EXHIBIT 2.2
ACQUISITION AND MERGER AGREEMENT
BY AND AMONG
THE INTERCEPT GROUP, INC.,
a Georgia corporation,
DAI ACQUISITION CORP.,
a Georgia corporation,
AND
DIRECT ACCESS INTERACTIVE, INC.,
a Tennessee corporation,
AND
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇,
shareholders of Direct Access Interactive, Inc.
DATED MARCH 9, 1999
TABLE OF CONTENTS
Page
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ARTICLE 1 THE MERGER.......................................................................... 1
Section 1.1. Merger Transaction..................................................... 1
Section 1.2. Effective Time of the Merger........................................... 2
Section 1.3. Terms and Conditions; Conversion of Shares............................. 2
ARTICLE 2 PURCHASE PRICE; EXCHANGE OF SHARES.................................................. 2
Section 2.1. Purchase Price; Payment for Shares..................................... 2
Section 2.2 Rights of Former Company Shareholders.................................. 3
Section 2.3. Establishment of Escrow................................................ 3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS.................. 4
Section 3.1. Authorization; Organization............................................ 4
Section 3.2. Capitalization; Structure.............................................. 5
Section 3.3. Financial Statements................................................... 5
Section 3.4. Undisclosed Liabilities................................................ 6
Section 3.5. Properties............................................................. 7
Section 3.6. Litigation 7
Section 3.7. Intellectual Property.................................................. 8
Section 3.8. Adequacy of Technical Documentation.................................... 9
Section 3.9. Third-Party Components in Software..................................... 9
Section 3.10. Third-Party Interests or Marketing Rights in Software.................. 9
Section 3.11. Licenses............................................................... 9
Section 3.12. Compliance with Laws................................................... 9
Section 3.13. Insurance.............................................................. 10
Section 3.14. Material Contracts..................................................... 10
Section 3.15. Brokers, Finders, etc.................................................. 11
Section 3.16. Taxes 11
Section 3.17. Pension and Employee Benefit Plans..................................... 12
Section 3.18. Labor and Employment Matters........................................... 14
Section 3.19. Environmental Matters.................................................. 15
Section 3.20. Agreements Affecting Competition....................................... 15
Section 3.21. Transactions with Related Parties...................................... 16
Section 3.22. Major Vendors and Customers............................................ 16
Section 3.23. Absence of Certain Commercial Practices................................ 16
Section 3.24. Accounts Receivable.................................................... 16
Section 3.25. Disclosure............................................................. 17
Section 3.26. Year 2000.............................................................. 17
Section 3.27. Shareholders' Additional Representations............................... 17
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER AND INTERCEPT............................... 18
ARTICLE 5 INTENTIONALLY OMITTED............................................................... 19
ARTICLE 6 COVENANTS AND AGREEMENTS OF THE PARTIES............................................. 19
Section 6.1. Shareholder Approved by Unanimous Consent.............................. 19
Section 6.2. Affiliates 19
Section 6.3. Pooling of Interests................................................... 20
Section 6.4. Employee Benefit Plans................................................. 20
Section 6.5. Agreements regarding Employee Benefits................................. 20
ARTICLE 7 CONDITIONS PRECEDENT TO BUYER'S AND INTERCEPT'S OBLIGATIONS......................... 21
Section 7.1. Accuracy of Representations............................................ 21
Section 7.2. Performance of Company and Shareholders................................ 21
Section 7.3. Material Changes....................................................... 21
Section 7.4. Absence of Litigation.................................................. 21
Section 7.5. Certificates of the Company and Shareholders........................... 22
Section 7.6. Corporate Approval..................................................... 22
Section 7.7. Approvals.............................................................. 22
Section 7.8. Employment Agreements.................................................. 22
Section 7.9. Opinion of Counsel..................................................... 22
Section 7.10. Pooling................................................................ 22
Section 7.11. Escrow Agreement....................................................... 22
Section 7.12. Cancellation Agreements................................................ 22
Section 7.13. Registration Rights Agreement.......................................... 22
Section 7.14. Nonsolicitation and Confidentiality Agreement.......................... 23
ARTICLE 8 CONDITIONS PRECEDENT TO THE COMPANY'S AND THE SHAREHOLDER'S OBLIGATIONS............. 23
Section 8.1. Accuracy of Representations............................................ 23
Section 8.2. Performance of Buyer................................................... 23
Section 8.3. Absence of Litigation.................................................. 23
Section 8.4. Certificates of the Buyer.............................................. 23
Section 8.5. Corporate Approval..................................................... 23
Section 8.6. Third Party Approvals.................................................. 23
Section 8.7. Employment Agreements.................................................. 24
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ARTICLE 9 CLOSING............................................................................. 24
Section 9.1. Time and Place of Closing.............................................. 24
Section 9.2. Deliveries by the Company.............................................. 24
Section 9.3. Deliveries by Buyer.................................................... 25
Section 9.4. Post Closing Deliveries and Power of Attorney.......................... 25
ARTICLE 10 SURVIVAL; INDEMNIFICATION.......................................................... 25
Section 10.1. Survival............................................................... 25
Section 10.2. Indemnification........................................................ 25
Section 10.3. Procedure for Third-Party Claims....................................... 27
ARTICLE 11 OTHER AGREEMENTS....................................................... 28
Section 11.1. Effective Date......................................................... 28
Section 11.2. Arbitration............................................................ 28
ARTICLE 12 MISCELLANEOUS.......................................................... 28
Section 12.1. Integration; Severability.............................................. 28
Section 12.2. Intentionally Omitted.................................................. 28
Section 12.3. Expenses............................................................... 28
Section 12.4. Notices 29
Section 12.5. Public Announcements................................................... 30
Section 12.6. Invalidity of any Part................................................. 30
Section 12.7. Remedies............................................................... 30
Section 12.8. Assistance of Counsel.................................................. 31
Section 12.9. Governing Law and Jurisdiction......................................... 31
Section 12.10. Assignment; Amendments; Binding Agreement.............................. 31
Section 12.11. Counterparts; Facsimiles............................................... 31
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ACQUISITION AND MERGER AGREEMENT
--------------------------------
THIS ACQUISITION AND MERGER AGREEMENT ("Agreement") is dated as of March 9,
1999, by and among The InterCept Group, Inc., a Georgia corporation
("InterCept"), DAI Acquisition Corp., a Georgia corporation and wholly-owned
subsidiary of InterCept ("Buyer"), Direct Access Interactive, Inc., a Tennessee
corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇ ("White") and
▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), each of whom is a resident of the State of Tennessee
(▇▇▇▇▇▇▇▇, Jones, Hollingsworth, White and ▇▇▇▇▇, each a "Shareholder" and,
collectively, the "Shareholders").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Shareholders own 100% of the outstanding capital stock of the
Company; and
WHEREAS, subject to the terms and conditions of this Agreement, the
Shareholders, the Company, InterCept and Buyer desire and deem it in their
respective best interests that the Company be merged with and into Buyer (the
"Merger"); and
WHEREAS, the Company's issued and outstanding capital stock currently
consists of 2,000,000 shares of Common Stock, no par value (the "Company Common
Stock"); and
WHEREAS, the Shareholders own all of the outstanding shares of Company
Common Stock which constitutes all of the outstanding shares of the Company's
capital stock; and
WHEREAS, the Company's Board of Directors has recommended approval of the
Merger by the Company's shareholders and such shareholders have adopted as of
the date hereof the Merger and other transactions contemplated hereby by
unanimous written consent.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
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Section 1.1. Merger Transaction. Subject to the terms and conditions
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hereof, the parties hereto agree that the Company shall be merged with and into
Buyer in accordance with the applicable provisions of the Georgia Business
Corporation Act (the "GBCA") and the Tennessee Business Corporation Act (the
"TBCA"), and the separate existence of the Company shall thereupon cease. Buyer
shall be the surviving corporation in the Merger (the "Surviving Corporation")
and shall be a wholly-owned subsidiary of InterCept. Subject to the terms and
conditions hereof, the parties hereto shall take all actions necessary in
accordance with applicable
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law and their respective Articles of Incorporation and Bylaws to cause the
Merger to be consummated.
Section 1.2. Effective Time of the Merger. The Merger shall become
----------------------------
effective on the date and time (the "Effective Time") that the Articles of
Merger (the "Articles of Merger") in the form attached hereto as Exhibit 1.2
-----------
become effective with the Secretary of State of Georgia in accordance with the
applicable provisions of the GBCA and the Secretary of State of Tennessee in
accordance with applicable provisions of the TBCA.
Section 1.3. Terms and Conditions; Conversion of Shares. The effect of the
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Merger on the Articles of Incorporation, Bylaws, directors and officers of the
Surviving Corporation, and the manner and basis of converting the shares of
capital stock of Buyer and the Company into stock, shall be as set forth in the
Plan of Merger executed by the Buyer and the Company and attached hereto as
Exhibit 1.3.
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ARTICLE 2
PURCHASE PRICE; EXCHANGE OF SHARES
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Section 2.1 Purchase Price; Payment for Shares. Subject to the
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provisions of this Article 2, at the Effective Time, by virtue of the Merger and
without any action on the part of the holders thereof, the shares of the
constituent corporations shall be converted as follows:
(a) Each share of common stock, no par value, of InterCept
("InterCept Common Stock") issued and outstanding immediately prior to the
Effective Time shall remain issued and outstanding from and after the Effective
Time.
