UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 1, 2000
JACK HENRY & ASSOCIATES, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 0-14112
43-1128385
(State or other jurisdiction (Commission File Number)
(IRS Employer
of Incorporation) Identification No.)
663 Highway 60, P.O. Box 807, Monett, MO 65708
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: (417) 235-6652
ITEM 5. OTHER EVENTS.
On June 1, 2000, Jack Henry & Associates, Inc., a Delaware
corporation (the "Registrant"), entered into a definitive Agreement
and Plan of Merger (the "Merger Agreement") providing for the merger
(the "Merger") of Sys-Tech Acquisition Corp., a Kansas corporation
and wholly owned subsidiary of the Registrant ("Sub") and Big Sky
Marketing, Inc., a Kansas corporation ("BSMI") with and into
Sys-Tech, Inc. of Kansas, a Kansas corporation ("Sys-Tech"). The
Merger was effected on June 1, 2000 (the "Effective Time"), pursuant
to a Certificate of Merger (the "Certificate of Merger") filed with
the Secretary of State of the State of Kansas. Upon the Effective
Time of the Merger, the outstanding shares of the Common Stock, no
par value, of Sys-Tech ("Sys-Tech Common Stock"), were converted
into the right to receive 388,712 shares of the Common Stock, $.01
par value, of the Registrant ("Registrant Common Stock") and the
outstanding shares of the Common Stock, $1.00 par value, of BSMI
("BSMI Common Stock") were converted into the right to receive
28,700 shares of the Registrant's Common Stock.
Sys-Tech Common Stock was converted by dividing $14,900,000 by the
"Pre-Announcement Average Price" of Registrant Common Stock. BSMI
Common Stock was converted by dividing $1,100,000 by the
"Pre-Announcement Average Price." The Pre-Announcement Average
Price was the average of the last sale price per share of Registrant
Common Stock during the five consecutive trading days prior to the
public announcement of the Merger on June 2, 2000. The
Pre-Announcement Average Price used to determine the amount of
shares received is $38.33125.
Sys-Tech sells and services uninterruptible power supply systems and
builds and maintains specialized computer facilities for its
customers. Sys-Tech has provided services to the Registrant and its
customers since 1989 and has been a business partner of the
Registrant since 1991. As a business partner of the Registrant,
Sys-Tech has provided over 700 of Registrant's community bank
customers with products and services that support their computer
systems facilities. In addition, Sys-Tech provides its customers
with design and project management of computer facilities, data
center facility management and systems monitoring. BSMI was
affiliated with Sys-Tech and owns real property used in Sys-Tech's
business.
The Merger is intended to be a tax-free reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended, and is
intended to be treated as a pooling of interests for financial
reporting purposes in accordance with generally accepted accounting
principles.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following financial statements and exhibits are filed as
part of this report, where indicated.
c) Exhibits in accordance with Item 601 of Regulation S-K:
2.1 Agreement and Plan of Merger, dated as of June 1, 2000, by
and among Jack Henry and Associates, Inc., a Delaware
corporation, Sys-Tech, Inc. of Kansas, a Kansas
corporation, Big Sky Marketing, Inc., a Kansas corporation
and Sys-Tech Acquisition Corp., a Delaware corporation.
99.1 Company Press Release dated June 2, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: June 13, 2000 JACK HENRY & ASSOCIATES, INC.
(Registrant)
By: /s/ Terry W. Thompson
Terry W. Thompson
Chief Financial Officer
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") entered
into as of this 1st day of June, 2000 by and among JACK HENRY &
ASSOCIATES, INC., a Delaware corporation ("Parent"), SYS-TECH
ACQUISITION CORP., a Kansas corporation and wholly-owned subsidiary
of Parent ("Newco"), SYS-TECH, INC. OF KANSAS, a Kansas corporation
("SYS-TECH"), BIG SKY MARKETING, INC., a Kansas corporation
("BSMI"), and Barry Cowles, Martin Bosch, P. David Enger and Roger
Ramsey (such individuals being collectively referred to herein as
the "Shareholders"). SYS-TECH and BSMI are affiliated by ownership
and are referred to herein together as the "Companies," and
individually as a "Company."
WHEREAS, the Boards of Directors of Parent and Newco and the
Companies deem it advisable and in the best interests of their
respective stockholders that Parent acquire the Companies, and such
Boards of Directors have approved the merger (the "Merger") of Newco
and BSMI with and into SYS-TECH upon the terms and subject to the
conditions set forth herein; and
WHEREAS, the Shareholders own all of the issued and outstanding
capital stock of the Companies and have unanimously approved the
Merger on behalf of each of the Companies; and
WHEREAS, for federal income tax purposes, this Agreement
contemplates a tax-free merger of Newco and BSMI with and into
SYS-TECH in a reorganization pursuant to Section 368(a)(1)(A) and
(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, and in order to set
forth the terms of the Merger, the parties hereto agree as follows.
ARTICLE 1.
DEFINITIONS
For purposes of this Agreement, the following terms shall
have the following meanings, and additional capitalized terms
defined elsewhere in this Agreement shall have such meaning:
Section (a) An "Affiliate" of any Person means another
Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common
control with, such first Person.
Section (b) "BSMI Shares" means the issued and outstanding
shares of BSMI.
Section (c) "BSMI Stock" means the common stock, $1.00 per
share par value, of BSMI.
Section (d) "Disclosure Schedule" means the disclosure
schedule prepared by the Companies.
Section (e) "Confidential Information" means any information
concerning the businesses and affairs of the Companies or Parent and
its subsidiaries, as applicable, that is not already generally
available to the public.
Section (f) "Financial Statements" means the compiled
balance sheets and statements of income for each of the Companies
for fiscal year ended September 30, 1999 and September 30, 1998, and
the interim balance sheets and statements of income for each of the
Companies for the seven months ended April 30, 2000.
Section (g) "GAAP" means generally accepted accounting
principles in the United States as in effect from time to time.
Section (h) "JHA Shares" shall mean the shares of common
stock, par value $.01, of Parent ("Parent Stock") which the holders
of SYS-TECH Shares and BSMI Shares will receive in exchange pursuant
to this Agreement.
Section (i) "Person" means an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, a governmental entity (or
any department, agency, or political subdivision thereof), or any
other form of business organization or any other entity.
Section (j) "Pre-Closing Average Price" means the average
closing price of JHA Shares, as reported on the NASDAQ National
Market System by the Wall Street Journal, for the five (5)
consecutive trading days ending on the second day prior to the
Closing Date.
Section (k) "Sys-Tech Shares" means issued and outstanding
shares of SYS-TECH Stock.
