AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of August
2, 2000, among Internet Commerce Corporation, a Delaware corporation ("ICC"),
Intercoastal Data Corporation, a Georgia corporation (the "Company"), and the
individuals listed on the signature pages hereto (such persons being herein
referred to individually as a "Seller" and collectively as "Sellers").
WHEREAS, the Boards of Directors of ICC and the Company, deeming it
advisable and for the respective benefit of ICC and the Company, and their
respective shareholders, have approved the merger of the Company with and into
ICC on the terms and conditions hereinafter set forth, and have approved this
Agreement and authorized the transactions contemplated hereby; and
WHEREAS, the Board of Directors of the Company has determined to
recommend to all of the Company's shareholders, including the Sellers, that the
Merger and this Agreement be approved; and
WHEREAS, ICC, the Company and the Sellers desire to make certain
representations, warranties and agreements in connection with, and establish
various conditions precedent to, the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Adjustment Event"--as defined in Section 2.7(c).
"Articles of Merger"--as defined in Section 2.2.
"Average Trading Price"--the average of the high and low trading prices on
any trading day on which trading takes place (i) in the over-the-counter market
and prices reflecting such trading are published by NASDAQ, or (ii) if such
security is then listed or admitted to trading on a national securities
exchange, on the principal national securities exchange on which such security
is then listed or admitted to trading.
"Balance Sheet Date"--March 31, 2000.
"Certificate of Merger"--as defined in Section 2.2.
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"Closing"--as defined in Section 2.1(b).
"Closing Date"--the date and time as of which the Closing actually takes
place.
"Code"--the Internal Revenue Code of 1986, as amended, and any successor
law.
"Commission"--the United States Securities and Exchange Commission.
"Company"--as defined in the first paragraph of this Agreement.
"Company Common Stock"--the common stock, par value $0.50 per share, of
the Company.
"Company Shareholders"-- the holders of the Company Common Stock at the
Effective Time.
"Contract"--any agreement, contract, obligation, promise or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Damages"--as defined in Section 11.2(a).
"DGCL"-- as defined in Section 2.1(a).
"Disclosure Schedule"--the disclosure schedule delivered by the Sellers
and the Company to ICC concurrently with the execution and delivery of this
Agreement.
"Dissenting Shareholders"--as defined in Section 2.11.
"Effective Time"--as defined in Section 2.2.
"Effective Day for the Registration Statement"--the day on which the
Commission declares a Registration Statement on Form S-3 relating to the resale
of the ICC Shares effective.
"Encumbrance"--any mortgage, charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership.
"Environment"--soil, land surface or subsurface strata, surface waters,
groundwater, drinking water supply, stream sediments, ambient air, plant and
animal life and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities"--any cost, damages,
expense, liability, obligation or other responsibility arising from or under any
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to: (a) any environmental, health or safety matter or condition
(including on-site or off-site contamination, generation, handling and disposal
of hazardous substances, occupational safety and health and regulation of
chemical and hazardous substances or products); (b) fines, penalties, judgments,
awards, settlements, legal or administrative proceedings, damages, losses,
litigation, including civil and criminal claims,
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demands and response, investigative, remedial, response or inspection costs and
expenses arising under Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational Safety and
Health Law for cleanup costs or corrective action, including any investigation,
cleanup, removal, containment or other remediation or response actions required
by applicable Environmental Law or Occupational Safety and Health Law and for
any natural resource damages; or (d) any other compliance, corrective,
investigative or remedial measures required under Environmental Law or
Occupational Safety and Health Law. The terms "removal," "remedial" and
"response action" include the types of activities covered by the United States
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
ss. 9601 et seq., as amended ("CERCLA").
"Environmental Law"--any and all federal, state, local, civil and
criminal laws, statutes, ordinances, orders, codes, rules, regulations,
permits, policies, guidance documents, judgments, decrees and agreements with
any Governmental Authority of or relating to the protection of health and the
Environment, worker health and safety, and/or governing the handling, use,
generation, treatment, storage, transportation, disposal, manufacture,
distribution, packaging, labeling or release of Hazardous Materials,
including CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C.
ss. 6901 et seq.; the Clean Air Act, 42 U.S.C.ss. 7401 et seq.; and the
Occupational Safety and Health Act, 29 U.S.C.ss. 651 et seq.; and the state
analogues thereto and any common law doctrine, including negligence,
nuisance, trespass, personal injury or property damage related or arising out
of the presence, release or exposure to Hazardous Materials.
"ERISA"--the Employee Retirement Income Security Act of 1974, as amended,
or any successor law.
"Exchange Act"--the Securities Exchange Act of 1934, as amended, or any
successor law.
"Facilities"--any real property, leaseholds or other interests currently
or formerly owned or operated by the Company and any buildings, plants,
structures or equipment (including motor vehicles) currently or formerly owned
or operated by the Company.
"Financial Statements"--as defined in Section 4.5(a).
"GAAP"--generally accepted United States accounting principles applied on
a basis consistent with the basis on which the financial statements of the
Company referred to in Section 4.5 were prepared.
"GBCC"--as defined in Section 2.1(a).
"Governmental Authority" --any court, tribunal, authority, agency,
commission, bureau, department, official or other instrumentality of the United
States, any foreign country or any domestic, foreign, state, local, county, city
or other political subdivision.
"Governmental Permit" --any license, franchise, permit or other
authorization of any Governmental Authority.
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"Hazardous Activity"--the distribution, generation, handling,
manufacturing, processing, production, release, storage, transportation,
treatment, disposal or use of Hazardous Materials in, on, under, about or from
the Facilities or any part thereof into the Environment.
"Hazardous Materials"--any waste or other substance that is listed,
defined, designated or classified as, or otherwise determined to be, hazardous,
radioactive or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law.
"ICC"--as defined in the first paragraph of this Agreement.
"ICC Common Stock"--the Class A Common Stock, $0.01 par value per share,
of ICC.
"ICC Common Stock Market Value"--as of any date equals the average of the
Average Trading Prices for ICC Common Stock for the 10 trading days ending four
days prior to such date.
"ICC SEC Reports"--as defined in Section 5.4(a).
"ICC Shares"--the shares of ICC Common Stock to be issued to the Company
Shareholders in connection with the Merger.
"IDC Portfolio"--all cash (including money market accounts) and marketable
securities owned by IDC in investment or brokerage accounts.
"IDC Portfolio Market Value"--the total amount obtained by adding (A) the
cash (including current balances of money market accounts) in the IDC Portfolio
as of the date four days prior to the Effective Time, plus (B) the product of
(i) the average of the Average Trading Price for each equity investment in the
IDC Portfolio for the 10 trading days ending four days prior to the Effective
Time, relevant date and (ii) the number of shares in each such investment.
"Indemnified Persons"-- as defined in Section 11.2(a).
"Intellectual Property Assets" --as defined in Section 4.21(a).
"IRS"--the United States Internal Revenue Service or any successor agency.
"Lease"--as defined in Section 9.7(c).
"Liabilities"--any liability or other obligation of any kind or nature
whatsoever, and whether absolute, accrued, contingent or otherwise.
"Liens" means any mortgage, lien, debt, pledge, security interest,
encumbrance, assessment, restriction charge or other adverse claim or interest
of every nature.
"Material Adverse Effect"--as defined in Section 4.7.
"Merger"--as defined in Section 2.1(a).
"New Certificates"--as defined in Section 2.8(a).
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"Occupational Safety and Health Law"--any legal or governmental
requirement or obligation relating to safe and healthful working conditions and
to reduce occupational safety and health hazards.
"Old Certificates"--as defined in Section 2.8(a).
"Organizational Documents"--the articles or certificate of incorporation
and the bylaws of a corporation and any amendment thereto.
"Permitted Encumbrances"--as defined in Section 4.10.
"Person"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Governmental Authority.
"Proceeding"--as defined in Section 4.13.
"Resale Registration Statement"--as defined in Section 7.6(a).
"Resale Registration Statement Effective Day Value"--as defined in
Section 2.7(a).
"Securities Act"--the Securities Act of 1933, as amended, or any successor
law.
"Seller"--as defined in the first paragraph of this Agreement.
"Sellers"--Vernon E. Zander, Marilyn A. Zander, Bill Loftin, Hollis B.
Johnson, Stanley Parkman and Byrl Pointer.
"Seller Parties"--as defined in Section 11.3(a).
"Shareholder Percentage"--as defined in Section 2.7(b).
"Shares"--the Company Common Stock owned by the Sellers.
"Subsidiary"--of any Person is any corporation, joint venture, limited
liability company, partnership, association or other business entity of which
more than 20% of the total voting power of stock or other equity entitled to
vote generally in the election of directors or managers thereof is owned or
controlled, directly or indirectly, by such Person.
"Surviving Corporation"--as defined in Section 2.1(a).
2. THE MERGER; CLOSING
2.1 THE MERGER
(a) Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the Georgia Business Corporation Code (the
"GBCC") and the Delaware General Corporation Law (the "DGCL"), the Company shall
be merged with and into ICC at the
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Effective Time (the "Merger"). Following the Merger, the separate corporate
existence of the Company shall cease and ICC shall continue as the surviving
corporation (the "Surviving Corporation").
(b) Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
10 and subject to the satisfaction or waiver of the conditions set forth in
Sections 8 and 9, the consummation of the Merger will take place August 1, 2000
or as promptly thereafter as practicable (and in any event within two business
days) after satisfaction or waiver of the conditions set forth in Sections 8 and
9 at the offices of King & Spalding, 191 Peachtree Street, Atlanta, Georgia (the
"Closing"), unless another date, time or place is agreed to in writing by the
parties hereto.
2.2 EFFECTIVE TIME
Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Section 10 and subject
to the satisfaction or waiver of the conditions set forth in Sections 8 and 9,
on the Closing Date, the parties shall (i) file articles of merger (the
"Articles of Merger") in such form as is required by and executed in accordance
with the relevant provisions of the GBCC and a certificate of merger (the
"Certificate of Merger") in such form as is required by and executed in
accordance with the DGCL, and (ii) make all other filings or recordings required
under the GBCC and the DGCL. The Merger shall become effective at the latest to
occur of (i) such time as the Articles of Merger are duly filed with the
Secretary of State of the State of Georgia, (ii) such time as the Certificate of
Merger is duly filed with the Secretary of State of the State of Delaware or
(iii) such subsequent time as the Company and ICC shall agree and be specified
in the Articles of Merger and Certificate of Merger (the date and time the
Merger becomes effective being the "Effective Time"). Unless otherwise agreed,
ICC and the Company shall use their commercially reasonable efforts to cause the
Effective Time to occur on the Closing Date.
2.3 EFFECTS OF THE MERGER
At and after the Effective Time, the Merger will have the effects set
forth in Section 259 of the DGCL.
2.4 ARTICLES OF INCORPORATION
At the Effective Time, the certificate of incorporation of ICC shall be
the certificate of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
2.5 BY-LAWS
The by-laws of ICC as in effect at the Effective Time shall be the by-laws
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
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2.6 DIRECTORS AND OFFICERS OF SURVIVING CORPORATION
The officers of ICC immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until the earliest
of their resignation or removal from office or their otherwise ceasing to be
officers or until their respective successors are duly elected and qualified.
The directors of the ICC immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation until the earlier of their
resignation or removal or otherwise ceasing to be directors or until their
respective successors are duly elected and qualified.
2.7 CONVERSION OR CANCELLATION OF CAPITAL STOCK OF THE COMPANY
At the Effective Time of the Merger, by virtue of the Merger and without
any action on the part of any holder thereof:
(a) Subject to Section 2.11, all shares of the Company Common Stock
outstanding immediately prior to the Effective Time shall be converted into (i)
an aggregate number of shares of ICC Common Stock equal to the number obtained
by dividing (x) the sum of (A) $2,000,000 (two million dollars), and (B) 100% of
the dollar amount of the IDC Portfolio Market Value as of the Effective Time by
(y) the ICC Common Stock Market Value as of the Effective Time; and (ii) the
right to receive, in the event that the ICC Common Stock Market Value determined
as of the Effective Day for the Registration Statement ("Resale Registration
Statement Effective Day Value") is less than the ICC Common Stock Market Value
determined as of the Effective Time (the "ICC Common Stock Effective Time
Value"), additional shares of ICC Common Stock equal to the difference between
the number of shares of ICC Common Stock calculated pursuant to Section
2.7(a)(i) and the number of shares of ICC Common Stock into which the Company
Common Stock would have been converted pursuant to Section 2.7(a)(i) had the ICC
Common Stock Effective Time Value been equal to the Resale Registration
Statement Effective Day Value; provided; however, that in no event shall the
aggregate of (x) the additional number of shares of ICC Common Stock into which
the Company Common Stock is converted pursuant to this Section 2.7(a)(ii) and
(y) the total number of shares of ICC Common Stock into which the Company Common
Stock was converted as calculated pursuant to Section 2.7(a)(i) exceed one
hundred twenty and five percent (125%) of the total number of shares of ICC
Common Stock into which the Company Common Stock was converted as calculated
pursuant to Section 2.7(a)(i).
(b) Subject to Section 2.11, the shares held by each holder of
shares of the Company Common Stock outstanding immediately prior to the
Effective Time shall be converted into (i) an aggregate number of shares of ICC
Common Stock equal to the number of ICC Shares as determined pursuant to Section
2.7(a)(i) above and (ii) the right to receive such number of additional shares
of ICC Common Stock, if any, as determined pursuant to Section 2.7(a)(ii), in
each case multiplied by a fraction (the "Shareholder Percentage"), the numerator
of which shall be the number of shares of outstanding Company Common Stock held
by such shareholder immediately prior to the Effective Time and the denominator
of which shall be the total number of shares of Company Common Stock outstanding
immediately prior to the Effective Time; provided, however, that if the number
of shares of ICC Common Stock to which
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any such holder is entitled includes a fractional share, such number of shares
shall be rounded up to the next whole number of shares.
(c) In the event of any change in ICC Common Stock between the date
of this Agreement and the Effective Time or between the date of this Agreement
and the Effective Day for the Registration Statement by reason of any stock
dividend, stock split, subdivision, reclassification, recapitalization,
combination, exchange of shares or the like (an "Adjustment Event"), the number
of shares of ICC Common Stock into which the Company Common Stock is converted
pursuant to Section 2.7(a) shall be appropriately adjusted so each holder of
Company Common Stock will receive in the Merger the amount of ICC Common Stock
such holder would have been entitled to receive if the Effective Time or the
Effective Day for the Registration Statement, as applicable, had occurred
immediately prior to the record date for such Adjustment Event.
