EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
By and Between
NETZEE, INC.
(A Georgia corporation)
And
HOMECOM COMMUNICATIONS, INC.
(A Delaware corporation)
Dated as of
March 15, 2001
TABLE OF CONTENTS
Page
----
SECTION 1. SALE AND PURCHASE..................................................1
SECTION 2. ASSUMPTION OF CONTRACTS BY THE PURCHASER...........................1
SECTION 3. PURCHASE PRICE AND PAYMENT.........................................2
(a) Generally........................................................2
(b) Delayed Payment..................................................2
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER...........................2
(a) Corporate Existence..............................................2
(b) Corporate Power; Authorization; Enforceable Obligations..........2
(c) No Conflict......................................................3
(d) Required Government Consents.....................................3
(e) Required Contract Consents.......................................3
(f) Assigned Contracts...............................................3
(g) Title to Assets..................................................4
(h) Condition of Equipment; Adequacy of Assets.......................4
(i) Intellectual Property............................................4
(i) Ownership...............................................4
(ii) Procedures for Copyright Protection.....................4
(iii) Procedures for Trade Secret Protection..................4
(iv) Ownership of Software...................................5
(v) Absence of Claims.......................................5
(vi) Adequacy of Technical Documentation.....................5
(vii) Third-Party Components in Software......................5
(viii) Third-Party Interests or Marketing Rights in Software...5
(j) Litigation.......................................................6
(k) Court Orders, Decrees, and Laws..................................6
(l) Broker's or Finder's Fees........................................6
(m) No Fraudulent Transfer...........................................6
(n) Access to Information............................................6
(o) Disclosure.......................................................6
SECTION 5. REPRESENTATIONS AND WARRANTIES OF PURCHASER.......................7
(a) Corporate Existence..............................................7
(b) Corporate Power; Authorization; Enforceable Obligations..........7
(c) No Conflict; Consents............................................7
SECTION 6. CONDITIONS TO CLOSING..............................................7
(a) Conditions to Seller's Obligations...............................7
(b) Conditions to Purchaser's Obligations............................8
SECTION 7. CLOSING............................................................9
(a) Closing..........................................................9
(b) Actions at Closing...............................................9
(i) Copies of Consents......................................9
(ii) Conveyance Instruments..................................9
(iii) Assumption Agreements...................................9
(iv) Certificates............................................9
(v) Legal Opinions..........................................9
(vi) Other...................................................9
(c) Delivery of Purchase Price.......................................9
i
SECTION 8. COVENANTS OF SELLER AND PURCHASER..................................9
(a) Allocation of Purchase Price.....................................9
(b) Maintenance of Books and Records.................................9
(c) Mail, Etc.......................................................10
(d) Covenant Not to Compete.........................................10
(e) Injunctive Relief...............................................10
(f) Certain Consents................................................10
(g) Best Efforts; Further Assurances; Cooperation...................11
(h) Transition......................................................11
(i) No Transfer or Encumbrance......................................11
SECTION 9. INDEMNIFICATION...................................................11
(a) Indemnification by Seller.......................................11
(i) Breach of Representation, Warranty or Obligation.......11
(ii) Excluded Liabilities...................................11
(iii) Failure to Obtain Consents.............................12
(iv) Violations of Fraudulent Conveyance Laws...............12
(v) Title to Assets........................................12
(vi) Incidental Matters.....................................12
(b) Indemnification by Purchaser....................................12
(c) Notice of Claim.................................................12
(d) Defense.........................................................12
(e) Offset..........................................................13
(f) Time of Assertion...............................................13
(g) Arbitration.....................................................13
(h) Indemnification Exclusive Remedy................................13
(i) Limitation on Indemnification...................................13
SECTION 10. MISCELLANEOUS....................................................13
(a) Sales, Transfer and Documentary Taxes, etc......................13
(b) Expenses........................................................14
(c) Entire Agreement; Assignment....................................14
(d) Waiver..........................................................14
(e) Notices.........................................................14
(f) Georgia Law to Govern...........................................15
(g) No Benefit to Others............................................15
(h) Headings; Gender; Certain Definitions...........................15
(i) Schedules and Exhibits..........................................15
(j) Severability....................................................15
(k) Counterparts....................................................15
(l) Assistance of Counsel...........................................16
(m) Time of the Essence.............................................16
(n) Actions and Proceedings.........................................16
(o) Execution by Facsimile..........................................16
ii
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
iii
Defined Terms
-------------
Agreement......................................................................1
Assets.........................................................................1
Business.......................................................................1
Claim.........................................................................12
Claimant......................................................................12
Closing........................................................................9
Closing Date...................................................................9
Closing Payment................................................................2
Contracts......................................................................1
Delayed Payment................................................................2
Documentation..................................................................4
Equipment......................................................................1
Governmental Authorities.......................................................3
Intellectual Property..........................................................1
Laws...........................................................................3
Litigation.....................................................................6
Loss..........................................................................11
Losses........................................................................11
Material Adverse Effect........................................................2
Obligor.......................................................................12
Purchase Price.................................................................2
Purchaser......................................................................1
Purchaser Documents............................................................7
Purchaser Group...............................................................11
Required Contract Consents.....................................................3
Required Government Consents...................................................3
Required Notice...............................................................12
Seller.........................................................................1
Seller Documents...............................................................3
Seller Group..................................................................12
Software.......................................................................4
Software Programs..............................................................4
iv
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.
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.
2
(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 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.
3
(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 ▇▇▇▇, 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 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.
4
(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).
5
(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.
(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.
6
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as follows:
(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:
7
(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.
(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
▇▇▇▇ ▇▇▇▇▇▇▇ 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 ▇▇. ▇▇▇▇▇▇▇.
8
SECTION 7.
CLOSING
(a) Closing.
The closing of the purchase and sale of the Assets (the "Closing") shall
take place at the offices of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 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 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.
9
(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.
10
(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 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;
11
(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.
12
(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 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.
13
(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:
If to Purchaser:
Netzee, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Executive Vice President and
Chief Financial Officer
With a copy, which shall not constitute notice, to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
If to Seller:
HomeCom Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (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.
14
(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.
15
(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]
16
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first written above:
PURCHASER:
NETZEE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Executive Vice President and
Chief Financial Officer
SELLER:
HOMECOM COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: President and CEO
17