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OMB APPROVAL
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OMB Number 3235-0145
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. )(1)
Columbia Capital Corp.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
197351208
- --------------------------------------------------------------------------------
(CUSIP Number)
Stephen J. Schaller, c/o CNG Financial Corporation
4824 Socialville-Fosters Road, Mason, Ohio 45040 (513) 336-7735
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 16, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Check the following box if a fee is being paid with the statement [ ].
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 197351208 13D Page 2 of 7 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
CNG Financial Corporation (31-1481590)
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
BK, WC
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
34,000,000
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
34,000,000
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
34,000,000
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
70.01%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Page 3 OF 7 Pages
COLUMBIA CAPITAL CORP.
----------------------
SCHEDULE 13D
CNG Financial Corporation, an Ohio corporation ("Reporting Person")
September 27, 1999
1. Security and Issuer.
--------------------
Common Stock
Columbia Capital Corp.
1157 North Fifth Street
Abilene, Texas 79601
2. Identity and Background.
------------------------
a. CNG Financial Corporation,
an Ohio corporation
b. 4824 Socialville-Fosters Road
Mason, Ohio 45040
c. Holding company of subsidiaries
which provide consumer financial services.
d. Not applicable
e. Not applicable
f. Ohio
3. Sources and Amount of Funds or Other Consideration.
---------------------------------------------------
a. On September 16, 1999, pursuant to the terms of an Agreement for
Purchase of Stock, dated as of September 16, 1999 (the "Stock Purchase
Agreement"), by and between Columbia Capital Corp., a Delaware corporation (the
"Company") and CNG Financial Corporation, an Ohio corporation (the "Reporting
Person"), the Reporting Person purchased 4,000,000 shares of Common Stock of the
Company (the "Common Stock") for a purchase price of $500,000. The source of the
funds came from a working capital line of credit made available by the Reporting
Person's credit facility lenders, the lead bank of which is PNC Bank, N.A. (the
"Credit Facility Lenders").
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Page 4 of 7 Pages
b. The Stock Purchase Agreement also provides that the Reporting Person
shall be mandatorily obligated to purchase an additional 20,000,000 shares of
Common Stock (the "Second Installment") for a purchase price of $2,500,000 (the
"Second Installment Payment"), on or before September 30, 1999; PROVIDED,
HOWEVER, in the event that the Reporting Person's Credit Facility Lenders fail
to approve of or consent to the Second Installment Payment, then the Reporting
Person shall not be mandatorily obligated to purchase the Second Installment,
but shall instead be granted an option to purchase the Second Installment in
consideration of $2,500,000, which option shall expire on October 10, 1999.
The Reporting Person anticipates that the source of funds for the
Second Installment Payment will be from a working capital line of credit to be
made available by the Credit Facility Lenders, or in the event that the Credit
Facility Lenders do not approve of or consent to the payment of the Second
Installment Payment, the Reporting Person anticipates that the source of funds
for the exercise price of the option for the Second Installment, if at all, will
be from general working capital of the Reporting Person.
c. The Stock Purchase Agreement also provides that the Reporting Person
shall be granted a Non-Qualified Stock Option (the "Stock Option") to purchase
an additional 10,000,000 share of Common Stock for the purchase price of
$2,000,000 (the "Third Installment Payment"), which Stock Option must be
exercised by the Reporting Person on or before September 16, 2000. The Stock
Option shall be exercisable in whole, and not in part, in the event that the
Reporting Person shall pay the Second Installment Payment. In the event that the
Reporting Person shall not pay the Second Installment Payment, the Stock Option
shall be immediately cancelled.
The Reporting Person anticipates that source of funds for the Third
Installment Payment will be from a working capital line of credit to be made
available by the Credit Facility Lenders, or in the event that the Credit
Facility Lenders do not approve of or consent to the payment of the Third
Installment Payment, the Reporting Person anticipates that the source of funds
for the Third Installment Payment related to the Stock Option, if at all, will
be from general working capital of the Reporting Person.
4. Purpose of Transaction.
-----------------------
The purpose of the transaction described in this Schedule 13D is for
the Reporting Person to become the principal and controlling stockholder of the
Company. The Reporting Person is a holding company of subsidiaries which provide
consumer financial services. The Reporting Person intends to obtain a
controlling interest in the Company, which provides, among other services,
credit and debit card processing services and operates an existing processing
facility for such purposes.
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Page 5 of 7 Pages
As of the date of this Schedule 13D, the Reporting Person has purchased
4,000,000 shares of Common Stock. The Reporting Person will also be mandatorily
obligated, subject to certain terms and conditions described elsewhere in this
Schedule 13D, to purchase an additional 20,000,000 shares of Common Stock (the
"Second Installment"), on or before September 30, 1999, and in the event that
the Reporting Person shall not be mandatorily obligated to purchase the Second
Installment on or before such date, the Reporting Person shall have an option to
purchase the Second Installment on or before October 10, 1999.
In the event that the Reporting Person acquires the Second Installment,
as described above, the Reporting Person shall be entitled to designate a
majority of the members of the Board of Directors of the Company. Prior to the
acquisition of the Second Installment, the Reporting Person shall not be
entitled to designate any members of the Board of Directors of the Company.
In the event that the Reporting Person acquires the Second Installment,
the Reporting Person shall be entitled to exercise the Stock Option to purchase
an additional 10,000,000 shares of Common Stock. The Stock Option expires on
September 16, 2000.
In the event that the Reporting Person shall fail to acquire the Second
Installment, as described above, the Company shall have the right to repurchase
all or none of the 4,000,000 shares of Common Stock currently beneficially owned
by the Reporting Person, at a repurchase price of $500,000, through and
including the period ending September 16, 2001.
5. Interest in Securities of the Issuer.
-------------------------------------
a. 34,000,000 shares (70.01%)
b. SOLE VOTING AND DISPOSITIVE POWERS - 34,000,000 shares
SHARED VOTING AND DISPOSITIVE POWERS - Not applicable
c. Not applicable
d. Not applicable
e. Not applicable
Item 6. Contracts, Arrangements, Understandings or Relationships with
respect to Securities of the Issuer.
-------------------------------------------------------------
a. On September 16, 1999, pursuant to the terms of the Stock Purchase
Agreement, the Reporting Person purchased 4,000,000 shares of Common Stock for a
purchase price of $500,000.
b. The Stock Purchase Agreement also provides that the Reporting Person
shall be mandatorily obligated to purchase the Second Installment of 20,000,000
shares of Common Stock for the Second Installment Payment of $2,500,000, on or
before September 30, 1999; PROVIDED, HOWEVER, in the event that the Reporting
Person's Credit Facility Lenders fail to approve of or consent to the Second
Installment Payment, then the Reporting Person shall not be mandatorily
obligated to purchase the Second Installment, but shall instead be granted an
option to purchase the Second Installment in consideration of $2,500,000, which
option shall expire on October 10, 1999.
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Page 6 of 7 Pages
c. The Stock Purchase Agreement also provides that the Reporting Person
shall be granted the Stock Option to purchase an additional 10,000,000 shares of
Common Stock for the purchase price of $2,000,000 (the "Third Installment
Payment"), which Stock Option must be exercised by the Reporting Person on or
before September 16, 2000. The Stock Option shall be exercisable in whole, and
not in part, in the event that the Reporting Person shall pay the Second
Installment Payment. In the event that the Reporting Person shall not pay the
Second Installment Payment, the Stock Option shall be immediately cancelled.
d. In the event that the Reporting Person shall fail to acquire the
Second Installment, as described above, the Company shall have the right to
repurchase all or none of the 4,000,000 shares currently beneficially owned by
the Reporting Person, at a repurchase price of $500,000, through and including
the period ending September 16, 2001.
e. Further, in connection with the Stock Purchase Agreement, pursuant
to the terms of an Agreement for the Purchase of Stock, dated as of September
16, 1999 (the "Century Agreement"), Century Financial Group, Inc. ("Century"),
an affiliate of two (2) of the Company's principal stockholders, Douglas R.
Baetz and Glenn M. Gallant, the Reporting Person has agreed to sell 1,000,000
shares of Common Stock to Century for the purchase price of $10; provided,
however, that the Century Agreement shall be null and void, and the Reporting
Person shall have no obligation whatsoever to sell any shares of Common Stock to
Century, in the event that the following contingencies are not satisfied: (i)
that Century procure or broker, without compensation, executed processing
contracts ("Processing Contracts") between the Company and one or more
customers; (ii) that each of the Processing Contracts have a term length of not
less than five (5) years; (iii) that the Processing Contracts collectively
generate not less than $150,000 of processing revenues for the Company during
the month of March, 2000; and (iv) that the Reporting Person shall pay the
Second Installment Payment to the Company, in accordance with the terms and
conditions of the Stock Purchase Agreement. Century and Messrs. Baetz and
Gallant are not affiliates of the Reporting Person.
7. Material to be Filed as Exhibits.
---------------------------------
a. Agreement for Purchase of Stock, by and between Columbia Capital
Corp., a Delaware corporation and CNG Financial Corporation, an Ohio
corporation, dated as of September 16, 1999.
b. Non-Qualified Stock Option Agreement, dated as of September 16,
1999.
c. Agreement for the Purchase of Stock, by and among Century Financial
Group, Inc., a Florida corporation and CNG Financial Corporation, an Ohio
corporation, dated as of September 16, 1999.
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Page 7 of 7 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 27, 1999 CNG FINANCIAL CORPORATION
By: /s/ Stephen J. Schaller
--------------------------
Stephen J. Schaller
General Counsel
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Exhibit a
AGREEMENT FOR THE PURCHASE OF STOCK
by and between
COLUMBIA CAPITAL CORPORATION
a Delaware corporation
and
CNG FINANCIAL CORPORATION
an Ohio corporation
September 16, 1999
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TABLE OF CONTENTS
ARTICLE I REPRESENTATIONS, COVENANTS AND WARRANTIES
OF CNG
PAGE
----
Section 1.1 Organization........................................2
Section 1.2 Binding Obligation; No Default......................2
Section 1.3 Compliance with Other
Instruments, etc.................................3
Section 1.4 Consents............................................3
Section 1.5 Financial Statements................................3
Section 1.6 No Undisclosed Liabilities..........................4
Section 1.7 Absence of Certain Changes..........................4
Section 1.8 Compliance with Law.................................6
Section 1.9 Accuracy of Information Furnished...................6
Section 1.10 Title and Related Matters...........................6
Section 1.11 Securities Warranties...............................7
Section 1.12 CNG Schedules.......................................9
ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES OF CLCK
Section 2.1 Organization........................................9
Section 2.2 Capitalization......................................9
Section 2.3 Subsidiaries........................................9
Section 2.4 Options and Warrants...............................10
Section 2.5 Binding Obligation; No Default.....................10
Section 2.6 Compliance with Other
Instruments, etc................................10
Section 2.7 Consents...........................................10
Section 2.8 Books and Records..................................11
Section 2.9 Financial Statements...............................11
Section 2.10 No Undisclosed Liabilities.........................11
Section 2.11 Absence of Certain Changes.........................11
Section 2.12 Plant and Equipment................................13
Section 2.13 Leases.............................................14
Section 2.14 Tax Returns........................................14
Section 2.15 Transactions with Affiliates.......................14
Section 2.16 Contracts and Commitments..........................15
Section 2.17 Compliance with Contracts;
Delivery of Certain Contracts...................16
Section 2.18 Insurance..........................................16
Section 2.19 Labor Difficulties.................................17
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PAGE
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Section 2.20 Litigation.........................................18
Section 2.21 No Condemnation or Expropriation...................18
Section 2.22 Compliance with Law................................18
Section 2.23 Environmental Compliance...........................19
Section 2.24 Employee Benefits..................................21
Section 2.25 Absence of Questionable Payments...................22
Section 2.26 Personnel..........................................22
Section 2.27 Real Property Holding Corporation..................22
Section 2.28 Accuracy of Information Furnished..................22
Section 2.29 Intellectual Property and Technology Licenses......22
Section 2.30 Real Properties....................................24
Section 2.31 Title and Related Matters..........................24
Section 2.32 Title to the Exchanged CLCK Stock..................24
Section 2.33 Compliance With Exchange Act.......................25
Section 2.34 CLCK Schedules.....................................25
ARTICLE III CLOSING
Section 3.1 Purchase and Sale..................................25
Section 3.2 Closing............................................26
Section 3.3 Closing Events.....................................26
Section 3.4 Termination........................................27
ARTICLE IV SPECIAL COVENANTS
Section 4.1 Access to Properties and Records...................27
Section 4.2 Availability of Rule 144...........................28
Section 4.3 Information for CLCK Registration
Statement and Public Reports....................28
Section 4.4 Special Covenants and Representations
Regarding the Exchanged CLCK Stock..............28
Section 4.5 Third Party Consents...............................28
Section 4.6 Actions Prior to Closing...........................29
Section 4.7 Indemnification....................................30
Section 4.8 Directors and Officers.............................30
Section 4.9 Satisfaction of Note Payable Obligations to Century
with CLCK Common Stock..........................30
Section 4.10 Stock Option Plan..................................31
Section 4.11 Option to Purchase Additional Shares...............31
Section 4.12 Certain Restrictions on Future
Issuances by CLCK...............................32
Section 4.13 Enhancement of Sales Volume........................32
Section 4.14 Century/CNG Stock Purchase Agreement...............32
ii
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ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF CLCK
PAGE
----
Section 5.1 Accuracy of Representations........................33
Section 5.2 Officer's Certificate..............................33
Section 5.3 No Material Adverse Change.........................33
Section 5.4 Other Items........................................33
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF CNG
Section 6.1 Accuracy of Representations........................33
Section 6.2 Officer's Certificate..............................34
Section 6.3 No Material Adverse Change.........................34
Section 6.4 Other Items........................................34
ARTICLE VII MISCELLANEOUS
Section 7.1 Brokers and Finders................................34
Section 7.2 Choice of Law......................................34
Section 7.3 Notices............................................34
Section 7.4 Attorneys' Fees....................................35
Section 7.5 Confidentiality....................................35
Section 7.6 Schedules; Knowledge...............................35
Section 7.7 Third Party Beneficiaries..........................36
Section 7.8 Entire Agreement...................................36
Section 7.9 Survival; Termination..............................36
Section 7.10 Counterparts.......................................36
Section 7.11 Amendment or Waiver................................36
Section 7.12 Incorporation of Recitals..........................36
Section 7.13 Expenses...........................................36
Section 7.14 Headings; Context..................................36
Section 7.15 Benefit............................................37
Section 7.16 Public Announcements...............................37
Section 7.17 Severability.......................................37
Section 7.18 Failure of Conditions; Termination.................37
Section 7.19 No Strict Construction.............................37
Section 7.20 Execution Knowing and Voluntary....................37
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AGREEMENT FOR THE PURCHASE OF STOCK
THIS AGREEMENT FOR THE PURCHASE OF STOCK (the "Agreement"), is entered
into as of September 16, 1999, by and between Columbia Capital Corporation, a
Delaware corporation ("CLCK"), on the one hand, and CNG Financial Corporation,
an Ohio corporation ("CNG"), on the other hand.