(b) Each share of common stock, no par value, of Buyer ("Buyer Common
Stock") issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding from and after the Effective Time.
(c) Each share of Company Common Stock issued and outstanding at the
Effective Time shall be converted into only the right to receive .06849 validly
issued, fully paid, non-assessable shares of InterCept Common Stock (the
"Exchange Ratio"). No fractional shares of InterCept Common Stock will be
issued, and fractional shares to which each Shareholder would otherwise be
entitled will be disregarded. The Shareholders acknowledge and agree that the
allocation of InterCept Common Stock issued pursuant to the effectiveness of the
Merger shall be set forth on Schedule 2.1(c), subject to the provisions of the
---------------
Section 2.3 hereof and the Escrow Agreement.
(d) (i) The principal amount of $100,000 of the promissory note held
by ▇▇▇▇ ▇▇▇▇▇▇▇▇ dated June 6, 1998 (the ▇▇▇▇▇▇▇▇ Note), related to the transfer
of that certain debt assumed by the Company on November 1, 1996, shall be
converted pursuant to the Exchange Ratio into only the right to receive 10,958
validly issued, fully paid, non-assessable shares of InterCept Common Stock; and
(ii) the principal amount of $30,000 payable to ▇▇▇▇▇▇▇▇ from the
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inception of the Company shall be converted pursuant to the Exchange Ratio into
only the right to receive 3,287 validly issued, fully paid, non-assessable
shares of InterCept Common Stock.
(e) The Company has no shares held in treasury. All shares of Company
Common Stock held in the treasury of the Company, if any, immediately prior to
the Effective time shall be canceled and extinguished without any conversion
thereof and no stock or cash shall be delivered or deliverable in exchange
therefor.
Section 2.2 Rights of Former Company Shareholders. (a) At the Effective
-------------------------------------
Time, the stock transfer books of the Company shall be closed as to holders of
the Company Common Stock immediately prior to the Effective Time, and no
transfer of the Company Common Stock by any such holder shall thereafter be made
or recognized. Until surrendered for exchange in accordance with the provisions
of Section 2.2(b) of this Agreement, each certificate theretofore representing
shares of the Company Common Stock shall from and after the Effective Time
represent for all purposes only the right to receive the consideration provided
in Section 2.1 and 2.3 of this Agreement in exchange therefor.
(b) At the Closing or immediately after the Effective Time, each
holder of shares of Company Common Stock issued and outstanding at the Effective
Time shall surrender the certificate or certificates representing such shares to
InterCept or Buyer and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 2.1 of this Agreement (less the
Escrow Shares delivered to the Escrow Agent pursuant to Section 2.3 hereof).
InterCept and Buyer shall not be obligated to deliver the consideration to which
any former holder of the Company Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's certificate or certificates
representing the shares of Company Common Stock for exchange as provided in this
Section 2.2(b). The certificate or certificates of the Company Common Stock so
surrendered shall be duly endorsed as the Buyer or InterCept may require.
(c) At the Closing or immediately after the Effective Time ▇▇▇▇
▇▇▇▇▇▇▇▇, upon his cancellation and delivery of the ▇▇▇▇▇▇▇▇ Note to InterCept
or Buyer, shall promptly receive in exchange therefor the consideration provided
in Section 2.1 of this Agreement.
Section 2.3. Establishment of Escrow. (a) Ten percent (10%) of the
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aggregate Merger consideration to be paid pursuant to Section 2.1(c) by
InterCept and Buyer shall be delivered at Closing to First Union National Bank
(the "Escrow Agent"), which shall hold such shares (the "Escrow Shares") in
escrow (the "Escrow") pursuant to the terms of the Escrow Agreement in the form
of Exhibit 2.3(a) (the "Escrow Agreement").
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(b) Prior to the Effective Time on the Closing Date, InterCept, the
Escrow Agent, and the Shareholder Representative (as defined in the Escrow
Agreement) shall enter into the Escrow Agreement in order to establish terms and
conditions regarding the use of Escrow Shares to satisfy indemnification
pursuant to Article 10 of this Agreement. Approval of this Agreement by the
Shareholders whether at a meeting or by unanimous written consent
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shall constitute approval of the establishment of the Escrow contemplated by the
Escrow Agreement and the appointment of the Escrow Agent and the Shareholder
Representative. At the Effective Time, InterCept shall deliver to the Escrow
Agent that number of Escrow Shares in accordance with the provisions of Sections
2.1 and 2.3 of this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
AND THE SHAREHOLDERS
--------------------
The Company and the Shareholders, jointly and severally, hereby represent
and warrant to Buyer and InterCept as follows:
Section 3.1. Authorization; Organization.
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(a) The Company is a corporation duly organized and validly existing
and in good standing under the laws of the State of Tennessee and has all
requisite corporate power and authority to own, lease or operate its properties
and assets and to carry on its business as now being conducted. The Company is
duly qualified to transact business and is in good standing in each jurisdiction
in which the nature of property owned or leased by it or the conduct of its
business requires it to be so qualified, except where the failure to do so would
not have a material adverse effect on its business, operations, properties,
assets or condition, financial or otherwise (a "Material Adverse Effect").
(b) The Company has full corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Merger and the other transactions provided for herein and in the Articles of
Merger, the Plan of Merger, and all other documents and agreements executed in
connection herewith and therewith (collectively, the "Merger Documents"). The
Board of Directors of the Company and the Shareholders have unanimously approved
the execution, delivery and performance of this Agreement and the consummation
of the transactions provided for herein.
(c) This Agreement has been duly and voluntarily executed and
delivered by each of the Shareholders and the Company and constitutes the legal,
valid and binding obligations of each of them, enforceable in accordance with
its terms.
(d) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a violation, breach, default, right to accelerate or increase in
obligations under the Company's Articles of Incorporation or Bylaws, any law or
statute or any order, judgment or decree by which the Company is bound by name
or any license, lease or other agreement to which the Company is a party or by
which its assets and business may be affected.
(e) The Company's Articles of Incorporation, Bylaws and stock book
and, in all material respects, its minute books are complete and correct and
contain all amendments
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thereto to date, a record of all corporate proceedings of the Company, and a
record of all stock issuances and transfers of the Company.
(f) The Company has no subsidiaries and never has had any
subsidiaries, and the Company does not conduct and never has conducted any
business under any trade name or other fictitious name.
(g) The Company is not a party to any joint venture or other similar
agreement or arrangement that involves any sharing of profits of the Company or
its assets or is similar to or competitive with the business.
(h) The Shareholders are the sole record and beneficial owners of the
Company Common Stock, and, except as set forth on Schedule 3.1(h), such Company
---------------
Common Stock is free and clear of all mortgages, liens, pledges, security
interests, charges, proxies, claims, restrictions, options and encumbrances of
any nature whatsoever (collectively, "Liens"). The Shareholders each have the
full legal right, power and authority to vote the shares of Common Stock held by
them. The Shareholders have not transferred or assigned any right, power or
authority with respect to the Shareholder Shares to any other person or entity.
Section 3.2. Capitalization; Structure.
-------------------------
(a) The authorized capital stock of the Company consists of (i)
10,000,000 authorized shares of Common Stock, of which 2,000,000 shares are
issued and outstanding. All of the outstanding shares of Common Stock have been
duly and validly authorized and issued, and are all fully paid and
nonassessable. No shares of the Company's capital stock have been issued in
violation of any preemptive rights, any rights of first refusal or any similar
restrictions. There are no: (i) outstanding options (including phantom options),
warrants or other rights (including preemptive rights) of any kind relating to
the sale, issuance or voting of any shares of capital stock of the Company; (ii)
securities convertible into, exchangeable for or evidencing the right to
purchase any such shares; or (iii) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance, transfer or
voting of such shares, any such convertible or exchangeable securities or any
such options, warrants or rights.
(b) All transactions whereby the Company repurchased, redeemed,
canceled or reacquired shares of its capital stock and the solicitation of
shareholder consents in connection with this Agreement have been effected in
compliance with all applicable corporate and securities laws, and documentation
prepared by or on behalf of the Company in connection therewith did not include
any untrue statement of any material fact or omit to state any material fact
necessary to make the statements made therein correct and complete.
Section 3.3. Financial Statements. Attached hereto as Exhibit 3.3(a) is a
-------------------- --------------
true and complete copy of the compiled financial statements of the Company at
and for the periods ending December 31, 1998 and December 31, 1997
(collectively, the "Financial Statements").
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The Financial Statements:
(a) have been prepared from, and are in accordance with, the books and
records of the Company;
(b) fairly present the financial position, results of operations and
cash flows of the Company as of and for the periods set forth therein; and
(c) have been prepared on a cash basis throughout the indicated
periods.
Section 3.4. Undisclosed Liabilities.
-----------------------
(a) Other than as shown on Schedule 3.4(a), the Company has no
---------------
material liabilities or obligations of any nature, known or unknown (whether
accrued, absolute, contingent or otherwise).