2.8 ISSUANCE OF MERGER CONSIDERATION
(a) Subject to the provisions of Section 2.7, at the Effective Time,
ICC shall issue and deliver, upon surrender by a Company Shareholder of one or
more certificates ("Old Certificates") representing Company Common Stock for
cancellation, to a holder that surrenders Old Certificates representing Company
Common Stock, one or more certificates ("New Certificates"), registered in the
name of such holder, for a number of shares of ICC Common Stock equal to the
number of shares of ICC Common Stock into which the number of shares of Company
Common Stock represented by the Old Certificates has been converted pursuant to
the provisions of Section 2.7(a)(i). As soon as practicable after the Resale
Registration Statement Effective Day, ICC will issue a certificate to each such
holder for any additional shares required by the adjustment provided for in
Section 2.7(a)(ii). If more than one stock certificate representing Company
Common Stock shall be surrendered for the account of the same holder, the number
of whole shares of ICC Common Stock for which such certificates shall be
exchanged pursuant to this Section 2.8 shall be computed on the basis of the
aggregate number of Company Common Stock evidenced by all such certificates.
(b) No dividends or other distributions declared on shares of ICC
Common Stock that are to be represented by New Certificates shall be paid to any
Person otherwise entitled to receive the same until Old Certificates have been
surrendered in exchange for such New Certificates in the manner herein provided,
and upon such surrender such dividends or other distributions shall be paid to
such Persons in accordance with their terms. In no event shall the Persons
entitled to receive such dividends or other distributions be entitled to receive
interest on such dividends or other distributions.
(c) ICC shall pay any transfer taxes in connection with the exchange
of Old Certificates for New Certificates, except that if any New Certificate is
to be issued in a name other than that in which the Old Certificate surrendered
in exchange therefor is registered, it shall be a condition of such exchange
that the Person requesting such exchange shall pay to ICC any transfer or other
taxes required by reason of the issuance of the New Certificate in a name other
than the registered holder of such Old Certificate, or shall establish to the
satisfaction of ICC that such tax has been paid or is not applicable.
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(d) If any Old Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Old Certificate to be lost, stolen or destroyed, ICC will issue and deliver
in exchange for such affidavit (i) the New Certificates representing the shares
of ICC Common Stock into which the shares represented by such Old Certificate
have been converted pursuant to Section 2.7 and (ii) any dividends or
distributions payable with respect to such shares of ICC Common Stock pursuant
to Section 2.8(b); provided; however, that the Person to whom such consideration
is issued and delivered shall, as a condition precedent to the issuance and
delivery thereof, give ICC a bond in such sum as it may direct or otherwise
indemnify ICC in a manner reasonably satisfactory to it against any claim that
may be made against ICC with respect to the Old Certificate alleged to have been
lost, stolen or destroyed.
2.9 STOCK TRANSFER BOOKS
At the close of business on the day prior to the Effective Time of the
Merger, the stock transfer books of the Company shall be closed and no transfer
of Company Common Stock shall thereafter be made on such stock transfer books.
2.10 TAX-FREE REORGANIZATION
The parties intend that the Merger qualify as a tax-free reorganization
pursuant to Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
2.11 DISSENTERS
Shares of Company Common Stock owned by a holder (each a "Dissenting
Shareholder" and, collectively, the "Dissenting Shareholders") who (i) shall not
have voted in favor of the Merger and (ii) shall have filed with the Company,
prior to the Company Shareholders Meeting, a written objection to the Merger,
setting out that such Dissenting Shareholder's right to dissent will be
exercised if the Merger shall become effective, in the manner provided in
Section 14-2-1302 of the GBCC, shall not be cancelled, extinguished and
converted as provided in Section 2.7(a) or (b) of this Agreement, as the case
may be, but the holder of such shares shall be entitled to receive such
consideration as shall be provided in Section 14-2-1302 of the GBCC. To the
extent the Company or any Seller knows the identify of any Dissenting
Shareholder at the Closing, the Company shall notify ICC in writing of the names
of the Dissenting Shareholders and the number of shares of Company Capital Stock
that they own. The Company shall not enter into any agreement or settlement with
any Dissenting Shareholder without the prior written consent of ICC.
2.12 DISTRIBUTION OF IDC REALTY
In conjunction with the consummation of the Merger at the Effective Time,
the Company shall distribute to the holders of Company Common Stock all of the
outstanding limited liability company membership interests in IDC Realty, LLC
("IDC Realty"), a Georgia limited liability company and a wholly owned
subsidiary of the Company (such distribution is hereinafter referred to as the
"Realty Distribution"). Upon surrender of his stock certificate representing
shares of IDC Common Stock at the Closing, each holder of Company Common Stock
shall
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receive an uncertificated membership interest in IDC Realty equal to such
holder's Shareholder Percentage.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS
Each Seller severally and not jointly represents and warrants to ICC as to
itself as follows:
3.1 AUTHORITY; NO CONFLICT
(a) Such Seller has the right, power, authority and capacity to
execute and deliver this Agreement and to perform his or her obligations under
this Agreement, and this Agreement has been executed and delivered by such
Seller and constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws at
the time in effect affecting the enforceability or rights of creditors generally
and by general equitable principles that may limit the right to obtain equitable
remedies.
(b) Neither the execution and delivery of this Agreement by such
Seller nor the consummation or performance by such Seller of any of the
transactions contemplated hereby will, directly or indirectly (with or without
notice or lapse of time or both) contravene, conflict with or result in a
violation or breach of or a default under any legal requirement or any order or
any Contract to which such Seller may be subject.
3.2 OWNERSHIP OF SHARES
Such Seller owns, beneficially and of record, and has good, valid and
marketable title to that number of the Shares set forth opposite its name on the
signature page hereto executed by such Seller, free and clear of any and all
Encumbrances. There are no voting trusts, shareholder agreements or any other
agreements or understandings to which such Seller is a party with respect to the
transfer, voting or registration of the capital stock of the Company.
3.3 LEGAL PROCEEDINGS
There is no pending Proceeding against such Seller that challenges, or
seeks to prevent, delay or make illegal, or otherwise materially interferes
with, any of the transactions contemplated hereby and, to the knowledge of such
Seller, no such Proceeding has been threatened.
3.4 INVESTMENT REPRESENTATIONS OF THE SELLERS
(a) Such Seller is either (i) an accredited investor as that term is
defined in Rule 501 under the Securities Act, or (ii) has, either alone or with
his purchaser representative or representatives (as that term is defined in Rule
501 under the Securities Act), such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the ICC Common Stock.
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(b) The ICC Common Stock is being acquired by such Seller for his own
account, and not for any other Person, for investment only and with no intention
of reselling, assigning, transferring or otherwise disposing of (collectively,
"Transfer") such ICC Common Stock or any part thereof or interest therein, and
such Seller will not Transfer any of such shares of ICC Common Stock, or any
part thereof or interest therein, in a transaction that would be a violation of
the securities laws of the United States of America, or any state, without
prejudice, however, to the rights of such Seller to Transfer all or any part of
such ICC Common Stock under an effective registration statement or applicable
exemption from registration under the Securities Act and any applicable state
securities law. Such Seller has no contract, undertaking, agreement or
arrangement with any Person to Transfer the ICC Common Stock, or any part
thereof or interest therein, and such Seller has no present plans to enter into
any such contract, undertaking, agreement or arrangement.
(c) Such Seller has read this Agreement and all other documents provided
by ICC in connection herewith, including the ICC SEC Reports, and fully
understands the terms and conditions under which the ICC Common Stock is being
issued to it pursuant hereto. ICC has made available to such Seller the
opportunity to ask questions of and receive answers from ICC concerning ICC and
the terms and conditions under which ICC Common Stock will be issued to it and
to obtain any additional information which ICC possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
information furnished in connection with this Agreement or in response to any
request for information. Such Seller has asked all the questions and received
all the answers and information that it has requested from ICC.
(d) Such Seller agrees that the New Certificates evidencing the ICC Common
Stock and any securities issued in exchange for or in respect thereof shall bear
a legend to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS."
The legend shall not be required on certificates issued upon a transfer of the
ICC Common Stock if such transfer is being made in connection with a sale that
is (i) pursuant to an effective registration statement under the Securities Act
or (ii) exempt from registration pursuant to Rule 144 under the Securities Act.
At the holder's request, the legend shall be removed from the certificates
representing the shares of ICC Common Stock and new certificates issued to the
holder thereof not bearing the legend, without expense, upon the receipt of a
written opinion of such holder's counsel, in form and substance reasonably
satisfactory to ICC, to the effect that
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such transfer has been registered, or has been or may be effected in a
transaction that does not require registration, under the Securities Act.
3.5 Relationships with Related Persons
Except as described in Section 4.23 of the Disclosure Schedule and except
for the ownership by any of the Sellers or any Related Person (as defined in
Section 4.23) of less than 1% of the total outstanding stock of a publicly
traded corporation in which such owner has no active role in management, none of
the Sellers or any Related Person (as hereinafter defined) has owned an equity
interest or any other financial or profit interest in a Person that has (i) had
business dealings with the Company or (ii) engaged in competition with the
Company.
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
Except as set forth in the Disclosure Schedule, the Company and each of
the Sellers, jointly and severally, hereby represent and warrant to ICC as
follows:
4.1 ORGANIZATION AND GOOD STANDING
(a) Section 4.1 of the Disclosure Schedule contains a complete and
accurate list for the Company of the identity of each shareholder and the number
of shares held by each. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, with full
corporate power and authority to conduct its business as presently conducted and
to own or use the properties and assets that it purports to own or use. The
Company is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification, except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect on the Company.
(b) The Company has delivered to ICC correct and complete copies of
the Organizational Documents of the Company.
4.2 AUTHORITY; NO CONFLICT
(a) The Company has the corporate power and authority to execute and
deliver this Agreement, to consummate the Merger and to perform its obligations
under this Agreement. Subject to approval of this Agreement by the Company
Shareholders, this Agreement has been duly authorized and approved, executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws at the time in effect affecting the enforceability or rights of
creditors generally and by general equitable principles that may limit the right
to obtain equitable remedies.
(b) Except as set forth in Section 4.2(b) of the Disclosure
Schedule, neither the execution and delivery of this Agreement by the Company
nor the consummation or
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performance by the Company of the Merger or any of the other transactions
contemplated hereby will, directly or indirectly (with or without notice or
lapse of time or both):
(i) contravene, conflict with or result in a violation or
breach of (A) any provision of the Organizational Documents of the Company, (B)
any standing resolution adopted by the board of directors (or any Committee
thereof) or the shareholders of the Company, (C) any legal requirement or any
order of any Governmental Authority to which the Company or any of the
properties or assets owned or used by the Company may be subject, or (D) any
Governmental Permit that is held by the Company or that otherwise relates to the
business of, or any of the assets owned or used by, the Company;
(ii) result in a breach of or constitute a default, give rise
to a right of termination, cancellation or acceleration, create any entitlement
to any payment or benefit, or require the consent or approval of or any notice
to or filing with any third party, under any Contract to which the Company is a
party or by which its properties or assets are bound, or require the consent or
approval of or any notice to or filing with any Governmental Authority to which
the Company or any of its properties or assets is subject; or
(iii) result in the imposition or creation of any Encumbrance
upon or with respect to any of the properties or assets owned or used by the
Company; except, with respect to clauses (i)(C), (i)(D), (ii) or (iii) of this
Section 4.2, where any such breach, default, termination right, cancellation or
acceleration right or Encumbrance could not reasonably be expected to have a
Material Adverse Effect on the Company or would not adversely affect the ability
of the Company to consummate the Merger or the other transactions contemplated
hereby.
(c) The only vote required by the Company Shareholders to approve
this Agreement is a majority of the outstanding shares of Company Common Stock.
4.3 CAPITALIZATION
The authorized equity securities of the Company consist only of 1,000,000
shares of common stock, $0.50 par value per share, of which 43,700 shares are
issued and outstanding. All of the outstanding equity securities of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. There are no outstanding or unexercised warrants, options,
agreements or understandings, convertible securities or other commitments
(contingent or otherwise) pursuant to which the Company is or may become
obligated to issue any shares of its capital stock or other securities of the
Company or any securities with profit participation features or any stock
appreciation rights or phantom stock plans. There are no voting trusts or other
agreements or understandings to which the Company is a party with respect to the
transfer, voting or registration of the capital stock of the Company. There are
no Contracts in effect to which the Company has been a party in the last three
years relating to the issuance, sale or transfer of any equity securities or
other securities of the Company. None of the outstanding equity securities of
the Company were issued in violation of the Securities Act. Except for IDC
Realty, the Company does not own any Subsidiaries, or, except for the IDC
Portfolio, own or have any Contract to acquire, any equity securities or other
securities of any Person or any direct or indirect equity of ownership interest
in any other business. IDC Realty owns no assets other
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than the real property described in Section 6.13 of the Disclosure Schedule. No
Person has any pre-emptive rights with respect to any security of the Company.
4.4 BOOKS AND RECORDS
The books of account and other records of the Company, all of which have
been made available to ICC, are correct and complete in all material respects.
The minute books of the Company contain materially correct and complete records
of all meetings held of, and corporate action taken by, the shareholders and the
Board of Directors and committees of the Board of Directors of the Company. The
stock records of the Company are correct and complete in all material respects.
At the Closing, all of such books and records will be in the possession of the
Company.
4.5 FINANCIAL STATEMENTS
(a) For purposes of this Agreement, "Financial Statements" shall
mean the consolidated balance sheets of the Company as of March 31, 2000, and
the related consolidated income statements for the year then ended. The Company
has delivered to ICC correct and complete copies of the Financial Statements.
(b) The Financial Statements (i) have been prepared from the books
and records of the Company and (ii) fairly present in all material respects the
financial position of the Company as of the respective dates of the balance
sheets included in the Financial Statements and the consolidated results of its
operations for each of the periods then ended.
(c) There has been no material adverse change since the Balance
Sheet Date in the amount or delinquency of accounts payable of the Company.
(d) Section 4.5(d) of the Disclosure Schedule sets forth as of June
30, 2000 (a) the amount of all indebtedness for borrowed money of the Company
then outstanding and the interest rate applicable thereto, (b) any Encumbrances
which relate to such indebtedness and (c) the name of the lender or the other
payee of each such indebtedness.
4.6 NO UNDISCLOSED LIABILITIES
The Company has no Liabilities except for (i) Liabilities reflected or
reserved against in the Financial Statements, (ii) current Liabilities incurred
in the ordinary course of business consistent with past practice since the
Balance Sheet Date, which current Liabilities will not, individually or in the
aggregate, have a Material Adverse Effect on the Company, (iii) Liabilities and
obligations otherwise disclosed as a Liability in this Agreement or any schedule
hereto, or (iv) Liabilities incurred in connection with the transactions
contemplated by this Agreement.
