) CONDITION OF EQUIPMENT; ADEQUACY OF ASSETS. All of the Equipment
is in good operating order, condition, and repair, ordinary wear and tear
excepted, and is suitable for use in the Business in the ordinary course, as
presently operated. The Assets constitute all of the property and assets
necessary to conduct the Business as currently conducted. Purchaser accepts the
Equipment "as is" and no warranties explicit or implied are offered by Seller
except as specifically set forth in this Agreement.
(i) INTELLECTUAL PROPERTY. The Intellectual Property includes certain
proprietary application software products and systems which Seller develops,
markets and licenses to financial institutions and other customers (the
"Software Programs"), and in connection therewith Seller has developed certain
related technical documentation and user reference manuals (the
"Documentation"). The Software Programs and the Documentation are collectively
referred to as the "Software".
(i) Ownership. Except as set forth in Schedule 4(i)(i),
Seller owns all of the Intellectual Property and all other proprietary
information included in the Assets. Schedule 4(i)(i) sets forth all
domestic and foreign patents, trademarks, service marks, trade names
and copyrights included in the Assets and all applications therefor and
registrations thereof. Except as disclosed in Schedule 4(i)(i), to the
best knowledge of Seller, no person has a prior use of any trademark,
service xxxx, or trade name that is the same as, or confusingly similar
to, any of the trademarks, service marks and trade names included in
the Assets.
(ii) Procedures for Copyright Protection. Schedule 4(i)(ii)
sets forth the form and placement of the proprietary legends and
copyright notices displayed in or on the Software, including screen
displays. In no instance has the eligibility of the Software for
protection under copyright law been forfeited to the public domain.
(iii) Procedures for Trade Secret Protection. Seller has never
disclosed source code for any of the Software to a third party other
than the persons disclosed in Schedule 4(i)(iii), each of which has
executed a nondisclosure agreement in favor of Seller. Seller discloses
its source code to employees only on a need-to-know basis in connection
with the performance of their duties to Seller. All personnel,
including employees, agents, consultants, and contractors, who have
contributed to or participated in the conception and development of the
Software on behalf of Seller either (A) have been party to a
"work-for-hire" arrangement or agreement with Seller, in accordance
with applicable Laws, that has accorded Seller full, effective,
exclusive, and original ownership of all tangible and intangible
property thereby arising, or (B) have executed appropriate instruments
of assignment in
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favor of Seller as assignee that have conveyed to Seller full, effective, and
exclusive ownership of all tangible and intangible property thereby arising. The
source code and system documentation comprising the Software have at all times
been maintained by Seller in confidence, and Seller has not taken (nor has it
failed to take) any action which would be reasonably likely to result in such
source code and system documentation not being protectable as a trade secret
under applicable Laws.
(iv) Ownership of Software. Except as disclosed in Schedule
4(i)(iv) and except for independent contractors disclosed in Schedule 4(i)(iii),
all persons who have contributed to or participated in the conception and
development of the Software on behalf of Seller have been full-time employees of
Seller hired to prepare such works within the scope of employment. As a
consequence, Seller has all ownership interests in the Software.
(v) Absence of Claims. Except as disclosed in Schedule
4(i)(v), no claim has been asserted by any person to any rights in the Software,
and to the best knowledge of Seller, no valid basis for any such claim exists.
To the best knowledge of Seller, the use of the Software by Seller and its
licensees does not infringe on the rights of any person (whether arising under
copyright, trade secret, patent, unfair competition or other Laws that protect
intellectual property rights). Seller has received no notice of any claim that
the use by Seller of the Intellectual Property infringes the rights of any
person, and to the best knowledge of Seller, the use by Seller of the
Intellectual Property does not infringe the rights of any person. Seller has
received no notice of any claim asserted by any person to the effect that any
current or former employee of Seller has violated the provisions of any
noncompete or nondisclosure agreement with such person, or has disclosed any
proprietary information of such person to Seller or any third party.
