FACTUAL DATA CORP, SB-2/A, 1998-04-09

FACTUAL DATA CORP
SB-2/A, 1998-04-09
COMPUTER PROCESSING & DATA PREPARATION

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<PAGE> 1

As filed with the Securities and Exchange Commission on April 9, 1998
Registration No. 333-47051

==============================================================================

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

---------------------------

PRE-EFFECTIVE AMENDMENT NO. 1
TO

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------

FACTUAL DATA CORP.
-------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
COLORADO 7375 84-1449911
--------------- -------------------- -------------------
(State or other jurisdiction of (Primary S.I.C. Code Number) (I.R.S. Employer
incorporation or organization) Identification Number)

</TABLE>

5200 HAHNS PEAK DRIVE
LOVELAND, COLORADO 80538
(970) 663-5700

- ------------------------------------------------------------------------------
(Address and telephone number of principal
executive offices and principal place of business)

Jerald H. Donnan
5200 HAHNS PEAK DRIVE
LOVELAND, COLORADO 80538
(970) 663-5700

---------------------------------------------------------
(Name, address and telephone number of agent for service)

COPIES TO:
SAMUEL E. WING, ESQ. ROBERT W. WALTER, ESQ.
JONES & KELLER, P.C. BERLINER ZISSER WALTER & GALLEGOS, P.C.
1625 BROADWAY, SUITE 1600 ONE NORWEST CENTER, SUITE 4700
DENVER, COLORADO 80202 DENVER, COLORADO 80202
TELEPHONE: (303) 573-1600 TELEPHONE: (303) 830-1700
-------------------------------

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE> 2

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Security(1) Price Fee

Units consisting of: 1,380,000 $ 5.60 $ 7,728,000 $ 2,280

Common Stock(2) 1,380,000 $ 5.50 $ 7,590,000 --

Redeemable Common Stock
Purchase Warrants(3) 1,380,000 $ .10 $ 138,000 --

Common Stock(4) 1,380,000 $ 7.15 $ 9,867,000 $ 2,911

Common Stock(5) 120,000 $ 6.60 $ 792,000 $ 233

Redeemable Common Stock 120,000 $ .001 $ 120 $ --
Purchase Warrants(6)

Common Stock(7) 120,000 $ 7.15 $ 858,000 $ 253
------------ -------
Total $ 19,245,120 $ 5,677(8)
============ =======
</TABLE>

_________________

(1) Estimated solely for purposes of calculating the registration fee.

(2) Includes 180,000 shares of Common Stock subject to the Underwriters'
over-allotment option.

(3) Includes 180,000 Warrants subject to the Underwriters' over-allotment
option.

(4) Issuable upon exercise of the Redeemable Common Stock Purchase Warrants.

(5) Issuable upon exercise of the Representative's Option for the Purchase
of Common Stock.

(6) Issuable upon exercise of the Representative's Option for the Purchase
of Warrants.

(7) Issuable upon exercise of the Warrants underlying the Representative's
Option for the Purchase of Warrants.

(8) Previously paid.

___________________________

PURSUANT TO RULE 416, THERE ARE ALSO BEING REGISTERED SUCH ADDITIONAL SHARES
AND WARRANTS AS MAY BECOME ISSUABLE PURSUANT TO ANTI-DILUTION PROVISIONS UPON
THE EXERCISE OF THE WARRANTS AND REPRESENTATIVE'S OPTIONS.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================

<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED APRIL 9, 1998

PROSPECTUS

FACTUAL DATA CORP.

1,200,000 Units
Consisting of

1,200,000 SHARES OF COMMON STOCK
AND
1,200,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS

All of the securities offered hereby are being sold by Factual Data
Corp. (the "Company"). The Common Stock and the Redeemable Common Stock
Purchase Warrants (the "Warrants") will be initially offered together as Units
on the basis of one share of Common Stock and one Warrant. Each Warrant will
entitle the holder to purchase one share of Common Stock at a price of $o (the
"Warrant Exercise Price") during the three-year period commencing on the date of
this Prospectus. Commencing one year from the date hereof, the Warrants will be
redeemable upon 30 days prior written notice at a redemption price of $.05 per
Warrant if the closing high bid price of the Common Stock has exceeded the
Warrant Exercise Price by 50% or more for 20 consecutive trading days
immediately preceding the date of mailing of the notice of redemption, subject
to certain other conditions. See "Description of Securities."

Prior to this offering, there has been no public market for the
securities of the Company. It is currently anticipated that the initial public
offering price of the Units will be between $5.10 and $5.60 including Common
Stock to be priced between $5.00 and $5.50 per share and Warrants to be priced
at $.10 per Warrant. For a discussion of the factors considered in determining
the initial public offering prices of the securities offered, see
"Underwriting." The Company has filed an application to have the Common Stock
and Warrants approved for quotation on the Nasdaq SmallCap Market under the
trading symbols FDCC and FDCCW, respectively. If such application is not
approved, subject only to completion of the offering, the offering will not be
consummated. The Units will not be listed or quoted on the Nasdaq SmallCap
Market and no market for the Units is expected to otherwise develop.

------------------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN
RISKS ASSOCIATED WITH AN INVESTMENT IN THE SECURITIES OFFERED HEREBY. THE
SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL
DILUTION.

------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

------------------------------

<PAGE> 4

<TABLE>
<S> <C> <C> <C>
Price to Underwriting Proceeds to
Public Discount(2) Company (3)

Per Unit $o $o $o

Total(4) $o $o $o
- ----------
</TABLE>

(1) Each Unit consists of one share of Common Stock with an assigned value
of $o and one Warrant with an assigned value of $.10. The Common Stock
and Warrants will be immediately separately transferable.

(2) The Company has agreed to pay Schneider Securities, Inc., the
representative of the Underwriters (the "Representative") a 3%
non-accountable expense allowance and to issue Representative's
Options (as defined herein). The Company has also agreed to indemnify
the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."

(3) Before deducting offering expenses estimated at $541,000, including
the non-accountable expense allowance. See "Underwriting."

(4) The Company has granted to the Underwriters options, exercisable
within 45 days after the date of this Prospectus, to purchase up to an
additional 180,000 shares of Common Stock and/or Warrants on the same
terms as set forth above solely to cover over-allotments, if any. If
the options are exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $o, $o and $o,
respectively. See "Underwriting."

The Common Stock and Warrants comprising the Units are being offered
severally by the Underwriters, subject to prior sale, when, as and if delivered
to and accepted by the Underwriters, and subject to their right to reject orders
in whole or in part and certain other conditions. It is expected that delivery
of certificates representing the shares of Common Stock and Warrants will be
made at the offices of the Representative on or about o, 1998.

SCHNEIDER SECURITIES, INC.

THE DATE OF THIS PROSPECTUS IS , 1998
<PAGE> 5

[BACKSIDE OF FRONT COVER]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
COMMON STOCK AND WARRANTS, INCLUDING ENTERING STABILIZING BIDS, EFFECTING
SYNDICATE COVERING TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."

"Factual Data," among other trademarks used herein, is a registered
trademark of the Company.

On the effective date of the Registration Statement of which this
Prospectus forms a part, the Company will become a "reporting company" under
the Securities Exchange Act of 1934 (the "1934 Act"). The Company intends to
register the Common Stock and Warrants under the 1934 Act as of the effective
date of the Registration Statement. The Company is a "small business issuer"
as defined under Regulation S-B adopted under the Securities Act of 1933, and
will file reports with the Commission pursuant to the 1934 Act on forms
applicable to small business issuers.

The Company intends to furnish its shareholders with annual reports
containing audited financial statements and quarterly reports for the first
three quarters of each fiscal year containing unaudited interim financial
information.
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the information
appearing elsewhere in this Prospectus. See "Risk Factors" for information
prospective investors should consider. Unless otherwise indicated, all
information in this Prospectus assumes no exercise of the Underwriters'
over-allotment options, the Representative's Options or options granted or
reserved under the Company's stock incentive plan. Unless the context
otherwise requires, the term "Company" refers to and includes FDC Group, Inc.
and Lenders Resource Incorporated, both wholly owned subsidiaries of the
Company. Industry data used in this Prospectus was obtained from industry
publications that the Company believes to be reliable, but has not
independently verified.

THE COMPANY

The Company provides a broad range of information services to mortgage
and consumer lenders, employers, landlords and other business customers located
throughout the United States. The Company specializes in preparing mortgage
credit reports ("MCRs") that are customized to each mortgage lender's
requirements and transmitted to lenders via the Internet, modem or facsimile.
The Company's larger customers include, among others, NationsBanc/Boatmen's
National, Chase Manhattan Residential, U.S. Home Mortgage, CoreStates Mortgage
and CTX Mortgage. In 1996, the Company was selected to be one of five approved
information vendors for the Federal Home Loan Mortgage Corporation's ("Freddie
Mac") automated underwriting system, Loan Prospector. Based on publicly
reported information concerning mortgage loans originated and refinanced in the
United States, management believes the Company, and its franchisees and
licensees (referred to herein as "System Affiliates"), are collectively one of
the leading suppliers of MCRs in the United States. The Company and its System
Affiliates delivered approximately 1.08 million and 1.43 million MCRs
representing gross system billings of approximately $27.3 million and $31.3
million in 1996 and 1997, respectively.

MCRs supplied by the Company generally fall in three categories:
residential mortgage credit reports ("RMCRs") under which the Company verifies
credit, employment and other information and conducts an in-person or telephone
interview with the loan applicant; residential mortgage credit reports that do
not encompass applicant interviews ("RMCR Jrs.(R)"); and Bureau Express(R)
reports, which provide only the merged credit information from the three
primary credit repositories in the United States without the verification
performed in RMCRs or RMCR Jrs. Through its expertise developed in mortgage
credit reporting, the Company has recently expanded its services to include
EMPfacts(R), an employment screening service, QUICKpeek Identifier(R), an
instant employment screening service, QUICKpeek Tenant(R), a credit and
employment screening service for use by leasing agents and landlords, and
Corpdata(R), a credit reporting service on businesses.

1
<PAGE> 7

The Company markets its services through Company operated offices and
its System Affiliates which combined provide services to lenders in all states
in the continental United States from 45 locations. System Affiliates
consisted of 30 franchisees and 34 licensees as of December 31, 1996, and 29
franchisees and 35 licensees as of December 31, 1997. The Company receives
royalties, license and other fees from its System Affiliates, which combined
accounted for 36% and 55% of the Company's gross revenues for 1996 and 1997,
respectively.

The Company's and System Affiliates' MCR and other information
services integrate data obtained from national credit repositories, criminal
records, motor vehicle records and other public information databases. The
integration of this information, and delivery of its services, is performed by
the Company's proprietary and non-proprietary computer software, hardware and
state-of-the-art communication systems. The Company credits its success to its
technological sophistication and employs 15 persons who are assigned to the
continued development and maintenance of its technology. The Company is
committed to maintaining its technological competitive advantage, and it will
continue to devote resources to this effort. See "Use of Proceeds."

The Company intends to implement a consolidation plan in the MCR
business. The Company believes a favorable environment exists for acquisitions
because of the highly fragmented nature of the industry and the increased cost
of new technologies that generally cannot be afforded by smaller participants
in the market. The Company's consolidation plan is designed to expand its
existing business and take advantage of its core competencies including, among
other things, its highly developed customer service program, use of
sophisticated technology to achieve efficiencies in the MCR market, development
of close working relationships with mortgage lenders, knowledge of the MCR
market and its experienced management team. The Company's consolidation plan
envisions the purchase of unaffiliated companies active in the MCR market as
well as companies that are presently franchisees or licensees of the Company.
Consistent with its consolidation plan, the Company concluded the acquisition
of Mirocon, Inc., a former franchisee providing MCR and other services, in
December 1997. See "Business."

The Company's business is directly influenced by the mortgage lending
industry since its primary services are credit reports used by mortgage
lenders. The mortgage lending industry enjoyed a near record year in 1997 due
to low interest rates and a robust economy. Mortgage originations (including
refinancings) are estimated to have totaled approximately $870 billion in 1997,
almost 11% higher than the $785 billion in originations in 1996 and the
third-best year ever. The 1997 loan activity equates to the generation of an
estimated 11 million mortgage credit reports. See "Business--Industry."

2
<PAGE> 8
The Company's strategy is to enhance its position as a leading
provider of MCRs and associated information services. The principal components
of the Company's strategy are to: (i) implement its consolidation plan in
order to accelerate growth and leverage operating efficiencies, (ii) continue
to capitalize on its proprietary and non- proprietary technology to provide
prompt and accurate customer service, (iii) accelerate its market penetration
through engaging in additional sales and marketing activities to broaden its
customer base, (iv) increase revenue by bundling additional services with the
Company's MCRs and other services in order to facilitate "one-stop shopping" by
its customers, and (v) enhance the Company's relationships with key customers
through continued commitment to customer service and support and quality
control.

The Company was incorporated in the State of Colorado in 1985. The
Company's principal office is located at 5200 Hahns Peak Drive, Loveland,
Colorado 80538, and its telephone number is (970) 663-5700.

3
<PAGE> 9

<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
Securities offered by the Company . . . . . . . . 1,200,000 Units consisting of 1,200,000 shares of
Common Stock and 1,200,000 Warrants. The Common Stock and Warrants will
be initially sold together but are immediately separately transferable.
Each Warrant will entitle the holder to purchase one share of Common
Stock at the Warrant Exercise Price during the three-year period
commencing on the date of this Prospectus. Commencing one year from the
date hereof, the Warrants will be redeemable upon thirty (30) days prior
written notice at a redemption price of $.05 per Warrant if the closing
high bid price of the Common Stock has exceeded the Warrant Exercise
Price by 50% or more for at least 20 consecutive trading days
immediately preceding the date of mailing of the notice of redemption,
subject to certain other conditions. See "Description of Securities."

Common Stock outstanding prior to
offering . . . . . . . . . . . . . . . . . . . . 1,800,000 shares(1)

Common Stock to be outstanding
after offering . . . . . . . . . . . . . . . . . 3,000,000 shares(1)

Use of proceeds . . . . . . . . . . . . . . . . . For acquisitions, repayment of indebtedness,
technological development, expansion of marketing
activities and services and working capital. See
"Use of Proceeds."

Proposed Nasdaq symbols:
Common Stock . . . . . . . . . . . . . . FDCC
Warrants . . . . . . . . . . . . . . . . FDCCW

__________________
</TABLE>

(1) Does not include up to (i) 27,000 shares of Common Stock issuable upon
exercise of outstanding options held by employees and directors which
have an exercise price of $o per share, (ii) 1,200,000 shares of
Common Stock issuable upon full exercise of the Warrants, (iii)
240,000 shares of Common Stock issuable upon full exercise of the
Representative's Options, and (iv) 180,000 shares of Common Stock
and/or Warrants issuable upon full exercise of the Underwriters'
over-allotment options.

4
<PAGE> 10

<TABLE>
<CAPTION>
SUMMARY CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
<S> <C> <C>
STATEMENT OF INCOME (LOSS) DATA: Year Ended December 31,
-----------------------------------------------------------------------
1996 1997 1996 1997
---- ---- ---- ----
Historical Pro Forma(1)
------------------------------------- ------------------------------

- ----
Revenue . . . . . . . . . . . . . . $ 4,009 $ 3,520 $ 3,401 $ 4,370
Operating expenses . . . . . . . . . 3,568 2,724 3,562 3,413
Net income (loss) . . . . . . . . . . 284 503 (132) 598
Basic earnings (loss) per share(2). . $ .16 $ .28 $ (.07) $ .33
Weighted average number of
shares outstanding . . . . . . . . 1,800 1,800 1,800 1,800

OTHER STATISTICAL DATA:(3) 1996 1997
---- ----

Information services MCRs . . . . . . 1,080 1,432
Gross system billings . . . . . . . . $ 27,340 $ 31,318

BALANCE SHEET DATA: December 31, 1997
------------------------------------------------
Actual As adjusted(4)
------ -----------
Working capital . . . . . . . . . . . $ 116 $ 4,655
Total assets . . . . . . . . . . . . 2,864 7,121
Long term debt, including current
portion . . . . . . . . . . . . . . . 1,210 400
Shareholders' equity . . . . . . . . 647 5,614
- ------------------
</TABLE>

(1) Assumes the Company completed the acquisition of Mirocon, Inc. on
January 1, 1996 and sold the Texas Territories on January 1, 1996. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business--Recent Acquisition," Note 2 to the
Consolidated Financial Statements and the Financial Statements of
Mirocon, Inc.

(2) No difference exists between basic and fully diluted earnings per
share.

(3) Represents the aggregate number of MCRs generated through the
Company's system for itself, and its System Affiliates, and the gross
system billings by the Company and its System Affiliates.

(4) Adjusted to reflect the sale by the Company of Units comprised of
1,200,000 shares of Common Stock and 1,200,000 Warrants offered hereby
at an assumed combined offering price of $5.10 and application of the
net proceeds. See "Use of Proceeds."

5
<PAGE> 11
RISK FACTORS

This Prospectus contains statements which include forward looking
information. Those statements appear in a number of places in this Prospectus
and include statements regarding the intent, belief or current expectations of
the Company with respect to, among other things: (i) the Company's growth
strategy and the availability of companies which it believes may be acquired;
(ii) the Company's anticipated results of future operations and economies of
scale it believes may exist with acquisitions; (iii) regulatory matters
affecting or which in the future may affect the Company; (iv) matters related
to general economic conditions, particulary interest rates, and responses in
changes thereto by lenders and consumers; and (v) the Company's ability to
quickly react to changing interest rates. Prospective investors are cautioned
that any such forward looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual events and
results thereof may differ materially from those discussed in the forward
looking statements as a result of various factors. Moreover, any investment in
the securities being offered involves a high degree of risk and may result in a
loss of the entire amount invested. Therefore, prospective investors should
carefully consider the following risks, as well as all other information set
forth in this Prospectus.

Adverse Effects Due to Changes in Demand for Mortgage Credit Reports.
The Company's primary service is its mortgage credit report ("MCR"). In
general, the use of this service is driven by consumer demand for credit (via
new home mortgages and refinancings) and, to a lesser extent, lenders' efforts
to develop new, and monitor existing, credit relationships. Consumer demand for
mortgage credit tends to vary due to interest rate fluctuations and general
economic conditions. Management has found that MCR demand tends to increase
during periods of economic expansion or when interest rates are declining,
although consistent patterns cannot always be determined due to the complexity
of the economy. Consequently, revenue from MCRs, the Company's primary service
at present, is influenced materially by the foregoing factors. Since the
Company's expenses consist largely of labor, repository and communication
charges, its ability to control these costs as economic and interest rate trends
change is critical. Also, as MCRs are the Company's primary service, the
Company's lack of significant diversification in other services hinders the
Company's ability to withstand the negative impact of a downturn in demand for
MCRs. See "Business--Industry" and "--Mortgage Credit Reports."

Recent Consolidation Plan. The Company historically franchised and
licensed territories to companies already engaged in providing mortgage credit
reporting services in those territories. The Company is now implementing a
consolidation plan to acquire certain of its System Affiliates and competitors
engaged in providing MCR services that either complement or will expand its
existing business. Implementation of this plan could involve a number of
risks, including diversion of management time and Company financial resources
in reviewing acquisition candidates and assimilation of the acquired companies,
adverse short-term effects on the Company's operating results and the
amortization of acquired intangible assets. Also, there are 48 System
Affiliates that have exclusive territory rights which expire at various times
through the year 2005. The Company will be required to purchase a System
Affiliate, or wait until the expiration of the applicable agreement with the
System Affiliate, before expanding into, or acquiring a competitor in, the same
territory. The impact of this plan on the Company's

6
<PAGE> 12
operations, both long-term and short-term, remains unknown. Although the
Company has identified and has held, and will continue to hold, discussions
from time-to-time with potential acquisition candidates, no agreement,
arrangement, plan or understanding exists as of the date hereof with respect to
any acquisitions. Accordingly, no assurance can be given that the Company will
be successful in acquiring System Affiliates or other companies, assets or
service lines or that if acquired, such companies, assets or service lines will
be economically beneficial to the Company. See "Business-- Business Strategy."

Competition. The MCR industry is highly fragmented. The Company
faces both direct and indirect competition for its services. There are large
numbers of companies engaged in the sale of one or more of the services offered
by the Company. A significant number of these competitors are small companies
operating on a local or regional basis, while some are large companies
operating on a national scale. Management believes there are approximately
1,400 companies in the United States providing MCR services, among which are
several large companies having far greater financial resources than the
Company, including CBC Companies, Inc., Equifax Credit Information Services,
Inc., The First American Financial Corp., and Trans Union Corporation. The
Company faces intense competition in MCR services from these entities, and, as
to its other services, from companies engaged in employment and tenant
application verification activities. See "Business--Competition."

Government Regulation; Privacy Issues; Legal Considerations. The
Company's business involves the collection of consumer and business credit data
and other information and the distribution of such information to lenders and
businesses making credit and other decisions. Concerns about individual
privacy and the collection, distribution and use of information about
individuals have led to substantial governmental regulation of the credit
reporting industry. The credit reporting industry is regulated under the
federal Fair Credit Reporting Act (the "FCRA") and by legislation in many
states. The credit reporting industry has recently been subject to increased
legislative attention. Legislation was recently enacted amending the FCRA to
refine the legal treatment of certain credit reporting practices, including
provisions codifying rules applicable to prescreening. In addition, bills are
pending in various state legislatures that are generally intended to regulate
how personal information is used in the marketplace. While management does not
believe that any of the proposed state bills, if passed as currently drafted,
would have a material adverse effect on the Company, there can be no assurance
that pending or additional federal or state consumer-oriented legislation will
not significantly limit demand for, or increase the costs of, certain of the
Company's services. See "Business--Government Regulation and Privacy Issues."
Under general legal concepts and, in some instances, under specific federal and
state statutes, the Company could be held liable to customers or to the
subjects of credit reports prepared by the Company for inaccurate information
or misuse of information. The Company maintains internal policies designed to
help ensure that credit information retrieved by it is accurate and that it
otherwise complies with the provisions of the FCRA. No assurance can be given
that any claims made against the Company can be successfully defended, that
insurance will cover any such claims or that uninsured losses from such claims
might arise thereby adversely impacting the operations and financial condition
of the Company. See "Business--Legal Considerations."

7
<PAGE> 13

Control by Management. Existing shareholders of the Company will own
approximately 60% of the outstanding Common Stock upon completion of this
offering and will be able to elect all of the Company's Directors.

Dependence Upon Key Personnel. The Company is highly dependent on the
services of its President, Jerald H. Donnan, who is subject to a three year
employment agreement which was effective July 1, 1997. See
"Management--Employment Agreements." To the extent that Mr. Donnan's services
become unavailable, there could be a material adverse effect on the operations
of the Company. In such an event, there can be no assurance that the Company
will be able to promote existing personnel or employ qualified persons on terms
favorable to the Company. The Company intends to secure a $1 million Key Man
term life insurance policy upon the life of Mr. Donnan as soon as possible
following the closing of this offering.

Dependence on Key Suppliers. The Company does not maintain its own
consumer credit database. Instead, the Company obtains consumer credit data
from large, national credit repositories such as Experian, Inc., TransUnion,
Inc. and Equifax, Inc. pursuant to "reseller" agreements with these entities.
Generally, the reseller agreements are terminable without cause by either party
within a short period of time upon written notice. Also, the agreements can be
terminated if the Company uses the information in violation of the FCRA or
other applicable laws, or in violation of the reseller agreement. In addition,
the reseller agreements typically do not provide any warranties as to the
accuracy or correctness of the information contained in the databases
maintained by credit repositories, and further provide that the Company will
hold the repositories harmless and indemnify them from claims or liabilities
arising from the use of inaccurate information contained in the databases.
While the Company believes its relationships with the various credit
repositories is good, there can be no assurance that its reseller agreements
with the credit repositories will not be terminated for any reason. The loss
of access to the databases of key credit repositories would materially and
adversely affect the Company's business and financial condition. See
"Business--Suppliers."

Need for Additional Financing. Proceeds from this offering are not
sufficient to enable the Company to fully implement its consolidation plan as
described under "Business-Business Strategy." To the extent the Company requires
additional funds for acquisitions under its consolidation plan, the Company will
likely consider funding such acquisitions through cash from operations, proceeds
from the exercise of the Warrants offered herein, the issuance of capital stock
to the acquisition candidates, further private or public debt or equity
financing or by a combination of the foregoing. Even if this offering is
successful, there is no assurance that the Warrants will be exercised, or that
other sources of equity or debt financing can be obtained by the Company.

Dilution. This offering will result in immediate substantial dilution
of $3.40 (67%) per share, which amount represents the difference between the pro
forma net tangible book value per share after the offering and the assumed
combined public offering price of $5.10 per Unit comprised of one share of
Common Stock and one Warrant. In the event the Company issues shares of Common
Stock in connection with potential acquisitions, inventors' ownership interest
in the Company could also be diluted. See "Dilution" and "Business-Business
Strategy."

Intellectual Property Rights and Limitations. The Company's success
depends in part upon its technological expertise and proprietary information
and technologies. The Company relies on a combination of trademark,
servicemark, copyright, trade secret and contract protection to establish and
protect its proprietary rights in its services and technology; however, because
there is little in the design, development or delivery of the Company's
services that is protectable under law, the Company's services are and will
continue to be subject to replication by competitors. The Company generally
enters into confidentiality agreements with customers and limits access to and
distribution of its proprietary information. There can be no assurance that
these steps will be adequate to deter misappropriation or infringement of the
Company's proprietary technologies and that costly litigation may not ensue.
While the Company intends to defend its trade names and trademarks against
unauthorized use or infringement by others, the cost of defending such
intellectual property could be substantial in the event of infringement. The
Company believes that its marks may be of significant value to the Company's
business and reputation. Failure or inability to defend the trade names and
trademarks could adversely affect the Company. Although the Company believes
that its trade names, trademarks and technologies do not infringe any
proprietary rights of others, the growing use of copyrights and patents to
protect proprietary rights has increased the risk that

8
<PAGE> 14
third parties may assert claims of infringement in the future. The Company
does not maintain a formal intellectual property protection program. See
"Business--Intellectual Property."

Large Institutions' Special Requirements. The Federal National
Mortgage Association ("Fannie Mae") and Freddie Mac provide a secondary market
for residential mortgages. Both entities require that any mortgage purchased
be supported by a credit report on the mortgagee and prepared by an entity,
such as the Company, independent from the lender. The Company is aware that
these and other entities are increasingly using "automated" credit reporting
techniques which require credit report providers to render almost instantaneous
responses, often within 60 seconds or less. Although the Company is presently
able to provide such service, no assurance can be given that it will continue
to be able to provide the level of performance required by these or other large
institutional lenders or that it will be able to match the level of
technological service provided, or developed in the future, by competitors.

Risk of Data Center Failure. The Company's operations are dependent
upon its ability to protect its data center against damage from fire, power
loss, telecommunications failure, natural disasters or a similar event. The
Company moved into a new facility in Loveland, Colorado in April, 1998, which is
outfitted with backup power and duplicate telecommunication facilities;
nonetheless, in the event the Company experiences a natural disaster, hardware
or software malfunction or other interruption of its data center operations, the
Company's results of operations could be materially adversely affected.
Extended interruptions in the Company's services could be significantly
detrimental, and the Company's insurance may not be adequate to compensate the
Company for all resulting losses that may occur. See "Business--Technology
Center."

Effect of General Economic Conditions. The Company's business is
directly related to economic factors that affect the mortgage lending industry,
including interest rates, housing demand and general economic conditions. When
these factors adversely affect the mortgage lending industry, such factors will
likely exert downward pressure on the volume of MCRs requested, and may also
increase price competition among MCR suppliers. Although the Company believes
that current economic conditions favor continued growth in the markets it
serves, a future economic slowdown or recession could adversely affect the
Company's ability to maintain profitability. See "Business."

Determination of Offering Prices; Absence of Public Market; Price
Fluctuations. The public offering prices of the Common Stock and Warrants, and
the exercise price of the Warrants, have been determined by the Company and the
Representative and do not necessarily bear any relationship to assets, book
value, earnings history or other investment criteria. Prior to this offering,
there has been no public market for any class of the Company's securities.
Although the Company has filed an application to have the Common Stock and
Warrants approved for quotation on

9
<PAGE> 15
the Nasdaq SmallCap Market upon notice of issuance, there can be no assurance
that an active trading market will develop or that the market price of such
securities will not decline below the public offering price. Factors such as
quarterly fluctuations in results of operations, or market conditions in
general, may cause the market prices of the Company's securities to fluctuate,
perhaps substantially. In addition, in recent years the stock market has
experienced significant price and volume fluctuations. These fluctuations,
which are often unrelated to the operating performance of specific companies,
have had a substantial effect on the market price for many small capitalization
companies. Factors such as those cited above, as well as other factors which
may be unrelated to the operating performance of the Company, may adversely
affect the price of the Company's securities. See "Underwriting."

Shares Eligible for Future Sale. Sales of a substantial number of
shares of the Company's Common Stock in the public market following this
offering could adversely affect the market price of the Common Stock. The
1,800,000 shares of Common Stock now outstanding are eligible for sale in the
public market, subject to compliance with Rule 144 under the Securities Act of
1933 (the "Securities Act") (assuming all shares currently held in custody are
released in accordance with the terms of the custody agreement). Rule 144
provides that beneficial owners of shares who have held such shares for one
year may sell within a three-month period a number of shares not exceeding the
greater of 1% of the total outstanding shares or the average trading volume of
the shares during the four calendar weeks preceding such sale. In the absence
of agreements with the Representative, the outstanding restricted Common Stock
could be sold in accordance with Rule 144 commencing 90 days from the date of
this Prospectus. However, pursuant to the terms of the Underwriting Agreement,
the Representative has required the holders of such shares to enter into
lock-up agreements which restrict the sale or disposition of such shares for 18
months from the date of this Prospectus without the prior written consent of
the Representative. See "Principal Shareholders--Custodial Shares" and "Shares
Eligible for Future Sale."

Anti-takeover Provisions. The Company's Articles of Incorporation and
Bylaws (the "Incorporation Documents") contain provisions that may make it more
difficult for a third party to acquire, or may discourage acquisition bids for,
the Company. The Board of Directors of the Company is authorized, without
action of its shareholders, to issue authorized but unissued Common and
Preferred Stock. The existence of undesignated Preferred Stock and authorized
but unissued Common Stock enables the Company to discourage or to make it more
difficult to obtain control of the Company by means of a merger, tender offer,
proxy contest or otherwise. The Incorporation Documents provide further that
(i) directors may be elected for three-year terms, with approximately one-third
of the Board of Directors standing for election each year, (ii) to alter or
repeal the staggered board provision or other measures in the Incorporation
Documents relating to the matters listed in this paragraph, the affirmative vote
of the holders of not less than two- thirds of the votes entitled to be cast by
the holders of all stock entitled to vote in the election of directors is
required, (iii) the unanimous vote of the Board of Directors or the affirmative
vote of the holders of not less than two-thirds of the votes entitled to be cast
by the holders of all stock entitled to vote in the election of directors is
required to change the size of the Board of Directors, (iv) directors may only
be removed with or without cause by holders of not less than two-thirds of

10
<PAGE> 16

all stock entitled to vote, (v) any action required or permitted to be taken by
shareholders of the Company must be effected at a duly called annual or special
meeting of such shareholders and may not be effected by consent in writing by
such shareholders, and (vi) the affirmative vote of the holders of two-thirds of
the Company's capital stock entitled to vote thereon is required to approve the
merger, dissolution or sale of all or substantially all of the assets of the
Company. The Company has also entered into employment agreements with its top
two executive officers which require significant severance pay upon termination
of employment with the Company due to a change in control of the Company. See
"Management--Employment Agreements" and "Description of Securities--Preferred
Stock."

Absence of Dividends. The Company has not declared nor paid, and does
not intend to declare or pay, any cash or other dividends in the foreseeable
future. Earnings, if any, will be retained to finance the Company's operations
and growth. See "Dividend Policy."

Warrant Exercise and Redemption Provisions. Each Warrant offered
hereby entitles the holder to purchase one share of Common Stock at a price of
$o per share (130% of the initial offering price) commencing on the date hereof
and expiring three years thereafter. Holders may exercise such Warrants only if
a current prospectus relating to the Common Stock underlying the Warrants is
then in effect and only if such shares are qualified for sale under applicable
state securities laws of the states in which holders of the Warrants reside. The
Company will use its best efforts to have a current prospectus in effect during
the Warrant exercise period. There can be no assurance the Company will be
successful in maintaining a current prospectus covering the shares underlying
the Warrants. The Warrants may be deprived of any value in the event this
Prospectus or another prospectus covering the shares issuable upon exercise of
the Warrants is not kept current or if such shares are not registered or
otherwise qualified in the states in which holders of the Warrants reside.
Although during this offering the Warrants will not knowingly be sold in any
jurisdiction in which they are not registered or otherwise qualified, purchasers
of the Warrants may relocate to a jurisdiction in which the Common Stock
underlying the Warrants is not so registered or qualified. In addition,
purchasers of the Warrants in the open market may reside in a jurisdiction in
which the Common Stock underlying the Warrants is not registered or qualified.
If the Company is unable or chooses not to register or qualify or maintain the
registration or qualification of the Common Stock underlying the Warrants for
sale in all of the states in which the Warrant holders reside, the Company would
not permit such Warrants to be exercised and Warrant holders in those states may
have no choice but to either sell their Warrants or let them expire.
Prospective investors and other interested persons who wish to know whether
Common Stock may be issued upon the exercise of Warrants by holders in a
particular state should send a written inquiry to the Company or the
Representative. Commencing one year from the date of this Prospectus, the
Warrants may be redeemed by the Company, in whole but not in part, upon not less
than 30 days' prior written notice at a price of $.05 per Warrant at such time
as the closing bid price of the Common Stock equals or exceeds $o (150% of the
Warrant Exercise Price) for 20 consecutive trading days. The redemption notice
must be provided not more than five business days after conclusion of the 20
consecutive trading days in which the closing bid

11
<PAGE> 17
price of the Common Stock equals or exceeds $o per share. While the Warrants
may be exercised during the notice period prior to the date of redemption, the
holder may be unable (for financial or other reasons) to exercise the Warrants
at the time of receipt of the notice of redemption. See "Description of
Securities--Warrants."

Securities Issuable Pursuant to Warrants, Options and Representative's
Options. At the date of this Prospectus, the Company has reserved 1,200,000
shares of Common Stock for issuance on exercise of the Warrants and 200,000
shares of Common Stock for issuance on exercise of options under the Company's
1997 Stock Incentive Plan, under which 27,000 options have been issued as of the
date of this Prospectus. At the completion of this offering, the Representative
will receive options (collectively, the "Representative's Options") to purchase
120,000 shares of Common Stock at a price of $o (120% of the aggregate price of
the Common Stock), exercisable during a period of four years commencing one year
from the date of this Prospectus and Warrants to purchase 120,000 shares of
Common Stock on and subject to the same terms and conditions as the Warrants
issued to the public in this offering. During the terms of the Warrants, the
options and the Representative's Options, the holders are given the opportunity
to profit from a rise in the market price of the Common Stock, and their
exercise may dilute the ownership interest of existing shareholders, including
investors in this offering. The existence of the Warrants, the options and the
Representative's Options may affect adversely the terms on which the Company may
obtain additional equity financing. Moreover, the holders are likely to
exercise their rights to acquire Common Stock at a time when the Company would
otherwise be able to obtain capital on terms more favorable that could be
obtained through the exercise of such securities. See "Description of
Securities" and "Underwriting."

Repayment of Debt from Offering Proceeds. The Company has allocated
approximately $810,000, or 16%, of the net proceeds from this offering to repay
certain indebtedness of the Company. Approximately $435,000 will be used to
retire a note which is personally guaranteed by Jerald H. and Marcia R. Donnan,
President and Executive Vice President of the Company, respectively. See "Use of
Proceeds."

Broad Management Discretion in Use of Proceeds to Make Unspecified
Acquisitions. The Company has allocated $2.75 million, or approximately 54% of
the estimated net proceeds to be received in this offering, to the acquisitions
of businesses similar to its own. The Company's success will depend in part on
the discretion and judgment of the Company's management with respect to the
application and allocation of these proceeds in such acquisitions. Furthermore,
management will retain broad discretion over the allocation of proceeds received
from the exercise of Warrants, if any. See "Use of Proceeds,"
"Business--Business Strategy" and "Management."

12
<PAGE> 18
Limitation of Liability. The Company's Articles of Incorporation
provides that a director of the Company shall not be personally liable for
monetary damages to the Company or its shareholders for a breach of fiduciary
duty as a director, subject to limited exceptions. Although such limitation of
liability does not affect the availability of equitable remedies such as
injunctive relief or rescission, the presence of these provisions in the
Articles of Incorporation could prevent the recovery of monetary damages
against directors of the Company. See "Management--Indemnification of
Officers and Directors."