(b) Since the Company's inception, the Company has conducted its
business only in the normal course and has not:
(i) suffered any physical damage, destruction or casualty loss
(whether or not such loss or damage shall have been covered by insurance)
which adversely affects the properties, business or prospects of the
Company, or suffered any deterioration in the operating condition of any
physical assets of the Company, normal wear and tear excepted;
(ii) incurred, created, assumed or guaranteed any liability or
obligation of any nature (whether absolute, accrued, contingent or
otherwise), except in the ordinary course of business;
(iii) increased, or made any change in any assumptions underlying
the method of calculating, any bad debt, contingency or other reserves;
(iv) made any change in the method of valuing assets included in
the Financial Statements;
(v) made any change in any method of accounting or keeping its
books of account or accounting practices or systems of internal accounting
controls;
(vi) paid, discharged or satisfied any liability or obligation
(whether absolute, accrued, contingent or otherwise), other than by
payment, discharge or satisfaction in the ordinary course of business;
(vii) permitted or allowed any of its assets (real, personal or
mixed, tangible or intangible) to be subjected to any Lien;
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(viii) written down the value of any inventory or written off as
uncollectible any notes or accounts receivable, except for write-downs and
write-offs in the ordinary course of business;
(ix) canceled or waived any claims or rights, or sold,
transferred, distributed or otherwise disposed of any assets or properties,
except in the ordinary course of business;
(x) declared or paid any dividend or distribution on or in
respect of the Common Stock, or directly or indirectly redeemed, purchased,
or otherwise acquired any shares of its capital stock, any securities
convertible into or exchangeable for its capital stock, or any options,
warrants or other rights to purchase any of the foregoing, or authorized
the issuance of, or issued, sold or committed to sell (or granted any
options or rights to purchase) any additional shares of its capital stock,
or sold, issued or incurred any indebtedness;
(xi) experienced any strike, walkout, similar labor trouble or
other similar event; or
(xii) increased the salaries or other remuneration payable or to
become payable to, or made any advance (excluding advances for ordinary
business expenses) or loan to, any officer, director, employee or
shareholder (except normal merit increases made in the ordinary course of
business and consistent with past practice), or established, made any
increase in, or any addition to, other benefits (including, without
limitation, any Employee Plans, as defined in Section 3.17 below) to which
any of them may be entitled, or made any payments to any Employee Plan,
except payments in the ordinary course of business and consistent with past
practice, or entered into any agreement, arrangement or transaction with
any such person not in the ordinary course of business, or failed to make
any required payment under any Employee Plan.
Section 3.5. Properties. The Company has good and marketable title to, or
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holds by valid and existing lease or license, free and clear of all Liens, each
piece of real and personal property used in its business as now conducted,
except in any of the foregoing cases for such imperfections of title or Liens as
(a) are set forth in Schedule 3.5 hereof, (b) are reflected or reserved against
------------
in the Financial Statements, or (c) arise out of taxes or general or special
assessments which are not yet due and payable or are not in default and payable
without penalty or interest. The real and personal property owned, leased or
licensed by the Company constitutes all real or personal property that is
material to and necessary for the operation of its business as currently
conducted.
Section 3.6. Litigation. There are no suits, claims, investigations or
----------
proceedings pending or, to the knowledge of each Shareholder, threatened against
the Company, its officers or directors in their capacities as officers or
directors, any Shareholder or any other person or
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entity for whom the Shareholders or the Company may be vicariously liable at law
or in equity. The Shareholders are not subject to, and the Company is not
operating under or subject to, any order, writ, injunction or decree of any
court or governmental authority in which any of them is named.
Section 3.7. Intellectual Property. The Company conducts an active
---------------------
business using proprietary application software products and systems and
provides internet banking and integrated voice response (telephone banking)
services utilizing such products and systems (the "Software Programs"), and in
connection therewith the Company has developed certain related technical
documentation and user reference manuals (the "Documentation"). The Software
Programs and the Documentation are collectively referred to as the "Software."
The Software Programs and Documentation are listed in Schedule 3.7 hereto.
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(a) Ownership. Except as set forth in Section 3.9, the Company owns
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all patents, trademarks, service marks, trade names and copyrights (including
registrations, licenses and applications pertaining thereto) and all other
proprietary information used by the Company in the conduct of its business,
including, without limitation, the Software. Schedule 3.7(a) sets forth all
--------------
patents, trademarks, service marks, trade names and copyrights owned or used by
the Company and all applications therefor and registrations thereof.
(b) Procedures for Copyright Protection. Schedule 3.7(b) sets forth
----------------------------------- ---------------
the form and placement of the proprietary legends and copyright notices
displayed in or on the Software, including screen displays. In no instance has
the eligibility of the Software for protection under copyright law been
forfeited to the public domain.
(c) Procedures for Trade Secret Protection. The Company has never
--------------------------------------
disclosed its source code to a third party other than the consultants identified
in Schedule 3.7(c), each of which has executed a nondisclosure agreement in
---------------
favor of the Company, and discloses its source code to employees only on a need-
to-know basis in connection with the performance of their duties to the Company.
The source code and system documentation comprising the Software have at all
times been maintained by the Company in confidence, and the Company has not
taken (nor has it failed to take) any action which would result in such source
code and system documentation not being protectable as a trade secret under
applicable law.
(d) Ownership of Software. All persons who have contributed to or
---------------------
participated in the conception and development of the Software on behalf of the
Company have been full-time employees of the Company hired to prepare such works
within the scope of employment. As a consequence, the Company has all ownership
interests in the Software.
(e) Absence of Claims. Except as set forth in Schedule 3.7(e), no
----------------- ---------------
claims have been asserted by any person to rights in the Software, and no valid
basis for any such claim exists. The use of the Software by the Company and its
licensees does not infringe on the rights of any person (whether arising under
copyright, trade secret, patent, unfair competition
-8-
or other state or federal laws which protect intellectual property rights). The
use by the Company of the patents, trademarks, service marks, trade names and
copyrights identified in Schedule 3.7(a) does not infringe the rights of any
---------------
person, and no claim has been asserted that the use by the Company of any of the
foregoing infringes the rights of any person. No claim has been asserted by any
person to the effect that any current or former employee of the Company has
violated the provisions of any noncompete or nondisclosure agreement with such
person, or has disclosed any proprietary information of such person to the
Company or any third party.
Section 3.8. Adequacy of Technical Documentation. The Software includes
-----------------------------------
the source code, system documentation, statements of principles of operation,
and schematics for all Software Programs, as well as any pertinent commentary or
explanation that may be reasonably necessary to render such materials
understandable and usable by a trained computer programmer. The Software also
includes any program (including compilers), workbenches, tools, and higher level
language used for the development, maintenance and implementation of a Software
Program.
Section 3.9. Third-Party Components in Software. The Company has validly
----------------------------------
obtained the right and license to use, copy, modify and distribute any third-
party programming and materials contained in the Software pursuant to the
contracts identified in Schedule 3.9, subject to no further license fee, royalty
------------
or other payment obligations, other than software maintenance payments
customarily associated therewith. The Software contains no other programming or
materials in which any third party may claim superior, joint or common
ownership, including any right or license. The Software does not contain
derivative works of any programming or materials not owned in their entirety by
the Company.
Section 3.10. Third-Party Interests or Marketing Rights in Software. The
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Company has not granted, transferred, or assigned any right or interest in the
Software to any person, except pursuant to the contracts identified in Schedule
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3.10. There are no contracts, agreements, licenses, commitments or arrangements
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in effect with respect to the marketing, distribution, licensing or promotion of
the Software by any independent salesperson, distributor, sublicensor or other
remarketer or sales organization, except as set forth in Schedule 3.10.
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Section 3.11. Licenses. The Company has all government licenses, consents,
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permits, franchises, approvals and other governmental authorizations
("Licenses") required for its business as currently conducted. No proceeding is
pending or threatened seeking the revocation or suspension of any License.
Section 3.12. Compliance with Laws. The Company's business has been
--------------------
operated and maintained in all material respects in compliance with all
statutes, laws, regulations, ordinances, rules, judgments, orders or decrees
applicable thereto. There is not outstanding and, to the Shareholders' best
knowledge, there are no threatened orders, writs, injunctions, or decrees of any
court, governmental agency, or arbitration tribunal against Company affecting,
-9-
involving, or relating to its business or assets. The Company is not in
violation of any applicable federal, state, or local law, regulation, ordinance,
zoning requirement, governmental restriction, order, judgment, or decree
affecting, involving, or relating to its business or assets except where
noncompliance has no Material Adverse Effect on the Company (including under
ownership by InterCept) or the Company's assets, and neither the Company nor any
Shareholder has received any notices of any allegation of any such violation.
The foregoing shall be deemed to include laws and regulations relating to the
patent, copyright, and trademark laws, state trade secret and unfair competition
laws of the U.S. and foreign jurisdictions, environmental laws and to all other
applicable laws, including equal opportunity, wage and hour, and other
employment matters, and antitrust and trade regulation laws.
Section 3.13. Insurance. Schedule 3.13 lists all policies of casualty,
--------- -------------
liability, workers' compensation, life and other forms of insurance by which the
Company is currently insured or has been insured since inception of the Company
and includes for each policy in effect the period through which premiums have
been paid. All of the policies indicated as in force in Schedule 3.13 are in
-------------
full force and effect and no notice of cancellation has been received with
respect thereto and are sufficient for compliance in all material respects with
all requirements of law and all agreements to which the Company is a party.
