Goodwill Purchase Agreement - Check Solutions Co., Paul Lechtenberg and Joseph M. Rowell
GOODWILL PURCHASE AGREEMENT
THIS GOODWILL PURCHASE AGREEMENT (the "Agreement") dated as of the 22nd
day of May, 2001, is made and entered into by and among CHECK SOLUTIONS COMPANY,
a New York general partnership (the "Buyer"), PAUL LECHTENBERG, a resident of
Shelby County, Tennessee ("Lechtenberg"), and JOSEPH M. ROWELL, a resident of
Shelby County, Tennessee ("Rowell" and, together with Lechtenberg, collectively
referred to as the "Sellers") (the Buyer and the Sellers are sometimes referred
to herein collectively as the "Parties").
WHEREAS, the Sellers have independently developed, owned and will
continue to own on the Closing Date (as defined in Section 2) close personal and
ongoing business relationships, trade secrets and knowledge in connection with
the Buyer's business of the sale of products and services related to financial
transaction processing, through the personal ability, personality, reputation,
skill and integrity of each Seller, and other information relating thereto
(collectively, the "Goodwill"), which the Sellers desire to sell to the Buyer as
hereinafter provided: and
WHEREAS, neither Seller is subject to a noncompetition or similar
restrictive covenant agreement relating to the Goodwill; and
WHEREAS, the Buyer desires to acquire all of the Goodwill, as hereinafter
provided:
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree as
follows:
1. PURCHASE PRICE AND EXCHANGE OF CONSIDERATION. The Sellers agree to
sell, assign, transfer, convey and deliver to the Buyer at the Closing the
Goodwill including, but not limited to, all of the Sellers' respective rights
and benefits related to the Goodwill. In exchange for the Goodwill and subject
to the terms and conditions of this Agreement, the Buyer agrees to pay to the
Sellers on June 29, 2001, the total sum of Eight Million Eight Hundred Eighty
Thousand and 00/100 Dollars ($8,880,000.00) for all of the Goodwill (the
"Purchase Price"). The Purchase Price shall be payable in immediately
available cash funds or, with the consent of each respective Seller, through
the substitution of other property acceptable to such respective Seller. The
Purchase Price shall be allocated among each Seller in accordance with
SCHEDULE A, which is attached hereto and incorporated herein by reference. The
payment required by this Section 1 shall not be affected by the death or
disability of either Seller or the breach or termination by either Seller of
any agreement (other than this Agreement) between either or both of them and
the Buyer.
2. CLOSING/TERMINATION. The sale and assignment of the Goodwill (the
"Closing") shall take place at 10 a.m. at the offices of Waring Cox, PLC on
June 7, 2001, or at such other time and date as the Buyer and the Sellers may
agree (the "Closing Date"). The effective time of the transactions
contemplated hereby shall be 12:01 a.m. on the Closing Date.
3. REPRESENTATIONS AND WARRANTIES. The Sellers jointly and severally
represent and warrant to the Buyer as follows:
3.1 GOODWILL. All of the Goodwill is owned, and immediately prior to
the Closing will be owned, by the Sellers, free and clear of all liens,
encumbrances, claims, options, security interests, calls and commitments of
any kind. The Sellers each have full legal right, power and authority to enter
into this Agreement and to sell, assign and transfer the Goodwill to the Buyer
and, on the Closing Date, the sale and assignment of the Goodwill to the Buyer
hereunder will transfer to the Buyer valid title thereto, free and clear of
all liens, encumbrances, claims, options, security interests and commitments
of any kind.
3.2 NO RESTRICTIONS. Neither Seller is currently a party to any
contract, employment agreement, non-compete agreement or any other contract or
agreement or subject to any other restriction or subject to any restriction or
condition contained in any permit, license, judgment, order, writ, injunction,
decree or award which, singly or in the aggregate, materially and adversely
affects or restricts or is likely to materially and adversely affect or
restrict the Goodwill or the Buyer's acquisition, use or enjoyment thereof.
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3.3 APPROVAL AND AUTHORIZATION. The execution and delivery of this
Agreement by each Seller and the performance of the transactions contemplated
herein have been duly and validly authorized by each Seller, and this
Agreement is a legal, valid and binding obligation of each Seller, enforceable
against each of them in accordance with its respective terms subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting creditor's rights and general equity
principles.
3.4 ECONOMIC BENEFITS. To the best of their respective knowledge,
each Seller is not aware of any present facts or any pending events, which
would prevent the Buyer from realizing the economic benefits associated with
the Goodwill in the same manner as presently enjoyed by the Sellers.
3.5 NO CONFLICTS. The execution and delivery of this Agreement by
each Seller does not, and the consummation by each of them of the transactions
contemplated hereby does not and will not, violate or conflict with, or result
(with the giving of notice or the lapse of time or both) in the violation of
or constitute a default under any provision of, or result in the acceleration
or termination of or entitle any party to accelerate or terminate (whether
after giving of notice or lapse of time or both), any obligation or benefit
under, or result in the creation or imposition, lien, pledge, security
interest or other encumbrance upon the Goodwill pursuant to any material
contract, law, ordinance, regulation, order, arbitration award, judgment or
decree to which the Sellers or any of them are a party or by which they or
their respective assets (including the Goodwill) are bound and to their
knowledge, does not and will not violate or conflict with any other material
restriction of any kind or character to which the Sellers or any of them is
subject or by which any of their respective assets (including the Goodwill)
may be bound.
