Exhibit 10.2
AGREEMENT
This Agreement is entered into as of this 19th day of October,
1994 by and between Carolina First Corporation ("CFC"), Richard E.
Greer ("Greer"), William Graham ("Graham") and Telepay, Inc.
("Telepay").
PREAMBLE
Whereas the parties hereto desire to engage in the delivery of
certain home banking products and services through the development
and marketing of a home banking system, as the same may be amended,
changed, replaced and improved (the "System");
Now, Therefore, in consideration of the mutual covenants and
representations contained herein, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
SECTION I. FORMATION OF DART, INC.
1.1. Formation of DART, Inc. The parties hereto agree to form
a new corporation named DART, Inc. ("DART"), which shall have
5,000,000 common shares authorized. The formation of DART (the
"Formation Time") shall occur as soon as reasonably practicable after
CFC receives a final determination from the Board of Governors of the
Federal Reserve System and the South Carolina State Board of
Financial Institution regarding whether or not it will may own the
450,000 shares of DART Common Stock as contemplated in Section 2.2
below.
1.2. Contributions of Telepay Shareholders. Greer and Graham
shall cause all shareholders of Telepay (including themselves) to
contribute to DART all outstanding shares of Telepay capital stock.
All new shareholders of Telepay shall be required, as a condition to
investment in Telepay, to agree to maintain their Telepay stock free
and clear of all liens and encumbrances and to contribute their
Telepay stock to DART (upon the formation of DART) in exchange for
the DART stock as contemplated in Section 2.1 below. Such agreement
shall be in a form reasonably acceptable to CFC. A non-exclusive
list of the assets of Telepay is set forth on Schedule 1.2.
1.3. Contributions of CFC. Subject to other provisions herein,
CFC (or its affiliate) shall contribute to DART (i) the CFC customer
base in connection with the testing and marketing of the System, (ii)
the data processing capability necessary to perform beta testing of
the System, (iii) its know-how regarding the marketing of the System,
and (iv) the data processing hardware and software necessary to
perform the data processing. A non-exclusive list of the assets to
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be contributed, in addition to the assets expressly referenced in the
preceding sentence, is set forth on Schedule 1.3.
1.4. Contributions of Other Parties. As contemplated in
Section 2.3, other parties who may be members of the initial control
group within the contemplation of (section mark)351 of the Internal
Revenue Code of 1986 ("(Section Mark)351"), may contribute cash or such
other property in exchange for such number of shares of DART Common
Stock as may be agreed upon by CFC and Greer.
1.5. Capital Matters of Telepay. It is acknowledged that prior
to the Formation Time, Greerco Partners shall loan or cause to be
loaned to Telepay $750,000 for a period of up to six months (the
"Greerco Loan"), which loan shall have an interest rate of prime plus
1% if loaned by Greerco Partnership or, if loaned by a third party,
at a rate agreed upon by Telepay and the third party. From the date
hereof and prior to the Formation Time, Telepay shall have received
additional equity capital contributions totalling $500,000 in cash.
It is ackowledged that Telepay may use any or all of the $1,250,000
before the Formation Time for such reasonable expenses as may be from
time to time agreed upon by Telepay and CFC. At the Formation Time,
Greerco Partnership shall contribute shares of Baby Superstore, Inc.
common stock having a fair market value of $1,000,000 in exchange for
166,667 shares of DART common stock. The fair market value shall be
determined as the average closing prices of the Baby Superstore, Inc.
common stock on the five business days prior to contribution to DART.
It is acknowledged that DART shall pay off the Greerco Loan as soon
as reasonably practicable after the Formation Time through proceeds
received from the sale of such Baby Superstore, Inc. common stock or
a loan secured by such stock. The parties agree to use their
reasonable best efforts to effect such sale.
1.6. Best Efforts. Telepay, Greer, Graham, CFC and DART (after
its formation) shall use their respective assets and best efforts to
develop and market the System.