4.7 NO MATERIAL ADVERSE CHANGE
Since March 31, 2000, there has not been any material adverse change in
the business, operations, properties, assets, prospects, liabilities, results of
operations or condition (financial or otherwise) (a "Material Adverse Effect")
of the Company other than changes relating to or
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arising from general economic, market or financial conditions or generally
affecting the Company's industry.
4.8 TAXES
(a) The Company has properly and timely filed all federal, state, local
and foreign tax returns, declarations of estimated tax, tax reports, information
returns, amended returns and statements (collectively, the "Returns") required
to be filed by the Company relating to any Taxes (as defined below) with respect
to any income, properties or operations of the Company; (b) as of the time of
filing, the Returns were complete and correct in all material respects and the
Company has timely paid, collected or withheld, or caused to be paid, collected
or withheld, all material amounts of Taxes required to be paid, collected or
withheld, other than such Taxes for which adequate reserves in the Financial
Statements have been established; (c) the Company has not been delinquent in the
payment of any Taxes, nor has the Company requested any extension of time within
which to file any Return, which Return has not since been filed; (d) there are
no pending tax audits of any Returns of the Company; (e) to the Company's
knowledge, no Tax liens have been filed and no deficiency or addition to Taxes,
interest or penalties for any Taxes with respect to any income, properties or
operations of the Company have been proposed, asserted or assessed in writing
against the Company; (f) the Company has not been granted any extension of the
statute of limitations applicable to any Return or other Tax claim with respect
to any income, properties or operations of the Company; (g) the Company has not,
during the five-year period preceding the date hereof, been a personal holding
company within the meaning of Section 542 of the Code (or any corresponding
provision of state, local or foreign law); (h) the Company has not made any
election under Section 341(f) of the Code (or any corresponding provisions of
state, local or foreign law); (i) other than payroll Taxes, the Company is not
liable for the Taxes of any other Person, nor is the Company currently under any
contractual obligation to indemnify any Person with respect to Taxes (except for
customary agreements to indemnify lenders or security holders in respect of
taxes other than income taxes), nor is the Company party to any tax sharing
agreement or any other agreement providing for payments by the Company with
respect to Taxes of any other Person; (j) the Company has not agreed, nor is the
Company required, as a result of a change in method of accounting or otherwise,
to include any adjustment under Section 481 of the Code (or any corresponding
provision of state, local or foreign law) in taxable income; and (k) the Company
has not elected S Corporation status within the meaning of Section 1361(a)(1) of
the Code (or any corresponding provision of state, local or foreign law). As
used in this Agreement, the term "Tax" shall mean any of the Taxes and the term
"Taxes" shall mean, with respect to any Person, (i) all income taxes (including
any tax on or based upon net income, or gross income, or income as specially
defined, or earnings, or profits, or selected items of income, earnings or
profits) and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, alternative or add-on minimum
taxes, customs duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority (domestic or foreign) on such
Person and (ii) any liability for the payment of any amount of the type
described in the immediately preceding clause (i) as a result of being a
"transferee" (within the meaning of Section 6901 of the Code or any other
applicable law) of another Person or a member of an affiliated or combined
group.
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4.9 ACCOUNTS RECEIVABLE
All accounts receivable of the Company that are reflected on the Financial
Statements or on the accounts receivable ledger of the Company as of the Closing
Date (collectively, the "Accounts Receivable") represent valid obligations
arising from sales actually made or services actually performed in the ordinary
course of business. Except as described in Section 4.9 of the Disclosure
Schedule, all of the Accounts Receivable are or will be collectible at the full
recorded amount thereof, less any applicable reserves established in accordance
with GAAP, in the ordinary course of business.
4.10 TITLE TO PROPERTIES; ENCUMBRANCES
Section 4.10 of the Disclosure Schedule contains a correct and complete
list of all real property, leaseholds or other interests therein owned or held
by the Company. The Company has delivered or made available to ICC correct and
complete copies of the real property leases, if any, to which the Company is
party or pursuant to which it uses or occupies any real property. The Company
has good title to, or a valid leasehold, license or other interest in, all of
the material properties and assets, real and personal, tangible and intangible,
it owns, purports to own or uses in its business, including those reflected on
its books and records and in the Financial Statements (except for accounts
receivable collected and materials and supplies disposed of in the ordinary
course of business consistent with past practice after the date of the most
recent Financial Statements). All material properties and assets owned, leased
or used by the Company are free and clear of all material Encumbrances, except
for (a) Liens for current taxes not yet due, (b) workman's, common carrier and
other similar liens arising in the ordinary course of business, none of which
materially detracts from the value or impairs the use of the property or asset
subject thereto, or impairs the operations of the Company, (c) Encumbrances
disclosed in the Financial Statements and (d) with respect to real property, (i)
minor imperfections of title, if any, none of which is substantial in amount,
materially detracts from the value or impairs the use of the property subject
thereto, or impairs the operations of the Company and (ii) zoning laws and other
land use restrictions that do not impair the present or anticipated use of the
property subject thereto ("Permitted Encumbrances").
4.11 CONDITION AND SUFFICIENCY OF ASSETS
The Facilities and other property and assets owned or used by the Company
are structurally sound, are in good operating condition and repair, and are
adequate for the uses to which they are being put, and none of such Facilities
or other property or assets owned or used by the Company is in need of
maintenance or repairs except for ordinary, routine maintenance and repairs that
are not material in nature or cost. The Facilities and other property and assets
owned or used by the Company are sufficient for the continued conduct of its
business after the Effective Time in substantially the same manner as conducted
prior to the Effective Time.
4.12 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS
(a) Except as set forth in Section 4.12 of the Disclosure Schedule,
the Company is in compliance in all material respects with all federal, state
and local laws, regulations, licenses, orders, ordinances, judgments and decrees
affecting the properties and
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assets owned or used by the Company and the business or operations of the
Company where a failure to comply would have a Material Adverse Effect. The
Company has not been charged with violating, nor, to the knowledge of the
Company or any of the Sellers, threatened with a charge of violating, nor, to
the knowledge of the Company or any of the Sellers, is the Company under
investigation with respect to a possible violation of, any provision of any
federal, state or local law, regulation, license, order, ordinance, judgment or
decree relating to any of its properties or assets or any aspect of its business
or operations where a failure to comply would have a Material Adverse Effect.
The representations and warranties contained in this Section 4.12 do not relate
to the matters as to which representations and warranties are made in Section
4.17, 4.19 and 4.20.
(b) Section 4.12 of the Disclosure Schedule contains a complete and
accurate list of each material Governmental Permit that is held by the Company
or that otherwise relates to the business or operations of, or to any of the
properties or assets owned or used by, the Company. Each Governmental Permit
listed or required to be listed in Section 4.12 of the Disclosure Schedule is
valid and in full force and effect.
4.13 LEGAL PROCEEDINGS
Except as set forth in Section 4.13 of the Disclosure Schedule, there is
no pending claim, action, investigation, arbitration, litigation or other
proceeding ("Proceeding"):
(i) that has been commenced by or against the Company or that
otherwise relates to or may affect the business of, or any of the properties or
assets owned or used by, the Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated hereby.
To the knowledge of the Company or any of the Sellers, no such Proceeding
has been threatened in writing. The Company has made available to ICC true,
correct and complete copies of all pleadings, correspondence and other documents
relating to each Proceeding listed in Section 4.13 of the Disclosure Schedule.
The Proceedings listed in Section 4.13 of the Disclosure Schedule could not
reasonably be expected to have a Material Adverse Effect on the Company.
4.14 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Section 4.14 of the Disclosure Schedule, since the
Balance Sheet Date, the Company has conducted its business only in the ordinary
course, consistent with past practice, and the Company has not:
(a) declared or paid any dividend or other distribution in respect
of shares, or redeemed or otherwise repurchased, any shares of the capital stock
of the Company;
(b) issued or sold or authorized for issuance or sale, or granted
any Options with respect to, any shares of its capital stock or any other type
of its securities, or made any change in its outstanding shares of capital stock
or other ownership interests or its capitalization,
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whether by way of a reclassification, recapitalization, stock split or
combination, exchange or readjustment of shares, stock dividend or otherwise;
(c) paid or increased any bonuses, salaries or other compensation to
any stockholder, director, officer, consultant or (except in the ordinary course
of business consistent with past practice) employee or entered into any
employment, severance or similar Contract with any director, officer or
employee;
(d) adopted or increased the payments to or benefits under any
profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement or other employee benefit plan for or with any employees;
(e) suffered any damage to or destruction or loss of any property or
asset, whether or not covered by insurance, which could reasonably be expected
to have a Material Adverse Effect on the Company;
(f) entered into, terminated or received notice of termination of
any Contract or transaction involving a total remaining commitment by or to the
Company of at least $100,000, or any other Contract, the entering into or
termination of which could reasonably be expected to have a Material Adverse
Effect on the Company, including the entry into (i) any document evidencing any
indebtedness, (ii) any capital or other lease or (iii) any guaranty;
(g) sold, leased, or otherwise disposed of (other than in the
ordinary course of business consistent with past practice) any material property
or asset or mortgaged, pledged or imposed any Encumbrance, other than Permitted
Encumbrances, on any material property or asset;
(h) cancelled, compromised or waived any claim or right with a value
to the Company in excess of $25,000 or instituted or settled any Proceeding;
(i) changed the method of accounting or the accounting principles or
practices used by the Company in the preparation of the Financial Statements; or
(j) agreed, whether orally or in writing, to do any of the
foregoing.
4.15 CONTRACTS; NO DEFAULTS
(a) Section 4.15(a) of the Disclosure Schedule contains a correct
and complete list, and the Company has delivered to ICC correct and complete
copies, of:
(i) each Contract that involves the current or future
performance of services or delivery of goods or materials by the Company of an
amount or value in excess of $10,000 per year;
(ii) each Contract that involves the current or future
performance of services or delivery of goods or materials to the Company of an
amount or value in excess of $10,000 per year;
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(iii) each lease, license and other Contract affecting any
leasehold or other interest in any real or personal property of an amount or
value in excess of $5,000 per year;
(iv) each collective bargaining agreement and other Contract
to or with any labor union or other employee representative of a group of
employees;
(v) each joint venture, partnership and other Contract that is
currently in effect involving a sharing of profits, losses, costs or liabilities
by the Company with any other Person or requiring the Company to make any
capital contribution;
(vi) each Contract that is currently in effect containing
covenants that in any way purport to restrict the business activity of the
Company or limit the freedom of the Company to engage in any line of business or
to compete with any Person or hire any Person;
(vii) each agreement that is currently in effect between the
Company and an officer or director of the Company or any Seller or any affiliate
of any of the foregoing; (viii) each power of attorney executed by the Company
that is currently effective and outstanding;
(ix) each Contract that is currently in effect for capital
expenditures by the Company in excess of $15,000;
(x) each agreement under which any money has been or may be
borrowed or loaned by the Company or any note, bond, factoring agreement,
indenture or other evidence of indebtedness has been issued or assumed by the
Company (other than those under which there remain no ongoing obligations of the
Company), each guaranty by the Company (including "take-or-pay" and "keepwell"
agreements) of any evidence of indebtedness or other obligation, or of the net
worth, of any Person (other than endorsements for the purpose of collection in
the ordinary course of business) and each pledge, security or other agreement
pursuant to which any Encumbrance, other than Permitted Encumbrances, is created
in any material asset or property of the Company;
(xi) each agreement containing restrictions with respect to
the payment of dividends or other distributions in respect of the Company's
capital stock;
(xii) each stock purchase, merger or other agreement pursuant
to which the Company acquired any material business, and all relevant documents
and agreements delivered in connection therewith;
(xiii) each agreement to which the Company is a party that is
currently in effect containing a change of control provision;
(xiv) each other agreement to which the Company is a party
that is currently in effect having an indefinite term or a fixed term of more
than one (1) year (other than those that are terminable at will or upon not more
than sixty (60) days' notice by the Company without penalty) or requiring
payments by the Company of more than $10,000 per year; and
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(xv) each standard form of agreement pursuant to which the
Company provides services to customers.
(b) Each Contract identified or required to be identified in Section
4.15(a) of the Disclosure Schedule is in full force and effect and is valid and
enforceable against the Company and, to the knowledge of Company or any of the
Sellers, against the other parties thereto in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws at the time in effect affecting the enforceability or rights of
creditors generally and by general equitable principles that may limit the right
to obtain equitable remedies.
(c) Except as set forth in Section 4.15(c) of the Disclosure
Schedule:
(i) the Company is in compliance in all material respects with
all applicable terms and requirements of each Contract under which the Company
has any obligation or liability or by which the Company or any of the assets
owned or used by the Company is or was bound, except for such noncompliance that
could not reasonably be expected to have a Material Adverse Effect on the
Company;
(ii) to the knowledge of the Company or any of the Sellers,
each other person that has or had any obligation or liability under any Contract
under which the Company has any rights is in compliance in all material respects
with all applicable terms and requirements of such Contract; except for such
noncompliance that would not have a Material Adverse Effect; and
(iii) no event has occurred or, to the knowledge of the
Company or any of the Sellers, circumstance exists that (with or without notice
or lapse of time or both) may result in a violation or breach of any Contract,
which violation or breach could reasonably be expected to have a Material
Adverse Effect on the Company.
4.16 INSURANCE
Section 4.16 of the Disclosure Schedule sets forth the annual premium
payments and describes all the insurance policies of the Company, which policies
are in full force and effect in accordance with their terms and expire on the
dates shown on Section 4.16 of the Disclosure Schedule. There has been no
material default in the payment of premiums on any of such policies, and, to the
knowledge of the Company or any of the Sellers, there is no ground for
cancellation or avoidance of any such policies. Such policies insure the Company
in amounts and against losses and risks customary and sufficient for businesses
similar to that of the Company. Correct and complete copies of all insurance
policies listed in Section 4.16 have been previously made available to ICC.
4.17 ENVIRONMENTAL MATTERS
(a) The Company is in compliance in all respects with, and has not
in the last five years been, and is not in violation of or liable under, any
applicable Environmental Law where a failure to comply would have a Material
Adverse Effect. Neither the Sellers or the Company has received any actual
order, notice or other communication from (i) any
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Governmental Authority or third party, or (ii) the current or prior owner or
operator of any Facilities, of any actual or potential violation or failure to
comply with any Environmental Law, or of any actual or threatened Environmental,
Health, and Safety Liabilities with respect to any of the Facilities or any
other properties or assets in which the Company has had an interest or the
operation of its business.