(vi) Adequacy of Technical Documentation. The Software
includes the source code, system documentation and schematics for all Software
Programs, as well as any programmer comments for documentation and pertinent
commentary or explanation that may be reasonably necessary to render such
materials understandable and usable by a trained computer programmer. The
Software also includes the programs (including compilers), workbenches, tools
and higher level language, if any, used for the development, maintenance and
implementation of the Software Programs.
(vii) Third-Party Components in Software. Seller has obtained
the right and license to use, copy, modify and distribute any third-party
programming and materials contained in the Software pursuant to the contracts
disclosed in Schedule 4(i)(vii), subject to no further license fee, royalty or
other payment obligations not disclosed in Schedule 4(i)(vii), other than
software maintenance payments customarily associated therewith, which are also
set forth in Schedule 4(i)(vii). The Software contains no other programming or
materials in which any third party could reasonably claim superior, joint or
common ownership, including any right or license. The Software does not contain
derivative works of any programming or materials not owned in their entirety by
Seller.
(viii) Third-Party Interests or Marketing Rights in Software.
Other than in the ordinary course of business pursuant to the terms of the
agreements listed in Schedule 4(i)(viii), Seller has not granted, transferred or
assigned any right or interest in the Software to any person. There are no
contracts, agreements, licenses, commitments or arrangements in effect with
respect to the marketing, distribution, licensing or promotion of the Software
by any independent salesperson, distributor, sublicensor or other remarketer or
sales organization except as set forth on Schedule 4(i)(viii).
(j) LITIGATION. Except as disclosed in Schedule 4(j), no claim, action,
suit, proceeding, inquiry, hearing, arbitration, administrative proceeding,
infringement claim, or investigation (collectively, "Litigation") is pending,
or, to Seller's best knowledge, threatened against Seller or its subsidiaries or
any of its present or former directors, officers, or employees, affecting,
involving, or relating to any of the Assets or the Business. Seller knows of no
facts or circumstances that could reasonably be expected to serve as the basis
for Litigation against Seller (or Purchaser upon acquisition of the Assets) or
its present or former directors, officers, or employees, affecting, involving,
or relating to the Assets or the Business.
(k) COURT ORDERS, DECREES, AND LAWS. There is no outstanding or, to
Seller's best knowledge, threatened, order, writ, injunction, or decree of any
court, governmental agency, or arbitration tribunal against Seller affecting,
involving, or relating to the Assets or the Business. The Business is and has
been in compliance in all material respects with all applicable Laws, and Seller
has received no notices of any such alleged violation. The foregoing shall be
deemed to include Laws relating to the patent, copyright, and trademark laws,
state trade secret and unfair competition laws of the U.S. and foreign
jurisdictions, and all other applicable Laws, including equal opportunity, wage
and hour, and other employment matters, and antitrust and trade regulation laws.
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(l) BROKER'S OR FINDER'S FEES. Seller has not authorized any person to
act as broker or finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement, and no broker or finder is entitled
to any payment in respect thereof.
(m) NO FRAUDULENT TRANSFER. Seller has entered into this Agreement and
the other Seller Documents without any intent to hinder, delay or defraud any of
its creditors. Seller has received a reasonably equivalent value in exchange for
the Assets transferred to Purchaser. Immediately prior to and after the Closing,
the value of Seller's assets is and will be greater than the amount of its
debts, and Seller is and will be generally able to pay its debts as they become
due.
(n) ACCESS TO INFORMATION. Seller has had access to sufficient
information about Purchaser and the Delayed Payment upon which to analyze the
transactions contemplated by this Agreement. Seller has been given the
opportunity to ask questions and receive answers from the officers of Purchaser
concerning the terms and conditions of the transactions contemplated by this
Agreement and the business and financial condition of Purchaser. Seller has had
the opportunity to obtain any additional information it deems necessary to
verify the accuracy and completeness of information provided by Purchaser in
connection with this Agreement and the transactions contemplated hereby.