PREMISES
--------
WHEREAS, this Agreement provides for the issuance and delivery by CLCK
to CNG of 4,000,000 shares of the common stock of CLCK (the "CLCK Common
Stock"), par value $0.001 per share, on the Closing Date (defined in Section 3.2
below) and in consideration of CNG's payment of $500,000 in cash;
WHEREAS, this Agreement further provides for the issuance and delivery
by CLCK to CNG of an additional 20,000,000 shares CLCK Common Stock, conditioned
upon the approval of such sale by CNG's Lenders (defined in Section 1.2 below),
on or before the Second Installment Payment Date (defined in Section 3.1(b)
below) and in consideration of CNG's payment of $2,500,000 in cash;
WHEREAS, this Agreement further provides for an option on the part of
CNG to purchase an additional 10,000,000 shares of CLCK Common Stock on or
before the Third Installment Payment Date (defined in Section 4.11 below) and in
consideration of CNG's payment of $2,000,000 in cash;
WHEREAS, this Agreement further provides for the issuance and delivery
by CLCK to Century Financial Group, Inc. ("Century") of 1,736,512 shares of CLCK
Common Stock on the Closing Date, and an additional contingent 1,736,512 shares
of CLCK Common Stock, depending upon whether Century satisfies certain customer
procurement contingencies, on March 31, 2000 and in consideration of Century's
releasing CLCK from certain note payable obligations;
WHEREAS, this Agreement further provides for CNG's use of its best
efforts to increase the revenues and sales volume of CLCK, including selling to
Century 1,000,000 shares of CLCK Common Stock owned by CNG on March 31, 2000 and
in consideration of Century's payment of $10 in cash, provided that Century
satisfies certain customer procurement contingencies (without which satisfaction
CNG shall have no obligation to sell shares of CLCK Common Stock to Century);
and
WHEREAS, the parties intend and believe that it is in their best
interests to enter into this Agreement and the other agreements contemplated
herein.
1
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AGREEMENT
---------
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF CNG
As an inducement to, and to obtain the reliance of CLCK, CNG represents
and warrants, as follows:
Section 1.1 ORGANIZATION. CNG is a corporation duly organized, validly
existing and in good standing under the laws of the state of Ohio and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification, except where the failure to so qualify would not have
a Material Adverse Effect (as hereinafter defined) upon the assets, business,
properties or operations of CNG. Included in the CNG Schedules (as hereinafter
defined) as Schedule 1.1 are complete and correct copies of the articles of
incorporation and bylaws of CNG as in effect on the date hereof. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of (a) the articles of incorporation or bylaws
of CNG, or (b) any resolution adopted by the CNG board of directors or the
stockholders of CNG. CNG has taken all action required by law, CNG's articles of
incorporation, bylaws or otherwise to authorize the execution and delivery of
this Agreement. Each of the CNG Parties has the full power, authority and legal
right and have taken all actions required by law, CNG's articles of
incorporation, bylaws or otherwise to execute and deliver this Agreement and
consummate the transactions herein contemplated.
Section 1.2 BINDING OBLIGATION; NO DEFAULT. CNG has duly taken all
action necessary to authorize the execution, delivery and performance of this
Agreement and the other instruments and agreements contemplated hereby. Such
execution, delivery and performance does not and will not (a) contravene,
conflict with, or result in a violation of, or give any person the right to
challenge any of the transactions contemplated hereby or to exercise any remedy
or obtain any relief under, any law, rule, regulation, judgment, order,
injunction, decree or ruling of any court, tribunal, arbitrator or governmental
authority, domestic or foreign to which any of CNG, or any of the assets owned
or used by CNG, may be subject; (b) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any person the right
to revoke, withdraw, suspend, cancel, terminate, or modify, any license, permit
or other authorization that is held by CNG or that otherwise relates to the
business of, or any of the assets owned or used by, CNG; or (c) contravene,
2
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conflict with, or result in a violation or breach of any provision of, or give
any person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any contract, commitment, agreement, arrangement, plan or understanding (each, a
"Contract") to which CNG is a party; PROVIDED, HOWEVER, that CNG's execution and
performance of this Agreement will constitute a default under that certain
Credit Facility dated July 24, 1998, attached hereto as Schedule 1.2, and made a
part hereof by reference (the "Credit Facility"), unless the Lenders (defined in
the Credit Facility) approve of or consent to CNG's execution and performance of
this Agreement. This Agreement constitutes the legal, valid and binding
obligation CNG, enforceable against CNG in accordance with its terms, subject to
laws of general application affecting creditors generally.
Section 1.3 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the
execution and delivery of this Agreement by CNG nor compliance by CNG with the
terms and conditions of this Agreement will: (a) require CNG to obtain the
consent of any governmental agency or any other person; (b) constitute a
material default under any indenture, mortgage or deed of trust to which CNG is
a party or by which CNG, or its properties may be subject; or (c) cause the
creation or imposition of any Encumbrance (as such term is defined hereinafter)
on any of the assets of CNG.
Section 1.4 CONSENTS. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority or any third party is required to be made or obtained by CNG in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
Section 1.5 FINANCIAL STATEMENTS. Schedule 1.5 (a) attached hereto are
true, complete and correct copies of CNG's audited financial statements,
including CNG's audited consolidated balance sheets as of December 31, 1998 and
1997, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1998 and 1997 (the "CNG
Audited Financial Statements"). The CNG Audited Financial Statements, together
with the notes thereto, fairly present the financial position of CNG at December
31, 1998 and 1997, as the case may be, and the consolidated results of the
operations and the changes in stockholders' equity and cash flows for CLCK for
the periods covered by the Audited CNG Financial Statements and have been
prepared in accordance with GAAP consistently applied with prior periods.
Schedule 1.5(b) attached hereto are true, complete and correct copies of CLCK's
unaudited financial statements, including CNG's unaudited consolidated balance
sheets as of June 30, 1999 and 1998, and the related consolidated statements of
operations, stockholders' equity and cash flows for the quarterly periods ended
June 30, 1999 and 1998 (the "CNG Unaudited Financial Statements"). The CNG
Unaudited Financial Statements, together with the notes thereto, fairly present
the financial position of CNG at June 30, 1999 and 1998, as the case may be, and
the consolidated results of the operations and the changes in stockholders'
equity and cash flows for CNG for the periods covered by the CNG Unaudited
Financial Statements and have been prepared in accordance with GAAP consistently
applied with prior periods. (The CLCK Audited Financial Statements and CNG
Unaudited Financial Statements are collectively referred to herein as the "CNG
Financial Statements").
3
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Section 1.6 NO UNDISCLOSED LIABILITIES. CNG does not have any material
liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) which were not adequately reflected or reserved against on the CNG
Financial Statements, except for liabilities and obligations incurred since June
30, 1999 in the ordinary course of CNG's business and consistent with past
practice and which, in any event, in the aggregate, would not have a material
adverse effect on the assets, operations or condition (financial or otherwise)
of CNG's business ("Material Adverse Effect").
Section 1.7 ABSENCE OF CERTAIN CHANGES. Except as set forth in the CNG
Financial Statements June 30, 1999, CNG has not:
(a) Suffered any material adverse change in its financial condition,
assets, liabilities (absolute, accrued, contingent or otherwise), or reserves,
and no event has occurred and no action has been taken by CNG or, to the
knowledge of CNG, any other person, nor, to the best of CNG's knowledge, is any
such event or action contemplated or threatened, which might reasonably be
expected to have a Material Adverse Effect, except that no representation or
warranty is made as to general economic conditions or matters affecting CNG's
industry generally;
(b) Suffered any material adverse change in its business, operations or
prospects;
(c) Experienced any shortage of raw materials or supplies;
(d) Incurred any short-term or long-term liabilities or obligations
(absolute, accrued, contingent or otherwise) except items incurred in the
ordinary course of business and consistent with past practice, none of such
short-term or long-term liabilities or obligations exceeds $10,000 individually,
or $25,000 in the aggregate, (counting obligations or liabilities arising from
one transaction or a series of similar transactions, and all periodic
installments or payments under any lease or other agreement providing for
periodic installments or payments, as a single obligation or liability), or
increased or changed any assumptions underlying or method of calculating any bad
debt, contingency or other reserves;
(e) Paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice of liabilities and obligations reflected or reserved against in
the CNG Financial Statements or incurred in the ordinary course of business and
consistent with past practice since the date of the CNG Financial Statements;
4
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(f) Permitted or allowed any of its property or assets (real, personal
or mixed, tangible or intangible) to be subjected to any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind;
(g) Written down the value of any inventory in excess of $10,000
(including write-downs by reason of shrinkage or markdown) or written down or
written off as uncollectible any notes or accounts receivable in excess of
$10,000;
(h) Canceled any debts or waived any claims or rights in excess of
$10,000;
(i) Sold, transferred or otherwise disposed of any of its properties or
assets in excess of $10,000 (real, personal or mixed, tangible or intangible);
(j) Disposed of or permitted to lapse any rights to the use of any
Intellectual Property (as defined hereinafter) necessary to permit CNG to
conduct its business or develop its products, or disposed of or disclosed to any
person, other than representatives of CLCK, necessary to permit CNG to conduct
its business or develop its products;
(k) Granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension, profit
sharing or other plan or commitment) other than in the ordinary course of
business and consistent with past practice, or any increase in the compensation
(including, without limitation, salary and bonus) payable or to become payable
to any officer or key employee;
(l) Made any single capital expenditure or commitment in excess of
$10,000 for additions to property, plant, equipment or intangible capital assets
or made aggregate capital expenditures and commitments in excess of $10,000 for
additions to property, plant, equipment or intangible capital assets;
(m) Declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock or other
securities of CNG;
(n) Made any change in any method of accounting or accounting practice;
(o) Paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any
"Affiliate" or "Associate" of CNG as such terms are defined in Rule 405
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act, or any officer, director or stockholder of CNG
(collectively, "Affiliates" or individually, an "Affiliate");
(p) Made any gifts, or sold, transferred or exchanged any property of
any material value for less than the fair value thereof;
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(q) Suffered any material casualty loss or damage (whether or not
covered by insurance); or
(r) Agreed, whether in writing or otherwise, to take any action
described in this Section 1.7.
Section 1.8 COMPLIANCE WITH LAW. The operations of CNG have been
conducted in accordance with all applicable laws, regulations and other
requirements of all foreign and national governmental authorities, and of all
territories, states, municipalities and other political subdivisions and
agencies thereof having jurisdiction over CNG, including, without limitation,
all such laws, regulations, ordinances and requirements relating to
environmental, antitrust, consumer protection, labor and employment, zoning and
land use, currency exchange, immigration, health, occupational safety, pension,
securities, defense procurement and trading with the enemy matters. CNG has not
received any notification since its inception of any asserted present or past
failure by CNG to comply with such laws, regulations, ordinances or
requirements. CNG has all permits, authorizations and consents necessary for the
operation of its business except for those which the failure to have would not,
individually or in the aggregate, have a Material Adverse Effect.
Section 1.9 ACCURACY OF INFORMATION FURNISHED. No representation or
warranty by CNG contained in this Agreement or in respect of the exhibits,
schedules or documents delivered to CLCK by CNG and expressly referred to
herein, and no statement contained in any certificate furnished or to be
furnished by or on behalf of CNG pursuant hereto, or in connection with the
transactions contemplated hereby, contains, or will contain as of the date such
representation or warranty is made or such certificate is or will be furnished,
and as of the Closing Date, any untrue statement of a material fact, or omits,
or will omit to state as of the date such representation or warranty is made or
such certificate is or will be furnished, any material fact which is necessary
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. True and correct
copies of each agreement and other document referred to in the schedules hereto
have been furnished by CNG to CLCK.
Section 1.10 TITLE AND RELATED MATTERS. CNG has good and marketable
title to and is the sole and exclusive owner of all of the properties and
assets, inventory, interests in properties and assets, real and personal, which
are reflected in the most recent CNG balance sheet and the CNG Schedules or
acquired after that date (except properties, interests in properties and assets
sold or otherwise disposed of since such date in the ordinary course of
business)(collectively, "CNG Assets"), free and clear of all Encumbrances
except: (a) statutory liens or claims not yet delinquent; (b) such imperfections
of title and easements as do not and will not, materially detract from or
interfere with the present or proposed use of the properties subject thereto or
affected thereby or otherwise materially impair present business operations on
such properties; and (c) as described in the CNG Schedules. Except as set forth
in the CNG Schedules, CNG owns free and clear of any Encumbrances, royalty
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interests or other restrictions or limitations of any nature whatsoever, any and
all products it is currently manufacturing, and all procedures, techniques,
marketing plans, business plans, methods of management or other information
utilized in connection with CNG's business. Except as set forth in the CNG
Schedules, no third party has any right to, and CNG has not received any notice
of infringement of or conflict with asserted rights of others with respect to
any product, service, which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect on
the business, operations or financial condition of CNG or any material portion
of its properties, assets or rights.