Section (l) "Sys-Tech Stock" means the common stock, no par
value, of SYS-TECH.
Section (m) "Subsidiary" means any corporation or other
entity with respect to which either of the Companies (or any
Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
ARTICLE 2.
MERGER
Section (a) The Merger. At the Effective Time (as
hereinafter defined in Section 2.2 hereof), Newco and BSMI shall be
merged with and into SYS-TECH on the terms and conditions
hereinafter set forth as permitted by and in accordance with the
Kansas Corporation Code. Thereupon, the separate existence of Newco
and BSMI shall cease, and SYS-TECH, as the surviving corporation
("Surviving Corporation"), shall continue to exist as a wholly owned
subsidiary of Parent and shall be governed by the Kansas Corporation
Code.
Section (b) Effective Time. The Merger shall become
effective immediately upon the later of the filing of the
Certificate of Merger ("Certificate of Merger") with the Secretary
of State of the State of Kansas or such other time or date as the
parties hereto may agree (the "Effective Time"). The Surviving
Corporation may, at any time after the Effective Time, take any
action (including executing and delivering any document) in the name
and on behalf of the Companies or Newco in order to carry out and
effectuate the transactions contemplated by this Agreement.
Section (c) The Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at
the offices of Shughart Thomson & Kilroy, P.C., 120 West 12th
Street, Kansas City, Missouri, commencing at 6:00 p.m. on June 1,
2000, or, if later, following the satisfaction or waiver of all
conditions to the obligations of the parties to consummate the
transactions contemplated hereby (other than conditions with respect
to actions the respective parties will take at the Closing itself)
or such other place or time and date as the parties may mutually
determine (the "Closing Date").
Section (d) Effects of the Merger. The Merger shall have
the effects set forth in this Agreement and in the applicable
provisions of the Kansas Corporation Code. Without limiting the
generality of the foregoing, and subject thereto, at the Effective
Time, all property of SYS-TECH, BSMI and Newco shall vest in the
Surviving Corporation, and all liabilities of SYS-TECH, BSMI and
Newco shall become the liabilities of the Surviving Corporation.
ARTICLE 3.
THE SURVIVING CORPORATION
Section (a) Certificate of Incorporation. At the Effective
Time, the Certificate of Incorporation of the Surviving Corporation
shall be amended to be in the form set forth in Exhibit A, until
thereafter changed or amended in accordance with the provisions
thereof and applicable law.
Section (b) Bylaws. At the Effective Time, the Bylaws of the
Surviving Corporation shall be amended to be in the form set forth
in Exhibit B, until thereafter changed or amended in accordance with
the provisions thereof and applicable law.
Section (c) Directors. From and after the Effective Time,
the members of the Board of Directors of the Surviving Corporation
shall consist of the members of the Board of Directors of Newco (as
constituted immediately prior to the Effective Time).
Section (d) Officers. From and after the Effective Time,
the officers of the Surviving Corporation shall consist of the
officers of Newco, as constituted immediately prior to the Effective
Time, until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified.
ARTICLE 4.
CONVERSION OF SHARES AND OPTIONS
Section (a) Conversion of Company Common Stock. At and as
of the Effective Time, by virtue of the Merger and without any
action on the part of Parent, Newco, SYS-TECH, BSMI or any holder of
any securities thereof:
(i) All SYS-TECH Shares in the aggregate shall be
converted into the right to receive such number of shares of
Parent Stock as is determined by dividing the sum of
$14,900,000 by the Pre-Closing Average Price.
(ii) All BSMI Shares in the aggregate shall be
converted into the right to receive such number of shares of
Parent Stock as is determined by dividing the sum of $1,100,000
by the Pre-Closing Average Price.
The JHA Shares resulting from such conversions shall be distributed
pro-rata to the holders of the SYS-TECH Shares and the holders of
BSMI Shares, and all JHA Shares amounts shall be rounded to the
nearest share. No SYS-TECH Share or BSMI Share shall be deemed to
be outstanding or to have any rights other than those set forth
above in this Section 4.1 after the Effective Time, and each holder
of a certificate representing any such shares will cease to have any
rights with respect thereto, except to receive the shares of Parent
Stock.
Section (b) Procedure for Payment. The JHA Share will be
delivered at Closing upon presentation and surrender of certificates
for SYS-TECH Shares and BSMI Shares.
Section (c) Conversion of Newco Stock. Each issued and
outstanding share of capital stock of Newco shall be converted into
and become one validly issued, fully paid and non-assessable share
of common stock, par value $.01, of the Surviving Corporation.
Section (d) Closing of Transfer Records. At and after the
Effective Time, transfers of SYS-TECH Shares and BSMI Shares
outstanding immediately prior to the Effective Time shall not be
made on the stock transfer books of the Surviving Corporation.
Section (e) JHA Shares. In connection with the payment of
the merger consideration in JHA Shares, the Shareholders hereby
represent and warrant that their purchases of JHA Shares are for
investment purposes and not for resale. The Shareholders agree not
to sell, transfer or encumber any of such JHA Shares in
contravention of the legends which will be placed on all such stock
certificates. Parent has informed the Shareholders that the JHA
Shares will not be registered under the Securities Act of 1933 (the
"Securities Act") and the applicable state securities or blue sky
law or laws. Parent agrees to file all reports and other
information required to be filed by Parent under the Securities Act
or the Securities Exchange Act of 1934 so that the Shareholders can
avail themselves of Rule 144 under the Securities Act. The
Shareholders represent and warrant to Parent that they are familiar
with the business of Parent and have the necessary knowledge and
experience in business and financial matters in order to be capable
of evaluating the merits and risks of purchasing JHA Shares and
making an informed investment decision with respect thereto. The
Shareholders have had the opportunity to ask questions, review
publicly available information and to inquire further of the Parent
regarding all other matters deemed necessary.
Section (f) Restrictive Legends. The Shareholders agree that
the certificates representing the JHA Shares received as
consideration hereunder may have appropriate orders restricting
transfer placed against them on the records of the transfer agent,
and may have placed upon them the following legend:
"THE SHARES REPRESENTED HEREBY WERE ACQUIRED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY
STATE SECURITIES LAW, BUT PURSUANT TO EXEMPTIONS FROM SAID
REGISTRATION. THESE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SAID
REGISTRATION, OR THE AVAILABILITY OF EXEMPTIONS THEREFROM.