SECTION II. ISSUANCE OF COMMON STOCK
2.1. Issuance of Common Stock to Telepay Shareholders. In
exchange for the contribution of Telepay capital stock as set forth
in Section 1.2 above, DART shall issue 800,000 shares of DART Common
Stock to the Telepay shareholders in the same proportion as they hold
their Telepay stock. In the event that Telepay receives less than
the $1,500,000 in cash contemplated in Section 1.5, the number of
shares issuable upon the contribution of the Telepay stock shall be
reduced at a rate of $6 per share (i.e. if only $1,200,000 is
contributed to Telepay within the contemplation of Section 1.5, then
Telepay shareholders shall receive an aggregate of 750,000 shares
instead of 800,000 shares).
2.2. Issuance of Common Stock to CFC. Subject to receipt of
regulatory approval, as partial consideration for CFC's contributions
set forth in Section 1.3 above, DART shall issue 49,500 shares of
DART Common Stock to CFC (or its affiliate). Subject to receipt of
regulatory approval, in exchange for CFC's contributions set forth in
Section 1 above, DART shall issue an additional 400,500 shares of
DART Common Stock to CFC (or its affiliate). In the event that CFC
does not receive all necessary regulatory approvals for its ownership
of the additional 400,500 shares of DART Common Stock, such 400,500
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shares of Common Stock shall be issued to Greer and Graham in the
same proportion as designated pursuant to Section 2.1 and CFC shall
be entitled to receive the percentage compensation referenced in
Section 4.2.
2.3. Subsequent Issuance of Common Stock. DART may issue
additional shares of DART Common Stock to one or more additional
persons or entities who shall be a part of the initial control group
within the contemplation of (section mark)351. Such issuance may only
be upon such terms and for such consideration as may be agreed upon by
CFC and Greer.
2.4. Maintenance of 4.95% Equity Interest. In the event that
CFC is unable to procure the necessary regulatory approvals for its
ownership of DART Common Stock in excess of 5%, and in consideration
of this Agreement, CFC's contributions set forth in Section I above,
and other good and valuable consideration, the receipt of which is
hereby acknowledged, DART shall, for no additional consideration,
issue such number of shares of DART Common Stock as may be required
from time to time such that the DART Common Stock owned by CFC shall,
at all times, constitute 4.95% of the then outstanding DART Common
Stock (such action being hereinafter referred to as the "4.95% Equity
Maintenance"). The 4.95% Equity Maintenance shall be applicable
regardless of whether CFC shall receive regulatory approval to
receive (or actually receives) the percentage compensation referenced
in Section 4.2 and set forth in Exhibit A. Notwithstanding the
foregoing, the 4.95% Equity Maintenance shall be capped such that no
shares of DART Common Stock will be issued after the total number of
shares of DART Common Stock owned by CFC pursuant to the 4.95% Equity
Maintenance equals the 450,000 shares which it originally was to
receive (but for denial of regulatory approval of such ownership), as
such 450,000 shares may be equitably adjusted from time to time to
take into account stock splits, stock dividends, reverse stock
splits, other similar recapitalizations, and issuances of DART Common
Stock (or securities convertible into DART Common Stock) at less than
fair market value.
2.5. Issuance of DART Common Stock to Greerco Partnership.
DART shall issue Common Stock to Greerco Partnership as contemplated
in Section 1.5 above.
SECTION III. REGULATORY MATTERS
3.1. Compliance with Applicable Law. Consummation of the
transactions contemplated herein shall be subject to receipt of all
necessary regulatory approvals, and CFC shall not consummate any
transactions contemplated herein except upon receipt of necessary
approvals. Notwithstanding anything to the contrary herein, in no
event shall this Agreement be construed to require CFC to take, or
impose any liability on CFC as a result of its failure to take, any
action which is not permissible under applicable law. The
consummation of any transaction contemplated herein (including, but
not limited to the entry into the DP Agreement (as defined below)
shall constitute a representation to Telepay, Telepay's shareholders
and DART that all regulatory approvals necessary for that particular
transaction have been received.