For purposes of this Agreement, the term "Encumbrance" means any
mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, security interest, lien (statutory or other) or preference, equity,
option, charge, limitation on voting rights, right to receive dividends,
dissenters' or appraisal rights, priority or other security or similar agreement
or preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
Section 1.11 SECURITIES WARRANTIES. With respect to the securities of
CLCK to be issued and delivered by CLCK to CNG pursuant to Section 3.1 hereof,
each of the CNG Stockholders represents and warrants to CLCK that:
(a) The Exchanged CLCK Stock is being acquired for the account of CNG
and not with a view to sale in connection with any distribution of the Exchanged
CLCK Stock;
(b) CNG is acquiring the Exchanged CLCK Stock hereunder without having
received any form of general solicitation or general advertising;
(c) CNG or its representative, if any, have been provided with, or
given reasonable access to, full and fair disclosure of all material information
concerning CLCK;
(d) CNG has a preexisting personal or business relationship with CLCK
or certain of its officers, directors or controlling persons, or by reason of
its business or financial experience, CNG could reasonably be assumed to have
the capacity to represent his own interests in connection with this Agreement;
(e) CNG understands and hereby acknowledges that the Exchanged CLCK
Stock will be issued pursuant only to those restrictions imposed by and
exemptions available pursuant to applicable federal and state laws and that the
certificates to be issued in respect of the Exchanged CLCK Stock may bear a
legend in a form satisfactory to counsel for CLCK; in part, CLCK's reliance upon
such exemptions is based on the representations and warranties made by CNG in
this Section 1.11;
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(f) CNG agrees that the certificates to be issued in respect of the
Exchanged CLCK Stock shall bear a legend in a form satisfactory to counsel for
CLCK reflecting the status of the Exchanged CLCK Stock as restricted securities
under Rule 144(a)(3) promulgated under the Securities Act and acknowledges that
the transfer agent or registrar for CLCK may be instructed to restrict the
transfer of the Exchanged CLCK Stock in accordance with such legend and any
other restrictions provided in this Agreement;
(g) CNG hereby agrees that it will not sell, transfer, hypothecate,
pledge, assign or otherwise dispose of any of the Exchanged CLCK Stock, except
pursuant to the terms of this Agreement and to a registration statement filed
under the provisions of the Securities Act, a favorable no-action or
interpretive letter received from the Commission or an opinion of counsel
satisfactory to CLCK that such sale, transfer, hypothecation, pledge, assignment
or other disposition will not violate the registration requirements of the
Securities Act, and does not in any way violate the terms of this Agreement;
(h) CNG hereby acknowledges that: (i) the shares of Exchanged CLCK
Stock referred to herein are being acquired after adequate investigation of the
business plan and prospects of CLCK; (ii) that CNG is not relying upon the
accuracy of any predictions as to the future prospects or developments of CLCK
or its business and is well informed as to the business of CLCK and has reviewed
its operations and financial statements; (iii) CNG or its professional advisors
have discussed the financial condition and business operations of CLCK with the
officers, directors and principal stockholders of CLCK and has been afforded the
opportunity to ask questions with respect thereto; and (iv) CNG specifically
acknowledges that the shares of Exchanged CLCK Stock are speculative and involve
a very high degree of risk and that there can be no assurance that CLCK will
achieve its business objectives or, in particular, that it will ever have cash
available for distribution to its stockholders;
(i) CNG is a sophisticated investor (as defined in Rule 506(b)(2)(ii)
of Regulation D promulgated under the Securities Act ("Regulation D") and an
accredited investor (as defined in Rule 501 of Regulation D), and CNG has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in the securities. CNG acknowledges that
the securities are speculative and involve a high degree of risk, including the
potential loss of CNG's investment herein and CNG has taken cognizance of and
understands the risk factors related to the purchase of the securities.
(j) Each certificate evidencing the shares of Exchanged CLCK Stock
shall be issued in the name of CNG.
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Section 1.12 CNG SCHEDULES. CNG shall cause the CNG Schedules to be
delivered to CLCK hereunder at or before the Closing.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF CLCK
As an inducement to, and to obtain the reliance of the CNG Parties,
CLCK represents and warrants, as follows:
Section 2.1 ORGANIZATION. Each of CLCK and the subsidiaries of CLCK
described in Section 2.3 hereof (collectively, the "CLCK Group") is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its respective incorporation and has the corporate power
and is duly authorized, qualified, franchised and licensed under all applicable
laws, regulations, ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification, except where the failure to so qualify would not have a Material
Adverse Effect (as hereinafter defined) upon the assets, business, properties or
operations of CLCK Group. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of (a) the
certificate of incorporation or bylaws of CLCK, or (b) any resolution adopted by
the board of directors or the stockholders of CLCK. CLCK has the full power,
authority and legal right, and, subject to approval by the stockholders of CLCK
of the transactions contemplated by this Agreement, has taken all actions
required by law, its certificate of incorporation, bylaws or otherwise to
execute and deliver this Agreement and consummate the transactions herein
contemplated.
Section 2.2 CAPITALIZATION. The authorized capitalization of CLCK
consists of 50,000,000 shares of common stock, par value $0.001 per share (the
"CLCK Common Stock"), and 5,000,000 shares of preferred stock, par value $0.001
per share (the "CLCK Preferred Stock"), of which 12,775,000 shares of CLCK
Common Stock and no shares of CLCK Preferred Stock are issued and outstanding.
All issued and outstanding shares of CLCK Common Stock have been duly
authorized, validly issued and are fully paid and nonassessable, and none of
such shares of CLCK Common Stock were issued in violation of the preemptive or
other rights of any person or the provisions of any applicable law, rule or
regulation.
Section 2.3 SUBSIDIARIES. Except as set forth on Schedule 2.3, CLCK
does not have any subsidiaries and does not own, beneficially or of record,
directly or indirectly, any equity securities or other securities issued by any
other person, or any direct or indirect equity or ownership interest in any
other business.
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Section 2.4 OPTIONS AND WARRANTS. Except as set forth on Schedule 2.4
attached hereto, there are no: (a) outstanding securities convertible into or
exchangeable for any of CLCK's capital stock; (b) outstanding options, warrants,
calls or other rights, including rights to demand registration or to sell in
connection with any registration by CLCK under the Securities Act of 1933, as
amended (the "Securities Act") to purchase or subscribe to capital stock of CLCK
or securities convertible into or exchangeable for capital stock of CLCK; or (c)
Contracts relating to the issuance, sale or transfer of any equity or other
security of CLCK, other than this Agreement. Except as set forth in Schedule 2.4
attached hereto, neither CLCK nor, to its knowledge, any holder of the CLCK
Common Stock is a party to any voting trust agreement or other Contract
restricting or otherwise relating to voting or dividend rights with respect to
the CLCK Common Stock.
Section 2.5 BINDING OBLIGATION; NO DEFAULT. CLCK has duly taken all
action necessary to authorize the execution, delivery and performance of this
Agreement and the other instruments and agreements contemplated hereby. Such
execution, delivery and performance does not and will not (a) contravene,
conflict with, or result in a violation of, or give any person the right to
challenge any of the transactions contemplated hereby or to exercise any remedy
or obtain any relief under, any law, rule, regulation, judgment, order,
injunction, decree or ruling of any court, tribunal, arbitrator or governmental
authority, domestic or foreign to which CLCK, or any of its assets, may be
subject; (b) contravene, conflict with, or result in a violation of any of the
terms or requirements of, or give any person the right to revoke, withdraw,
suspend, cancel, terminate, or modify, any license, permit or other
authorization that is held by CLCK or that otherwise relates to the business of,
or any of the assets owned or used by, CLCK; or (c) contravene, conflict with,
or result in a violation or breach of any provision of, or give any person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or modify, any Contract to
which CLCK is a party. This Agreement constitutes the legal, valid and binding
obligation of CLCK, enforceable against CLCK in accordance with its terms,
subject to laws of general application affecting creditors generally.
Section 2.6 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the
execution and delivery of this Agreement by CLCK nor compliance by CLCK with the
terms and conditions of this Agreement will: (a) require CLCK to obtain the
consent of any governmental agency or any other person; (b) constitute a
material default under any indenture, mortgage or deed of trust to which CLCK is
a party or by which it, or any of its properties may be subject; or (c) cause
the creation or imposition of any Encumbrance on any of CLCK's assets.
Section 2.7 CONSENTS. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority or any third party is required to be made or obtained by CLCK in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
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Section 2.8 BOOKS AND RECORDS. The books of account and other financial
records of CLCK are complete and correct in all material aspects. The minute
books of CLCK, as previously made available to CNG and its legal counsel,
contain records of all meetings and accurately reflect all other material
corporate action of the stockholders, directors and any committees of the Board
of Directors of CLCK.
Section 2.9 FINANCIAL STATEMENTS. Schedule 2.9 (a) attached hereto are
true, complete and correct copies of CLCK's audited financial statements,
including CLCK's audited consolidated balance sheets as of December 31, 1998 and
1997, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1998 and 1997 (the "CLCK
Audited Financial Statements"). The CLCK Audited Financial Statements, together
with the notes thereto, fairly present the financial position of CLCK at
December 31, 1998 and 1997, as the case may be, and the consolidated results of
the operations and the changes in stockholders' equity and cash flows for CLCK
for the periods covered by the Audited CLCK Financial Statements and have been
prepared in accordance with GAAP consistently applied with prior periods. CNG
has heretofore been furnished with true, complete and correct copies of the
Audited CLCK Financial Statements for the years ended December 31, 1998 and
1997, included in CLCK's Annual Report on Form 10-KSB for the year ended
December 31, 1998. Schedule 2.9 (b) attached hereto are true, complete and
correct copies of CLCK's unaudited financial statements, including CLCK's
unaudited consolidated balance sheets as of June 30, 1999 and 1998, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the quarterly periods ended June 30, 1999 and 1998 (the "CLCK
Unaudited Financial Statements"). The CLCK Unaudited Financial Statements,
together with the notes thereto, fairly present the financial position of CLCK
at June 30, 1999 and 1998, as the case may be, and the consolidated results of
the operations and the changes in stockholders' equity and cash flows for CLCK
for the periods covered by the CLCK Unaudited Financial Statements and have been
prepared in accordance with GAAP consistently applied with prior periods. CNG
has heretofore been furnished with true, complete and correct copies of the CLCK
Financial Statements for the quarterly periods ended June 30, 1999 and 1998,
included in CLCK's Quarterly Report on Form 10-QSB for the quarterly period
ended June 30, 1999 (The CLCK Audited Financial Statements and CLCK Unaudited
Financial Statements are collectively referred to herein as the "CLCK Financial
Statements").
Section 2.10 NO UNDISCLOSED LIABILITIES. Except as set forth in
Schedule 2.10 attached hereto and in Section 4.9 hereof, since June 30, 1999,
CLCK Group does not have, any material liabilities or obligations of any nature
(absolute, accrued, contingent or otherwise) which were not adequately reflected
or reserved against on the CLCK Financial Statements, except for liabilities and
obligations incurred in the ordinary course of CLCK Group's business and
consistent with past practice and which, in any event, in the aggregate, would
not have a Material Adverse Effect.
Section 2.11 ABSENCE OF CERTAIN CHANGES. Except as set forth in
Schedule 2.11 attached hereto and in Section 4.9 hereof, since June 30, 1999,
CLCK Group has not:
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(a) Suffered any material adverse change in its financial condition,
assets, liabilities (absolute, accrued, contingent or otherwise), or reserves,
and no event has occurred and no action has been taken by CLCK Group or, to the
knowledge of CLCK, any other person, nor, to CLCK's knowledge, is any such event
or action contemplated or threatened, which might reasonably be expected to have
a material adverse effect on the assets, the operations or condition (financial
or otherwise) of CLCK Group's business ("Material Adverse Effect"), except that
no representation or warranty is made as to general economic conditions or
matters affecting CLCK Group's industry generally;
(b) Suffered any material adverse change in its business, operations or
prospects;
(c) Experienced any shortage of raw materials or supplies;
(d) Incurred any short-term or long-term liabilities or obligations
(absolute, accrued, contingent or otherwise) except items incurred in the
ordinary course of business and consistent with past practice, none of such
short-term or long-term liabilities or obligations exceeds $10,000 individually,
or $25,000 in the aggregate, (counting obligations or liabilities arising from
one transaction or a series of similar transactions, and all periodic
installments or payments under any lease or other agreement providing for
periodic installments or payments, as a single obligation or liability), or
increased or changed any assumptions underlying or method of calculating, any
bad debt, contingency or other reserves;
(e) Paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice of liabilities and obligations reflected or reserved against in
the CLCK Financial Statements or incurred in the ordinary course of business and
consistent with past practice since the date of the CLCK Financial Statements;
(f) Permitted or allowed any of its property or assets (real, personal
or mixed, tangible or intangible) to be subjected to any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind;
(g) Written down the value of any inventory in excess of $10,000
(including write-downs by reason of shrinkage or markdown) or written down or
written off as uncollectible any notes or accounts receivable in excess of
$10,000;
(h) Canceled any debts or waived any claims or rights in excess of
$10,000;
(i) Sold, transferred or otherwise disposed of any of its properties or
assets in excess of $10,000 (real, personal or mixed, tangible or intangible);
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(j) Disposed of or permitted to lapse any rights to the use of any
Intellectual Property necessary to permit CLCK Group to conduct its business or
develop its products, or disposed of or disclosed to any person, other than
representatives of CNG, necessary to permit CLCK Group to conduct its business
or develop its products;
(k) Granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension, profit
sharing or other plan or commitment) other than in the ordinary course of
business and consistent with past practice, or any increase in the compensation
(including, without limitation, salary and bonus) payable or to become payable
to any officer or key employee;
(1) Made any single capital expenditure or commitment in excess of
$10,000 for additions to property, plant, equipment or intangible capital assets
or made aggregate capital expenditures and commitments in excess of $10,000 for
additions to property, plant, equipment or intangible capital assets;
(m) Declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock or other
securities of CLCK;
(n) Made any change in any method of accounting or accounting practice;
(o) Paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any
"Affiliate" or "Associate" of CLCK as such terms are defined in Rule 405
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act, or any officer, director or stockholder of CLCK
(collectively, "Affiliates" or individually, an "Affiliate");
(p) Made any gifts, or sold, transferred or exchanged any property of
any material value for less than the fair value thereof;
(q) Suffered any material casualty loss or damage (whether or not
covered by insurance); or
(r) Agreed, whether in writing or otherwise, to take any action
described in this Section 2.11.
Section 2.12 PLANT AND EQUIPMENT. The material plants, buildings,
fixtures, structures and equipment owned, leased or used by CLCK Group are in
good operating condition and repair, ordinary wear and tear excepted, and are
adequate for the uses to which they are being put.