(b) There are no pending or, to the knowledge of the Company or any
of the Sellers, threatened claims, Encumbrances, or other restrictions of any
nature, resulting from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any Environmental Law, with respect to or affecting
any of the Facilities or any other properties or assets in which the Company has
or had an interest, except as would not individually or in the aggregate result
in a Material Adverse Effect on the Company.
(c) None of the Sellers or the Company has incurred any
Environmental, Health, or Safety Liabilities with respect to the Facilities or
with respect to any other properties and assets in which the Company (or any
predecessor) has or had an interest that could reasonably be expected to have a
Material Adverse Effect on the Company.
(d) There has been no release or threat of release of any Hazardous
Materials at or from the Facilities or from or by any other properties and
assets in which the Company has or had an ownership interest.
(e) None of the Sellers or the Company possesses or has initiated
any reports, studies, analyses, tests or monitoring pertaining to Hazardous
Materials or Hazardous Activities in, on or under the Facilities, or concerning
compliance by the Company with Environmental Laws, and to the knowledge of the
Company or any of the Sellers, no such reports, studies, tests or monitoring
exist.
4.18 EMPLOYEES
(a) Section 4.18 of the Disclosure Schedule contains a complete and
accurate list of the following information for each current employee of the
Company: name, job title, current compensation, vacation accrued and service
credited for purposes of vesting and eligibility to participate under any
Employee Benefit Plan.
(b) No officer of the Company is a party to, or is otherwise bound
by, any agreement or arrangement, including any confidentiality, noncompetition
or proprietary rights agreement, between such Person and any other Person that
materially and adversely affects (i) the performance of his duties as an officer
or employee of the Company or (ii) the ability of the Company to conduct its
business.
4.19 EMPLOYEE BENEFITS
(a) Except as listed on Section 4.19 of the Disclosure Schedule,
neither the Company nor any ERISA Affiliate maintains any Employee Benefit
Plans. "Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA and any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation or
other benefits to any current or former director, officer,
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employee or consultant (or to any dependent or beneficiary thereof) of the
Company or any ERISA Affiliate, which are now, or were within the past six
years, maintained by the Company or any ERISA Affiliate, or under which the
Company or any ERISA Affiliate has any obligation or liability, whether actual
or contingent, including all incentive, bonus, deferred compensation, vacation,
holiday, cafeteria, medical, disability, stock purchase, stock option, stock
appreciation, phantom stock, restricted stock or other stock-based compensation
plans, policies, programs, practices or arrangements. "ERISA Affiliate" means
any entity (whether or not incorporated) other than the Company that, together
with the Company, is or was a member of (i) a controlled group of corporations
within the meaning of Section 414(b) of the Code, (ii) a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code
or (iii) an affiliated service group within the meaning of Section 414(m) of the
Code.
The Company has made available to ICC or its counsel prior to the
date of this Agreement correct and complete copies of (i) any employment
agreements and any procedures and policies relating to the employment of
employees of the Company and the use of temporary employees and independent
contractors by the Company (including summaries of any procedures and policies
that are unwritten), (ii) plan instruments and amendments thereto for all
Employee Benefit Plans and related trust agreements, insurance and other
contracts, summary plan descriptions, summaries of material modifications and
material communications distributed to the participants of each Plan, (iii) to
the extent annual reports on Form 5500 are required with respect to any Employee
Benefit Plan, the three most recent annual reports and attached schedules for
each Employee Benefit Plan as to which such report is required to be filed and
(iv) where applicable, the most recent (A) opinion, notification and
determination letters, (B) audited financial statements, (C) actuarial valuation
reports and (D) nondiscrimination tests performed under the Code (including
401(k) and 401(m) tests) for each Employee Benefit Plan.
(b) Neither the Company nor any ERISA Affiliate maintains or has
ever maintained an Employee Benefit Plan subject to Title IV of ERISA.
(c) To the knowledge of the Company or any of the Sellers, with
respect to each Employee Benefit Plan, (i) no party in interest or disqualified
person (as defined in Section 3(14) of ERISA and Section 4975 of the Code,
respectively) has at any time engaged in a transaction which could subject ICC
or the Company, directly or indirectly, to a tax, penalty or liability for
prohibited transactions imposed by ERISA or the Code and (ii) no fiduciary (as
defined in Section 3(21) of ERISA) with respect to any Employee Benefit Plan, or
for whose conduct the Company could have any liability (by reason of indemnities
or otherwise), has breached any of the responsibilities or obligations imposed
upon the fiduciary under Title I of ERISA.
(d) Each Employee Benefit Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA (a "Pension Plan") and which
is subject to Sections 201, 301 or 401 of ERISA has received a favorable
determination letter from the Internal Revenue Service covering all amendments
required by the Tax Reform Act of 1986 and prior legislation and, to the
knowledge of the Company or any of the Sellers, there are no circumstances that
are reasonably likely to result in revocation of any such favorable
determination letter. To the knowledge of the Company or any of the Sellers,
each Employee Benefit Plan is and has been operated in all material respects in
compliance with its terms and all
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applicable laws, and by its terms can be amended and/or terminated at any time.
As of and including the Closing Date, the Company shall have made all
contributions required to be made by them up to and including the Closing Date
with respect to each Employee Benefit Plan, or adequate accruals therefor will
have been provided for and will be reflected on the Financial Statements
provided to ICC by the Company. All notices, filings and disclosures required by
ERISA or the Code (including notices under Section 4980B of the Code) have been
timely made.
(e) Neither the Company nor any of the Sellers has received or is
aware of any actions, claims (other than routine claims for benefits), lawsuits
or arbitrations pending or, to the knowledge of the Company or any of the
Sellers, threatened with respect to any Employee Benefit Plan or against any
fiduciary of any Employee Benefit Plan, and neither the Company nor any of the
Sellers has knowledge of any facts that could give rise to any such actions,
claims, lawsuits or arbitrations. To the knowledge of the Company or any of the
Sellers, there has not occurred any circumstances by reason of which the Company
may be liable for an act, or a failure to act, by a fiduciary with respect to
any Employee Benefit Plan.
(f) No Employee Benefit Plan provides for medical or health benefits
(through insurance or otherwise) or provides for the continuation of such
benefits or coverage for any participant or any dependent or beneficiary of any
participant after such participant's retirement or other termination of
employment except as may be required by Part 6 of Subtitle B of Title I of ERISA
and Section 4980B of the Code ("COBRA").
(g) Neither the Company or any ERISA Affiliate has ever contributed
to, or withdrawn in a partial or complete withdrawal from, any "multiemployer
plan" (as defined in Section 3(37) of ERISA) or has any fixed or contingent
liability under Section 4204 of ERISA.
(h) No Employee Benefit Plan is a "multiple employer plan" as
described in Section 3(40) of ERISA or Section 413(c) of the Code.
(i) No Employee Benefit Plan, other than a "pension plan" within the
meaning of Section 3(2) of ERISA ("Pension Plan"), is funded through a trust
intended to be exempt from tax pursuant to Section 501 of the Code.
(j) Except as provided in Section 4.19 of the Disclosure Schedule,
no person or entity has an employment, severance, consulting or independent
contractor agreement with the Company. No "leased employee" (within the meaning
of Section 414(n) or (o) of the Code) performs any material services for the
Company.
Except as set forth in Section 4.19 of the Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will not result
in (i) any payment (including severance, unemployment compensation, golden
parachute or bonus payments or otherwise) becoming due to any director, officer,
employee or consultant of the Company, (ii) any increase in the amount of
compensation or benefits payable in respect of any director, officer, employee
or consultant of the Company or (iii) accelerate the vesting or timing of
payment of any benefits or compensation payable in respect of any director,
officer, employee or consultant of the Company. No Employee Benefit Plan
provides benefits or payments contingent upon, triggered by or increased as a
result of a change in the ownership or effective control of the Company.
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4.20 LABOR RELATIONS
(a) The Company believes it has satisfactory relationships with its
employees.
(b) The Company is in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours and is not engaged in any unfair
labor practice.
(c) None of the Company's employees are covered by a collective
bargaining agreement. No employees of the Company are on strike or threatening
any strike or work stoppage, and there is no pending union representation
election or negotiation of a collective bargaining agreement. The Company is not
involved in any material controversy with any of its employees.
(d) To the knowledge of the Company or any of the Sellers, there are
no complaints or charges against the Company pending before the National Labor
Relations Board or any state or local labor agency and no complaints or charges
have been filed or threatened to be filed against the Company with any such
board or agency.
(e) To the knowledge of the Company or any of the Sellers, no
charges with respect to or relating to the business of the Company are pending
before the Equal Employment Opportunity Commission or any state or local agency
responsible for the prevention of unlawful employment practices.
(f) Section 4.20 of the Disclosure Schedule accurately sets forth
all unpaid severance which, as of the date hereof, is due or claimed, in
writing, to be due from the Company to any Person whose employment with the
Company was terminated.
(g) The Company has paid all wages which are due and payable to each
employee and each independent contractor of the Company.
4.21 INTELLECTUAL PROPERTY RIGHTS
(a) As used herein, the term "Intellectual Property Assets" shall
mean all worldwide industrial and intellectual property rights that are owned by
the Company or that are used pursuant to a license or other right granted by a
third party, including, without limitation, patents, patent applications, patent
rights, trademarks, trademark applications, trademark rights, service marks,
service mark applications, service mark rights, copyrights, copyright
applications, trade names, unfair competition rights, franchises, licenses,
inventories, know-how, trade secrets, rights of publicity, customer lists,
proprietary information, technologies, processes and formulae, all source and
object code, algorithm, architecture, structure, display screens, layouts,
inventions, development tools, and all documentation and media constituting,
describing or relating to the above, including, without limitation, manuals,
memoranda and records in any format, whether hard copy or machine-readable only.
(b) Except as set forth in Section 4.21(b) of the Disclosure
Schedule, the Company is the sole legal and beneficial owner, free and clear of
any Encumbrance, of the entire right, title and interest in and to, or has the
right to use, pursuant to valid and effective
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agreements, the Intellectual Property Assets used in the conduct of the
Company's business as presently conducted and such rights to use, sell or
license are sufficient for such conduct of its business. The execution, delivery
and performance of this Agreement and the consummation of the transaction
contemplated hereby will not constitute a breach of any Contract involving any
of the Company's Intellectual Property Assets, will not cause the forfeiture or
termination or give rise to a right of forfeiture or termination of any
Intellectual Property Asset or impair the rights of the Company to use its
Intellectual Property Assets or any portion thereof, as presently used, except
where such breach, forfeiture, termination or impairment would not have a
Material Adverse Effect.
(c) Set forth in Section 4.21(c) of the Disclosure Schedule is a
complete and correct list of (i) all patents and patent applications owned by
the Company worldwide, (ii) all trademark and service mark registrations and all
trademark and service mark applications and all trade names owned by the Company
worldwide, (iii) all copyright registrations and copyright applications owned by
the Company worldwide and (iv) all material licenses owned by the Company in
which the Company is (A) a licensor with respect to any of the patents,
trademarks, service marks, trade names or copyrights listed in Section 4.21(c)
of the Disclosure Schedule or (B) a licensee of any other person's patents,
trade names, trademarks, service marks or copyrights. The Company has made all
necessary filings and recordations to protect and maintain its interests in the
patents, patent applications, trademark and service mark registrations,
trademark and service mark applications, trade names, copyright registrations
and copyright applications and licenses set forth in Section 4.21(c) of the
Disclosure Schedule where the failure to so file or record would have a Material
Adverse Effect.
(d) Except as set forth in Section 4.21(d) of the Disclosure
Schedule, each patent, patent application, trademark or service mark
registration, trademark or service mark application and copyright registration
or copyright application of the Company set forth in Section 4.21(c) of the
Disclosure Schedule, is valid and subsisting and has not been judged invalid,
unregistrable or unenforceable, in whole or in part, and is valid, registrable
and enforceable. Each license of the Company identified in Section 4.21(c) of
the Disclosure Schedule is valid, subsisting and enforceable and has not been
adjudged invalid or unenforceable, in whole or in part. The Company has not made
a previous assignment, transfer or Contract constituting a present or future
assignment, transfer or Encumbrance of any material Intellectual Property Asset.
Except as listed in Section 4.21(d) of the Disclosure Schedule and except for
the sale of licenses in the Company's software to customers in the ordinary
course of business, the Company has not granted any license, release, covenant
not to sue, or non-assertion assurance to any person with respect to any part of
the Intellectual Property Assets.
(e) Except as set forth in Section 4.21(e) of the Disclosure
Schedule, no use of the Intellectual Property Assets by the Company, nor the
manufacture, marketing, license, sale or use of any product or service currently
licensed or sold by the Company or currently under development by the Company
violates any license agreement between the Company and any third party or
infringes any proprietary rights of any third party and there is no pending or
threatened claim or litigation contesting the validity, ownership or right to
use, sell, license or dispose of any Intellectual Property Asset nor is there
any basis for any such claim, nor has the Company received any notice asserting
that any of the Company's Intellectual Property Assets
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or products, or the proposed use, sale, license or disposition thereof,
conflicts or will conflict with the rights of any other party, nor is there any
basis for any such assertion.
(f) Except as set forth in Section 4.21(f) of the Disclosure
Schedule, to the knowledge of the Company or any of the Sellers, there is no
unauthorized use, infringement or misappropriation of any of the Company's
Intellectual Property Assets by any third party, including any employee or
former employee of the Company, that would have a Material Adverse Effect.
(g) There are no royalties, honoraria, fees or other fixed or
contingent amounts or payments payable by Company to any person with respect to
any Intellectual Property Assets.
(h) The Company believes it has taken reasonable and practicable
steps designed to safeguard and maintain the secrecy and confidentiality of, and
the Company's proprietary rights in, the Intellectual Property Assets. To the
knowledge of the Company or any of the Sellers, no current or prior officers,
employees or consultants of or to the Company claims or has a right to claim an
ownership interest in any Intellectual Property Assets as a result of having
been involved in the development or licensing of any such property while
employed by or consulting to the Company, or otherwise.
(i) Section 4.21(i) of the Disclosure Schedule lists all products
and services of the Company sold or licensed by the Company in 1999. Section
4.21(i) of the Disclosure Schedule sets forth, for each product and service, the
following information: (i) as to any Contract under which compliance or
performance continues to be required, the advances paid or payable, and the
royalties or other sums payable, to any third parties with respect to such
product or service and (ii) a list of third parties with distribution rights to
such product or service together with a description of: (a) the territory in
which the third party has distribution rights and (b) whether such distribution
rights are exclusive or nonexclusive.