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3.2. Receipt of Regulatory Approvals. CFC shall, at its own
costs, be responsible for obtaining any necessary regulatory
approvals. CFC shall use its best efforts to obtain all regulatory
approvals necessary to the consummation of the transactions
contemplated herein. Notwithstanding the foregoing, the parties
acknowledge that CFC shall be responsible only for regulatory
approvals from banking authorities and any other applicable
regulatory approvals (such as regulatory approvals for
telecommunications related matters) shall be the responsibility of
DART.
SECTION IV. DATA PROCESSING CONTRACT
4.1. Entry in Data Processing Agreement. Telepay shall enter
into an agreement (the "DP Agreement") with CFC or an affiliate of
CFC which shall provide that CFC or its affiliate shall provide all
servicing and data processing which are incident to the System. The
compensation payable to CFC shall, subject to other provisions
contained herein, consist of the fixed compensation per transaction
set forth on Exhibit A attached hereto. The DP Agreement shall be
for a period of at least 20 years and shall contain other reasonable
terms and industry provisions typical of such agreements. CFC and
Telepay shall enter into this DP Agreement regardless of whether CFC
is ultimately able to acquire the stock as contemplated in Section
2.2 above or receive the percentage compensation as contemplated in
Section 4.2 below). It is expressly acknowledged that the CFC,
pursuant to the DP Contract, shall be entitled to provide data
processing services to all System customers (including those
customers who are not customers of CFC or its affiliates). It is
further acknowledged that Telepay's obligations under the DP Contract
will be assumed by DART upon contribution of the Telepay stock to
DART as contemplated in Section I above.
4.2. Percentage Compensation. In the event that CFC is unable
to procure regulatory approval for its ownership of the DART Common
Stock contemplated in Section 2.2 hereof, the DP Agreement shall
provide that CFC (or its affiliate) shall be entitled to receive the
percentage compensation set forth in Exhibit A attached hereto.
SECTION V. REPRESENTATIONS OF TELEPAY, GREER AND GRAHAM
Telepay, Greer and Graham hereby jointly and severally represent
and warrant to CFC the following matters on and as of the date of
this Agreement:
5.1. Organization, Good-Standing and Conduct of Business.
Telepay is a corporation, duly organized, validly existing and in
good standing under the laws of South Carolina, and has full power
and authority and all necessary governmental and regulatory
authorization to own all of its properties and assets and to carry on
its business as it is presently being conducted.
5.2. Corporate Authority. The execution, delivery and
performance of this Agreement have been duly authorized by the Board
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of Directors of Telepay. No other corporate acts or proceedings on
the part of Telepay are required or necessary to authorize this
Agreement or the consummation of the transactions contemplated
herein; except that additional Telepay shareholders will be required
to contribute their Telepay stock as contemplated in Section I above.
5.3. Binding Effect. When executed, this Agreement will
constitute valid and legally binding obligations of Telepay, Greer
and Graham and, subject to the conditions set forth herein, will be
enforceable against each of such parties in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights or the relief of debtors generally. Each
document and instrument contemplated by this Agreement, when executed
and delivered by Telepay, Greer and/or Graham (as applicable) in
accordance with the provisions hereof, shall be duly authorized,
executed and delivered by Telepay, Greer and Graham (as applicable)
and enforceable against Telepay, Greer and Graham (as applicable) in
accordance with its terms, subject to the exceptions in the previous
sentence.
5.4. Capitalization of Telepay. The authorized capital stock
of Telepay consists solely of (i) 10,000 authorized shares of common
stock (no par value), of which 1,000 shares are currently issued and
outstanding. Greer and Graham are the only shareholders of Telepay.