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Section 2.13 LEASES. Except as set forth in Schedule 2.13 hereto, each
lease pursuant to which CLCK Group leases real property or any material item of
personal property is valid and in full force and effect, there are no existing
material defaults by CLCK Group thereunder, and, to the knowledge of CLCK, no
event has occurred which (with notice, lapse of time or both) would constitute a
default thereunder by any party to such leases. Except as set forth on Schedule
2.13 hereto, CLCK Group is presently in compliance in all material respects with
all laws, rules, regulations and ordinances relating to zoning and land use
restrictions which are applicable to any portion of the land subject to each
such real property lease. Except as set forth on Schedule 2.13 hereto, no
consent is required from the lessor under any lease of each such real or
personal property prior to the consummation of the transactions contemplated
hereby.
Section 2.14 TAX RETURNS. CLCK has: (a) filed or has caused to be filed
all federal, state and local and all material foreign, territorial, franchise,
income, sales, gross receipts and all other tax returns and statements required
to be filed by CLCK or on its behalf and which were due prior to the date of
this Agreement (the "Tax Returns and Statements"); (b) paid within the time and
in the manner prescribed by law all Taxes (as defined below), due for all
periods ending on or prior to the date of this Agreement, except with respect to
Taxes which are immaterial in amount and the failure to so pay or file would not
result in material penalties and would not have a Material Adverse Effect; and
(c) established adequate reserves for the payment of all unpaid Taxes as of the
date of the CLCK Financial Statements. The Tax Returns and Statements are true,
complete and accurate, in all material respects. No tax assessment or deficiency
has been made against CLCK nor has any notice been given of any actual or
proposed assessment or deficiency which has not been paid or for which an
adequate reserve has not been set aside. Except as set forth in such Tax Returns
and Statements, the Tax Returns and Statements are not presently, nor have they
since CLCK's inception been, the subject of any audit or other administrative or
court proceeding by any federal, territorial, state, local or foreign
governmental agency. CLCK has not received any notice that any of the Tax
Returns and Statements is now being or will be examined or audited, and no
consents extending any applicable statute of limitations have been filed.
For purposes of this Agreement, "Taxes" shall mean any and all taxes,
payroll and employment related taxes, levies, assessments, charges or other
fees, together with any interest, penalties or other additions, imposed by any
governmental authority upon CNG or CLCK, as the case may be.
Section 2.15 TRANSACTIONS WITH AFFILIATES. Except as described in the
Commission Filings or in Schedule 2.15 attached hereto, no Affiliate of CLCK
Group has any interest, directly or indirectly, in any Contract to which CLCK
Group is a party, or any interest in any competitor, supplier or customer of
CLCK Group. CLCK Group is not indebted, directly or indirectly, to any Affiliate
of CLCK Group, for any liability or obligation, whether arising by reason of
stock ownership, contract, oral or written agreement or otherwise. Except as set
forth in the Commission Filings or in Schedule 2.15 attached hereto, no
Affiliate is indebted, directly or indirectly, to CLCK Group and no employee of
CLCK Group is indebted to CLCK Group.
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Except as described in the Commission Filings, no Affiliate: (a) is a
party to any Contract with CLCK Group pursuant to which it directly provides
material services to CLCK Group; or (b) is a party to any Contract with a third
party, to which CLCK Group is not a party, but under which CLCK Group receives
any material amount of goods or services from said third party. All goods and
services provided to CLCK Group by any of its Affiliates and all goods and
services provided to any of its Affiliates by CLCK Group, at any time since CLCK
Group's inception have been charged to the recipient at a price that would have
been acceptable to an unrelated third party receiving such goods and services in
an arm's-length transaction with the provider.
Section 2.16 CONTRACTS AND COMMITMENTS. Except as described in the
Commission Filings:
(a) CLCK Group has not entered into any Contracts which, individually
or in the aggregate, are material to its business, operations or prospects, or
which require the making of any charitable contribution;
(b) No purchase contracts or commitments of CLCK Group continue for a
period of more than 30 days or are in excess of the normal, ordinary and usual
requirements of its business or, to the knowledge of CLCK, at any excessive
price;
(c) CLCK Group has not entered into any Contracts pursuant to which
CLCK Group is, as of the date hereof, required to obtain or maintain, on behalf
of itself or any of its directors, officers or employees, any facility or
personnel security clearances from the U.S. Department of Defense or any other
agency of the U.S. Government or any comparable agency of any other government;
(d) There are no outstanding sales contracts, purchase orders,
commitments or proposals of CLCK Group which continue for a period of more than
30 days or will likely result in any loss to CLCK Group upon completion or
performance thereof;
(e) CLCK Group has not entered into any outstanding Contracts with
officers, employees, agents, consultants, advisors, salesmen, sales
representatives or suppliers that are not cancelable by any of the them on
notice of not longer than 30 days and without liability, penalty or premium, or
any agreement or arrangements providing for the payment of any bonus or
commission based on sales or earnings;
(f) CLCK Group has not entered into any outstanding employment Contract
that contains any severance or termination pay liabilities or obligations;
(g) CLCK Group is not a party to any collective bargaining agreement or
other Contract with any labor organization;
(h) CLCK Group is not restricted by agreement from carrying on its
business anywhere in the world;
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(i) CLCK Group has not incurred any outstanding debt obligation for
borrowed money, including guarantees of or agreements to acquire any such debt
obligation of others other than as reflected on the CLCK Financial Statements;
(j) CLCK Group is not a party to any Contract, subcontract or agreement
with the U.S. Government or any agency or instrumentality thereof, or with any
foreign, territorial or state government or any agency or instrumentality
thereof; and
(k) CLCK Group has not entered into any outstanding loan with or to any
person other than (i) as reflected on the CLCK Financial Statements and (ii) for
amounts not more than $5,000 to any individual and $25,000 in the aggregate.
Section 2.17 COMPLIANCE WITH CONTRACTS; DELIVERY OF CERTAIN CONTRACTS.
CLCK Group is not in default under any Contract, including, without limitation,
those listed in Schedules 2.13, 2.16 and 2.30 hereto or as described in the
Commission Filings, except for those which would not have a Material Adverse
Effect, and no act or omission by CLCK Group has occurred which, with notice or
lapse of time or both, would constitute such a default under any term or
provision of any such Contract. Each of the agreements referred to in Schedules
2.13, 2.16 and 2.30 hereto or as described in the Commission Filings is valid
and in full force and effect. To the knowledge of the CLCK, no party is in
default under any agreement referred to in Sections 2.13, 2.16 and 2.30 hereto
or as described in the Commission Filings, and, no act or omission has occurred
by any party which, with notice or lapse of time or both, would constitute such
a default under any term or provision thereof.
Section 2.18 INSURANCE. All existing policies of fire, liability,
worker's compensation and all other forms of insurance owned or held by, or
covering the business, properties or assets of, CLCK Group, are in full force
and effect, all premiums with respect thereto covering all periods up to and
including the date hereof have been paid, and no notice of cancellation or
termination has been received by CLCK Group with respect to any such policy.
Such policies will remain in full force and effect through the respective dates
set forth on Schedule 2.18 without additional premiums being paid or properly
accrued as an additional liability. Schedule 2.18 also: (a) describes all
products liability claims made since CLCK Group's inception, and all other
claims (except medical and dental) pending or made since CLCK Group's inception
under such insurance policies; and (b) identifies all types of insurable risks
which CLCK Group and its Board of Directors has designated as being self
insured. To the knowledge of CLCK, except as set forth in Schedule 2.18, CLCK
Group has not been turned down at any time since the inception of CLCK Group for
any insurance with respect to its assets or operations, nor has its coverage
been limited by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance during the last three (3)
years.
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Section 2.19 LABOR DIFFICULTIES. Except as described in the Commission
Filings or as described in Schedule 2.19 attached hereto:
(a) No employee of CLCK Group is in violation of, or has threatened any
violation of, any material term of any employment contract or any other Contract
relating to the relationship of such employee with CLCK Group or any other
party, including any employee handbook and/or personnel policy manual of CLCK
Group except for violations which would not, individually or in the aggregate,
have a Material Adverse Effect;
(b) CLCK Group has complied in all material respects with each and
every term, provision, section and part of any written employment Contract,
including any employee handbook and/or personnel policy manual, that CLCK Group
has or has had with any individual who has performed work for CLCK Group;
(c) There is no unfair labor practice charge or similar charge,
complaint, allegation or other process or claim pending or, to the knowledge of
CLCK, threatened against CLCK Group before the National Labor Relations Board
(the "NLRB") or any other foreign, federal, territorial, state or local
governmental agency or other entity;
(d) There is no labor dispute, strike, slowdown, work stoppage or other
job action pending or, to the knowledge of CLCK, threatened against or otherwise
affecting CLCK Group;
(e) No Petition for election or similar charge, complaint, allegation
or other process or claim is pending or, to the knowledge of CLCK, threatened
against CLCK Group before the NLRB, any region of the NLRB, or any other
foreign, federal, territorial, state or local governmental agency or other
entity, and no organizing campaign or other effort is underway or, to the
knowledge of CLCK, threatened by any labor organization to organize any
employees of CLCK Group;
(f) CLCK Group has not experienced any labor dispute, strike, slowdown,
work stoppage, or other job action since its inception; and
(g) There is not pending or, to the knowledge of CLCK, threatened
against CLCK Group any complaint, charge, allegation or other process or claim
whatsoever, other foreign, than those which would not, individually or in the
aggregate, have a Material Adverse Effect: (i) alleging any violation of the
Occupational Safety and Health Act or any other foreign, federal, territorial,
state or local law governing health and/or safety in the workplace; (ii) seeking
compensation, benefits and/or penalties pursuant to any Workers' Compensation
Act or similar law (including the laws of any foreign country having
jurisdiction over CLCK Group); (iii) seeking any compensation or benefits
pursuant to any Unemployment Insurance Act or similar law (including the laws of
any foreign country having jurisdiction over CLCK Group); (iv) alleging any
violation of the Immigration Reform and Control Act of 1986 or any similar law
(including the laws of any foreign country having jurisdiction over CLCK Group);
(v) alleging any violation of the Fair Labor Standards Act or any other foreign,
federal, territorial, state or local law governing wage and/or hour issues; (vi)
alleging any violation of any foreign, federal, territorial, state or local
child labor law; and/or (vii) alleging any other foreign, federal, territorial,
state or local law relating to or governing employment or labor matters.
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Section 2.20 LITIGATION. Except as described in the Commission Filings:
(a) There is no pending or, to the knowledge of CLCK, threatened
complaint, charge, claim, action, suit or arbitration proceeding before any
federal, territorial, state, municipal, foreign or other court or governmental
or administrative body or agency, or any private arbitration tribunal or any
investigation or inquiry before any federal, territorial, state, municipal,
foreign or other court or governmental or administrative body or agency against,
relating to or affecting (i) CLCK Group or any director, officer, agent or
employee thereof in his or her capacity as such, (ii) the assets, properties or
business of CLCK Group, or (iii) the transactions contemplated by this
Agreement, nor, to the knowledge of CLCK Group, is there any basis for any such
complaint, charge, claim, action, suit, arbitration proceeding, investigation or
inquiry which could have an adverse effect on the assets, property, business or
prospects of CLCK Group;
(b) There is not in effect any order, judgment or decree of any court
or governmental or administrative body or agency enjoining, barring, suspending,
prohibiting or otherwise limiting CLCK Group or, to the knowledge of CLCK, any
officer, director, employee or agent thereof from conducting or engaging in any
aspect of the business of CLCK Group, or requiring CLCK Group or, to the
knowledge of CLCK Group, any officer, director, employee or agent thereof to
take certain action with respect to any aspect of the business of CLCK Group
which could reasonably be anticipated to have a Material Adverse Effect; and
(c) CLCK Group is not in violation of or default under any applicable
order, judgment, writ, injunction or decree of any federal, territorial, state,
municipal, foreign or other court or regulatory authority.
Section 2.21 NO CONDEMNATION OR EXPROPRIATION. Neither the whole nor
any portion of the leaseholds or any other assets of CLCK Group is subject to
any governmental decree or order to be sold or is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor, to the knowledge of CLCK, has any such condemnation,
expropriation or taking been proposed.
Section 2.22 COMPLIANCE WITH LAW. The operations of CLCK Group have
been conducted in accordance with all applicable laws, regulations and other
requirements of all foreign and national governmental authorities, and of all
territories, states, municipalities and other political subdivisions and
agencies thereof having jurisdiction over CLCK Group, including, without
limitation, all such laws, regulations, ordinances and requirements relating to
environmental, antitrust, consumer protection, labor and employment, zoning and
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land use, currency exchange, immigration, health, occupational safety, pension,
securities, defense procurement and trading with the enemy matters. CLCK Group
has not received any notification since its inception of any asserted present or
past failure by CLCK Group to comply with such laws, regulations, ordinances or
requirements. CLCK Group has all permits, authorizations and consents necessary
for the operation of its business except for those which the failure to have
would not, individually or in the aggregate, have a Material Adverse Effect.
Section 2.23 ENVIRONMENTAL COMPLIANCE.
A. For purposes of this Section 2.23, the following terms shall have
the meanings set forth below:
(a) "PREMISES" means any property or facility CLCK Group owns, operates
or leases which relate to the business of CLCK Group or which constitute any of
the CLCK Assets (as defined hereinafter);
(b) "HAZARDOUS SUBSTANCE" means, at any time, any substance, material,
chemical or waste the presence of which requires investigation or remediation
under, or which is or becomes regulated by, any federal, state or local
governmental authority due to its properties of being toxic, hazardous,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic, or
mutagenic, including, without limitation, any material, waste, chemical or
substance which is: (i) defined as a "hazardous," "extremely hazardous" or
"restricted hazardous" waste, material or substance under the laws of the
governmental jurisdiction where the Premises are located and/or to which the
Premises are subject; (ii) Petroleum or a Petroleum product, including, without
limitation, gasoline and diesel fuel; (iii) asbestos or asbestos containing;
(iv) polychlorinated biphenyls; (v) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. ss.1251 et seq. (33
U.S.C. ss.1321) or listed pursuant to Section 307 of the Clean Water Act (33
U.S.C. ss.1317); (vi) defined as A "hazardous waste" pursuant to Section 1004 of
the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901 et seq. (42 U.S.C.
ss.6903); or (vii) defined as a "hazardous substance" pursuant to Section 101 of
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. ss.9601 et seq. ("CERCLA") (42 U.S.C. ss.9601);
(c) "HAZARDOUS MATERIALS LAW" means any foreign, national, territorial,
state, province or local statute, ordinance, order, rule or regulation of any
type, relating to pollution or the protection of worker safety, public safety,
human health, natural resources, or the environment, including laws, statutes,
ordinances, rules or regulations relating to the emission, discharge, release or
threatened release, of pollutants, contaminants or Hazardous Substances into
ambient air, surface water, ground water or land, or remediation or removal
thereof, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants or Hazardous Substances, including without limitation those
statutes and regulations referred to in Subparagraph (b) above, the Occupational
Health and Safety Act (29 U.S.C. ss.651 et seq.); and
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(d) "LOSS" means any and all of the following, whether the result of
any action of any governmental agency or a third party liabilities; penalties;
forfeitures; suits; losses; damages; expenses; debts; obligations; claims; fines
or civil liability for violation of any Hazardous Materials Law; costs
(including the costs of investigation, defense, settlement and attorneys' and
other professional fees whether or not litigation is instituted); or, costs and
capital expenditures required for compliance with Hazardous Materials Law.