Listing and Maintenance Criteria for Nasdaq Securities. The Company
has applied for listing on the Nasdaq SmallCap Market and believes it will meet
the recently adopted standards for such listing which require: (i) net tangible
assets of $4 million, (ii) a public float of 1 million shares, (iii) a market
value of the public float of $5 million, (iv) three market makers, (v) a
minimum $4.00 bid price per share of common stock, and (vi) at least 300
shareholders.

Nasdaq also adopted new criteria for continued Nasdaq SmallCap Market
eligibility. In order to continue to be included on the Nasdaq SmallCap Market
(thereby exempting a company from the "penny stock" regulations described
below), a company must maintain (i) at least two market makers, (ii) 300 holders
of its common stock, (iii) a minimum bid price of $1.00 per share of common
stock, (iv) net tangible assets of $2 million (unless the company had net income
of $500,000 in two of the last three years or a market capitalization of $35
million), (v)500,000 shares in the public float, and (vi) a market value of the
public float of $1 million. The Company's failure to meet these maintenance
criteria in the future may result in the termination of listing of its
securities on the Nasdaq SmallCap Market. In such event, trading, if any, in the
securities may continue to be conducted in the non-Nasdaq over-the-counter
market in what are commonly referred to as the electronic bulletin board and the
"pink sheets." As a result, an investor may find it more difficult to dispose of
or to obtain accurate quotations as to the market value of the securities.

Disclosure Related to Penny Stocks. The Commission has adopted rules
that define a "penny stock" as equity securities priced at under $5.00 per share
which are not listed for trading on Nasdaq, (unless (i) the issuer has a net
worth of $2 million if in business for more than three years or $5 million if in
business for less than three years or (ii) the issuer has had average annual
revenues of $6 million or more for the prior three years). In the event that any
of the Company's securities are characterized in the future as penny stock,
broker-dealers dealing in the securities will be subject to the disclosure rules
for transactions involving penny stocks which require the broker-dealer among
other things to (i) determine the suitability of purchasers of the securities,
and obtain the written consent of purchasers to purchase such securities prior
to the transaction, (ii) provide customers with required risk disclosure
documents, disclose quotation and compensation information and provide monthly
price information and other required information and (iii) disclose the best
(inside) bid and offer prices for such securities and the price at which the
broker-dealer last purchased or sold the securities. The additional burdens
imposed upon broker-dealers may discourage them from effecting transactions in
penny stocks, which usually reduces the liquidity of such securities. The
Company's securities will not be considered a "penny stock" initially if they
will be listed on the Nasdaq SmallCap Market.

13
<PAGE> 19
DILUTION

The net tangible book value of the Company as of December 31, 1997 was
approximately $37,000, or $0.02 per share of Common Stock. Without taking into
account any other changes in tangible book value after December 31, 1997, except
to give pro forma effect to the sale by the Company of the Units comprised of
shares of Common Stock and Warrants in this offering at an assumed combined
offering price of $5.10, the pro forma net tangible book value of the Company at
December 31, 1997 would have been $5.1 million, or $1.70 per share of Common
Stock. This represents an immediate increase in net tangible book value of
$1.68 per share to existing holders of Common Stock and an immediate dilution of
$3.40 per share (67%) to purchasers of Common Stock in this offering, as
illustrated in the following table:

<TABLE>
<S> <C> <C>
Assumed public offering price per Unit(1) . . . . . . . . . . . . $ 5.10
Net tangible book value per share
before this offering. . . . . . . . . . . . . . . . . . . . . . $ .02
Increase per share attributable to new investors(2) . . . . . . . 1.68
------
Pro forma net tangible book value per share after
this offering . . . . . . . . . . . . . . . . . . . . . . . . . 1.70
------
Dilution per share to new investors . . . . . . . . . . . . . . . $ 3.40
======
Dilution as a percent of assumed public offering
price per share of Common Stock . . . . . . . . . . . . . . . . 67%
- ------------------ ===
</TABLE>

(1) Represents the assumed purchase price of one Unit consisting of one
share of Common Stock and one Warrant.

(2) After deduction of the underwriting discount and estimated offering
expenses.

The following table sets forth as of December 31, 1997 the difference
between the existing shareholders and the new investors with respect to the
number of shares of Common Stock purchased from the Company, the total
consideration paid and the average price per share paid. The calculations in
this table exclude shares issuable, and proceeds receivable, upon the exercise
of the Warrants, stock options, the Representative's Options, and the
Underwriters' over- allotment options. See "Management--Stock Incentive Plan,"
"Description of Securities" and "Underwriting." To the extent such foregoing
options or Warrants are exercised, there may be further dilution to new
investors.

Shares Purchased Total Consideration Average
---------------- --------------------- Price
Number Percent Amount Percent Per Share
--------- -------- --------- -------- --------
Existing Shareholders 1,800,000 60% $ 647,000(1) 10% $ 0.36
New Investors 1,200,000 40% 6,120,000 90% 5.10
--------- ---- ----------- ----
Total 3,000,000 100% $ 6,767,000 100%
- ------------------ ========= ==== =========== ====
</TABLE>

(1) The amount shown is the net worth of the Company at December 31, 1997.
See the Consolidated Financial Statements.

14
<PAGE> 20
USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
1,200,000 Units offered hereby, after deduction of the underwriting discount and
estimated expenses payable by the Company in connection with this offering, are
expected to be approximately $5.1 million (based on an assumed combined offering
price of $5.10). The following table sets forth the anticipated use of proceeds
from the offering:

<TABLE>
<CAPTION>
Amount Percent
------ -------
<S> <C> <C>
Acquisitions . . . . . . . . . . . . . . . . $2,750,000 53.9%
Repayment of indebtedness. . . . . . . . . . 810,000 15.9
Software and technology development. . . . . 500,000 9.8
Marketing and advertising . . . . . . . . . 500,000 9.8
Working capital and general
corporate purposes. . . . . . . . . . . . . 540,000 10.6
---------- -----
Total . . . . . . . . . . . . . . . . . $5,100,000 100.0%
========== =====

</TABLE>

The Company intends to allocate $2.75 million of the net proceeds from
this offering for the purpose of making acquisitions pursuant to its
consolidation plan which is more fully discussed in "Business--Business
Strategy." There are no present agreements, plans, arrangements or
understandings with respect to any such acquisitions.

The Company intends to use approximately $435,000 of the net proceeds
to retire a note payable to a financial institution which bears interest at
2.75% over the New York prime rate and which matures in December 2005. The
note is secured by substantially all of the Company's assets and is personally
guaranteed by Jerald H. and Marcia R. Donnan. Approximately $375,000 is
intended to be used by the Company to reduce indebtedness incurred in previous
acquisitions, including the required payment of $160,000 incurred in the
Mirocon, Inc. acquisition. These obligations bear interest at an average of 8%
and are unsecured. See "Business--Recent Acquisition" and Note 2 to
Consolidated Financial Statements.

Approximately $500,000 of net proceeds will be allocated by the
Company to continue its software and technological support development
activities, including capital expenditures associated therewith. Approximately
$500,000 of the net proceeds will be allocated to the expansion of the
Company's marketing activities and services. The Company intends to allocate
the remaining $540,000 of net proceeds for general working capital purposes.
See "Business."

Proceeds, if any, from the exercise of Warrants will be used to
continue making acquisitions, to fund continued software and technological
support development and for working capital.

Pending the uses described above, the net proceeds to the Company will
be invested in short-term, government, government guaranteed or investment
grade securities.

15
<PAGE> 21
CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1997, and as adjusted to give effect to the sale by the Company of
1,200,000 Units comprised of 1,200,000 shares of Common Stock and 1,200,000
Warrants at an assumed combined offering price of $5.10 (after deducting the
underwriting discount and estimated offering expenses payable by the Company and
application of the net proceeds). The table should be read in conjunction with
the Consolidated Financial Statements and Notes thereto appearing elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
December 31, 1997
-------------------------------
Actual As Adjusted(1)
------ --------------
(in thousands)
<S> <C> <C>
Long-term debt, including current maturities................ $1,210 $ 400
------ ------
Shareholders' equity:
Preferred Stock, 1,000,000 shares authorized;
none issued or outstanding.............................. -- --
Common Stock, 10,000,000 shares authorized;
1,800,000 shares issued and outstanding,................ 2 4,969
3,000,000 shares issued and outstanding, as adjusted....

Retained earnings......................................... 645 645
------ ------
Shareholders' equity...................................... 647 5,614
------ ------
Total capitalization............................... $1,857 $6,014
- ------------------ ====== ======
</TABLE>

DIVIDEND POLICY

The Company has not paid any cash dividends on its Common Stock. It
is the current policy of the Company not to pay cash dividends on its Common
Stock. Any payment of cash dividends in the future will be dependent upon the
Company's financial condition, results of operations, current and anticipated
cash requirements, restrictions on the payment of dividends under the terms of
any of the Company's future financing arrangements and plans for expansion, as
well as other factors that the Board of Directors deems relevant. The
Company's current bank loan agreements do not prohibit the payment of
dividends.

16
<PAGE> 22
SELECTED FINANCIAL DATA

The following consolidated selected financial data should be read in
conjunction with the Consolidated Financial Statements and related Notes
thereto appearing elsewhere in this Prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The consolidated
statements of income (loss) data for the years ended December 31, 1996 and 1997
and the actual and adjusted consolidated balance sheet data as of December 31,
1997 are derived from the consolidated financial statements of the Company which
have been audited by Ehrhardt Keefe Steiner & Hottman PC, the Company's
independent auditors, as indicated in their report included herein. The
selected financial data provided below is not necessarily indicative of the
future results of operations or financial performance of the Company. The pro
forma data assumes the Company completed the acquisition of Mirocon, Inc. on
January 1, 1996 and sold the Texas Territories on January 1, 1996.

<TABLE>
<CAPTION>
Historical Pro Forma
For the Year Ended For the Year Ended
December 31, December 31,
---------------------- -------------------
1996 1997 1996 1997
---- ---- ---- ----

STATEMENTS OF INCOME (LOSS) DATA: (in thousands, except (in thousands, except
per share data) per share data)
<S> <C> <C> <C> <C>
REVENUE
System Affiliates.............................. $1,447 $1,951 $1,374 $1,896
Information services........................... 2,066 735 1,531 1,640
Proceeds from the sale of Company
operated territories......................... 480 714 480 714
Training, license and other.................... 16 120 16 120
------ ------ ------ ------
Total revenue................................ 4,009 3,520 3,401 4,370
------ ------ ------ ------

OPERATING EXPENSES
Costs of services provided..................... 2,124 1,301 1,708 1,587
Costs of Company operated territories.......... 31 506 31 506
Selling, general and administrative............ 1,413 917 1,823 1,320
------ ------ ------ ------
Total operating expenses..................... 3,568 2,724 3,562 3,413
------ ------ ------ ------

Income (loss) from operations...................... 441 796 (161) 957

Other income....................................... 29 28 32 37
Interest expense................................... (108) (77) (139) (103)
------ ------ ------ ------

Income (loss) before income taxes.................. 362 747 (268) 891

Income tax expense(benefit)........................ 78 244 (136) 293
------ ------ ------ ------

Net income(loss)................................... $ 284 $ 503 $ (132) $ 598
====== ====== ====== ======

Basic earnings (loss) per share(1)................. $ .16 $ .28 $ (.07) $ .33
====== ====== ====== ======

Weighted average common stock outstanding.......... 1,800 1,800 1,800 1,800
====== ====== ====== ======

</TABLE>

17
<PAGE> 23
<TABLE>
<CAPTION>
BALANCE SHEET DATA: December 31, 1997
---------------------------------------------------------

Actual As adjusted(2)
------ -----------
(in thousands)
<S> <C> <C>
Working capital............................... $ 116 $ 4,655
Total assets.................................. 2,864 7,121
Total liabilities............................. 2,217 1,407
Shareholders' equity.......................... 647 5,614
- ------------------
</TABLE>

(1) No difference exists between basic and fully diluted earnings (loss)
per share.

(2) Adjusted to reflect the sale by the Company of the 1,200,000 Units
comprised of 1,200,000 shares of Common Stock and 1,200,000 Warrants
offered hereby at an assumed combined offering price of $5.10 and
application of the net proceeds. See "Use of Proceeds."

18
<PAGE> 24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company specializes in preparing mortgage credit reports that are
customized to meet each lender's individual needs. The Company also provides a
broad range of credit, employment and other information services to mortgage
lenders, consumer lenders, employers, landlords, and other businesses. See
"Business."

The Company provides its services in two different fashions. The
first involves services sold directly by the Company to third party customers
such as mortgage lenders, financial institutions, private enterprises, and
individuals (referred to as "information services"). Secondly, the Company
sells its services through franchisees and licensees ("System Affiliates").
The Company currently has 29 franchisees and 35 licensees. The System
Affiliates provide information services to customers using the Company's
technology and pay royalty, license and other fees to the Company.

During 1996 and 1997, the Company's primary emphasis, in addition to
expanding its market, was the completion of its technology center. This center
was necessary for the Company to provide its Bureau Express reports and other
on- line services to both third party users and System Affiliates. Associated
with this center were hardware costs of $111,000 and $563,000 in 1996 and 1997,
salaries to programmers of $400,000 and $468,000 in 1996 and 1997, and
communications costs of $157,000, primarily in 1997. The Company funded these
expenditures principally from the proceeds from the sale of certain Company
operated territories as described below.

On January 5, 1996, one Company developed territory (the "Indiana
Territory") was sold to a non-affiliated party for $480,000, which had a
financial reporting carrying value of $31,000. On January 6, 1997, the Company
sold certain areas (the "Texas Territories") to a non-affiliated party for
$714,000 which had a financial reporting carrying value of $506,000. The
Company sold both territories because they represented unique opportunities to
maximize current cash flow and fund the Company's technology center development.
In conjunction with the sales of these territories, the Company granted licenses
to the buyers to use its proprietary technology thereby assuring continued
revenue from these territories in the form of System Affiliates revenue. Each
license has a primary term of three years and is automatically extended for an
additional three years unless terminated by either party upon at least 60 days
advance written notice. Management of the Company believed the long range
economic benefit from the Texas Territories sale, which provided the capital to
enable the Company to accelerate the completion of its technology center,
outweighed the loss of information services revenue from those territories,
especially when mitigated by lower resultant costs and the receipt of license
fees after the sale. There are no agreements, arrangements or rights in favor of
the Company to repurchase these territories or licenses in the future.

The sale of these two territories resulted in a change in the mix of
revenues and decrease in certain expenses in 1997. Revenue associated with
information services, costs of services provided, and selling, general and
administrative expenses decreased in 1997 compared to 1996, while System
Affiliates revenue increased.

19
<PAGE> 25
FUTURE TRENDS

In June of 1997, having substantially completed the technology center
with proceeds from the sale of the two territories, the Company redirected its
focus from the expansion of System Affiliates revenue to sales of information
services to third party customers. The Company believes this will result in
increased profitability due to higher gross profit experienced from information
service sales compared to System Affiliates revenue. In 1997, the Company
realized gross profit, as a percentage of total revenue, equal to 68% from
sales of information services compared to 49% gross profit, as a percentage of
total revenue, from System Affiliates revenue. See Note 9 to the Consolidated
Financial Statements. The Company does not intend to license or franchise
territories to third parties in the foreseeable future.

In order to expand information services, the Company has devised a
consolidation plan whereby it has targeted both competitors and System
Affiliates as potential acquisition candidates. See "Business--Business
Strategy." The Company's first acquisition under its consolidation plan
occurred in December of 1997 when the Company acquired substantially all of the
assets of Mirocon, Inc., a former franchisee located in Loveland, Colorado. As
disclosed in the unaudited pro forma combined statement of income for the year
ended December 31, 1997, Mirocon, Inc. had in excess of $900,000 in information
services revenue while contributing $95,000 to pro forma combined net income.
The Company intends to realize additional cost savings by consolidating
Mirocon, Inc.'s operations into the Company's facilities.

The Company expects to realize other benefits when it acquires System
Affiliates or competitors, such as reducing and consolidating accounting,
administrative and technology maintenance functions at each location by
performing these duties at its present facilities. Currently, there are 29
franchisees and 18 licensees that have exclusive territory rights to market
the Company's MCR information services. Most of the Company's existing
franchise agreements expire at various times through the year 2005 while most
of the Company's license agreements expire at various times through the year
2001. The Company will be required to purchase a System Affiliate, or wait
until the expiration of the applicable agreement with the System Affiliate,
before expanding into, or acquiring a competitor in, the same territory.

As the Company implements its consolidation plan, it expects
information services revenue and gross profit to increase and System Affiliates
revenue to decrease as System Affiliates are either acquired or their
agreements with the Company expire. The Company also expects that revenue from
the sale or licensing of Company operated territories will substantially
decrease or be eliminated in future periods.

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<PAGE> 26
REVENUE RECOGNITION

The Company's accounting policies for significant revenue recognition
are as follows:

System Affiliates Revenue

Pursuant to the various franchise and license agreements, System
Affiliates are required to pay the Company royalties based on a percentage of
gross billings. In addition, territories providing EMPfacts services are
required to pay $100 per month for national advertising conducted by the
Company. Royalties under the franchise and license agreements are accrued
based on the percentage of gross billings as reported by System Affiliates and
are included in accounts receivable.

Information Service Revenue

The Company recognizes revenue generated from direct sales of mortgage
credit reports and other information services when the information has been
provided to the customer, since substantially all required services have then
been performed.

Software Development Costs

Software development costs are those costs, which are primarily
payroll and related costs, that are directly related to the development of the
Company's proprietary software technology.

In 1996, software development costs associated with internally
developed software used to support System Affiliates revenue and information
services were expensed as incurred by the Company.

In 1997, the Company adopted the provisions of Statement of Position
(SOP) 98-1, "Accounting for Costs of Computer Software Developed for Internal
Use." Direct costs incurred in the development of software are capitalized once
the preliminary project stage is completed, management has committed to funding
the project and completion and use of the software for its intended purpose are
probable. The Company ceases capitalization of development costs once the
software has been substantially completed and is ready for its intended use.
Software development costs are amortized over their estimated useful lives of
three years. This SOP encourages early adoption but does not allow retroactive
restatement of previously issued financial statements. Accordingly, management
believes that adoption of SOP 98-1 in a year prior to the Company's initial
public offering ("IPO") would be more informative to users of financial
statements rather than in a period after its IPO. The effect of the adoption
was to increase 1997 net income by approximately $200,000 or $.11 per share of
Common Stock. The 1997 increase resulted from capitalized salaries of $450,000
less $150,000 of related amortization and $100,000 of income taxes. Had the
Company adopted SOP 98-1 in 1996, net income would have been increased by
approximately $178,000 to $462,000 or $.26 per share of Common Stock.

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<PAGE> 27
RESULTS OF OPERATIONS

The following table sets forth for the periods indicated, as a
percentage of total revenues, those items included in the Company's
Consolidated Statements of Income and the Unaudited Pro Forma Combined
Statements of Income (Loss):

<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, December 31,
--------------------- ---------------------
(Actual) (Pro Forma)(1)
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE
System Affiliates.......................... 36.1% 55.4% 40.4%
Information services....................... 51.5 20.9 45.1

Proceeds from the sale of
Company operated territories............. 12.0 20.3 14.1
Training, license and other................ .4 3.4 .4 2.7
------- ------- ------- -------
Total revenue.............................. 100.0% 100.0% 100.0% 100.0%
------- ------- ------- -------

OPERATING EXPENSES
Costs of services provided................. 53.0 37.0 50.2 36.3

Costs of Company operated
territories.............................. 0.8 14.4 .9 11.6
Selling, general and administrative........ 35.2 26.0 53.6 30.2
------- ------- -------- -------
Total operating expenses............ 89.0% 77.4% 104.7% 78.1%
------- ------- -------- -------

Income (loss) from operations.................. 11.0% 22.6% (4.7)% 21.9%

Other income................................... .7 .8 .9 .9
Interest expense............................... (2.7) (2.2) (4.0) (2.4)
------- ------- -------- -------

Income (loss) before income taxes.............. 9.0% 21.2% (7.8)% 20.4%
------- ------- -------- -------

Income tax (expense) benefit................... (1.9)% (6.9)% 3.9% (6.7)%
------- ------- -------- -------

Net income(loss)............................... 7.1% 14.3% (3.9)% 13.7%
======= ======= ======== =======
</TABLE>

- -------------------

Years ended December 31, 1996 and 1997.

System Affiliates revenue increased $500,000, or 35%, from $1.45
million in 1996 to $1.95 million in 1997. The Texas Territories sold and
licensed accounted for $105,000 of the $500,000 increase in 1997. The
remaining increase of $395,000 is due to increased billing volume by System
Affiliates and resultant royalty, license and other fees.

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<PAGE> 28
Company information services revenue decreased $1.33 million, or 64%,
from $2.07 million in 1996 to $735,000 in 1997. The sale of the Texas
Territories to a Dallas based mortgage credit reporting agency, which then
became a System Affiliate in January of 1997, resulted in this decrease. The
Texas Territories accounted for $1.47 million of the 1996 information services
revenue and none in 1997. The recent acquisition of Mirocon, Inc. in December
of 1997 contributed $85,000 to information services revenue in 1997.

Proceeds from the sale of Company operated territories increased by
$234,000, or 49%, from $480,000 in 1996 to $714,000 in 1997. Revenue generated
in 1996 represented the Indiana Territory sale, whereas revenue for 1997
consisted of the Texas Territories sale. With the Texas Territories sale, the
Company expensed approximately $506,000 in costs, consisting of accounts
receivable and intangibles, associated with those territories. The financial
reporting carrying value of the Indiana Territory was $31,000 which reflected
the net book value of certain fixed assets. The difference in the financial
reporting carrying value of the Indiana Territory and Texas Territories was due
to the fact that the Indiana Territory was organized and developed by the
Company with relatively low capitalized costs whereas the Texas Territories
were previously acquired from a franchisee at their market value.

Training, license and other revenue increased $104,000, or 650%, from
$16,000 in 1996 to $120,000 in 1997. The majority of this increase was a
one-time charge to System Affiliates for a marketing software interface.

Costs of services decreased $822,000, or 39%, from $2.12 million in
1996 to $1.30 million in 1997. This decrease directly relates to the costs of
information services revenue associated with the Texas Territories sale.
Included in the costs of services provided are direct costs such as salaries,
employment taxes, telephone, rent and repository costs. The total of these
direct costs in the Texas Territories incurred in 1996 were $736,000. In
addition, in 1997, $450,000 of salary related costs were capitalized as
software development costs related to the Company's change in accounting policy
described in Note 3 of the Consolidated Financial Statements. The costs of
services provided for in 1997 also include $157,000 of costs directly related
to the completion of the Company's technology center.

Selling, general and administrative expenses decreased $496,000, or
35%, from $1.41 million in 1996 to $917,000 in 1997. This decrease related to
costs associated with the operations of the Texas Territories sold, including
$307,000 of salaries to sales representatives and $164,000 related to
amortization of intangible assets acquired in the original purchase of the
Texas Territories.

Total operating costs decreased $850,000, or 24%, from $3.57 million
in 1996 to $2.72 million in 1997 resulting in an increase in operating income
of $355,000, or 80%, from $441,000 in 1996 to $796,000 in 1997.

Interest expense decreased $32,000, or 29%, from $109,000 in 1996 to
$77,000 in 1997 due to a reduction in long-term debt.

23
<PAGE> 29
Income taxes increased $166,000, or 213%, from $78,000 in 1996 to
$244,000 in 1997. The effective tax rate increased 11.2% in 1997 because in
1996 the Company was able to utilize research tax credits and the corporate
surtax exemption.

As a result of the foregoing factors, net income increased $219,000,
or 77%, from $284,000 in 1996 to $503,000 in 1997.

The impact from the acquisition of Mirocon, Inc. can be seen in the
pro forma combined statements of income for the years ended December 31, 1996
and 1997. The Company's historical net income increased on a pro forma basis
by approximately 19% in 1997 as a result of the Mirocon, Inc. acquisition.

Liquidity and Capital Resources

From inception through 1994, the Company funded its operations through
various debt financing obligations, including a line of credit and a Small
Business Administration loan, and working capital. Since 1995, the Company
has met its capital requirements from operating cash flow and from the sale of
certain territories as described above.

In December of 1997, the Company acquired Mirocon, Inc. for
approximately $519,000, of which $100,000 has been paid. The remainder is
evidenced by a note payable of $419,000. The Company has required contractual
payments under the note of approximately $135,000 in 1998. Upon the completion
of this offering, a payment of the lesser of $160,000 or the outstanding
balance on the note is required.

The Company had cash balances of $397,000 at December 31, 1997. In
1997, net cash provided from operations was approximately $1.2 million which
resulted from depreciation, amortization, and the financial carrying value in
assets related to territories sold in 1997. The Company also experienced an
increase in receivables of approximately $326,000. Net cash used in investing
activities was approximately $501,000. Cash payments on the Company's line of
credit and principal payments on long-term debt were approximately $321,000.
Capital expenditures amounted to approximately $593,000, which were partially
offset by the collection of $185,000 on notes receivable associated with the
Indiana Territory sale. Cash used by financing activities was approximately
$357,000. With the exception of scheduled long-term debt repayment of
$442,000, the Company has no other material capital commitments.

The Company's current consolidation plan calls for expansion of
information services through the acquisition of competitors and/or System
Affiliates. While the Company has not determined the number of acquisitions to
be made, it has identified a group of approximately 30 potential acquisition
candidates, although there are no agreements, arrangements or understandings
with any persons or entities as to any acquisition at the present time. The
current use of proceeds from this offering allocates $2.75 million for
acquisitions. Additional funding to complete the consolidation plan will be
required and may come from operations, future public or private equity or debt
financings, the issuance of Company securities to

24
<PAGE> 30
purchase the acquisition candidates, or any combination of the foregoing. No
assurances can be given that the Company will be able to fully implement its
consolidation plan.

Inflation

Although the Company cannot accurately anticipate the effect of
inflation on its operations, the Company does not believe that inflation has
had, or is likely in the foreseeable future to have, a material effect on its
results of operations or financial condition.

Year 2000 Compliance

The Company is aware of the issues associated with the programming
code in existing computer systems as the year 2000 approaches. The "year 2000"
problem is pervasive and complex as virtually every computer operation will be
affected in some way by the rollover of the two-digit year value to 00. The
issue is whether computer systems will properly recognize date-sensitive
information when the year changes to 2000. Systems that do not properly
recognize such information could generate erroneous data or cause a system to
fail.

The Company is utilizing both internal and external resources to
identify, correct or reprogram, and test its systems for year 2000 compliance.
It is anticipated that all reprogramming efforts will be complete by December
31, 1998, allowing adequate time for

25
<PAGE> 31
testing. To date, confirmations have been received from the Company's primary
processing vendors that plans are being developed to address processing of
transactions in the year 2000. Management has not yet completed their full
assessment of the year 2000 compliance expense and related potential effect on
the Company's earnings, although management believes that the costs of
compliance and potential impact on operations will not be material.

Forward Looking Statements

Certain of the information discussed in the Prospectus, and in
particular in this section are forward-looking statements that involve risks
and uncertainties that might adversely affect the Company's operating results
in the future in a material way. Such risks and uncertainties include, without
limitation, the effect of national and regional economic and market conditions,
costs of labor and employee benefits, costs of marketing, costs of telephone
and repository's costs used in the operation of the business, intensity of
competition for locations as well as customers, changes in interest rates,
legal claims, and the availability of financing for the Company consolidation
and expansion plans. Most of these risks are beyond the control of the
Company. Notwithstanding that the safe harbor provided by the Private
Securities Litigation Reform Act of 1995 is inapplicable to offers and sales
pursuant to this Prospectus, investors should use caution when reviewing
forward-looking statements.

26
<PAGE> 32
BUSINESS

GENERAL

The Company provides a broad range of information services to mortgage
and consumer lenders, employers, landlords and other business customers located
throughout the United States. The Company specializes in preparing mortgage
credit reports ("MCRs") that are customized to each mortgage lender's
requirements and transmitted to lenders via the Internet, modem or facsimile.
The Company's larger customers include, among others, NationsBanc/Boatmen's
National, Chase Manhattan Residential, U.S. Home Mortgage, CoreStates Mortgage
and CTX Mortgage. In 1996, the Company was selected to be one of five approved
information vendors for Freddie Mac's automated underwriting system, Loan
Prospector. Based on publicly reported information concerning mortgage loans
originated and refinanced in the United States, management believes the Company
and its System Affiliates are one of the leading suppliers of MCRs in the
United States. The Company and its System Affiliates delivered approximately
1.08 million and 1.43 million MCRs representing gross system billings of
approximately $27.3 million and $31.3 million in 1996 and 1997, respectively.

MCRs supplied by the Company generally fall in three categories:
residential mortgage credit reports ("RMCRs") under which the Company verifies
credit, employment and other information and conducts an in-person or telephone
interview with the loan applicant; residential mortgage credit reports that do
not encompass applicant interviews ("RMCR Jrs."); and Bureau Express reports,
which provide only the merged credit information from the three primary credit
repositories in the United States without the verification performed in RMCRs
or RMCR Jrs. Through its expertise developed in mortgage credit reporting, the
Company has recently expanded its services to include EMPfacts, an employment
screening service, QUICKpeek Identifier, an instant employment screening
service, QUICKpeek Tenant, a credit and employment screening service for use by
leasing agents and landlords, and Corpdata, a credit reporting service on
businesses.

The Company intends to implement a consolidation plan in the MCR
business. The Company believes a favorable environment exists for acquisitions
because of the highly fragmented nature of the industry and the increased cost
of new technologies that generally cannot be afforded by smaller participants
in the market. The Company's consolidation plan envisions the purchase of
unaffiliated companies active in the MCR market as well as System Affiliates.
Consistent with this consolidation plan, the Company concluded the acquisition
of Mirocon, Inc. in December 1997. The Company's consolidation plan is
designed to expand its existing business and take advantage of its core
competencies including, among other things, its highly developed customer
service program, use of sophisticated technology to achieve efficiencies in the
MCR market, development of close working relationships with mortgage lenders,
knowledge of the MCR market and its experienced management team.

27
<PAGE> 33
INDUSTRY

The Company believes the mortgage credit reporting industry is highly
fragmented and consists of approximately 1,400 providers in the United States.
As the primary service of the Company is its MCRs, the Company's business is
directly related to the mortgage lending industry, which enjoyed a near record
year in 1997. Mortgage originations (including refinancings) have been
estimated at $870 billion in 1997, almost 11% higher than the $785 billion in
originations in 1996 and the third-best year ever. The 1997 loan activity
equates to the generation of an estimated 11 million mortgage credit reports.

In 1997, there were about 4.3 million sales of existing homes and 10
million sales of new homes according to the Mortgage Bankers Association of
America. The Company estimates one million refinancings of existing homes
occurred in 1997. The Company also estimates, based on its historical
experience, that a significant number of applications for residential mortgage
credit were not funded for a variety of reasons during 1997.

According to the Mortgage Bankers Association of America, the outlook
for the remainder of the decade appears stable due to demographics,
particularly the impact of the aging of the baby boom generation, which is
entering its peak earnings period. Presently, home ownership rates are
approximately 66% for the 35-to-44 age group, 75% for the 45-to-54 age group
and 80% for the 55-to-64 age group. Although population growth and household
formation rates are projected to slow during the next 10 years, population
growth within the top earning groups -- ages 45-to-54 and 55-to-64 -- is
projected to increase. Management believes that interest rates will remain
relatively stable in 1998. Thus, if the foregoing home ownership and interest
rate trends continue, demand for MCRs should continue, although such results
cannot be assured.

The mortgage credit reporting industry provides a valuable service to
the lending industry due to its report formatting and verification services.
Millions of pieces of credit data are furnished unverified to the three major
credit repositories from lenders and creditors worldwide. Due to the volume of
information and lack of verification at the credit repository level,
significant inaccuracies of information can occur in an individual's credit
file which must be verified and accurately reported.

Historically, mortgage credit reporting entities have performed these
services by manual verification in the form of calling creditors, lenders,
employers, landlords, and other businesses directly to verify information, and
reviewing public files and other information sources. However, the industry
has been undergoing significant change in terms of how services are requested,
how information is delivered, and the format in which the data is returned.
These changes have been driven by the advances in computer software and
hardware, along with advances in communications technology. The mortgage
lending industry, along with other

- ---------------

(1) Source Department of Housing and Urban Development and the Mortgage Bankers
Association of America.

28
<PAGE> 34
users of credit information, expect quick turnaround of accurate reports in a
customized format in order to facilitate their lending decisions. Thus, the
Company believes that entities involved in mortgage credit reporting must
continually develop and maintain sophisticated computer and communication
technology to compete. Due to the costs and technical competence required to
keep abreast of technological advances in the industry, the Company believes
that the credit reporting industry will consolidate, and that the market may be
dominated by a handful of companies that have proven technological capabilities
and diversified product lines.

BUSINESS STRATEGY

The Company intends to expand its present business operations and to
develop new opportunities by, among other things, pursuing the following
strategies:

o Acquire System Affiliates and Competitors to Expand Business. The
Company intends to expand its business operations by purchasing
certain of its System Affiliates as well as purchasing competing
businesses. While the Company has not determined the number of
acquisitions to be made, it has identified approximately 30 potential
acquisition candidates from the approximately 1,400 mortgage credit
reporting companies in the United States, although there are no
agreements, arrangements or understandings with any persons or
entities as to any acquisition at the present time. The Company
believes its consolidation plan will result in substantial savings in
accounting, administrative and technology expenses, and that marketing
of its ancillary services can be accelerated through acquisitions.
The Company may use cash, stock, or a combination thereof, to effect
any such acquisitions. To the extent the Company requires additional
funds for acquisitions under its consolidation plan, the Company will
likely consider funding such acquisitions through cash from
operations, proceeds (if any) from the exercise of the Warrants
offered herein, the issuance of capital stock to the acquisition
candidates, further private or public debt or equity financing or by a
combination of the foregoing.

o Capitalize on Sophisticated Technology. The Company believes its
technology is state-of-the-art, and to preserve this advantage, it
employs 15 technical persons, seven of whom are software programmers,
to continually upgrade its electronic capabilities and develop new
applications. The Company has budgeted a portion of the proceeds of
this offering to the continued maintenance and development of its
technology. If funds from operations or external financing sources
permit, the Company will devote additional resources to technological
development and implementation. The Company believes that speed and
accuracy of service, which are directly related to its technical
ability, are critical to the Company's growth and success.

o Accelerate Market Penetration. The Company intends to accelerate its
market penetration throughout the United States by expanding and
refining sales and marketing techniques used by it over the past
several years, including: (i) face-to-face selling with prospective
customers, consisting primarily of larger companies; (ii) in-house
telemarketing to existing and prospective customers who have shown an
interest in purchasing the Company's services; (iii) public relations
efforts; (iv) participation in trade shows and seminars; (v)
advertising in trade publications; (vi) maintaining a web page on the
Internet; and (vii) mailing of quarterly news releases to existing and
prospective customers.

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<PAGE> 35
o Increase Revenue and Customer Convenience by Offering Additional
Services. The Company intends to increase revenue and customer
convenience by providing one-stop shopping for its customers through
expanded services. The Company will attempt to accomplish this by
"bundling" with its MCRs the services of third party vendors that
provide appraisals, title insurance, flood certification and title
searches. The Company's strategy is to receive a commission or
discount on such services in order to enhance its revenues while
better serving its customers. The Company has already begun to
implement this strategy as it is currently offering flood
determination certificates through a third party vendor.

o Increase Quality Customer Service and Support. The Company intends to
expand and enhance its customer service and support program by: (i)
providing customer service representatives on-call for 12 hours a day
Monday through Friday; (ii) performing additional in-house training of
all franchisees, licensees and customer service representatives with
regard to the Company's services; (iii) enhancing quality control
checks on the Company's services; and (iv) revising, when appropriate,
minimum acceptable performance guidelines for employees. In addition,
the Company realizes the importance of employees to the success of its
operations and, therefore, strives to provide a positive work
environment and benefit package for employees.

RECENT ACQUISITION

In December 1997, the Company acquired the business of one if its
franchisees, Mirocon, Inc., for $519,000, of which $100,000 has been paid. The
remaining $419,000 of the purchase price is evidenced by a note to the seller
which requires five monthly principal-only payments of $7,000 beginning in
February 1998 with the remaining balance of $384,000 to be amortized over 55
months bearing interest at 8% per annum commencing June 1998. The terms of the
note also provide that upon closing of this offering, the Company is to pay at
least $160,000 towards the remaining balance of the note, and any amount
remaining outstanding after such payment is to be paid in 24 equal monthly
installments without interest. See "Use of Proceeds." The Company believes
this acquisition is typical of similar acquisitions that it could make upon
availability of funding.