(o) DISCLOSURE. Seller has completely and accurately responded to the
inquiries and diligence requests of Purchaser and its agents, representatives,
attorneys and employees in connection with the transactions contemplated by this
Agreement. No representation, warranty, or statement made by Seller in this
Agreement or in any document or certificate furnished or to be furnished to
Purchaser pursuant to this Agreement contains or will contain any untrue
statement or omits or will omit to state any fact necessary to make the
statements contained herein or therein, under the circumstances in which they
were made, not materially misleading. Seller has disclosed to Purchaser all
facts known or reasonably available to Seller that are material to the Assets or
the Business.
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
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(a) CORPORATE EXISTENCE. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Georgia.
(b) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Purchaser
has the corporate power, authority and legal right to execute, deliver and
perform this Agreement and the other agreements and instruments to be executed
and delivered in connection with the transactions contemplated hereby and
thereby (this Agreement and such other agreements and instruments collectively
the "Purchaser Documents"). The execution, delivery and performance of this
Agreement and the other Purchaser Documents, and the consummation of the
transactions contemplated hereby and thereby, by Purchaser have been duly
authorized by all necessary corporate action of Purchaser. This Agreement is,
and the other Purchaser Documents will be, the legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with their
terms except as such enforcement may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent
transfer or other similar laws now or hereafter in effect affecting creditors'
rights generally, and by general principles of equity.
(c) NO CONFLICT; CONSENTS. The execution, delivery and performance of
this Agreement and the other Purchaser Documents, and the consummation of the
transactions contemplated hereby and thereby, by Purchaser do not and will not
violate any Laws to which Purchaser is subject, and will not violate, conflict
with or result in the breach of any term, condition or provision of, or require
the consent of any other party to, (i) any judgment, order, writ, injunction,
decree or award of any court, arbitrator or governmental or regulatory official,
body or authority which is applicable to Purchaser, or (ii) the articles of
incorporation, bylaws, or other governing or organizational instrument of
Purchaser.
SECTION 6.
CONDITIONS TO CLOSING
(a) CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller to be
performed hereunder shall be subject to the satisfaction (or waiver by Seller)
at or prior to the Closing Date of each of the following conditions:
(i) Purchaser's representations and warranties contained in
this Agreement shall be true and correct in all respects on and as of the date
of this Agreement.
(ii) Purchaser shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
(iii) No Litigation shall be threatened or pending against
Seller before any court or governmental agency that, in the reasonable opinion
of counsel for Seller, could result in the restraint or prohibition of Seller in
connection with this Agreement or the consummation of the transactions
contemplated hereby.
(iv) Purchaser shall have delivered to Seller a certificate
signed by a duly authorized officer of Purchaser certifying that the conditions
set forth in Sections 6(a)(i) and (ii) have been satisfied.
(v) Purchaser shall have delivered to Seller an opinion of
counsel to Purchaser, dated as of the Closing Date, in form and substance
reasonably satisfactory to Seller.
(b) CONDITIONS TO PURCHASER'S OBLIGATIONS. Each of the obligations of
Purchaser to be performed hereunder shall be subject to the satisfaction (or
waiver by Purchaser) at or prior to the Closing Date of each of the following
conditions:
(i) Seller's representations and warranties contained in this
Agreement shall be true and correct in all respects on and as of the date of
this Agreement.
(ii) Seller shall have performed and complied with all
agreements, obligations, and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing.
(iii) All Required Government Consents and Required Contract
Consents shall have been obtained.
(iv) No Litigation shall be threatened or pending against
Purchaser before any court or governmental agency that, in the reasonable
opinion of counsel for Purchaser, could result in the restraint or prohibition
of Purchaser in connection with this Agreement or the consummation of the
transactions contemplated hereby.
(v) Seller shall have provided to Purchaser payoff letters for
all liens, encumbrances and liabilities with respect to the Assets and shall
have paid all amounts required to be paid by Seller with respect thereto or
otherwise obtained the release of all such liens, encumbrances and liabilities.