FURTHERMORE, NO OFFER, SALE, PLEDGE, HYPOTHECATION OR TRANSFER
SHALL TAKE PLACE WITHOUT SUBMITTING TO THE COMPANY EVIDENCE
ACCEPTABLE TO COUNSEL FOR THE COMPANY TO THE EFFECT THAT SUCH
TRANSACTION DOES NOT VIOLATE THE RESTRICTIONS SET FORTH HEREIN.
THE COMPANY'S TRANSFER AGENT HAS BEEN INSTRUCTED TO EFFECT
TRANSFERS OF THESE SHARES ONLY IN ACCORDANCE WITH THESE
RESTRICTIONS."
The Shareholders agree not to attempt any transfer of the JHA Shares
without first complying with the substance of the foregoing legend.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANIES AND SHAREHOLDERS
The Companies and the Shareholders represent and warrant to
Parent and Newco that the statements contained in this Article V are
correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date.
Section (a) Organization, Qualification, and Corporate
Power. Each of the Companies is a corporation duly organized,
validly existing, and in good standing under the laws of Kansas.
Each is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is
required, except where the lack of such qualification would not have
a material adverse effect. Each Company has full corporate power
and authority to carry on the business in which it is engaged and to
own and use the properties owned and used by it.
Section (b) Capitalization. The entire authorized capital
stock of SYS-TECH consists of 10,000 SYS-TECH Shares, 8,000 of which
are issued and outstanding. The entire authorized capital stock of
BSMI consists of 20,000 BSMI Shares, 1,332 of which are issued and
outstanding. All of the issued and outstanding SYS-TECH Shares and
BSMI Shares are duly authorized and are validly issued, fully paid,
and nonassessable. All of the issued and outstanding SYS-TECH
shares and BSMI Shares are held of record by the Shareholders. There
are no outstanding or authorized shares, options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require either of the
Companies to issue, sell, or otherwise cause to become outstanding
any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar
rights with respect to the Companies.
Section (c) Subsidiaries. The Companies have no subsidiaries.
Section (d) Authorization of Transaction. The Companies
have full corporate power and authority to execute and deliver this
Agreement and to perform their obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of
the Companies, enforceable against the Companies in accordance with
its terms and conditions. The Boards of Directors and Shareholders
of each of the Companies have approved this Merger Agreement and
have declared the advisability of the Merger Agreement and the
Merger.
Section (e) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency,
or court to which either of the Companies is subject or any
provision of the charter or bylaws of either of the Companies or (b)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument or other
arrangement to which either Company is a party or by which it is
bound or to which any of its assets is subject (or result in the
imposition of any security interest or lien upon any of its assets).
Neither of the Companies needs to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of
any government or governmental agency in order for the parties to
consummate the transactions contemplated by this Agreement.
Section (f) Financial Statements. The Financial Statements
have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby (except for the
omission of footnotes and the statement of cash flows required by
GAAP) and fairly present in all material respects the financial
condition of the Companies as of the indicated dates and the results
of operations of the Companies for the indicated periods, are
correct and complete in all material respects, and are consistent
with prior accounting policies and with the books and records of the
Companies; provided, however, that the interim statements are
subject to normal year-end adjustments.
Section (g) Events Subsequent. Since the dates of the most
recent interim Financial Statements, there has not been any material
adverse change in the business, financial condition, operations,
results of operations, or future prospects of the Companies.
Section (h) Properties. (a) SYS-TECH does not own of record
any real property; (b) BSMI does own of record real property
described in Section 5.8 of the Disclosure Schedule (the "BSMI
Property"), subject only to those liens and encumbrances set forth
in Section 5.8 of the Disclosure Schedule, and (c) all material real
property leases of the Companies are in good standing, valid and
effective in accordance with their respective terms, and neither of
the Companies are in default under any of such leases (collectively
and individually the "Leases"). The BSMI Property and the property
demised to the Companies under the Leases are sometimes hereinafter
collectively referred to as the "Properties." No portion of the
Properties are leased or subleased to any third parties.
Section (i) Environmental Conditions. Except as permitted
by applicable Environmental Laws, no Hazardous Substances are
present in, on or under the Properties, and there is no present
Release or threatened Release of any Hazardous Substances in, on or
under the Properties; the Properties or any part thereof has never
been used by the Companies and the Companies have never permitted
any party to use the Properties or any part thereof, for the
production, processing, manufacture, generation, treatment,
handling, storage or disposal of Hazardous Substances in violation
of Environmental Laws; no underground or above ground storage tanks
are or were located in, on, under or about the Properties; the
Properties and every part thereof, and all operations and activities
therein and thereon and the use and occupancy thereof, comply with
all applicable Environmental Laws, and neither the Companies nor any
person using or occupying the Properties or any part thereof is
violating any Environmental Laws; and no claim, demand, action or
proceeding of any kind relating to any past or present Release or
threatened Release of any Hazardous Substances in, on or under the
Properties or any past or present violation of any Environmental
Laws at the Properties has been made or commenced or is pending
against the Companies or is threatened or contemplated by any party.
For purposes hereof, "Environmental Laws" shall mean all federal,
state and local laws, ordinances, rules and regulations enacted or
in force as of the date of this Agreement, and all federal and state
court decisions, consent decrees and orders entered prior to the
date of this Agreement interpreting or enforcing any of the
foregoing, in anyway relating to or regulating human health or
safety, or industrial hygiene or environmental conditions, or
protection of the environment, or pollution or contamination of the
air, soil, surface water or groundwater, and includes the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. Section9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section6901 et seq., and the Clean Water
Act, 33 U.S.C. Section 1251 et seq. For purposes hereof "Hazardous
Substances" shall mean any substance or material that is described
as a toxic or hazardous substance, waste or material or a pollutant
or contaminant, or words of similar import, in any of the
Environmental Laws. For purposes hereof "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaking, dumping or disposing into
the environment, including continuing migration, of Hazardous
Substances into or through soil, surface water or groundwater.
Section (j) Agreements, Contracts and Commitments. Neither
of the Companies has breached, or received in writing any claim or
notice that it has breached, any of the terms or conditions of any
agreement, contract or commitment in such a manner as, individually
or in the aggregate, would have a material adverse effect,
financially or otherwise, on the Companies. Each material contract
of the Companies that has not expired by its terms is in full force
and effect and enforceable against the parties thereto in accordance
with its terms.