MORTGAGE CREDIT REPORTS

The Company specializes in preparing MCRs that are customized to each
mortgage lender's requirements and transmitted to lenders via the Internet,
modem or facsimile. MCRs supplied by the Company generally fall in three
categories: RMCRs, under which the Company verifies credit, employment and
other information and conducts an in-person or telephone interview with the
loan applicant; RMCR Jrs., which do not encompass applicant interviews; and
Bureau Express Reports, which provide only the merged credit information in a
user-friendly integrated report from the three primary national credit
repositories in the United States without the Company verification performed in
the RMCRs or RMCR Jrs. Bureau Express Reports are typically compiled by the
Company's proprietary system in less than 60 seconds,

30
<PAGE> 36
free of duplication. The system also provides a means to resolve
inconsistencies between the credit repositories' information.

The following graph sets forth information concerning the annual
volume of MCRs performed by the Company and its System Affiliates for the years
indicated:

MORTGAGE CREDIT REPORT VOLUME
[CHART]

The following graph sets forth information concerning the annual
volume of Bureau Express Reports performed by the Company and its System
Affiliates for the years indicated:

BUREAU EXPRESS REPORT VOLUME
[CHART]

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<PAGE> 37

The Company's MCR services are fully automated. Mortgage lenders
submit credit applications to the Company via facsimile or computer modem.
Depending on the type of MCR requested, applications are assigned to credit
investigators who poll the three credit repositories for credit reports, verify
credit information, residence history and employment history for the last two
years, check or verify legal proceedings and tax liens and conduct an interview
with the applicant regarding all the information obtained. If any
discrepancies are uncovered during the investigation, the Company contacts the
applicant and conducts a conference call with the reporting entity to clear up
the matter.

Once the report is completed, the Company delivers the report directly
to the mortgage lender's computer or by transmission via facsimile. In the
future, the Company hopes to receive most applications into its computer system
via the Internet. This technology has been implemented on a limited basis to
date, but the Company believes most mortgage lenders will eventually use the
Internet for most, if not all, of their communication needs. All report forms
are customized according to each lender's requirements and generated by the
Company's proprietary and non-proprietary computer system, thereby eliminating
the need for a stockpile of forms and effectively reducing overhead costs.
Credit reports are printed using state-of-the-art laser technology. Lenders
can choose to interface directly with the Company using their own mortgage
origination or processing software. The Company can also remotely laser print
completed credit reports in the lender's office. The Company provides its
customers with proprietary software which allows electronic ordering and
retrieval of reports. The Company effectively provides the lenders with all
report forms because the reports are generated by the computer system. The
Company also adapts its computer generated forms and reports to comply with
different state requirements.

To capture more of the market and to provide one stop shopping for its
customers, the Company is expanding its service line to include other services
required by mortgage lenders such as appraisals, title insurance, flood
certification and title searches, which the Company calls "bundled services."
Generally, the Company provides such bundled services through third party
providers, and the Company receives revenue by way of a commission or the
spread between the retail price paid by the customer and a wholesale price paid
by the Company. The Company also provides outsourcing to its customers,
generally on an "overflow basis." In effect, the Company acts as the loan
processor by compiling a complete loan application, with all required reports.
The lender needs only to approve the loan via its loan committee. This service
constitutes a small percentage of the Company's overall revenue. However, as
the trend to outsourcing of services continues, management of the Company
anticipates this service may constitute a larger portion of its revenue,
especially during periods of significant mortgage refinancings.

The Company certifies to lenders that its MCRs meet standards required
by Freddie Mac, Fannie Mae, the Veterans Administration, the Federal Housing
Administration, and the Rural Housing Service.

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<PAGE> 38
The Company has developed a program to assist lenders to low and
moderate income applicants with its Form 1003 Supplement. Determining such a
borrower's creditworthiness involves developing his/her credit history.
However, many low to moderate income borrowers do not always use the types of
credit traditionally reported to the credit repositories. Through the use of
the Company's Affordable Housing 1003 Supplement Form, the gap between
traditional and non-traditional credit is bridged. Credit history is developed
through verifying non-traditional credit such as utilities, car insurance,
child care, furniture rental, loans from employers, payments to savings
accounts, and automatic deductions from paychecks.

OTHER SERVICES

Although MCRs are, and are expected to remain, the Company's principal
business activity, it is developing additional services which it intends to
aggressively market in the future. The following describes the more important
of these services.

EMPfacts. Management of the Company believes employment screening is
a growing industry due in large part to the legal consequences of negligent
hiring, as well as the desire and necessity for employers to hire the best
applicants. The Company's EMPfacts employment screening services offer
state-of-the-art, accurate background checks that verify an applicant's
professional, educational and personal history. EMPfacts offers individual or
bundled screening services in the following areas:

o Substance Abuse Testing
o Motor Vehicle Record (MVR)
o Worker's Compensation History
o Public Records Information
o Fraud Searches
o Criminal History
o Education Verification
o Financial Reports
o Property Search
o Employment Verification
o Social Security Number Search
o Professional License Verification
o Psychological Testing

33
<PAGE> 39
The following graph sets forth information concerning the annual
volume of EMPfacts reports performed by the Company and its System Affiliates
for the years indicated:

EMPFACTS REPORT VOLUME

[CHART]

QUICKpeek Identifier. The Company's QUICKpeek Identifier system
enables customers, via Windows compatible software, to receive an instant
report, in 60 seconds or less, which can be viewed on screen or printed. By
entering a person's name, address and social security number, QUICKpeek
Identifier provides employment information, public records and fraud search,
financial summaries and residence information. The QUICKpeek Identifier
program commenced in January 1997. The Company is in the process of developing
various marketing strategies to further its implementation.

QUICKpeek Tenant. The Company has designed a system specifically for
leasing agents and landlords with respect to rental property. The system
checks and reports information regarding a proposed tenant through credit
repository inquiries, employment history, public records, residence history,
payment habits, criminal and eviction data. This program was also initiated in
1997.

In 1997, a combined 4,587 QUICKpeek Identifier and QUICKpeek Tenant
searches were performed.

Corpdata. The Company also offers Corpdata, its credit reporting
service on small, medium and large sized businesses. Commercial credit
repositories sometimes do not have information on businesses and users can
often expect to receive a "No Record" response when seeking information on
businesses. Corpdata obtains credit information and other data about such
businesses which can be customized to meet customer needs.

34
<PAGE> 40
SYSTEM AFFILIATES

From 1989 to 1993, the Company pursued a strategy of franchising its
MCR system. The Company earns fees based on each franchisee's use of its
system to generate reports for the franchisees' customers. In 1993, the
Company terminated its franchise program and began entering into licensing
agreements whereby licensees utilize the Company's systems to service their
customers in return for the payment to the Company of a percentage of their
gross billings. The Company presently has 29 franchisees and 35 licensees, the
majority of which are networked with the Company's Technology Center.

The Company's System Affiliates currently provide significant revenue
to the Company. For the years ended December 31, 1996 and 1997, System
Affiliates provided 36% and 55%, respectively, of the revenue of the Company.

Franchises. The following table sets forth certain information at
December 31,1997, about the geographic location of the Company's 29 franchises.

<TABLE>
<CAPTION>
MCR FRANCHISES
<S> <C> <C>
Number of
Franchises State
---------- -----

1 Arizona
2 California
1 Colorado
2 Florida
2 Georgia
1 Illinois
1 Indiana
1 Kansas
1 Michigan
1 Minnesota
1 Missouri
1 Nevada

Number of
Franchises State
---------- -----
1 New Jersey
1 New Mexico
1 North Carolina
1 North Dakota
1 Ohio
1 Pennsylvania
1 South Carolina
1 South Dakota
1 Tennessee
2 Texas(1)
1 Utah
1 Washington
1 Wisconsin

_________________
</TABLE>

(1) One of the Texas franchisees owns the Arizona and New Mexico
franchises.

35
<PAGE> 41
The Company has a standard Franchise Agreement that it has entered
into with its franchisees. While all agreements may not be completely uniform
due to modifications made pursuant to negotiations with each franchisee, in
general, the Franchise Agreements include the following provisions, among
others:

o Franchisees are permitted to use the Company's trademarks in a
specified territory for the purpose of providing MCRs.

o Franchisees are provided with an operational manual, interface
software and several months of training in connection with using the
Company's software and systems for producing MCRs.

o The term of the Franchise Agreement is generally 10 years and is
automatically extended unless (i) the franchisee declines to extend in
writing, or (ii) the Company declines to extend due to the franchisee
failing to comply with the Franchise Agreement, subject to a 30 day
cure period. In addition, the Franchise Agreement may also be
terminated by the Company upon notice if the franchisee becomes
insolvent, bankrupt or makes an assignment for the benefit of
creditors, or if the franchisee is in default under the Franchise
Agreement.

o The Franchise Agreements sometimes required an initial fee based on
the population of the franchisee's territory. In addition,
franchisees are required to pay a monthly royalty fee based on MCRs
sold per month as set forth in the following table:

<TABLE>
Number of MCRs Sold per Month Percentage of Gross Sales
----------------------------- -------------------------
<S> <C>
0 to 200 . . . . . . . . 0%
201 to 400 . . . . . . . . 7%
401 to 500 . . . . . . . . 8%
501 to 700 . . . . . . . . 9%
701 to 800 . . . . . . . . 10%
801 & above . . . . . . . . 11%
</TABLE>

Generally, when a franchise attains a certain royalty rate, the
Franchise Agreement requires that future royalties be based on that
rate (unless a higher royalty rate is attained) even though gross sales
for a later month fall below that royalty rate's threshold:

Also, franchisees are required to pay monthly fees as follows:

(a) 3% of all gross billings in connection with any out-sourced
"bundled services" provided by the Company; and

(b) a communication fee to cover communication costs incurred by
the Company.

o Typically, franchisees may not transfer or assign the Franchise
Agreement and related rights without the written consent of the
Company. In addition, the Franchise Agreement generally provides for
a right of first refusal in favor of the Company when a franchisee
receives a bona-fide offer to purchase its business.

36
<PAGE> 42
Licenses. The following table sets forth certain information about
the geographic location of the Company's 35 licenses in effect at December 31,
1997, of which 18 are MCR licenses and 17 are EMPfacts licenses.

<TABLE>
<CAPTION>
MCR LICENSES
<S> <C>
Number of
Licenses State
-------- -----

5 Alabama
1 Arkansas
1 California
1 Florida
1 Illinois
1 Iowa

Number of
Licenses State
--------- -----

1 Louisiana
1 Montana
1 New Hampshire
1 New York
3 Pennsylvania
1 Wyoming

EMPFACTS LICENSES

Number of
Licenses State
--------- -----

1 Alabama
1 Colorado
1 Florida
2 Illinois
1 Indiana
1 Iowa
1 Louisiana

Number of
Licenses State
--------- -----

1 Missouri
1 New Jersey
1 Ohio
2 Pennsylvania
1 Texas
2 Washington
1 Wisconsin
</TABLE>

The Company has a standard License Agreement that it enters into with
its licensees. While all licenses may not be completely uniform due to
modifications made pursuant to negotiations with each licensee, in general, the
License Agreements include the following provisions, among others:

37
<PAGE> 43
o Licensees are permitted to use the Company's trademarks in a specified
territory for the purpose of providing MCRs and other Company
services.

o Licensees are provided with an operational manual and approximately a
week of training in connection with using the Company's software and
systems.

o The term of the License Agreement is generally three years unless
earlier terminated and is automatically extended for another three
years unless terminated by either party upon at least 60 days advance
written notice. In addition, the Company (i) has the right to suspend
services if the licensee fails to pay any amounts due pursuant to the
License Agreement within 30 days, (ii) has the right to immediately
terminate the license if the licensee utilizes any other mortgage
credit reporting software, and (iii) has the right to compete with the
licensee or grant other licenses in the licensee's territory if the
licensee breaches any material term of the License Agreement.

o The License Agreements can require an initial fee based on the
population of the licensee's territory, although such fee is waived in
many instances. In addition, licensees are required to pay monthly
fees as follows:

(a) generally the greater of $700 or 5% of all gross billings of
the licensee from MCRs or other Company services;

(b) 3% of all gross billings in connection with any out-sourced
"bundled services" provided by the Company; and

As to both franchisees and licensees, the Company provides access to
its Technology Center (computer network system), updates to its software,
hardware and software support, training and marketing support, and the right to
use the Factual Data trademark and trade name. Some franchisees and licensees
service states outside of their office location.

In connection with the Company's consolidation plan, some System
Affiliate's exclusive territory rights could be a hindrance to the plan since
the Company will be required to purchase a System Affiliate, or wait until the
expiration of the applicable agreement with the System Affilate, before
expanding into, or acquiring a competitior, in the same territory.

The Company presently operates two offices, both located in Colorado,
which market services in the following jurisdictions: Alaska, Colorado,
District of Columbia, Hawaii, Texas, Virginia, New Hampshire and West Virginia.
Between the Company operated offices and System Affiliates, the Company
believes it provides service to lenders in all states in the continental United
States.

SUPPLIERS

The Company relies heavily on the three national credit repositories
- -- Experian, Inc. TransUnion, Inc. and Equifax, Inc. -- and is on-line with
these repositories 24 hours per day. Each repository credit file contains the
following information which the Company accesses by computer modem:

<PAGE> 44
Identifying Information - name, address, former address, social
security number, and employment.

Credit History - balances and payment history of credit cards, finance
companies, banks, mortgage loans, accounts referred for collection and
accounts written off.

Public Records - tax liens, civil judgments, bankruptcies,
foreclosures.

Inquiries - credit grantors or authorized parties are listed as
inquiries when they have requested a copy of a credit file.

The Company also obtains other information, such as criminal and motor
vehicle history, from other third party suppliers from time to time. The
Company pays each repository a fee per completed inquiry.

New technology continues to be developed in the mortgage industry and
by major lenders to facilitate underwriting capability through artificial
intelligence systems. These systems require electronic information so that
decisions can be completed in minutes. The Company is one of five credit
vendors authorized to provide information to Freddie Mac's Loan Prospector
underwriting system which utilizes this advanced technology. Other value added
networks (private networks used to facilitate commercial communications) and
systems are currently being developed or tested by the Company.

TECHNOLOGY CENTER

The Company believes that the credit reporting industry will continue
to move to automated operations driven by comprehensive computer software,
hardware and communications programs and equipment. The Company is committed
to maintaining and developing leading technology to increase its customer
service. The following summarizes the Company's current technology.

Hardware. The Company's Technology Center is the nerve center for
customer and vendor communications. The Technology Center is designed to
provide services faster and less expensively than many competitors. Since
1996, the Company has experienced minimal downtime at its Technology Center due
to redundancy and on-line monitoring.

Systems in the Technology Center are non-proprietary Windows 95 or
Windows NT based Intel platforms. Each system has at least one backup, and can
be repaired or replaced easily and cheaply. The server platform is Windows NT
with a mirrored server that can replace the primary server in minutes if
necessary. Backup power is available to the servers to ensure up to 45 minutes
of uninterrupted power. Networking is achieved through four 100Base-TX
backbone connections to four 3COM Network switches.

The Company works closely with its vendors to ensure high speed and
reliability. High-speed repository bureau lines allow it to pull up to 18,000
files per hour. The Company's

39
<PAGE> 45
systems automatically move to backup lines when necessary. System availability
is monitored continuously, and a technical support specialist can be paged
within 60 seconds if an outage is detected on either the primary or secondary
systems.

Service requests are delivered through the Company's computer system.
This system offers high speed and high volume capabilities. Call capacity is
greater than 10,000 calls per hour, up to the speed of the communications
equipment of its customers. Redundancy is achieved by sending fully redundant
connections to national hosts in Cheyenne, Wyoming as well as Amarillo, Texas.
The Company is connected to its outside offices through use of the Internet.
The Technology Center has primary and secondary Internet connections through
two different Internet Service Providers ("ISP"). Each office has a primary
dedicated connection to the Internet as well as a secondary dial-up connection
through two separate ISPs. Data flowing to and from the Technology Center is
secured by means of public key encryption technology and protected login
passwords.

Software. The Company uses proprietary software developed in-house
over the past 13 years. The Company believes its proprietary software allows
it to remain competitive in an increasingly competitive marketplace. The
Company's software was originally written in 1984, and began full production
use in 1985. From 1987 through 1997, the Company significantly developed and
expanded its software capability including its ability to completely customize
reporting forms to the various requirements of each customer. The Company has
moved to Microsoft Visual Studio for the majority of its new programs. The
Company employs 15 persons in its Technology Center of whom seven are software
programmers, and the others are full-time hardware and telecommunications
specialists.

COMPETITION

The MCR industry is highly fragmented. The Company faces both direct
and indirect competition for its services. There are a large number of
companies engaged in the sale of one or more of the services offered by the
Company, and the Company believes that this number will increase. A
significant number of these competitors are small companies operating on a
local scale while a limited number are large companies operating on a national
scale. Management believes there are approximately 1,400 companies in the
United States providing MCR services. Certain of these competitors, including
The First American Financial Corp., CBC Companies, Inc., TransUnion
Corporation, Equifax Credit Information Services, Inc., Informative Research
and Credit Data Kingston, are significantly larger and have greater financial
and marketing resources than the Company. The Company and its System
Affiliates combined are believed by management to account for less than 10% of
national MCRs delivered annually. The Company faces intense competition not
only from the above sources, but various companies engaged in employment and
tenant application verification services.

The primary competitive factors in most of the Company's existing and
contemplated related service areas are customer service, service accuracy, easy
to read reports, technological sophistication and speed of delivery, price and
name recognition. The Company believes that one of its most significant
advantages is its software and communications

40
<PAGE> 46
technology. Management believes that the industry is moving towards an
automated credit reporting system which mandates quick turnaround of reliable,
user-friendly credit reports. The Company believes it has state-of-the-art
technology which allows it to compete favorably in the credit reporting
industry. In order to maintain this perceived advantage, the Company currently
has 15 employees assigned to the development and maintenance of the Company's
proprietary software and communications technology.

GOVERNMENT REGULATION AND PRIVACY ISSUES

The Company is a "consumer reporting agency" within the meaning of
that term as used in, and therefore is subject to, the provisions of the Fair
Credit Reporting Act (referred to herein as the "FCRA") and is regulated by the
Federal Trade Commission ("FTC") under the Federal Trade Commission Act. Under
the provisions of the FCRA, a consumer reporting agency may furnish a "consumer
report" in response to the order of a court having jurisdiction or in
accordance with written instructions of the consumer. Such information may
also be furnished to a person the Company has reason to believe intends to use
the information: (i) in connection with a credit transaction; (ii) for
employment purposes; (iii) in connection with the underwriting of insurance;
(iv) in connection with a determination of the consumer's eligibility for a
license or other benefit granted by a governmental instrumentality required by
law; (v) as a potential investor or servicer or current insurer, in connection
with a valuation of, or an assessment of the credit or prepayment risks
associated with, an existing obligation; or (vi) to a person who otherwise has
a legitimate business need for the information. The FCRA prohibits disclosure
of obsolete information concerning a consumer. Obsolete information generally
means information which is more than seven years old.

The FCRA requires a consumer reporting agency to maintain reasonable
procedures designed to ensure that the proscriptions on the use of obsolete
information are not violated, and that the information contained in a consumer
report is provided for a permissible purpose. In addition, a consumer
reporting agency must follow reasonable procedures to assure maximum possible
accuracy of the information concerning the consumer about whom the report
relates. The FCRA also requires a consumer reporting agency, upon request from
a consumer, to disclose all information about that consumer in its files,
together with the source and the recipients of the information. In some cases,
this information must be delivered to the consumer at no cost, and, in others,
the agency may charge a reasonable fee.

The FCRA provides that an investigative consumer report may not be
prepared on any consumer unless (1) such consumer receives notice thereof in
writing not later than three days after the date on which the report was first
requested, which must include a statement, among others, that the consumer has
the right to request complete disclosure of the nature and scope of the
investigation requested, or (2) the report is to be used for employment
purposes for which the consumer has specifically applied. The FCRA further
provides that if the consumer requests disclosure of the information, the
consumer reporting agency must make such disclosure in writing not later than
five days after the date on which the request for disclosure was received. A
consumer reporting agency may not be held liable for any violation of the FCRA
provisions relating to investigative consumer reports if that agency shows by a

41
<PAGE> 47
preponderance of the evidence that at the time of the violation such agency
maintained reasonable procedures to assure compliance with those provisions.
Of the Company's current services, employment and reference checks may be
investigative consumer reports for purposes of the FCRA.

The FCRA provides for civil liability sanctions against a consumer
reporting agency by a consumer for willful or negligent noncompliance with the
FCRA and criminal sanctions against officers and directors thereof who
knowingly and willfully disclose information in a report to a person not
authorized to receive the information.

State laws also impact the Company's business. There are a number of
states which have laws similar to the FCRA, and some states which have human
rights laws much like the Americans with Disabilities Act ("ADA"). In
addition, to the Company's knowledge, at least four states require companies
engaged in investigative reporting, such as EMPfacts, to be licensed in order
to conduct business within those states. A large number of states also
regulate the type of information which can be made available to the public
and/or impose conditions to the release of the information. For example some
state laws prohibit access to certain types of information, such as workers'
compensation histories or criminal histories, while others restrict access
without a signed release from the subject of the report. In addition, many
privacy and consumer advocates and federal regulators have become increasingly
concerned with the use of personal information. Attempts have been made and
will continue to be made by these groups to adopt new or additional federal and
state legislation to regulate the use of personal information. Existing
federal and/or state laws, future modifications thereto, or laws enacted in the
future regulating consumer reporting agencies or access and use of personal
information, in particular, and privacy and civil rights, in general, could
materially adversely impact the Company's operations.

The nature of the Company's business requires it to have certain
licenses and qualifications to do business in various states. Management
believes it has all material licenses, permits and qualifications necessary to
the conduct of its business.

LEGAL CONSIDERATIONS

Under general legal concepts and, in some instances, by specific
federal or state statute, the Company could be held liable to customers and/or
to the subjects of reports for inaccurate information prepared by the Company
(which is not corrected after proper notice) or for misuse of the information.
The FCRA contains civil liability provisions for willful and negligent
noncompliance with its requirements. The FCRA further provides in effect that,
except for liability for willful or negligent noncompliance with the FCRA and
false information furnished with malice or willful intent to injure a consumer,
neither a consumer reporting agency, any user of information nor any person who
furnishes information to a consumer reporting agency will be liable to the
consumer for defamation, invasion of privacy or negligence based on information
provided on such consumer under the provisions of the FCRA.

42
<PAGE> 48
The Company has developed and implemented internal policies designed
to help ensure that background information retrieved by it concerning a
consumer is accurate and that it otherwise complies with the provisions of the
FCRA. In addition, each customer of the Company is required to sign an
agreement, wherein such customer agrees, among other matters, to accept
responsibility for using information provided by the Company in accordance with
the provisions of the FCRA and the ADA. The Company also has internal checks
in place regarding access and release of such information. Additionally, the
Company requires that all employees sign a written acknowledgment covering the
proper procedures for handling confidential information.

SOFTWARE DEVELOPMENT COSTS

The Company incurs research and development costs associated with the
development and improvement of software utilized in its credit information and
delivery system. In 1996, software development costs associated with
internally developed software used to support System Affiliate revenues and
information service sales were expensed as incurred by the Company.

INTELLECTUAL PROPERTY

The Company has not yet adopted a formal intellectual property
protection program, and currently relies on a combination of trademark,
servicemark, copyright, trade secret and contract protection (licenses) to
establish and protect its proprietary rights in its services and technology.
There can be no assurance that such measures will provide meaningful protection
to the Company. The Company currently maintains approximately 43 trademarks,
servicemarks and copyrights all of which it believes are properly filed and
recorded. The Company does not have any knowledge of infringement of its
proprietary rights.

FACILITIES

The Company relocated its corporate office to a new building in
Loveland, Colorado on April 3, 1998 and commenced a 20 year operating lease at
that facility. The lease calls for annual lease payments of the lesser of 11%
of the total construction costs for the premises once completed or $236,000,
plus applicable taxes, maintenance and insurance. The rent increases 15% every
five years for the duration of the

43
<PAGE> 49

lease. The Company anticipates the space will be adequate to meet the Company's
office requirements for the foreseeable future.

The Company assumed the lease obligations of its franchisee, Mirocon,
Inc., when it purchased the assets of Mirocon, Inc. on December 1, 1997. The
lease requires monthly payments of $2,400 and expires on August 31, 2000.
However, the Company plans on exercising a provision of the lease which allows
early termination at the end of August 1998 upon the payment of $2,500.

INSURANCE

The Company maintains commercial general liability and property
insurance. The policy provides for a general liability aggregate limit of $2
million. In addition, the policy also provides for products/completed
operations, business auto and personal property coverage.

EMPLOYEES

The Company employs 37 persons on a full-time basis in its corporate
headquarters in Ft. Collins, Colorado. There are no union or collective
bargaining agreements between the Company and its employees and employee
relations are considered by management to be excellent. Approximately 14
employees have been employed by the Company for five years or more. The
Company retains consultants from time to time as needed.

HISTORY OF THE COMPANY

Factual Data Corp was incorporated in the State of Colorado in 1985.
The Company was established for the purpose of providing value added
information services nationally to financial institutions primarily in the
mortgage lending industry.

In late 1986, the Company began its conversion from a manual operation
to an automated processing system to reduce labor costs and speed the delivery
of services from an average 3 to 4 day turnaround to a more aggressive 1 to 2
day turnaround for a typical MCR. In 1986 a single software engineer began
work on the Company's software system for mortgage credit reporting. Today the
Company has 15 employees assigned to the development and maintenance of the
Company's software.

The Company recognized the importance of having national coverage in
order to compete for the larger national accounts while maintaining a local
presence and individualized MCR services. With limited capital resources, the
Company initially elected to franchise its MCR operations in order to achieve
the goal of national coverage. The first franchise, located in Loveland,
Colorado was sold in 1989. As of December 1, 1997, the Company, as part of its
new acquisition plan, purchased the business of this franchisee. In 1992, the
Company began licensing its proprietary software to existing consumer reporting
agencies ("CRAs"). The Company discontinued selling franchises in late 1995
and continued to license its software and techniques to existing CRAs through
1997.

44
<PAGE> 50
In late 1996, a newly completed employment screening service, EMPfacts
was introduced. EMPfacts services are used by employers for screening
potential and current employees. Background checks include criminal records,
professional license and education verifications, employment and residence
verifications, worker's compensation, driver's license records, financial
summaries and public records information. Substance abuse testing and
psychological testing are provided through the use of third party services.

The QUICKpeek Identifier was added to the EMPfacts services in late
1996. Placed on the customer's computer system, this Windows(TM) based
software allows the customer on-line access to employment and residence
history, social security number confirmation, fraud investigation, and
financial and public records history.

45
<PAGE> 51
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company are as follows:

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Jerald H. Donnan 52 Chairman of the Board, Chief Executive Officer and President

Marcia R. Donnan 53 Executive Vice President

Todd A. Neiberger 33 Chief Financial Officer and a Director

Russell E. Donnan 33 Vice President

James N. Donnan 26 Vice President and a Director

Robert J. Terry 57 Director

Abdul H. Rajput 50 Director
</TABLE>

The Company's Articles of Incorporation provide for a Board of
Directors of not less than one nor more than seven directors. The current
Board of Directors consists of five members. All directors hold office until
the next annual meeting of shareholders, or until their successors have been
elected. Officers serve at the discretion of the Board of Directors, except
for Jerald H. Donnan and Marcia R. Donnan who are employed pursuant to
employment agreements. See "--Employment Agreements" below.

JERALD H. DONNAN, Chairman of the Board, Chief Executive Officer and
President, has been with the Company since its incorporation in January 1985.
He is responsible for oversight of corporate development and services, and is
responsible for operations, technical development and policies and procedures.
Mr. Donnan's early career experience includes 15 years with Avco Financial
Services, Inc. where he was responsible for lending and collecting a
multi-hundred million dollar portfolio and managing geographically diverse
branches with many of employees. Mr. Donnan was a founding member and past
president of the National Credit Reporting Association, a trade association
founded to promote ethical standards and fair competition within the credit
reporting industry.

MARCIA R. DONNAN, Executive Vice President, has been with the Company
since its incorporation in January 1985. She is responsible for compliance
with the FCRA and all other federal, state and local laws as they apply to the
gathering, processing and distribution of credit information. Staff training
and education are also areas of her primary responsibility. Ms.

46
<PAGE> 52
Donnan spent 15 years in credit reporting with Credit Information Systems
(formerly Credit Bureau of Council Bluffs, Inc.) as operations manager, prior
to co-founding Factual Data Corp. in 1985. Ms. Donnan is active in two credit
reporting associations and she concluded a second term as a director of
Associated Credit Bureaus, Inc. in January, 1997.

TODD A. NEIBERGER, Chief Financial Officer and a Director, joined the
Company in March 1995. Mr. Neiberger graduated from the University of Northern
Colorado in 1987 with a degree in accounting. Mr. Neiberger has 10 years
experience in staff, senior and management level positions with various public
accounting firms. From 1994 through 1995, he served as the audit manager of
Rickards & Co. P.C., and from 1991 through 1993 he served as the tax manager
for Krutchen & Co., both Fort Collins, Colorado based certified public
accounting firms. From 1988 through 1990 he was employed with Lemke, Feis &
Co., P.C., a certified public accounting firm, as a staff and senior level
accountant in the audit and tax department. Mr. Neiberger is a Certified
Public Accountant and a member of the Colorado Society of Certified Public
Accountants and the American Institute of Certified Public Accountants.

RUSSELL E. DONNAN, Vice President, has been employed by the Company
since August 1993. He is responsible for technical project management for
software and support services. Before coming to Factual Data Corp, he was a
senior design engineer at Apple Computer in the Power Book division from
February 1992 to August 1993. He is experienced in the super computer field
and was previously employed by Convex Computer (1990-1992) and as a founding
member and employee of Key Computer (1988-1990), now a subsidiary of Amdahl
Corporation. Mr. Donnan graduated from Ohio State University in 1987 with a
degree in electrical engineering.

JAMES N. DONNAN, Vice President and a Director, has been employed by
the Company on a full-time basis since 1994, and prior to that, on a part-time
basis since 1986. He is responsible for management of the Company operated
mortgage credit reporting production offices and EMPfacts employment screening
operations. His duties also include overall sales, growth and customer service
development. Mr. Donnan graduated from Colorado State University in 1994 with
a degree in history.

ROBERT J. TERRY has been a Director since February 1998. From
February 1994 to his retirement in January 1998, Mr. Terry served as a
director, president and chief operating officer of Mail-Well, Inc., a publicly
traded envelope manufacturer and printing company. From January 1992 to
February 1994, Mr. Terry served as executive vice president of Mail-Well
Envelope, a subsidiary of Georgia Pacific. From June 1989 to December 1991,
Mr. Terry served as regional vice president for Butler Paper in Englewood,
Colorado. Mr. Terry obtained a Bachelor of Science degree in Business from
DePaul University in 1963 and attended the Executive Program at the University
of Michigan in 1988.

ABDUL H. RAJPUT has been a Director since February 1998. Since 1991,
Mr. Rajput has been employed in San Diego, California, by Bank of America, a
federal savings bank, a subsidiary of Bank America Corp., where he currently
holds the position of executive vice

47
<PAGE> 53
president, administrative services. Since 1990, Mr. Rajput has also owned and
operated Factual Data Minnesota, Inc., one of the Company's franchises which
operates in Minnesota and Iowa. From 1980 to 1989, Mr. Rajput was employed by
Green Tree Financial Corp., St. Paul, Minnesota, initially as vice president
and then senior vice president for administration. Mr. Rajput also serves on
the board of directors of Security Pacific Housing Services, Inc. Mr. Rajput
obtained a Bachelor of Science degree in Mathematics and a Master of Science
degree in Statistics from the University of Sind, Pakistan, in 1968 and 1970,
respectively.

Russell and James Donnan are sons of Jerald and Marcia Donnan who are
husband and wife.

DIRECTOR COMPENSATION

Employee directors of the Company do not receive any fixed
compensation for their services as directors while non-employee directors
receive compensation of $7,500 annually plus a $500 travel allowance per
calendar quarter. Messrs. Terry and Rajput, the Company's two non-employee
directors, will each be issued options to purchase 5,000 shares of Common Stock
upon the completion of this offering. See "--Stock Incentive Plan."

BOARD COMMITTEES

The Company has two Committees, an Audit Committee and Compensation
Committee. Messrs. Terry and Rajput, the two independent directors, serve on
each committee. Mr. Jerald Donnan, President of the Company, also serves on
each committee.

The primary function of the Compensation Committee is to review and
make recommendations to the Board with respect to the compensation, including
bonuses, of the Company's officers and to administer the Stock Incentive Plan.
The function of the Audit Committee is to review and approve the scope of audit
procedures employed by the Company's independent auditors, to review and
approve the audit reports rendered by the Company's independent auditors and to
approve the audit fee charged by the independent auditors. The Audit Committee
reports to the Board of Directors with respect to such matters and recommends
the selection of independent auditors.

EXECUTIVE COMPENSATION

The following table sets forth compensation awarded by the Company to
Jerald H. Donnan, its Chief Executive Officer and President, and Marcia R.
Donnan, its Executive Vice President, for services rendered during fiscal 1995,
1996 and 1997. Jerald H. Donnan and Marcia R. Donnan are husband and wife. No
person serving as an executive officer as of February 1, 1998 or any former
officer received compensation in excess of $100,000 during the reported years.

48
<PAGE> 54
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

Long Term Compensation
--------------------------------
Annual Compensation Awards Payouts
---------------------------- -------------------- --------
Other
Annual Restricted Other
Compens- Stock LTP Compen-
Name and Fiscal Salary Bonus sation Award(s) Options/ Payouts sation*
Principal Position Year (S) (S) ($) ($) SARs ($) (S)
- ------------------ ---- -------- ------ --------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jerald H. Donnan 1997 82,445 -- 82,445 -- -- -- 3,345
President, Chief 1996 48,031 -- 48,031 -- -- -- 3,300
Executive Officer 1995 45,000 -- 45,000 -- -- -- 3,350

Marcia R. Donnan 1997 93,773 -- 93,773 -- -- -- 3,173
Executive Vice 1996 89,217 -- 89,217 -- -- -- 5,217
President 1995 4,742 -- 4,742 -- -- -- 1,342
- ------------------
</TABLE>

*Consists of certain health and accident insurance benefits and automobile
expense reimbursements.

EMPLOYMENT AGREEMENTS

Jerald H. Donnan and Marcia R. Donnan are parties to three year
employment agreements with the Company effective July 1, 1997. In addition to
salaries of $99,600 (which increase to $111,600 in year two and $123,600 in year
three if the Company has net income in those years), of each Mr. and Ms. Donnan
are entitled to health and accident insurance benefits and certain automobile
reimbursements. Both employment agreements also provide that if the employee is
terminated due to a change in control of the Company, then they are entitled to
severance pay equal to the product of 2.99 times the previous year's pay
(including bonuses). The employment agreements contain customary provisions as
to death, disability and termination for cause.

STOCK INCENTIVE PLAN

In April 1997, the Company adopted the 1997 Stock Incentive Plan (the
"Stock Incentive Plan"). The purpose of the Stock Incentive Plan is to provide
continuing incentives to the Company's key employees, which may include
officers and members of the Board of Directors. The Stock Incentive Plan
provides for an authorization of 200,000 shares of Common Stock for issuance
thereunder. Under the Stock Incentive Plan, the Company may grant to
participants awards of stock options and restricted stock or any combination
thereof.

The Stock Incentive Plan is to be administered by the Compensation
Committee of the Board of Directors composed of at least one disinterested
member. Subject to the terms of the Stock Incentive Plan, the Compensation
Committee determines, among other matters, the persons to whom awards are
granted, the type of award granted, the number of shares granted, the vesting
schedule, employment requirements or performance goals relating to

49
<PAGE> 55
restricted stock awards, the type of consideration to be paid to the Company
upon exercise of options and the terms of any option (which cannot exceed ten
years).

Under the stock option component of the Stock Incentive Plan, the
Company may grant both incentive stock options ("incentive stock options)
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and options which are not qualified as incentive stock
options; provided that incentive stock options cannot be granted to any
participant who is not an employee of the Company. Stock options may not be
granted at an exercise price of less than the fair market value of the Common
Stock on the date of grant. The exercise price of incentive stock options
granted to holders of more than 10% of the Common Stock must be at least 110%
of the fair market value of the Common Stock on the date of grant, and the term
of these options cannot exceed five years. Options granted under the Stock
Incentive Plan are not transferable otherwise than by will or the laws of
descent and distribution and, during the lifetime of the optionholder, options
are exercisable only by such optionholder. In addition, outstanding options
may not be exercised more than three months (but in no event beyond the
expiration date of the option) after the optionholder ceases to be an employee
of the Company, except that in the event of the death or permanent and total
disability of the optionholder, the option may be exercised by the holder (or
his estate, as the case may be) until the first to occur of the expiration of
the option period or the expiration of one year after the date of death or
permanent or total disability. The exercise price may be paid in cash, in
shares of Common Stock (valued at fair market value at the date of exercise) by
delivery of a promissory note or by a combination of such means of payment, as
may be determined by the Compensation Committee.