(j) Any software products or services currently provided by the
Company which incorporate any date-related information or otherwise process any
date-related information, provide, among other things, the following
functionality: (i) accurate processing of date-related information before,
during and after January 1, 2000, including accepting the date input, providing
the date output and performing calculations on dates or portions of dates, (ii)
accurate functioning without interruption before, during and after January 1,
2000 without any change in operation associated with the advent of the new
century, (iii) ability to respond to two-digit date input in a way that resolves
any ambiguity as to century in a disclosed, defined and predetermined manner and
(iv) the ability to store and provide output date information in ways that are
unambiguous as to century, except where the failure to so provide would not have
a Material Adverse Effect.
(k) Each employee of or consultant to the Company who has or is
proposed to have access to the Company's source code or any material
confidential and proprietary information of the Company, each of whom is listed
on Section 4.21(k) of the Disclosure Schedule, has executed and delivered, or
will execute and deliver prior to the Closing, an agreement with the Company
relating to non-competition, non-disclosure, proprietary
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information and invention assignment in form and substance reasonably designed
to safeguard and maintain the confidentiality of, and the Company's proprietary
rights in, such information.
4.22 CERTAIN PAYMENTS
Neither the Company nor any director, officer, agent or employee of the
Company or, to the knowledge of the Company or any of the Sellers, any other
Person associated with or acting for or on behalf of the Company has directly or
indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment to any Person, private or public, regardless
of form, whether in money, property or services (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment for business
secured, (iii) to obtain special concessions, or for special concessions already
obtained, for or in respect of the Company or any affiliate of the Company or
(iv) in violation of any legal requirement or (b) established or maintained any
fund or asset that has not been recorded in the books and records of the
Company.
4.23 RELATIONSHIPS WITH RELATED PERSONS; USE OF NAME
(a) Except as set forth in Section 4.23 of the Disclosure Schedule,
none of the Sellers, or any officer, director or employee of the Company, or any
spouse or child of any of them or any Person associated with any of them (a
"Related Person") has any interest in any material property or asset used in or
pertaining to the business of the Company. None of the Sellers or any Related
Person is a party to any Contract with, or has any claim or right against, the
Company, except employment or consulting agreements listed in Section 4.19(j) of
the Disclosure Schedule and other arrangements listed in Section 4.23 of the
Disclosure Schedule.
(b) The business carried on by the Company has been conducted by the
Company directly and not through any Related Person or through any other Person.
As between the Company and the Sellers, the Company owns and has the exclusive
right, title and interest in and to the name "Intercoastal Data Corporation".
4.24 BROKERS OR FINDERS
Neither the Company nor any of the Sellers nor their respective agents has
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or financial advisory services or other
similar payment in connection with this Agreement.
4.25 DEPOSIT ACCOUNTS
Section 4.25 of the Disclosure Schedule contains a true, correct and
complete list of (a) the name of each financial institution in which the Company
has an account or safe deposit box, (b) the names in which each account or box
is held, (c) the type of account and (d) the name of each person authorized to
draw on or have access to each account or box.
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4.26 INVESTMENT SECURITIES.
Section 4.26 of the Disclosure Schedule sets forth a complete and correct
list of all securities (including warrants) included in the IDC Portfolio. The
Company has good and marketable title to all such securities, free and clear of
any Lien. All of such securities that are equity securities are publicly traded
on a national securities exchange or on the NASDAQ Market and none is subject to
any restriction on sale or other transfer under applicable securities laws.
4.27 DISCLOSURE
No representation or warranty of the Company or any of the Sellers
contained in this Agreement and no statement in the Disclosure Schedule is
inaccurate in any material respect or omits to state a material fact necessary
to make the statements herein or therein, in light of the circumstances under
which they were made, not misleading.
4.28 RESALE REGISTRATION STATEMENT
The information supplied in writing by the Sellers with respect to the
Sellers and the Company and their respective officers, directors, stockholders
and other affiliates (collectively, the "Company Information") for inclusion in
the Resale Registration Statement shall not at the time the Resale Registration
Statement is declared effective by the Commission contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding the
foregoing, the Sellers and the Company make no representation or warranty with
respect to any information supplied by ICC which is contained or incorporated by
reference in, or furnished in connection with the preparation of, the Resale
Registration Statement.
4.29 KNOWLEDGE OF SELLERS
Notwithstanding anything to the contrary contained in this Agreement, but
without limiting Sellers' obligations pursuant to Section 11.2(a)(i) for a
breach of a representation or warranty by the Company, each of Bill Lofton,
Hollis B. Johnson, Stanley Parkman and Byrl Pointer make the representations and
warranties set forth in this Section 4 only to the best of such Seller's
knowledge.
5. REPRESENTATIONS AND WARRANTIES OF ICC
ICC represents and warrants to the Company and the Sellers as follows:
5.1 ORGANIZATION AND GOOD STANDING
ICC is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. ICC has full corporate power and
authority to conduct its business as it is now being conducted and to own or use
the properties and assets that it purports to own or use. ICC is duly qualified
to do business as a foreign corporation and is in good standing under the laws
of each state or other jurisdiction in which either the ownership or use of the
properties
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owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect on ICC.
5.2 AUTHORITY; NO CONFLICT
(a) ICC has the corporate power and authority to execute and deliver
this Agreement, to consummate the Merger and to perform its obligations under
this Agreement. This Agreement has been duly authorized and approved, executed
and delivered by ICC and constitutes the legal, valid and binding obligation of
ICC, enforceable against ICC in accordance with its terms except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws at
the time in effect affecting the enforceability or rights of creditors generally
and by general equitable principles that may limit the right to obtain equitable
remedies.
(b) Neither the execution and delivery of this Agreement by ICC nor
the consummation or performance by ICC of the Merger or any of the other
transactions contemplated hereby will, directly or indirectly (with or without
notice or lapse of time or both):
(i) contravene, conflict with, or result in a violation or
breach of (A) any provision of the Organizational Documents of ICC, (B) any
resolution adopted by the board of directors (or any committee thereof) or the
stockholders of ICC, (C) any legal requirement or any order to which ICC or any
of the properties or assets owned or used by it may be subject or (D) any
Governmental Permit held by ICC;
(ii) result in a breach of or constitute a default, give rise
to a right of termination, cancellation or acceleration, create any entitlement
to any payment or benefit, or require the consent or approval of or any notice
to or filing with any third party, under any Contract to which ICC is a party or
by which its properties or assets are bound, or require the consent or approval
of or any notice to or filing with any Governmental Authority to which either
ICC or its assets are subject; or
(iii) result in the imposition or creation of any Encumbrance
upon or with respect to any of the properties or assets owned or used by ICC,
except, with respect to clause (i) (C) or (D), (ii) or (iii) of this Section
5.2, where any such contravention, conflict, violation, breach, default,
termination right, cancellation or acceleration right or Encumbrance could not
reasonably be expected to have a Material Adverse Effect on ICC or could not
reasonably be expected to adversely affect the ability of ICC to consummate the
Merger or the other transactions contemplated by this Agreement.
5.3 CAPITALIZATION; ICC SHARES
(a) The authorized capital stock of ICC consists of (i) 5,000,000
shares of preferred stock, $.01 par value per share, of which 10,000 shares have
been designated Series A Convertible Redeemable Preferred Stock, of which as of
the date of this Agreement 768 shares were issued and outstanding, and 10,000
shares have been designated Series C Convertible Redeemable Preferred Stock, of
which as of the date of this Agreement 10,000 shares were issued and
outstanding, (ii) 40,000,000 shares of ICC Common Stock, of which as of July 14,
2000, 6,357,301 shares were issued and outstanding, and (iii) 2,000,000 shares
of Class B
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Common Stock, $.01 par value per share, of which as of July 14, 2000, 3,218
shares were issued and outstanding.
(b) The ICC Shares issuable as a result of the Merger have been duly
authorized and upon the Effective Time and any subsequent date of issuance, will
be validly issued, fully paid and nonassessable and designated for quotation on
The Nasdaq SmallCap Market.
5.4 FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION
(a) ICC has delivered to each Seller correct and complete copies of
its Prospectus dated March 28, 2000 as filed with the Commission pursuant to
Rule 424(b) under the Securities Act (the "Prospectus"), its Annual Report on
Form 10-KSB for the year ended July 31, 1999 (the "Form 10-KSB") and its
Quarterly Reports on Form 10-QSB for the quarters ended October 31, 1999,
January 31, 1999 and April 30, 2000 (the "Forms 10-QSB"). The Prospectus, the
Form 10-KSB and the Forms 10-QSB (the "ICC SEC Reports") have been timely filed
pursuant to the Securities Act or the Exchange Act, as applicable.
(b) The Prospectus, the Form 10-KSB and the Forms 10-QSB complied as
to form in all material respects with the requirements of the Securities Act and
the Exchange Act, as applicable, in effect on the respective dates thereof. None
of the Prospectus, the Form 10-KSB or the Forms 10-QSB, when filed pursuant to
the Securities Act or the Exchange Act, as applicable, contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(c) Each of the financial statements (including the related notes)
included in the Form 10-KSB and the Forms 10-QSB presents fairly, in all
material respects, the consolidated financial position and consolidated results
of operations and cash flows of ICC as of the respective dates or for the
respective periods set forth therein, all in conformity with GAAP consistently
applied during the periods involved, except as otherwise noted therein, and
subject, in the case of any unaudited interim financial statements included
therein, to normal year-end adjustments and to the absence of complete
footnotes.
5.5 NO MATERIAL ADVERSE CHANGE
Since July 31, 1999, there has not been any material adverse change in the
business, operations, properties, prospects, liabilities, results of operations,
assets or condition (financial or otherwise) of ICC taken as a whole. Certain
recent developments involving ICC are described in Section 5.5 of the disclosure
schedule delivered by ICC to the Company.
5.6 LEGAL PROCEEDINGS
Except as set forth in Section 5.6 of the disclosure schedule delivered by
ICC to the Company, there is no pending Proceeding against ICC that challenges,
or that may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by this Agreement. To the
knowledge of ICC, no such Proceeding has been threatened in writing.
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5.7 BROKERS OR FINDERS
Neither ICC nor any of its officers and agents has incurred any obligation
or liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or financial advisory services or other similar payment in
connection with this Agreement, except for fees that will be paid by ICC.
5.8 RESALE REGISTRATION STATEMENT
Subject to the accuracy of the representations of the Company in Section
4.29, the Resale Registration Statement pursuant to which the ICC Shares will be
registered with the Commission shall not at the time the Resale Registration
Statement is declared effective by the Commission contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading. Any
preliminary prospectus or final prospectus contained in the Resale Registration
Statement, and any amendments or supplements thereto, as of their respective
dates, shall not contain any untrue statement of a material fact or omit to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, ICC makes no representation or warranty with
respect to any Company Information which is contained or incorporated by
reference in, or furnished in connection with the preparation of, the Resale
Registration Statement.
6. COVENANTS OF THE COMPANY AND THE SELLERS
The Company and each of the Sellers, jointly and severally (except
Sections 6.9 and 6.11, which shall be several and not joint), covenant and agree
with ICC as follows:
6.1 NORMAL COURSE
From the date of this Agreement until the Closing, the Company will and
the Sellers will cause the Company to: (a) maintain its corporate existence in
good standing, (b) maintain the general character of its business, (c) use all
reasonable commercial efforts to maintain in effect all of its presently
existing insurance coverage (or substantially equivalent insurance coverage),
preserve its business organization substantially intact, keep the services of
its present principal employees and preserve its present business relationships
with its material suppliers and customers, (d) permit ICC, its accountants,
legal counsel and other representatives full access to the Company's management,
minute books and stock transfer records, other books and records, Contracts,
properties and operations at all reasonable times and upon reasonable notice and
(e) in all respects conduct its business in the usual and ordinary manner
consistent with past practice and perform in all material respects all
agreements or other obligations with banks, customers, suppliers, employees and
others.
6.2 CONDUCT OF BUSINESS
Without limiting the provisions of Section 6.1, from the date of this
Agreement until the Closing, the Company will not, and the Sellers will cause
the Company not to, without the prior written consent of ICC:
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(a) take or fail to take any action that, if it had occurred after
the Balance Sheet Date and prior to the date of this Agreement would be required
to be disclosed in Section 4.14 of the Disclosure Schedule, except for the
distribution contemplated by Section 2.12;
(b) amend or otherwise modify its Organizational Documents;
(c) pay any material Liability, except for any current Liabilities
and the current portion of any long term Liabilities shown on the Financial
Statements (or not required as of the date thereof to be shown thereon in
accordance with GAAP) or incurred since the Balance Sheet Date in the ordinary
course of business consistent with past practice and Liabilities required to be
paid pursuant to Section 6.6;
(d) make any material loan or advance to any Person other than
travel and other similar routine advances in the ordinary course of business
consistent with past practice;
(e) make any capital expenditure or capital addition or betterment
in amounts which exceed $25,000 in the aggregate, except as contemplated in
capital budgets in effect on the date of this Agreement;
(f) acquire any security as part of the IDC Portfolio or otherwise
(except as a result of a stock split or dividend for no consideration payable by
the Company) or contribute any cash to or, within four days prior to the
Effective Time, withdraw any cash from the IDC Portfolio; or
(g) enter into any commitment to do any of the foregoing.
6.3 CERTAIN FILINGS
The Company (prior to the Effective Time) and the Sellers agree to
cooperate with ICC with respect to all filings with regulatory authorities that
are required to be made, respectively, by any of the Sellers or by the Company
to carry out the transactions contemplated by this Agreement, including
providing information and cooperating in the preparation and filing of the
Resale Registration Statement (or such other form as may be appropriate). The
Sellers shall assist and shall cause the Company to assist ICC in making all
such filings, applications and notices as may be necessary or desirable in order
to obtain the authorization, approval or consent of any governmental entity
which may be reasonably required or which ICC may reasonably request in
connection with the consummation of the transactions contemplated by this
Agreement.
6.4 CONSENTS AND APPROVALS
The Company (prior to the Effective Time) and the Sellers shall use their
respective reasonable commercial efforts to obtain as promptly as practicable
all consents, authorizations, approvals and waivers required in connection with
the consummation of the transactions contemplated by this Agreement.
6.5 BEST EFFORTS TO SATISFY CONDITIONS
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The Company and the Sellers shall use their reasonable commercial efforts
to cooperate with ICC for purposes of satisfying the conditions set forth in
Sections 8 and 9 that are within their control.
6.6 INTERCOMPANY PAYMENTS
All loans, payables and other amounts due to or from the Company and its
affiliates as listed in Section 6.6 of the Disclosure Schedule shall be paid in
full, written off or adjusted to zero balances at or prior to the Closing. Such
amounts due may be paid from cash on hand or as may otherwise be available to
the Company from existing lines of credit with third party lenders.