All of the issued and outstanding shares of Telepay are validly
issued and fully paid and nonassessable. All of shares of Telepay
which may, in the future, become issued and outstanding, shall be
validly issued and fully paid and nonassessable. Except as
contemplated herein, there are no outstanding obligations, options,
warrants or commitments of any kind or nature or any outstanding
securities or other instruments convertible into shares of any class
of capital stock of Telepay, or pursuant to which Telepay is or may
become obligated to issue any shares of its capital stock. Greer and
Graham own their respective shares of Telepay stock free and clear of
all liens or encumbrances of any type. At the Formation Time, all
shareholders of Telepay will own their respective shares of Telepay
stock free and clear of all liens or encumbrances of any type. Upon
consummation of the transactions contemplated herein, DART shall own
100% of all Telepay stock free and clear of all liens and
encumbrances of any type.
5.5. Non-Contravention and Defaults; No Liens. Neither the
execution or delivery of this Agreement, nor the fulfillment of, or
compliance with, the terms and provisions hereof, will (i) result in
a breach of the terms, conditions or provisions of, or constitute a
default under, or result in a violation of, termination of or
acceleration of the performance provided by the terms of, any
agreement to which Telepay, Greer or Graham is a party or by which
any of them may be bound, (ii) violate any provision of any law, rule
or regulation, (iii) result in the creation or imposition of any
lien, charge, restriction, security interest or encumbrance of any
nature whatsoever on any asset of Telepay, Greer or Graham, or (iv)
violate any provisions of Telepay's Articles of Incorporation or
Bylaws.
5.6. Necessary Approvals. Except for any necessary approvals
from banking regulators and the public service commission, Telepay
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has obtained all certificates of authority, licenses, permits,
franchises, registrations of foreign ownership or other regulatory
approvals in every jurisdiction necessary for the continuing conduct
of its business and ownership of its assets (including the operation
of the System).
5.7. Representations Regarding the System. The System is a
unique system for providing home banking services. The System
generally consists of a telephone system with magnetic strip "swipe"
capabilities which will permit the user to pay bills electronically,
to purchase various consumer items such as cable movies and takeout
food, and select long distance companies.
5.8. Patents. There are patent applications pending on the
principal proprietary aspects of the System, the sole beneficiary of
which is Telepay. Telepay has been advised by competent patent
counsel that such patent applications have reasonable probability of
being granted. Such patent applications, if granted and upon
transfer of the stock of Telepay to DART as contemplated herein, will
provide Dart with a significant technical advantage over systems
presently being used for "home banking."
5.9. Title to Properties, Encumbrances. Telepay has good and
marketable title to all of its property, free and clear of any liens,
claims, charges, options or other encumbrances, except for any lien
for current taxes not yet due and payable. Telepay solely owns the
rights to all of the software necessary to operate the System, except
for such software which is currently owned or licensed to CFC or its
affiliates. All intangible assets of Telepay will be assignable to
DART after contribution of the Telepay stock as contemplated in
Section I.
5.10. Litigation. There are no claims, actions, suits or
proceedings pending or threatened against Telepay, or to Telepay's,
Greer's or Graham's knowledge affecting Telepay, at law or in equity,
before or by any Federal, state, municipal, administrative or other
court, governmental department, commission, board, or agency, an
adverse determination of which could have a material adverse effect
on the business or operations of Telepay, and none of Greer, Graham
or Telepay know of no basis for any of the foregoing. There is no
order, writ, injunction, or decree of any court, domestic or foreign,
or any Federal agency affecting Telepay or to which Telepay is
subject.
5.11. Telepay Information. The information with respect to
Telepay, Greer, Graham and the System which has been provided to CFC
is accurate and complete in all material respects. Except for such
liabilities as have been expressly disclosed to CFC in writing,
Telepay has no material liabilities or material obligations of any
nature, whether absolute, accrued, contingent or otherwise, and
whether due or to become due. Since its incorporation, there has
been (i) no material adverse change in the business or operations of
Telepay, (ii) no incurrence by or subjection of Telepay to any
obligation or liability (whether fixed, accrued or contingent) or
commitment material to Telepay not expressly disclosed to CFC in
writing.