Section (k) Employee Benefit Plans; ERISA. Section 5.11 of
the Disclosure Schedule identifies each employee pension,
retirement, profit sharing, bonus, incentive, deferred compensation,
hospitalization, medical, dental, vacation, insurance, sick pay,
disability, severance or other plan, fund, program, policy, contract
or arrangement providing employee benefits maintained, promised or
contributed to by either of the Companies, whether created in
writing, through an employee manual or similar document or orally
(the "Plans"). Neither Company has any formal plan or commitment,
whether legally binding or not, to create any additional Plan or
modify or change any existing Plan. Section 5.11 of the Disclosure
Schedule sets forth all liabilities, obligations and commitments of
either of the Companies, whether legally binding or not, to make any
contributions to any Plan or payments to any employee or any other
Person (other than payments being made on claims under health plans)
with respect to any of the Plans as of the date hereof. Except as
set forth in Section 5.11 of the Disclosure Schedule: (a) all such
Plans that are subject to the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar
import, together with the regulations thereunder ("ERISA") comply in
all material respects with ERISA and the Internal Revenue Code, (b)
all contributions to or payments under such Plans that were due and
payable by either Company on or before the date hereof have been
made, and (c) neither of the Companies sponsors, maintains or
contributes to any Plan which is subject to Title IV of ERISA, or
has terminated or withdrawn from any such Plan.
Section (l) Proprietary Rights.
(i) The Companies own or are licensed to use all
copyrights, know-how, patents, trademarks and trade secrets
(collectively, the "Proprietary Rights") necessary for the
operation of their businesses as now conducted.
(ii) Neither of the Companies has entered into any
agreement that limits or restricts its right to use, copy,
modify, prepare derivatives of, sublicense, distribute and
otherwise market, severally or together, the Proprietary Rights
they own. There are no agreements or arrangements in effect
with respect to the marketing, distribution, licensing or
promotion of the Proprietary Rights with any current or past
employee of either of the Companies, or with any independent
sales person, distributor, sublicensee or other remarketer or
sales organization. The Companies' present use, copying,
modification, preparation of derivatives of, sublicensing,
distribution or other marketing of the Proprietary Rights does
not infringe any intellectual property right of any Person.
(iii) Each Person who has participated in or contributed
to the development of the Proprietary Rights has either: (a) so
contributed or participated as an employee of either Company
within the scope of his or her employment obligations, or (b)
contributed or participated as an independent contractor
pursuant to a valid and binding agreement which specifically
assigns all copyrights to either Company.
(iv) The Companies have taken efforts that are reasonable
under the circumstances to prevent the unauthorized disclosure
to other Persons of such portions of their trade secrets as
would enable any such other Person to compete with the
Companies within the scope of their businesses as now conducted.
(v) The Companies do not use any trademark in connection
with their businesses in any material way and have no
registered trademark.
(vi) No claim has been asserted against either of the
Companies by any other Person: (a) that such Person has any
right, title or interest in or to any of the Proprietary
Rights, (b) that such Person has the right to use any of the
Subsidiaries' Proprietary Rights, (c) to the effect that any
past, present or projected act or omission by either of the
Companies infringes any rights of such Person to any
Proprietary Rights, or (d) that challenges the Companies' right
to use any Proprietary Rights.
Section (m) Labor Matters. Neither of the Companies is a
party to, or bound by, any collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor
organization. There is no unfair labor practice or labor arbitration
proceeding pending or, to the knowledge of the Companies, threatened
against either of the Companies. To the knowledge of the companies,
there are no organizational efforts with respect to the formation of
a collective bargaining unit presently being made or threatened
involving employees of either of the Companies.
Section (n) Undisclosed Liabilities. Neither of the
Companies has any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and
whether due or to become due), including any liability for taxes,
except for (a) liabilities set forth on the face of the balance
sheet dated as of April 30, 2000 (or in the notes thereto), (b)
liabilities which have arisen after April 30, 2000 in the ordinary
course of business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of
contract, breach of warranty, tort, infringement, or violation of
law), and (c) liabilities specifically described in this Agreement
or in the Disclosure Schedule.
Section (o) Litigation. As of the date hereof (a) there is
no suit, claim, action, proceeding, at law or in equity, or
investigation pending or, to the knowledge of the Companies,
threatened against either of the Companies before any court or other
governmental entity, and (b) neither of the Companies is subject to
any outstanding order, writ, judgment, injunction, decree or
arbitration order or award. As of the date hereof, there are no
suits, claims, actions, proceedings or investigations pending or, to
the knowledge of the Companies, threatened, seeking to prevent,
hinder, modify or challenge the transactions contemplated by this
Agreement.
Section (p) Taxes.
(i) All federal, state and local tax returns
required to be filed by the Companies on or prior to the date
hereof have been filed; (ii) all Taxes and assessments
including, without limitation, estimated tax payments, excise,
unemployment, social security, occupation, franchise, property,
sales and use taxes, and all penalties or interest in respect
thereof now or heretofore due and payable by or with respect to
the Companies have been paid; (iii) all federal, state and
local withholdings of the Companies including, without
limitation, withholding taxes, social security, and any similar
taxes, have been withheld and paid over as required by law; and
(iv) no extension with any taxing authority concerning any tax
liability of or with respect to either of the Companies is
currently outstanding.
(ii) There are no tax liens, whether imposed by any
federal, state, local or foreign taxing authority, outstanding
against any of the assets, properties or business of the
Companies (except for liens for property taxes not yet due and
payable).
For purposes of this Agreement, "Taxes" shall mean all federal,
state, local, foreign income, property, sales, excise, employment,
payroll, franchise, withholding and other taxes, tariffs, charges,
fees, levies, imposts, duties, licenses or other assessments of
every kind and description, together with any interest and any
penalties, additions to tax or additional amounts imposed by any
taxing authority.
Section (q) Brokers' Fees. Neither of the Companies has any
liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
Section (r) Compliance with Laws. Each of the Companies has
complied with, is not in violation of, and has not received any
notices of violation with respect to, any federal, state, local or
foreign statute, law or regulation with respect to the conduct of
its business, or the ownership or operation of its business, except
for failure to comply or violations which, individually or in the
aggregate, have not had and are not reasonably likely to have a
material adverse effect, financial or otherwise, on the Companies.
Section (s) Tax and Accounting Matters. Neither of the
Companies nor any of their Affiliates has taken or agreed to take
any action, and neither of the Companies has knowledge of any
circumstances that (a) would prevent the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code or
(b) would prevent the Merger from being accounted for as a pooling
of interests under the requirements of Opinion No. 16 of the
American Institute of Certified Public Accounts ("AICPA"), as
amended by the Statements of Financial Accounting Standards Board
(the "SFAS Board") and the related interpretations of the AICPA, the
SFAS Board, and the rules and regulations of the SEC.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO
Parent and Newco represent and warrant to Company and the
Shareholders that the statements contained in this Article VI are
correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date.