Upon a change in control (as defined in the Stock Incentive Plan) of
the Company, all stock options granted under the Stock Incentive Plan will
become exercisable in full, and all restricted stock grants will become
immediately vested and any applicable restrictions will lapse. Also, in the
event the number of outstanding shares of Common Stock is increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company or of another company whether as
the result of stock split, stock dividend, combination or exchange of shares,
merger or otherwise, each share subject to an unexercised option shall be
substituted for the number and kind of shares of stock into which each share of
the outstanding Common Stock is to be changed for which each such share is to
be exchanged and the option price shall be increased or decreased
proportionately.

Upon completion of this offering, the Company will grant and issue
options to purchase up to 17,000 shares of Common Stock to 22 employees of the
Company which will vest annually in one-third increments beginning on the first
anniversary date of the grant of such options and options to purchase 10,000
shares of Common Stock to the two non- employee directors of the Company, all
exercisable at the initial public offering price of the Common Stock offered
herein.

50
<PAGE> 56
LIFE INSURANCE POLICY

The Company intends to obtain a Key Man term life insurance policy for
$1,000,000 upon the life of Jerald H. Donnan following closing of the offering
described herein. The death benefits under this policy will be payable in full
to the Company.

CERTAIN TRANSACTIONS

Jerald H. Donnan and Marcia R. Donnan personally guaranteed a $500,000
loan from a financial institution in 1995. No separate consideration was paid
for such guarantee. The balance of the loan will be paid using a portion of
the proceeds from this offering. See "Use of Proceeds."

The Company has adopted a policy that future transactions between the
Company and its officers, directors and 5% or more shareholders are subject to
approval by a majority of the disinterested independent directors of the
Company. Any such transactions will be on terms believed to be no less
favorable than could be obtained from unaffiliated parties.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Company's Articles of Incorporation authorize the Company to
indemnify its directors for certain breaches of fiduciary duty to the Company
and its shareholders, and other liabilities, subject to certain limitations.
Such indemnification does not apply to acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law or the payment of
unlawful distributions to shareholders.

The Company has also entered into indemnification agreements with all
of its executive officers and directors. The agreements require the Company to
indemnify such persons in all situations where indemnification is allowable by
Colorado law, including partial indemnification if the person is only partially
successful in the defense of a qualified proceeding. The agreements also
require the Company to advance costs and expenses, subject to certain
requirements of Colorado law, and to pay or reimburse such persons for costs
and expenses relating to that person's serving as a witness in any proceeding
relating to the Company.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

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<PAGE> 57
PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of the date of this
Prospectus by (i) each person who is known by the Company to own beneficially
more than 5% of the Company's outstanding Common Stock, (ii) each of the
Company's executive officers and directors, and (iii) all executive officers
and directors as a group. Common Stock not outstanding but deemed beneficially
owned by virtue of the right of an individual to acquire shares within 60 days
are treated as outstanding only when determining the amount and percentage of
Common Stock owned by such individual. Each person has sole voting and sole
investment power with respect to the shares shown except as noted.

<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to Owned After
Offering(2) Offering
------------------------- ---------------------------
Name(1) Number Percent Number Percent
- ---- ------ ------- ------ -------
<S> <C> <C> <C> <C>
Jerald H. Donnan 630,000 35% 630,000 22.5%
Marcia R. Donnan 630,000 35 630,000 22.5
Russell E. Donnan 270,000 15 270,000 9.6
James N. Donnan 270,000 15 270,000 9.6
Todd A. Neiberger --- -- --- --
Robert J. Terry(3) 5,000 * 5,000 *
Abdul H. Rajput(3) 5,000 * 5,000 *

All officers and directors
as a group (seven persons) 1,810,000 100% 1,810,000 60.1%
- ------------------
</TABLE>

* Less than 1%

(1) The address for each of the Donnans and Mr. Neiberger is 5200 Hahns
Peak Drive, Loveland, Colorado 80538; the address for Mr. Terry is
5402 South Cottonwood Court, Greenwood Village, Colorado 80121; and
the address for Mr. Rajput is Post Office Box 8310, Rancho Santa Fe,
California 82067.

(2) Shares beneficially owned prior to this offering include an aggregate
of 500,000 shares of Common Stock held in custody and subject to
release to the Company's shareholders prior to the date hereof in 2003
or earlier upon the Company reaching certain performance objectives.
For further information regarding the terms of such custody
arrangement, see immediately below.

(3) Represents options to be issued upon the completion of this offering
to purchase shares of Common Stock at $o per share which will be fully
exercisable upon issuance.

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<PAGE> 58
CUSTODIAL SHARES

As a condition to this offering, the Company's shareholders as of
December 31, 1997, have been required to deposit an aggregate of 500,000 shares
of Common Stock of the Company owned by such shareholders (on a pro-rata basis)
in custody pursuant to a custody agreement with American Securities Transfer &
Trust, Inc. and the Representative. The Common Stock deposited in the custody
account will be subject to release to the shareholders upon the earlier of:
(i) the Company achieving pre-tax net income (excluding extraordinary items) of
$3,000,000 in the four complete calendar quarters immediately subsequent to the
date of this Prospectus; (ii) the Company achieving pre-tax net income (but
excluding extraordinary items) of $8,000,000 in the four complete calendar
quarters commencing one year after the date of this Prospectus; (iii) a merger
or sale of all or substantially all of the Company's assets if such transaction
is approved by the holders of a majority of the Company's outstanding shares
not including shares held by parties to the custody agreement; or (iv) seven
years after the date of this Prospectus. The determination of earnings per
share will be made in accordance with generally accepted accounting principles
and will be based upon the audited financial statements of the Company. The
shares held in custody are not transferable or assignable, although they may be
voted by the holder. The earnings levels set forth above were determined by
negotiations between the shareholders and the Representative and should not be
construed to imply or predict any future earnings by the Company. See
"Underwriting" for information concerning an 18 month lock-up of all presently
outstanding shares.

53
<PAGE> 59
DESCRIPTION OF SECURITIES

UNITS

Each Unit offered in this Prospectus is comprised of one share of
Common Stock and one Redeemable Common Stock Purchase Warrant. The Common Stock
and Warrants will be immediately separately transferable upon completion of the
offering. There will be no separate market for the Units after this offering;
accordingly, the Company has filed an application to have only the Common Stock
and Warrants approved on the Nasdaq SmallCap Market.

COMMON STOCK

The Company is authorized to issue 10,000,000 shares of Common Stock,
of which 1,800,000 shares of Common Stock are currently issued and outstanding.
Holders of shares of Common Stock are entitled to dividends as and when
declared by the Company's Board of Directors from funds legally available
therefor, and upon liquidation, dissolution or winding up of the Company to
share ratably in all assets remaining after payment of liabilities. The
Company has not paid any dividends to date nor does it anticipate paying any
dividends on its Common Stock in the foreseeable future. It is the Company's
present policy to retain earnings, if any, for use in the development and
expansion of its business. The holders of shares of the Common Stock are
entitled to one vote for each share held of record by them, and do not have the
right to cumulate their votes for election of directors. The holders of shares
of Common Stock do not have preemptive rights.

PREFERRED STOCK

The Company is authorized to issue up to 1,000,000 shares of Preferred
Stock with such designations, rights and preferences as may be determined from
time to time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without shareholder approval, to issue Preferred Stock with
dividend, liquidation, conversion, voting or other rights that could aversely
affect the voting power or other rights of the holders of the Company's Common
Stock. In the event of issuance, the Preferred Stock could be utilized, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of the Company. The Company has no present intention to
issue any shares of its Preferred Stock, and no shares of Preferred Stock are
currently outstanding.

WARRANTS

One Warrant will entitle the holder to purchase one share of Common
Stock at an exercise price of $o (130% of the initial offering price of the
Common Stock) for a period of three years from the date hereof subject to the
Company's redemption rights described below. The Warrants will be issued
pursuant to the terms of a Warrant Agreement between the Company and American
Securities Transfer & Trust, Inc. (the "Warrant Agent"). The Company has
authorized and reserved for issuance the shares of Common Stock issuable on
exercise of the Warrants. The Warrants are exercisable to purchase a total of
1,200,000 shares of Common Stock of the Company unless the Underwriters'
over-allotment option relating to the Warrants is exercised, in which case the
Warrants are exercisable to purchase a total of 1,380,000 shares of Common
Stock.

The Warrant exercise price and the number of shares of Common Stock
purchasable upon exercise of the Warrants are subject to adjustment in the
event of, among other events, a stock dividend on, or a subdivision,
recapitalization or reorganization of, the Common Stock,

54
<PAGE> 60
or the merger or consolidation of the Company with or into another corporation
or business entity.

Commencing one year from the date of this Prospectus and until the
expiration of the Warrants, the Company, in its discretion, may redeem
outstanding Warrants, in whole but not in part, upon not less than 30 days'
notice, at a price of $.05 per Warrant, provided that the closing bid price of
the Common Stock equals or exceeds $o (150% of the Warrant exercise price) for
20 consecutive trading days. The redemption notice must be provided not more
than five business days after conclusion of the 20 consecutive trading days in
which the closing bid price of the Common Stock equals or exceeds $o per share.
In the event the Company exercises its right to redeem the Warrants, the
Warrants will be exercisable until the close of business on the date fixed for
redemption in such notice. If any Warrant called for redemption is not
exercised by such time, it will cease to be exercisable and the holder thereof
will be entitled only to the redemption price.

The Company must have on file a current registration statement with
the Securities and Exchange Commission pertaining to the Common Stock
underlying the Warrants in order for a holder to exercise the Warrants or in
order for the Warrants to be redeemed by the Company. The shares underlying
the Warrants must also be registered or qualified for sale under the securities
laws of the states in which the Warrant holders reside. The Company intends to
use its best efforts to keep the Registration Statement incorporating this
Prospectus current, but there can be no assurance that such Registration
Statement (or any other registration statement filed by the Company covering
shares underlying the Warrants) can be kept current. In the event the
Registration Statement covering the underlying Common Stock is not kept
current, or if the Common Stock underlying the Warrants is not registered or
qualified for sale in the state in which a Warrant holder resides, the Warrants
may be deprived of any value.

The Company is not required to issue any fractional shares of Common
Stock upon the exercise of Warrants or upon the occurrence of adjustments
pursuant to anti-dilution provisions. The Company will pay to holders of
fractional interests an amount equal to the cash value of such fractional
interests based upon the then-current market price of a share of Common Stock.

The Warrants may be exercised upon surrender of the certificate
representing such Warrants on or prior to the expiration date (or earlier
redemption date) of such Warrants at the offices of the Warrant Agent with the
form of "Election to Purchase" on the reverse side of the Warrant certificate
completed and executed as indicated, accompanied by payment of the full
exercise price by check payable to the order of the Company for the number of
Warrants being exercised. Shares of Common Stock issued upon exercise of
Warrants for which payment has been received in accordance with the terms of
the Warrants will be fully paid and non-assessable.

The Warrants do not confer upon the Warrantholder any voting or other
rights of a shareholder of the Company. Upon notice to the Warrantholders, the
Company has the right to reduce the exercise price or extend the expiration
date of the Warrants. Although this right

55
<PAGE> 61
is intended to benefit Warrantholders, to the extent the Company exercises this
right when the Warrants would otherwise be exercisable at a price higher than
the prevailing market price of the Common Stock, the likelihood of exercise,
and the resultant increase in the number of shares outstanding, may impede or
make more costly a change in control of the Company.

ANTI-TAKEOVER PROVISIONS

The Company's Articles of Incorporation and Bylaws (the "Incorporation
Documents") contain provisions that may make it more difficult for a third party
to acquire, or may discourage acquisition bids for, the Company. The Board of
Directors of the Company is authorized, without action of its shareholders, to
issue authorized but unissued Common and Preferred Stock. The existence of
undesignated Preferred Stock and authorized but unissued Common Stock enables
the Company to discourage or to make it more difficult to obtain control of the
Company by means of a merger, tender offer, proxy contest or otherwise. The
Incorporation Documents provide further that (i) directors may be elected for
three- year terms, with approximately one-third of the Board of Directors
standing for election each year, (ii) to alter or repeal the staggered board
provision or other measures in the Incorporation Documents relating to the
matters listed in this paragraph, the affirmative vote of the holders of not
less than two-thirds of the votes entitled to be cast by the holders of all
stock entitled to vote in the election of directors is required, (iii) the
unanimous vote of the Board of Directors or the affirmative vote of the holders
of not less than two-thirds of the votes entitled to be cast by the holders of
all stock entitled to vote in the election of directors is required to change
the size of the Board of Directors, (iv) directors may only be removed with or
without cause by holders of not less than two-thirds of all stock entitled to
vote, (v) any action required or permitted to be taken by shareholders of the
Company must be effected at a duly called annual or special meeting of such
shareholders and may not be effected by consent in writing by such shareholders,
and (vi) the affirmative vote of the holders of two-thirds of the Company's
capital stock entitled to vote thereon is required to approve the merger,
dissolution or sale of all or substantially all of the assets of the Company.
The Company has also entered into employment agreements with its top two
executive officers which require significant severance pay upon termination of
employment with the Company due to a change in control of the Company. See
"Management--Employment Agreements" and "Description of Securities--Preferred
Stock."

LISTING

The Company has filed an application to have the Common Stock and
Warrants approved for quotation on the Nasdaq SmallCap Market on notice of
issuance.

TRANSFER AGENT, WARRANT AGENT AND REGISTRAR

The transfer agent, Warrant Agent and registrar for the Company's
Common Stock and Warrants is American Securities Transfer & Trust, Inc.

56
<PAGE> 62
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have outstanding
3,000,000 shares of Common Stock, assuming no exercise of the Warrants, the
Underwriters' over-allotment options, the Representative's Options or any other
options or warrants. Of these shares, the 1,200,000 shares of Common Stock
sold in this offering will be freely tradeable without restriction or
registration under the Securities Act, except that any shares purchased by an
"affiliate" of the Company (as defined in the rules and regulations promulgated
under the Securities Act) will be subject to the resale limitations under Rule
144 under the Securities Act. The remaining 1,800,000 shares of outstanding
Common Stock were issued and sold by the Company in private transactions and/or
in reliance upon exemptions from registration under the Securities Act. Such
shares may be sold only pursuant to an effective registration statement filed
by the Company under the Securities Act, or an applicable exemption, including
the exemption contained in Rule 144 of the Securities Act.

In general, under Rule 144, a shareholder, including an affiliate of
the Company, may sell shares of Common Stock after at least one year has
elapsed since such shares were acquired from the Company or an affiliate of the
Company. The number of shares of Common Stock which may be sold within any
three-month period is limited to the greater of one percent of the then
outstanding Common Stock or the average weekly trading volume in the Common
Stock during the four calendar weeks preceding the date on which notice of such
sale was filed under Rule 144. Certain other requirements of Rule 144
concerning availability of public information, manner of sale and notice of
sale must also be satisfied. In addition, a shareholder who is not an
affiliate of the Company (and who has not been an affiliate of the Company for
90 days prior to the sale) and who has beneficially owned shares acquired from
the Company or an affiliate of the Company for over two years may resell the
shares of Common Stock without compliance with the foregoing requirements under
Rule 144.

The Company's existing shareholders have agreed not to offer, sell or
otherwise dispose of any shares of Common Stock owned by them for a period of
18 months after the date of this Prospectus without the prior written consent
of the Representative. A portion of the shares owned by existing shareholders
is subject to a custody arrangement and may, under certain circumstances, be
released as late as seven years after the date of this Prospectus. In the
absence of agreements with the Representative, the outstanding restricted
Common Stock could be sold in accordance with Rule 144 commencing 90 days from
the date of this Prospectus.

No predictions can be made as to the effect, if any, that future sales
of shares, or the availability of shares for future sale, will have on the
market price of the Common Stock or Warrants prevailing from time to time.
Nevertheless, sales of substantial amounts of Common Stock or Warrants, or the
perception that such sales may occur, could have a material adverse effect on
prevailing market prices of the Common Stock and Warrants.

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<PAGE> 63
UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
Underwriter named below, for which Schneider Securities, Inc. is acting as the
representative (the "Representative") has agreed to purchase from the Company
the number of Units set forth opposite their names, and will purchase the Units
at the price to public less the underwriting discount set forth on the cover
page of this Prospectus:

<TABLE>
<CAPTION>
Number of
Underwriter Units
----------- ---------
<S> <C>

Schneider Securities, Inc.

Total 1,200,000
=========
</TABLE>

The Underwriting Agreement provides that the Underwriters' obligations
are subject to conditions precedent and that the Underwriters are committed to
purchase all securities offered hereby (other than those covered by the over-
allotment options described below) if the Underwriters purchase any such
securities.

The Representative has advised the Company that the Underwriters
propose to offer the securities offered hereby, initially together, directly to
the public at the price to public set forth on the cover page of this
Prospectus, and that it may allow to certain dealers which are members of the
National Association of Securities Dealers, Inc., concessions not in excess of
$o. After the offering of the securities to the public, the Underwriters may
change the initial price to public and other selling terms, although no change
in such terms will change the amount of proceeds to be received by the Company
as set forth on the cover page of this Prospectus. The Representative has
further advised the Company that the Underwriters do not intend to confirm
sales to any accounts over which any of them exercises discretionary authority.

The Company has agreed to pay the Representative a nonaccountable
expense allowance of 3% of the aggregate public offering price of the
securities offered, including Common Stock and Warrants sold on exercise of
either over- allotment option, of which $30,000 has been previously paid to the
Representative. The Company has also agreed to pay all expenses in connection
with qualifying the securities offered hereby for sale under the laws of such
states as the Representative may designate.

The Company has granted the Underwriters options, exercisable for 45
days after the date of this Prospectus, to purchase up to 180,000 additional
shares of Common Stock and/or Warrants at the same price as the initial
securities offered. The Underwriters may purchase

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<PAGE> 64
the Common Stock and Warrants solely to cover over-allotments, if any, in
connection with the sale of the securities offered hereby.

The Underwriters may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids in accordance
with Regulation M under the Securities Exchange Act of 1934 (the "1934 Act").
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed
a specified maximum. Syndicate covering transactions involve purchases of the
securities in the open market after the distribution has been completed in
order to cover syndicate short positions. Penalty bids permit the Underwriters
to reclaim a selling concession from a syndicate member when the securities
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
Common Stock or Warrants to be higher than they would otherwise be in the
absence of such transactions.

Neither the Company nor the Underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock or Warrants. In
addition, neither the Company nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.

The Company's existing shareholders have agreed not to offer, sell or
otherwise dispose of any shares of capital stock owned by them for a period of
18 months after the date of this Prospectus without the prior written consent
of the Representative.

In connection with this offering, the Company will sell to the
Representative for a total purchase price of $100, purchase options (the
"Representative's Options") entitling the Representative or its assigns to
purchase one share of Common Stock and one Warrant for each 10 shares and 10
warrants sold to the public (excluding the over- allotment options). The
Representative's Options to purchase Common Stock and Warrants shall be
exercisable commencing one year from the date of this Prospectus and shall
expire five years from such date. The Warrants included in the Representative's
Options will be identical in all respects to the public Warrants (i.e., one
Warrant will be exercisable to purchase one share of Common Stock at the
exercise price to be paid by the public during the three year term of the
Warrants). The Representative's Options will contain certain anti-dilution
provisions and provide for the cashless exercise of such options utilizing
securities of the Company (which may include the implicit value of the
Representative's Options or Warrants being surrendered). The exercise price of
the Representative's Options to purchase Common Stock and Warrants is 120% of
the public offering price or $o per share and $.12 per Warrant. The Company
shall set aside and at all times have available a sufficient number of
securities to be issued upon exercise of the Representative's Options. The
Representative's Options and underlying securities will not be transferable to
anyone for a period of one year after the date of this Prospectus, except to
officers of the Representative, co-underwriters, selling

59
<PAGE> 65
group members and their officers or partners. Thereafter, the Representative's
Options and underlying securities will be transferable provided such transfer
is in accordance with the provisions of the Securities Act.

Upon any solicited exercise of the Warrants after one year from the
date of this Prospectus, the Company will pay the Representative a fee of 5% of
the aggregate exercise price for Warrant exercises if (i) the market price of
the Common Stock on the date the Warrant is exercised is greater than the then
exercise price of the Warrant, (ii) the exercise of the Warrant was solicited
by a member of the National Association of Securities Dealers, Inc. as
designated in writing on the Warrant Certificate subscription form (provided
that any request for exercise will be presumed to be unsolicited unless the
customer states in writing that the transaction was solicited and designates
the broker-dealer to receive compensation); (iii) the Warrant is not held in a
discretionary account; (iv) disclosure of compensation arrangements was made
both at the time of the offering and at the time of exercise of the Warrant;
and (iv) the solicitation of exercise of the Warrant was not in violation of
Regulation M promulgated under the 1934 Act. A portion of the 5% fee may be
reallowed by the Representative to participating broker-dealers.

Regulation M under the 1934 Act, as amended, will prohibit the
Representative from engaging in any market making activities with regard to the
Company's securities during the period commencing as of the date on which the
Representative becomes a participant in the solicitation of the exercise of
Warrants until the termination of such solicitation activity. As a result, the
Representative may be unable to make a market in the Company's securities
during certain periods while the Warrants are exercisable.

The Company and the Representative have entered into an agreement
which provides that, if the Representative arranges for the purchase or sale of
substantially all of the assets of the Company, or for a merger, consolidation
or acquisition accepted by the Company during the five-year period commencing
on the date of this Prospectus, the Representative will receive a fee based on
a sliding scale ranging from 5% of the first $1 million of consideration and
decreasing to 3% of the consideration in excess of $2 million.

The Company and the Representative have entered into an agreement
which provides that the Company and its affiliates must give the Representative
a right of first refusal for a period of three years after the date of this
Prospectus to purchase for its or their account, or to sell on behalf of the
Company or its affiliates, any debt or equity securities of the Company
(excluding bank indebtedness) or Common Stock owned by such selling affiliate.

Prior to this offering, there has not been a public market for the
Common Stock or Warrants. The public offering prices of the Common Stock and
Warrants have been determined by arm's-length negotiation between the Company
and the Representative. There is no direct relation between the offering price
of the Common Stock and Warrants or the exercise price of the Warrants and the
assets, book value or net worth of the Company. Among the factors considered
by the Company and the Representative in pricing the securities offered were
the results of operations, the current financial condition and future prospects
of

60
<PAGE> 66
the Company, the experience of management, the amount of ownership to be
retained by present shareholders, and the general condition of the economy and
the securities markets.

In connection with this offering, the Company and the Underwriters
have agreed to indemnify each other against certain liabilities, including
liabilities under the Securities Act, and if such indemnification is
unavailable or insufficient, the Company and the Underwriters have agreed to
damage contribution arrangements based upon relative benefits received from
this offering and relative fault resulting in such damages.

61
<PAGE> 67
LEGAL MATTERS

The validity of the securities offered will be passed upon the Company
by Jones & Keller, P.C., Denver, Colorado. Certain legal matters will be
passed upon for the Representative by Berliner Zisser Walter & Gallegos, P.C.,
Denver, Colorado.

EXPERTS

The consolidated balance sheet of the Company at December 31, 1997,
and the consolidated statements of income, shareholders' equity and cash flows
for each of the two years ended December 31, 1996 and 1997 included in this
Prospectus have been included herein in reliance on the report of Ehrhardt
Keefe Steiner & Hottman PC, independent certified public accountants, given on
the authority of that firm as experts in accounting and auditing.

The balance sheets of Mirocon, Inc. as of December 31, 1996 and
November 30, 1997, and the statements of income, shareholders' equity and cash
flows for the year ended December 31, 1996 and the eleven months ended November
30, 1997, have been included herein in reliance on the report of Ehrhardt Keefe
Steiner & Hottman PC, independent certified public accountants, given on the
authority of that firm as experts in accounting and auditing.

The pro forma combined statements of income (loss) of the Company for
the years ended December 31, 1996 and 1997 have not been audited or reviewed by
the independent certified public accountants and they do not express an opinion
or purport to give any other form of assurance on them.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission a
Registration Statement (which term shall encompass any and all amendments
thereto) on Form SB-2 (the "Registration Statement") under the Securities Act,
with respect to the Common Stock and Warrants offered hereby. This Prospectus,
which is part of the Registration Statement, does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto, certain items of which are omitted in accordance with the
rules and regulations of the Securities and Exchange Commission. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Registration
Statement, reference is hereby made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference. For further information with
respect to the Company, reference is hereby made to the Registration Statement
and such exhibits and schedules filed as a part thereof, which may be
inspected, without charge, at the Public Reference Section of the Securities
and Exchange Commission at Room 1024, Judiciary Plaza, 450 Fifth Street N.W.,
Washington, D.C. 20549, and at the regional offices of the Securities and
Exchange Commission located at Seven World Trade Center, 13th Floor, New York,
New York 10048 and at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The

62
<PAGE> 68
Securities and Exchange Commission maintains a web site that contains reports,
proxy and information statements regarding registrants that file electronically
with the Securities and Exchange Commission. The address of this web site is
(http://www.sec.gov). Copies of all or any portion of the Registration
Statement may be obtained from the Public Reference Section of the Securities
and Exchange Commission, upon payment of the prescribed fees.

63
<PAGE> 69

<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS

<S> <C>
FACTUAL DATA CORP.

Independent Auditors' Report........................................................................................F - 2

Financial Statements

Consolidated Balance Sheet...................................................................................F - 3

Consolidated Statements of Income............................................................................F - 4

Consolidated Statement of Changes in Shareholders' Equity....................................................F - 5

Consolidated Statements of Cash Flows........................................................................F - 6

Notes to Consolidated Financial Statements..........................................................................F - 8

MIROCON, INC.

Independent Auditors' Report.......................................................................................F - 22

Financial Statements

Balance Sheets..............................................................................................F - 23

Statements of Income........................................................................................F - 24

Statement of Changes in Shareholders' Equity................................................................F - 25

Statements of Cash Flows....................................................................................F - 26

Notes to Financial Statements......................................................................................F - 27

UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME .................................................................F - 31

</TABLE>

<PAGE> 70

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Factual Data Corp.
Fort Collins, Colorado

We have audited the accompanying consolidated balance sheet of Factual Data
Corp. and Subsidiaries as of December 31, 1997, and the related consolidated
statements of income, changes in shareholders' equity and cash flows for the
years ended December 31, 1996 and 1997. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Factual Data Corp.
and Subsidiaries as of December 31, 1997 and the results of their operations
and their cash flows for the years ended December 31, 1996 and 1997 in
conformity with generally accepted accounting principles.

As discussed in Note 3, during 1997 the Company changed its method of
accounting for Costs of Computer Software Developed for Internal Use.

Ehrhardt Keefe Steiner & Hottman PC
January 22, 1998
Denver, Colorado

F - 2

<PAGE> 71

FACTUAL DATA CORP.

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>

ASSETS
<S> <C>
Current assets
Cash $ 396,752
Accounts receivable, net (Note 7)................................... 633,017
Note receivable (Note 4)............................................ 117,160
Prepaid expenses.................................................... 7,438
Deferred tax asset (Note 10)........................................ 64,577
---------------
Total current assets............................................ 1,218,944

Property and equipment, net (Notes 5 and 7)............................. 995,907

Other assets (Notes 2 and 6)............................................ 649,234
---------------

$ 2,864,085
===============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable (Note 7).............................................. $ 16,140
Current portion of long-term debt (Note 7).......................... 282,396
Accounts payable.................................................... 590,467
Accrued payroll and expenses........................................ 152,513
Income taxes payable................................................ 61,154
---------------
Total current liabilities....................................... 1,102,670

Long-term debt (Note 7)................................................. 927,988

Deferred income taxes (Note 10)......................................... 186,354

Commitments (Note 11)

Shareholders' equity (Note 8)...........................................
Common stock, 10,000,000 shares authorized; 1,800,000 issued and
outstanding 2,500
Retained earnings................................................... 644,573
---------------
Total shareholders' equity...................................... 647,073
---------------

$ 2,864,085
===============
</TABLE>

See notes to consolidated financial statements.

F - 3
<PAGE> 72

FACTUAL DATA CORP.

CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended
December 31,
--------------------------
1996 1997
----------- -----------
<S> <C> <C>
Revenue
System affiliates .................................... $ 1,446,559 $ 1,950,668
Information services ................................. 2,066,254 734,946
Proceeds from the sale of Company operated territories
(Note 12) .......................................... 480,000 714,365
Training, license and other .......................... 16,000 119,692
----------- -----------
Total revenue .................................... 4,008,813 3,519,671
----------- -----------

Operating Expenses
Costs of services provided ........................... 2,123,357 1,301,085
Costs of Company operated territories ................ 31,302 506,101
Selling, general and administrative .................. 1,412,974 916,521
----------- -----------
Total operating expenses ......................... 3,567,633 2,723,707
----------- -----------

Income from operations ................................... 441,180 795,964

Other income (expense)
Other income ......................................... 29,437 28,806
Interest expense ..................................... (108,919) (77,497)
----------- -----------

Income before income taxes ............................... 361,698 747,273

Income tax expense (Note 10) ............................. 78,063 244,339
----------- -----------

Net income ............................................... $ 283,635 $ 502,934
=========== ===========

Basic earnings per share ................................. $ .16 $ .28
=========== ===========

Weighted average shares outstanding ...................... 1,800,000 1,800,000
=========== ===========

</TABLE>

See notes to consolidated financial statements.

F - 4

<PAGE> 73

FACTUAL DATA CORP.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997

Total
Common Stock (Note 8) Stock Retained Shareholders'
--------------------- Subscriptions Earnings Equity
Shares Amount Receivable (Deficit) (Deficit)
--------- --------- --------- --------- ---------

<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 ....................... 1,800,000 $ 2,500 $ (500) $(141,996) $(139,996)

Net income for the year ended December 31, 1996 .... -- -- -- 283,635 283,635
--------- --------- --------- --------- ---------

Balance at December 31, 1996 ....................... 1,800,000 2,500 (500) 141,639 143,639

Collection of stock subscription ................... -- -- 500 -- 500

Net income for the year ended December 31, 1997 .... -- -- -- 502,934 502,934
--------- --------- --------- --------- ---------

Balance at December 31, 1997 ....................... 1,800,000 $ 2,500 $ -- $ 644,573 $ 647,073
========= ========= ========= ========= =========
</TABLE>

See notes to consolidated financial statements.

F - 5

<PAGE> 74

FACTUAL DATA CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended
December 31,
--------------------------
1996 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income .......................................................... $ 283,635 $ 502,934
----------- -----------
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization .................................... 246,540 355,084
Deferred income taxes ............................................ 57,670 128,867
Basis of non-current assets of territories sold .................. 31,302 391,330
Issuance of note receivable for sale of company operated territory
(230,000) --
Changes in operating assets and liabilities
Accounts receivable ........................................... 141,437 (325,503)
Prepaid expenses .............................................. (1,668) 10,217
Other assets .................................................. -- (23,460)
Accounts payable .............................................. (106,224) 111,590
Accrued payroll, payroll taxes and expenses ................... (63,411) 24,275
Accrued taxes and other ....................................... 20,386 30,017
----------- -----------
96,032 702,417
----------- -----------
Net cash provided by operating activities ................. 379,667 1,205,351
----------- -----------

Cash flows from investing activities
Purchase of property and equipment .................................. (111,882) (592,868)
Proceeds from sale of property and equipment ........................ 11,687 29,504
Payments received on note receivable ................................ -- 185,000
Increase in note receivable ......................................... -- (72,160)
Acquisition of a business ........................................... -- (50,000)
----------- -----------
Net cash provided by (used in) investing activities ....... (100,195) (500,524)
----------- -----------

Cash flows from financing activities
Line-of-credit, net ................................................. 66,000 (66,000)
Principal payments on long-term debt ................................ (341,481) (255,078)
Collection from common stock subscription ........................... -- 500
Deferred offering costs incurred net of accounts payable ............ -- (36,491)
----------- -----------
Net cash used in financing activities ..................... (275,481) (357,069)
----------- -----------

Net increase in cash ................................................... 3,991 347,758

Cash, at beginning of period ........................................... 45,003 48,994
----------- -----------

Cash, at end of period ................................................. $ 48,994 $ 396,752
=========== ===========

Continued on following page.
</TABLE>

See notes to consolidated financial statements.

F - 6

<PAGE> 75

FACTUAL DATA CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Continued from previous page.

Supplemental disclosure of cash flow information:

Interest paid on borrowings for the years ended December 31, 1996 and
1997 was $108,919 and $78,578, respectively.

Supplemental disclosure of non-cash investing and financing activities:
During 1996, the Company received a note receivable of $230,000
related to the sale of certain fixed assets and Company operated
territory rights which had a total purchase price of $480,000.

During 1997, the Company financed fixed assets purchases totaling
$50,918 with notes payable.

During 1997, the Company incurred $61,739 in offering costs that were
included in accounts payable.

During 1997, the Company acquired a business for a cost of $50,000
cash and a note payable of $468,919 (Note 2).

See notes to consolidated financial statements.

F - 7

<PAGE> 76
FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Factual Data Corp was incorporated in the state of Colorado in 1985. The Company
was established for the purpose of providing information services nationally to
financial lending institutions primarily in the mortgage lending industry. In
April of 1997, the shareholders of Factual Data Corp (Predecessor) and Lenders
Resources, Inc. (Affiliate) exchanged all of their outstanding shares of common
stock in exchange for 1.8 million shares of common stock in a newly formed
holding company Factual Data Corp. (Successor).

The Company provides information services to lenders from its Company operated
offices and 65 franchised and licensed offices located in 45 states. Franchised
and licensed offices of the Company are referred to as system affiliates and
related revenue derived from such system affiliates is referred to as system
affiliate revenues.

In exchange for system affiliate revenue from its system affiliates, the Company
provides certain on-going services that include sophisticated technology
systems, training, marketing/sales assistance, management, techniques, and
policy and procedure manuals.

The Company's sophisticated technology platforms used to develop new products
and services allowed the Company to begin providing employee background
information under EMPfactsSM and QuickPeek IdentifierSM reports for employers
and landlords.

Principles of Consolidation

The Company's consolidated financial statements include the accounts of Factual
Data Corp. and Lenders Resources Incorporated. All intercompany accounts and
transactions have been eliminated in consolidation.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid
short-term investments with an original maturity of three months or less to be
cash equivalents. As of the balance sheet date, balances of cash and cash
equivalents at financial banking institutions exceeded the federally insured
limit by $247,308. The Company has not experienced any losses in such accounts
and believes it is not exposed to any significant credit risk on cash and cash
equivalents. The Company had no cash equivalents at December 31, 1997.

F-8
<PAGE> 77

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable

In the normal course of business, the Company extends unsecured credit to
virtually all of its customers and system affiliates related to providing
information services. The Company's customers and system affiliates are located
throughout the United States.

Because of the credit risks involved, management has provided an allowance for
doubtful accounts of $4,000 which reflects its opinion of amounts which will
eventually become uncollectible. In the event of complete nonperformance by the
Company's customers or system affiliates, the maximum exposure to the Company is
the outstanding accounts receivable balance at the date of non-performance.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the
straight-line method based on the estimated useful lives of the assets which
range from three to fifteen years.

Intangible Assets

Intangible assets are stated at cost, and consist of goodwill, customer lists,
covenants not to compete and deferred offering costs. Goodwill and customer
lists are amortized using the straight-line method over fifteen years. Covenants
not to compete are amortized over the life of the agreements, which extend over
five years.

Deferred offering costs consist of costs associated with the Company's proposed
initial public offering. These costs will be netted against the proceeds of the
offering if successful or charged to expense if the offering is unsuccessful.

Software Development Costs

In 1996, software development costs associated with internally development
software used to support system affiliate revenues and information service sales
were expensed as incurred by the Company.

In 1997, the Company adopted the provisions of Statement of Position 98-1
"Accounting for Costs of Computer Software Developed for Internal Use". Direct
costs incurred in the development of software are capitalized once the
preliminary project stage is completed, management has committed to funding the
project and completion and use of the software for its intended purpose are
probable. The Company ceases capitalization of development costs once the
software has been substantially completed and is ready for its intended use.
Software development costs are amortized over their estimated useful lives of
three years. Costs associated with upgrades and enhancements that result in
additional functionality are capitalized.

*** INSERT F9A ****

F-9

<PAGE> 78

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

Deferred income taxes result from temporary differences. Temporary differences
are differences between the tax basis of assets and liabilities and their
reported amounts in the financial statements that will result in taxable or
deductible amounts in future years. The Company's temporary differences result
primarily from depreciation of fixed assets, amortization of intangibles and
accrued vacation.