B. Except as described in the Commission Filings:
(a) CLCK Group has obtained, and is in full compliance with, all
material permits, licenses or other authorizations which are required under any
Hazardous Materials Law for the operations of the business of CLCK Group;
(b) CLCK is not aware of any material past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans
which may interfere with, or prevent continued compliance by CLCK Group with,
any Hazardous Materials Law, or which may give rise to Loss to CLCK Group based
on or related to any Hazardous Materials Law;
(c) CLCK Group has not entered into any agreement with any governmental
authority or agency, or with any private entity, including, but not limited to,
any prior owners of Premises, relating in any way to violation of any Hazardous
Materials Law, or to the presence, release, threat of release, disposal,
placement on, under or about any Premises of Hazardous Substances;
(d) CLCK Group has not discovered or caused, and to the knowledge of
CLCK, no other person has discovered or caused, any discharge, emission,
disposal or release of Hazardous Substances on the Premises, on property
formerly owned, operated or leased by CLCK Group or on the property of any third
party;
(e) CLCK has not discovered, and to the knowledge of CLCK, no other
person has discovered, any occurrence or condition on the Premises or on any
real property in the vicinity of the Premises, which could cause the Premises to
be subject to any restrictions on the ownership, occupancy, transferability or
use under any Hazardous Materials Law;
(f) CLCK Group has not manufactured, stored or disposed of Hazardous
Substances at any location, including, without limitation, any disposal which
was in compliance with any Hazardous Materials Law;
(g) CLCK Group does not use or maintain any underground storage tanks
or surface impoundments on the Premises and, to the knowledge of CLCK, no
underground storage tanks or surface impoundments are now, or ever have been,
located on the Premises; and
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(h) CLCK Group has not received notice of any lien in favor of any
governmental authority for: (i) any liability under any Hazardous Materials Law;
or (ii) damages arising from or costs incurred by such governmental authority in
response to a release of Hazardous Substances into the environment, nor has any
such lien ever been filed or attached to the Premises.
Section 2.24 EMPLOYEE BENEFITS. Except for the plans, agreements,
arrangements and practices as described in the Commission Filings or as set
forth in Schedule 2.24 attached hereto (collectively, the "Employment Plans").
(a) Neither CLCK Group nor any Affiliate of CLCK Group, maintains or
contributes to, or is obligated or required to contribute to, any bonus,
deferred compensation, severance or termination pay, pension, profit sharing,
stock purchase, stock grant, stock option, group life insurance, health care,
hospitalization insurance, disability, retirement or any other employee benefit
or fringe benefit plan, agreement, arrangement or practice, whether formal or
informal and whether legally binding or not, which covers employees of CLCK
Group. Neither CLCK Group nor any Affiliate has any commitment, whether formal
or informal and whether legally binding or not, to create or contribute to any
additional such plan.
(b) Each Employment Plan, including each Employment Plan which is an
"employee pension benefit plan," as such term is defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") (the
"Pension Plans"), or an "employee welfare benefit plan," as such term is defined
in Section 3(l) of ERISA (the "Welfare Plans"), in all respects conforms to, and
is and has been operated in compliance with, applicable law, including, but not
limited to, ERISA and the Code.
(c) Neither CLCK Group nor any Affiliate, nor any of the Pension Plans,
nor any of the Welfare Plans nor any trust created thereunder, nor any trustee
or administrator thereof, has engaged in a prohibited transaction (within the
meaning of Section 406 of ERISA and Section 4975 of the Code) which might
subject CLCK Group to any material liability or civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code.
(d) Full payment has been duly made or reserved for by CLCK Group of
all amounts that CLCK Group or any Affiliate is required under the terms of all
Employment Plans to pay as contributions to such Employment Plans, with respect
to employees of CLCK Group covered by such Plans, on or prior to the Closing
Date.
(e) None of the Pension Plans is a "multiemployer plan," as such term
is defined in Section 3(37) of ERISA.
(f) Neither CLCK Group nor any Affiliate nor, to the knowledge of CLCK,
any administrator or fiduciary of any Pension Plan or Welfare Plan has engaged
in any transaction or acted or failed to act in a manner which could subject
CLCK Group to any liability for a breach of fiduciary duty under ERISA.
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(g) Neither CLCK Group nor any Employment Plan is obligated to make
payment of post-retirement life, accidental death, medical or disability
insurance benefits of any type, excluding for this purpose the provision of any
such benefits as a result of an individuals exercise of his or her conversion
rights under the Consolidated Omnibus Budget Reconciliation Act of 1986, to, or
with respect to, any former employee of CLCK Group.
Section 2.25 ABSENCE OF QUESTIONABLE PAYMENTS. Neither CLCK Group nor,
to the knowledge of CLCK, any of its directors, officers, agents, employees or
other persons acting on CLCK Group's behalf or for CLCK Group's benefit has used
any corporate or other funds for unlawful contributions, payments, gifts, or
entertainment, or made any unlawful expenditures relating to political activity
to government officials or others or established or maintained any unlawful or
unrecorded funds for such purpose under any foreign, national, territorial,
state, province or local statute, ordinance, order, rule or regulation of any
type. Neither CLCK Group nor, to the knowledge of CLCK, any of its directors,
officers, agents, employees or other persons acting on its behalf or for CLCK
Group's benefit has accepted or received any unlawful contributions, payments,
gifts or expenditures under any foreign, national, territorial, state, province
or local statute, ordinance, order, rule or regulation of any type.
Section 2.26 PERSONNEL. CLCK Group has delivered to CNG a true and
complete list of the wage rates for all non-salaried and salaried employees of
CLCK Group by classification.
Section 2.27 REAL PROPERTY HOLDING CORPORATION. CLCK Group is not a
U.S. Real Property Holding Corporation within the meaning of Section 897(c)(2)
of the Code.
Section 2.28 ACCURACY OF INFORMATION FURNISHED. No representation or
warranty by CLCK contained in this Agreement or in respect of the exhibits,
schedules or documents delivered to CNG Parties by CLCK and expressly referred
to herein, and no statement contained in any certificate furnished or to be
furnished by or on behalf of CLCK pursuant hereto, or in connection with the
transactions contemplated hereby, contains, or will contain as of the date such
representation or warranty is made or such certificate is or will be furnished,
and as of the Closing Date, any untrue statement of a material fact, or omits,
or will omit to state as of the date such representation or warranty is made or
such certificate is or will be furnished, any material fact which is necessary
to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. True and correct
copies of each agreement and other document referred to in the schedules hereto
have been furnished by CLCK to CNG Parties.
Section 2.29 INTELLECTUAL PROPERTY AND TECHNOLOGY LICENSES. Except as
set forth in the Commission Filings and in Schedule 2.29 attached hereto, CLCK
Group neither owns nor licenses any Intellectual Property, and CLCK Group is not
a party to any Technology Licenses. CLCK Group has not, nor to the knowledge of
CLCK, has it been alleged to have, infringed upon any Intellectual Property of
any other party entitled to legal protection. CLCK Group has never asserted any
claim of infringement, misappropriation or misuse of any Intellectual Property
necessary to permit CLCK Group to conduct its business and develop its products
or services.
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The following terms as used in this Agreement shall have the meanings
set forth below:
"COMPUTER TECHNOLOGY" shall mean all designs, drawings, procedures
(including design, manufacturing, test and maintenance procedures),
specifications, software (other than as described within the meaning of the term
"Software" defined elsewhere herein), printed circuit board art work, integrated
circuit masks, test equipment, tools, fixtures, documentation, training
materials, and information, in whatever form, related to, useful, utilizable or
necessary in the design, manufacture, test and/or maintenance of the computer
system, or relate to any Technology Licenses.
"COPYRIGHTS" shall mean all registered copyrights of or applications
therefor, or relate to any Technology Licenses for registration of copyrights,
including the registration number, country and filing and expiration date of
each such copyright.
"INTELLECTUAL PROPERTY" shall mean all Patents, Copyrights, Trade
Names, Computer Technology and Software.
"PATENTS" shall mean the patents, patents pending, industrial designs,
utility models and applications for patent or relate to any Technology Licenses
or which relate to any products (or any component thereof) or services related
to the business of the person, and its method of use or manufacture and any
patents issued thereon and any continuations or reissues thereof, including any
continuation-in-part or divisional patent application thereof and all foreign
counterparts and extensions thereof, including for each such Patent, the serial
or patent number, country, filing and expiration date and title.
"SOFTWARE" shall mean all software (including object and source codes,
in machine readable and listing form), documentation (including internal
documentation made available to customers and training materials), flowcharts,
source code notes, software tools, compilers, test routines and information, in
whatever form and all revisions, release levels and versions of the foregoing
used on or with Computer Technology, owned or licensed by the person, developed
by or for the person, or in the possession of the person, or relate to any
Technology Licenses.
"TECHNOLOGY LICENSES" shall mean all material licenses and other
contracts or commitments, to which the person, is party (either as licensor or
licensee) or otherwise subject, relating to the Intellectual Property (or
applications or registrations as applicable for any thereof).
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"TRADE NAMES" shall mean all registered trademarks and service marks of
the person, or relate to any Technology Licenses, to register trademarks and
service marks, including, for each such trademark and service mark, the
registration or application number, country, filing and expiration date, mark
and class and all unregistered trademarks and service marks used by the person,
or relate to any Technology Licenses.
Section 2.30 REAL PROPERTIES. Included in the Commission Filings is an
accurate and complete list of all real property owned by CLCK, together with a
description of every Encumbrance in such real property. Except as described in
the Commission Filings, CLCK is presently in compliance in all material respects
with all laws, rules, regulations and ordinances relating to zoning and land use
restrictions which are applicable to any portion of the land subject to the real
property. Except as described in the Commission Filings, no consent is required
from the lessor under any lease of real property described in the Commission
Filings prior to the consummation of the transactions contemplated hereby.
Section 2.31 TITLE AND RELATED MATTERS. CLCK Group has good and
marketable title to and is the sole and exclusive owner of all of the properties
and assets, inventory, interests in properties and assets, real and personal,
including the Intellectual Property which are reflected in the most recent CLCK
Financial Statements and the CLCK Schedules or acquired after that date (except
properties, interests in properties and assets sold or otherwise disposed of
since such date in the ordinary course of business) (collectively, "CLCK
Assets"), free and clear of all Encumbrances except: (a) statutory liens or
claims not yet delinquent; (b) such imperfections of title and easements as do
not and will not, materially detract from or interfere with the present or
proposed use of the properties subject thereto or affected thereby or otherwise
materially impair present business operations on such properties; and (c) as
described in the CLCK Schedules. Except as set forth in the CLCK Schedules, CLCK
Group owns free and clear of any Encumbrances, royalty interests or other
restrictions or limitations of any nature whatsoever, any and all products it is
currently manufacturing, including the underlying Proprietary Information and
Technical Information, and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
CLCK Group's business. Except as set forth in the CLCK Schedules, no third party
has any right to, and CLCK Group has not received any notice of infringement of
or conflict with asserted rights of others with respect to any product, service,
or Intellectual Property which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse Effect on
the business, operations or financial condition of CLCK Group or any material
portion of its properties, assets or rights.
Section 2.32 TITLE TO THE EXCHANGED CLCK STOCK. Upon issuance and
delivery to CNG of the certificates for the First Installment of Exchanged CLCK
Stock, the Second Installment of Exchanged Stock, and/or the Third Installment
of Exchanged Stock (collectively the "Exchanged CLCK Stock") described in
Article III and Section 4.11 of this Agreement, CNG shall receive good and
marketable title to the Exchanged CLCK Stock, all of the Exchanged CLCK Stock
shall be received by CNG as validly issued, fully paid and nonassessable, free
and clear of all Encumbrances (other than any restrictions generally imposed by
federal, corporate or territorial securities laws or as otherwise provided for
in this Agreement).
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Section 2.33 COMPLIANCE WITH EXCHANGE ACT. As of the Closing, CLCK
shall be current in all filings required to be tendered to the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). CNG has heretofore been furnished with true, complete and correct copies
of the following: (a) CLCK's Annual Report on Form 10-KSB for the year ended
December 31, 1998, and (b) CLCK's Quarterly Report on Form 10-QSB for the
quarterly periods ended June 30, and March 31, 1999 (collectively, the
"Commission Filings"). The Commission Filings were or shall be, as the case may
be, prepared in accordance and complied in all material respects with the
applicable requirements of the Securities Act or the Exchange Act, as the case
may be. None of such forms, reports and statements, including, without
limitation, any financial statements, exhibits and schedules included therein
and documents incorporated therein by reference, at the time filed, or declared
or it became effective, as the case may be, contained, or now contains, and at
the Closing Date, will contain an untrue statement of a material fact or omitted
or will omit to state a 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.
Section 2.34 CLCK SCHEDULES. CLCK shall cause the CLCK Schedules to be
delivered to CNG Stockholders hereunder at or before the Closing.
ARTICLE III
CLOSING
Section 3.1 PURCHASE AND SALE. Upon the terms and subject to the
conditions contained herein:
(a) FIRST INSTALLMENT OF CLCK COMMON STOCK. At the Closing
(defined in Section 3.2 below), CNG shall deliver and
pay to CLCK the sum of $500,000 (the "First Installment
Payment") in cash, and CLCK shall issue and deliver to
CNG 4,000,000 shares of CLCK Common Stock (the "First
Installment of Exchanged CLCK Stock").