Section (a) Organization. Each of Parent and Newco is a
corporation duly organized, validly existing, and in good standing
under the laws of the states of their respective organization.
Parent has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties
owned and used by it.
Section (b) Capitalization. The entire authorized capital
stock of Parent consists of (a) 50,000,000 shares of Common Stock
and 500,000 shares of Preferred Stock, of which no shares of
Preferred Stock are issued and outstanding, and, as of April 30,
2000, 40,728,202 shares of Common Stock were issued and outstanding.
All of the JHA Shares to be issued in the Merger have been duly
authorized and, upon consummation of the Merger, will be validly
issued, fully paid, and nonassessable.
Section (c) Authorization of Transaction. Each of Parent and
Newco has full power and authority (including full corporate power
and authority) to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Parent and Newco, enforceable in
accordance with its terms and conditions. No approval of this
Agreement or the Merger by Parent's security holders is required.
Section (d) Noncontravention. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental agency,
or court to which Parent or Newco is subject or any provision of the
charter or bylaws of Parent or Newco, or (b) conflict with, result
in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement
to which Parent or Newco is a party or by which it is bound or to
which any of its assets is subject, except where the violation,
conflict, breach, default, acceleration, termination, modification,
cancellation, or failure to give notice would not have a material
adverse effect.
Section (e) Brokers' Fees. Neither Parent nor Newco has any
liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Companies or the
Shareholders could become liable or obligated.
Section (f) SEC Reports. Parent has made all filings with
the Securities and Exchange Commission that it has been required to
make under the Securities and Exchange Act. None of the reports
contained in such filings, as of their respective dates (or if
amended or superseded by subsequent filing, on the date of such
filing), contained any untrue statement of a material fact or
omitted to state a material fact in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The financial statements of Parent contained in
such filings and reports were prepared in accordance with GAAP
applied on a consistent basis through the periods covered thereby
(except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by
Form 10-Q promulgated by the SEC) and present fairly the financial
condition of Parent as of the indicated dates and the results of
operations of Parent for the indicated periods and are correct and
complete in all material respects. Since the date of Parent's Form
10-Q for the quarter ended March 31, 2000, there has not been any
material adverse change in the business, financial condition,
results of operations or future prospects of Parent.
Section (g) Litigation. As of the date hereof, there are no
suits, claims, actions, proceedings or investigations pending or, to
the knowledge of Parent, threatened, seeking to prevent, hinder,
modify or challenge the transactions contemplated by this Agreement.
Section (h) Tax and Accounting Matters. Neither Parent, nor
its subsidiaries nor any of its Affiliates has taken or agreed to
take any action, and Parent does not have Knowledge of any
circumstances relating to Parent or its subsidiaries or any of its
Affiliates that (a) would prevent the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code or
(b) would prevent the Merger from being accounted for as a pooling
of interests under the requirements of Opinion No. 16 of the AICPA,
as amended by the SFAS Board and the related interpretations of the
AICPA, the SFAS Board, and the rules and regulations of the SEC.
Section (i) Ownership of Newco; No Prior Activities. Newco
was formed solely for the purpose of engaging in the Merger, and is
wholly owned by Parent. As of the date hereof and the Effective
Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the Merger and except for
this Agreement and any other agreements or arrangements contemplated
by this Agreement, Newco has not and will not have incurred,
directly or indirectly, through any subsidiary or Affiliate, any
obligations or liabilities or engaged in any business activities of
any type or kind whatsoever or entered into any agreements or
arrangements with any Person.
Section (j) Issuance of JHA Shares. The JHA Shares to be
issued pursuant to the Merger will be duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights created by statute, Parent's Certificate of Incorporation or
Bylaws or any agreement to which Parent is a party or by which
Parent is bound.
ARTICLE 7.
ADDITIONAL COVENANTS
The parties agree as follows with respect to the period from
and after the execution of this Agreement:
Section (a) General. Each of the parties will use its best
efforts to take all action and to do all things necessary, proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement.
Section (b) Notices and Consents. Each of the parties
hereto will give any notices to third parties, and will use its best
efforts to obtain any third party consent, that any other party may
reasonably request.
Section (c) Pooling of Interests. Each of the parties
hereto will use their best efforts to cause the business combination
to be effected by the Merger to be accounted for as a pooling of
interests. Each of the parties shall use their best efforts to not
take any action and to cause its respective Affiliates not to take
any action that would adversely affect the ability of Parent to
account for the business combination to be effected by the Merger as
a pooling of interests.
Section (d) Tax-Free Reorganization. Each of the parties
hereto will use their best efforts to cause the Merger to be treated
as a reorganization within the meaning of Section 368(a) of the
Code. Parent shall file, and shall cause its Affiliates (including
the Surviving Corporation) to, file all tax returns in a manner that
is consistent with the intended treatment of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
Section (e) Operation of Business. The Companies will not,
without the consent of Parent, engage in any practice, take any
action, or enter into any transaction outside the ordinary course of
business. Without limiting the generality of the foregoing, neither
of the Companies will:
(i) authorize or effect any change in its charter or
bylaws;
(ii) grant any options, warrants, or other rights to
purchase or obtain any of its capital stock or issue, sell, or
otherwise dispose of any of its capital stock (except upon the
conversion or exercise of options, warrants, and other rights
currently outstanding);
(iii) declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash
or in kind), or redeem, repurchase, or otherwise acquire any of
its capital stock;
(iv) issue any note, bond, or other debt security or
create, incur, assume, or guarantee any indebtedness for
borrowed money or capitalized lease obligation;
(v) impose any security interest or lien upon any of
its assets;
(vi) make any capital investment in, make any loan
to, or acquire the securities or assets of any other Person; or
(vii) make any change in employment terms for any
of its directors, officers, and employees.
Section (f) Full Access and Confidentiality. The Companies
shall afford to the Parent and to the Parent's financial advisors,
legal counsel, accountants, consultants and other representatives
full access during normal business hours throughout the period prior
to the Effective Time to all of their books, records, properties,
plans and personnel and, during such period, each shall furnish
promptly all information as Parent may reasonably request, provided
that no investigation pursuant to this Section 7.6 shall affect any
representations or warranties made herein or the conditions to the
obligations of the respective parties to consummate the Merger.