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SECTION VI. REPRESENTATIONS OF CFC
CFC hereby represents and warrants to CFC the following matters
on and as of the date of this Agreement:
6.1. Organization, Good-Standing and Conduct of Business. CFC
is a corporation, duly organized, validly existing and in good
standing under the laws of South Carolina, and has full power and
authority and all necessary governmental and regulatory authorization
to own all of its properties and assets and to carry on its business
as it is presently being conducted.
6.2. Corporate Authority. The execution, delivery and
performance of this Agreement have been duly authorized by the Board
of Directors of CFC. No other corporate acts or proceedings on the
part of CFC are required or necessary to authorize this Agreement or
the consummation of the transactions contemplated herein.
6.3. Binding Effect. When executed, this Agreement will
constitute valid and legally binding obligation of CFC and, subject
to the conditions set forth herein, will be enforceable against CFC
in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights or the relief of
debtors generally. Each document and instrument contemplated by this
Agreement, when executed and delivered by CFC in accordance with the
provisions hereof, shall be duly authorized, executed and delivered
by CFC and enforceable against CFC in accordance with its terms,
subject to the exceptions in the previous sentence.
6.4. Capitalization of CFC. CFC is a company registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended and
its capitalization is as set forth in its publicly-filed documents.
6.5. Non-Contravention and Defaults; No Liens. Neither the
execution or delivery of this Agreement, nor the fulfillment of, or
compliance with, the terms and provisions hereof, will, assuming
receipt of all necessary regulatory approvals, (i) result in a breach
of the terms, conditions or provisions of, or constitute a default
under, or result in a violation of, termination of or acceleration of
the performance provided by the terms of, any agreement to which CFC
is a party or by which it may be bound, (ii) violate any provision of
any law, rule or regulation, (iii) result in the creation or
imposition of any lien, charge, restriction, security interest or
encumbrance of any nature whatsoever on any asset of CFC, or (iv)
violate any provisions of CFC's Articles of Incorporation or Bylaws.
6.6. Necessary Approvals. Except for any necessary approvals
from banking regulators and the public service commission, CFC has
obtained all certificates of authority, licenses, permits,
franchises, registrations of foreign ownership or other regulatory
approvals in every jurisdiction necessary for the continuing conduct
of its business and ownership of its assets (including the operation
of the System).
6.7. Representations Regarding Data Processing. Except for the
proprietary software of Telepay (which will be provided to CFC), CFC
has or will have the capability to provide all data processing
reasonably necessary to the operation of the System, as the System
has been described to CFC.
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6.8. Title to Properties, Encumbrances. CFC has good and
marketable title to all of the property which will be contributed to
DART, free and clear of any liens, claims, charges, options or other
encumbrances, except for any lien for current taxes not yet due and
payable.
6.9. Litigation. There are no claims, actions, suits or
proceedings pending or threatened against CFC, or to its knowledge
affecting CFC, at law or in equity, before or by any Federal, state,
municipal, administrative or other court, governmental department,
commission, board, or agency, an adverse determination of which could
have a material adverse effect on the business or operations of CFC,
and CFC knows of no basis for any of the foregoing. There is no
order, writ, injunction, or decree of any court, domestic or foreign,
or any Federal agency affecting CFC or to which CFC is subject.
6.10. CFC Information. The information with respect to CFC and
its data processing capabilities which has been provided to Telepay,
Greer and Graham is accurate and complete in all material respects.
SECTION VII. MANAGEMENT
7.1. Directors. DART shall initially have a total of nine
directors. The following persons shall be elected as directors for
an initial term of three years and thereafter until such time as a
public offering of DART Common Stock has occurred:
Richard E. Greer Edward Sebastian Carroll A. Campbell
Leighton Cubbage Donald R. Futch Mack I. Whittle, Jr.