Section 3.14. Material Contracts. Schedule 3.14 lists the following
------------------ -------------
agreements (including, without limitation, leases, purchase contracts and
commitments) to which the Company is a party or by which the Company or any of
its properties is bound:
(a) all contracts which involve future obligations on the part of the
Company in an aggregate amount during any 12 month period exceeding $10,000 in
the case of purchase orders and commitments or $5,000 in the case of any other
type of contract;
(b) all joint ventures, sales agency, sales representative or
distributorship, broker, franchise, license or similar contracts;
(c) all real estate leases;
(d) all notes, bonds, mortgages, security agreements, guarantees and
other agreements and instruments for or relating to any lending by the Company
in any amount (exclusive of advances to employees for expenses in the ordinary
course of business) or any borrowing of $5,000 or more;
(e) all powers of attorney, guarantees, suretyships or similar
agreements given by the Company; and
(f) all other written material agreements to which any Shareholder is
a party or to which the Shareholder's Company Common Stock may be or become
subject.
-10-
Each contract set forth in Schedule 3.14 is valid, binding and
enforceable in accordance with its terms, and neither the Company nor any other
party to any such contract is in material breach or material default of the
express written terms of such contracts.
Section 3.15. Brokers, Finders, etc. Neither the Shareholders nor the
---------------------
Company have employed any broker, finder, consultant or other intermediary in
connection with the transactions contemplated by this Agreement who might be
entitled to a fee or commission in connection with such transactions.
Section 3.16. Taxes.
-----
(a) Filing of Tax Returns. Except as set forth on Schedule 3.16(a),
--------------------- ----------------
the Company has timely filed with the appropriate taxing authorities all returns
(including, without limitation, information returns and other material
information) in respect of Taxes (as hereinafter defined) required to be filed
through the date hereof. All such returns and other information filed are
complete and accurate in all material respects.
(b) Payment of Taxes. All Taxes that are due and payable by the
----------------
Company (whether or not shown on any return) before the date hereof have been
paid. To the extent required by GAAP, an adequate reserve has been established
on the Financial Statements for all unpaid Taxes payable by the Company with
respect to all periods through the date of such Financial Statements, and the
Company is not required under GAAP to reserve for any liability for Taxes in
excess of the reserves so established. No portion of the reserve established on
the Financial Statements for Taxes reflects any contingent liability or other
potential liability for Taxes that are due and payable, or that may become due
and payable in the future, as a result of an audit, amended return or otherwise.
(c) Audit History. Except as set forth in Schedule 3.16(c):
------------- ----------------
(i) no deficiencies for Taxes have been claimed, proposed or
assessed by any taxing or other governmental authority against the Company
which have not been paid or otherwise finally settled and resolved;
(ii) the Company has not waived the statute of limitations in
respect of any Tax or agreed to any extension of time with respect to the
assessment of any Tax; and
(iii) the Company is not currently under audit with respect to
Taxes by any governmental authority, and no such authority in a
jurisdiction where the Company does not file Tax returns or pay Taxes has
claimed that the Company is required to file Tax returns or otherwise is
subject to taxation.
-11-
(d) Withholding Taxes. The Company has withheld and paid all Taxes
-----------------
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, shareholder or other third
party.
(e) Tax Sharing or Allocation Agreements. The Company is not a party
------------------------------------
to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement.
(f) Prior Affiliated Groups. The Company has never been a member of
-----------------------
an affiliated group of corporations, within the meaning of Section 1504 of the
Code (as hereinafter defined).
(g) Taxes. For purposes of this Agreement, "Taxes" shall mean all
-----
federal, state, local, foreign and other taxes, assessments, or other
governmental charges, including, without limitation, income, estimated income,
business, occupation, franchise, property, sales, gross receipts, excise,
employment, or withholding taxes, including interest, penalties and additions in
connection therewith.
Section 3.17. Pension and Employee Benefit Plans.
----------------------------------
(a) For purposes of this Agreement, the terms set forth below shall
have the following meanings:
(i) "Code": The Internal Revenue Code of 1986, as amended,
----
together with the regulations promulgated thereunder;
(ii) "Employee Plans": All plans, programs, arrangements,
--------------
practices or contracts pursuant to which the Company provides or is
obligated to provide or has within the last six years been obligated to
provide, directly or indirectly, benefits or compensation to or on behalf
of employees or former employees of the Company, whether formal or
informal, whether or not written, whether or not terminated, including but
not limited to the following:
(A) Executive Arrangements -- any bonus, incentive
compensation, stock option, deferred compensation, commission,
severance, golden parachute or other executive compensation plan,
employment contract, arrangement or practice;
(B) ERISA plans -- any Pension Plan or Welfare Plan, as
defined in Section 3 of ERISA, including but not limited to any multi-
employer plan, defined benefit pension plan, profit sharing plan,
savings or thrift plan, stock bonus plan, employee stock ownership
plan, or any plan, fund, program, arrangement or practice providing
for medical hospitalization, accident, sickness, disability, severance
pay or life insurance benefits; and
-12-
(C) Other Employee Fringe Benefits -- any stock purchase,
vacation, scholarship, day care, prepaid legal services, severance
pay, or fringe benefit plan, program, arrangement, contract, or
practice;
(iii) "ERISA": The Employee Retirement Income Security Act of
-----
1974, as amended, and the rulings and regulations thereunder; and
(iv) "ERISA Affiliate": A corporation that is or was a member
---------------
of a controlled group of corporations with the Company or a trade or
business that is under common control with the Company or which together
with the Company is treated as a single employer, in each case within the
meaning of Section 414 of the Code.
(b) Schedule 3.17 lists or describes all Employee Plans maintained or
-------------
contributed to by the Company pursuant to which the Company provides benefits or
compensation to or on behalf of employees or former employees of the Company.
The Company has no ERISA Affiliates.
(c) Each Employee Plan (and related trust or funding vehicle, if any)
has at all times been administered and maintained in accordance with its terms
and the applicable law including, without limitation, the filing of Forms 5500
and all other applicable reports.
(d) To the extent any Employee Plan is subject to approval by any
governmental agency, such Employee Plan has received such approval and such
approval is current.
(e) The Company is not subject to, and no facts exist which could
subject the Company to, any liability whatsoever which is directly or indirectly
related to any Employee Plan, including, but not limited to, liability for
benefits payments or related claims (other than the ordinary claims by
participants or beneficiaries which have been made for benefits called for under
the terms of such Employee Plans), any liability for any Tax or related penalty
under the Code, or liability for any damages or penalties arising under Title I
or Title IV of ERISA.
(f) No Employee Plan has engaged in or been a party to any
"prohibited transaction" (as defined in ERISA or the Code), and the Company has
not incurred, and does not reasonably expect to incur, any liability under
Chapter 43 of the Code or Section 502 of ERISA with respect to any Employee
Plan.
(g) No ERISA Welfare Plan provides benefits to former employees of
the Company, other than continuation coverage required by Section 4980B of the
Code and Section 601 of ERISA.
(h) There are no pending or threatened claims, suits or other
proceedings with respect to any Employee Plan other than the ordinary claims by
participants or
-13-
beneficiaries which have been made for benefits called for under the terms of
such Employee Plans and which will be paid under such Employee Plans in the
ordinary course.
(i) There is no requirement that the Buyer or InterCept make any
further contributions to any Employee Plan after the date of this Agreement, and
each Employee Plan which provides benefits to or on behalf of employees or
former employees of the Company may be terminated by the Buyer or InterCept in
its sole discretion without liability of any kind or description whatsoever to
Buyer, InterCept or any other person, entity or governmental agency.
(j) The Company is not a party to or obligated under any agreement,
plan, contract or other arrangements that will result, separately or in the
aggregate, in the payment of any "excess parachute payment" within the meaning
of Section 28OG of the Code.
Section 3.18. Labor and Employment Matters. Except to the extent set forth
----------------------------
in Schedule 3.18:
-------------
(a) the Company is not a party to any collective bargaining
agreements;
(b) the Company is in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health and is
not engaged in any unfair labor or unfair employment practices;
(c) there is no unfair labor practice, charge or complaint or any
other matter against or involving the Company pending or, to the knowledge of
the Shareholders, threatened before the National Labor Relations Board or any
court of law;
(d) there is no labor strike, dispute, slowdown or stoppage actually
pending or, to the knowledge of the Shareholders, threatened against the
Company, and the Company has not experienced any organized work stoppage,
organizational drive or other labor difficulty since its inception;
(e) there are no charges, investigations, administrative proceedings
or formal complaints of discrimination (including discrimination based upon sex,
age, marital status, race, national origin, sexual preference, handicap or
veteran status) pending or, to the knowledge of the Shareholders, threatened
before the Equal Employment Opportunity Commission or any federal, state or
local agency or court against the Company, and to the knowledge of the
Shareholders, no basis for any such claim exists; and
(f) there are no citations, investigations, administrative
proceedings or formal complaints of violations of local, state or federal
occupational safety and health laws pending, or to the knowledge of the
Shareholders, threatened before the Occupational Safety
-14-
and Health Review Commission or any federal, state or local agency or court
against the Company.