Each party shall hold in confidence all Confidential Information
until such time as such information is otherwise publicly available
and, if this Agreement is terminated, each party will deliver to the
other all documents, work papers and other material (including
copies) obtained by such party or on its behalf from the other party
as a result of this Agreement or in connection herewith, whether so
obtained before or after the execution hereof. The confidentiality
obligations of the parties hereto shall be terminated regarding any
Confidential Information obtained or acquired if (a) such
Confidential Information becomes known to the public generally
through no fault of the receiving party, (b) disclosure is required
by law or the order of any governmental authority, or (c) the
disclosing party reasonably believes that such disclosure is
required in connection with the defense of a lawsuit against the
disclosing party; provided, that prior to disclosing any information
pursuant to clause (a), (b) or (c), such party shall, if possible,
give prior written notice thereof to the other party to provide the
other party with the opportunity to contest such disclosure.
Section (g) Notice of Developments. Each party will give
prompt written notice to the other of any material adverse
development causing a breach of any of its own representations and
warranties in Article V and VI above. No disclosure by any party
pursuant to this Section 7.7, however, shall be deemed to amend or
supplement the Disclosure Schedule.
Section (h) Exclusivity. The Companies and the Shareholders
agree that (a) neither the Companies nor the Shareholders shall, and
that it and they will cause their respective directors, officers,
employees, agents and representatives not to initiate or solicit,
directly or indirectly, any inquiries or the making of any proposal
with respect to, engage in negotiations concerning, provide any
Confidential Information or data to or have any discussions with any
Person relating to, any acquisition, business combination or
purchase of all or the major portion of the assets of, or any equity
interest in either of the Companies, other than the Merger, and (b)
that such parties will promptly notify Parent immediately in writing
if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, the
Companies.
Section (i) Expenses. Whether or not the Merger is
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses.
Section (j) Governmental Approvals. The parties shall use
their reasonable best efforts to (a) take, or cause to be taken, all
appropriate action necessary, proper or advisable under applicable
law or required to be taken by any governmental entity or otherwise
to consummate and make effective the Merger as promptly as
practicable, (b) obtain from any governmental entity any consents,
licenses, permits, waivers, approvals, authorizations or orders
required to be obtained in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
Merger, and (c) furnish to each other all information required for
any application or other filing to be made pursuant to any
applicable law in connection with this Agreement and the Merger.
Section (k) Public Announcements. Parent and the Companies
shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this
Agreement or the Merger and shall not issue any such press release
or make any such public statement prior to such consultation.
Section (l) Release of Guaranties. Parent shall use its
best efforts to cause Valley View State Bank to release the
Shareholders from any liability or obligation under their guaranties
of Company indebtedness, from and after the Closing Date. If Parent
is unable to obtain the release of said guaranties, then it shall
indemnify and hold the Shareholders harmless from any liability
thereunder.
ARTICLE 8.
CONDITIONS TO OBLIGATIONS TO CLOSE
Section (a) Conditions to Obligation of Parent and Newco.
The obligation of Parent and Newco to consummate the transactions to
be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) The Companies shall have procured all third
party consents reasonably requested by Parent pursuant to
Section 7.2;
(ii) the representations and warranties of the
Companies and the Shareholders set forth in Article V above
shall be true and correct in all material respects at and as of
the Closing Date;
(iii) The Companies and the Shareholders shall
have performed and complied in all material respects with all
of their covenants hereunder through the Closing;
(iv) no action, suit, or proceeding shall be pending
or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would
prevent consummation of any of the transactions contemplated by
this Agreement, cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, or
adversely affect the right of the Surviving Corporation to own
its assets and to operate its business;
(v) no governmental entity shall have issued,
enacted, promulgated, enforced or entered any order, stay,
decree, judgment, injunction, rule, regulation or statute which
is in effect and has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger;
(vi) Parent shall have received the resignations,
effective as of the Closing, of each director and officer of
each of the Companies; and
(vii) Parent shall have received an opinion of
counsel in form reasonably acceptable to it, regarding the Companies
and the due authorization of the Merger.
Section (b) Conditions to Obligation of the Companies. The
obligation of the Companies and the Shareholders to consummate the
transactions to be performed by them in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties of Parent and
Newco set forth in Article VI above shall be true and correct
in all material respects at and as of the Closing Date;
(ii) Parent and Newco shall have performed and
complied in all material respects with all of their covenants
hereunder through the Closing;
(iii) no action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would
prevent consummation of any of the transactions contemplated by
this Agreement, cause any of the transactions contemplated by
this Agreement to be rescinded following consummation, or
affect adversely the right of the Surviving Corporation to own
its he assets and to operate its business; and
(iv) no governmental entity shall have issued,
enacted, promulgated, enforced or entered any order, stay,
decree, judgment, injunction, rule, regulation or statute which
is in effect and has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
ARTICLE 9.
TERMINATION
Section (a) Termination of Agreement. Either Parent or the
Companies may terminate this Agreement as provided below:
(i) this Agreement may be terminated by mutual
written consent of Parent and the Companies at any time prior
to the Effective Time;
(ii) Parent may terminate this Agreement by giving
written notice to the Company at any time prior to the
Effective Time (a) in the event that either of the Companies or
the Shareholders have breached any material representation,
warranty, or covenant contained in this Agreement in any
material respect, or (b) if the Closing shall not have occurred
on or before July 15, 2000 (unless the failure to close results
primarily from Parent or Newco breaching any representation,
warranty, or covenant contained in this Agreement);
(iii) The Companies may terminate this Agreement by
giving joint written notice to Parent at any time prior to the
Effective Time (a) in the event Parent has breached any
material representation, warranty, or covenant contained in
this Agreement in any material respect, or (b) if the Closing
shall not have occurred on or before July 15, 2000 (unless the
failure to close results primarily either of the Companies
breaching any representation, warranty, or covenant contained
in this Agreement);
(iv) either of the Companies or Parent may terminate
this Agreement by giving written notice to the other if there
shall be a final nonappealable order in effect preventing
consummation of the Merger, or there shall be any action taken,
or any governmental entity shall have issued, enacted,
promulgated, enforced or entered any order, stay, decree,
judgment, injunction, statute, law, rule or regulation deemed
applicable to the Merger that would make consummation of the
Merger illegal; or
(v) subject to the parties' obligations under
Section 7.3, either of the Companies or Parent may terminate
this Agreement by giving written notice to the other that such
party is in receipt of opinions of counsel or of their
accountants to the effect that the Merger is not reasonably
likely to qualify for pooling of interests accounting.
Section (b) Effect of Termination. If this Agreement is
terminated pursuant to Section 9.1. all rights and obligations of
the parties hereunder shall terminate without any liability of any
party to any other party (except for any liability of any party then
in breach); provided, however, that the confidentiality provisions
contained in Section 7.6 shall survive any such termination.
ARTICLE 10.
MISCELLANEOUS
Section (a) Survival of Representations; Indemnification.