Revenue Recognition

System Affiliate

Pursuant to the various franchise and license agreements, network affiliates are
required to pay the Company royalties based on a percentage of sales. In
addition, territories providing EMPfactsSM services are required to pay $100 per
month for national advertising conducted by the Company.

Royalties as allowed by the franchise and license agreements are accrued based
on the percentage of adjusted gross billings, as reported by system affiliates
and are included in accounts receivable.

Advertising fees paid to the Company are included in the Company's balance
sheet. At December 31, 1997, the Company had collected fees in excess of the
amount expended for advertising by approximately $22,000.

Information Services

The Company recognizes revenue generated from mortgage credit reports and other
information services when the information has been provided to the customer, as
substantially all required services have been performed. The services represent
revenue earned through Company owned locations.

Initial Territory License Fees

Initial territory license fees are recognized as revenue when all material
services and conditions required to be performed by the Company are
substantially completed, which is generally when the territory commences
operations. Initial territory license fees collected by the Company before all
material services and conditions are substantially performed are recorded as
deferred territory license revenue. The Company received and recognized as
revenue $0 and $44,000 in initial territory license fees in 1996 and 1997,
respectively, and did not receive any initial franchise fees in 1996 or 1997.

F-10

<PAGE> 79

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition (continued)

Software License Fees

The Company recognizes revenue from the licensing of computer software when the
customer accepts the configured master. Subsequent to customer acceptance, the
Company has no significant post contract support obligations.

Advertising Costs

The Company expenses advertising and promotional expenses as incurred.

Valuation of Long-Lived Assets

The Company assesses valuation of long-lived assets in accordance with Statement
of Financial Accounting Standards (SFAS) No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be disposed of. The Company
periodically evaluates the carrying value of long-lived assets to be held and
used, including goodwill and other intangible assets, when events and
circumstances warrant such a review. The carrying value of a long-lived asset is
considered impaired when the anticipated undiscounted cash flow from such asset
is separately identifiable and is less than its carrying value. In that event, a
loss is recognized based on the amount by which the carrying value exceeds the
fair market value of the long-lived asset. Fair market value is determined
primarily using the anticipated cash flows discounted at a rate commensurate
with the risk involved.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash, receivables,
prepaid expenses, accounts payable and accrued expenses approximate their fair
values as of December 31, 1997 because of the relatively short maturity of these
instruments.

The carrying amounts of notes payable and debt outstanding also approximate
their fair values as of December 31, 1997 because interest rates on these
instruments approximate the interest rate on debt with similar terms available
to the Company.

F-11

<PAGE> 80

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basic Earnings Per Share

The Company computes earnings per share in accordance with Statement of
Financial Accounting Standard No. 128. The Company has presented only basic
earnings per share as it had no dilutive potential common shares outstanding
during 1996 or 1997. Basic earnings per share has been computed based on the
weighted average number of shares outstanding.

Reclassifications

Certain reclassifications have been made to the financial statements for the
year ended December 31, 1996 to conform with the 1997 presentation.

NOTE 2 - ACQUISITION OF ASSETS

Effective December 1, 1997, the Company purchased the assets of its Loveland
franchise, Mirocon, Inc. The results of operations of Mirocon, Inc. from
December 1, 1997 to December 31, 1997 have been included in the 1997 financial
statements. The acquisition has been accounted for under the purchase method of
accounting.

The purchase price totaled $519,419 which has been allocated to the assets
purchased based on the fair market values on the date of acquisition, as
follows:

<TABLE>

<S> <C>
Computer equipment................................................. $ 19,200
Furniture and fixtures............................................. 4,800
Non-compete agreement.............................................. 50,000
Customer lists..................................................... 445,419
---------------
519,419
Notes payable less discount of $1,081.............................. (469,419)
---------------

Cash paid at closing............................................... $ 50,000
===============

</TABLE>

F-12

<PAGE> 81

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - ACQUISITION OF ASSETS (CONTINUED)

The following table depicts the historical and unaudited pro forma results of
the Company's 1997 acquisition.

<TABLE>
<CAPTION>
(Unaudited)
Year Ended Recorded Consolidated
December 31, 1996 Amounts (1) Mirocon Total Adjustments(3) Total
- ------------------------------ --------------- -------------- --------------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Revenue ...................... $ 4,008,813 $ 935,727 $ 4,944,540 $ (72,290) $4,872,250
=============== ============== =============== ============== ==========

Net income after taxes ....... $ 283,635 $ 53,580 $ 337,215 $ 16,041 $ 353,256
=============== ============== =============== ============== ==========

Basic earnings per share ..... $ .16 $ .03 $ .19 $ .01 $ .20
=============== ============== =============== ============== ==========
</TABLE>

<TABLE>
<CAPTION>
(Unaudited)
Year Ended Recorded Consolidated
December 31, 1997 Amounts (1) Mirocon (2) Total Adjustments (3) Total
- ----------------------------- =============== ============== =============== ============== ==========

<S> <C> <C> <C> <C> <C>
Revenue...................... $ 3,519,671 $ 904,587 $ 4,424,258 $ (54,265) $4,369,993
=============== ============== =============== ============== ==========

Net income after taxes....... $ 502,934 $ 68,432 $ 571,366 $ 26,302 $ 597,668
=============== ============== =============== ============== ==========

Basic earnings per share..... $ .28 $ .03 $ .31 $ .02 $ .33
=============== ============== =============== ============== ==========

</TABLE>

(1) Includes the results of operations for Factual Data Corp. for the year
ended December 31, 1997 and 1996, respectively.

(2) Represents activity for the eleven months ended November 30, 1997.

(3) Adjustments relate to amortization of the non-compete agreement and
customer lists, officers' salaries and bonuses, franchise fee expense, and
interest expense on acquisition debt which would have been required had the
Company completed the acquisition as of January 1, 1996.

NOTE 3 - CHANGE IN ACCOUNTING POLICY

In 1997 the Company adopted Statement of Position (SOP) 98-1, "Accounting for
Costs of Computer Software Developed for Internal Use". The Company expends
significant capital on internally developed software that is used to support
operations of both sales of services to financial lending institutions as well
as support for System Affiliates. This SOP encourages early adoption but does
not allow retroactive restatement of previously issued financial statements.
Accordingly, management believes that adoption of SOP 98-1 in a year prior to
its initial public offering (IPO) would be more informative to users of
financial statements rather than in a period after its IPO. The effect of the
change was to increase 1997 net income by approximately $200,000 or $.11 per
common share. Had the Company adopted SOP 98-1 in 1996, net income would have
been increased by approximately $178,000 to $461,813 or $.26 per common share.

F-13

<PAGE> 82

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - NOTES RECEIVABLE

Notes receivable consists of the following:

<TABLE>
<CAPTION>
December 31,
1997
------------
<S> <C>
Note receivable related to the sale of operating territory;
18% interest rate, balance due on or before June 30, 1998 ............... $ 45,000

Note receivable from a corporation, interest rate at 8%; due on demand ... 72,160
------------

$ 117,160
============

</TABLE>

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
December 31,
1997
------------
<S> <C>
Computer equipment and software.................................... $ 960,415
Furniture and fixtures............................................. 575,732
Software development costs......................................... 452,915
Leasehold improvements............................................. 20,938
Vehicles........................................................... 132,496
------------
2,142,496
Less accumulated depreciation.................................. (1,146,589)
------------

$ 995,907
============

</TABLE>

NOTE 6 - OTHER ASSETS

Other assets consist of the following:

<TABLE>
<CAPTION>
December 31,
1997
------------
<S> <C>
Deposits and other................................................. $ 39,276
Customer lists (Note 2)............................................ 445,419
Goodwill........................................................... 9,040
Covenant not to compete (Note 2)................................... 50,000
Deferred offering costs and other.................................. 110,730
------------
654,465
Less accumulated amortization.................................. (5,231)
------------

$ 649,234
============

</TABLE>

F-14

<PAGE> 83

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - NOTES PAYABLE

Line-of-Credit

<TABLE>
<CAPTION>
December 31,
1997
-----------
<S> <C>
The Company has a $100,000 line-of-credit. The line-of-credit expires
on May 5, 1998 and accrues interest at the bank's index rate (10% at
December 31, 1997). The line is collateralized by substantially all
the assets of one of the Company's subsidiaries and is personally
guaranteed by officers of the
Company....................................................................... $ -

Unsecured note payable to an individual, monthly payment of interest
only of 10%. Due on demand. .................................................. 16,140
-----------

$ 16,140
===========

</TABLE>

Long-Term Obligations

<TABLE>
<CAPTION>
December 31,
1997
-----------
<S> <C>
Long-term debt obligations consist of the following:

Unsecured note payable to a corporation incurred in the acquisition of
a business. Note is payable in the following terms; $50,000 (Note 2)
principal payment on January 15, 1998, five principal payments of
$7,000 each commencing on February 1, 1998 and ending on June 1, 1998.
Interest begins accruing June 1, 1998 at a rate of 8%. Monthly
payments of $8,396 for interest and principal through January 2003.
The contract contains a clause which states that if Factual Data Corp.
closes an initial public offering, the corporation receives the lesser
of $160,250 or any unpaid principal and interest on the note at the
time of the closing .......................................................... $ 469,419

Note payable to a financial institution, monthly principal and
interest payments of $7,102 through December 2005. Interest at 2.75%
over New York prime (Prime was 8.5% at December 31, 1997). The note is
collateralized by accounts receivable, inventory and equipment. The
note is also personally guaranteed by certain
shareholders ................................................................. 435,035

Unsecured note payable to a corporation, monthly principal and
interest payments of $6,000 through November 1999. Interest at
10.50% ....................................................................... 150,896

</TABLE>

F-15

<PAGE> 84

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - NOTES PAYABLE (CONTINUED)

Long-Term Obligations (continued)

<TABLE>
<CAPTION>
December 31,
1997
-----------
<S> <C>
Unsecured note payable to a individual, monthly principal payments are
the greater of $750 or 5% of gross billable revenue of a certain
corporate-owned franchise with the balance due August 31, 2002.
Interest at 8.5% ............................................................. 61,619

Unsecured note payable to a former franchisee, monthly principal and
interest payments of $5,000 through September 1998. Interest is at
5.5% ......................................................................... 43,986

Various notes payable to financial institutions. Monthly principal and
interest payments ranging from $394 to $1,578. Interest rates vary
from 6.85% to 11%. Notes mature at various times ranging from April
1997 to June 2001. Notes are collateralized by certain fixed assets
and automobiles .............................................................. 49,429
-----------
1,210,384
Less current portion (282,396)
-----------

$ 927,988
===========

</TABLE>

As of December 31, 1997, future maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
Long-term
Debt
-----------
<S> <C>
Year ending December 31,

1998.............................................. $ 282,396
1999.............................................. 229,556
2000.............................................. 149,113
2001.............................................. 155,292
2002.............................................. 161,241
Thereafter........................................ 232,786
-----------

Total long-term obligations....................... $ 1,210,384
===========

</TABLE>

F-16

<PAGE> 85

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - SHAREHOLDERS' EQUITY

In April 1997, predecessor and affiliate, (two entities, owned 100% by direct
family members) merged with a new entity, Factual Data Corp. (Successor). The
combination has been accounted for as a reorganization of companies under common
control. The combination has been accounted for in a manner similar to a pooling
of interests in that the assets and liabilities are transferred at historical
cost and the result of operations reflect the combination as if it occurred
January 1, 1996. Four shareholders were issued 1,800,000 shares of voting common
stock in exchange for their voting common stock in both original entities. All
shares and per share amounts have been restated to reflect this reincorporation
as of January 1, 1996.

Stock Option Plan

Management of the Company is currently in the process of adopting a stock option
plan whereby the Board of Directors can issue both tax qualified and
nonqualified options to officers, employees, consultants and others. Under the
plan, 200,000 shares of the Company's stock would be reserved for options to be
issued in the future. At December 31, 1997, no options have been granted under
the plan.

Subsequent to year end options to acquire 27,000 shares of common stock at $5.00
per share have been issued to employees of the Company.

NOTE 9 - BUSINESS SEGMENTS

Operating results and other financial data are presented for the principal
business segments of the Company for the years ended December 31, 1996 and 1997.
Total revenue in one business segment includes information services which
represent sales by Company operated territories, in another segment, system
affiliate revenue and training, license, and other revenues and the third
segment is sales of Company operated territories, as reported in the Company's
consolidated financial statements.

Identifiable assets by business segment are those assets used in the Company's
operation of each segment.

System Affiliates
and License, Sales of Company
Information Training and Operated
Services Other Territories Totals
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
December 31, 1996
Net sales......................................... $ 2,066,254 $ 1,462,559 $ 480,000 $ 4,008,813
Cost of services and territory sales.............. $ 1,223,251 $ 900,106 $ 31,302 $ 2,154,659
Gross profit...................................... $ 843,003 $ 562,453 $ 448,698 $ 1,854,154

Total assets...................................... $ 981,755 $ 537,504 $ 240,031 $ 1,759,290
Depreciation and amortization..................... $ 136,995 $ 37,068 $ 72,477 $ 246,540
Capital expenditures.............................. $ 21,289 $ 90,593 $ -- $ 111,882

</TABLE>

F-17

<PAGE> 86

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - BUSINESS SEGMENTS (CONTINUED)

<TABLE>
<CAPTION>
System Sales of
Affiliates Company
Information and Owned
Services Training Territories Totals
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
December 31, 1997
Net sales .................................... $ 734,946 $2,070,360 $ 714,365 $3,519,671
Cost of services and territory sales ......... $ 236,640 $1,064,445 $ 506,101 $1,807,186
Gross profit ................................. $ 498,306 $1,005,915 $ 208,264 $1,712,485

Total assets ................................. $1,364,049 $1,500,036 $ -- $2,864,085
Depreciation and amortization ................ $ 111,100 $ 214,824 $ 29,160 $ 355,084
Capital expenditures ......................... $ 2,069 $ 590,799 $ -- $ 592,868

</TABLE>

NOTE 10 - INCOME TAXES

Deferred tax liabilities and assets are determined based on the difference
between the financial statement assets and liabilities and tax basis assets and
liabilities using the tax rates in effect for the year in which the differences
occur. The measurement of deferred tax assets is reduced, if necessary, by the
amount of any tax benefits that based on available evidence, are not expected to
be realized.

The components of the provision for income tax expense for the year ended
December 31, 1996 and 1997 are as follows:

<TABLE>
<CAPTION>
December 31,
--------------------
1996 1997
------- --------
<S> <C> <C>
Current ................................ $20,393 $115,472
Deferred ............................... 57,670 128,867
------- --------

$78,063 $244,339
======= ========

</TABLE>

The deferred income tax assets and liabilities result primarily from differing
depreciation and amortization periods of certain assets, research and
development credits, and the recognition of certain expenses for financial
statement purposes and not for tax purposes.

F-18

<PAGE> 87

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - INCOME TAXES (CONTINUED)

The net current and long-term deferred tax assets (liabilities) in the
accompanying balance sheet include the following items:

<TABLE>
<CAPTION>
December 31,
1997
---------
<S> <C>
Current deferred tax asset .................. $ 75,853
Current deferred tax liability .............. (11,276)
---------

$ 64,577
=========

Long-term deferred tax asset ................ $ --
Long-term deferred tax liability ............ (186,354)
---------

$(186,354)
=========
</TABLE>

The Company has research and development credit carryforwards of approximately
$31,000 at December 31, 1997, which if unused will expire in 2001.

Rate Reconciliation

The reconciliation of income tax expense by applying the Federal statutory tax
rates to the Company's effective income tax rate is as follows:

<TABLE>
<CAPTION>
December 31,
-------------
1996 1997
---- ----
<S> <C> <C>
Federal statutory rate ............................................... 34.0% 34.0%
State tax on income, net of federal income tax benefit ............... 3.3 3.3
Federal surtax exemption ............................................. (5.3) --
Research tax credits ................................................. (6.5) (3.6)
Other, net ........................................................... (4.0) (1.0)
---- ----

21.5% 32.7%
==== ====
</TABLE>

F-19

<PAGE> 88

FACTUAL DATA CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - COMMITMENTS

In 1996, the Company leased office space for its corporate owned franchise
locations under operating lease agreements which provide for the payment of rent
totaling approximately $1,900 per month. Rent expense under these operating
leases totaled $23,795 during the year ended December 31, 1996. These franchises
were sold January 1, 1997.

The Company leases its corporate office space under an operating lease agreement
which provides for the payment of $6,735 per month. This lease expires April
1998, at which time the corporate office will relocate to a nearby office and
begin a 20 year operating lease. The new corporate office lease calls for annual
payments of the lesser of 11% of the total construction costs for the premise
once completed or $236,000. The rent increases 15% every 5 years for the
duration of the lease. This lease expires approximately May of 2018. Rent
expense under all operating leases totaled $149,823 and $147,452 for the years
ended December 31, 1996 and 1997, respectively.

The Company assumed the lease obligations for Mirocon, Inc. when it acquired the
operating assets on December 1, 1997. The facility lease calls for monthly
payments of $2,427 and expires on August 31, 2000. If the Company defaults on
this lease, the seller of the franchise is contingently liable. The Company
intends on relocating the office of Mirocon, Inc. to its new corporate office in
April 1998. In conjunction with its relocation the Company intends to exercise
its buyout option under the Mirocon, Inc. office lease effective September 1,
1998 for approximately $2,500.

Future minimum annual lease payments are as follows:

Year Ended December 31,

<TABLE>

<S> <C>
1998............................. $ 198,634
1999............................. 255,507
2000............................. 245,798
2001............................. 226,378
2002............................. 226,378
Thereafter....................... 4,603,874
----------

$5,756,569
==========

</TABLE>

NOTE 12 - SALE OF TERRITORIES

In January 1996, the Company sold its Indiana territory it has started in 1992.
The sales price was $480,000, of which $250,000 was paid in cash and the balance
in a note receivable. The required payments on the note balance, as amended,
were due and paid by September 1997. The purchaser acquired fixed assets with a
net book value of $31,302, as well as the customer base, the ongoing business
and a license to operate in the territory. Of the $480,000 sale price, $125,000
was allocated to the fixed assets. The balance relates to goodwill and customer
lists.

In January 1997, the Company sold its Texas territories which were reacquired
by the Company from certain franchisees from 1990 to 1995. The sales price was
$714,000 which was paid in cash. The purchaser acquired accounts receivable of
$115,000, net intangibles of $276,000, and net fixed assets of $115,000.

F-20

<PAGE> 89

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Mirocon, Inc.
Loveland, Colorado

We have audited the accompanying balance sheets of Mirocon, Inc. as of December
31, 1996 and November 30, 1997, and the related statements of income, changes in
shareholders' equity and cash flows the year ended December 31, 1996 and for the
eleven months ended November 30, 1997, respectively. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mirocon, Inc. as of December
31, 1996 and November 30, 1997 and the results of their operations and their
cash flows the year ended December 31, 1996 and for the eleven months ended
November 30, 1997 in conformity with generally accepted accounting principles.

Ehrhardt Keefe Steiner & Hottman PC

January 13, 1998
Denver, Colorado

F-21
<PAGE> 90

MIROCON, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31, November 30,
1996 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents ..................................................... $378,557 $194,793
Accounts receivable (net of allowance for doubtful
accounts of $0 (1996) and $10,427 (1997)) .................................... 74,450 125,755
-------- --------
Total current assets ...................................................... 453,007 320,548

Property and equipment (Note 2) ................................................... -- 7,000

Other assets
Intangible assets, net (Note 3) ............................................... 5,426 3,868
-------- --------
Total other assets ........................................................ 5,426 3,868
-------- --------

$458,433 $331,416
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Advances from shareholders (Note 4) ........................................... $108,923 $ --
Accounts payable .............................................................. 25,278 31,284
Accrued payroll, payroll taxes and expenses ................................... 19,242 35,363
-------- --------
Total current liabilities ................................................. 153,443 66,647

Commitments (Notes 5 and 6)

Shareholder's equity
Capital stock, no par value, 50,000 shares authorized,
20,000 shares issued and outstanding in 1996 and 1997 ........................ 87,741 87,741
Retained earnings ............................................................. 217,249 177,028
-------- --------
Total shareholders' equity ................................................ 304,990 264,769
-------- --------

$458,433 $331,416
======== ========
</TABLE>

See notes to financial statements.

F-22

<PAGE> 91

MIROCON, INC.

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
For the
For the Year Eleven
Ended Months Ended
December 31, November 30,
1996 1997
--------- ---------
<S> <C> <C>
Revenue
Information services ..................................... $ 935,727 $ 904,587
--------- ---------
Total revenue ........................................ 935,727 904,587
--------- ---------

Operating Expenses
Costs of services provided ............................... 392,490 340,422
Selling, general and administrative ........................ 463,582 468,973
--------- ---------
Total operating expenses ............................. 856,072 809,395
--------- ---------

Income from operations ....................................... 79,655 95,192

Other income (expense)
Other income ............................................. 2,394 8,240
Interest expense ......................................... (469) --
--------- ---------

Net income ................................................... 81,580 103,432

Pro forma adjustment - provision for income taxes (Note 1).... 28,000 35,000
--------- ---------

Pro forma net income ......................................... $ 53,580 $ 68,432
========= =========

Pro forma basic earnings per share ........................... $ 2.68 $ 3.42
========= =========

Weighted average number of shares outstanding ................ 20,000 20,000
========= =========
</TABLE>

See notes to financial statements.

F-23

<PAGE> 92
MIROCON, INC.

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
Common Stock
----------------------- Retained
Shares Amount Earnings Total
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance - December 31, 1995 ...................... 20,000 $ 87,741 $ 237,452 $ 325,193

1996 shareholder distributions ................... -- -- (101,783) (101,783)

Net income for the year .......................... -- -- 81,580 81,580
--------- --------- --------- ---------

Balance - December 31, 1996 ...................... 20,000 87,741 217,249 304,990

1997 shareholder distributions ................... -- -- (143,653) (143,653)

Net income for the year .......................... -- -- 103,432 103,432
--------- --------- --------- ---------

Balance - November 30, 1997 ...................... 20,000 $ 87,741 $ 177,028 $ 264,769
========= ========= ========= =========

</TABLE>

See notes to financial statements.

F-24

<PAGE> 93
MIROCON, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
For the
For the Year Eleven
Ended Months Ended
December 31, November 30,
1996 1997
-------------- ------------
<S> <C> <C>
Cash flows from operating activities
Net income........................................................... $ 81,580 $ 103,432
-------------- ------------
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization..................................... 3,555 2,258
Changes in operating assets and liabilities.......................
Accounts receivable, net....................................... 16,152 (51,305)
Accounts payable............................................... 2,627 6,006
Accrued payroll, payroll taxes and expenses.................... (1,263) 16,121
-------------- ------------
21,071 (26,920)
-------------- ------------
Net cash provided by operating activities.................. 102,651 76,512
-------------- ------------

Cash flows from investing activities
Capital expenditures................................................. -- (7,700)
-------------- ------------
Net cash used in investing activities...................... -- (7,700)
-------------- ------------

Cash flows from financing activities
Advances from (repayment to) shareholders, net....................... 143 (108,923)
Distributions to shareholders........................................ (101,783) (143,653)
-------------- ------------
Net cash used in financing activities...................... (101,640) (252,576)
-------------- ------------

Net increase (decrease) in cash and cash equivalents.................... 1,011 (183,764)

Cash and cash equivalents, at beginning of period....................... 377,546 378,557
-------------- ------------

Cash and cash equivalents, at end of period............................. $ 378,557 $ 194,793
============== ============

</TABLE>

Supplemental disclosure of cash flow information:
Interest paid during the year was $469 for 1996 and $0 for 1997.

See notes to financial statements.

F-25

<PAGE> 94

MIROCON, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Mirocon, Inc. (Mirocon) was incorporated in the state of Colorado in 1989. The
Company was established for the purpose of providing information services to
financial lending institutions primarily in the mortgage lending industry in the
Northern Colorado area under the Factual Data trade name through a license
agreement.

Cash and Cash Equivalents

For the purpose of the statement of cash flows, the Company considers highly
liquid short-term instruments purchased with an original maturity of three
months or less to be cash equivalents. As of December 31, 1996 and November 30,
1997, balances of cash and cash equivalents at financial banking institutions
exceeded the federally insured limit by $139,173 and $62,502, respectively.

Accounts Receivable

In the normal course of business, the Company extends unsecured credit to
virtually all of its customers for information services. The Company's customers
are located in the Northern Colorado area.

Because of the credit risks involved, management has provided an allowance for
doubtful accounts which reflects its opinion of amounts which will eventually
become uncollectible. In the event of complete non-performance by Mirocon's
customers, the maximum exposure to Mirocon is the outstanding accounts
receivable balance at the date of non-performance.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using
accelerated methods based on the estimated useful lives of the assets which
range from three to seven years.

Intangible Assets

The goodwill and non-compete agreement were acquired when the current
shareholders purchased the licensed territory and other related assets in 1989.
The non-compete agreement was amortized over 3 years, the length of the
agreement. Goodwill is recorded as the difference between net assets and the
related purchase price and was amortized over the estimated useful life of five
years. The EMPfacts license represents fees paid to the licensor for the rights
to use basic EMPfacts and/or CORPdata software systems and management services
provided by the licensor.

F-26

<PAGE> 95

MIROCON, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

The Company has elected to be taxed under Subchapter S of the Internal Revenue
Code. Under these provisions, the Company is not subject to income taxes as a
separate entity. Income or loss of the Company is required to be included in the
income tax returns of the shareholders.

Included in the statement of operations are pro forma income tax adjustments
computed using the statutory rates in effect, which represent the federal and
state tax provisions that would have been required had the Company been taxed as
a C-corporation. Mirocon's effective statutory rate based on pretax income was
34% for both the year ended December 31, 1996 and the eleven months ended
November 30, 1997.

Revenue Recognition

Information Service

Mirocon recognizes revenue generated from mortgage credit reports and other
information services when the information has been provided to the customer, as
substantially all required services have been performed.

Use of Estimates

Fair Value of Financial Instruments

The carrying amounts of financial instruments including cash and cash
equivalents, receivables, accounts payable, accrued expenses, and advances from
shareholders approximate their fair values as of December 31, 1996 and November
30, 1997 because of the relatively short maturity of these instruments.

F-27

<PAGE> 96

MIROCON, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
December 31, November 30,
1996 1997
--------- ---------
<S> <C> <C>
Furniture and fixtures ........................... $ 29,445 $ 29,445
Computer equipment and software .................. 59,582 67,282
Computer software ................................ 28,457 28,457
--------- ---------
117,484 125,184
Less accumulated depreciation ................ (117,484) (118,184)
--------- ---------

$ -- $ 7,000
========= =========
</TABLE>

NOTE 3 - INTANGIBLE ASSETS

Intangible assets consist of the following:

<TABLE>
<CAPTION>
December 31, November 30,
1996 1997
-------- --------
<S> <C> <C>
EMPfacts license ................................. $ 8,500 $ 8,500
Covenant not to compete .......................... 60,000 60,000
Goodwill ......................................... 2,500 2,500
Loan origination fees ............................ 958 958
Organization costs ............................... 780 780
Other intangibles ................................ 4,238 4,238
-------- --------
76,976 76,976
Less accumulated amortization ................ (71,550) (73,108)
-------- --------

$ 5,426 $ 3,868
======== ========
</TABLE>

NOTE 4 - ADVANCES FROM SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The advances from shareholders represents the shareholder's personal funds
advanced to Mirocon to be used for working capital as needed. The balance of the
advances was $108,923 at December 31, 1996 with the full balance being repaid in
1997.

F-28

<PAGE> 97

MIROCON, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 5 - COMMITMENTS

The Company entered into a lease agreement for its office space on September 1,
1990. The lease expires August 31, 2000 and the Company is currently paying
$2,427 per month. The Company's lease has been assumed by the purchasor in
conjunction with the sale of primarily all operating assets of the Company (Note
7); however, the Company remains contingently liable under the assignment of the
lease. The purchaser of the Company's operating assets intends to exercise the
buyout option under the lease assumed effective September 1, 1998 for
approximately $2,500.

Future minimum rental payments under the lease commitments are as follows:

<TABLE>
<CAPTION>
Fiscal Year
-----------
<S> <C>
1998........................................ $ 29,130
1999........................................ 29,130
2000........................................ 19,420
-------------

$ 77,680
=============
</TABLE>

NOTE 6 - PROFIT SHARING PLAN

The Company provides a SEP IRA profit sharing program for its employees. In
order to receive the profit sharing annual contribution, employees must work
full time for the calendar year.

The Company contributed $6,018 and $4,100 for 1996 and 1997, respectively.

NOTE 7 - SUBSEQUENT EVENTS

Effective December 1, 1997, the Company sold primarily all operating assets for
a total purchase price of $519,419 which consisted of a $50,000 cash payment at
closing and a note receivable of $469,419. The sale also included a covenant not
to compete with the acquirer for a period of five years.

F-29

<PAGE> 98

UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME (LOSS)

The following unaudited pro forma combined statements of income (loss) for the
years ended December 31, 1996 and 1997, give effect to the business combination
of Factual Data Corp. and Mirocon, Inc. effective January 1, 1996, including the
related pro forma adjustments described in the notes thereto as well as the sale
of the Texas territory effective January 1, 1996. The transaction between
Factual Data Corp. and Mirocon, Inc. has been accounted for as a combination of
companies under the purchase method. A separate Proforma combined balance sheet
is not included as the acquisition took place December 1, 1997 and is included
in the historical balance sheet of Factual Data Corp. at December 31, 1997. The
unaudited pro forma combined statements of income (loss) also reflect the sale
of the Texas territory effective January 1, 1997 as if the territory sale took
place January 1, 1996. These pro forma statements are not necessarily indicative
of the results of operations as they might have been had the transaction become
effective on the above mentioned date.

The pro forma combined statements of income (loss) for the year ended December
31, 1997 and 1996 include the results of operations of Factual Data Corp. and
Mirocon, Inc.

The unaudited pro forma combined statements of income (loss) should be read in
conjunction with the separate historical financial statements and notes thereto
of Factual Data Corp. and Mirocon, Inc.

F-30

<PAGE> 99

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)

<TABLE>
<CAPTION>
Factual
Data(1) Mirocon Total
------------ ------------ ------------
<S> <C> <C> <C>
Revenue
System affiliates............................................... $ 1,446,559 $ -- $ 1,446,559
Information services............................................ 2,066,254 935,727 3,001,981
Proceeds from the sale of Company operated territories.......... 480,000 -- 480,000
Training, license and other..................................... 16,000 -- 16,000
------------ ------------ ------------
Total revenue................................................. 4,008,813 935,727 4,944,540

Operating Expenses
Costs of services provided...................................... 2,123,357 392,490 2,515,847
Costs of Company operated territories........................... 31,302 -- 31,302
Selling, general and administrative............................. 1,412,974 463,582 1,876,556
------------ ------------ ------------
Total operating expenses...................................... 3,567,633 856,072 4,423,705

Income (loss) from operations...................................... 441,180 79,655 520,835

Other income (expense)
Other income.................................................... 29,437 2,394 31,831
Interest expense................................................ (108,919) (469) (109,388)
------------ ------------ ------------

Income (loss) before income taxes.................................. 361,698 81,580 443,278

Income tax expense (benefit)....................................... 78,063 28,000 106,063
------------ ------------ ------------

Net income (loss).................................................. $ 283,635 $ 53,580 $ 337,215
============ ============ ============

Basic earnings (loss) per share.................................... 0.16 .03 0.19
============ ============ ============

Weighted average pro forma shares outstanding...................... 1,800,000 1,800,000
============ ============

</TABLE>

<TABLE>
<CAPTION>
Pro Forma Adjustments
--------------------------------------
Texas Mirocon Acquisition
Territories ---------------------- Pro Forma
Sold(7) Debit Credit Combined
----------- --------- --------- ------------
<S> <C> <C> <C>
Revenue
System affiliates............................................... $ -- (2) $ 72,290 -- $ 1,374,269
Information services............................................ (1,471,154) -- -- 1,530,827
Proceeds from the sale of Company operated territories.......... -- -- -- 480,000
Training, license and other..................................... -- -- -- 16,000
----------- --------- --------- ------------
Total revenue.................................................. (1,471,154) 72,290 -- 3,401,096

Operating Expenses
Costs of services provided...................................... (735,776) -- (2) 72,290 1,707,781
Costs of Company operated territories........................... -- -- -- 31,302
Selling, general and administrative............................. -- (5) 39,695 (3) 93,000 1,823,251
----------- --------- --------- ------------
Total operating expenses...................................... (735,776) 39,695 165,290 3,562,834

Income (loss) from operations...................................... (735,378) 111,985 165,290 (161,238)

Other income (expense)
Other income.................................................... -- -- -- 31,831
Interest expense................................................ -- (4) 29,000 -- (138,388)
----------- --------- --------- ------------

Income (loss) before income taxes.................................. (735,378) 140,985 165,290 (267,795)

Income tax expense (benefit)....................................... (250,029)(6) (47,935)(6) 56,199 (135,702)
----------- --------- --------- ------------

Net income (loss).................................................. $ (485,349) $ 93,050 $ 109,091 $ (132,093)
========== ========= ========= ============

Basic earnings (loss) per share.................................... (27) .05 .06 (.07)
========== ========= ========= ============

Weighted average pro forma shares outstanding...................... 1,800,000
============
</TABLE>

F-31

<PAGE> 100

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME (LOSS)
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)

<TABLE>
<CAPTION>
Factual
Data (1) Mirocon Total
------------ ------------ ------------
<S> <C> <C> <C>
Revenue
System affiliates............................................... $ 1,950,668 $ - $ 1,950,668
Information services............................................ 734,946 904,587 1,639,533
Proceeds from the sale of Company operated territories.......... 714,365 - 714,365
Training, license and other..................................... 119,692 - 119,692
------------ ------------ ------------
Total revenue................................................. 3,519,671 904,587 4,424,258
------------ ------------ ------------

Operating Expenses
Costs of services provided...................................... 1,301,085 340,422 1,641,507
Costs of Company operated territories........................... 506,101 - 506,101
Selling, general and administrative............................. 916,521 468,973 1,385,494
------------ ------------ ------------
Total operating expenses...................................... 2,723,707 809,395 3,533,102

Income from operations............................................. 795,964 95,192 891,156

Other income (expense).............................................
Other income.................................................... 28,806 8,240 37,046
Interest expense................................................ (77,497) - (77,497)
------------ ------------ ------------

Income before income taxes......................................... 747,273 103,432 850,705

Income tax expense (benefit)....................................... 244,339 35,000 279,339
------------ ------------ ------------

Net income......................................................... $ 502,934 $ 68,432 $ 571,366
============ ============ ============

Basic earnings per share........................................... 0.28 .03 0.31
============ ============ ============

Weighted average pro forma shares outstanding...................... 1,800,000 1,800,000
============ ============

</TABLE>

<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------------- Pro Forma
Debit Credit Combined
------------ ------------ -------------
<S> <C> <C> <C>
Revenue
System affiliates............................................... (2) $ 54,265 $ - $ 1,896,403
Information services............................................ - - 1,639,533
Proceeds from the sale of Company operated territories.......... - - 714,365
Training, license and other..................................... - - 119,692
------------ ------------ -------------
Total revenue................................................. 54,265 - 4,369,993
------------ ------------ -------------

Operating Expenses
Costs of services provided...................................... - (2) 54,265 1,587,242
Costs of Company operated territories........................... - - 506,101
Selling, general and administrative............................. (5) 39,695 (3) 105,547 1,319,642
------------ ------------ -------------
Total operating expenses...................................... 39,695 159,812 3,412,985

Income from operations............................................. 93,960 159,812 957,008

Other income (expense).............................................
Other income.................................................... - - 37,046
Interest expense................................................ (4) 26,000 - (103,497)
------------ ------------ -------------

Income before income taxes......................................... 119,960 159,812 890,557

Income tax expense (benefit)....................................... (6) (40,786) (6) 54,336 292,889
------------ ------------ -------------

Net income......................................................... $ 79,174 $ 105,476 $ 597,668
============ ============ =============

Basic earnings per share........................................... .04 .06 0.33
=========== ============ =============

Weighted average pro forma shares outstanding...................... 1,800,000
=============
</TABLE>

F-32

<PAGE> 101

NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME

The acquisition of the operating assets of Mirocon, Inc., included property and
equipment, a non-compete agreement and customer lists for a total purchase price
of $519,419. Factual Data Corp. issued a note payable for $469,419 and paid
$50,000 cash at closing. The purchase price has been allocated as follows:

<TABLE>
<CAPTION>
Asset Category Valuation
--------------------------------- ---------------
<S> <C>
Property and equipment........... $ 24,000
Non-compete agreement............ 50,000
Customer lists................... 445,419
---------------

$ 519,419
===============
</TABLE>

The following adjustments are related to the business combination between
Factual Data Corp. and Mirocon, Inc.

1. Excludes the results from the Indiana territory which was sold effective
January 1, 1996 and excludes the results of the Texas territories in 1997
as these territories were sold effective January 1, 1997.

