Item 1.01 Entry into a Material Definitive Agreement.
On July 29, 2022, Deluxe Corporation (the "Company") announced that three of its
wholly-owned subsidiaries, First American Payment Systems, LP, a limited
partnership, also d/b/a Merimac Capital ("First American"), Eliot Management
Group, LLC, limited liability company, also d/b/a Sundance Payment Solutions
("EMG") and Think Point Financial, LLC, a limited liability company, also d/b/a
Cypress Bay Solutions and Impulse Payments ("Think Point", together with First
American and EMG, the "First American Subsidiaries") and the Federal Trade
Commission (the "FTC") entered into a Stipulated Order for Permanent Injunction,
Monetary Judgment, and Other Relief (the "Consent Order"), which was lodged in
the United States District Court for the Eastern District of Texas (the "Court")
and is subject to final approval by the Court before becoming effective. Once
effective, the Consent Order will resolve the FTC's investigation regarding the
First American Subsidiaries' participation in certain acts or in the marketing,
promotion, offering for sale, or sale of payment processing services to
merchants throughout the United States (the "FTC Investigation"). The FTC
alleged that these practices violated Section 5 of the Federal Trade Commission
Act and Section 4 of the Restore Online Shoppers' Confidence Act.
Pursuant to the Consent Order, under which the First American Subsidiaries
neither admitted nor denied the FTC's allegations (except as to the Court having
jurisdiction over the matter), the First American Subsidiaries agreed to make a
$4,900,000 payment to the FTC (the "Monetary Judgment") within seven days of
entry of the Consent Order. Additionally, among other things, the First American
Subsidiaries agreed to refrain from engaging in certain sale and debiting
practices, make certain disclosures concerning negative options and to maintain
a compliance program. The foregoing summary of the Consent Order is not complete
and is qualified in its entirety by reference to the complete text of the
Consent Order, a copy of which is attached hereto as Exhibit 10.1, and
incorporated herein by reference.
The Company expects to be fully indemnified for the Monetary Judgment, pursuant
to that certain Agreement and Plan of Merger, dated as of April 21, 2021 (the
"Merger Agreement"), by and among the Company, FAPS Holdings, Inc. ("FAPS"),
ApplePoint FAPS Holdings LP and Fox Acquirer Sub, Inc. Under the terms of the
Merger Agreement, the Company is entitled to limited indemnification for certain
expenses and losses that may be incurred after the consummation of the
acquisition of FAPS that arise out of certain matters, including the FTC
Investigation. The foregoing description of the Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Merger Agreement, which was filed as Exhibit 2.1 to the Company's
Current Report on Form 8-K filed with the SEC on April 22, 2021 and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of April 21, 2021, by and among
Deluxe Corporation, Fox Acquirer Sub, Inc., FAPS Holdings, Inc. and
Applepoint FAPS Holdings LP (solely in its capacity as the stockholder
representative) (incorporated by reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K filed with the SEC on April 22,
2021).
10.1 Stipulated Order for Permanent Injunction, Monetary Judgment, and Other
Relief.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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