(i) All representations, warranties, covenants and
agreements made by the parties to this Agreement or pursuant
hereto shall survive the Closing; provided, however, that the
representations and warranties of the parties shall survive
only for a period of two (2) years following the Closing Date;
and provided further, however, that all claims made by virtue
of such representations, warranties and agreements must be made
within two (2) years following the Closing Date and shall be
made under and subject to, all other limitations set forth in
this Section 10.1.
(ii) (a) Subject to the limitations, conditions, and
provisions set forth herein, the Shareholders agree to
indemnify, defend and hold harmless Parent and the Companies or
any Affiliate thereof from and against all demands, claims,
actions, losses, damages, liabilities, costs and expenses
asserted against or incurred by Parent or the Companies or any
Affiliate thereof ("Parent Loss") resulting from a breach of
any covenant, agreement, representation or warranty of the
Companies or the Shareholders contained in this Agreement, to
the extent such Parent Loss or any portion thereof is not
covered by an existing policy of insurance or bond held by or
for the benefit of Parent or the Companies (collectively,
"Uninsured Parent Damages"). With respect to Parent Loss claims
covered by an insurance policy or bond, Parent shall promptly
tender any such claims to each respective insurance company
from whom a policy of insurance is held, or bonding company
form whom a bond is held, which policy provides coverage for
such claims.
(b) The obligations and liabilities of the Shareholders
under this Section 10.1.2 with respect to claims for Uninsured
Parent Damages resulting from the assertion of liability by
third parties ("Parent Claims") shall be subject to the
following terms and conditions:
(i) Within 20 days after receiving notice thereof,
Parent will give the Shareholders notice of any Parent
Claims. The Shareholders may undertake the defense
thereof by counsel of their own choosing. Parent may, by
counsel, participate in such proceedings, negotiations or
defense at its own expense, but the Shareholders shall
retain control over such litigation. In all such cases,
Parent will give reasonable assistance to the Shareholders.
(ii) In the event that, within 20 days after notice
of any such Parent Claim, the Shareholders fail to notify
Parent of their intention to defend, Parent will have the
right to undertake the defense, compromise or to
participate in such proceedings, negotiations or defense
at any time at its own expense. Parent shall not settle
any such Parent Claim without the consent of the
Shareholders, which consent shall not be unreasonably
withheld.
(iii) In the event a Parent Claim has been tendered
to any insurance or bonding company, and such tender has
been rejected, and the Shareholders are thereafter
required to indemnify Parent against such Parent Claim(s),
Parent's rights against such insurance and/or bonding
company or companies rejecting such tender shall
thereafter be subrogated and assigned to the Shareholders.
(c) Notwithstanding anything to the contrary contained in
this Agreement, the Shareholders shall not have liability under
this Section 10.1.2 unless and until Uninsured Parent Damages
exceed $25,000 in the aggregate. The Shareholders' aggregate
liability for all Uninsured Parent Damages shall not exceed the
sum of $1,400,000.
(iii) (a) The Parent agrees to indemnify, defend and hold
harmless the Shareholders from and against all demands, claims,
actions, losses, damages, liabilities, costs and expenses
asserted against or incurred by Shareholders resulting from the
failure of the Companies to pay any amount or perform any
obligation to the extent such payment or obligation accrues
after the Closing Date, and/or any of the liabilities as
reflected on the Financial Statements or resulting from a
breach of any covenant, agreement, representation or warranty
of Parent or Newco contained in this Agreement (collectively,
"Shareholders Damages").
(b) Conditions of Indemnification. The obligations and
liabilities of the Parent under this Section 10.1.3 with
respect to claims for Shareholders Damages resulting from the
assertion of liability by third parties ("Shareholders Claims")
shall be subject to the following terms and conditions:
(i) Within 20 days after receiving notice thereof,
Shareholders will give the Parent notice of any
Shareholder Claims. The Parent may undertake the defense
thereof by counsel of its own choosing. The Shareholders
may, by counsel, jointly participate in such proceedings,
negotiations or defense at their own expense, but Parent
shall retain control over such litigation. In all such
cases, Shareholders will give reasonable assistance to
Parent.
(ii) In the event that, within 20 days after notice
of any such Shareholders Claim, the Parent fails to notify
the Shareholders of its intention to defend, the
Shareholders will have the right to jointly undertake the
defense, compromise or to participate in such proceedings,
negotiations or defense at any time at their own expense.
The Shareholders shall not settle any such Shareholders
Claim without the consent of the Parent, which consent
shall not be unreasonably withheld.
(iv) The Shareholders jointly appoint Roger Ramsey to
serve as their agent for purposes of receiving notice and
taking all actions with regard to Parent Claims and
Shareholders Claims. Parent shall be entitled to rely upon any
actions taken or notices received from such person as the duly
authorized action of all of the Shareholders.
Section (b) Press Releases and Public Announcements. No
party shall issue any press release or make any public announcement
relating to the subject matter of this Agreement without the prior
written approval of the other parties; provided, however, that
Parent may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case it will use
its reasonable best efforts to advise the other parties prior to
making the disclosure).
Section (c) No Third Party Beneficiaries. This Agreement
shall not confer any rights or remedies upon any Person other than
the parties and their respective successors and permitted assigns.
Section (d) Entire Agreement. Other than the Confidentiality
Agreement between Companies and Parent dated January 21, 2000, this
Agreement, including the Exhibits and Schedules attached hereto,
constitutes the entire agreement between the parties and supersedes
any prior understandings, agreements, or representations by or
between the parties, written or oral, to the extent they relate in
any way to the subject matter hereof. No representation, warranty,
promise, inducement or statement of intention has been made by any
party hereto which is not embodied in this Agreement or such other
documents, and no party hereto shall be bound by, or be liable for,
any alleged representation, warranty, promise, inducement or
statement of intention not embodied herein or therein.
Section (e) Succession and Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties named herein
and their respective successors and permitted assigns. No party may
assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the
other parties.
Section (f) Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
Section (g) Headings. The section headings contained in
this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section (h) Notices. All notices, requests, demands,
claims, and other communications hereunder shall be in writing and
shall be deemed duly given if (and then two business days after) it
is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set
forth below:
<TABLE>
<S> <C>
If to the Companies: with a copy to:
Sys-Tech, Inc. of Kansas Morrison & Hecker, L.L.P.
23001 W. 81st Street 2600 Grand Avenue
Shawnee, Kansas 66227 Kansas City, Missouri
FAX: 913-422-3237 64108
Attn: Roger Ramsey FAX: 816-474-4208
Attn: Joseph C. Benage
If to Parent or Newco: with a copy to:
Jack Henry & Associates, Shughart Thomson &
Inc. Kilroy, P.C.