(b) SECOND INSTALLMENT OF CLCK STOCK. Two (2) weeks
following the Closing Date (the "Second Installment
Payment Date"), CNG shall be mandatorily obligated to
purchase an additional 20,000,000 shares of CLCK Common
Stock (the "Second Installment of Exchanged CLCK Stock")
for a purchase price of $2,500,000 (the "Second
Installment Payment") pursuant to this Section 3.1(b);
PROVIDED, HOWEVER, in the event that the Lenders,
pursuant to the Credit Facility, fail to approve of or
consent to CNG's payment of the Second Installment
Payment, then CNG shall not be mandatorily obligated to
purchase the Second Installment of Exchanged CLCK Stock,
but shall instead be granted an option to purchase the
Second Installment of Exchanged CLCK Stock in
consideration of CNG's payment of the Second Installment
Payment, which option shall expire on October 10, 1999.
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CNG shall have no cure period whatsoever for the failure
to pay the Second Installment Payment in a timely manner
on the Second Installment Payment Date. All payments
hereunder by CNG shall be by wire transfer to an account
specified in writing by CLCK. In the event that any
payment date shall occur on a weekend or a national
holiday, such payment date shall be extended to the
immediately following business day.
(c) CNG'S CONTROL OF BOARD OF DIRECTORS. In the event that
CNG shall purchase the Second Installment of Exchanged
CLCK Stock in accordance with this Section 3.1, then CNG
shall be entitled to designate a majority of the members
of the board of directors of CLCK in accordance with and
subject to the terms and conditions of Section 4.8.
(d) CLCK'S OPTION TO REPURCHASE FIRST INSTALLMENT OF
EXCHANGED CLCK STOCK. In the event that CNG shall fail
to purchase the Second Installment of Exchanged CLCK
Stock, then CLCK or its designees shall have the right
to repurchase all or none of the shares of the First
Installment of Exchanged CLCK Stock, referenced in
Section 3.1(a), at a per share repurchase price of
$0.125, during the two (2) year period following the
Closing Date.
Section 3.2 CLOSING. Subject to the terms and conditions of this
Agreement, the closing ("Closing") of the transactions contemplated by this
Agreement shall occur on Wednesday, September 16, 1999 or such other date as the
parties may agree (the "Closing Date").
Section 3.3 CLOSING EVENTS. At the Closing, each of the respective
parties hereto shall execute, acknowledge and deliver (or shall cause to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings, or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby. However, in no event shall the
Closing occur without the satisfaction or waiver of the conditions set forth in
Articles V and VI of this Agreement.
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Section 3.4 TERMINATION.
(a) This Agreement may be terminated by CLCK or by CNG at any time
prior to the Closing Date if:
(i) there shall be any actual or threatened action or
proceeding before any court or any governmental body which shall seek to
restrain, prohibit or invalidate the transactions contemplated by this Agreement
and which, in the judgment of such boards of directors, made in good faith and
based on the advice of their legal counsel, makes it inadvisable to proceed with
the transactions contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required to consummate
such transactions or in the judgment of such boards of directors, made in good
faith and based on the advice of counsel, there is substantial likelihood that
any such approval will not be obtained or will be obtained only on a condition
or conditions which would be unduly burdensome, making it inadvisable to proceed
with the merger and consolidation.
In the event of termination pursuant to this paragraph (a) of Section
3.4, no obligation, right or liability shall arise hereunder, and each party
shall bear all of the expenses incurred by it in connection with the
negotiation, drafting and execution of this Agreement and the transactions
herein contemplated;
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the Board of Directors of CLCK, if CNG shall fail to comply in
any material respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of CNG contained herein
shall be inaccurate in any material respect. If this Agreement is terminated
pursuant to this paragraph (b) of Section 3.4, this Agreement shall be of no
further force or effect, and no obligation, right or liability shall arise
hereunder; and
(c) This Agreement may be terminated at any time prior to the Closing
Date by CNG if CLCK shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of CLCK contained herein shall be inaccurate in
any material respect. If this Agreement is terminated pursuant to this paragraph
(c) of Section 3.4, this Agreement shall be of no further force or effect and no
obligation, right or liability shall arise hereunder.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 ACCESS TO PROPERTIES AND RECORDS. CLCK and CNG will each
afford the other or their respective authorized representatives, full access to
the properties, books and records of CLCK and CNG, as the case may be, in order
that each may have full opportunity to make such reasonable investigation as it
or he shall desire to make of the affairs of the other, and each will furnish
the other with such additional financial and operating data and other
information as to the business and properties of CLCK, and CNG, as the case may
be, as the other shall from time to time reasonably request.
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Section 4.2 AVAILABILITY OF RULE 144. Each of the parties acknowledge
that the Exchanged CLCK Stock to be issued pursuant to this Agreement will be
"restricted securities," as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. CLCK is under no obligation, except as set forth
herein, to register such shares under the Securities Act. Notwithstanding the
foregoing, however, CLCK will use its best efforts to: (a) make publicly
available on a regular basis not less than semi-annually, business and financial
information regarding CLCK so as to make available to the stockholders of CLCK
the provisions of Rule 144 pursuant to subparagraph (c)(1) thereof; and (b)
within ten (10) days of any written request of any stockholder of CLCK, CLCK
will provide to such stockholder written confirmation of compliance with such of
the foregoing subparagraph as may then be applicable. The covenants set forth in
this Section 4.2 shall survive the Closing and the consummation of the
transactions herein contemplated.
Section 4.3 INFORMATION FOR CLCK REGISTRATION STATEMENT AND PUBLIC
REPORTS. CNG will furnish CLCK with all information concerning CNG, including
all financial statements, required for inclusion in any registration statement
or public report required to be filed by CLCK pursuant to the Securities Act,
the Exchange Act or any other applicable federal or state law. CNG represents
and warrants to CLCK that, to the best of his knowledge and belief, all
information so furnished for either such registration statement or other public
release by CLCK, including the financial statements described in Section 1.5,
shall be true and correct in all material respects without omission of any
material fact required to make the information stated not misleading.
Section 4.4 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
EXCHANGED CLCK STOCK. The consummation of this Agreement and the transactions
herein contemplated, including the issuance and delivery of the Exchanged CLCK
Stock to CNG, as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes, which depend, INTER ALIA,
upon the circumstances under which CNG and CLCK acquire such securities.
Section 4.5 THIRD PARTY CONSENTS. CLCK and CNG agree to cooperate with
each other in order to obtain any required third party consents to this
Agreement and the transactions herein and therein contemplated.
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Section 4.6 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the CLCK or CNG Schedules or as permitted or
contemplated by this Agreement, CLCK, and the CNG, respectively, will each:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary wear and
tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or affecting its
assets, properties and business;
(v) use its reasonable commercial efforts to maintain and
preserve its business organization intact, to retain its key employees and to
maintain its relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state laws and all
rules, regulations and orders imposed by federal or state governmental
authorities.
(b) From and after the date of this Agreement until the Closing Date,
CLCK and CNG shall have the right to terminate this Agreement in the event that
the other party shall, prior to the Closing Date:
(i) except as otherwise specifically set forth herein, make
any change in their respective certificates or articles of incorporation or
bylaws;
(ii) take any action described in Section 1.7 in the case of
CNG, or in Section 2.11, in the case of CLCK (all except as permitted therein or
as disclosed in the applicable party's schedules); or
(iii) enter into or amend any Contract, agreement or other
instrument of any of the types described in such party's schedules, except that
a party may enter into or amend any Contract, agreement or other instrument in
the ordinary course of business involving the sale of goods or services.
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Section 4.7 INDEMNIFICATION.
(a) CNG hereby agrees to indemnify CLCK and each of the officers and
directors of CLCK as of the date of execution of this Agreement and as of the
Closing Date against any loss, liability, claim, damage or expense (including,
but not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened or any claim whatsoever), to which it or they may become subject
arising out of or based on any inaccuracy appearing in or misrepresentation made
in this Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement; and
(b) CLCK hereby agrees to indemnify CNG and each of the officers and
directors of CNG as of the date of execution of this Agreement and as of the
Closing Date against any loss, liability, claim, damage or expense (including,
but not limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened or any claim whatsoever), to which it or they may become subject
arising out of or based on any inaccuracy appearing in or misrepresentation made
in this Agreement. The indemnification provided for in this Paragraph shall
survive the Closing and consummation of the transactions contemplated hereby and
termination of this Agreement.
Section 4.8 DIRECTORS AND OFFICERS. Upon CNG's payment of the First
Installment Payment on the Closing Date, CNG shall not be entitled to designate
any members of the Board of Directors of CLCK. Upon and in the event of CNG's
payment of the Second Installment Payment on or before the Second Installment
Payment Date, CNG shall be entitled to designate a majority of members of the
Board of Directors of CLCK.
Section 4.9 SATISFACTION OF NOTE PAYABLE OBLIGATIONS TO CENTURY WITH
CLCK COMMON STOCK. On or before the Closing Date, CLCK shall take all actions
necessary to effect the release and waiver by Century of the following: (i) all
note payable obligations from CLCK to Century, including but not limited to that
certain $700,000 note payable from First Independent Computers, Inc., a Texas
corporation ("FICI"), which is a wholly-owned subsidiary of CLCK, to Century,
dated October 31, 1999, the balance of principal and accrued interest of which
is $251,569, as of the date of this Agreement, and that certain $250,000 note
payable from Fi-Scrip, Incorporated, a Nevada corporation, which is a
wholly-owned subsidiary of CLCK, to Century, dated May 1, 1999, the balance of
principal and accrued interest of which is $182,559, as of the date of this
Agreement, and (ii) all collateral, if any, securing such note payable
obligations. In consideration of Century's releasing CLCK from such note payable
obligations, CLCK shall issue to Century $434,128 of CLCK Common Stock, at
purchase price of $0.25 per share, pursuant to the Agreement for the Purchase
and Sale of Stock (the "Century/CLCK Stock Purchase Agreement") attached as
Schedule 4.9 hereto. Pursuant to the Century/CLCK Stock Purchase Agreement, on
the Closing Date, CLCK shall issue to Century 1,736,512 shares of CLCK Common
Stock in consideration of the cancellation of the debt obligations of $434,128
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owing by CLCK to Century. In addition, on March 31, 2000, CLCK shall issue to
Century an additional 1,736,512 shares of CLCK Common Stock in consideration of
Century's payment to CLCK of $10, if the following contingencies set forth in
the Century/CLCK Stock Purchase Agreement are satisfied: (i) that Century
procure or broker, without compensation, executed processing contracts (the
"Processing Contracts") between CLCK and one or more customers; (ii) that each
of the Processing Contracts have a term length of not less than five (5) years;
(iii) that the Processing Contracts collectively generate not less than $150,000
of processing revenues for CLCK during the month of March, 2000; and (iv) that
CNG pay the CLCK Second Installment Payment to CLCK in accordance with the terms
and conditions of this Agreement. Notwithstanding anything to the contrary
herein, CNG and CLCK acknowledge that, on September 14, 1999, Douglas R. Baetz
and Glenn M. Gallant ("Century Affiliates"), affiliates of Century, during the
pendency of negotiations between CLCK and CNG with respect to this Agreement,
loaned the additional principal amount of $150,000 to CLCK, in excess of any of
the amounts referenced above in this Section 4.9. CLCK shall pay to Century
Affiliates, at the Closing, and from the proceeds of the First Installment
Payment, the sum of $150,000 as repayment in full of such loan and such amount
shall not be convertible into CLCK Common Stock upon repayment of such amount.
Section 4.10 STOCK OPTION PLAN. At the Closing, CLCK's Board of
Directors shall have approved the Stock Option Plan, in the form attached as
Schedule 4.10 hereto, which shall authorize the grant and issuance of options to
purchase up to 2,000,000 shares of CLCK Common Stock, and which shall further be
subject to the approval of the stockholders of CLCK, as required by applicable
law.
Section 4.11 OPTION TO PURCHASE ADDITIONAL SHARES. Simultaneously
with the Closing, CLCK and CNG shall enter into the Non-Qualified Stock Option
Agreement, of even date herewith (the "Option Agreement"), in the form attached
as Schedule 4.11 hereto. Pursuant to the Option Agreement, CLCK shall grant to
CNG the option (the "Option") to purchase an additional 10,000,000 shares of
CLCK Common Stock (the "Third Installment of Exchanged CLCK Stock") for the
purchase price of $2,000,000 (the "Third Installment Payment"), which option
must be exercised by CNG on or before the first anniversary of the Closing Date
(the "Third Installment Payment Date"). The Option shall be exercisable in
whole, and not in part, in the event that CNG shall pay the Second Installment
Payment pursuant to Section 3.1(b) hereof. In the event that CNG shall not pay
the Second Installment Payment in accordance with Section 3.1(b) hereof, the
Option shall be immediately cancelled.
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Section 4.12 CERTAIN RESTRICTIONS ON FUTURE ISSUANCES BY CLCK.
Immediately following the Closing and until CNG's payment in full of the Second
Installment Payment, and so long as CNG shall not be in default under this
Agreement (which default shall not be continuing), CLCK shall not issue any
shares of CLCK Common Stock without the written consent of CNG, except: (i) the
issuance of shares of CLCK Common Stock with respect to any derivative
securities of CLCK issued and outstanding at the Closing Date and described in
Schedule 2.4 attached hereto; and (ii) the Exchanged CLCK Stock.
Section 4.13 ENHANCEMENT OF SALES VOLUME. CNG shall take all actions
that CNG, in the exercise of its reasonable judgment, determines are necessary
to increase the revenues and sales volume of CLCK. Such actions on the part of
CNG may include, but are not limited to, retaining CLCK to complete the
following: (i) design and implement store software applications for CNG's
approximately 650 retail locations throughout the United States; (ii) provide
processing services for CNG's new credit/debit card products; and (iii) perform
technology design and implementation services for CNG in connection with CNG's
collection of delinquent consumer accounts. Additionally, CNG shall provide
sales and marketing services for the benefit of CLCK by leveraging the contacts
and experience possessed by CNG's principals in the banking, consumer finance
and electronic payment industries.