6.7 NOTIFICATION OF CERTAIN MATTERS
The Company (prior to the Effective Time) and each Seller shall promptly
notify ICC of (i) the occurrence or non-occurrence of any fact or event of which
such Seller or the Company has knowledge which would be reasonably likely (A) to
cause any representation or warranty of such Seller or the Company contained in
this Agreement or the Disclosure Schedule to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Closing Date
or (B) to cause any covenant, condition or agreement of such Seller or the
Company in this Agreement not to be complied with or satisfied in any material
respect and (ii) any failure of such Seller or the Company to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder in any material respect; provided; however, that no such
notification shall affect the representations or warranties of the Sellers or
the Company or the right of ICC to rely thereon, or the conditions to the
obligations of ICC. The Company shall give prompt notice to ICC of any notice or
other communication from any third party (prior to the Effective Time) alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement.
6.8 TAX TREATMENT
The Company and each Seller agrees not to take any action that would
jeopardize treatment of the Merger as a tax-free reorganization as described in
Section 2.11.
6.9 RESTRICTIVE COVENANTS
(a) Scope and Reasonableness. Each Seller acknowledges that ICC
would not consummate the transactions contemplated by this Agreement without the
assurance that such Seller will not engage in the activities prohibited by this
Section 6.9 as and for the period set forth below. In order to induce ICC to
consummate the transactions contemplated by this Agreement, each Seller agrees
to restrict his actions and activities throughout the United States and Canada
(the "Territory") as provided in this Section 6.9. Each Seller acknowledges and
agrees that the restrictions in this Section 6.9 are reasonable in light of the
benefits of the transactions contemplated by this Agreement to such Seller.
(b) Non-competition. Each Seller hereby covenants and agrees that
from the Closing Date until the second (2nd) anniversary of the Closing Date, it
will not in the Territory, directly or indirectly, (a) engage on its own behalf
in the IDC Business (as hereinafter defined) or (b) own any interest in or
engage in or perform any service for any Person, either as a partner,
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owner, employee, consultant, agent, officer, director or shareholder, that (A)
derives a meaningful portion of its revenues from the IDC Business or (B) is a
meaningful competitor in the IDC Business. Notwithstanding any provision of this
Section 6.9(b), it shall not be a violation of this Section 6.9(b) for a Seller
to own two percent (2%) or less of a public company, provided that, such Seller
does not exert or have the power to exert any management or other control over
such public company. The IDC Business means the development, sale, marketing or
other exploitation of business-to-business electronic data interchange
standards-based applications for standard-based EDI exchange over value-added
networks, private networks Intranets, Extranets or the Internet.
(c) Non-Solicitation. Each Seller hereby covenants and agrees that
from the Closing Date through the second (2nd) anniversary of the Closing Date,
it will not induce or attempt to induce, in any manner, directly or indirectly,
any employee, agent, representative, customer or any other person or concern
dealing with or in any way associated with the Company to terminate or to
modify, in any fashion to the material detriment of the Company, such
association with the Company. Each Seller acknowledges that the provisions of
Sections 6.9(b) and this Section 6.9(c) are such Seller's separate agreement.
(d) Remedies. Each Seller's agreements contained in this Section 6.9
relate to matters of unique character and peculiar value impossible of
replacement, that breach of such agreements by such Seller will cause the
Company great and irreparable injury, that the remedy at law for any breach of
the agreements contained in this Section 6.9 will be inadequate and that ICC, in
addition to any other remedy available to it, shall be entitled to temporary
restraining orders and temporary and permanent injunctive relief or other
equitable relief without the necessity of proving actual damage or of providing
a bond so as to prevent a breach or threatened breach of any of the agreements
contained in this Section 6.9 and to secure the enforcement thereof.
6.10 COMPANY SHAREHOLDERS MEETING
The Company shall call the Company Shareholders Meeting as promptly as
practicable for the purpose of voting upon the approval of this Agreement. The
Company shall take all reasonable action necessary or advisable to secure the
vote or consent of the shareholders of the Company in favor of approval of this
Agreement and shall not take any action that could reasonably be expected to
prevent the vote or consent of stockholders in favor of such approval. The Board
of Directors of the Company shall unanimously recommend approval of this
Agreement prior to the Company Shareholders Meeting, and such recommendations
shall not be withdrawn, modified or changed in a manner and adverse to ICC.
6.11 AGREEMENT TO VOTE COMPANY CAPITAL STOCK
Each of the Sellers shall, at any meeting of the shareholders of the
Company prior to the Effective Time, however called, vote, or shall execute a
written consent with respect to all of, its shares of Company Capital Stock (a)
in favor of this Agreement, (b) against any action or agreement that would
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of the Company or the Sellers under this Agreement and
(c) against any action or agreement (other than this Agreement) that would
impede, interfere with, delay,
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postpone or attempt to discourage the Merger, including, but not limited to: (i)
any extraordinary corporate transaction, such as a merger, consolidation or
other business combination involving the Company, (ii) a sale or transfer of a
material amount of assets of the Company or a reorganization, recapitalization
or liquidation of the Company, except as provided in this Agreement, (iii) any
change in the management or board of directors of the Company, except as
otherwise agreed to in writing by ICC, (iv) any material change in the present
capitalization or dividend policy of the Company, except as provided in this
Agreement or (v) any other material change in the Company's corporate structure
or business, except as provided in this Agreement.
6.12 AGREEMENT TO COOPERATE
The Company and each Seller shall provide to ICC such financial (including
financial statements) and other information concerning the Company, and shall
otherwise fully cooperate with ICC, in connection with the preparation and
filing with the Commission of any registration statement, report or other
document required to be filed by ICC. All such information provided by the
Sellers to ICC in writing for use in any such statement, report or other
document shall be true and correct and none shall contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein, or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.13 DISTRIBUTION OF REAL ESTATE
Immediately prior to the Closing, the Company shall contribute to IDC
Realty the land and building described in Section 6.13 of the Disclosure
Schedule and upon the Effective Time the Sellers shall cause IDC Realty to enter
into the Lease with ICC.
7. COVENANTS OF ICC
ICC covenants and agrees with the Company and the Sellers as follows:
7.1 NORMAL COURSE
From the date of this Agreement until the Closing, ICC will: (a) maintain
its corporate existence in good standing, (b) maintain the general character of
its business, (c) use all reasonable commercial efforts to maintain in effect
all of its presently existing insurance coverage (or substantially equivalent
insurance coverage), preserve its business organization substantially intact,
keep the services of its present principal employees and preserve its present
business relationships with its material suppliers and customers, (d) permit the
Company, the Sellers, their accountants, their legal counsel and their other
representatives full access to its management, minute books and stock transfer
records, other books and records, Contracts, properties and operations at all
reasonable times and upon reasonable notice and (e) in all respects conduct its
business in the usual and ordinary manner consistent with past practice and
perform in all material respects all agreements or other obligations with banks,
customers, suppliers, employees and others.
7.2 CERTAIN FILINGS
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ICC agree to make or cause to be made all filings with regulatory
authorities that are required to be made by ICC or its affiliates to carry out
the transactions contemplated by this Agreement.
7.3 BEST EFFORTS TO SATISFY CONDITIONS
ICC agrees to use its commercially reasonable efforts to satisfy the
conditions set forth in Sections 8 and 9 that are within its control.
7.4 NOTIFICATION OF CERTAIN MATTERS
ICC shall promptly notify the Company and the Sellers of (i) the
occurrence or non-occurrence of any fact or event of which ICC has knowledge
which would be reasonably likely (A) to cause any representation or warranty of
ICC contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Closing Date or (B) to cause any
covenant, condition or agreement of ICC in this Agreement not to be complied
with or satisfied in any material respect and (ii) any failure of ICC to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder in any material respect; provided, however, that no
such notification shall affect the representations or warranties of ICC, or the
Company's or the Sellers' right to rely thereon, or the conditions to the
obligations of the Company and the Sellers. ICC shall give prompt notice to the
Company and the Sellers of any notice or other communication from any third
party alleging that the consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement.
7.5 TAX TREATMENT
ICC agrees not to take any action that would jeopardize treatment of the
Merger as a tax-free reorganization as described in Section 2.11.
7.6 REGISTRATION OF ICC COMMON STOCK
(a) ICC shall file no later than the later of (i) forty-five (45)
days after the Closing Date, and (ii) ten (10) days after ICC receives all
information from the holders of ICC shares covered thereby which it deems
reasonably necessary to file, and use its reasonable commercial efforts to cause
to become effective as promptly as possible thereafter, a registration statement
on Form S-3 (the "Resale Registration Statement"), covering the resale of all of
the ICC Shares. Subject to Section 7.6(b), ICC agrees to use its commercially
reasonable efforts to keep the Resale Registration Statement with respect to the
ICC Shares continuously effective until all of such ICC Shares, (i) have been
disposed of under the Resale Registration Statement or any other effective
registration statement, (ii) have been sold or otherwise transferred pursuant to
Rule 144 under the Securities Act or (iii) are eligible for sale pursuant to
Rule 144 under the Securities Act and could be sold by the holder thereof in one
three-month period under Rule 144 under the Securities Act, whichever event
first occurs. Subject to Section 7.6(b), ICC further agrees to amend the Resale
Registration Statement if and as required by the rules, regulations or
instructions applicable to the registration form used by ICC for such Resale
Registration Statement or by the Securities Act or any rules and regulations
thereunder; provided; however, that ICC shall not be deemed to have used its
reasonable commercial efforts to keep the Resale Registration Statement
effective during the applicable period if it voluntarily takes any action
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that would result in the holder of ICC Shares not being able to sell the ICC
Shares covered thereby during that period, unless such action is required under
applicable law or ICC has filed a post-effective amendment to the Resale
Registration Statement and the Commission has not declared it effective or
except as permitted by Section 7.6(b). The "Plan of Distribution" section of the
Resale Registration Statement shall permit negotiated purchases, secondary
distributions, block trades, ordinary brokerage transactions or a combination of
such methods of sale.
(b) Notwithstanding the provisions of Section 7.6(a), if ICC
determines that, in its reasonable judgment, it would (because of the existence
of, or in anticipation of, any acquisition or corporate reorganization or other
transaction, financing activity, stock repurchase or development involving ICC
or any subsidiary or the unavailability for reasons substantially beyond ICC's
control of any required financial statements, or any other event or condition of
similar significance to the Company or any of its subsidiaries) be materially
disadvantageous (a "Material Development Condition") to ICC for the Resale
Registration Statement to become effective or to be maintained effective or for
sales of ICC Shares to continue pursuant to the Resale Registration Statement,
ICC shall, notwithstanding Section 7.6(a), be entitled, upon the delivery or
transmission of a written notice from ICC (a "Delay Notice") to such effect to
all of the holders of ICC Shares included in the Resale Registration Statement,
(i) to delay filing or the effectiveness of the Resale Registration Statement
until the earlier of (x) the date that the Material Development Condition ceases
to exist, and (y) 90 days after the giving of the Delay Notice, (ii) to cause
sales of ICC Shares by such holders pursuant to the Resale Registration
Statement to cease or (iii) to cause the Resale Registration Statement to be
withdrawn and the effectiveness of the Resale Registration Statement to be
terminated; provided, however, that ICC shall be entitled to deliver no more
than two (2) Delay Notices in any twelve-month period; and provided, further,
however, that ICC shall not be entitled to deliver a Delay Notice prior to the
expiration of ten business days after the Resale Registration Statement has been
declared effective by the Commission and ICC has first furnished Sellers with
copies of the final prospectus relating thereto as required by Section 7.6(f).
In the event a Resale Registration Statement is filed and subsequently withdrawn
by reason of any existing or anticipated Material Development Condition as
herein before provided, ICC shall cause a new Resale Registration Statement
covering resales by the holders of the ICC Shares to be filed with the
Commission not later than 30 days after the date on which such Material
Development Condition ceases to exist and to use its reasonable commercial
efforts to cause such new Resale Registration Statement to become effective as
soon as practicable after such Material Development Condition ceases to exist.
(c) Any other holder of ICC's securities who has registration rights
may include its securities in the Resale Registration Statement; provided;
however, that holders of ICC Shares shall have priority sale rights over the
Company and such other holders.
(d) ICC shall notify the Sellers promptly (i) when the Resale
Registration Statement has been filed and when it has become effective, (ii) of
any request by the Commission for amendments or supplements to the Resale
Registration Statement or for additional information, (iii) of the issuance by
the Commission of any comments with respect to any filing, (iv) of any stop
order suspending the effectiveness of the Resale Registration Statement or the
initiation of any proceedings for that purpose, (v) of any suspension of the
qualification of the ICC Common Stock covered by the Resale Registration
Statement for sale in
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any jurisdiction or the initiation or threatening of any proceeding for such
purpose and (vi) if there is a misstatement or omission of a material fact in
the Resale Registration Statement, or any document incorporated therein by
reference, or if any event occurs which requires the making of any changes in
the Resale Registration Statement or any document incorporated therein by
reference in order to make the statements therein (in the case of any
prospectus, in the light of the circumstances under which they were made) not
misleading.
(e) ICC shall use its reasonable commercial efforts to register or
qualify the ICC Shares covered by the Resale Registration Statement under the
securities or blue sky laws of such jurisdiction as the Sellers reasonably
request and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Sellers to consummate the disposition in
such jurisdictions of such shares; provided; however, that ICC will not be
required to qualify generally to do business, subject itself to general taxation
or consent to general service of process in any jurisdiction where it would not
otherwise be required to do so but for this paragraph (e).
(f) ICC shall furnish to the Sellers such number of copies of a
summary prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act in order to facilitate
the public sale or other disposition of the shares of ICC Common Stock covered
by the Resale Registration Statement.
(g) Each Seller agrees that, upon receipt from ICC of a Delay Notice
or any notice of the happening of any event of the kind described in clause
(ii), (iv), (v) or (vi) of Section 7.6(d), the Sellers will (x) deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in the Sellers' possession, of the prospectus covering ICC Shares current
at the time of receipt of such notice and (y) the Sellers will immediately
discontinue disposition of ICC Shares pursuant to the Resale Registration
Statement until (i) the Sellers are advised in writing by the Company that a new
Resale Registration Statement has become effective under the Securities Act or
(ii) the Sellers receive copies of any required supplemented or amended
prospectus, or until the Sellers are advised in writing by the Company that the
use of the prospectus may be resumed.