2. To eliminate royalty and franchise fees.

3. To eliminate officer's salaries and bonus, for a Mirocon officer who did
not continue employment with Factual Data Corp. and was not replaced.

4. To record interest expense on acquisition debt, which reflects an 8% annual
rate.

5. To record amortization expense on non-compete agreement and customer list.

6. Pro-forma income tax adjustment at the statutory rate of 34%.

7. To reflect the direct operating revenues and costs which would have been
eliminated had the Texas territory been sold effective January 1, 1996. No
adjustments have been made to general and administrative costs for the
reduction to the level of support required in Company operated
territories.

F-33

<PAGE> 102
================================================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION NOT AUTHORIZED,
OR IN WHICH THE PERSON MAKING SUCH AN OFFER OR SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Description of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Shares Eligible for Future Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Index to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

UNTIL o, 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK OR WARRANTS, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

================================================================================

1,200,000 UNITS
consisting of
1,200,000 SHARES of
COMMON STOCK
and
1,200,000 REDEEMABLE
COMMON STOCK PURCHASE
WARRANTS

FACTUAL DATA CORP.

________________

PROSPECTUS
________________

SCHNEIDER SECURITIES, INC.

APRIL * , 1998

<PAGE> 103

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Capitalized terms used but not defined in Part II have the meanings
ascribed to them in the Prospectus contained in this Registration Statement.

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Registrant's Bylaws requires the Registrant to indemnify, to the
fullest extent authorized by applicable law, any person who is or is threatened
to be made a party to any civil, criminal, administrative, investigative, or
other action or proceeding instituted or threatened by reason of the fact that
he is or was a director or officer of the Registrant or is or was serving at
the request of the Registrant as a director of officer of another corporation,
partnership, joint venture, trust or other enterprise.

The Registrant's Articles of Incorporation provides that, to the
fullest extent permitted by Colorado law, directors and officers of the
Registrant shall not be liable to the Registrant or any of its shareholders for
damages caused by a breach of fiduciary duty by such director or officers.

Sections 7-109-102 and 103 of the Colorado Business Corporation Act
("CBCA") authorize the indemnification of directors and officers against
liability incurred by reason of being a director or officer and against
expenses (including attorney's fees) judgments, fines and amounts paid in
settlement and reasonably incurred in connection with any action seeking to
establish such liability, in the case of third-party claims, if the officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and in the case of
actions by or in the right of the corporation, if the officer or director acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation and if such officer or director shall not
have been adjudged liable to the corporation, unless a court otherwise
determines. Indemnification is also authorized with respect to any criminal
action or proceeding where the officer or director also had no reasonable cause
to believe his conduct was unlawful.

All executive officers and directors of the Company have entered into
indemnification agreements with the Company which provide for certain defense
costs and reimbursements.

The above discussion of the Registrant's Articles of Incorporation,
bylaws the CBCA and the indemnification agreements is only a summary and is
qualified in its entirety by the full text of each of the foregoing.

Reference is made to the Underwriting Agreement, the proposed form of
which is filed as Exhibit 1.1, in which each Underwriter agrees, under certain
circumstances, to indemnify the directors and officers of the Registrant and
certain other persons against certain civil liabilities.

II-1
<PAGE> 104
The Company is in the process of receiving quotes for a Directors' and
Officers' Liability Insurance policy. The terms of such a policy, if obtained,
will be disclosed by amendment.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the expenses (other than underwriting
discounts) expected to be incurred in connection with the issuance and
distribution of the securities registered hereby, all of which expenses, except
for the Commission registration fee and the National Association Securities
Dealers, Inc. and Nasdaq SmallCap Market filing fees, are estimated:

<TABLE>
<S> <C>
Commission registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,677
National Association of Securities Dealers, Inc. filing fee . . . . . . . . . . . . . . . . . . . . 2,425
Nasdaq SmallCap Market filing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Representative's Non-Accountable Expense Allowance . . . . . . . . . . . . . . . . . . . . . . . . . 183,600
Printing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,798
--------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $541,000
========
</TABLE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

On June 1, 1997, the Registrant issued 1,800,000 shares of its Common
Stock to its four founders (i.e., Jerald H., Marcia R., Russell E. and James N.
Donnan) in exchange for all of their shares of FDC Group, Inc. and Lenders
Resource Incorporated. Both of these companies are now wholly owned
subsidiaries of the Registrant. Information with respect to the exchange
issuance, the only issuance by the Registrant during the past three years, is as
follows:

(a) Common Stock was issued on June 1, 1997 as follows:

<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Jerald H. Donnan 630,000
Marcia R. Donnan 630,000
Russell E. Donnan 270,000
James N. Donnan 270,000
</TABLE>

(b) The above persons are the founding family members of the
Registrant; no underwriter was involved in the issuances described above.

II-2
<PAGE> 105

(c) The shares were issued in exchange for shares of two family
corporations, i.e., Factual Data Corp founded by them in 1985 and Lenders
Resource Incorporated founded by them in 1994.

(d) The Registrant believes the issuances to have been exempt from
the registration requirements of Section 5 of the Securities Act of 1933 ("Act")
by virtue of Section 4(2) thereof as a transaction not involving a public
offering and being the formation of a private company by four family members not
needing the protection of the registration provisions of the Act.

Contemporaneous with the completion of the offering described herein,
the Registrant will issue options to purchase 17,000 shares of the Registrant's
Common Stock to 22 of its employees and options to purchase 10,000 shares to
the two independent directors of the Company.

No underwriters were involved in these transactions. The issuances
were or will be made in transactions exempt from the requirements of Section 5
of the Securities Act, pursuant to Section 4(2) thereof. With regard to the
Registrant's reliance upon such exemption, the Company made certain inquiries
to establish that such issuances qualified for the exemption. The Registrant
further obtained a representation from each purchaser/recipient of his or her
intent to acquire the securities for purposes of investment only and not with a
view toward any distribution or public resale, and each of the certificates
representing the securities has been embossed with a restrictive legend
restricting transfer of the securities.

ITEM 27. EXHIBITS

The following exhibits have been previously filed or filed herewith:

1.1 Revised form of Underwriting Agreement.(2)

1.3 Form of Selected Dealers Agreement.(1)

1.4 Revised form of Warrant Exercise Fee Agreement.(3)

1.5 Form of Custody Agreement.(1)

3.1 Restated and Amended Articles of Incorporation.(2)

II-3
<PAGE> 106

3.2 Amended Bylaws of the Registrant.(2)

4.1 Specimen Common Stock Certificate of the Registrant.(3)

4.2 Specimen Warrant Certificate of the Registrant.(3)

4.3 Form of Representative's Option for the Purchase of Common
Stock.(2)

4.3A Revised form of Representative's Option for the Purchase of
Warrants.(2)

4.4 Form of Warrant Agreement.(1)

5.1 Form of opinion of Jones & Keller as to the legality of the
issuance of the Common Stock and Warrants.(2)

10.1 Office Lease between FDC Office I, LLC and Lenders Resource
Incorporated dated August 14, 1997 and as amended December 26,
1997.(1)

10.2 Registrant's 1997 Stock Incentive Plan, as amended, with form
of Stock Option Agreement.(1)

10.3 Employment Agreement with Jerald H. Donnan.(1)

10.3A Amendment to the Employment Agreement of Jerald H. Donnan
dated March 31, 1998.(3)

10.4 Employment Agreement with Marcia R. Donnan.(1)

10.4A Amendment to the Employment Agreement of Marcia R. Donnan
dated March 31, 1998.(3)

10.5 Form of Indemnification Agreement.(1)

10.6A Form of Franchise Agreement.(1)

10.6B Form of License Agreements.(1)

10.6C Credit Reporting Service Agreement with Trans Union
Corporation.(1)

10.6D Agreement for Service--Consumer Reporting Agencies with
Equifax Credit Information Services, Inc.(1)

10.6E Reseller Services Agreement with Experian Information
Solutions, Inc.(1)

II-4
<PAGE> 107

10.6F Assets Purchase Agreement between the Company and Mirocon,
Inc. dated December 1, 1997.(1)

10.6G Flood Zone Determination Agreement between the Company and GE
Capital Corporation dated February 19, 1996.(1)

10.6H Asset Purchase Agreement between Factual Data Corp and C B
Unlimited, Inc. regarding the Indiana Territory.(2)

10.6I Purchase Agreement by and between Landmark Financial Services,
Inc. and Factual Data Corp. regarding the Texas
Territories.(2)

21. Subsidiaries of the Registrant.(1)

23.1 Consent of Ehrhardt Keefe Steiner & Hottman PC.(2)

23.2 Form of consent of Jones & Keller, P.C. (filed as part of
Exhibit 5.1).(2)

- --------------------
(1) Previously filed.
(2) Filed herewith.
(3) To be filed by amendment.

ITEM 28. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by a controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by a
final adjudication of such issue.

The Registrant hereby undertakes:

II-5
<PAGE> 108
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act; (ii)
to reflect in the Prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information in the Registration Statement; and (iii) to include
any additional or changed material information with respect to the plan of
distribution.

(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(4) To provide to the underwriter at the closing specified in the
underwriting agreements certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.

(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to the directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

(6) The undersigned Registrant hereby undertakes that it will:

(a) For determining any liability under the Securities
Act, treat the information omitted from the form of
prospectus filed as part of this Registration
Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4), or 497(h) under the
Securities Act as part of this Registration Statement
as of the time it was declared effective.

(b) For determining any liability under the Securities
Act, treat each post-effective amendment that
contains a form of prospectus as a new registration
statement for the securities at that time as the
initial bona fide offering of those securities.

II-6
<PAGE> 109
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Pre- effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of Fort Collins, State of
Colorado, on this 8th day of April, 1998.

FACTUAL DATA CORP.

By: /s/ Jerald H. Donnan
--------------------------------
Jerald H. Donnan, President

Pursuant to the requirements of the Securities Act of 1933, this
Pre-effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
By:/s/ Jerald H. Donnan Chairman of the Board of April 8, 1998
--------------------------------------- Directors, President and Chief
Jerald H. Donnan Executive Officer (Principal
Executive Officer)

By:/s/ Todd Neiberger Chief Financial Officer and a April 8, 1998
---------------------------------------- Director (Principal Financial and
Todd Neiberger Accounting Officer)

By:/s/ James N. Donnan Vice President and a Director April 8, 1998
--------------------------------------
James N. Donnan

By: Director April *, 1998
----------------------------------------
Robert J. Terry

By: Director April *, 1998
----------------------------------------
Abdul H. Rajput
</TABLE>

II-7
<PAGE> 110
EXHIBIT INDEX

<TABLE>
<S> <C>
1.1 Revised form of Underwriting Agreement.(2)

1.3 Form of Selected Dealers Agreement.(1)

1.4 Revised form of Warrant Exercise Fee Agreement.(3)

1.5 Form of Custody Agreement.(1)

3.1 Restated and Amended Articles of Incorporation.(2)

3.2 Amended Bylaws of the Registrant.(2)

4.1 Specimen Common Stock Certificate of the Registrant.(3)

4.2 Specimen Warrant Certificate of the Registrant.(3)

4.3 Form of Representative's Option for the Purchase of Common
Stock.(2)

4.3A Revised form of Representative's Option for the Purchase of
Warrants.(2)

4.4 Form of Warrant Agreement.(1)

5.1 Form of opinion of Jones & Keller as to the legality of the
issuance of the Common Stock and Warrants.(2)

10.1 Office Lease between FDC Office I, LLC and Lenders Resource
Incorporated dated August 14, 1997 and as amended
December 26, 1997.(1)

10.2 Registrant's 1997 Stock Incentive Plan, as amended, with form of
Stock Option Agreement.(1)

10.3 Employment Agreement with Jerald H. Donnan.(1)

</TABLE>

<PAGE> 111

<TABLE>
<S> <C>
10.3A Amendment to the Employment Agreement of Jerald H. Donnan dated
March 31, 1998.(3)

10.4 Employment Agreement with Marcia R. Donnan.(1)

10.4A Amendment to the Employment Agreement of Marcia R. Donnan dated
March 31, 1998.(3)

10.5 Form of Indemnification Agreement.(1)

10.6A Form of Franchise Agreement.(1)

10.6B Form of License Agreements.(1)

10.6C Credit Reporting Service Agreement with Trans Union
Corporation.(1)

10.6D Agreement for Service--Consumer Reporting Agencies with Equifax
Credit Information Services, Inc.(1)

10.6E Reseller Services Agreement with Experian Information Solutions,
Inc.(1)

10.6F Assets Purchase Agreement between the Company and Mirocon, Inc.
dated December 1, 1997.(1)

10.6G Flood Zone Determination Agreement between the Company and GE
Capital Corporation dated February 19, 1996.(1)

10.6H Asset Purchase Agreement between Factual Data Corp and C B
Unlimited, Inc. regarding the Indiana Territory.(2)

10.6I Purchase Agreement by and between Landmark Financial Services,
Inc. and Factual Data Corp. regarding the Texas Territories.(2)

21. Subsidiaries of the Registrant.(1)

23.1 Consent of Ehrhardt Keefe Steiner & Hottman PC.(2)

23.2 Consent of Jones & Keller, P.C. (filed as part of Exhibit 5.1).(2)

</TABLE>

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(1) Previously filed.
(2) Filed herewith.
(3) To be filed by amendment.

<PAGE> 1
EXHIBIT 1.1

1,200,000 UNITS CONSISTING OF

1,200,000 SHARES OF COMMON STOCK

1,200,000 WARRANTS

FACTUAL DATA CORP.

UNDERWRITING AGREEMENT

, 1998

Schneider Securities, Inc.
1120 Lincoln Street
Suite 900
Denver, Colorado 80203

Dear Sirs:

Factual Data Corp., a Colorado corporation (the "Company") hereby
confirms its agreement with you (who are sometimes hereinafter referred to as
the "Representative") and with the other members of the underwriting group (the
"Underwriters") named on Schedule 1 hereto as follows:

1. Introductory. Subject to the terms and conditions contained
herein, the Company proposes to issue and sell to the Underwriters 1,200,000
units (the "Units") comprised of 1,200,000 shares of common stock (the "Common
Stock") and 1,200,000 redeemable warrants (the "Warrants"). The Common Stock
and Warrants shall be immediately separately transferrable and the units shall
not be listed for trading on the Nasdaq SmallCap Market. For the purpose of
this Agreement, references hereinafter to Common Stock and Warrants shall be
deemed to include where appropriate, the Units. In addition, solely for the
purpose of covering over-allotments, the Company grants to the Representative
the option to purchase up to an additional 180,000 shares of Common Stock and/or
180,000 Warrants (the "Additional Securities"), which option to purchase shall
be exercisable, in whole or in part, from time to time during the forty-five
(45) day period commencing on the date on which the Registration Statement (as
hereinafter defined) is initially declared effective (the "Effective Date") by
the Securities and Exchange Commission (the "Commission"). Unless otherwise
noted, the Common Stock, together with the additional 180,000 shares of Common
Stock issuable on exercise of the over-allotment option, is referred to
hereinafter as the "Common Stock" and the Warrants and the 180,000 Warrants
issuable on exercise of the over-allotment option are referred to hereinafter as
the "Warrants".

Each Warrant will entitle the holder to purchase one share of Common
Stock (a "Warrant Share") at a price equal to $ during the
thirty-six (36) month exercise period of the Warrants, subject to the Company's
right of redemption. The Warrants may be redeemed by the Company commencing
one year from the Effective Date of the Registration Statement upon at least 30
days prior written notice, in whole but not in part, at a price of $.05 per
Warrant provided the

<PAGE> 2
closing bid price for the Company's Common Stock is at least 150% of the
exercise price of the Warrant during each day of the twenty (20) trading day
period ending five days preceding the date of the written notice. The terms and
provisions of the Warrants shall be governed by a warrant agreement between the
Company and its transfer agent (the "Warrant Agreement"), which Warrant
Agreement will contain, among other provisions, anti-dilution protection for
warrantholders on terms acceptable to the Representative. The Common Stock,
Warrants and Additional Securities are more fully described in the Prospectus
referred to below. All references to the Company below shall be deemed to
include, where appropriate, the Company's subsidiaries, if any.

2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:

a. The Company has filed with the Commission a
registration statement, and may have filed one or more amendments
thereto, on Form SB-2 (Registration No. 333-47051), including in such
registration statement and each such amendment a facing sheet, the
information called for by Part I, audited consolidated financial
statements for the past two fiscal years or such other period as may be
appropriate, the information called for by Part II, the undertakings to
deliver certificates, file reports and file post-effective amendments,
the required signatures, consents of experts, exhibits, a related
preliminary prospectus (a "Preliminary Prospectus") and any other
information or documents which are required for the registration of the
Common Stock and Warrants, the Warrant Shares, the purchase options
referred to in Section 2(n) (the "Representative's Options"), and the
securities referred to in Section 2(n) underlying the Representative's
Options (the "Representative's Option Securities"), under the
Securities Act of 1933, as amended (the "Act"). As used in this
Agreement, the term "Registration Statement" means such registration
statement, including incorporated documents, all exhibits and
consolidated financial statements and schedules thereto, as amended,
when it becomes effective, and shall include information with respect
to the Common Stock, the Warrants, the Warrant Shares, the
Representative's Options, and the Representative's Option Securities
and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A of the
General Rules and Regulations promulgated under the Act (the
"Regulations"), which information is deemed to be included therein when
it becomes effective as provided by Rule 430A; the term "Preliminary
Prospectus" means each prospectus included in the Registration
Statement, or any amendments thereto, before it becomes effective under
the Act and any prospectus

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<PAGE> 3
filed by the Company with the consent of the Representative pursuant
to Rule 424(a) of the Regulations; and the term "Prospectus" means the
final prospectus included as part of the Registration Statement,
except that if the prospectus relating to the securities covered by
the Registration Statement in the form first filed on behalf of the
Company with the Commission pursuant to Rule 424(b) of the Regulations
shall differ from such final prospectus, the term "Prospectus" shall
mean the prospectus as filed pursuant to Rule 424(b) from and after
the date on which it shall have first been used.

b. When the Registration Statement becomes effective,
and at all times subsequent thereto, to and including the Closing Date
(as defined in Section 3) and each Additional Closing Date (as defined
in Section 3), and during such longer period as the Prospectus may be
required to be delivered in connection with sales by the
Representative or any dealer, and during such longer period until any
post-effective amendment thereto shall become effective, the
Registration Statement (and any post-effective amendment thereto) and
the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectus) will contain all statements
which are required to be stated therein in accordance with the Act and
the Regulations, will comply with the Act and the Regulations, and
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and no event will have
occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus which has
not then been set forth in such an amendment or supplement; and no
Preliminary Prospectus, as of the date filed with the Commission,
included any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; except that no representation
or warranty is made in this Section 2(b) with respect to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Company as stated in Section 8(b) with
respect to the Underwriters by or on behalf of the Underwriters
expressly for inclusion in any Preliminary Prospectus, the
Registration Statement, or the Prospectus, or any amendment or
supplement thereto.
c. Neither the Commission nor the "blue sky" or
securities authority of any jurisdiction have issued an order (a "Stop
Order") suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus, the

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<PAGE> 4
Prospectus, the Registration Statement, or any amendment or supplement
thereto, refusing to permit the effectiveness of the Registration
Statement, or suspending the registration or qualification of the
Common Stock, the Warrants, the Warrant Shares, the Representative's
Options, or the Representative's Option Securities, nor has any of
such authorities instituted or threatened to institute any proceedings
with respect to a Stop Order.

d. Any contract, agreement, instrument, lease, or
license required to be described in the Registration Statement or the
Prospectus has been properly described therein. Any contract,
agreement, instrument, lease, or license required to be filed as an
exhibit to the Registration Statement has been filed with the
Commission as an exhibit to or has been incorporated as an exhibit by
reference into the Registration Statement.

e. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Colorado, with full power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits
of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities and all courts and other
tribunals, to own, lease, license, and use its properties and assets
and to carry on the business in the manner described in the
Prospectus. The Company is duly qualified to do business and is in
good standing in every jurisdiction in which its ownership, leasing,
licensing, or use of property and assets or the conduct of its
business makes such qualifications necessary. The Company has no
subsidiaries except as disclosed in the Prospectus.

f. The authorized capital stock of the Company consists
of 10,000,000 shares of Common Stock, of which 1,800,000 shares of
Common Stock are issued and outstanding, 27,000 shares of Common Stock
are reserved for issuance upon the exercise of currently outstanding
options and 173,000 shares of Common Stock are reserved for issuance
upon the exercise of the remaining options authorized under the
Company's option plans; and 1,000,000 shares of Preferred Stock, none
of which are issued or outstanding. Of the outstanding shares of
Common Stock, 500,000 shares are subject to a custody agreement,
release under which will occur upon the earlier of (i) the Company
achieving designated certain financial performance criteria as set
forth in the custody agreement or (ii) , 2005 (seven
years from the date of the Prospectus), all or more fully set forth in
a custody agreement (the "Custody Agreement") by and among Jerald H.
Donnan, Marcia R. Donnan, Russell E. Donnan, James N. Donnan,
American Securities Transfer & Trust, Inc., the

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<PAGE> 5
Company and the Representative. Each outstanding share of Common
Stock is validly authorized, validly issued, fully paid, and
nonassessable, without any personal liability attaching to the
ownership thereof, and has not been issued and is not owned or held in
violation of any preemptive rights of stockholders. There is no
commitment, plan, or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of
capital stock of the Company or any security or other instrument which
by its terms is convertible into, exercisable for, or exchangeable for
capital stock of the Company, except as set forth above, and as may be
properly described in the Prospectus.

g. The consolidated financial statements of the Company
included in the Registration Statement and the Prospectus fairly
present with respect to the Company the consolidated financial
position, the results of operations, and the other information
purported to be shown therein at the respective dates and for the
respective periods to which they apply. Such consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles, except to the extent that certain footnote
disclosures regarding any stub period may have been omitted in
accordance with the applicable rules of the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
consistently applied throughout the periods involved, are correct and
complete, and are in accordance with the books and records of the
Company. The accountants whose report on the audited consolidated
financial statements is filed with the Commission as a part of the
Registration Statement are, and during the periods covered by their
report(s) included in the Registration Statement and the Prospectus
were, independent certified public accountants with respect to the
Company within the meaning of the Act and the Regulations. No other
financial statements are required by Form SB-2 or otherwise to be
included in the Registration Statement or the Prospectus. There has
at no time been a material adverse change in the consolidated
financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of the Company from the
latest information set forth in the Registration Statement or the
Prospectus, except as may be properly described in the Prospectus.

h. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation pending, or, to the knowledge of the Company,
threatened, or in prospect with respect to the Company or any of its
operations, businesses, properties, or assets, except as may be
properly described in the Prospectus or such as

-5-
<PAGE> 6
individually or in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations, business,
properties, or assets of the Company. The Company is not in violation
of, or in default with respect to, any law, rule, regulation, order,
judgment, or decree except as may be properly described in the
Prospectus or such as in the aggregate do not now have and will not in
the future have a material adverse effect upon the operations,
business, properties, or assets of the Company; nor is the Company
required to take any action in order to avoid any such violation or
default.

i. The Company has good and marketable title in fee
simple absolute to all real properties and good title to all other
properties and assets which the Prospectus indicates are owned by it,
free and clear of all liens, security interests, pledges, charges,
encumbrances, and mortgages except as may be properly described in the
Prospectus or such as in the aggregate do not now have and will not in
the future have a material adverse effect upon the operations,
business, properties, or assets of the Company. No real property
owned, leased, licensed, or used by the Company lies in an area which
is, or to the knowledge of the Company will be, subject to zoning,
use, or building code restrictions which would prohibit, and no state
of facts relating to the actions or inaction of another person or
entity or his or its ownership, leasing, licensing, or use of any real
or personal property exists or will exist which would prevent, the
continued effective ownership, leasing, licensing, or use of such real
property in the business of the Company as presently conducted or as
the Prospectus indicates it contemplates conducting, except as may be
properly described in the Prospectus or such as in the aggregate do
not now have and will not in the future have a material adverse effect
upon the operations, business, properties, or assets of the Company.

j. Neither the Company nor any other party is now or is
expected by the Company to be in violation or breach of, or in default
with respect to complying with, any material provision of any
contract, agreement, instrument, lease, license, arrangement, or
understanding which is material to the Company, and each such
contract, agreement, instrument, lease, license, arrangement, and
understanding is in full force and is the legal, valid, and binding
obligation of the parties thereto and is enforceable as to them in
accordance with its terms. The Company enjoys peaceful and
undisturbed possession under all leases and licenses under which it is
operating. The Company is not a party to or bound by any contract,
agreement, instrument, lease, license, arrangement, or understanding,
or subject to any charter or other restriction, which has had or may
in the future have a material

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<PAGE> 7
adverse effect on the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the
Company. The Company is not in violation or breach of, or in default
with respect to, any term of its Articles of Incorporation (or other
charter document) or by-laws.

k. All patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights,
franchises, technology, know-how and other intangible properties and
assets (all of the foregoing being herein called "Intangibles") that
the Company owns or has pending, or under which it is licensed, are in
good standing and uncontested. Except as otherwise disclosed in the
Registration Statement, the Intangibles are owned by the Company, free
and clear of all liens, security interests, pledges, and encumbrances.
"Factual Data" is a registered trademark used by the Company to
identify its services and such mark is protected by registration in
the name of the Company on the principal register of the United States
Patent Office. There is no right under any Intangible necessary to
the business of the Company as presently conducted or as the
Prospectus indicates it contemplates conducting (except as may be so
designated in the Prospectus). The Company has not infringed, is not
infringing, and has not received notice of infringement with respect
to asserted Intangibles of others. To the knowledge of the Company,
there is no infringement by others of Intangibles of the Company. To
the knowledge of the Company, there is no Intangible of others which
has had or may in the future have a materially adverse effect on the
financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of the Company.

l. Neither the Company nor any director, officer, agent,
employee, or other person associated with or acting on behalf of the
Company has, directly or indirectly: used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment. The Company has not accepted any
material advertising allowances or marketing allowances from suppliers
to the Company and, to the extent any advertising allowance has been
accepted, the Company has provided proper documentation to the
supplier with respect to advertising as to which the advertising
allowance has been granted.

-7-
<PAGE> 8
m. The Company has all requisite power and authority to
execute and deliver, and to perform thereunder each of this Agreement,
the Warrants, the Representative's Options, the Warrant Exercise Fee
Agreement described in Section 5(ff) (the "Warrant Exercise Fee
Agreement") and the Custody Agreement. All necessary corporate
proceedings of the Company have been duly taken to authorize the
execution and delivery, and performance thereunder by the Company of
this Agreement, the Warrants, the Representative's Options, the
Warrant Exercise Fee Agreement and the Custody Agreement. This
Agreement has been duly authorized, executed, and delivered by the
Company, is a legal, valid, and binding obligation of the Company, and
is enforceable as to the Company in accordance with its terms. Each
of the Warrants, the Representative's Options, the Warrant Exercise
Fee Agreement and the Custody Agreement has been duly authorized by
the Company and, when executed and delivered by the Company, will each
be a legal, valid, and binding obligation of the Company, and will be
enforceable against the Company in accordance with its respective
terms. No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any
federal, state, local, or other governmental authority or any court or
other tribunal is required by the Company for the execution and
delivery, or performance thereunder by the Company of this Agreement,
the Warrants or the Representative's Options except filings under the
Act which have been or will be made before the Closing Date and such
consents consisting only of consents under "blue sky" or securities
laws which are required in connection with the transactions
contemplated by this Agreement and which have been obtained at or
prior to the date of this Agreement. No consent of any party to any
contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Company is a party, or to which any of its
properties or assets are subject, is required for the execution or
delivery, or performance thereunder of this Agreement, the Warrants,
the Representative's Options, the Warrant Exercise Fee Agreement or
the Custody Agreement; and the execution and delivery, and performance
thereunder of this Agreement, the Warrants, the Representative's
Options, the Warrant Exercise Fee Agreement and the Custody Agreement
will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle
any party to terminate or call a default under any such contract,
agreement, instrument, lease, license, arrangement, or understanding,
or violate or result in a breach of any term of the Articles of
Incorporation or by-laws of the Company, or violate, result in a

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<PAGE> 9
breach of, or conflict with any law, rule, regulation, order,
judgment, or decree binding on the Company or to which any of its
operations, businesses, properties, or assets are subject.

n. The Common Stock, the Warrants, the Warrant Shares,
purchase options (the "Representative's Options") entitling the
Representative or its assigns to purchase the Representative's Option
Securities, and the Representative's Option Securities are validly
authorized and reserved for issuance. The Common Stock, when issued
and delivered in accordance with this Agreement, the Warrant Shares,
when issued and delivered upon exercise of the Warrants, the
Representative's Option Securities, when issued and delivered upon
exercise of the Representative's Options and the Representative's
Option Shares issuable on exercise of warrants included in the
Representative's Option Securities, upon payment of the exercise price
therefor, will be validly issued, fully paid, and nonassessable,
without any personal liability attaching to the ownership thereof, and
will not be issued in violation of any preemptive rights of
stockholders, and the Underwriters will receive good title to the
Common Stock and the Warrants purchased, the Representative will
receive good title to the Representative's Options purchased and any
purchaser of the Warrant Shares or Representative's Option Securities
will receive good title thereto, all such title free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts.

o. The Common Stock, the Warrants, the Warrant Shares,
the Representative's Options and the Representative's Option
Securities conform to all statements relating thereto contained in the
Registration Statement and the Prospectus.

p. Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as may otherwise be properly described in the Prospectus,
the Company has not (i) issued any securities or incurred any
liability or obligation, primary or contingent, for borrowed money,
(ii) entered into any transaction not in the ordinary course of
business, or (iii) declared or paid any dividend on its capital stock.

q. Neither the Company nor any of its officers,
directors, or affiliates (as defined in the Regulations), has taken or
will take, directly or indirectly, prior to the termination of the
distribution of securities contemplated by this Agreement, any action
designed to stabilize or manipulate the price of any security of the
Company, or which has caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization or

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<PAGE> 10
manipulation of the price of any security of the Company, to
facilitate the sale or resale of the Common Stock and Warrants.

r. The Company has not incurred any liability for a fee,
commission, or other compensation on account of the employment of a
broker or finder in connection with the transactions contemplated by
this Agreement.

s. The Company has obtained from each officer, director
and person who beneficially owns shares of the Company's capital stock
or derivative securities convertible into shares of the Company's
capital stock his or her enforceable written agreement that for a
period of 18 months from the Effective Date, he or she will not,
without the Representative's prior written consent, offer, pledge,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of capital stock or any
security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for shares of Common Stock (except
that, subject to compliance with applicable securities laws, any such
officer, director or stockholder may transfer his or her stock in a
private transaction, provided that any such transferee shall agree, as
a condition to such transfer, to be bound by the restrictions set
forth in this Agreement and further provided that the transferor,
except in the case of the transferor's death, shall continue to be
deemed the beneficial owner of such shares in accordance with
Regulation 13d-(3) of the Exchange Act). For a period of three (3)
years, commencing 18 months from the Effective Date, all public sales
by officers, directors and stockholders of the Company prior to the
Effective Date shall be effected through or with the Representative on
an exclusive basis, provided that the Representative offers the best
price reasonably available to the selling stockholders. In addition,
for a period of three years commencing 18 months from the Effective
Date in the case of private transactions in the Company's Common
Stock, each such selling security holder specified above shall offer
the Representative the exclusive opportunity to purchase or sell the
securities on terms at least as favorable as the selling security
holder can obtain elsewhere. If the Representative fails to accept in
writing any such proposal for sale by the selling security holders
within three (3) business days after receipt of a notice containing
such proposal, then the Representative shall have no claim or right
with respect to any such sales contained in such notice. If,
thereafter, such proposal is modified in any material respect, the
selling security holders shall adopt the same procedure as with
respect to the original proposal. An appropriate legend shall be
marked on the face of stock

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<PAGE> 11
certificates representing all of such securities. Public or private
sales of Common Stock by such persons shall not include gifts,
intra-family transfers or transfers for estate planning purposes,
which shall be exempt from the foregoing provisions. The Company, on
behalf of itself, and all officers, directors and holders of five
percent or more of the Common Stock of the Company, have provided the
Representative their enforceable written agreements not to sell,
transfer, or hypothecate capital stock or derivative securities of the
Company (i) through a "Regulation S" transaction for a minimum period
of five years from the Effective Date without the prior written
consent of the Representative, or (ii) through a "Regulation D"
transaction for a minimum period of 24 months from the Effective Date.

t. Except as otherwise provided in the Registration
Statement, no person or entity has the right to require registration
of shares of Common Stock or other securities of the Company because
of the filing or effectiveness of the Registration Statement.

u. The Company is eligible to use Form SB-2 for
registration of the Common Stock, the Warrants, the Warrant Shares,
the Representative's Options and the Representative's Option
Securities.

v. No unregistered securities of the Company, of an
affiliate of the Company or of a predecessor of the Company have been
sold within three years prior to the date hereof, except as described
in the Registration Statement.

w. Except as set forth in the Registration Statement,
there is and at the Closing Date there will be no action, suit or
proceeding before any court, arbitration tribunal or governmental
agency, authority or body pending or, to the knowledge of the Company,
threatened which might result in judgments against the Company not
adequately covered by insurance or which collectively might result in
any material adverse change in the condition (financial or otherwise),
the business or the prospects of the Company or would materially
affect the properties or assets of the Company.

x. The Company has filed all federal and state tax
returns which are required to be filed by it and has paid all taxes
shown on such returns and all assessments received by it to the extent
such taxes have become due. All taxes with respect to which the
Company is obligated have been paid or adequate accruals have been set
up to cover any such unpaid taxes.

y. Except as set forth in the Registration Statement:

i. The Company has obtained all permits,
licenses and other authorizations which are required under the
Environmental Laws for the ownership,

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<PAGE> 12
use and operation of each location operated or leased by the
Company (the "Property"), all such permits, licenses and
authorizations are in effect, no appeal nor any other action
is pending to revoke any such permit, license or
authorization, and the Company is in full compliance with all
terms and conditions of all such permits, licenses and
authorizations.

ii. The Company and the Property are in
compliance with all Environmental Laws including, without
limitation, all restrictions, conditions, standards,
limitations, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws
or contained in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.

iii. The Company has not, and to the best
knowledge of the Company's executive officers, no other person
has, released, placed, stored, buried or dumped any Hazardous
Substances, Oils, Pollutants or Contaminants or any other
wastes produced by, or resulting from, any business,
commercial, or industrial activities, operations, or
processes, on, beneath, or adjacent to the Property or any
property formerly owned, operated or leased by the Company
except for inventories of such substances to be used, and
wastes generated therefrom, in the ordinary course of business
of the Company (which inventories and wastes, if any, were and
are stored or disposed of in accordance with applicable laws
and regulations and in a manner such that there has been no
release of any such substances into the environment).

iv. Except as provided to the Representative,
there exists no written or tangible report, synopsis or
summary of any asbestos, toxic waste or Hazardous Substances,
Oils, Pollutants or Contaminants investigation made with
respect to all or any portion of the assets of the Company
(whether or not prepared by experts and whether or not in the
possession of the executive officers of the Company).

v. Definitions: As used herein:

(1) Environmental Laws means all
federal, state and local laws, regulations, rules and
ordinances relating to pollution or protection of the
environment, including, without limitation, laws
relating to Releases or threatened Releases of
Hazardous Substances, Oils, Pollutants or
Contaminants into the indoor or outdoor environment
(including, without

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<PAGE> 13
limitation, ambient air, surface water, groundwater,
land, surface and subsurface strata) or otherwise
relating to the manufacture, processing,
distribution, use, treatment, storage, Release,
transport or handling of Hazardous Substances, Oils,
Pollutants or Contaminants.

(2) Hazardous Substances, Oils, Pollutants
or Contaminants means all substances defined as such
in the National Oil and Hazardous Substances Pollutant
Contingency Plan, 40 C.F.R. Section 300.6, or defined
as such under any Environmental Law.

(3) Release means any release, spill,
emission, discharge, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environmental
(including, without limitation, ambient air, surface
water, groundwater, and surface or subsurface strata)
or into or out of any property, including the movement
of Hazardous Substances, Oils, Pollutants or
Contaminants through or in the air, soil, surface
water, groundwater or any property.

z. Any pro forma financial or other information and
related notes included in the Registration Statement, each Preliminary
Prospectus and the Prospectus comply (or, if the Prospectus has not
been filed with the Commission, as to the Prospectus, will comply) in
all material respects with the requirements of the Act and the rules
and regulations of the Commission thereunder and present fairly the
pro forma information shown, as of the dates and for the periods
covered by such pro forma information. Such pro forma information,
including any related notes and schedules, has been prepared on a
basis consistent with the historical financial statements and other
historical information, as applicable, included in the Registration
Statement, the Preliminary Prospectus and the Prospectus, except for
the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis to give effect to historical
and, if applicable, proposed transactions described in the
Registration Statement, each Preliminary Prospectus and the
Prospectus. All of the above representations and warranties shall
survive the performance or termination of this Agreement.