663 Highway 60 12 Wyandotte Plaza
P.O. Box 807 120 W. 12th Street
Monett, Missouri 65708 Kansas City, Missouri
FAX: 417-235-1765
Attn: Michael E.
Henry, President
</TABLE>
Any party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary
mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to
be delivered by giving the other party notice in the manner herein
set forth.
Section (i) Governing Law. This Agreement shall be governed
by and construed in accordance with the domestic laws of the State
of Kansas without giving effect to any choice or conflict of law
provision or rule (whether of the State of Kansas or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Kansas.
Section (j) Amendments and Waivers. The parties may mutually
amend any provision of this Agreement at any time prior to the
Effective Time. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by all
of the parties. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless signed by the
party to be charged with such waiver. No waiver by any party of any
default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
Section (k) Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
Section (l) Construction. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the
parties and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context
otherwise requires. The word "including" shall mean including
without limitation.
Section (m) Incorporation of Exhibits and Schedules. The
Exhibits and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof. Inclusion of
information in any Schedule to this Agreement does not constitute an
admission or acknowledgment of the materiality of such information.
To the extent that any information included in any Section of any
Schedule provided by a party hereto applies or pertains to any other
Section of such Schedule, such information shall be deemed to be
incorporated by reference in all Sections of such Schedule to which
such information is applicable.
Section (n) Cooperation. Parent, Newco and the Companies shall
each deliver or cause to be delivered to the other at the Closing,
and at such times and places as shall be reasonably agreed to, such
additional instruments as the other may reasonably request for the
purpose of effectuating this Agreement.
Section (o) Submission to Jurisdiction. Each of the parties
hereto irrevocably (a) consents to submit itself to the personal
jurisdiction of federal court in Kansas City, Kansas or any Kansas
state court located in Johnson County, Kansas in the event that any
dispute arises out of this Agreement or of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will
not initiate any action related to this Agreement or any of the
transactions contemplated by this Agreement in any court other than
a Federal court in the State of Kansas or a Kansas state court.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
JACK HENRY & ASSOCIATES, INC.
By:
Title:
SYS-TECH ACQUISITION CORP.
By:
Title:
SYS-TECH, INC. OF KANSAS
By:
Title:
BIG SKY MARKETING, INC.
By:_____________________________
Title:_____________________________
THE SHAREHOLDERS
_________________________________
Barry Cowles
_________________________________
Martin Bosch
________________________________
P. David Enger
_________________________________
Roger Ramsey
FOR IMMEDIATE RELEASE
Company: Jack Henry & Associates, Inc.
663 Highway 60
Monett, MO 65708
ANALYST CONTACT: Terry W. Thompson IR CONTACT: Becky Pendleton Reid
Chief Financial Officer Len Cereghino & Co.
(417) 235-6652 (206) 448-1996
JACK HENRY & ASSOCIATES ACQUIRES
SYS-TECH, INC.;
ADDS UPS SYSTEMS CAPABILITIES
Monett, MO and Shawnee, KS -- June
2, 2000. Jack Henry & Associates
(Nasdaq: JKHY) today announced it
has purchased Sys-Tech, Inc.,
providers of uninterruptible power
supply (UPS) systems and specialists
in building and maintaining computer
facilities. Sys-Tech has provided
services to JKHY and its customers
since 1989 and has been a JKHY
Business Partner since 1991. The
$16 million stock transaction will
be accounted for as a pooling of
interests.
Headquartered in Shawnee, Kansas,
privately held Sys-Tech posted
revenues of $10 million in 1999 and
generated attractive profit margins
before payment of owner bonuses. As
a Jack Henry Business Partner,
Sys-Tech has provided over 700 of
JKHY's community bank customers with
mission critical products and
services that support their computer
systems and facilities. Sys-Tech's
UPS systems ensure computer system
reliability and stability in the
event of power failure. In
addition, Sys-Tech provides its
customers with design and project
management services of computer
facilities, data center facility
management and systems monitoring.
"Over the past 10 years, we have
relied on Sys-Tech to supply our
customers with the products and
services that ensure dependable
'uptime' for our real-time banking
applications. Sys-Tech's UPS
capabilities, as well as their
experience in designing and building
computer facilities, provide the
foundation for reliable and
efficient systems for our customers
and for Jack Henry. Sys-Tech built
our first computer room in Monett in
1986. Over the past 14 years, they
have provided exceptional technical
expertise and quality customer
service for all our facilities,"
said Michael E. Henry, Chairman and
CEO of Jack Henry. "With this
acquisition, we will enhance our
ability to support the technical
needs of the banking marketplace by
offering a more complete solution
for their processing needs."
"We are very excited to join the
Jack Henry & Associates family,"
stated Roger Ramsey, President of
Sys-Tech, Inc. "We've worked as an
integral part of Jack Henry's
activities and see this transition
as a natural progression for our
company. Jack Henry & Associates
provides a national presence and
resources for expanding our
business, primarily in the financial
services sector, but also to a wide
variety of public and private
organizations that require reliable
support for their high-tech
facilities."
"Sys-Tech has proven its ability to
provide mission critical facilities
services from the beginning of a
project through its entire life,"
commented Michael R. Wallace, Jack
Henry's President. "We are very
pleased to bring their services
in-house for our benefit and for our
customers, and expect this
transaction to be accretive to
earnings in our next fiscal year."
Sys-Tech currently employs 16 people
and will continue to operate out of
its Shawnee, Kansas location, as a
division of Jack Henry & Associates.
Jack Henry & Associates, Inc.
provides integrated computer systems
and ATM networking products for
banks and credit unions. Jack Henry
markets and supports its systems
throughout the United States serving
millions of customers nationwide.
Following the closing of the Symitar
Systems, Inc. transaction, Jack
Henry will have over 2,850 financial
institution clients. For additional
information on Jack Henry, visit the
company's web site at
www.jackhenry.com.
Statements made in this news release
that are not historical facts are
forward-looking information. Actual
results may differ materially from
those projected in any
forward-looking information.
Specifically, there are a number of
important factors that could cause
actual results to differ materially
from those anticipated by any
forward-looking information.
Additional information on these and
other factors which could affect the
Company's financial results are
included in its Securities and
Exchange Commission (SEC) filings on
Form 10-K, and these statements
should be reviewed by potential
investors. Finally, there may be
other factors not mentioned above or
included in the Company's SEC
filings that may cause actual
results to differ materially from
any forward-looking information.
-thirty-