(g) Schedule 3.18(g) lists all employment, consulting, loan-out,
----------------
retainer or other contracts or agreements involving any person employed by the
Company as an employee or independent contractor to which the Company is a party
or by which it is bound. The Company is not and no other party to any such
agreement or contract is in default with respect to any material term or
condition thereof (including the making of contributions and recording services
therefor), nor has any event occurred which through the passage of time or the
giving of notice, or both, would constitute a default thereunder or would cause
the acceleration of any obligation of any party thereto.
(h) Schedule 3.18(h) lists the names and current compensation levels
----------------
of all employees and consultants of the Company.
Section 3.19. Environmental Matters.
---------------------
(a) The operations of the Company comply, and have complied, in all
respects with all applicable environmental laws.
(b) The Company has obtained all environmental, health and safety
permits, approvals, licenses and other authorizations necessary for the
operation of the Company's business, all of which are valid and in good standing
and are not subject to any modification or revocation proceeding, and the
Company is in compliance in all respects with all terms and conditions thereof.
(c) The Company has not received any written notice of any pending or
threatened investigation, proceeding or claim to the effect that it is or may be
liable to any person, or responsible or potentially responsible for the costs of
any remedial or removal action or other cleanup costs, as a result of
noncompliance with any applicable environmental laws or arising out of the
presence, generation, storage or disposal of hazardous waste, including
liability under the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, or any state superfund law, and there is no past or
present action, activity, condition or circumstance that could be expected to
give rise to any such liability on the part of the Company to any person, or for
any such cleanup costs.
Section 3.20. Agreements Affecting Competition. The Company is neither a
--------------------------------
party to nor bound by any agreement which presently restricts or precludes the
Company or any present or future affiliate of the Company from conducting any
business anywhere in the world, or upon the occurrence of any event, the giving
of notice or the passage of time, by its terms would have such an effect.
-15-
Section 3.21. Transactions with Related Parties. Except a set forth on
---------------------------------
Schedule 3.21, in connection with customary transactions in the ordinary course
-------------
of business, no officer, director or shareholder of the Company or any relative
or affiliate thereof:
(a) owes money to the Company;
(b) has any claim against the Company;
(c) has any interest in any property or assets used by the Company in
its business;
(d) has any benefits which are contingent on the transactions
contemplated by this Agreement, other than as stated herein;
(e) has any agreement with the Company that is not terminable by the
Company without penalty or notice;
(f) has any agreement providing severance benefits or other benefits
(which are conditioned upon a change of control) after the termination of
employment of such employee regardless of the reason for such termination of
employment; or
(g) has any agreement or plan, any of the benefits of which will be
increased, vested or accelerated by the occurrence of any of the transactions
contemplated by this Agreement.
Section 3.22. Major Vendors and Customers. Schedule 3.22 sets forth a
--------------------------- -------------
list of each licensor, developer, remarketer, distributor and supplier of
property or services to, and each licensee, end-user or customer of, the
Company, to whom the Company paid or billed in the aggregate in excess of $5,000
during calendar year 1997 or 1998.
Section 3.23. Absence of Certain Commercial Practices. Since the Company's
---------------------------------------
inception, neither the Company, any of its directors, officers, agents,
affiliates or employees, nor any other person acting on behalf of the Company or
any shareholder, has (a) given or agreed to give any gift or similar benefit
having a value of $1,000 or more to any customer, supplier or governmental
employee or official or any other person, for the purpose of directly or
indirectly furthering the business of the Company, (b) used any corporate funds
for contributions, payments, gifts or entertainment, or made any expenditures
relating to political activities to government officials or others in violation
of any applicable laws, or (c) received any unlawful contributions, payments,
gifts or expenditures in connection with the business of the Company.
Section 3.24. Accounts Receivable. Schedule 3.24 is a complete and
------------------- -------------
accurate schedule of the accounts receivable of the Company as of March 1, 1999,
as reflected in the balance sheet as of that date, included in the Financial
Statements, together with an accurate
-16-
aging of these accounts. These accounts receivable, and all accounts receivable
of the Company created after that date, arose from valid transactions in the
ordinary course of business and will be good and collectible at the recorded
amounts thereof. No portion of the accounts receivable is subject to
counterclaim or setoff.
Section 3.25. Disclosure. No representation, warranty, or statement made
----------
by the Company or any Shareholder in this Agreement or in any document or
certificate furnished or to be furnished to Buyer and InterCept 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 not
misleading. All facts known or reasonably available to the Company and all
Shareholders that are material to the financial condition, operation, or
prospects of the Company's business and assets have been disclosed to Buyer and
InterCept.
Section 3.26. Year 2000. The Software is designed to be used after
---------
February 28, 1999, and during, and after the calendar year 2000 AD, and the
Software will operate during each such time period without error relating to
date data, specifically including any error relating to, or the product of, date
data which represents or references different centuries or more than one century
or any leap year (the "Year 2000 issue"). The Company's internal systems and
software and the network connections it maintains are adequately programmed to
address the Year 2000 issue. Copies of any certificates or warranties made by
or given to the Company regarding the Year 2000 issue are attached to this
Agreement as Schedule 3.26.
-------------
Section 3.27. Shareholders' Additional Representations. To induce the
----------------------------------------
Buyer and InterCept to enter into this Agreement, each Shareholder represents
and warrants to the Buyer and InterCept as follows:
(a) Such Shareholder has the right, power, capacity and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby; this Agreement has been duly and validly executed and
delivered by such Shareholder and is entered into voluntarily without promise or
benefit other than as set forth herein; and this Agreement constitutes such
Shareholder's legal, valid and binding obligation, enforceable in accordance
with its terms.
(b) Such Shareholder owns, of record and beneficially, valid title to
his respective Shareholder Shares, and such shares are free and clear of all
Liens, Claims (as defined below) and encumbrances. Other than the Company Common
Stock owned by each Shareholder, such Shareholder does not own, beneficially or
of record, or have any right to acquire, now or in the future, any shares of
Common Stock or other securities of any kind of the Company. The execution,
delivery and performance of this Agreement by such Shareholder will not conflict
with or result in a breach of any agreement, instrument, order, injunction,
decree, statute, rule or regulation applicable to such Shareholder or any of its
material assets. The execution, delivery and performance of this Agreement by
such Shareholder does not require the consent or approval of any third party or
governmental agency or authority which has not been obtained (and a copy of
which is attached hereto).
-17-
(c) Each Shareholder represents and warrants that the Company
generally has good relationships with its customers and that such Shareholder
has no reason to believe that any of those customers would not be agreeable to
consider entering into item or data processing contracts with Buyer or its
affiliates.
(d) Each Shareholder hereby represents and warrants that he or she is
not aware as of the date hereof of any claim (as defined by ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code, as amended), debts, demands, actions, causes of
action, suits, accounts, damages and liabilities of any name and nature that
such Shareholder may have, or which such Shareholder is aware may arise in the
future against InterCept, Buyer or any of their subsidiaries, officers,
directors, employees, shareholders, attorneys, agents, successors, assigns,
representatives or affiliates.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER AND INTERCEPT
-----------------------------------------------------
The Buyer and InterCept hereby represent and warrant to the Company and the
Shareholders as follows:
(a) Corporate Existence. Buyer is a corporation duly organized,
-------------------
validly existing and in good standing under the laws of the State of Georgia.
InterCept is a corporation duly organized, validly existing and in good standing
under the laws of the State of Georgia.
(b) Corporate Power and Authorization. Buyer and InterCept have the
---------------------------------
corporate power, authority and legal right to execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement by Buyer
and InterCept have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Buyer and InterCept and
constitutes the legal, valid and binding obligation of Buyer and InterCept
enforceable against them in accordance with its terms.
(c) Validity of Contemplated Transactions, etc. The execution,
------------------------------------------
delivery and performance of this Agreement by Buyer and InterCept does not 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, (a) any existing
law, ordinance, or governmental rule or regulation to which Buyer or InterCept
is subject, (b) any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority
which is applicable to Buyer or InterCept, (c) the charter documents or By-Laws
of, or any securities issued by, Buyer or InterCept, or (d) any mortgage,
indenture, agreement, contract, commitment, lease, plan or other instrument,
document or understanding, oral or written, to which Buyer or InterCept is a
party or by which either is otherwise bound. Except as aforesaid, no
authorization, approval or consent of, and no registration or filing with, any
-18-
governmental or regulatory official, body or authority is required in connection
with the execution, delivery and performance of this Agreement by Buyer or
InterCept.
(d) Broker's or Finder's Fees. Neither InterCept nor Buyer has
-------------------------
authorized any person to act as broker, finder, or in any other similar capacity
in connection with the transactions contemplated by this Agreement.
ARTICLE 5
INTENTIONALLY OMITTED
ARTICLE 6
COVENANTS AND AGREEMENTS OF THE PARTIES
---------------------------------------
Section 6.1 Shareholder Approved by Unanimous Consent. By signing this
-----------------------------------------
Agreement, each Shareholder agrees that he or she is evidencing his or her
approval in all respects to the transactions contemplated by this Agreement.
Each Shareholder will use his or her best efforts to obtain unanimous approval
of the Merger and shall not take any action to encourage any shareholder of the
Company to vote its shares against the Merger or to assert dissenter's rights.
The Company will furnish to each Shareholder a notice of his rights to dissent
from the Merger under the TBCA and to demand an appraisal of his shares of
Company Common Stock and shall provide InterCept with a copy of such notice
prior to the Closing Date. Each of the Shareholders (i) hereby waives his or
her dissenters' appraisal and other rights, if any, to object to the Merger and
the transaction contemplated by this Agreement under the TBCA.