(vi) Seller shall have delivered to Purchaser a certificate
signed by a duly authorized officer of Seller certifying that the conditions set
forth in Sections 6(b)(i), (ii) and (iii) have been satisfied.
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(vii) Seller shall have delivered to Purchaser an opinion of
counsel to Seller, dated as of the Closing Date, in form and substance
reasonably satisfactory to Purchaser, which shall opine, among other things,
that no approval of the stockholders of Seller is required to sell the Assets to
Purchaser.
(viii) Purchaser shall have entered into a consulting
agreement with Xxxx Xxxxxxx for a term of 90 days from the Closing Date for a
minimum of 20 hours per week, upon such other terms and conditions as are
mutually agreed to by Purchaser and Xx. Xxxxxxx.
SECTION 7.
CLOSING
(a) CLOSING. The closing of the purchase and sale of the Assets (the
"Closing") shall take place at the offices of Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP,
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx commencing at 2:00 p.m. on March
15, 2001 (the "Closing Date"). Subject to consummation of the Closing on the
Closing Date, the sale, assignment, transfer and conveyance to Purchaser of the
Assets will be effective as of 12:01 a.m. Eastern Standard Time on the Closing
Date.
(b) ACTIONS AT CLOSING. At Closing, Purchaser and Seller shall take
the following actions, in addition to such other actions as may otherwise be
required under this Agreement:
(i) Copies of Consents. Seller shall deliver to Purchaser
copies of all Required Contract Consents and all Required Government Consents
which have been obtained.
(ii) Conveyance Instruments. Seller shall deliver to
Purchaser such bills of sale, assignments, and other instruments of conveyance
and transfer as Purchaser may reasonably request to effect the transfer and
assignment of the Assets to Purchaser.
(iii) Assumption Agreements. Purchaser shall deliver to
Seller one or more assumption agreements in form reasonably acceptable to
Seller, pursuant to which Purchaser assumes and agrees to pay and perform the
Contracts.
(iv) Certificates. The parties shall deliver to each other
the certificates to each other required under Section 6.
(v) Legal Opinions. Each party shall cause its respective
counsel to deliver to the other party the legal opinion required under Section
6.
(vi) Other. Each party shall deliver such other agreements
and instruments as the other party may reasonably request.
(c) DELIVERY OF PURCHASE PRICE. Purchaser shall deliver the payments
required under Section 3.
SECTION 8.
COVENANTS OF SELLER AND PURCHASER
(a) ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated as disclosed in Schedule 8(a), and all tax returns and reports filed
by Seller and Purchaser with respect to the transactions contemplated by this
Agreement shall be consistent with that allocation.
(b) MAINTENANCE OF BOOKS AND RECORDS. Each of Seller and Purchaser
shall preserve until the fifth anniversary of the Closing Date all records
possessed or to be possessed by such party relating to any of the Assets or the
Business prior to the Closing Date. After the Closing Date, where there is a
legitimate purpose, such party shall provide the other party with access, upon
prior reasonable written request specifying the need therefor, during regular
business hours, to (i) the officers and employees of such party, and (ii) the
books of account and records of such party, but, in each case, only to the
extent relating to the Assets or the Business prior to the Closing Date, and the
other party and its representatives shall have the right to make copies of such
books and records; provided, however, that the foregoing right of access shall
not be exercisable in such a manner as to interfere unreasonably with the normal
operations and business of such party; and further provided, that, as to so much
of such information as constitutes trade secrets or confidential business
information of such party, the requesting party and its officers, directors and
representatives will use due care to not disclose such information except (A) as
required by any applicable Laws, (B) with the prior written consent of the party
who owns such information, which consent shall not be unreasonably withheld,
delayed or conditioned or (C) where such information becomes available to the
public generally, or becomes generally known to competitors of such party,
through sources other than the requesting party, its affiliates or its officers,
directors or representatives. Such books and records may nevertheless be
destroyed by a party if such party sends to the other party written notice of
its intent to destroy such books and records, specifying with particularity the
contents of the books and records to be destroyed. Such books and records may
then be destroyed after the 30th
Asset Purchase Agreement - Page 12
14
day after such notice is given unless the other party objects to the
destruction, in which case the party seeking to destroy the books and records
shall deliver such books and records to the objecting party.