Section 4.14 CENTURY/CNG STOCK PURCHASE AGREEMENT. Simultaneously with
the Closing, CNG and Century shall enter into the Agreement for the Purchase of
Stock (the "Century/CNG Stock Purchase Agreement"), attached as Schedule 4.14
hereto. Pursuant to the Century/CNG Stock Purchase Agreement, on March 31, 2000,
CNG shall sell to Century 1,000,000 shares of CLCK Common Stock owned by CNG in
consideration of Century's payment to CNG of $10; PROVIDED, HOWEVER, that the
Century/CNG Stock Purchase Agreement shall be null and void, and CNG shall have
no obligation whatsoever to sell any shares of CLCK Common Stock to Century, in
the event that the following contingencies are not satisfied: (i) that Century
procure or broker, without compensation, executed Processing Contracts between
CLCK and one or more customers; (ii) that each of the Processing Contracts have
a term length of not less than five (5) years; (iii) that the Processing
Contracts collectively generate not less than $150,000 of processing revenues
for CLCK during the month of March, 2000; and (iv) that CNG shall pay the Second
Installment Payment to CLCK in accordance with the terms and conditions of this
Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF CLCK
The obligations of CLCK under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
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Section 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by CNG in this Agreement were true when made and shall be true
at the Closing Date with the same force and effect as if such representations
and warranties were made as of the date of this Agreement (except for changes
therein permitted by this Agreement), and CNG shall have performed or complied
with all covenants and conditions required by this Agreement to be performed or
complied with by CNG prior to or at the Closing. CLCK shall be furnished with a
certificate, signed by CNG dated the Closing Date, to the foregoing effect.
Section 5.2 OFFICER'S CERTIFICATE. CLCK shall have been furnished with
a certificate dated the Closing Date and signed by duly authorized officers of
CNG and the CNG Stockholders to the effect that no litigation, proceeding,
investigation or inquiry is pending or, to the knowledge of CNG, threatened,
which might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or, to the extent not disclosed in
the CNG Schedules, by or against the CNG Parties, which might result in any
material adverse change in any of the assets, properties, business or operations
of CNG, in the form of Schedule 5.2.
Section 5.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of CNG.
Section 5.4 OTHER ITEMS. CLCK shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as CLCK may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF CNG
The obligations of CNG under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by CLCK in this Agreement were true when made and shall be true
as of the Closing Date (except for changes therein permitted by this Agreement)
with the same force and effect as if such representations and warranties were
made at and as of the date of this Agreement, and CLCK shall have performed and
complied with all covenants and conditions required by this Agreement to be
performed or complied with by CLCK prior to or at the Closing. CNG shall have
been furnished with a certificate, signed by a duly authorized executive officer
of CLCK and dated the Closing Date, to the foregoing effect.
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Section 6.2 OFFICER'S CERTIFICATE. CNG shall have been furnished with a
certificate dated the Closing Date and signed by duly authorized officers of
CLCK to the effect that no litigation, proceeding, investigation or inquiry is
pending or, to the best knowledge of CLCK, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or, to the extent not disclosed in the CLCK Schedules, by or
against CLCK, which might result in any material adverse change in any of the
assets, properties, business or operations of CLCK, in the form of Schedule 6.2.
Section 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of, nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of, CLCK.
Section 6.4 OTHER ITEMS. CNG shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as it may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.1 BROKERS AND FINDERS. Except as set forth in Schedule 7.1,
neither CLCK nor CNG, nor any of their respective officers, directors, agents or
employees has employed any investment banker, broker or finder, or incurred any
liability on behalf of CLCK or CNG, as the case may be, for any investment
banking fees, brokerage fees, commissions or finders' fees, in connection with
the transactions contemplated by this Agreement. The parties each agree to
indemnify the other against any other claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section 7.2 CHOICE OF LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware. Any dispute
arising under this Agreement shall be resolved exclusively in the federal or
state courts of the State of Ohio.
Section 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by overnight mail, registered mail or certified mail, postage prepaid, or
by prepaid telegram, or when telecopied and followed by confirmation copy
hand-delivered or sent by first class mail, addressed as follows:
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If to CNG, to:............. Jared A. Davis, President
CNG Financial Corporation
4824 Socialville-Fosters Road
Mason, Ohio 45040
Telephone no. (513) 336-7735 ext. 101
Facsimile no. (513) 573-4680
If to CLCK, to:............ Columbia Capital Corporation
1157 North Fifth Street
Abilene, Texas 79601
Attn: Kenneth A. Klotz
Telephone no. (915) 674-3110
Facsimile no. (915) 674-3174
With copies to:............ Matthias & Berg LLP
1990 South Bundy Drive, Suite 790
Los Angeles, California 90025
Attn: Jeffrey P. Berg, Esq.
Telephone no. (310) 820-0083
Facsimile no. (310) 820-8313
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 7.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 7.5 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except: (a) to the extent such data is a matter of public knowledge or is
required by law to be published; and (b) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
Section 7.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
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Section 7.7 THIRD PARTY BENEFICIARIES. This Agreement is solely among
CLCK and CNG Parties and as otherwise as specifically provided no director,
officer, stockholder, employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.8 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations or warranties, written or oral,
except as set forth herein.
Section 7.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the consummation of the
transactions herein contemplated until the executory provisions of this
Agreement shall be completed.
Section 7.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended. This Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
Section 7.12 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 7.13 EXPENSES. Each of the parties to this Agreement shall bear
all of its own expenses incurred by it in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation therefor.
Section 7.14 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
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Section 7.15 BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 7.16 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section 7.17 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
Section 7.18 FAILURE OF CONDITIONS; TERMINATION. In the event any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, the parties, or any one of them, have the right either to
proceed or, upon prompt written notice to the other, to terminate and rescind
this Agreement without liability to any other party. The election to proceed
shall not affect the right of such electing party reasonably to require the
other party to continue to use its efforts to fulfill the unmet conditions.
Section 7.19 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.20 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprised of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) has been
afforded the opportunity to negotiate as to any and all terms hereof; and (d) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and entered into as of the date first above written at Abilene, Texas.
("CLCK")
COLUMBIA CAPITAL CORPORATION
a Delaware corporation
By: /s/ Kenneth A. Klotz
------------------------------------------
Kenneth A. Klotz, Chief Executive Officer
("CNG")
CNG FINANCIAL CORPORATION
an Ohio corporation
By: /s/ Jared A. Davis
------------------------------------------
Jared A. Davis, President
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Exhibit b
COLUMBIA CAPITAL CORP.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of September 16, 1999 by and between Columbia
Capital Corp., a Delaware corporation (the "Company"), and CNG Financial
Corporation, an Ohio corporation ("Optionee").
R E C I T A L
- - - - - - -
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, pursuant to Section 4.11 of that certain
Agreement for the Purchase of Stock, by and among the Company and Optionee, of
even date herewith (the "Stock Purchase Agreement"), of a non-qualified stock
option to purchase the number of shares of Common Stock of the Company specified
in Paragraph 1 hereof, at the price specified therein, such option to be for the
term and upon the terms and conditions hereinafter stated.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, in consideration of the premises and of the
undertakings of the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the Board
of Directors, the Company hereby grants to Optionee, subject to Section 4.11 of
the Stock Purchase Agreement, and in consideration of the Stock Purchase
Agreement, the option ("Option") to purchase up to 10,000,000 shares ("Option
Shares") of Common Stock of the Company, at the exercise price of $0.20 per
share.
2. TERM. This Option shall expire one (1) year from the date first
written above. In the event that CNG shall fail to pay each of the First and
Second Installment Payments (as such terms are defined in the Stock Purchase
Agreement) in a timely manner, this Option shall be cancelled immediately.
3. SHARES SUBJECT TO EXERCISE. All 10,000,000 Options shall be
exercisable in whole, and not in part, upon payment in full of the Second
Installment Payment for the Second Installment of Exchanged CLCK Stock (as such
term is defined in the Stock Purchase Agreement) of the Company, pursuant to
Section 3.1(b) of the Stock Purchase Agreement, and shall thereafter remain
subject to exercise for the term specified in Paragraph 2 hereof.
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4. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company stating the number of shares with respect to
which the Option is being exercised, together with a check made payable to the
Company in the amount of the purchase price of such shares plus the amount of
applicable federal, state and local withholding taxes, and the written statement
provided for in Paragraph 8 hereof, if required by such Paragraph 8. Only whole
shares may be purchased.
5. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Company and
upon the request of the Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of shares of Common Stock
otherwise issuable to the Optionee upon the exercise of this Option.
6. TRANSFERABILITY. Until such time that this Option is exercisable
hereunder, this Option may not be assigned or transferred.
7. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued.
8. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that,
upon Optionee's exercise of the Option in whole or part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to him, he will acquire the shares issuable upon
exercise of this Option for the purpose of investment and not with a view to
their resale or further distribution, and that upon each exercise thereof
Optionee will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. Optionee agrees that any
certificates issued upon exercise of this Option may bear a legend indicating
that their transferability is restricted in accordance with applicable state or
federal securities law. Any person or persons entitled to exercise this Option
under the provisions of Paragraph 6 hereof shall, upon each exercise of the
Option under circumstances in which Optionee would be required to furnish such a
written statement, also furnish to the Company a written statement to the same
effect, satisfactory to the Company in form and substance.
9. NOTICES. All notices to the Company shall be addressed to the
Company at the principal office of the Company at 1157 North Fifth Street,
Abilene, Texas 79601, Telecopier No. (915) 674-3174, and all notices to Optionee
shall be addressed to Optionee at the address and telecopier number of Optionee
on file with the Company, or to such other address and telecopier number as
either may designate to the other in writing. A notice shall be deemed to be
duly given if and when enclosed in a properly addressed sealed envelope
deposited, postage prepaid, with the United States Postal Service and followed
by telecopier to the addressee. In lieu of giving notice by mail as aforesaid,
written notices under this Agreement may be given by personal delivery to
Optionee or to the Company (as the case may be).
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10. ADJUSTMENTS. If there is any change in the capitalization of the
Company affecting in any manner the number or kind of outstanding shares of
Common Stock of the Company, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because the Company has
merged or consolidated with one or more other corporations (and provided the
Option does not thereby terminate pursuant to Section 2 hereof), then the number
and kind of shares then subject to the Option and the price to be paid therefor
shall be appropriately adjusted by the Board of Directors; PROVIDED, HOWEVER,
that in no event shall any such adjustment result in the Company's being
required to sell or issue any fractional shares. Any such adjustment shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Option, but with an appropriate adjustment to the
price of each Share or other unit of security covered by this Option.
11. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other
provision of this Option, upon the dissolution or liquidation of the Company,
the reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or the sale of substantially all the assets of the Company or of more than 50%
of the then outstanding stock of the Company to another corporation or other
entity, the Option granted hereunder shall terminate; provided, however, that:
(i) each Option for which no option has been tendered by the surviving
corporation in accordance with all of the terms of provision (ii) immediately
below shall, within five days before the effective date of such dissolution or
liquidation, merger or consolidation or sale of assets in which the Company is
not the surviving corporation or sale of stock, become fully exercisable; or
(ii) in its sole and absolute discretion, the surviving corporation may, but
shall not be so obligated to, tender to any Optionee, an option to purchase
shares of the surviving corporation, and such new option or options shall
contain such terms and provisions as shall be required substantially to preserve
the rights and benefits of this Option.
12. INVALID PROVISIONS. In the event that any provision of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
13. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
14. COUNTERPARTS. This Agreement may be executed in counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
hereto and delivered to the other.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
COLUMBIA CAPITAL CORP.
("Company")
By: /s/ Kenneth A. Klotz
---------------------------
Kenneth A. Klotz
Chief Executive Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
CNG FINANCIAL CORPORATION
31-1481590 By: /s/ Jared A. Davis
- --------------------------- ---------------------------
Jared A. Davis, President
Address:
CNG Financial Corporation
Attn: Jared A. Davis, President
4824 Socialville - Fosters Road
Mason, Ohio 45040
Telecopier No. (513) 573-4680
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Exhibit c
AGREEMENT FOR THE PURCHASE OF STOCK
THIS AGREEMENT FOR THE PURCHASE OF STOCK (the "Agreement"), is entered
into as of September 16, 1999 by and among Century Financial Group, Inc., a
Florida corporation ("Purchaser"), and CNG Financial Corporation, an Ohio
corporation ("Stockholder").
PREMISES
WHEREAS, Stockholder has entered into an Agreement for the Purchase of
Stock by and between Stockholder and Columbia Capital Corp., a Delaware
corporation (the "Company"), of even date herewith (the "CLCK/CNG Stock Purchase
Agreement");
WHEREAS, pursuant to the terms and conditions of the CLCK/CNG Stock
Purchase Agreement, Stockholder shall have the right, under certain terms and
conditions, to become the principal stockholder of the Company;
WHEREAS, Douglas R. Baetz and Glenn M. Gallant, the affiliates of
Purchaser, are currently the principal stockholders of the Company, and have
substantial knowledge of the financial condition and business prospects of the
Company;
WHEREAS, this Agreement provides for the right of Purchaser to purchase
1,000,000 shares (the "CLCK Shares") of the common stock of the Company ("CLCK
Common Stock") in consideration of the aggregate purchase price of $10.00
("Purchase Price"), determined in accordance with and subject to the terms and
conditions of this Agreement, and the covenants, representations and warranties
of each of the parties hereto; and
WHEREAS, the parties intend and believe that it is in their best
interests to enter into this Agreement and the other agreements contemplated
herein;
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF PURCHASER
As an inducement to, and to obtain the reliance of Stockholder,
Purchaser represents and warrants, as follows:
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Section 1.1 BINDING OBLIGATION; NO DEFAULT. Purchaser has duly taken
all action necessary to authorize the execution, delivery and performance of
this Agreement and the other instruments and agreements contemplated hereby.
Such execution, delivery and performance does not and will not, to the best
knowledge of Purchaser, constitute a default under or a violation of any
agreement, order, award, judgment, decree, statute, law, rule, regulation or any
other instrument to which Purchaser is a party or by which Purchaser or the
property of Purchaser may be bound or may be subject. This Agreement constitutes
the legal, valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and
subject to general principles of equity, whether applied in a proceeding in
equity or at law.