Section 6.2. Affiliates. On the Closing Date, the Company shall deliver
----------
to InterCept copies of letter agreements, each substantially in the form of
Exhibit 6.2, executed by all directors, executive officers, the Shareholders and
-----------
by any other person who is an "affiliate" of the Company for purposes of Rule
145 under the Securities Act of 1933 (the "1933 Act") providing that such person
will not sell, pledge, transfer or otherwise dispose of any shares of Company
Common Stock held by such "affiliate" and the shares of InterCept Common Stock
to be received by such "affiliate" in the Merger: (i) in the case of shares of
InterCept Common Stock only, except in compliance with the applicable provisions
of the 1933 Act and the rules and regulations thereunder; and (ii) during the
periods during which any such sale, pledge, transfer or other disposition would,
under GAAP or the rules, regulations or interpretations of the SEC, disqualify
the Merger for pooling-of-interest accounting treatment, except as permitted by
Staff Accounting Bulletin No. 76 issued by the Securities and Exchange
Commission (the "SEC"). The certificates of InterCept Common Stock issued to
"affiliates" of the Company will bear an appropriate legend reflecting the
foregoing and InterCept shall be entitled to issue stop orders to the transfer
agent for InterCept Common Stock consistent with the terms of such letters. The
parties understand that such periods in general encompass the period commencing
30 days prior to the Merger and ending at the time of the publication of
financial results covering at least 30 days of combined operations of InterCept
and the Company within the meaning of Section 201.01 of the SEC's Codification
of Financial Reporting Policies.
-19-
Section 6.3. Pooling of Interests. Each party shall use all commercially
reasonable efforts and shall in good faith attempt to cause the Merger to
qualify for pooling-of-interests accounting treatment. Each party represents and
warrants that its past transactions status conform to the conditions set forth
in Exhibit 6.3 hereto and covenants that it has no planned transactions that
-----------
contrary to any of the conditions set forth in Exhibit 6.3.
-----------
Section 6.4. Employee Benefit Plans
Notwithstanding anything in this Agreement to the contrary, the Company and
the Shareholders do hereby agree and covenant that, (i) as of the Closing, the
Company shall sponsor no Benefit Plan or Applicable Benefit Plan (defined
hereinafter); and (ii) as of the Closing, the Company shall not have any
liability, or responsibility to act or omit to act in any regard, in relation to
any Benefit Plan or Applicable Benefit Plan. Shareholders shall indemnify the
Company (or Buyer as its successor) for the payment of all costs of coverage,
administrative, and other fees, costs, expenses and other charges incurred by
Buyer or by InterCept related to each and every "group health plan" (within the
meaning of Internal Revenue Code of 1986, as amended ("Code"), section
4980B(g)(2)) relating to the Company with respect to coverage required under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for or with
respect to employees (and their applicable dependents) of the Company, including
those whose employment terminated or is terminated, for any reason or no reason,
at any time on or before the Closing. Intercept, Buyer and their respective
legal counsel shall be entitled to obtain any and all documents and other
information (whether written or unwritten), from any and all persons and
entities, relating to one or more of the Applicable Benefit Plans. For purposes
of this Section 6.4, the phrase "Benefit Plan" shall include, without
limitation, (i) each pension, retirement, profit-sharing, cash or deferred,
deferred compensation, stock option, phantom stock, stock appreciation rights,
employee stock ownership, severance pay, vacation, paid time off, education-
reimbursement, bonus, incentive, and other or similar plan, program or other
arrangement, (ii) each cafeteria, Section 125, medical, vision, dental,
disability, death benefit, life insurance, health and/or accident plan, program
or other arrangement, (iii) each written or unwritten employee or other or
similar program, arrangement, agreement or understanding, whether arrived at
through collective bargaining or otherwise, and (iv) each other employee benefit
plan, voluntary employees' beneficiary association, fringe benefit plan, and
other or similar plan, program or other arrangement, agreement or understanding,
including, without limitation, each "employee benefit plan," as that term is
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended. The phrases "Applicable Benefit Plan" and "Applicable Benefit Plans"
shall include, without limitation, (i) each and every Benefit Plan which, at any
time up to the Closing, was sponsored by, was contributed to or required to be
contributed to by, or was otherwise connected with, the Company.
Section 6.5. Agreements regarding Employee Benefits. Immediately following
the Effective Time, InterCept or one of its subsidiaries (the "InterCept
Companies") shall provide to those persons who were employees of the Company at
the Effective Time
-20-
employee benefits under employee benefit plans of the InterCept Companies on
terms and conditions which are comparable to those currently provided by the
InterCept Companies to their similarly situated employees. Company employees
will be given credit for employment with the Company, for purposes of
eligibility only, related to participation under Intercept's 401(k) Plan.
Coverage of Company employees under the InterCept health plan will not be
limited by pre-existing conditions to any greater extent than is applicable to
the Company's employees under the Company health plan immediately prior to the
Effective Time. Nothing contained herein shall be construed to entitle any
person not a party hereto to any third party benefit or other rights with
respect to Company employees or their dependents.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S AND INTERCEPT'S OBLIGATIONS
-----------------------------------------------------------
The obligations of Buyer and InterCept to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at or before the
Closing, of all the conditions set forth below (with the effectiveness of all
agreements listed below being expressly conditioned upon consummation of the
Merger. The Buyer and InterCept may waive any or all of these conditions in
whole or in part without prior notice; provided, however, that except to the
-------- -------
extent, if any, that such waiver constitutes an election of remedies under
Georgia law, no such waiver of a condition shall constitute a waiver by the
Buyer or InterCept of any of their other rights or remedies, at law or in
equity, if the Company or the Shareholders shall be in default of any of their
representations, warranties or covenants under this Agreement.
Section 7.1. Accuracy of Representations. The representations and
---------------------------
warranties of the Company and the Shareholders in this Agreement or any Schedule
hereto or in any written statement delivered by them at the Closing to the Buyer
or InterCept under this Agreement shall be true in all material respects as of
the date hereof.
Section 7.2. Performance of Company and Shareholders. The Company and the
---------------------------------------
Shareholders shall have performed, satisfied and complied with all covenants,
agreements and conditions required by this Agreement to be performed or complied
with by them on or before the Closing Date.
Section 7.3. Material Changes. During the period from December 31, 1998 to
----------------
the Closing Date, there shall not have been any material adverse change in the
financial condition or the results of operations of the Company, and the Company
shall not have sustained any material loss or damage to its assets, whether or
not insured, that materially affects its ability to conduct a material part of
its business.
Section 7.4. Absence of Litigation. No action, suit or proceeding before
---------------------
any court, governmental body or authority, other than routine regulatory and tax
inspections, audits and reviews, pertaining to the transactions contemplated by
this Agreement or its consummation, shall have been instituted or threatened.
-21-
Section 7.5. Certificates of the Company and Shareholders. The Buyer and
--------------------------------------------
InterCept shall have received certificates, dated the Closing Date, signed by
the Company and the Shareholders, certifying that the conditions specified in
Sections 7.1, 7.2, 7.3 and 7.4 have been fulfilled.
Section 7.6. Corporate Approval. The execution and delivery of this
------------------
Agreement by the Company, and the performance of its covenants and obligations
hereunder, shall have been duly authorized by the Company's Board of Directors
and its shareholders, and the Buyer and InterCept shall have received copies of
all resolutions or consents pertaining to those authorizations, certified by the
Secretary of the Company.
Section 7.7. Approvals. This Agreement and the transactions contemplated
---------
hereby shall have received all approvals, consents, authorizations and waivers
from governmental and regulatory agencies and other third parties (including
lenders and lessors) required to consummate the transactions contemplated
hereby, which, either individually or in the aggregate, if not obtained would
have a Material Adverse Effect.
Section 7.8. Employment Agreements. At or prior to Closing, ▇▇▇▇▇▇▇▇ and
---------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇ shall have entered into employment agreements substantially in the
form attached hereto as Exhibit 7.8, the effectiveness of which shall be
-----------
expressly contingent upon the occurrence of Closing.
Section 7.9. Opinion of Counsel. InterCept shall have received an
------------------
opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇, counsel to the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the Company, covering the
matters set forth on Exhibit 7.9.
-----------
Section 7.10. Pooling. Management of InterCept and Buyer shall have
-------
reasonably satisfied itself on or prior to Closing that the Merger will qualify
for pooling-of-interests accounting treatment.
Section 7.11. Escrow Agreement. The Shareholders shall have executed
----------------
and delivered the Escrow Agreement in the form attached hereto as Exhibit
-------
2.3(a).
------
Section 7.12. Cancellation Agreements. At Closing, ▇▇▇▇▇▇▇▇ shall
-----------------------
deliver to InterCept any and all documents, agreements and certificates
evidencing (i) the cancellation of the note in referenced in Section 2.1(d)(i),
and (ii) the cancellation of the principal amount of $30,000 due to ▇▇▇▇▇▇▇▇
from the inception of the Company referenced in Section 2.1(d)(ii).
Section 7.13. Registration Rights Agreement. The Company shall have
-----------------------------
executed and delivered a Registration Rights Agreement in favor of the
Shareholders providing for "piggyback" registration rights only in the form
attached hereto as Exhibit 7.13.