(h) All expenses incurred by ICC in complying with this Section 7.6,
including all registration and filing fees (including all expenses incident to
filing with the National Association of Securities Dealers, Inc.), fees and
expenses of complying with securities and blue sky laws, printing expenses and
fees and expenses of ICC's counsel and accountants, shall be paid by ICC;
provided, however, that all brokers commissions and other similar selling fees
and expenses in connection with the sales of the ICC Shares covered by the
Resale Registration Statement shall not be borne by ICC but shall be borne by
the Sellers.
(i) In connection with any Resale Registration Statement, ICC shall
indemnify and hold harmless the Sellers (and their respective heirs and personal
representatives) and any Person who controls a Seller (within the meaning of the
Securities Act) against any losses, claims, damages or liabilities, joint and
several (or actions in respect thereof), to which any of the foregoing persons
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Resale Registration Statement, any preliminary
prospectus or final prospectus contained therein
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or otherwise filed with the Commission, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or, with respect to any prospectus, necessary
to make the statements therein in the light of the circumstances under which
they were made not misleading and shall reimburse the Sellers (and their
respective heirs and personal representatives) and any such control Person for
any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided; however, that ICC shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Resale Registration Statement, preliminary
prospectus, final prospectus, amendment or supplement thereto in reliance upon
and in conformity with written information furnished to ICC through an
instrument duly executed by any Seller specifically for use in the preparation
thereof.
In connection with any Resale Registration Statement, the Sellers shall
indemnify and hold harmless and reimburse (in the same manner and to the same
extent as set forth in the preceding paragraph of this Section 7.6(i)) the
Company, each director of ICC, each officer of ICC who shall sign the Resale
Registration Statement and each person who controls any of the foregoing persons
within the meaning of the Securities Act with respect to any statement or
omission from the Resale Registration Statement, any preliminary prospectus or
final prospectus contained therein or otherwise filed with the Commission, or
any amendment or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information furnished to ICC
through an instrument duly executed by a Seller specifically for use in
connection with the preparation of the Resale Registration Statement,
preliminary prospectus, final prospectus, amendment or supplement; provided,
however, that the maximum amount of a Seller's liability in respect of such
indemnification shall be limited to an amount equal to the net proceeds actually
received by such Seller from the sale of ICC Shares effected pursuant to the
Resale Registration Statement.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 7.6, such indemnified party will, if a claim in
respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided; however, that if any indemnified
party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to
or conflict with those available to the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action on behalf of
such indemnified party with respect to such legal or equitable defenses and such
indemnifying party shall reimburse such indemnified party for that portion of
the fees and expenses of any one counsel retained by the indemnified party which
is reasonably related to the matters covered by the indemnity agreement provided
in this Section 7.6. Anything in this Section 7.6 to the contrary
notwithstanding, (i) an
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indemnifying party shall not settle any claim or action or consent to the entry
of any judgment therein unless the indemnified party is fully released and
discharged as a result thereof and (ii) an indemnified party shall not settle
any claim or action or consent to the entry of any judgment therein without the
prior written consent of the indemnifying party.
If the indemnification provided for in this Section 7.6 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, claim, damage, liability or action referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amounts paid or payable by such indemnified party as a
result of such loss, claim, damage, liability or action in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions which resulted in such loss, claim, damage, liability or action as
well as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Notwithstanding
the foregoing, the maximum amount which any Seller shall be required to
contribute pursuant to the provisions of this paragraph shall be limited to an
amount equal to the net proceeds actually received by such Seller from the sale
of ICC Shares effected pursuant to the Resale Registration Statement. No person
guilty of a fraudulent misrepresentation within the meaning of Section 11(f) of
the Securities Act shall be entitled to such contribution.
8. CONDITIONS TO OBLIGATIONS OF ICC
The obligations of ICC under this Agreement shall be subject to the
satisfaction, on or before the Closing Date, of each of the following
conditions:
8.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Company and the Sellers
contained in this Agreement or in the Disclosure Schedule or in any certificate
delivered pursuant to this Agreement that are qualified as to materiality (or
any variation on such term) shall be true and correct at and as of the Closing
Date as if made on the Closing Date, except where such representations and
warranties specifically relate to an earlier date, in which case they shall be
true and correct as of such earlier date, and any such representations and
warranties of the Company and the Sellers which are not so qualified shall be
true and correct in all material respects at and as of the Closing Date as if
made on the Closing Date, except where such representations and warranties
specifically relate to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date.
8.2 PERFORMANCE OF COVENANTS
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The Company and the Sellers shall have performed and complied with in all
material respects each covenant, agreement and condition required by this
Agreement to be performed or complied with by them prior to or on the Closing
Date.
8.3 LACK OF ADVERSE CHANGE
Since the date of this Agreement, there shall not have occurred any
incident or event, including the loss of any significant customer of the
Company, which, individually or in the aggregate, has had or is reasonably
likely to result in a Material Adverse Effect on the Company.
8.4 UPDATE CERTIFICATE
ICC shall have received favorable certificates, dated the Closing Date,
signed by the President of the Company and the Sellers as to the matters set
forth in Sections 8.1, 8.2 and 8.3.
8.5 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION
-------------------------------------------------
No order of any Governmental Authority shall be in effect that restrains
or prohibits any transaction contemplated by this Agreement or that would limit
or affect ICC's ownership or operation of the business of the Company; no suit,
action, investigation, inquiry or proceeding by any Governmental Authority shall
be pending or threatened against ICC, the Company or any Seller that challenges
the validity or legality, or that seeks to restrain the consummation, of the
transactions contemplated by this Agreement or that seeks to limit or otherwise
affect ICC's right to own or operate the business of the Company.
8.6 APPROVALS AND CONSENTS
All consents, waivers, approvals, authorizations or orders required to be
obtained, and all filings required to be made, by the Company for the
authorization, execution and delivery of this Agreement, the consummation by it
of the transactions contemplated by this Agreement shall have been obtained and
made by the Company, except where the failure to receive such consents, waivers,
approvals, authorizations or orders would not have a Material Adverse Effect on
the Company.
8.7 OPINION OF COUNSEL
The Sellers and the Company shall have delivered to ICC an opinion of King
& Spalding, dated the Closing Date and addressed to ICC, as to the matters set
forth on Exhibit 8.7.
8.8 SHAREHOLDER APPROVAL
This Agreement shall have been duly approved at or prior to the Effective
Time of the Merger by the requisite vote of the Company Shareholders in
accordance with the GBCC.
8.9 DISSENTING SHAREHOLDERS
As of the Closing, the Dissenting Shareholders shall hold, collectively,
no more than 21% of the shares of the Common Stock of the Company.
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8.10 EXECUTION OF LEASE
Sellers shall have caused IDC Realty to enter into the Lease.
9. CONDITIONS TO OBLIGATION OF THE COMPANY AND SELLERS
The obligations of the Company and the Sellers under this Agreement shall
be subject to the satisfaction, on or before the Closing Date, of each of the
following conditions:
9.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of ICC contained in this Agreement or
in any certificate delivered pursuant to this Agreement that are qualified as to
materiality (or any variation on such term) shall be true and correct at and as
of the Closing Date as if made on the Closing Date, except where such
representations and warranties specifically relate to an earlier date, in which
case they shall be true and correct as of such earlier date, and any such
representations and warranties of ICC which are not so qualified shall be true
and correct in all material respects at and as of the Closing Date as if made on
the Closing Date, except where such representations and warranties specifically
relate to an earlier date, in which case they shall be true and correct in all
material respects as of such earlier date.
9.2 LACK OF ADVERSE CHANGE
Since the date of this Agreement, there shall not have occurred any
incident or event, including the loss of any significant customer of ICC, which,
individually or in the aggregate, has had or is reasonably likely to result in a
Material Adverse Effect on ICC.
9.3 PERFORMANCE OF COVENANTS
ICC shall have performed and complied in all material respects with each
covenant, agreement and condition required by this Agreement to be performed or
complied with by ICC prior to or on the Closing Date.
9.4 UPDATE CERTIFICATE
The Sellers shall have received a favorable certificate, dated the Closing
Date, signed by ICC as to the matters set forth in Sections 9.1, 9.2 and 9.3.
9.5 NO GOVERNMENTAL OR OTHER PROCEEDING OR LITIGATION
No order of any Governmental Authority shall be in effect that restrains
or prohibits any transaction contemplated by this Agreement or that would limit
or affect ICC's ownership or operation of the business of the Company; no suit,
action, investigation, inquiry or proceeding by any Governmental Authority shall
be pending or threatened against ICC, the Company or any Seller that challenges
the validity or legality, or that seeks to restrain the consummation, of the
transactions contemplated by this Agreement or that seeks to limit or otherwise
affect ICC's right to own or operate the business of the Company.
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9.6 OPINION OF COUNSEL
ICC shall have delivered to the Sellers an opinion of Kramer Levin
Naftalis & Frankel LLP, dated the Closing Date and addressed to the Sellers, as
to the matters set forth on Exhibit 9.6.
9.7 EMPLOYMENT AND OPTION AGREEMENTS
(a) ICC shall have entered into an employment agreement with Vernon
E. Zander substantially in the form of Exhibit 9.7(a).
(b) ICC shall have offered employment to all existing employees of
the Company ("Company Employees") with benefits such as health and life
insurance, vacation and other similar benefits, substantially similar to those
received immediately prior to the Merger, or on terms and conditions
substantially similar to ICC's employees if such benefits are superior to those
of the Company. Company Employees shall be able to participate in stock option
plans of ICC on a basis consistent with ICC's current practices for similarly
situated employees.
(c) ICC shall have executed and delivered a lease agreement with IDC
Realty relating to the land and building described in Section 6.13 of the
Disclosure Schedule substantially in the form of Exhibit 9.7(c) (the "Lease").
10. TERMINATION OF AGREEMENT
This Agreement may be terminated upon the occurrence of any of the
following events:
10.1 MUTUAL CONSENT
At any time prior to the Effective Time, by mutual consent of ICC and the
Company.
10.2 TRANSACTION DATE
By ICC or the Company if the Effective Time shall not have occurred by
[September 30], 2000, unless such failure shall be due to a material breach of
any representation or warranty, or the nonfulfillment in any material respect,
and failure to cure such nonfulfillment, of any covenant or agreement contained
in this Agreement on the part of the party or parties seeking to terminate.
10.3 BREACH
By ICC if there has been a material misrepresentation by the Company or
the Sellers, or a material breach on the part of the Company or the Sellers of
any of their warranties or covenants set forth in this Agreement, or a material
failure on the part of the Company or the Sellers to comply with any of their
other obligations under this Agreement, in each case such that the conditions
set forth in Sections 8.1 and 8.2 would not be satisfied, or by the Company if
there has been a material misrepresentation by ICC, or a material breach on the
part of ICC of any of its warranties or covenants set forth in this Agreement,
or a material failure on the part of ICC to comply with any of its other
obligations under this Agreement, in each case such that the
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conditions set forth in Sections 9.1 and 9.3 would not be satisfied; provided,
however, that if such misrepresentation or breach is curable by a party such
that such conditions would be satisfied, then for so long as such party
continues to exercise such reasonable commercial efforts the other party may not
terminate this Agreement under this Section 10.3 unless such breach is not cured
within thirty (30) days of notice of such misrepresentation or breach (but no
cure period shall be required for a breach which by its nature cannot be cured).
No such termination shall relieve any party of the consequences of any such
misrepresentation, breach or failure.
11. INDEMNIFICATION; REMEDIES
11.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Schedule and any other certificate or document
delivered pursuant to this Agreement shall survive the Closing for a period
ending October 31, 2001 except as to Sections 3.2, 3.4, 4.3, 4.8, 4.17 and 4.24,
which shall survive for the applicable statute of limitations; provided;
however, that a claim asserted within such time may continue beyond any such
time limit. The right to indemnification, payment of Damages (as defined below)
or other remedy based on such representations, warranties, covenants and
obligations will not be affected by any investigation conducted with respect to,
or any knowledge acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or the Closing
Date, with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation; provided; however, that no
Seller shall have any liability after the Closing to any Indemnified Person for
indemnification or payment of Damages under this Section 11 for any
misrepresentation or breach of warranty, covenant or obligation disclosed in
writing to ICC pursuant to Section 6.7 prior to the Closing Date, and ICC shall
have no liability after the Closing to any Seller Party for indemnification or
payment of Damages under this Section 11 for any misrepresentation or breach of
warranty, covenant or obligation disclosed in writing to the Company pursuant to
Section 7.4 prior to the Closing Date.
11.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY THE SELLERS
(a) Each Seller hereby agrees to indemnify and hold harmless ICC,
the Company and their respective representatives (including all officers and
directors), stockholders, controlling persons and affiliates (collectively, the
"Indemnified Persons") from and against, and will pay to the Indemnified Persons
the amount of any loss, liability, claim, damage, cost or expense (including
costs of investigation and defense and reasonable attorneys' and experts' fees
and expenses) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with or incurred as a result of:
(i) any breach of any representation or warranty made by such
Seller or the Company in this Agreement, the Disclosure Schedule or in any
certificate delivered by such Seller or the Company pursuant to this Agreement;
(ii) any breach by such Seller or Company of any covenant or
obligation of such Seller or Company in this Agreement; and
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(iii) any and all Taxes payable by the Company with respect to
or as a result of the distribution of the membership interests in IDC Realty to
shareholders of the Company contemplated by Section 2.12.
(b) Notwithstanding anything in this Section 11.2 to the contrary,
the Sellers shall not have any obligation to indemnify the Indemnified Persons
for any Damages resulting from the breach or breaches of any representation or
warranty of the Sellers or the Company contained in Section 4 of this Agreement
or in the Disclosure Schedule or in any certificate relating thereto and
delivered by any of the Sellers or the Company pursuant to this Agreement until
the Indemnified Persons have suffered Damages, by reason of such breach or
breaches, in excess of $50,000 in the aggregate (the "Seller Basket"); provided
that once the Indemnified Persons' aggregate Damages exceed the Seller Basket,
the Sellers shall indemnify the Indemnified Persons for all such Damages
suffered in excess of the Seller Basket.
(c) Notwithstanding anything to the contrary in this Section 11.2,
in the absence of fraud or intentional misrepresentation, no Seller individually
shall be liable for any Damages resulting from the breach or breaches, in any
case or in the aggregate, of (i) any representation or warranty of the Sellers
or the Company contained in Section 4 of this Agreement or in the Disclosure
Schedule or in any certificate relating thereto and delivered by any of the
Sellers or the Company pursuant to this Agreement or (ii) any covenant contained
in Section 6.3, 6.4, 6.5 or 6.7 in excess of such Seller's Shareholder's
Percentage multiplied by one million dollars ($1,000,000). The indemnification
obligations of the Sellers under this Agreement shall terminate on October 31,
2001 except as to Sections 3.2, 3.4, 4.3, 4.8, 4.17 and 4.24, which shall
survive for the applicable statute of limitations. Subject to Section 6.9, the
right to indemnification pursuant to this Section 11 shall be the exclusive
remedy of the Indemnified Persons and the Seller Parties for any and all Damages
incurred by them as a result of the items described in Section 11.2(a) or
Section 11.3(a).