3. Purchase, Sale, and Delivery of the Common Stock and the
Warrants. On the basis of the representations, warranties, covenants, and
agreements of the Company herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters,
severally and not jointly, and the Underwriters,

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<PAGE> 14
severally and not jointly, agree to purchase from the Company the number of
shares of Common Stock and Warrants set forth opposite the Underwriters' names
in Schedule 1 hereto.

The purchase price per share of Common Stock to be paid by the
Underwriters shall be $ and the purchase price per Warrant
to be paid by the Underwriters shall be $.09. The initial public offering
price of the Common Stock shall be $ and the initial public
offering price of the Warrants shall be $.10.

Payment for the Common Stock and Warrants by the Underwriters shall be
made by certified or official bank check in clearing house funds, payable
to the order of the Company at the offices of Schneider Securities, Inc., 1120
Lincoln Street, Suite 900, Denver, Colorado 80203, or at such other place in
Denver, Colorado as the Representative shall determine and advise the Company
by at least two full days' notice in writing, upon delivery of the Common Stock
and Warrants to the Representative. Such delivery and payment shall be made at
10:00 a.m., Mountain Time, on the third business day following the time of the
initial public offering, as defined in Section 10(a). The time and date of
such delivery and payment are herein called the "Closing Date."

In addition, the Company hereby grants to the Representative the
option to purchase all or a portion of the Additional Securities as may be
necessary to cover over-allotments, at the same purchase price per Additional
Security as the price per share of Common Stock or Warrant provided for in this
Section 3. The Representative may purchase Common Stock and/or Warrants when
exercising such option, in its sole discretion. This option may be exercised
by the Representative on the basis of the representations, warranties,
covenants, and agreements of the Company herein contained, but subject to the
terms and conditions herein set forth, at any time and from time to time on or
before the 45th day following the Effective Date of the Registration Statement,
by written notice by the Representative to the Company. Such notice shall set
forth the aggregate number of Additional Securities as to which the option is
being exercised, and the time and date, as determined by the Representative,
when such Additional Securities are to be delivered (such time and date are
herein called an "Additional Closing Date"); provided, however, that no
Additional Closing Date shall be earlier than the Closing Date nor earlier than
the third business day after the date on which the notice of the exercise of
the option shall have been given nor later than the eighth business day after
the date on which such notice shall have been given; and further provided, that
not more than two Additional Closings shall be noticed and held following
purchase of Additional Securities by the Representative.

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<PAGE> 15
Payment for the Additional Securities shall be made by certified or
official bank check in clearing house funds payable to the order of the Company
at the offices of Schneider Securities, Inc., 1120 Lincoln Street, Suite 900,
Denver, Colorado, or at such other place in Denver, Colorado as you shall
determine and advise the Company by at least two full days' notice in writing,
upon delivery of certificates representing the Additional Securities to you.

Certificates for the Common Stock and Warrants and any Additional
Securities purchased shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
business days prior to the Closing Date or Additional Closing Date, as
applicable. The Company shall permit you to examine and package such
certificates for delivery at least one full business day prior to any such
closing with respect thereto.

If for any reason one or more Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 10 hereof) to purchase and pay for
the number of shares of Common Stock and Warrants agreed to be purchased by
such Underwriter, the Company shall immediately give notice thereof to the
Representative, and the non-defaulting Underwriters shall have the right within
24 hours after the receipt by the Representative of such notice, to purchase or
procure one or more other Underwriters to purchase, in such proportions as may
be agreed upon among the Representative and such purchasing Underwriter or
Underwriters and upon the terms herein set forth, the Common Stock and Warrants
which such defaulting Underwriter or Underwriters agreed to purchase. If the
non-defaulting Underwriters fail so to make such arrangements with respect to
all such Common Stock and Warrants, the number of shares of Common Stock and
Warrants which each non-defaulting Underwriter is otherwise obligated to
purchase under the Agreement shall be automatically increased pro rata to
absorb the remaining Common Stock and Warrants which the defaulting Underwriter
or Underwriters agreed to purchase; provided, however, that the non- defaulting
Underwriters shall not be obligated to purchase the Common Stock and Warrants
which the defaulting Underwriter or Underwriters agreed to purchase in excess
of 10% of the total number of shares of Common Stock and Warrants which such
non-defaulting Underwriter agreed to purchase hereunder, and provided further
that the non- defaulting Underwriters shall not be obligated to purchase any
Common Stock and Warrants which the defaulting Underwriter or Underwriters
agreed to purchase if such additional purchase would cause the Underwriter to
be in violation of the net capital rule of the Commission or other applicable
law. If the total number of Common Stock and Warrants which the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance

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<PAGE> 16
with the two preceding sentences, the Company shall have the right, within 24
hours next succeeding the 24-hour period above referred to, to make
arrangements with other underwriters or purchasers satisfactory to the
Representative for the purchase of such Common Stock and Warrants on the terms
herein set forth. In any such case, either the Representative or the Company
shall have the right to postpone the Closing for not more than seven business
days after the date originally fixed as the Closing in order that any necessary
changes in the Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting Underwriters nor the
Company shall make arrangements within the 24-hour periods stated above for the
purchase of all the Common Stock and Warrants which the defaulting Underwriter
or Underwriters agreed to purchase hereunder, this Agreement shall be
terminated without further act or deed and without any liability on the part of
the Company any non-defaulting Underwriter, except the Company shall be liable
for actual expenses incurred by the Representative as provided in Section 10
hereof, and without any liability on the part of any non-defaulting Underwriter
to the Company.

Nothing contained herein shall relieve any defaulting Underwriter of
its liability, if any, to the Company or to the remaining Underwriters for
damages occasioned by its default hereunder.

4. Offering. The Underwriters are to make a public offering of
the Common Stock and Warrants as soon, on or after the effective date of the
Registration Statement, as the Representative deems it advisable so to do. The
Common Stock and Warrants are to be initially offered to the public at the
initial public offering prices as provided for in Section 3 (such prices being
herein called the "public offering prices"). After the initial public
offering, you may from time to time increase or decrease the prices of the
Common Stock and/or Warrants, in your sole discretion, by reason of changes in
general market conditions or otherwise.

5. Covenants of the Company. The Company covenants that it will:

a. Use its best efforts to cause the Registration
Statement to become effective as promptly as possible. If the
Registration Statement has become or becomes effective with a form of
Prospectus omitting certain information pursuant to Rule 430A of the
Regulations, or filing of the Prospectus is otherwise required under
Rule 424(b), the Company will file the Prospectus, properly completed,
pursuant to Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such timely filing.

b. Notify you immediately, and confirm such notice in
writing, (i) when the Registration Statement and any post-effective
amendment thereto become effective, (ii) of the receipt of any
comments from the Commission or the "blue sky" or securities authority
of any

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<PAGE> 17
jurisdiction regarding the Registration Statement, any post-effective
amendment thereto, the Prospectus, or any amendment or supplement
thereto, and (iii) of the receipt of any notification with respect to
a Stop Order or the initiation or threatening of any proceeding with
respect to a Stop Order. The Company will use its best efforts to
prevent the issuance of any Stop Order and, if any Stop Order is
issued, to obtain the lifting thereof as promptly as possible.

c. During the time when a prospectus relating to the
Common Stock and Warrants or the Additional Securities is required to
be delivered hereunder or under the Act or the Regulations, comply so
far as it is able with all requirements imposed upon it by the Act, as
now existing and as hereafter amended, and by the Regulations, as from
time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Common Stock and Warrants and
Additional Securities in accordance with the provisions hereof and the
Prospectus. If, at any time when a prospectus relating to the Common
Stock and Warrants or Additional Securities is required to be
delivered hereunder or under the Act or the Regulations, any event
shall have occurred as a result of which, in the reasonable opinion of
counsel for the Company or counsel for the Representative, the
Registration Statement or the Prospectus, as then amended or
supplemented, contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or if, in the
opinion of either of such counsel, it is necessary at any time to
amend or supplement the Registration Statement or the Prospectus to
comply with the Act or the Regulations, the Company will immediately
notify you and promptly prepare and file with the Commission an
appropriate amendment or supplement (in form and substance
satisfactory to you) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to
have any such amendment declared effective as soon as possible.

d. Deliver without charge to you such number of copies
of each Preliminary Prospectus as you may reasonably request and, as
soon as the Registration Statement or any amendment thereto becomes
effective or a supplement is filed, deliver without charge to you two
signed copies of the Registration Statement or such amendment thereto,
as the case may be, including exhibits, and two copies of any
supplement thereto, and deliver without charge to you such number of
copies of the Prospectus, the Registration Statement, and amendments

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<PAGE> 18
and supplements thereto, if any, without exhibits, as you may
reasonably request for the purposes contemplated by the Act.

e. Endeavor in good faith, in cooperation with you, at
or prior to the time the Registration Statement becomes effective, to
qualify the Common Stock and Warrants and Additional Securities for
offering and sale under the "blue sky" or securities laws of such
jurisdictions as you may designate; provided, however, that no such
qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject. In each jurisdiction
where such qualification shall be effected, the Company will, unless
you agree in writing that such action is not at the time necessary or
advisable, file and make such statements or reports at such times as
are or may be required by the laws of such jurisdiction.

f. Make generally available (within the meaning of
Section 11(a) of the Act and the Regulations) to its security holders
as soon as practicable, but not later than fifteen (15) months after
the date of the Prospectus, an earnings statement (which need not be
certified by independent certified public accountants unless required
by the Act or the Regulations, but which shall satisfy the provisions
of Section 11(a) of the Act and the Regulations) covering a period of
at least 12 months beginning after the effective date of the
Registration Statement.

g. For a period of 12 months after the date of the
Prospectus, not, without your prior written consent, offer, issue,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any shares of Common Stock (or any
security or other instrument which by its terms is convertible into,
exercisable for, or exchangeable for shares of Common Stock) except as
provided in Section 3 and except for (i) the issuance of Warrant
Shares issuable upon the exercise of Warrants or issuance of Common
Stock underlying options outstanding on the date hereof which are
properly described in the Prospectus, (ii) the issuance of
Representative's Option Securities, or (iii) the grant of options
pursuant to the Company's existing stock option plans, or (iv) the
issuance of capital stock in connection with any acquisitions
undertaken by the Company.

h. For a period of five years after the Effective Date
of the Registration Statement, furnish you, without charge, the
following:

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<PAGE> 19
i. Within 90 days after the end of each fiscal
year, three copies of consolidated financial statements
certified by independent certified public accountants,
including a balance sheet, statement of operations, and
statement of cash flows of the Company and its then existing
subsidiaries, with supporting schedules, prepared in
accordance with generally accepted accounting principles, at
the end of such fiscal year and for the 12 months then ended;

ii. As soon as practicable after they have been
sent to stockholders of the Company or filed with the
Commission, three copies of each annual and interim financial
and other report or communication sent by the Company to its
stockholders or filed with the Commission;

iii. As soon as practicable, two copies of every
press release and every material news item and article in
respect of the Company or its affairs which was released by
the Company;

iv. Notice of any regular quarterly or special
meeting of the Company's Board of Directors concurrently with
the sending of such notice to the Company's directors; and

v. Such additional documents and information
with respect to the Company and its affairs and the affairs of
any of its subsidiaries as you may from time to time
reasonably request.

i. Designate an Audit Committee and a Compensation
Committee, the members of which shall be subject to your reasonable
approval, which will generally supervise the financial affairs of the
Company and review executive compensation, respectively.

j. Furnish to you as early as practicable prior to the
Closing Date and any Additional Closing Date, as the case may be, but
not less than two full business days prior thereto, a copy of the
latest available unaudited interim consolidated financial statements
of the Company which have been read by the Company's independent
certified public accountants, as stated in their letters to be
furnished pursuant to Section 7(e).

k. File no amendment or supplement to the Registration
Statement or Prospectus at any time, whether before or after the
Effective Date of the Registration Statement, unless such filing shall
comply with the Act and the Regulations and unless you shall
previously have been advised of such filing and furnished with a copy
thereof, and you and counsel for

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<PAGE> 20
the Representative shall have approved such filing in writing within a
reasonable time of receipt thereof.

l. Comply with all periodic reporting and proxy solicitation
requirements which may from time to time be applicable to the Company as a
result of the Company's registration under the Exchange Act on a Registration
Statement on Form 8-A .

m. Comply with all provisions of all undertakings contained in
the Registration Statement.

n. Prior to the Closing Date or any Additional Closing Date, as
the case may be, issue no press release or other communication, directly or
indirectly, and hold no press conference and grant no interviews with respect to
the Company, the financial condition, results of operations, business,
properties, assets, or liabilities of the Company, or this offering, without
your prior written consent.

o. File timely with the Commission and the National Association
of Securities Dealers, Inc. (the "NASD"), if required, a report on Form 10-C in
accordance with the Rules and Regulations of the Commission under the Exchange
Act.

p. On or prior to the Closing Date, sell to the Representative
for a total purchase price of $100, Representative's Options entitling the
Representative or its assigns to purchase (i) 120,000 shares of Common Stock at
a price equal to 120% of the public offering price of the Common Stock, and (ii)
120,000 Warrants at a price equal to 120% of the public offering price of the
Warrants, with the terms of the Representative's Options, including exercise
period, anti-dilution provisions, exercise price, exercise provisions,
transferability, and registration rights, to be in the form filed as an exhibit
to the Registration Statement.

q. Until expiration of the Representative's Options, keep
reserved sufficient shares of Common Stock and Warrants for issuance upon
exercise of the Representative's Options, and shares of Common Stock for
issuance upon exercise of the warrants contained in the Representative's
Options.

r. If the Representative, any employee of the Representative or
any company controlled by or under control of the Representative acts as the
introducing broker or finder during the five year period commencing on the
Effective Date with regard to (i) the sale of all or substantially all of the
assets and properties of the Company, (ii) the merger or consolidation of the
Company (other than a merger or consolidation effected for the purpose of
changing the Company's domicile) or (iii) the acquisition by the Company of the
assets or stock of another business entity, which agreement or understanding is
thereafter

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<PAGE> 21
consummated during such five-year period or within one year of expiration of
such five-year period, pay to the Representative or such person(s) as the
Representative may designate an amount equal to 5% of the first $1,000,000 or
portion thereof in value or consideration received or paid by the Company, 4% of
the second $1,000,000 or portion thereof in value or consideration received or
paid by the Company and 3% of such value or consideration received by the
Company in excess of the first $2,000,000 of such value or consideration
received or paid by the Company. The fee payable to the Representative will be
in the same form of consideration as that paid by or to the Company, as the case
may be, in any such transaction. It is understood that the designation of the
Representative to act as a finder is not exclusive and that the Representative
shall not be entitled to the foregoing amounts unless it participates in the
introduction.

s. Within six months of the Closing Date, engage a financial
public relations firm to assist the Company in preparing regular announcements
and disseminating such information to the financial community, such engagement
to extend for a period of at least one year from the date of retention of such
firm.

t. Adopt procedures for the application of the net proceeds it
receives from the sale of the Common Stock and Warrants and apply the net
proceeds from the sale of the Common Stock and Warrants substantially in the
manner set forth in the Registration Statement, which does not contemplate
repayment of debt to officers, directors, stockholders or affiliates of the
Company, unless any deviation from such application is in accordance with the
Registration Statement and occurs only after approval by the Board of Directors
of the Company and then only after the Board of Directors has obtained the
written opinion of recognized legal counsel experienced in federal and state
securities laws as to the propriety of any such deviation.

u. Within the time period which the Prospectus is required to be
delivered under the Act, comply, at its own expense, with all requirements
imposed upon it by the Act, as now or hereafter amended, by the Rules and
Regulations, as from time to time may be enforced, and by any order of the
Commission, so far as necessary to permit the continuance of sales or dealing in
the Common Stock and Warrants.

v. At the Closing, deliver to the Representative true and
correct copies of the Articles of Incorporation of the Company and all
amendments thereto, all such copies to be certified by the Secretary of the
Company; true and correct copies of the by-laws of the

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<PAGE> 22
Company and of the minutes of all meetings of the directors and stockholders of
the Company held prior to the Closing which in any way relate to the subject
matter of this Agreement or the Registration Statement.

w. Use all reasonable efforts to comply or cause to be complied
with the conditions precedent to the several obligations of the Underwriters in
Section 7 hereof.

x. File with the Commission all required information concerning
use of proceeds of the Public Offering in Forms 10-QSB and 10-KSB in accordance
with the provisions of the Act and to provide a copy of such reports to the
Representative and its counsel.

y. Supply to the Representative and the Representative's counsel
at the Company's cost, two bound volumes each containing material documents
relating to the offering of the Common Stock and Warrants within a reasonable
time after the Closing, not to exceed 90 days.

z. As soon as possible prior to the Effective Date, and as a
condition of the Underwriter's obligations hereunder, (i) have the Company
listed on an accelerated basis, and to maintain such listing for not less than
ten years from the Closing Date, in Standard & Poor's Standard Corporation
Records; and (ii) have the Common Stock and Warrants quoted on The Nasdaq
SmallCap Market(SM) as of the Effective Date, on the Closing Date, on the
Additional Closing Date and thereafter for at least ten years provided the
Company is in compliance with The Nasdaq SmallCap Market(SM) maintenance
requirements.

aa. As soon as possible prior to the Effective Date and at such
time as the Company qualifies for listing on the Nasdaq National Market, take
all steps necessary to have the Company's Common Stock and Warrants, to the
extent eligible, listed on the Nasdaq National Market.

bb. Continue, for a period of at least five years following the
Effective Date of the Registration Statement, to appoint such auditors as are
reasonably acceptable to the Representative, which auditors shall (i) prepare
consolidated financial statements in accordance with Regulation S-B or, if
applicable, Regulation S-X under the General Rules and Regulations of the Act
and (ii) examine (but not audit) the Company's consolidated financial statements
for each of the first three (3) fiscal quarters prior to the announcement of
quarterly financial information, the filing of the Company's 10-QSB quarterly
report and the mailing of quarterly financial information to security holders.

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<PAGE> 23
cc. Within 90 days of the Effective Date of the Registration
Statement, obtain a "key man" life insurance policy in the amount of $1,000,000
on the life of Jerald H. Donnan, with the Company designated as the beneficiary
of such policy, and pay the annual premiums thereon for a period of not less
than five years from the Effective Date of the Registration Statement.

dd. Cause its transfer agent to furnish the Representative a
duplicate copy of the daily transfer sheets prepared by the transfer agent
during the six-month period commencing on the Effective Date of the Registration
Statement and instruct the transfer agent to timely provide, upon the request of
the Representative, duplicate copies of such transfer sheets and/or a duplicate
copy of a list of stockholders, all at the Company's expense, for a period of 4
1/2 years after such six-month period.

ee. Refrain from filing a Form S-8 Registration Statement for a
period of 18 months from the Effective Date of the Registration Statement
without the Representative's prior written consent. The Company will also
obtain from each holder of options to acquire Common Stock of the Company such
person's written enforceable agreement not to sell shares of Common Stock
pursuant to the exemption afforded by Rule 701 under the 1933 Act for a minimum
period of 18 months from the Effective Date without the prior written consent of
the Representative.

ff. On the Closing Date, enter into a Warrant Exercise Fee
Agreement with the Representative whereby the Company will agree to pay the
Representative a fee of 5% of the aggregate exercise price of each Warrant
exercised commencing one year after the Effective Date, of which a portion may
be allowed by the Representative to the dealer who solicited the exercise (which
may also be the Representative), subject to applicable NASD guidelines.

gg. Afford the Representative the right, but not the obligation,
commencing on the Effective Date and surviving for a period of five years, to
designate an observer to attend meetings of the Board of Directors. The
designee, if any, and the Representative will receive notice of each meeting of
the Board of Directors in accordance with Colorado law, of which no less than
four in-person meetings will be held each year. Any such designee will receive
reimbursement for all reasonable costs and expenses incurred in attending
meetings of the Board of Directors, including but not limited to, food, lodging
and transportation, together with such other fee or compensation as is paid by
the Company to other members of the Board of Directors. Moreover, to the extent
permitted by law, the Representative and its

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<PAGE> 24
designee shall be indemnified for the actions of such designee as an observer to
the Board of Directors and in the event the Company maintains a liability
insurance policy affording coverage for the acts of its officers and/or
directors, to the extent permitted under such policy, each of the Representative
and its designee shall be an insured under such policy.

hh. The Company, on behalf of itself and on behalf of its
officers and directors, hereby grants and covenants to provide the
Representative a non-assignable right of first refusal, which right of first
refusal shall extend for a period of three years after the Effective Date. The
right of first refusal shall entitle the Representative to purchase for its
account, or to sell for the account of the Company, any of the Company's
subsidiaries or any selling security holders or officers, directors or
affiliates of such persons, any debt or equity securities of the Company or
common stock owned by such selling security holders with respect to which the
Company, any of its subsidiaries or successors (other than a successor entity
which has acquired the Company and in which the stockholders of the Company own
less than 25% of the outstanding shares) or selling security holders may seek to
offer and sell pursuant to a registration statement under the Act or in a
private transaction other than with a lending institution. The Company, its
subsidiaries and any selling security holders will consult with the
Representative with regard to any such offering and will offer the
Representative the opportunity to purchase or sell any such securities on terms
not more favorable to the Company than it can secure elsewhere. If the
Representative fails to accept in writing such proposal for financing made by
the Company, its subsidiaries or such selling security holders within 30 days
after the receipt by the Representative of a notice containing such proposal,
then the Representative shall have no further claim or right with respect to the
financing proposal contained in such notice. If thereafter such proposal is
modified, the Company, its subsidiaries or affiliates shall adopt the same
procedure as with respect to the original proposal, except that upon
re-presentation, such term for response by the Representative shall be 15 days.
Should the Representative not avail itself of such opportunity, the right of
first refusal shall not be affected thereby, and the right of first refusal
shall continue in effect for the remaining period thereof. The Company further
agrees that any breach by the Company of the Representative's right of first
refusal shall be enforceable through injunctive relief. The offer or sale by
the Company of equity securities in connection with acquisitions or mergers
shall be exempted from the foregoing right of first refusal.

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<PAGE> 25
6. Payment of Expenses. The Company hereby agrees to pay all
expenses (subject to the last sentence of this Section 6) in connection with
the offering, including but not limited to (a) the preparation, printing,
filing, distribution, and mailing of the Registration Statement and the
Prospectus, including NASD, SEC, Nasdaq filing and/or application fees, and the
printing, filing, distribution, and mailing of this Agreement, any Agreement
Among Underwriters, Selected Dealers Agreement, preliminary and final Blue Sky
Memorandums, material to be circulated to the Underwriters by you and other
incidental or related documents, including the cost of all copies thereof and
of the Preliminary Prospectuses and of the Prospectus, and any amendments or
supplements thereto, supplied to the Representative in quantities as
hereinabove stated, (b) the issuance, sale, transfer, and delivery of the
Common Stock and Warrants, the Additional Securities, the Warrant Shares, the
Representative's Options and the Representative's Option Securities, including,
without limitation, any original issue, transfer or other taxes payable thereon
and the costs of preparation, printing and delivery of certificates
representing such securities, as applicable, (c) the qualification of the
Common Stock and Warrants, Additional Securities, Representative's Options,
Representative's Option Securities, and Warrant Shares under state or foreign
"blue sky" or securities laws, (d) the fees and disbursements or counsel for
the Company and the accountants for the Company, (e) the listing of the Common
Stock and Warrants on The Nasdaq SmallCap Market(SM), and (f) the
Representative's non-accountable expense allowance equal to 3% of the aggregate
gross proceeds from the sale of the Common Stock and Warrants and the
Additional Securities. Prior to or immediately following the Closing Date, the
Company shall bear the costs of tombstone announcements not to exceed $3,000,
if requested to do so by the Representative. As an incentive for the
Representative to assist the Company in managing its costs and to minimize the
time of its management personnel in traveling to road shows, the Representative
agrees to limit such road show meetings to not more than two meetings for the
Representative's branch offices and underwriting syndicate members and, in
consideration of such limited road show schedule, the Company shall, upon
receipt of an invoice from the Representative, reimburse the Representative for
any direct accountable expenses incurred by the Representative and its
personnel in presenting and/or attending such meetings subject to a maximum of
such accountable expenses of $10,000. Except as hereinabove provided, the
Company and the Representative shall pay their own expenses incurred in
connection with any road shows.

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<PAGE> 26
The Company has previously remitted to the Representative the sum of
$30,000, which sum has been credited as a partial payment in advance of the
non-accountable expense allowance provided for in Section 6(f) above.

7. Conditions of Underwriters' Obligations. The Underwriters'
obligation to purchase and pay for the Common Stock and Warrants and the
Additional Securities, as provided herein, shall be subject to the continuing
accuracy of the representations and warranties of the Company contained herein
and in each certificate and document contemplated under this Agreement to be
delivered to you, as of the date hereof and as of the Closing Date (or the
Additional Closing Date, as the case may be), to the performance by the Company
of its obligations hereunder, and to the following conditions:

a. The Registration Statement shall have become
effective not later than 5:00 p.m., Mountain time, on the date of this
Agreement or such later date and time as shall be consented to in
writing by you.

b. At the Closing Date and any Additional Closing Date,
you shall have received the favorable opinion of Jones & Keller, P.C.,
counsel for the Company, dated the date of delivery, addressed to you,
and in form and scope satisfactory to your counsel, to the effect
that:

i. The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Colorado, with full power and authority, and all
necessary consents, authorizations, approvals, orders,
certificates, and permits of and from, and declarations and
filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals,
to own, lease, license, and use its properties and assets and
to conduct its business in the manner described in the
Prospectus. The Company is duly qualified to do business and
is in good standing in every jurisdiction in which its
ownership, leasing, licensing, or use of property and assets
or the conduct of its business makes such qualification
necessary;

ii. The authorized capital stock of the Company
as of the date of this Agreement consisted of 10,000,000
shares of Common Stock, of which 1,800,000 shares of Common
Stock are issued and outstanding, 27,000 shares of Common
Stock are reserved for issuance upon the exercise of
outstanding options and 173,000 shares of Common Stock are
reserved for issuance upon the exercise of the remaining

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options authorized under the Company's option plans; and
1,000,000 shares of Preferred Stock, none of which are issued
and outstanding; and there have been no changes in the
authorized and outstanding capital stock of the Company since
the date of this Agreement, except as contemplated by the
Registration Statement and the Prospectus. Each outstanding
share of capital stock is validly authorized, validly issued,
fully paid, and nonassessable, with no personal liability
attaching to the ownership thereof, has not been issued and is
not owned or held in violation of any preemptive right of
stockholders. There is no commitment, plan, or arrangement to
issue, and no outstanding option, warrant, or other right
calling for the issuance of, any share of capital stock of the
Company or any security or other instrument which by its terms
is convertible into, exercisable for, or exchangeable for
capital stock of the Company, except as set forth above, and
except as is properly described in the Prospectus. There is
outstanding no security or other instrument which by its terms
is convertible into or exchangeable for capital stock of the
Company, except as described in the Prospectus;

iii. There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation pending, threatened, or in prospect (or any
basis therefor) with respect to the Company or any of its
respective operations, businesses, properties, or assets,
except as may be properly described in the Prospectus or such
as individually or in the aggregate do not now have and will
not in the future have a material adverse effect upon the
operations, business, properties, or assets of the Company.
The Company is not in violation of, or in default with respect
to, any law, rule, regulation, order, judgment, or decree,
except as may be properly described in the Prospectus or such
as in the aggregate have been disclosed to the Representative
and do not now have and will not in the future have a material
adverse effect upon the operations, business, properties, or
assets of the Company; nor is the Company required to take any
action in order to avoid any such violation or default;

iv. Neither the Company nor any other party is
now or is expected by the Company to be in violation or breach
of, or in default with respect to, complying with any material
provision of any contract, agreement, instrument, lease,
license, arrangement, or understanding which is material to
the Company;

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<PAGE> 28
v. The Company is not in violation or breach of,
or in default with respect to, any term of its Articles of
Incorporation or by-laws;

vi. The Company has all requisite power and
authority to execute and deliver and to perform thereunder
this Agreement, the Warrants, the Representative's Options,
the Warrant Exercise Fee Agreement and the Custody Agreement.
All necessary corporate proceedings of the Company have been
taken to authorize the execution and delivery and performance
thereunder by the Company of this Agreement, the Warrants, the
Representative's Options, the Warrant Exercise Fee Agreement
and the Custody Agreement. Each of this Agreement, the
Warrants, the Representative's Options, the Warrant Exercise
Fee Agreement and the Custody Agreement have been duly
authorized, executed and delivered by the Company, and is a
legal, valid, and binding obligation of the Company, and
(subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors' rights generally)
enforceable as to the Company in accordance with its
respective terms. No consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or
filing with, any federal, state, local, or other governmental
authority or any court or other tribunal is required by the
Company for the execution or delivery, or performance
thereunder by the Company of this Agreement, the Warrants,
Representative's Options, the Warrant Exercise Fee Agreement
and the Custody Agreement (except filings under the Act which
have been made prior to the Closing Date and consents
consisting only of consents under "blue sky" or securities
laws which are required in connection with the transactions
contemplated by this Agreement, and which have been obtained
on or prior to the date the Registration Statement becomes
effective under the Act). No consent of any party to any
contract, agreement, instrument, lease, license, arrangement,
or understanding to which the Company is a party, or to which
any of its properties or assets are subject, is required for
the execution or delivery, or performance thereunder of this
Agreement, the Warrants, the Representative's Options, the
Warrant Exercise Fee Agreement or the Custody Agreement; and
the execution and delivery and performance thereunder of this
Agreement, the Warrants, the Representative's Options, the
Warrant Exercise Fee Agreement and the Custody Agreement will
not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both)
entitle

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<PAGE> 29
any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement,
or understanding, or violate or result in a breach of any term
of the Articles of Incorporation or by-laws of the Company, or
violate, result in a breach of, or conflict with any law,
rule, regulation, order, judgment, or decree binding on the
Company or to which any of its operations, businesses,
properties, or assets are subject;

vii. The shares of Common Stock are, the shares of
Common Stock issuable on exercise of the Warrants will be, the
shares of Common Stock underlying the Representative's Options
will be upon exercise of the Representative's Options, and the
Representative's Option Shares will be upon exercise of the
Warrants underlying the Representative's Options, validly
authorized, validly issued, fully paid, and nonassessable and
are not issued in violation of any preemptive rights of
stockholders, and the Underwriters have received good title to
the Common Stock and Warrants and Additional Securities
purchased by them from the Company, free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts; upon payment for
the Warrant Shares and the Representative's Securities, the
holders thereof will receive good title to such securities,
free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreement and voting
trusts. The Common Stock, the Warrants, the Warrant Shares,
the Representative's Options and the Representative's Option
Securities conform to all statements relating thereto
contained in the Registration Statement or the Prospectus;

viii. The Warrant Shares have been duly and validly
reserved for issuance pursuant to the terms of the Warrant
Agreement between the Company and its transfer agent, the
Representative's Option Securities have been duly and validly
reserved for issuance pursuant to the terms of the
Representative's Options or the Warrant Agreement, as the case
may be;

ix. Any contract, agreement, instrument, lease,
or license required to be described in the Registration
Statement or the Prospectus has been properly described
therein. Any contract, agreement, instrument, lease, or
license required to be filed as an exhibit to the Registration
Statement has been filed with the Commission as an

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<PAGE> 30
exhibit to or has been incorporated as an exhibit by reference
into the Registration Statement;

x. Insofar as statements in the Prospectus
purport to summarize the status of litigation or the
provisions of laws, rules, regulations, orders, judgments,
decrees, contracts, agreements, instruments, leases, or
licenses, such statements have been prepared or reviewed by
such counsel and accurately reflect the status of such
litigation and provisions purported to be summarized and are
correct in all material respects;

xi. Except as provided in the Registration
Statement, no person or entity has the right to require
registration of shares of Common Stock or other securities of
the Company because of the filing or effectiveness of the
Registration Statement;

xii. The Registration Statement has become
effective under the Act. No Stop Order has been issued and no
proceedings for that purpose have been instituted or
threatened;

xiii. The Registration Statement and the
Prospectus, and any amendment or supplement thereto, comply as
to form in all material respects with the requirements of the
Act and the Regulations;

xiv. Such counsel has no reason to believe that
either the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contains any untrue statement
of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading (except that no opinion need be
expressed as to the consolidated financial statements and
other financial data and schedules which are or should be
contained therein);

xv. Since the Effective Date of the Registration
Statement, any event which has occurred which should have been
set forth in an amendment or supplement to the Registration
Statement or the Prospectus has been set forth in such an
amendment or supplement;

xvi. The Company is not currently offering any
securities for sale except as described in the Registration
Statement;

xvii. Such counsel has no knowledge of any
promoter, affiliate, parent or subsidiaries of the Company
except as are described in the Registration Statement;

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xviii. The Company has no subsidiaries except as
described in the Registration Statement;

xix. The Company owns or possesses, free and clear
of all liens or encumbrances and rights thereto or therein by
third parties, the requisite licenses or other rights to use
all trademarks, copyrights, service marks, service names,
trade names and licenses necessary to conduct its business
(including without limitation, any such licenses or rights
described in the Registration Statement as being owned or
possessed by the Company or any subsidiary) (all of which are
collectively referred to herein as the "Intellectual
Property"); there is no actual or pending, or threatened
claim, proceeding or action by any person pertaining to or
which challenges the exclusive rights of the Company with
respect to any of the Company's Intellectual Property; based
on a review of all the Company's products, proposed products
and Intellectual Property, such products, proposed products or
Intellectual Property do not and will not infringe on any
trademarks, copyrights, service marks, service names, trade
names or valid patents or patents pending held by third
parties known to the Company and such counsel;

xx. The Company is not a party to any agreement
giving rise to any obligation by the Company or any subsidiary
to pay any third-party royalties or fees of any kind
whatsoever with respect to any technology developed, employed,
used or licensed by the Company or any subsidiary, other than
is disclosed in the Prospectus;

xxi. The Common Stock and Warrants are eligible
for quotation on The Nasdaq SmallCap Market;

xxii. All issued and outstanding shares of Common
Stock and all other securities issued and sold or exchanged by
the Company or its subsidiaries have been issued and sold or
exchanged in compliance with all applicable state and federal
securities laws and regulations; and

xxiii. The Company and all of its Property are in
compliance with all Environmental Laws and the Company is in
full compliance with all permits, licenses and authorizations
relating to Environmental Laws.

In rendering such opinion, counsel for the Company may rely
(A) as to matters involving the application of laws other than the
laws of the United States and the laws of the

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<PAGE> 32
State of Colorado, to the extent counsel for the Company deems proper
and to the extent specified in such opinion, upon an opinion or
opinions (in form and substance satisfactory to counsel for the
Representative) of other counsel, acceptable to counsel for the
Representative, familiar with the applicable laws, in which case the
opinion of counsel for the Company shall state that the opinion or
opinions of such other counsel are satisfactory in scope, form, and
substance to counsel for the Company and that reliance thereon by
counsel for the Company is reasonable; (B) as to matters of fact, to
the extent the Representative deems proper, on certificates of
responsible officers of the Company; and (C) to the extent they deem
proper, upon written statements or certificates of officers of
departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company,
provided that copies of any such statements or certificates shall be
delivered to counsel for the Representative.

c. On or prior to the Closing Date and any Additional
Closing Date, as the case may be, you shall have been furnished such
information, documents, certificates, and opinions as you may
reasonably require for the purpose of enabling you to review the
matters referred to in Sections 7(b) and (c), and in order to evidence
the accuracy, completeness, or satisfaction of any of the
representations, warranties, covenants, agreements, or conditions
herein contained, or as you may reasonably request.

d. At the Closing Date and any Additional Closing Date,
as the case may be, you shall have received a certificate of the chief
executive officer and of the chief financial officer of the Company,
dated the Closing Date or such Additional Closing Date, as the case
may be, to the effect that the conditions set forth in Section 7(a)
have been satisfied, that as of the date of this Agreement and as of
the Closing Date or such Additional Closing Date, as the case may be,
the representations and warranties of the Company contained herein
were and are accurate, and that as of the Closing Date or such
Additional Closing Date, as the case may be, the obligations to be
performed by the Company hereunder on or prior thereto have been fully
performed.

e. At the time this Agreement is executed and at the
Closing Date and any Additional Closing Date, as the case may be, you
shall have received a letter from Ehrhardt Keefe Steiner & Hottman PC,
Certified Public Accountants, addressed to you and dated the date of
delivery but covering a period within three business days of such
date, in form and substance satisfactory to you.