------------
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Section 7.14. Nonsolicitation and Confidentiality Agreements. At or prior
----------------------------------------------
to Closing, ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall have entered into a nonsolicitation
and confidentiality agreement substantially in the form attached hereto as
Exhibit 7.14, the effectiveness of which shall be expressly contingent upon the
------------
occurrence of Closing.
ARTICLE 8
CONDITIONS PRECEDENT TO THE COMPANY'S AND
-----------------------------------------
THE SHAREHOLDER'S OBLIGATIONS
-----------------------------
The obligations of the Company and the Shareholders to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, at
or before the Closing, of all the conditions set forth below. The Company and
the Shareholders may waive any or all of these conditions in whole or in part
without prior notice; provided, however, that no such waiver of a condition
-------- -------
shall constitute a waiver by the Company or the Shareholders of any of their
other rights or remedies, at law or at equity, if the Buyer or InterCept shall
be in default of any of their representations, warranties or covenants under
this Agreement.
Section 8.1. Accuracy of Representations. The representations and
---------------------------
warranties by the Buyer and InterCept in this Agreement or in any written
statement delivered to the Company under this Agreement shall be true in all
material respects as of the date hereof and on and as of the Closing Date as
though made at that time.
Section 8.2. Performance of Buyer and InterCept. The Buyer and InterCept
----------------------------------
shall have performed, satisfied and complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by it on
or before the Closing Date.
Section 8.3. Absence of Litigation. No action, suit or proceeding before
---------------------
any court, governmental body or authority, other than routine regulatory and tax
inspections, audits and reviews, pertaining to the transactions contemplated by
this Agreement or its consummation, shall have been instituted or threatened.
Section 8.4. Certificates of the Buyer. The Company shall have received a
-------------------------
certificates, dated the Closing Date, signed by the Buyer's and InterCept's
president or vice president and secretary or assistant secretary, certifying
that the conditions specified in Sections 8.1, 8.2 and 8.3 have been fulfilled.
Section 8.5. Corporate Approval. The execution and delivery of this
------------------
Agreement by the Buyer and InterCept and the performance of their respective
covenants and obligations hereunder, shall have been duly authorized by the
Board of Directors of Buyer and InterCept and the sole shareholder of Buyer. The
Shareholders and the Company shall have received copies of all resolutions
pertaining to these authorizations, certified by their respective corporate
secretaries.
Section 8.6. Third Party Approvals. This Agreement and the transactions
---------------------
contemplated hereby shall have received all approvals, consents, authorizations
and waivers from
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governmental and regulatory agencies required to consummate the transactions,
which, either individually or in the aggregate, if not obtained would have a
Material Adverse Effect on the financial condition, results of operation or
business of the Company.
Section 8.7. Employment Agreements. At or prior to Closing, ▇▇▇▇▇▇▇▇ and
---------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇ and Buyer shall have entered into employment agreements
substantially in the form attached hereto as Exhibit 7.8, the effectiveness of
---
which shall be expressly contingent upon the occurrence of Closing.
ARTICLE 9
CLOSING
-------
Section 9.1. Time and Place of Closing. The closing ("Closing") of the
-------------------------
transactions contemplated hereunder shall take place as soon as practicable on
execution and delivery of this Agreement on such date as the parties shall
agree, but in no event later than March 9, 1999 ("Closing Date"), and effective
as of the Effective Time. The Closing shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., Atlanta Time, on the Closing Date.
Section 9.2. Deliveries by the Company. At the Closing, the Company and
-------------------------
the Shareholders shall deliver to Buyer and InterCept:
(a) stock certificates evidencing all of the shares of Company Common
Stock, canceled or duly endorsed in blank or with stock powers endorsed in
blank;
(b) Articles of Incorporation of the Company, certified by the
Secretary of State of the State of Tennessee, and a true and correct copy of the
Bylaws of the Company, certified as of the Closing Date by the Secretary of the
Company;
(c) good standing certificates relating to the Company from the State
of Tennessee and each other jurisdiction in which the Company is qualified to
conduct business;
(d) the corporate seal and all stock ledgers and minute books of the
Company in existence as of the Closing, accompanied by a certificate of the
Secretary of the Company certifying that the stock ledgers and minutes books
are, to the best of his information and belief, true, correct and complete as of
the Closing Date;
(e) the Merger Documents, including the Articles of Merger and Plan of
Merger, duly executed by the Company;
(f) a Secretary's Certificate attesting to the incumbency of the
officers of the Company executing this Agreement and the other certificates and
agreements delivered by the Company at the Closing; and
-24-
(g) the documents and instruments referred to in Article 7 hereof.
Section 9.3. Deliveries by Buyer and InterCept. At the Closing, Buyer and
---------------------------------
InterCept shall deliver to the Company:
(a) a Secretary's Certificate attesting to the incumbency of the
officers of Buyer and InterCept executing this Agreement and the other
certificates and agreements delivered by Buyer and InterCept at the Closing;
(b) resolutions of the Board of Directors of Buyer and the acquisition
committee of the Board of Directors of InterCept authorizing the execution and
delivery of this Agreement and the performance of the transactions contemplated
hereby, certified by the respective Secretary of Buyer and InterCept;
(c) the Merger Documents, including the Articles of Merger and Plan of
Merger, duly executed by Buyer and InterCept, as applicable; and
(d) the documents and instruments referred to in Article 8 hereof.
Section 9.4. Post Closing Deliveries and Power of Attorney. The
---------------------------------------------
Shareholders, InterCept and Buyer agree that, from time to time after the
Closing, each of them will execute and deliver such further instruments of
conveyance and transfer and take such other action as may be necessary to carry
out the purposes and intent of this Agreement.
ARTICLE 10
SURVIVAL; INDEMNIFICATION
-------------------------
Section 10.1. Survival. The respective representations and warranties
--------
contained in this Agreement will survive execution and delivery of this
Agreement and Closing and shall remain in full force and shall not be affected
by any investigations by the parties prior to the Effective Time subject to the
limitations set forth herein.
Section 10.2. Indemnification.
---------------
(a) Indemnification by Shareholders. Subject to the terms of this
-------------------------------
Article 10, the Shareholders hereby severally, but not jointly, covenant and
agree to indemnify, defend, save and hold harmless Buyer, InterCept and the
Company and their respective officers, directors, employees, agents, affiliates
or any of their respective successors, assigns or personal representatives
(collectively, the "Buyer Indemnified Parties"), from and against any demands,
claims, actions, losses, damages, deficiencies, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses), together with interest and penalties, if any, awarded by court order
or otherwise agreed to (collectively, "Indemnifiable Damages"), suffered by the
Buyer Indemnified Parties which arise out of or result from:
-25-
(i) any misrepresentation in or breach of any of the
representations, warranties or covenants made by the Shareholders in this
Agreement;
(ii) any misrepresentation in a document, certificate or
affidavit delivered by or on behalf of the Shareholders in connection with
this Agreement;
(iii) the continued existence after the execution of this
Agreement of any Lien violation of this Agreement;
(iv) any guaranty or other material liability of the Company not
otherwise disclosed hereunder or in any Schedule hereto; or
(v) any claim alleging misconduct of, by or under the control
of the Company or any Shareholder with respect to actions taken related to
the Company which is criminal or of a grossly negligent character that is
attributable to events occurring prior to the execution of this Agreement.
(b) Indemnification by Buyer and InterCept. Subject to the terms of
--------------------------------------
this Article 10, Buyer and InterCept hereby covenant and agree to indemnify,
defend, save and hold harmless the Shareholders and their respective successors,
representatives, trustees and permitted assigns from and against any
Indemnifiable Damages suffered by them which arise out of or result from:
(i) any misrepresentation in or breach of any of the
representations, warranties or covenants made by Buyer or InterCept in this
Agreement;
(ii) any misrepresentation in a document, certificate or
affidavit delivered by or on behalf of Buyer or InterCept in connection
with this Agreement; or
(iii) any claim alleging misconduct of, by or under the control
of the InterCept, the Buyer or any individual acting in a representative
capacity on behalf of InterCept and/or Buyer, which is criminal or of a
grossly negligent character that is attributable to events occurring prior
to the execution of this Agreement.
(c) Limitations on Amount. None of InterCept, Buyer or the
---------------------
Shareholders will have liability (for indemnification or otherwise) with respect
to the matters described in clause 10.2(a) or 10.2(b) or for any other matter
unless and until the total of all damages with respect to such matters exceeds
$25,000. However, this provision in Section 10.3(c) will not apply to any breach
of any of the representations and warranties of the Company, the Shareholders,
InterCept or the Buyer where said party had knowledge at any time prior to the
date on which such representation or warranty is made that the representation or
warranty was not accurate. Further, the provisions of this Section 10.3(c) will
not apply to an intentional breach by either the Buyer, InterCept or the
Shareholders of any covenant or obligation.
-26-
Section 10.3. Procedure for Third-Party Claims.