(c) MAIL, ETC. Mail and payments relating to the Assets received by
Seller after the Closing Date will be forwarded to Purchaser. From and after the
Closing Date, Seller will promptly refer all inquiries relating to the Assets to
Purchaser.
(d) COVENANT NOT TO COMPETE. For a period of eighteen months after the
Closing Date, neither Seller nor any of its subsidiaries will, anywhere in the
United States, directly or indirectly, own, manage, operate, join, control or
participate in the ownership, management, operation or control of any business,
whether in corporate, proprietorship or partnership form or otherwise as more
than a five percent owner in such business, that competes with the Business.
(e) INJUNCTIVE RELIEF. The covenants and agreements contained in
Section 8(d) are made and given in connection with the sale of Seller's
goodwill, and to protect and preserve for Purchaser the benefit of its purchase
of the Assets. The remedy at law for any breach of the covenants and agreements
contained in Section 8(d) will be inadequate, and Purchaser, in addition to any
other relief available to it, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damage. In the event
that the provisions of Section 8(d) should ever be deemed to exceed the
limitation provided by applicable Laws, then the parties hereto agree that such
provisions shall be reformed to set forth the maximum limitations permitted.
(f) CERTAIN CONSENTS. To the extent that Seller's rights under any
Contract, permit, or other Asset to be assigned to Purchaser hereunder may not
be assigned without the consent of another person which has not been obtained
prior to the Closing Date, and which is material to the ownership, use or
disposition of an Asset or the operation of the Business, this Agreement shall
not constitute an agreement to assign the same if an attempted assignment would
constitute a breach thereof or be unlawful, and Seller shall use its
commercially reasonable good faith efforts to obtain any such required consents
as promptly as possible. If any necessary consent shall not be obtained or if
any attempted assignment thereof would be ineffective or would impair
Purchaser's rights under the Asset in question so that Purchaser would not in
effect acquire the benefit of all such rights, Seller, to the maximum extent
permitted by applicable Laws and the specific Asset, shall act after the Closing
as Purchaser's agent in order to obtain for Purchaser the benefits thereunder.
(g) BEST EFFORTS; FURTHER ASSURANCES; COOPERATION. Subject to the
other provisions in this Agreement, the parties hereto shall in good faith
perform their obligations under this Agreement before, at and after the Closing,
and shall each use their reasonable best efforts to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to obtain all
authorizations and consents and satisfy all conditions to the obligations of the
parties under this Agreement, and to cause the transactions contemplated by this
Agreement to be carried out promptly in accordance with the terms hereof. The
parties shall cooperate fully with each other and their respective officers,
directors, employees, agents, counsel, accountants and other designees in
connection with any steps required to be taken as part of their respective
obligations under this Agreement. Upon the execution of this Agreement and
thereafter, each party shall take such actions and execute and deliver such
documents as may be reasonably requested by the other party hereto in order to
consummate more effectively the transactions contemplated by this Agreement
(h) TRANSITION. Purchaser shall have a reasonable period of time after
the Closing in which to remove the Assets from Seller's premises and to install
the Assets at Purchaser's premises. Seller will provide such assistance in this
process as Purchaser may reasonably request, including but not limited to
providing access to Seller's premises at such reasonable times as Purchaser may
request.
(i) NO TRANSFER OR ENCUMBRANCE. Seller will not assign, transfer or
encumber its rights to the Delayed Payment without the prior written consent of
Purchaser.
SECTION 9.