Cynthia Engle Steve Powell William O. Graham, Jr.
The DART directors shall be paid reasonable directors' fees.
7.2. Replacement of Directors. In the event that any of the
persons set forth in Section 7.1 is unable or unwilling to serve (or
to continue in service) as director of DART, that the replacement
Director for such person(s) shall be mutually acceptable to Greer and
CFC. Until such time as CFC and Greer agree upon a mutually
acceptable replacement, DART's board shall be decreased in size to
equal the number of existing directors.
7.3. Executive Committee. The Board of Directors of DART shall
establish an executive committee consisting of Richard E. Greer and
Mack I. Whittle, Jr., which committee must unanimously approve
material capital expenditures, material compensation increases,
issuances of capital stock and any company restructuring. Such
approval shall be in addition to any necessary board approvals.
7.4. Voting of Stock and Other Actions. CFC, Greer and Graham
agree to vote their DART Common Stock and take such other reasonable
action as may be necessary to cause the actions set forth in this
Section VII to occur. CFC, Graham and Greer agree that each of them
shall not vote their DART Common Stock or take any actions which are
contrary to the purposes and intent set forth in this Section VII.
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7.5. Other Covenants of Telepay regarding Voting. In the event
that CFC is precluded because of regulatory reasons from acquiring
DART Common Stock in excess of the 4.95% to be owned by CFC as
contemplated herein, Greer and Graham shall nevertheless vote all of
their shares of DART Common Stock as may be necessary to implement
this Section VII.
7.6. Termination of Voting Agreement. The provisions of this
Section VII shall terminate completely upon the completion of an
underwritten public offering whereby DART is registered under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended.
SECTION VIII. COVENANTS OF THE PARTIES
8.1. Confidentiality and No-Use. Each party will and, will
cause its employees and agents to, hold in strict confidence, unless
disclosure is compelled by judicial or administrative process, or in
the opinion of its counsel, by other requirements of law, all
Confidential Information of the other party and will not disclose the
same to any person. Confidential Information shall be used only for
the purpose of and in connection with consummating the transaction
contemplated herein. Each party will and will cause its employees
and agents to hold in strict confidence all Confidential Information
except for such disclosure as may be required in the ordinary course
of business, or unless disclosure is compelled by judicial or
administrative process, or in the opinion of its counsel, by other
requirements of law. During the pendency of this Agreement, each
party agrees that it shall use Confidential Information only in
connection with the business of DART and not for any other purpose.
In the event that this Agreement is terminated because of a breach
hereof, the breaching party shall never be entitled to use
Confidential Information. Subsequent shareholders of DART shall be
required to agree to confidentiality and no-use provisions
substantially similar to the provisions contained in this Section
VIII. The term "Confidential Information" shall mean all information
of any kind concerning a party hereto (or an affiliate of a party)
that is furnished by such party or on its behalf in connection with
this Agreement, except information (i) ascertainable or obtained from
public or published information, (ii) received from a third party not
known to the recipient of Confidential Information to be under an
obligation to keep such information confidential, (iii) which is or
becomes known to the public (other than through a breach of this
Agreement), (iv) of which the recipient was in possession prior to
disclosure thereof in connection with the Merger, or (v) which was
independently developed by the recipient without the benefit of
Confidential Information.
8.2. CFC Customer Base. CFC shall offer the System to its
customer base, provided that the System functions in customer's homes
as demonstrated by the System prototypes shown to CFC.
8.3. Fees. Each party shall be responsible for its own costs
and fees associated with the transactions contemplated herein.
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8.4. Sale of Telepay Stock. Greer and Graham shall at all
times maintain ownership of at least two-thirds of the outstanding
stock of Telepay.
8.5. Contribution of Telepay Stock. Greer and Graham agree
that each Telepay shareholder, at the Formation Time, shall be
obligated to transfer their respective shares of Telepay stock to
DART upon the terms and conditions contemplated herein.