--------------------------------
(a) Promptly after obtaining knowledge of any claim or demand which
has given rise to, or could reasonably give rise to, a claim for indemnification
hereunder, the party seeking indemnification shall give written notice of such
claim ("Notice of Claim") to the other party in accordance with the terms of the
Escrow Agreement. The Notice of Claim shall set forth a brief description of the
facts giving rise to such claim and the amount (or a reasonable estimate) of the
liability, loss, damage or expense suffered, or which may be suffered, by the
party seeking indemnification, and shall be accompanied by all documentation in
the case of a third-party claim against the indemnified party.
(b) Upon receiving the Notice of Claim, the indemnifying party shall
resist, settle or otherwise dispose of such claim in such manner as it shall
deem appropriate, including the employment of counsel, and shall be responsible
for the payment of all settlements, judgments, costs and expenses, including the
reasonable fees and expenses of any counsel retained. The indemnified party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the indemnified party's expense unless:
(i) the employment has been specifically authorized by the
indemnifying party in writing;
(ii) the indemnifying party has improperly failed to assume the
defense and employ counsel; or
(iii) the named parties to any action (including any impleaded
parties) include the Buyer, InterCept and/or the Company and the Shareholders,
and the indemnified party has been advised by such counsel that representation
of Buyer, InterCept and/or the Company and Shareholders by the same counsel
would be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them (in which case, if the
indemnified party notifies the indemnifying party in writing that the
indemnified party elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall have neither the right nor the
obligation to assume the defense of such action on behalf of the indemnified
party).
(c) The party seeking indemnification shall comply with the foregoing
procedure for each claim arising hereunder, whether or not the amount of such
claims exceeds any minimum amount. All Notices of Claim for general
contingencies must be delivered within the time frame permitted by the Escrow
Agreement for the party making such claim(s) to collect from the Escrow Fund, as
defined in the Escrow Agreement. The indemnified party shall cooperate with the
indemnifying party in defending any such claim and provide any books, records,
information or testimony requested, which is in the hands of or under the
-27-
control of the indemnified party or obtainable by the indemnified party without
unreasonable expense.
ARTICLE 11
OTHER AGREEMENTS
----------------
Section 11.1. Effective Date. Notwithstanding the actual date of
--------------
execution and delivery of this Agreement, the parties agree that, for all
purposes (including legal, tax and accounting), this Agreement shall be deemed
dated and effective as of March 9, 1999.
Section 11.2. Arbitration. Any dispute, controversy or claim arising
-----------
out of or relating to this Agreement or any other related Merger Documents,
agreements, certificates or other writing, or the breach, termination,
construction, validity or enforceability hereof or thereof, shall be settled by
binding arbitration held in Atlanta, Georgia in accordance with the rules of the
American Arbitration Association in force at the time. Termination or
limitation of the Buyer's or InterCept's rights in any of its software,
products, or any associated intellectual property rights or documents may not be
awarded under any circumstances. The right to demand arbitration and to receive
damages and obtain other available remedies as provided hereunder shall be the
exclusive remedy in the event an arbitration demand is made, except that the
Buyer and/or InterCept shall be entitled to obtain equitable relief, such as
injunctive relief, from any court of competent jurisdiction to protect its
rights in any of its software products or any associated intellectual property
rights or documents while such proceeding is pending, and, further except that
the Shareholders, the Company, InterCept, Buyer, or any one or combination
thereof, shall be entitled to seek judicial remedies to enforce any award made
pursuant to such arbitration.
ARTICLE 12
MISCELLANEOUS
-------------
Section 12.1. Integration; Severability. This Agreement represents the
-------------------------
entire understanding of the Company, Buyer, InterCept and the Shareholders with
respect to the subject matter hereof and there are no other written or oral
agreements or understandings between the parties with respect thereto. If for
any reason any term, provision or portion thereof of this Agreement is held to
be unenforceable, invalid or illegal, such provision or portion thereof shall be
deemed modified to the minimum extent necessary to make such provision
consistent with the applicable law and the remaining portions and provisions of
this Agreement shall continue in full force and effect thereafter.
Section 12.2. Intentionally Omitted.
---------------------
Section 12.3. Expenses. All legal, accounting and other costs and
--------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses.
-28-
Section 12.4. Notices. All notices hereunder shall be sufficiently given
-------
for all purposes hereunder if in writing and delivered personally, sent by
documented overnight delivery service, or to the extent receipt is confirmed,
telecopy, telefax or other electronic transmission service to the appropriate
address or number as follows:
To the Shareholders:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Suite 800 - ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To the Company:
Direct Access Interactive, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-29-
To Buyer:
DAI Acquisition Corp.
c/o The InterCept Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and Chief Operating Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To InterCept:
The InterCept Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman and Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, L.L.P.
First Union Plaza - Suite 1400
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 12.5. Public Announcements. No Shareholder shall make any
--------------------
public announcement or other public disclosure regarding this Agreement or its
terms without the consent of the Buyer or InterCept except to the extent that
such disclosure is required by applicable law. Notwithstanding the foregoing,
the parties may communicate with their respective employees, customers,
suppliers, creditors, shareholders and relevant governmental agencies as may be
necessary and appropriate in connection with the implementation and consummation
of the terms of this Agreement.
Section 12.6. Invalidity of any Part. In any provision or part of this
----------------------
Agreement shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement and shall be construed as if such invalid,
illegal or unenforceable provision or part thereof had never been contained
herein, but only to the extent of its invalidity, illegality, or
unenforceability.
Section 12.7. Remedies. Each of the parties acknowledges that money
--------
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and
-30-
obligations of the parties under this Agreement shall be enforceable by a decree
of specific performance issued by any court of competent jurisdiction, and
appropriate injunctive relief may be applied for and granted in connection
therewith. A party's right to specific performance shall be in addition to all
other legal or equitable remedies available to such party.
Section 12.8. Assistance of Counsel. Each party hereto acknowledges
---------------------
that they have 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.
Section 12.9. Governing Law and Jurisdiction. This Agreement shall be
------------------------------
interpreted and enforced construed in accordance with the laws of the State of
Georgia (excluding conflict of laws principles). The Shareholders consent to
the exclusive jurisdiction and venue of the courts of any county in the State of
Georgia and the United States District Court for any District of Georgia in any
action or judicial proceeding brought to enforce, construe or interpret this
Agreement or any other documents or agreements contemplated hereby. The
Shareholders agree that any forum other than the State of Georgia is an
inconvenient forum and that a suit (or non-compulsory counterclaim) brought by
any Shareholder against Buyer or InterCept or any of their affiliates (including
the Releasees) in a court of any state other than the State of Georgia should be
forthwith dismissed or transferred to a court located in the State of Georgia.
Section 12.10. Assignment; Amendments; Binding Agreement. The
-----------------------------------------
Shareholders may not assign any of their rights or responsibilities hereunder
without the prior written consent of the Buyer or InterCept; any attempted
assignment without such prior written consent of the Buyer or InterCept shall be
null and void. No amendment or modification of this Agreement shall be binding
unless the same shall be in writing and executed by the parties hereto. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their successors, representatives, receivers, trustees and permitted
assigns.
Section 12.11. Counterparts; Facsimiles. This Agreement may be executed
------------------------
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. To the maximum
extent permitted by law or by any applicable governmental authority, any
document may be signed and transmitted by facsimile with the same validity as if
it were an ink-signed document.
[Signatures Appear on Next Page]
-31-
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf and as applicable its corporate seal to be hereunto
affixed and attested by officers thereunto as of the date and year first above
written.
ATTEST: DAI Acquisition Corp.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- --------------------------
Its: Secretary Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- Title: President
ATTEST: The InterCept Group, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------- By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Secretary --------------------------
--------------------------- Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and Chief
Operating Officer
ATTEST: Direct Access Interactive, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- --------------------------
Its: President Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- Title: Chairman and
Chief Executive Officer
Shareholders
State of Georgia /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------- ------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
County of ▇▇▇▇▇▇
----------------------
The foregoing instrument was acknowledged before me this 9/th/ day of March,
1999, by ▇▇▇▇ ▇▇▇▇▇▇▇▇. Witness my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Notary Public
My commission expires:10/24/99
--------
[Affix Notarial Seal]
-32-
State of Georgia /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------- ------------------------------
▇▇▇▇▇ ▇▇▇▇▇
County of ▇▇▇▇▇▇
------------------------
The foregoing instrument was acknowledged before me this 9/th/ day of March,
1999, by ▇▇▇▇▇ ▇▇▇▇▇. Witness my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Notary Public
My commission expires: 10/24/99
-----------
[Affix Notarial Seal]
State of Tennessee /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
------------------------- ------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
County of Shelby
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The foregoing instrument was acknowledged before me this 8/th/ day of March,
1999, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇. Witness my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Notary Public
My commission expires: 1/25/2000
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[Affix Notarial Seal]
State of Tennessee /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------- ------------------------------
County of Shelby ▇▇▇▇▇ ▇▇▇▇▇
------------------------
The foregoing instrument was acknowledged before me this 8/th/ day of March,
1999, by ▇▇▇▇▇ ▇▇▇▇▇. Witness my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Notary Public
My commission expires: 1/25/2000
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[Affix Notarial Seal]
-33-
State of Tennessee /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------- ------------------------------
County of Shelby ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
The foregoing instrument was acknowledged before me this 8/th/ day of March,
1999, by ▇▇▇▇▇▇ ▇▇▇▇▇. Witness my hand and official seal.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Notary Public
My commission expires: 1/25/2000
------------
[Affix Notarial Seal]
-34-