INDEMNIFICATION
(a) INDEMNIFICATION BY SELLER. Seller shall indemnify, defend, and
hold harmless Purchaser and its subsidiaries, successors, permitted assigns,
directors, officers, employees and agents (collectively, the "Purchaser Group")
at, and at any time after, the Closing, from and against any and all demands,
claims, actions, or causes of action, assessments, losses, damages, liabilities,
costs, and expenses, including reasonable fees and expenses of counsel, other
expenses of investigation, handling, and litigation, and settlement amounts,
together with interest and penalties (collectively, a "Loss" or "Losses"),
asserted against, resulting to, imposed upon, or incurred by
Asset Purchase Agreement - Page 13
15
Purchaser Group, directly or indirectly, by reason of, resulting from, incident
to or arising in connection with any of the following:
(i) Breach of Representation, Warranty or Obligation. Any
breach of any representation, warranty, covenant or agreement of Seller
contained in or made pursuant to this Agreement or any other Seller Document;
(ii) Excluded Liabilities. Any liabilities or obligations of
any kind or nature whatsoever, whether accrued, absolute, contingent, or
otherwise, known or unknown, arising out of or in connection with the ownership
or use of the Assets, the operation of the Business or Seller's business or the
performance of the Contracts prior to the Closing Date;
(iii) Failure to Obtain Consents. Any failure to obtain the
Required Government Consents or the Required Contract Consents prior to Closing;
(iv) Violations of Fraudulent Conveyance Laws. Any failure to
comply with any fraudulent conveyance or similar laws relating to notices to
creditors;
(v) Title to Assets. Any failure to deliver good,
indefeasible or marketable title to any of the Assets, free and clear of all
liens and encumbrances; and
(vi) Incidental Matters. Any and all actions, suits, claims,
proceedings, investigations, demands, assessments, audits, fines, judgments,
costs and other expenses incident to any of the foregoing or to the enforcement
of this Section 9(a).
(b) INDEMNIFICATION BY PURCHASER. Purchaser shall indemnify, defend,
and hold harmless Seller and its subsidiaries, successors, permitted assigns,
directors, officers, employees and agents (collectively, the "Seller Group") at,
and at any time after, the Closing, from and against any and all Losses asserted
against, resulting to, imposed upon, or incurred by Seller Group, to the extent
arising from any breach of any representation, warranty, covenant or agreement
of Purchaser contained in or made pursuant to this Agreement or any other
Purchaser Document.
(c) NOTICE OF CLAIM. The party entitled to indemnification hereunder
(the "Claimant") shall promptly deliver to the party liable for such
indemnification hereunder (the "Obligor") notice in writing (the "Required
Notice") of any claim for recovery under Section 9(a) or Section 9(b),
specifying in reasonable detail the nature of the Loss, and, if known, the
amount, or an estimate of the amount, of the liability arising therefrom (the
"Claim"). The Claimant shall provide to the Obligor as promptly as practicable
thereafter information and documentation reasonably requested by the Obligor to
support and verify the claim asserted, provided that, in so doing, it may
restrict or condition any disclosure in the interest of preserving privileges of
importance in any foreseeable litigation.
(d) DEFENSE. If the facts pertaining to the Loss arise out of the
claim of any third party (other than a member of Purchaser Group or Seller
Group, whichever is entitled to indemnification for such matter) and
indemnification is available by virtue of the circumstances of the Loss, the
Obligor shall assume the defense or the prosecution thereof, including the
employment of counsel or accountants, at its cost and expense. If representation
of both the Obligor and the Claimant by such counsel would be inappropriate due
to actual or potential differing interests between the Obligor and the Claimant
in such proceeding (such as the availability of defenses to the Claimant), the
Claimant (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the reasonable fees and expenses to be paid by the Obligor. The
consent of the Claimant shall be required for any settlement of such matter,
which consent shall not be unreasonably withheld, delayed or conditioned, except
that the Claimant need not consent to any settlement that the Obligor pays in
full. The Obligor shall not be liable for any settlement of any such claim
effected without its prior written consent, which shall not be unreasonably
withheld, delayed or conditioned. Both parties hereto shall cooperate in the
defense or prosecution of any third party claim and shall furnish such records,
information, and testimony, and attend such conferences, discovery proceedings,
hearings, trials, and appeals, as may be reasonably requested in connection
therewith.