SECTION IX. CONDITIONS TO CONSUMMATION
9.1. Conditions to CFC's Obligation of Consummation. The
following shall be a condition to CFC's obligation to enter into the
DP Agreement and to consummate any of the other transactions
contemplated herein (including the transfer of CFC property and the
receipt of DART Common Stock):
(i) All permits, orders, consents, or other authorizations
necessary for CFC to engage in the particular transaction shall have
been obtained, and no governmental agency or department or judicial
authority shall have issued any order, writ, injunction or decree
prohibiting the consummation of such transaction. Approvals of all
applicable regulatory agencies shall have been obtained without the
imposition of any condition or requirements that, in the reasonable
judgment of CFC, renders the subject transaction unduly burdensome.
(ii) Telepay, Greer and Graham shall have complied with all
their covenants contained herein (to the extent that such covenants
may have been complied with by the date of entry into the DP
Agreement) and Telepay's, Greer's and Graham's representations and
warranties contained herein shall be accurate in all material
respects.
(iii) The business of Telepay shall have been conducted in the
usual and customary manner, and there shall have been no material
casualty or material adverse change in the business or financial
condition of Telepay from the date hereof through the date of
consummation of the subject transaction.
9.2. Conditions to Consummation. The following shall be a
condition to Telepay's obligation to enter into the DP Agreement and
for Telepay, Greer and Graham to consummate any of the other
transactions contemplated herein:
(i) CFC shall have complied with all its covenants contained
herein (to the extent that such covenants may have been complied with
by the date of consummation of the subject transaction) and CFC's
representations and warranties contained herein shall be accurate in
all material respects.
SECTION X. TERMINATIONS
10.1. Termination. This Agreement may be terminated at any
time:
(i) by mutual consent of the parties;
(ii) by either (A) CFC or (B) Telepay, Greer or Graham, at that
party's option, if a permanent injunction or other order, including
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any order denying any required regulatory consent or approval, shall
have been issued by any Federal or state court of competent
jurisdiction in the United States or by any United States Federal or
state governmental or regulatory body, which order prevents the
consummation of the transactions contemplated herein;
(iii) by either (A) CFC or (B) Telepay, Greer or Graham, if the
other party has failed to comply with the agreements or fulfill the
conditions contained herein, provided, however, that any such failure
of compliance or fulfillment must be material and the breaching party
must be given notice of the failure to comply and a reasonable period
of time to cure; and provided, further that the non-breaching party
elects to terminate because of such failure of compliance;
(iv) by any party hereto as set forth in Section 12.2 hereof.
10.2. Effect of Termination. In the event of termination of
this Agreement by any party as provided above, this Agreement shall
forthwith become void and there shall be no liability hereunder on
the part of any party, or their respective agents, representatives or
affiliates, except for intentional breach; provided, however, that in
the event this Agreement is terminated, any agreements between the
two parties as to confidential information shall survive such
termination, and provided, further, that CFC shall be entitled to
sole possession and ownership to all of its property (both tangible
and intangible) contributed or made available to Telepay and/or DART
and to all work product created in furtherance of the transactions
contemplated herein.
SECTION XI. DISPUTE RESOLUTION
11.1. Dispute Resolution. Any dispute arising under this
Agreement, including without limitation, any dispute as to the terms
of the DP Agreement or the reasonableness of compensation thereunder,
referred to and resolved by arbitration in Greenwood, South Carolina,
in accordance with the rules of the American Arbitration Association,
by a panel of three arbitrators, one of whom shall be selected by the
Telepay, one of whom shall be selected by CFC and the third of whom
shall be selected by the arbitrators selected by Telepay and CFC. A
determination made in accordance with such rules shall be delivered
in writing to the parties hereto and shall be final and binding and
conclusive upon them. Each party shall pay its or his own legal,
accounting and other fees in connection with such an arbitration;
provided, however, that the arbitrators may award arbitration costs,
including legal, auditing and other fees to the prevailing party in
the arbitration proceeding if the arbitrators determine that such an
award is appropriate.