Section 1.2 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the
execution and delivery of this Agreement by Purchaser nor compliance by
Purchaser with the terms and conditions of this Agreement will: (a) require
Purchaser to obtain the consent of any governmental agency; (b) constitute a
material default under any indenture, mortgage or deed of trust to which
Purchaser is a party or by which Purchaser, or its properties may be subject;
(c) cause the creation or imposition of any Encumbrance (as defined hereinafter)
on any assets of Purchaser; or (d) breach any statute or regulation of any
governmental authority, domestic or foreign, or will on the Closing Date,
conflict with or result in a breach or any of the terms or conditions of any
judgment, order, injunction, decree or ruling of any court or governmental
authority, domestic or foreign, to which Purchaser is subject.
Section 1.3 CONSENTS. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority or any third party is required to be made or obtained by Purchaser in
connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
Section 1.4 ACCURACY OF INFORMATION FURNISHED. No representation or
warranty by Purchaser contained in this Agreement or in respect of the exhibits,
schedules or documents delivered to Stockholder by Purchaser and expressly
referred to herein, and no statement contained in any certificate furnished or
to be furnished by or on behalf of Purchaser pursuant hereto, or in connection
with the transactions contemplated hereby, contains, or will contain as of the
date such representation or warranty is made or such certificate is or will be
furnished, and as of the Closing Date, any untrue statement of a material fact,
or omits, or will omit to state as of the date such representation or warranty
is made or such certificate is or will be furnished, any material fact which is
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. True and correct
copies of each agreement and other document referred to in the schedules hereto
have been furnished by Purchaser to Stockholder.
Section 1.5 SECURITIES WARRANTIES. With respect to the CLCK Shares to
be transferred and delivered by Stockholder to Purchaser pursuant to Section 3.1
hereof, Purchaser hereby represents and warrants to Stockholder that:
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(a) The CLCK Shares are being acquired for the account of
Purchaser and not with a view to sale in connection with any distribution of the
CLCK Shares;
(b) Purchaser is acquiring the CLCK Shares hereunder without
having received any form of general solicitation or general advertising;
(c) Purchaser or its representative, if any, has been provided
with, or given reasonable access to, full and fair disclosure of all material
information concerning the Company;
(d) Purchaser has a preexisting personal or business
relationship with the Company or certain of its officers, directors or
controlling persons, or by reason of its business or financial experience,
Purchaser could reasonably be assumed to have the capacity to represent his own
interests in connection with this Agreement;
(e) Purchaser understands and hereby acknowledges that the
CLCK Shares will be transferred and delivered pursuant only to those
restrictions imposed by and exemptions available pursuant to applicable federal
and state laws and that the certificates to be issued in respect of the CLCK
Shares may bear a legend in a form satisfactory to counsel for the Company;
(f) Purchaser agrees that the certificates to be issued in
respect of the CLCK Shares may bear a legend in a form satisfactory to counsel
for the Company reflecting the status of the Shares as restricted securities
under Rule 144(a)(3) promulgated under the Securities Act of 1933, as amended
(the "Securities Act") and acknowledges that the transfer agent or registrar for
the Company may be instructed to restrict the transfer of the CLCK Shares in
accordance with such legend and any other restrictions provided in this
Agreement;
(g) Purchaser hereby agrees that he will not sell, transfer,
hypothecate, pledge, assign or otherwise dispose of any of the CLCK Shares,
except pursuant to the terms of this Agreement and to a registration statement
filed under the provisions of the Securities Act, a favorable no-action or
interpretive letter received from the Securities and Exchange Commission (the
"Commission") or an opinion of counsel satisfactory to the Company that such
sale, transfer, hypothecation, pledge, assignment or other disposition is exempt
from the registration requirements of the Securities Act, pursuant to an opinion
of counsel satisfactory to the Company that such sale, transfer, hypothecation,
pledge, assignment or other disposition is exempt from the registration
requirements of the Securities Act and does not in any way violate the terms of
this Agreement; and
(h) Purchaser hereby acknowledges that: (i) the CLCK Shares
referred to herein are being acquired after adequate investigation of the
business plan and prospects of the Company; (ii) that Purchaser is not relying
upon the accuracy of any predictions as to the future prospects or developments
of the Company or its business and is well informed as to the business of the
Company and has reviewed its operations and financial statements; (iii)
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Purchaser or his professional advisors have discussed the financial condition
and business operations of the Company with the officers, directors and
principal stockholders of the Company and has been afforded the opportunity to
ask questions with respect thereto; and (iv) Purchaser specifically acknowledges
that the CLCK Shares are speculative and involve a very high degree of risk and
that there can be no assurance that the Company will achieve its business
objectives.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF STOCKHOLDER
As an inducement to, and to obtain the reliance of Purchaser,
Stockholder represents and warrants, as follows:
Section 2.1 BINDING OBLIGATION; NO DEFAULT. Stockholder has duly taken
all action necessary to authorize the execution, delivery and performance of
this Agreement and the other instruments and agreements contemplated hereby.
Such execution, delivery and performance does not and will not, to the best
knowledge of Stockholder, constitute a default under or a violation of any
agreement, order, award, judgment, decree, statute, law, rule, regulation or any
other instrument to which Stockholder is a party or by which Stockholder or the
property of Stockholder may be bound or may be subject. This Agreement
constitutes the legal, valid and binding obligation of Stockholder, enforceable
against Stockholder in accordance with its terms, except as may be limited by
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and subject to general principles of equity, whether applied in a
proceeding in equity or at law.
Section 2.2 COMPLIANCE WITH OTHER INSTRUMENTS, ETC. Neither the
execution and delivery of this Agreement by Stockholder nor compliance by
Stockholder with the terms and conditions of this Agreement will: (a) require
Stockholder to obtain the consent of any governmental agency; (b) constitute a
material default under any indenture, mortgage or deed of trust to which
Stockholder is a party or by which Stockholder or its properties may be subject;
(c) cause the creation or imposition of any Encumbrance (as defined hereinafter)
on any of its assets; or (d) breach any statute or regulation of any
governmental authority, domestic or foreign, or will on the Closing Date,
conflict with or result in a breach or any of the terms or conditions of any
judgment, order, injunction, decree or ruling of any court or governmental
authority, domestic or foreign, to which Stockholder is subject.
Section 2.3 CONSENTS. No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority or any third party is required to be made or obtained by Stockholder
in connection with the execution, delivery and performance of this Agreement and
the transactions contemplated hereby.
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Section 2.4 ACCURACY OF INFORMATION FURNISHED. No representation or
warranty by Stockholder contained in this Agreement or in respect of the
exhibits, schedules or documents delivered to Purchaser by Stockholder and
expressly referred to herein, and no statement contained in any certificate
furnished or to be furnished by or on behalf of Stockholder pursuant hereto, or
in connection with the transactions contemplated hereby, contains, or will
contain as of the date such representation or warranty is made or such
certificate is or will be furnished, and as of the Closing Date, any untrue
statement of a material fact, or omits, or will omit to state as of the date
such representation or warranty is made or such certificate is or will be
furnished, any material fact which is necessary to make the statements contained
herein or therein, in light of the circumstances under which they were made, not
misleading. True and correct copies of each agreement and other document
referred to in the schedules hereto have been furnished by Stockholder to
Purchaser.
Section 2.5 TITLE TO THE CLCK SHARES. At the Closing Date: (a) all of
the CLCK Shares to be delivered to Purchaser shall be duly and validly issued,
fully paid and non-assessable and free from all stamp taxes, liens and charges
with respect to the purchase thereof; (b) Stockholder shall be the equitable and
legal owner of, and shall have good title to, the CLCK Shares, free and clear of
all pledges, liens, mortgages, encumbrances, security interests, equities,
options, claims, charges, limitations on voting rights or rights to receive
dividends, or other restrictions of any kind (other than any generally imposed
by federal, corporate or state securities laws or as otherwise provided for in
this Agreement)(collectively, "Encumbrances"), except as to Purchaser, and
Stockholder shall have the right to transfer the CLCK Shares as provided herein;
and (c) upon delivery to Purchaser of the certificates for the CLCK Shares
described in Section 3.1 of this Agreement, Purchaser shall receive good and
marketable title to the CLCK Shares, all of the CLCK Shares shall be received by
Purchaser as validly issued, fully paid and nonassessable, free and clear of all
Encumbrances.
ARTICLE III
CLOSING
Section 3.1 PURCHASE OF SHARES. As a result of and immediately upon the
completion of the transactions contemplated by this Agreement, at the Closing,
Stockholder shall transfer and deliver to Purchaser the 1,000,000 CLCK Shares in
consideration of the payment of the Purchase Price. Notwithstanding anything to
the contrary herein, this Agreement shall be null and void, and Stockholder
shall have no obligation whatsoever to sell any shares of CLCK Common Stock to
Purchaser, in the event that the following contingencies are not satisfied: (i)
that Purchaser shall procure or broker, without compensation, executed
processing contracts (the "Processing Contracts") between the Company and one or
more customers; (ii) that each of the Processing Contracts shall have a term
length of not less than five (5) years; (iii) that the Processing Contracts
shall collectively generate not less than $150,000 of processing revenues for
the Company, during the month of March, 2000; and (iv) that Stockholder shall
pay the Second Installment Payment to the Company in accordance with the terms
and conditions of the CLCK/CNG Stock Purchase Agreement.
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Section 3.2 CLOSING. The Closing of the transactions contemplated by
this Agreement shall be on March 31, 2000, or at such other time as the parties
may agree ("Closing Date"), prior to which the consummation of the transactions
contemplated hereby may not be effectuated.
Section 3.3 CLOSING EVENTS.
(a) At the Closing, each of the respective parties hereto
shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) this Agreement and any and all certificates,
opinions, financial statements, schedules, agreements, resolutions, rulings, or
other instruments required by this Agreement to be so delivered at or prior to
the Closing, together with such other items as may be reasonably requested by
the parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby. However, in no event shall the
Closing occur without the satisfaction or waiver of the conditions set forth in
Sections 5 and 6 of this Agreement;
(b) At the Closing, Stockholder shall deliver to Purchaser
certificates reflecting the number of CLCK Shares determined in accordance with
Section 3.1 hereof, registered in the name of Purchaser, or registered in the
name of Stockholder, together with stock powers executed by Stockholder, each
with medallion signature guarantees with respect to each stock certificate
reflecting the CLCK Shares; and
(c) At the Closing, Purchaser shall deliver to Stockholder
funds in the aggregate of amount of the Purchase Price.
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 AVAILABILITY OF RULE 144. Each of the parties acknowledge
that the CLCK Shares to be transferred and delivered pursuant to this Agreement
will be "restricted securities," as that term is defined in Rule 144 promulgated
pursuant to the Securities Act. The Company is under no obligation, except as
set forth herein, to register such shares under the Securities Act.
Section 4.2 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE SHARES.
The consummation of this Agreement and the transactions herein contemplated,
including the transfer and delivery of the CLCK Shares to Purchaser as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, INTER ALIA, upon the
circumstances under which Purchaser acquires such securities.
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Section 4.3 THIRD PARTY CONSENTS. Purchaser and Stockholder agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein and therein contemplated.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Stockholder in this Agreement were true when made and shall
be true as of the Closing Date with the same force and effect as if such
representations and warranties were made as of the date of this Agreement
(except for changes therein permitted by this Agreement), and Stockholder shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Stockholder prior to or at the
Closing.
Section 5.2 OTHER ITEMS. Purchaser shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as Purchaser may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF STOCKHOLDER
The obligations of Stockholder under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Purchaser in this Agreement were true when made and shall be
true as of the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the date of this Agreement
(except for changes therein permitted by this Agreement), and Purchaser shall
have performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by Purchaser prior to or at the
Closing.
Section 6.2 OTHER ITEMS. Stockholder shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as he may reasonably request.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 BROKERS AND FINDERS. Neither Purchaser nor Stockholder, nor
any of their respective officers, directors, agents or employees has employed
any investment banker, broker or finder, or incurred any liability on behalf of
Purchaser or Stockholder, as the case may be, for any investment banking fees,
brokerage fees, commissions or finders' fees, in connection with the
transactions contemplated by this Agreement. The parties each agree to indemnify
the other against any other claim by any third person for any commission,
brokerage or finder's fee or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or understanding
between the indemnifying party and such third person, whether express or implied
from the actions of the indemnifying party.
Section 7.2 CHOICE OF LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Ohio.
Section 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by overnight mail, registered mail or certified mail, postage prepaid, or
by prepaid telegram, or when telecopied and followed by confirmation copy
hand-delivered or sent by first class mail, addressed as follows:
If to Purchaser, to: Douglas R. Baetz, President
Century Financial Group, Inc.
3020 North West 33rd Avenue
Second Floor
Fort Lauderdale, Florida 33311
Telephone no. (954) 453-6519
Facsimile no. (954) 453-6557
If to Stockholder, to: Jared A. Davis, President
CNG Financial Corporation
4824 Socialville-Fosters Road
Mason, Ohio 45040
Telephone no. (513) 336-7735 ext. 101
Facsimile no. (513) 573-4680
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
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Section 7.4 ATTORNEYS' FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 7.5 THIRD PARTY BENEFICIARIES. This Agreement is solely among
Purchaser and Stockholder and as otherwise as specifically provided, no
director, officer, stockholder, employee, agent, independent contractor or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.6 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations or warranties, written or oral,
except as set forth herein.
Section 7.7 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date of the
reorganization and the consummation of the transactions herein contemplated.
Section 7.8 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.9 AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended. This Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
Section 7.10 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
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Section 7.11 EXPENSES. Each of the parties to this Agreement shall bear
all of its own expenses incurred by it in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation therefor.
Section 7.12 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
Section 7.13 BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 7.14 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section 7.15 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
Section 7.16 FAILURE OF CONDITIONS; TERMINATION. In the event any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, the parties, or any one of them, have the right either to
proceed or, upon prompt written notice to the other, to terminate and rescind
this Agreement without liability to any other party. The election to proceed
shall not affect the right of such electing party reasonably to require the
other party to continue to use its efforts to fulfill the unmet conditions.
Section 7.17 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.18 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprised of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) has been
afforded the opportunity to negotiate as to any and all terms hereof; and (d) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and entered into as of the date first above written at Mason, Ohio.
("Purchaser")
CENTURY FINANCIAL GROUP, INC.
By: /s/ Douglas R. Baetz
-------------------------------
Douglas R. Baetz, President
("Stockholder")
CNG FINANCIAL CORPORATION
By: /s/ Jared A. Davis
-------------------------------
Jared A. Davis, President
11