(e) OFFSET. Where Seller is obligated to indemnify Purchaser or any
other member of Purchaser Group under Section 9(a), such Loss may, in
Purchaser's sole discretion, be offset against any amounts owed to Seller by
Purchaser pursuant to this Agreement, including the Delayed Payment.
(f) TIME OF ASSERTION. Notwithstanding anything in this Section 9 to
the contrary, no indemnification for breaches of representations and warranties
shall be payable by either party with respect to matters as to which it has not
received notice from the Claimant prior to April 30, 2002, except that there
shall be no limitation on the
Asset Purchase Agreement - Page 14
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time during which indemnification may be sought or obtained for a breach of any
representation or warranty contained in Section 4(b), (e), (f), (g), (i) or (m),
or for any instance of fraud.
(g) ARBITRATION. In the event of a dispute in which the parties
involved cannot reach agreement as to the claim in question or their liability
under this Section 9, then the disputed amount of the claim of indemnification
or their liability hereunder shall be submitted to and settled by arbitration in
accordance with the then prevailing commercial arbitration rules of the American
Arbitration Association. Such arbitration shall be held in the Atlanta, Georgia
area before a panel of three (3) arbitrators, one selected by each of the
parties and the third selected by mutual agreement of the first two, and all of
whom shall be independent and impartial under the rules of the American
Arbitration Association. The decision of the arbitrators shall be final and
binding as to any matter submitted under this Agreement and judgment thereon may
be entered in any court of competent jurisdiction.
(h) INDEMNIFICATION EXCLUSIVE REMEDY. In the absence of fraud, and
except for non-monetary equitable relief, if the Closing occurs, indemnification
pursuant to the provisions of this Section 9 shall be the sole and exclusive
remedy of the parties for any breach of any representation or warranty contained
in this Agreement.
(i) LIMITATION ON INDEMNIFICATION. Neither party will be liable under
this Section 9 for Losses resulting from the breach of any representation or
warranty of such party contained in this Agreement or in any other agreement or
instrument executed and delivered by such party in connection with this
Agreement, until the aggregate amount of all such Losses exceeds $20,000 and, in
that event, the damaged party shall be entitled to recovery of all such Losses.
SECTION 10.
MISCELLANEOUS
(a) SALES, TRANSFER AND DOCUMENTARY TAXES, ETC. All sales and use
taxes relating to the sale and transfer of the Assets pursuant to this Agreement
shall be paid by Seller. Seller also shall pay all other federal, state and
local documentary and other transfer taxes, if any, due as a result of the
purchase, sale or transfer of the Assets in accordance herewith whether imposed
by applicable Laws on Seller or Purchaser, and Seller shall indemnify, reimburse
and hold harmless Purchaser in respect of the liability for payment of or
failure to pay any such taxes or the filing of or failure to file any reports
required in connection therewith.
(b) EXPENSES. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions of this Agreement and the
consummation of the transactions contemplated hereby.
(c) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, which includes the
Schedules and the other documents, agreements, certificates and instruments
executed and delivered pursuant to or in connection with this Agreement, sets
forth the entire understanding and agreement of the parties hereto with respect
to the transactions contemplated hereby. Any and all prior or contemporaneous
negotiations, agreements, representations, warranties and understandings between
the parties regarding the subject matter hereof, whether written or oral, are
superseded in their entirety by this Agreement and shall not create any
liability on the part of either party hereto in favor of the other party, except
as otherwise expressly set forth in this Agreement. This Agreement shall not be
assigned, amended or modified except by written instrument duly executed by each
of the parties hereto; provided, however, that Purchaser may assign its rights
and obligations under this Agreement to a wholly owned subsidiary or to a
purchaser of all or substantially all of Purchaser's assets, whether by sale of
assets, sale of stock, merger or otherwise.