SECTION XII. MISCELLANEOUS
12.1. Survival of Representations and Warranties. The
representations, warranties and covenants contained in this Agreement
or in any other documents delivered pursuant hereto, shall survive
the consummation of the transactions contemplated hereby.
Notwithstanding any investigation made by or on behalf of the
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parties, whether before or after Closing Date, the parties shall be
entitled to rely upon the representations and warranties given or
made by the other party(ies) herein.
12.2. Severability. Each provision of this Agreement is
severable from the remainder of the Agreement. If any provision or
covenant contained in this Agreement is not permissible under
applicable law, then such provision or covenant shall be modified
such that it is in accordance with applicable law and the benefits
resulting from such provision or covenant are substantially
preserved. However, in the event that such modification represents a
material change to the benefits or detriments of either party hereto,
then such party which is affected by such change in benefits and/or
detriments shall have the right to terminate this Agreement without
liability.
12.3. Entire Agreement. This Agreement, including any
schedules, exhibits, lists and other documents referred to herein
which form a part hereof, contains the entire agreement of the
parties with respect to the subject matter contained herein and there
are no agreements, warranties, covenants or undertakings other than
those expressly set forth herein.
12.4. Binding Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that the
Agreement shall not be assigned by either of the parties hereto
without the prior written consent of the other party hereto.
12.5. Notices. Any notice given hereunder shall be in writing
and delivered to such addresses as may be provided by the parties to
each other from time to time. Any notice shall be deemed delivered
and received upon reasonable proof of receipt.
12.6. Counterparts. This Agreement may be executed in one or
more Counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same
instrument.
12.7. Headings. The section and paragraph headings contained
in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretations of this Agreement.
12.8. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina.
12.9. Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of all of the parties.
12.10. Waiver. Any term, provision or condition of this
Agreement (other than the required by law) may be waived in writing
at any time by the party which is entitled to the benefits thereof.
IN WITNESS WHEREOF, this Agreement has been duly entered as of
the date first written above.
Witnesses
CAROLINA FIRST CORPORATION
/s/______________________ By: /s/_________________________
William S. Hummers III
Executive Vice President
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TELEPAY, INC.
/s/______________________ By: /s/_________________________
Richard E. Greer
WILLIAM GRAHAM
/s/______________________ By: /s/_________________________
An individual
RICHARD E. GREER
/s/______________________ By: /s/_________________________
An individual
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SCHEDULE 1.2
Non-exclusive List of Assets of Telepay
Software, patents, patent applications, licenses, trademarks and
know-how related to the System.
SCHEDULE 1.3
Capital Contributions of CFC
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Exhibit A
Fixed Compensation
$______ per transaction (with "transaction" to be defined more
clearly)
Percentage Compensation
CFC shall receive 32.5% of after tax net income of DART, as
calculated pursuant to generally accepted accounting principles (the
"Percentage Compensation"). This 32.55% assumes that the 200,000
shares is issued as contemplated in Section 2.3 of the Agreement;
otherwise the Percentage Commission shall be 40.05%. The Percentage
Compensation as may become payable shall be represented by a
promissory note delivered on April 1 of each year, which note shall
bear interest at 2% over prime, and shall be payable in full five
years from its date of issuance, with interest to be paid annually.
Such Percentage Compensation shall be adjusted in the event that
additional equity (in addition to the capital to be received from the
sale of 200,000 shares of Common Stock) is contributed to DART, all
in accordance with the following calculation:
The percentage compensation shall be diluted to the same extent
that 450,000 of the original total outstanding shares get
diluted by the issuance of equity.
For example: If there are 1,200,000 shares of Common Stock
outstanding (after the (Section Mark)351 incorporation) and DART
issues an additional 1,200,000 shares of Common Stock, then CFC
percentage compensation will be reduced to 18.75%.
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