(d) The Sellers shall be entitled to a credit against any liability
for Damages under Article 11 to the extent and in the amount of insurance
proceeds actually received by any Indemnified Person in respect of such Damages.
If a Seller indemnifies an Indemnified Person for Damages and the Indemnified
Person thereafter receives any funds or assets from another person or entity
with respect to such loss, such that the loss to be indemnified would have been
reduced, then the Seller shall be entitled to receive such funds or assets
promptly from the Indemnified Party.
(e) A Seller may elect to satisfy any claim for Damages for which he
is liable under this Section 11.2 either (i) by paying cash in the amount of
such Damages to the Indemnified Person or (ii) if Seller holds ICC Shares as of
the date of receipt of notice of such claim, by surrendering certificates, duly
endorsed in blank, with signatures guaranteed, representing a number of ICC
Shares with a value sufficient to satisfy such claim. Such shares shall be
transferred free and clear of all Encumbrances other than restrictions imposed
by law or by this Agreement. For purposes of clause (ii) of the preceding
sentence, each ICC Share shall be deemed to have a value equal to the ICC Common
Stock Market Value as of the Effective Time.
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11.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY ICC
(a) ICC will indemnify and hold harmless the Sellers and their
respective heirs, estates and personal representatives (the "Seller Parties")
and will pay to the Seller Parties the amount of any Damages arising, directly
or indirectly, from or in connection with or incurred as a result of (a) any
breach of any representation or warranty made by ICC in this Agreement or in any
certificate delivered by ICC pursuant to this Agreement, (b) any breach by ICC
of any covenant or obligation of ICC in this Agreement or (c) any claim by any
Person for brokerage or finder's fees or commissions or similar payments based
upon any agreement or understanding alleged to have been made by such Person
with ICC in connection with the transactions contemplated by this Agreement.
(b) Notwithstanding anything in this Section 11.3 to the contrary,
ICC shall not have any obligation to indemnify the Seller Parties for any
Damages resulting from the breach or breaches of any representation or warranty
of ICC contained in Section 5 of this Agreement or in any certificate relating
thereto and delivered by either ICC pursuant to this Agreement until the Seller
Parties have suffered Damages, by reason of such breach or breaches, in excess
of $50,000 in the aggregate (the "ICC Basket"); provided that once the Seller
Parties' aggregate Damages exceed the ICC Basket, ICC shall indemnify the Seller
Parties for all such Damages suffered in excess of the ICC Basket.
(c) ICC shall be entitled to a credit against any liability for
Damages under Article 11 to the extent and in the amount of insurance proceeds
actually received by any Seller Party in respect of such Damages. If ICC
indemnifies an Seller Party for Damages and the Seller Party thereafter receives
any funds or assets from another person or entity with respect to such loss,
such that the loss to be indemnified would have been reduced, then ICC shall be
entitled to receive such funds or assets promptly from the Seller Party.
11.4 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) An indemnified party shall promptly give notice to each
indemnifying party after obtaining knowledge of any matter as to which recovery
may be sought against such indemnifying party because of the indemnity set forth
above, and, if such indemnity shall arise from the claim of a third party, shall
permit such indemnifying party to assume the defense of any such claim or any
Proceeding resulting from such claim; provided, however, that failure to
promptly give any such notice shall not affect the indemnification provided
under this Section 11 except to the extent such indemnifying party shall have
been actually and materially prejudiced as a result of such failure.
Notwithstanding the foregoing, an indemnifying party may not assume the defense
of any such third-party claim or Proceeding if it does not demonstrate to the
reasonable satisfaction of the indemnified party that it has adequate financial
resources to defend such claim or Proceeding and pay any and all Damages that
may result therefrom, or if the claim or Proceeding (i) could result in
imprisonment of the indemnified party, (ii) could result in a criminal penalty
or fine against the indemnified party the consequences of which would be
reasonably likely to have a Material Adverse Effect on the indemnified party
unrelated to the size of such penalty or fine or (iii) could result in an
equitable remedy which would materially impair the indemnified party's ability
to exercise its rights under this Agreement, or impair ICC's right or ability to
operate the Company. If an indemnifying party assumes the defense of
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such third party claim or Proceeding, such indemnifying party shall agree prior
thereto, in writing, that it is liable under this Section 11 to indemnify the
indemnified party in accordance with the terms contained herein in respect of
such claim or Proceeding, shall conduct such defense diligently, shall have full
and complete control over the conduct of such claim or Proceeding on behalf of
the indemnified party and shall, in his or her or its sole discretion, have the
right to decide all matters of procedure, strategy, substance and settlement
relating to such claim or Proceeding; provided; however, that any counsel chosen
by such indemnifying party to conduct such defense shall be reasonably
satisfactory to the indemnified party. The indemnified party may participate in
such claim or Proceeding and retain separate co-counsel at its sole cost and
expense (except that the indemnifying party shall be responsible for the fees
and expenses of one separate co-counsel for the indemnified party to the extent
the indemnified party is advised by its counsel that the counsel the
indemnifying party has selected has a conflict of interest) and the indemnifying
party will not without the written consent of the indemnified party consent to
the entry of any judgment or enter into any settlement with respect to the
matter which does not include a provision whereby the plaintiff or the claimant
in the matter releases the indemnified party from all liability with respect
thereto. Failure by an indemnifying party to notify the indemnified party of its
election to defend any such claim or Proceeding by a third party within thirty
(30) days after notice thereof shall have been given to such indemnifying party
by the indemnified party shall be deemed a waiver by such indemnifying party of
its right to defend such claim or Proceeding. In the event more than one of the
Sellers is the indemnifying party, then the Sellers shall appoint one of them to
act on behalf of such Sellers in connection with the defense of any third-party
claim or Proceeding pursuant to this Section 11.4.
(b) If no indemnifying party is permitted or elects to assume the
defense of any such claim or Proceeding by a third party, the indemnified party
shall diligently defend against such claim or Proceeding in such manner as it
may deem appropriate and, in such event, the indemnifying party or parties shall
promptly reimburse the indemnified party for all reasonable out-of-pocket costs
and expenses, legal or otherwise, incurred by the indemnified party and its
affiliates in connection with the defense against such claim or Proceeding, as
such costs and expenses are incurred. Any counsel chosen by such indemnified
party to conduct such defense must be reasonably satisfactory to the
indemnifying party or parties, and only one counsel (in addition to local
counsel, if required) shall be retained to represent all indemnified parties in
an action (except that if litigation is pending in more than one jurisdiction
with respect to an action, one such counsel may be retained in each jurisdiction
in which such litigation is pending).
(c) The indemnified party will cooperate in all reasonable respects
as requested by and with any indemnifying party in the conduct of any claim or
Proceeding as to which such indemnifying party assumes the defense. For the
cooperation of the indemnified party pursuant to this Section 11.4, the
indemnifying party or parties shall promptly reimburse the indemnified party for
all reasonable out-of-pocket costs and expenses, legal or otherwise, incurred by
the indemnified party or its affiliates in connection therewith, as such costs
and expenses are incurred.
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12. GENERAL PROVISIONS
12.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, delivery and performance of this Agreement, including
all fees and expenses of agents, representatives, counsel and accountants.
12.2 PUBLIC ANNOUNCEMENTS
Unless required by law or by the NASD, any public announcement or similar
publicity with respect to this Agreement, the Closing or the transactions
contemplated hereby will be issued, if at all, at such time and in such manner
as ICC determines with the concurrence of the Company, which concurrence shall
not be unreasonably withheld or delayed by the Company. The Sellers and ICC will
consult with each other concerning the means by which the Company's employees,
customers and suppliers and others having dealings with the Company will be
informed of this Agreement, the Closing and the transactions contemplated by
this Agreement, and representatives of ICC may at its option be present for any
such communication.
12.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by fax (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses or fax numbers set forth below (or to
such other address, person's attention or fax number as a party may designate by
notice to the other parties given in accordance with this Section 12.3):
(a) If to ICC:
Internet Commerce Corporation
805 Third Avenue
New York, NY 10022
Telecopier No.: (212) 271-8580
Telephone No.: (212) 271-7640
Attention: Dr. Geoffrey S. Carroll
With a copy to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
Telecopier No.: (212) 715-8000
Telephone No.: (212) 715-9288
Attention: Peter S. Kolevzon, Esq.
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(b) If to the Company:
Intercoastal Data Corporation
129 Bankhead Avenue
Carrollton, GA 30117
Telecopier No.: (770) 832-0538
Telephone No.: (770) 834-6469
Attention: Vernon E. Zander, President
With a copy to:
King & Spalding
191 Peachtree Street, N.E.
Atlanta, GA 30303-1763
Telecopier No.: (404) 572-5135
Telephone No.: (404) 572-3597
Attention: J. Tucker Alford, Esq.
(c) If to any Seller, to the address or fax number and person's
attention set forth opposite such Sellers name on the signature pages of this
Agreement.
12.4 FURTHER ASSURANCES
The parties agree upon request to each other from and after the Effective
Time to (a) furnish such further information, (b) execute and deliver to each
other such other documents and instruments, and (c) do such other acts and
things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement and to put ICC in control of the
operations of the Company.
12.5 WAIVER
Neither the failure nor any delay by any party in exercising any right,
power or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power or privilege.
12.6 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter (including any correspondence among ICC, the
Company and the Sellers) and constitutes, along with the documents referred to
in this Agreement, the entire agreement among the parties with respect to its
subject matter. This Agreement may not be amended, and no provision hereof may
be waived, except by a written agreement executed by the party to be charged
with the amendment or waiver.
12.7 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior written consent of the other party. Subject to the preceding sentence,
this Agreement will apply to, be
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binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties and their respective heirs and personal
representatives. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement and the
Persons contemplated by Section 11 any legal or equitable right, remedy or claim
under or with respect to this Agreement or any provision of this Agreement.
12.8 SEVERABILITY
If any provision of this Agreement or the application of any such
provision to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to such person
or circumstances other than those to which it is so determined to be invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If the final judgment of a
court of competent jurisdiction declares that any item or provision hereof is
invalid or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability shall have the power, and is
hereby directed, to reduce the scope, duration or area of the term or provision,
to delete specific words or phrases and to replace any invalid or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified.
12.9 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. In this Agreement
(i) words denoting the singular include the plural and vice versa, (ii) "it" or
"its" or words denoting any gender include all genders, (iii) the word
"including" shall mean "including without limitation," whether or not expressed,
(iv) any reference to a statute shall mean the statute and any regulations
thereunder in force as of the date of this Agreement or the Closing Date, as
applicable, unless otherwise expressly provided, (v) any reference herein to a
Section, Article, Schedule or Exhibit refers to a Section or Article of or a
Schedule or Exhibit to this Agreement, unless otherwise stated, and (vi) when
calculating the period of time within or following which any act is to be done
or steps taken, the date which is the reference day in calculating such period
shall be excluded and if the last day of such period is not a business day, then
the period shall end on the next day which is a business day. Each party
acknowledges that he, she or it has been advised and represented by counsel in
the negotiation, execution and delivery of this Agreement and accordingly agrees
that if an ambiguity exists with respect to any provision of this Agreement,
such provision shall not be construed against any party because such party or
its representatives drafted such provision.
12.10 GOVERNING LAW; JURISDICTION
This Agreement will be governed by the internal laws of the State of New
York without regard to principles of conflict of laws. In the event of any
controversy or claim arising out of or relating to this Agreement or the breach
or alleged breach hereof, each of the parties irrevocably (i) submits to the
non-exclusive jurisdiction of the federal courts of the State of Georgia, or, if
such court does not have jurisdiction, the state courts of the State of Georgia,
in each case
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located in Atlanta, Georgia (ii) waives any objection which it may have at any
time to the laying of venue of any action or proceeding brought in any such
court, (iii) waives any claim that such action or proceeding has been brought in
an inconvenient forum and (iv) agrees that service of any summons and complaint
or other process in any such action or proceeding against any of the Sellers may
be made by ICC upon [Vernon E. Zander], whom each Seller hereby irrevocably
appoints as its agent for service of process and the documents in connection
with any such controversy or claim, by registered or certified mail as provided
in Section 12.3, each Seller hereby waiving personal service thereof, and that
such service shall be deemed good, proper and effective service upon such party.
12.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
[Remainder of the page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
INTERNET COMMERCE CORPORATION
By: /s/ Richard Berman
-----------------------------
Name: Richard Berman
Title: Chairman of the Board
INTERCOASTAL DATA CORPORATION
By: /s/ Vernon E. Zander
----------------------------
Name: Vernon E. Zander
Title: President
I hereby certify that (i) I am the Secretary of
ICC, (ii) this Agreement has been adopted pursuant
to Section 251(f) of the DGCL, (iii) this
Agreement does not amend in any respect the
certificate of incorporation of ICC, (iv) each
share of stock of ICC outstanding immediately
prior to the Effective Time of the Merger is to be
an identical outstanding or treasury share of the
Surviving Corporation after the effective date of
the Merger and (v) the shares of ICC issuable
pursuant to this Agreement do not exceed 20% of
the shares of common stock of ICC outstanding
immediately prior to the Effective Time of the
Merger.
/s/ Walter M. Psztur
------------------------------
Walter M. Psztur
<PAGE>
SELLERS: Address: No. of Shares:
------- -------------
/s/ Vernon E. Zander
----------------------- 165 Foggy Bottom Dr. 17,450
Name: Vernon E. Zander Carrollton, GA 30116
/s/ Marilyn Zander
----------------------- 165 Foggy Bottom Dr. 17,450
Name: Marilyn Zander Carrollton, GA 30116
/s/ Stanley Parkman
----------------------- 999 N. Highway 113 2,500
Name: Stanley Parkman Carrollton, GA 30117
/s/ Bill Loftin
----------------------- 50 Golfview Club Dr. 3,700
Name: Bill Loftin Newnan, GA 30263
/s/ Hollis Johnson
----------------------- 137 Fairway Drive 2,000
Name: Hollis Johnson Carrollton, GA 30116
/s/ Byrl Pointer
------------------------ P.O. Box 124 600
Name: Byrl Pointer Waco, GA 30182