4. REPRESENTATIONS AND COVENANTS OF BUYER. The Buyer represents and
warrants as follows:
4.1 EXISTENCE AND GOOD STANDING. The Buyer has been duly organized
and validly exists in good standing as a general partnership under the laws
of the State of New York.
4.2 NO DEFAULT. The execution of this Agreement by the Buyer and the
performance of its obligations hereunder will not violate or result in a breach
of or constitute a default under the Buyer's partnership agreement, as amended,
or any material agreement to which the Buyer is a party or by which it or its
assets are bound.
4.3 APPROVAL AND AUTHORIZATION. The execution and delivery of this
Agreement and the performance of the transactions contemplated herein have been
duly and validly authorized by all necessary action on the part of the Buyer and
is a legal, valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting creditor's rights and general equity principles.
5. PRESERVATION AND MAINTENANCE OF GOODWILL. The Sellers shall cooperate
with the Buyer after the Closing Date in connection with all reasonable
actions deemed necessary by the Buyer to transition the economic value of the
Goodwill to the Buyer.
6. SURVIVAL. The representations, warranties, covenants and agreements of
the Parties contained in this Agreement or in any writing delivered pursuant
to the provisions of this Agreement or in connection with this Agreement shall
survive the Closing Date and for three (3) years thereafter, and shall not be
affected by any examination made on behalf of the Parties.
7. GENERAL.
7.1 FURTHER ASSURANCES. The Sellers will cooperate with the Buyer on
and after the Closing Date in furnishing information and other assistance in
connection with any actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the Closing
Date and will take or cause to be taken such further action, and will execute,
deliver and file such further documents and instruments as the Buyer
reasonably requests in order to effectuate fully the purposes, terms and
conditions of this Agreement.
7.2 ASSIGNMENT: BINDING EFFECT. This Agreement and the rights of the
Buyer hereunder may be assigned by the Buyer. This Agreement and the rights of
the Sellers hereunder may not be assigned by either Seller. This Agreement shall
be binding upon and shall inure to the benefit of the Parties hereto, the
successors and
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assigns of the Buyer and the heirs, beneficiaries and legal representatives of
the Sellers.
7.3 EXECUTION. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument. Execution and
delivery of this Agreement by delivery of a facsimile copy bearing the facsimile
signature of a party shall constitute a valid and binding execution and delivery
of this Agreement by such party. Such facsimile copies shall constitute
enforceable original documents.
7.4 BROKERS. Each party represents and warrants that it employed no
broker or agent in connection with this transaction and agrees to indemnify the
other against all loss, cost, damage or expense arising out of claims for fees
or commissions of brokers or agents employed or alleged to have been employed by
such indemnifying party.
7.5 NOTICES. Any notice or communication required or permitted
hereunder shall be sufficiently given if sent by first class mail, postage
prepaid:
(a) If to Buyer, addressed to it at:
3400 Players Club Parkway, Suite 200
Memphis, TN 38125
Telephone No. (901) 252-2500
(b) If to the Sellers, addressed to each of them at:
Paul Lechtenberg
8508 Deerfield Cove
Germantown, TN 38138
Telephone No. (901) 757-9844
Joseph M. Rowell
3496 Windgarden Cove
Memphis, TN 38125
Telephone No. (901) 901-737-3533
7.6 APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF TENNESSEE WITHOUT REGARD TO SUCH
STATE'S CONFLICTS OF LAWS OR CHOICE OF LAW RULES.
7.7 CAPTIONS. The captions in this Agreement are for convenience
only and shall not be considered a part hereof or affect the construction or
interpretation of any provisions of this Agreement.
7.8 ENTIRE AGREEMENT. This Agreement (including the schedules and
annexes hereto) and the documents delivered pursuant hereto or in connection
herewith constitute the entire agreement and understanding between the Sellers
and the Buyer and supersedes any prior agreement and understanding, written or
oral, relating to the subject matter of this Agreement. The Sellers each
acknowledge that they have (a) had the opportunity to seek the advice of
independent counsel, including independent tax counsel, regarding the
consequences of this Agreement; and (b) received no representations from the
Buyer or its counsel regarding the tax consequences of this Agreement. This
Agreement may be modified or amended only by a written instrument executed by
the Parties.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the day and year first above written.
SELLERS:
Paul Lechtenberg
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Paul Lechtenberg
Joseph M. Rowell
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Joseph M. Rowell
BUYER:
CHECK SOLUTIONS COMPANY
By: Joseph M. Rowell
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Name: Joseph M. Rowell
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Title: President
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SCHEDULE A
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Paul Lechtenberg $3,330,000.00
Joseph M. Rowell $5,550,000.00
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