(d) WAIVER. Any term or provision of this Agreement may be waived at
any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party.
(e) NOTICES. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally or sent by facsimile, air
courier, telegram or by registered or certified mail, postage prepaid, as
follows:
Asset Purchase Agreement - Page 15
17
If to Purchaser:
Netzee, Inc.
0000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
(000) 000-0000
(000) 000-0000 (facsimile)
Attn: Xxxxxxx X. Xxxxxxxx, Senior Executive Vice President and
Chief Financial Officer
With a copy, which shall not constitute notice, to:
Xxxx X. Xxxxxxx
Xxxxxxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000-0000
(000) 000-0000
(000) 000-0000 (facsimile)
If to Seller:
HomeCom Communications, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: President
(000) 000-0000
(000) 000-0000 (facsimile)
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the date so delivered, transmitted by facsimile, telegraphed or mailed, as the
case may be.
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18
(f) GEORGIA LAW TO GOVERN. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of Georgia,
without regard to its conflict of law principles.
(g) NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors and assigns, and nothing
contained in this Agreement or the other Purchase Agreements shall be
construed as conferring any rights on any other persons.
(h) HEADINGS; GENDER; CERTAIN DEFINITIONS. All section headings
contained in this Agreement are for convenience of reference only, do not form a
part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine, or
neuter, as the context requires. Any reference to a "person" herein shall
include an individual, firm, corporation, partnership, trust, governmental
authority or body, association, unincorporated organization or any other entity.
The "knowledge" of a person shall include the current actual awareness of such
person, such person's officers charged with the responsibility for the matters
qualified by the use of the term "knowledge" and such matters as would be
revealed by a review of such person's records.
(i) SCHEDULES. All Schedules referred to herein are incorporated
herein by reference and are intended to be and hereby are specifically made a
part of this Agreement.
(j) SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not invalidate or render unenforceable any other
provision of this Agreement.
(k) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and either party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
(l) ASSISTANCE OF COUNSEL. Each party hereto has had the assistance of
counsel in negotiating and preparing the terms of this Agreement; therefore,
this Agreement shall be construed without regard to any presumption or other
rule requiring construction against the party causing the Agreement to be
drafted.
(m) TIME OF THE ESSENCE. Time is of the essence of this Agreement.
(n) ACTIONS AND PROCEEDINGS. Each party to this Agreement consents to
the exclusive jurisdiction and venue of the courts of any county in the State of
Georgia and the United States District Court for any District of Georgia in any
action or judicial proceeding seeking an injunction or other equitable relief or
to enforce an arbitration award. Each party consents and submits to the
non-exclusive personal jurisdiction of any court in the State of Georgia in
respect of any such proceeding. Each party consents to service of process upon
it with respect to any such proceeding by registered mail, return receipt
requested, and by any other means permitted by applicable Laws. Each party
waives any objection that it may now or hereafter have to the laying of venue of
any such proceeding in any court in the State of Georgia and any claim that it
may now or hereafter have that any such proceeding in any court in the State of
Georgia has been brought in an inconvenient forum. Each party waives trial by
jury in any such proceeding.
(o) EXECUTION BY FACSIMILE. Either party may deliver an executed copy
of this Agreement and any documents contemplated hereby by facsimile
transmission to the other party, and such delivery shall have the same force and
effect as any other delivery of a manually signed copy of this Agreement or of
such other documents.
[Signatures follow on next page]
Asset Purchase Agreement - Page 17
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above:
PURCHASER:
NETZEE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Executive Vice President and
Chief Financial Officer
SELLER:
HOMECOM COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxx
-------------------------------------------
Name: Xxxxxx Xxx
-------------------------------------------
Title: President and CEO
-------------------------------------------
Asset Purchase Agreement - Page 18