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<PAGE> 33
f. All proceedings taken in connection with the
issuance, sale, transfer, and delivery of the Common Stock and
Warrants and the Additional Securities shall be satisfactory in form
and substance to you and to counsel for the Representative, and you
shall have received a favorable opinion from counsel to the Company,
dated as of the Closing Date or the Additional Closing Date, as the
case may be, with respect to such of the matters set forth under
Sections 7(b) and 7(c), respectively, and with respect to such other
related matters, as you may reasonably request.

g. The NASD, upon review of the terms of the public
offering of the Common Stock and Warrants and the Additional
Securities, shall not have objected to your participation in such
offering.

h. The Company shall have received notice that the
Common Stock and Warrants will be quoted on The Nasdaq SmallCap
Market(SM) as of the Effective Date. Any certificate or other
document signed by any officer of the Company and delivered to you or
to counsel for the Representative shall be deemed a representation and
warranty by such officer individually and by the Company hereunder to
the Representative as to the statements made therein. If any
condition to your obligations hereunder to be fulfilled prior to or at
the Closing Date or any Additional Closing Date, as the case may be,
is not so fulfilled, you may terminate this Agreement or, if you so
elect, in writing waive any such conditions which have not been
fulfilled or extend the time for their fulfillment.

8. Indemnification and Contribution.

a. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Underwriters, the
Representative, and each of their officers, directors, partners,
employees, agents, and counsel, and each person, if any, who controls
the Representative or any one of the Underwriters within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any and all loss, liability, claim, damage, and expense whatsoever
(which shall include, for all purposes of this Section 8, but not be
limited to, attorneys' fees and any and all expense whatsoever
incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation) as and
when incurred arising out of, based upon, or in connection with (i)
any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration
Statement, or the Prospectus (as from time to time amended and
supplemented),

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<PAGE> 34
or any amendment or supplement thereto, or (B) in any application or
other document or communication (in this Section 8 collectively called
an "application") in any jurisdiction in order to qualify the Common
Stock and Warrants and Additional Securities under the "blue sky" or
securities laws thereof or filed with the Commission or any securities
exchange; or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any breach of any representation,
warranty, covenant, or agreement of the Company contained in this
Agreement. The foregoing agreement to indemnify shall be in addition
to any liability the Company may otherwise have, including liabilities
arising under this Agreement; however, the Company shall have no
liability under this Section 8 if such statement or omission was made
in reliance upon and in conformity with written information furnished
to the Company as stated in Section 8(b) with respect to the
Underwriters by or on behalf of the Underwriters expressly for
inclusion in any Preliminary Prospectus, the Registration Statement,
or the Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be.

If any action is brought against the Underwriters, the Representative
or any of their officers, directors, partners, employees, agents, or counsel,
or any controlling persons of an Underwriter or the Representative (an
"indemnified party") in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties
shall promptly notify the Company in writing of the institution of such action
(but the failure so to notify shall not relieve the Company from any liability
it may have other than pursuant to this Section 8(a)) and the Company shall
promptly assume the defense of such action, including the employment of counsel
(satisfactory to such indemnified party or parties) and payment of expenses.
Such indemnified party or parties shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall
be at the expense of such indemnified party or parties unless the employment of
such counsel shall have been authorized in writing by the Company in connection
with the defense of such action or the Company shall not have promptly employed
counsel satisfactory to such indemnified party or parties to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be one or more legal defenses available to
it or them or to other indemnified parties which are different from or
additional to those available to the Company, in any of which events such fees
and expenses shall be borne by the Company. Anything in this paragraph to the
contrary notwithstanding, the Company shall

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<PAGE> 35
not be liable for any settlement of any such claim or action effected without
its written consent. The Company agrees promptly to notify the Underwriters
and the Representative of the commencement of any litigation or proceedings
against the Company or against any of its officers or directors in connection
with the sale of the Common Stock and Warrants or the Additional Securities,
any Preliminary Prospectus, the Registration Statement, or the Prospectus, or
any amendment or supplement thereto, or any application.

b. The Underwriters agree to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company
who shall have signed the Registration Statement, each other person,
if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, to the same extent as
the foregoing indemnity from the Company to the Underwriters in
Section 8(a), but only with respect to statements or omissions, if
any, made in any Preliminary Prospectus, the Registration Statement,
or the Prospectus (as from time to time amended and supplemented), or
any amendment or supplement thereto, or in any application, in
reliance upon and in conformity with written information furnished to
the Company as stated in this Section 8(b) with respect to the
Underwriters by or on behalf of the Underwriters expressly for
inclusion in any Preliminary Prospectus, the Registration Statement,
or the Prospectus, or any amendment or supplement thereto, or in any
application, as the case may be; provided, however, that the
obligation of the Underwriters to provide indemnity under the
provisions of this Section 8(b) shall be limited to the amount which
represents the product of the number of shares of Common Stock and
Warrants and Additional Securities sold hereunder and the initial
public offering prices per share of Common Stock and Warrant set forth
on the cover page of the Prospectus. For all purposes of this
Agreement, the amounts of the selling concession and reallowance set
forth in the Prospectus, the information under "Underwriting" and the
identification of counsel to the Representative under "Legal Matters"
constitute the only information furnished in writing by or on behalf
of the Underwriters expressly for inclusion in any Preliminary
Prospectus, the Registration Statement, or the Prospectus (as from
time to time amended or supplemented), or any amendment or supplement
thereto, or in any application, as the case may be. If any action
shall be brought against the Company or any other person so
indemnified based on any Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto,
or any application, and in respect of which indemnity may be sought
against the Underwriters pursuant to this Section

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<PAGE> 36
8(b), the Underwriters shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall
have the rights and duties given to the indemnified parties, by the
provisions of Section 8(a).

c. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement
provided for in this Section 8 is for any reason held to be
unavailable to the Underwriters or the Company, then the Company shall
contribute to the damages paid by the several Underwriters, and the
several Underwriters shall contribute to the damages paid by the
Company; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, there shall
be considered the relative benefits received by each party from the
sale of the Common Stock and Warrants and Additional Securities
(taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would
not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose). No Underwriter or person
controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the total public offering
price of the Common Stock and Warrants and Additional Securities
purchased by such Underwriter under this Agreement, less the aggregate
amount of any damages which such Underwriter and its controlling
persons have otherwise been required to pay in respect of the same or
any substantially similar claim. The Underwriters' obligations to
contribute hereunder are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of
Section 15 of the Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of
the Company who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the
Act, shall have the same rights to contribution as the Company.
Anything in this Section 8(c) to the contrary notwithstanding, no
party shall be liable for contribution with respect to the

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<PAGE> 37
settlement of any claim or action effected without its written
consent. This Section 8(c) is intended to supersede any right to
contribution under the Act, the Exchange Act, or otherwise.

9. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date and any Additional Closing Date, and such
representations, warranties, covenants, and agreements of the Underwriters and
the Company, including the indemnity and contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Representative, the Underwriters
or any indemnified person, or by or on behalf of the Company or any person or
entity which is entitled to be indemnified under Section 8(b), and shall
survive termination of this Agreement or the delivery of the Common Stock and
Warrants and the Additional Securities to the Underwriters for a period equal
to the statute of limitations for claims related hereto, but not to exceed an
aggregate of three years from the date hereof. In addition, the provisions of
Sections 5(a), 6, 8, 9, 10, and 12 shall survive termination of this Agreement,
whether such termination occurs before or after the Closing Date or any
Additional Closing Date.

10. Effective Date of This Agreement and Termination Thereof.

a. This Agreement shall be executed within 24 hours of
the Effective Date of the Registration Statement and shall become
effective on the Effective Date or at the time of the initial public
offering of the Common Stock and Warrants, whichever is earlier. The
time of the initial public offering shall mean the time, after the
Registration Statement becomes effective, of the release by the
Representative for publication of the first newspaper advertisement
which is subsequently published relating to the Common Stock and
Warrants or the time, after the Registration Statement becomes
effective, when the Common Stock and Warrants are first released by
the Representative for offering by dealers by letter or telegram,
whichever shall first occur. The Representative or the Company may
prevent this Agreement from becoming effective without liability of
any party to any other party, except as noted below in this Section
10, by giving the notice indicated in Section 10(c) before the time
this Agreement becomes effective.

b. The Representative shall have the right to terminate
this Agreement at any time prior to the Closing Date or any Additional
Closing Date, as the case may be, by giving notice to the Company if
there shall have been a general suspension of, or a general

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<PAGE> 38
limitation on prices for, trading in securities on the New York Stock
Exchange or the American Stock Exchange or in the over-the-counter
market; or if there shall have been an outbreak of major hostilities
or other national or international calamity; or if a banking
moratorium has been declared by a state or federal authority; or if a
moratorium in foreign exchange trading by major international banks or
persons has been declared; or if there shall have been a material
interruption in the mail service or other means of communication
within the United States; or if the Company shall have sustained a
material or substantial loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage, or other calamity or malicious act which,
whether or not such loss shall have been insured, will, in the
Representative's opinion, make it inadvisable to proceed with the
offering, sale, or delivery of the Common Stock and Warrants or the
Additional Securities, as the case may be; or if there shall have been
such material and adverse change in the market for securities in
general so as to make it inadvisable to proceed with the offering,
sale, and delivery of the Common Stock and Warrants or the Additional
Securities, as the case may be, on the terms contemplated by the
Prospectus due to the impaired investment quality of the Common Stock
and Warrants or the Additional Securities; or if the Dow Jones
Industrial Average shall have fallen by 15% or more from its closing
price on the day immediately preceding the date that the Registration
Statement is declared effective by the Commission.

c. If the Representative elects to prevent this
Agreement from becoming effective as provided in this Section 10, or
to terminate this Agreement, it shall notify the Company promptly by
telephone, telex, or telegram, confirmed by letter. If, as so
provided, the Company elects to prevent this Agreement from becoming
effective, the Company shall notify the Representative promptly by
telephone, telex, or telegram, confirmed by letter.

d. Anything in this Agreement to the contrary
notwithstanding other than Section 10(e), if this Agreement shall not
become effective by reason of an election pursuant to this Section 10
or if this Agreement shall terminate or shall otherwise not be carried
out prior to August 31, 1998 because (i) of any reason solely within
the control of the Company or its stockholders and not due to the
breach of any representation, warranty or covenant or bad faith of the
Representative, (ii) the Company unilaterally withdraws the proposed
Public Offering from the Representative in favor of another
underwriter, (iii) the Company does not permit the Registration
Statement to become effective for any reason other than if the Common
Stock is proposed to be priced at less than $5.00 per share, in which
event this

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<PAGE> 39
provision will not apply, (iv) of any material discrepancy in any
representation by the Company and/or its officers, directors,
stockholders, agents, advisers or representatives, made in writing,
including but not limited to the Registration Statement, to the
Representative, (v) the Company is, directly and/or indirectly,
negotiating with other persons or entities of whatsoever nature
relating to a possible Public Offering of its securities, or (vi) of
any failure on the part of the Company to perform any covenant or
agreement or satisfy any condition of this Agreement by it to be
performed or satisfied, then, in any of such events, the Company shall
be obligated to reimburse the Representative for its out-of-pocket
expenses on an accountable basis. Should the Representative be
required to account for "out-of-pocket" expenses, any expense incurred
by the Representative shall be deemed to be reasonable and
unobjectionable upon a reasonable showing by the Representative that
such expenses were incurred, directly or indirectly, in connection
with the proposed transaction and/or relationship of the parties
hereto, as described herein. In no event will the Representative be
entitled to reimbursement of accountable expenses exceeding $50,000,
inclusive of the $30,000 advanced against the non-accountable expense
allowance. The Representative will return to the Company any portion
of the $30,000 payment previously received that is not used in the
payment of accountable expenses.

e. Notwithstanding any election hereunder or any
termination of this Agreement, and whether or not this Agreement is
otherwise carried out, the provisions of Sections 5(a), 6, 8, 9, and
10 shall not be in any way affected by such election or termination or
failure to carry out the terms of this Agreement or any part hereof.

f. Anything in this Agreement to the contrary
notwithstanding other than Sections 10(d) and (e), if this Agreement
shall not be carried out within the time specified herein for any
reason other than as set forth in Section 10(d), the Company shall
have no liability to the Representative other than for the
Representative's accountable expenses up to a maximum aggregate amount
of $30,000, which amount has been paid in advance in accordance with
Section 6 hereof. The Representative will return to the Company any
portion of the $30,000 payment previously received that is not used in
the payment of accountable expenses.

11. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Representative, shall be mailed, delivered, or sent by facsimile transmission
and confirmed by original letter, to Schneider Securities, Inc., 1120

-39-
<PAGE> 40
Lincoln Street, Suite 900, Denver, Colorado 80203, Attention: Keith Koch, with
a copy to Robert W. Walter, Esq., Berliner Zisser Walter & Gallegos, P.C., 1700
Lincoln Street, Suite 4700, Denver, Colorado 80203; or if sent to the Company
shall be mailed, delivered, or telexed or telegraphed and confirmed by letter,
to Factual Data Corp., 3665 JFK Parkway, Building 1, Fort Collins, Colorado
80525, Attention: Jerald H. Donnan, Chief Executive Officer, with a copy to
Samuel E. Wing, Esq., Jones & Keller, P.C., 1625 Broadway, Suite 1600, Denver,
Colorado 80202. All notices hereunder shall be effective upon receipt by the
party to which it is addressed.

12. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters, the Company, and the persons and
entities referred to in Section 8 who are entitled to indemnification or
contribution, and their respective successors, legal representatives, and
assigns (which shall not include any buyer, as such, of the Common Stock and
Warrants or the Additional Securities) and no other person shall have or be
construed to have any legal or equitable right, remedy, or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.

13. Construction. This Agreement shall be construed in accordance
with the laws of the State of Colorado, without giving effect to conflict of
laws. Time is of the essence in this Agreement. The parties acknowledge that
this Agreement was initially prepared by the Representative, and that all
parties have read and negotiated the language used in this Agreement. The
parties agree that, because all parties participated in negotiating and
drafting this Agreement, no rule of construction shall apply to this Agreement
which construes ambiguous language in favor of or against any party by reason
of that party's role in drafting this Agreement.

If the foregoing correctly sets forth the understanding between us,
please so indicate in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement between us.

Very truly yours,

FACTUAL DATA CORP.

By:
-----------------------------------------
Jerald H. Donnan, Chief Executive Officer

-40-
<PAGE> 41
Accepted as of the date first above written.
Denver, Colorado

SCHNEIDER SECURITIES, INC.
for itself

By:
----------------------------------------------
Thomas Schneider, President

-41-
<PAGE> 42

FACTUAL DATA CORP.

(A COLORADO CORPORATION)

SCHEDULE 1

This Schedule sets forth the name of each Underwriter referred to in
the Underwriting Agreement and the number of shares of Common Stock and
Warrants to be sold by the Company.

<TABLE>
<CAPTION>
NUMBER OF
SHARES OF NUMBER OF
NAME COMMON STOCK WARRANTS
-------------------------------- ------------ ------------
<S> <C> <C>
Schneider Securities, Inc.

--------- ---------
Total 1,200,000 1,200,000
========= =========
</TABLE>

-42-

<PAGE> 1
EXHIBIT 1.4

WARRANT EXERCISE FEE AGREEMENT

AGREEMENT dated as of the ______ day of _____________, 1998, by and
among Schneider Securities, Inc. ("Schneider"), Factual Data Corp. (the
"Company") and American Securities Transfer & Trust, Inc. (the "Warrant
Agent").

W I T N E S S E T H:

WHEREAS, in connection with a public offering of 1,000,000 shares of
Common Stock and 1,000,000 Warrants (or up to a maximum of 1,150,000 shares of
Common Stock and/or 1,150,000 Warrants including the over-allotment option),
the Company proposes to issue, in accordance with an agreement dated as of
, 1998, by and between the Company and the Warrant Agent (the "Warrant
Agreement"), Warrants to purchase shares of Common Stock; and

WHEREAS, the parties hereto wish to provide Schneider, a member of the
National Association of Securities Dealers, Inc. ("NASD"), with certain rights
on an exclusive basis in connection with the exercise of the Warrants.

NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:

SECTION 1. DESCRIPTION OF THE WARRANTS. The Company's Warrants
may be exercised on or after , 1998 and expire at 5:00 p.m. Colorado time
on , 2001 (the "Expiration Date"), subject to redemption rights
commencing on or after , 1999. In accordance with the provisions
of the Warrant Agreement, the holder of each Warrant shall have the right to
purchase from the Company, and the Company shall issue and sell to such holders
of Warrants, one fully paid and non-assessable share of the Company's Common
Stock for every Warrant exercised at an exercise price of $ per
share (the "Exercise Price"), subject to adjustment as provided in the Warrant
Agreement.

SECTION 2. NOTIFICATION OF EXERCISE. Within ten (10) days of
the last day of each month commencing one year from the date of the Company's
Prospectus, the Warrant Agent or the Company will notify Schneider of each
Warrant certificate which has been properly completed and delivered for
exercise by holders of Warrants during each such month, the determination of
the proper completion to be in the sole and absolute reasonable discretion of
the Company and the Warrant Agent. The Company or the Warrant Agent will
provide Schneider with such information, in connection with the exercise of
each Warrant, as Schneider shall reasonably request.

SECTION 3. PAYMENT TO SCHNEIDER. The Company hereby agrees to
pay to Schneider an amount equal to five (5%) percent of the exercise price
(i.e. $ per share based on the initial Exercise Price of the Warrants
which is $ per share) for each Warrant exercised (the
"Exercise Fee") a portion of which may be allowed by Schneider to the dealer
who solicited the exercise (which may also be Schneider) provided that:

(a) such Warrant is exercised on or after
, 1999, which is one year from the effective date of the Company's
Registration Statement;
<PAGE> 2
(b) at the time of exercise, the market price of the
Company's Common Stock is higher than the applicable Exercise Price of
the Warrant being exercised;

(c) the holders of Warrants being exercised have
specifically indicated in writing, either in the Form of Election
contained on the specimen Warrant Certificate or by written documents
signed and dated by the holders that the exercise of such Warrants was
solicited by Schneider or another member of the NASD; and

(d) Schneider and/or the member of the NASD which
solicited the exercise of Warrants delivers a certificate to the
Company within five (5) business days of receipt of information
relating to such exercised Warrants from the Company or the Warrant
Agent in the form attached hereto as Exhibit A, stating that:

(1) The Warrants exercised were not held in a
discretionary account;

(2) The member which solicited the exercise of
Warrants did not (unless granted an exemption by the
Securities and Exchange Commission ("the Commission") from the
provisions thereof), within the applicable number of business
days under Regulation M immediately preceding the date of
exercise of the Warrant bid for or purchase the Common Stock
of the Company or any securities of the Company immediately
convertible into or exchangeable for the Common Stock
(including the Warrants) or otherwise engage in any activity
that would be prohibited by Regulation M under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to a
broker-dealer engaged in a distribution of the Company's
securities; and

(3) In connection with the solicitation, it
disclosed the compensation it would receive upon exercise of
the Warrant.

SECTION 4. PAYMENT OF THE EXERCISE FEE. The Company hereby
agrees to pay over to Schneider within two (2) business days after receipt by
the Company of the certificate described in Section 3(d) above, the Exercise
Fee out of the proceeds it received from the applicable Exercise Price paid for
the Warrants to which the certificate relates.

SECTION 5. INSPECTION OF RECORDS. Schneider may at any time
during business hours, at its expense, examine the records of the Company and
the Warrant Agent which relate to the exercise of the Warrants.

SECTION 6. TERMINATION. Schneider shall be entitled to
terminate this Agreement prior to the exercise of all Warrants at any time upon
five (5) business days' prior notice to the Company and the Warrant Agent.
Notwithstanding any such termination notice, Schneider shall be entitled to
receive an Exercise Fee for the exercise of any Warrant for which it has
already delivered to the Company prior to any such termination the certificate
required by Section 3(d) of this Agreement.

SECTION 7. REPRESENTATIONS AND WARRANTIES OF SCHNEIDER. At the
date of execution hereof and at the time of solicitation of exercise of
Warrants, Schneider represents that it is, and will, (i) be registered as a
broker-dealer under the Exchange Act, (ii) be a member in good standing of the
NASD, and (iii) maintain its registration, qualification and membership in full
force and effect and

-2-
<PAGE> 3
in good standing throughout the term of this Agreement. Schneider acknowledges
and agrees that it will not solicit the exercise of Warrants, or offer or sell
the underlying Common Stock, in any state or jurisdiction except those in which
the Common Stock underlying the Warrants has been qualified or qualification is
not required. Further, Schneider agrees to comply with the laws of the states
in which it may solicit exercise of the Warrants or in which the Common Stock
underlying the Warrants may be offered or sold by it, with the applicable rules
and regulations of the NASD, and will comply with federal laws including, but
not limited to, the Securities Act of 1933, as amended (the "Act"), the
Exchange Act and the rules and regulations of the Commission thereunder.

SECTION 8. INDEMNIFICATION.

a. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless any and all statutory or
designated underwriters (the "Underwriters"), the representative of
the Underwriters, if any (the "Representative"), and each of their
officers, directors, partners, employees, agents, and counsel, and
each person, if any, who controls the Representative or any one of the
Underwriters within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all loss, liability, claim,
damage, and expense whatsoever (which shall include, for all purposes
of this Section 8, but not be limited to, attorneys' fees and any and
all expense whatsoever incurred in investigating, preparing, or
defending against any litigation, commenced or threatened, or any
claim whatsoever and any and all amounts paid in settlement of any
claim or litigation) as and when incurred arising out of, based upon,
or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any preliminary
prospectus, the registration statement, or any post-effective
amendment thereto, or the prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, relating to the
offer or sale of Common Stock underlying the Warrants or the
solicitation of exercise of the Warrants (such preliminary prospectus,
registration statement, post-effective amendment or prospectus
hereinafter collectively, the "Offering Documents") or (B) in any
application or other document or communication (in this Section 8
collectively called an "application") in any jurisdiction in order to
qualify the Common Stock and Warrants under the "blue sky" or
securities laws thereof or filed with the Commission or any securities
exchange; or any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any breach of any representation,
warranty, covenant, or agreement of the Company contained in this
Agreement. The foregoing agreement to indemnify shall be in addition
to any liability the Company may otherwise have, including liabilities
arising under this Agreement; however, the Company shall have no
liability under this Section 8 if such statement or omission was made
in reliance upon and in conformity with written information furnished
to the Company as stated in Section 8(b) with respect to the
Underwriters by or on behalf of the Underwriters expressly for
inclusion in any of the Offering Documents, or in any application, as
the case may be.

-3-
<PAGE> 4
than pursuant to this Section 8(a)) and the Company shall promptly
assume the defense of such action, including the employment of counsel
(satisfactory to such indemnified party or parties) and payment of
expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party or parties unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of
such action or the Company shall not have promptly employed counsel
satisfactory to such indemnified party or parties to have charge of
the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be one or more legal defenses
available to it or them or to other indemnified parties which are
different from or additional to those available to the Company, in any
of which events such fees and expenses shall be borne by the Company.
Anything in this paragraph to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or
action effected without its written consent. The Company agrees
promptly to notify the Underwriters and the Representative of the
commencement of any litigation or proceedings against the Company or
against any of its officers or directors in connection with the sale
of the Common Stock underlying the Warrants, any Offering Documents,
or any application.

b. The Underwriters agree to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company
who shall have signed the Registration Statement, each other person,
if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, to the same extent as
the foregoing indemnity from the Company to the Underwriters in
Section 8(a), but only with respect to statements or omissions, if
any, made in any of the Offering Documents, or in any application, in
reliance upon and in conformity with written information furnished to
the Company as stated in this Section 8(b) with respect to the
Underwriters by or on behalf of the Underwriters expressly for
inclusion in any of the Offering Documents, or in any application, as
the case may be; provided, however, that the obligation of the
Underwriters to provide indemnity under the provisions of this Section
8(b) shall be limited to the amount which represents the product of
the number of shares of Common Stock issued on exercise of Warrants
and the Warrant Exercise Price. For all purposes of this Agreement,
the amounts of the Exercise Fee set forth in the Offering Documents,
the information under "Plan of Distribution" and the identification of
counsel to the Representative under "Legal Matters" constitute the
only information furnished in writing by or on behalf of the
Underwriters expressly for inclusion in any of the Offering Documents,
or in any application, as the case may be. If any action shall be
brought against the Company or any other person so indemnified based
on any of the Offering Documents, or any application, and in respect
of which indemnity may be sought against the Underwriters pursuant to
this Section 8(b), the Underwriters shall have the rights and duties
given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of Section 8(a).

-4-
<PAGE> 5
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, there shall
be considered the relative benefits received by each party from the
sale of the Common Stock underlying the Warrants (taking into account
the portion of the proceeds of the offering realized by each), the
parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity
to correct and prevent any statement or omission, and any other
equitable considerations appropriate in the circumstances. The
Company and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity
for such purpose). No Underwriter or person controlling such
Underwriter shall be obligated to make contribution hereunder which in
the aggregate exceeds the total Exercise Price of the Warrants,
exercise of which was solicited by such Underwriter under this
Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required
to pay in respect of the same or any substantially similar claim. The
Underwriters' obligations to contribute hereunder are several in
proportion to their respective underwriting obligations and not joint.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act shall have the
same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Offering
Documents, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act, shall have the same rights to
contribution as the Company. Anything in this Section 8(c) to the
contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected
without its written consent. This Section 8(c) is intended to
supersede any right to contribution under the Act, the Exchange Act,
or otherwise.

SECTION 9. NOTICES. Any notice or other communication required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be deemed sufficiently given if sent by first class certified mail,
return receipt requested, postage prepaid, addressed as follows:

if to the Company: Jerald H. Donnan, Chief Executive Officer
Factual Data Corp.
3665 JFK Parkway, Building 1
Fort Collins, Colorado 80525

With a copy to: Samuel E. Wing, Esq.
Jones & Keller, P.C.
1625 Broadway Street
Suite 1600
Denver, Colorado 80202

If to Schneider: Keith Koch, Director of Corporate Finance
Schneider Securities, Inc.
1120 Lincoln Street, Suite 900
Denver, Colorado 80203

-5-
<PAGE> 6
With a copy to: Robert W. Walter, Esq.
Berliner Zisser Walter & Gallegos, P.C.
1700 Lincoln Street, Suite 4700
Denver, Colorado 80203

and if to the Warrant Administrative Services
Agent: American Securities Transfer & Trust, Inc.
938 Quail Street, Suite 101
Lakewood, Colorado 80215

or such other address as such party shall have given notice to other parties
hereto in accordance with this Section. All such notices or other
communications shall be deemed given three (3) business days after mailing, as
aforesaid.

SECTION 10. SUPPLEMENTS AND AMENDMENTS. The Company, the Warrant
Agent and Schneider may from time-to-time supplement or amend this Agreement by
a written instrument signed by the party to be charged, without the approval of
any holders of Warrants in order to cure any ambiguity or to correct or
supplement any provisions contained herein or to make any other provisions in
regard to matters or questions arising hereunder which the Company, the Warrant
Agent and Schneider may deem necessary or desirable and which do not adversely
affect the interest of the holders of Warrants.

SECTION 11. ASSIGNMENT. This Agreement may not be assigned by
any party without the express written approval of all other parties, except
that Schneider may assign this Agreement to its successors, if any.

SECTION 12. GOVERNING LAW. This Agreement will be deemed made
under the laws of the State of Colorado with respect to matters of contract law
and for all purposes shall be governed by and construed in accordance with the
internal laws of said State, without regard to the conflicts of laws provisions
thereof.

SECTION 13. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give any person or corporation other than the
Company, the Warrant Agent and Schneider any legal or equitable right, remedy
or claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of, and be binding upon, the Company, the Warrant Agent and
Schneider and their respective successors and permitted assigns.

SECTION 14. DESCRIPTIVE HEADINGS. The descriptive headings of
the sections of this Agreement are inserted for convenience only and shall not
control or affect the meanings or construction of any of the provisions hereof.

SECTION 15. SUPERSEDING AGREEMENT. This Agreement supersedes any
and all prior agreements between the parties with respect to the subject matter
hereof.

SECTION 16. EXCLUSIVE AGREEMENT. It is understood that this
Agreement is on an exclusive basis to solicit the exercise of the Warrants and
that the Company shall not engage other broker-dealers to solicit the exercise
of Warrants without the consent of Schneider.

-6-
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

FACTUAL DATA CORP.

By:
----------------------------------------
Jerald H. Donnan,
Chief Executive Officer

SCHNEIDER SECURITIES, INC.

By:
----------------------------------------
Thomas Schneider, President

AMERICAN SECURITIES TRANSFER & TRUST, INC.

By:
----------------------------------------
Gregory Tubbs, Senior Vice President

-7-
<PAGE> 8
EXHIBIT A

CERTIFICATE

The undersigned, being the _______________ of ______________________
(the "NASD Member") pursuant to Section 3(d) of the Warrant Exercise Fee
Agreement relating to the exercise of Warrants dated , 1998 among
Factual Data Corp. (the "Company"), Schneider Securities, Inc. and American
Securities Transfer & Trust, Inc. (the "Warrant Agent") hereby certifies that:

1. The Company or the Warrant Agent has notified the NASD Member
that ____________ Warrants (as defined in the Agreement) have been exercised
during _______________, 19__.

2. The exercise of _________ of such Warrants was solicited by
Schneider.

3. Such Warrants were not held in a discretionary account.

4. The NASD Member did not, within _____ business days
immediately preceding _______________, 19___, bid for or purchase the Common
Stock of the Company or any securities of the Company immediately convertible
into or exchangeable for the Common Stock (including Warrants) or otherwise
engage in any activity that would be prohibited by Regulation M under the
Securities Exchange Act of 1934, as amended, to one engaged in a distribution
of the Company's securities.

5. In connection with the solicitation of the exercise of the
Warrants, the NASD Member disclosed to holders of the Warrants the compensation
it will receive.

DATED: _______________, 19___

----------------------------
(Firm Name)

By:
----------------------------

Title:
-------------------------

-8-

<PAGE> 1
EXHIBIT 3.1

RESTATED AND AMENDED ARTICLES OF INCORPORATION
OF
FACTUAL DATA CORP.

Factual Data Corp., a Colorado corporation (hereinafter referred to as
the "Corporation") pursuant to the provisions of the Colorado Business
Corporation Act, hereby certifies to the Secretary of State of Colorado that:

FIRST: The Corporation desires to restate and amend its Articles of
Incorporation as currently in effect as hereinafter provided.

SECOND: The provisions set forth in these Restated and Amended
Articles of Incorporation supersede the original Articles of Incorporation and
all amendments thereto. These Restated and Amended Articles of Incorporation
correctly set forth the provisions of the Articles of Incorporation, as
amended, of the Corporation.

THIRD: The Articles of Incorporation of the Corporation are hereby
amended and restated by striking in their entirety Articles I through XII,
inclusive, and by substituting in lieu thereof the following:

ARTICLE I
Name

The name of the Corporation shall be Factual Data Corp.

ARTICLE II
Duration

The period of duration of the Corporation shall be perpetual.

ARTICLE III
Purpose

The purpose for which the Corporation is organized is the transaction
of all lawful business for which corporations may be incorporated pursuant to
Colorado law.

ARTICLE IV
Shares

The total number of shares of all classes which the Corporation has
authority to issue is 11,000,000 of which 10,000,000 shares shall be Common
Stock, and 1,000,000 shares shall be Preferred Stock.
<PAGE> 2
The designations and the preferences, conversion and other rights,
voting powers, restrictions, limitations as to distributions, qualifications,
and terms and conditions of redemption of the shares of each class of stock are
as follows:

PREFERRED STOCK

The Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more series. The description of shares of each
series of Preferred Stock, including any preferences, conversion and other
rights, voting powers, restrictions, limitations as to distributions,
qualifications, and terms and conditions of redemption shall be as set forth in
resolutions adopted by the Board of Directors and in Articles of Amendment to
State Terms of Series Shares filed as required by law from time to time prior
to the issuance of any shares of such series.

The Board of Directors is expressly authorized, prior to issuance, by
adopting resolutions providing for the issuance of, or providing for a change
in the number of, shares of any particular series of Preferred Stock and, if
and to the extent from time to time required by law, by filing Articles of
Amendment to State Terms of Series Shares to set or change the number of shares
to be included in each series of Preferred Stock and to set or change in any
one or more respects the designations, preferences, conversion or other rights,
voting powers, restrictions, limitations as to distributions, qualifications,
or terms and conditions of redemption relating to the shares of each such
series. Notwithstanding the foregoing, the Board of Directors shall not be
authorized to change the right of the Common Stock of the Corporation to vote
one vote per share on all matters submitted for stockholder action. The
authority of the Board of Directors with respect to each series of Preferred
Stock shall include, but not be limited to, setting or changing the following:

(a) the distinctive serial designation of such series and
the number of shares constituting such series (provided that the
aggregate number of shares constituting all series of Preferred Stock
shall not exceed 1,000,000);

(b) the annual distribution rate on shares of such
series, whether distributions shall be cumulative and, if so, from
which date or dates;

(c) whether the shares of such series shall be redeemable
and, if so, the terms and conditions of such redemption, including the
date or dates upon and after which such shares shall be redeemable,
and the amount per share payable in case of redemption, which amount
may vary under different conditions and at different redemption dates;

(d) the obligation, if any, of the Corporation to redeem
or repurchase shares of such series pursuant to a sinking fund;

- 2 -
<PAGE> 3
(e) whether shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or
classes and, if so, the terms and conditions of such conversion or
exchange, including the price or prices or the rate or rates of
conversion or exchange and the terms of adjustment, if any;

(f) whether the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and, if so,
the terms of such voting rights;

(g) the rights of the shares of such series in the event
of voluntary or involuntary liquidation, dissolution or winding up of
the Corporation; and

(h) any other relative rights, powers, preferences,
qualifications, limitations or restrictions thereof relating to such
series which may be authorized or permitted under the Colorado
Business Corporation Act.

The shares of Preferred Stock of any one series shall be identical
with each other in all respects except as to the dates from and after which
dividends thereon shall cumulate, if cumulative.

COMMON STOCK

Subject to all of the rights of the Preferred Stock as expressly
provided herein, by law or by the Board of Directors pursuant to this Article,
the Common Stock of the Corporation shall possess all such rights and
privileges as are afforded to capital stock by applicable law in the absence of
any express grant of rights or privileges in these Articles of Incorporation,
including, but not limited to, the following rights and privileges:

(a) distributions may be declared and paid or set apart
for payment upon the Common Stock out of any assets or funds of the
Corporation legally available for the payment of distributions;

(b) the holders of Common Stock shall have the right to
vote for the election of directors and on all other matters requiring
stockholder action, each share being entitled to one vote; and

(c) upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the net assets of the
Corporation shall be distributed pro rata to the holders of the Common
Stock in accordance with their respective rights and interests.

ARTICLE V
Cumulative Voting

Cumulative voting shall not be allowed in elections of
directors or for any other purpose.

- 3 -
<PAGE> 4
ARTICLE VI
Preemptive Rights

Holders of shares of the Corporation shall have no preemptive rights
to purchase additional shares of the Corporation's stock.

ARTICLE VII
Registered Office and Agent

The street address of the Corporation's registered office in Colorado
is:

3665 JFK Parkway, Building 1
Fort Collins, Colorado 80525

The name of the Corporation's registered agent at the address of the
aforesaid registered office is:

Jerald H. Donnan

ARTICLE VIII
Principal Office

The address of the Corporation's principal office is:

3665 JFK Parkway, Building 1
Fort Collins, Colorado 80525

ARTICLE IX
Directors

The affairs of the Corporation shall be governed by a Board of
Directors consisting of not less than one director, with the number of
directors specified in or fixed in accordance with the Bylaws of the
Corporation, as may be amended from time to time, except as to the number
constituting the initial board which number shall be five.

The Board of Directors shall be divided into three (3) classes, each
class to be as nearly equal in number as possible. The terms of office of
directors of the first class are to expire at the first annual meeting of
shareholders after their election, that of the second class is to expire at the
second annual meeting after their election, and that of the third class is to
expire at the third annual meeting after their election. Thereafter, each
director shall serve for a term ending on the date of the third annual meeting
of shareholders following the annual meeting at which such director was
elected. This divided Board of Directors provision shall not be altered or
repealed without the affirmative vote of the holders of at least two-thirds of
the shares entitled to vote in the election of directors. The directors may
not amend or repeal this divided Board of Directors provision.

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ARTICLE X
Elimination of Personal Liability of a Director

To the fullest extent permitted by Colorado law, as the same exists or
may hereafter be amended, a director of the Corporation shall not be liable to
the Corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director.

ARTICLE XI
Indemnification of Directors

The Corporation shall indemnify and advance expenses to a director of
the Corporation to the fullest extent permitted by Colorado law, as the same
exists or may hereafter be amended.

ARTICLE XII
Voting Requirements

The affirmative vote of the holders of not less than two-thirds of the
shares entitled to vote thereupon shall be required for approval or
authorization of any (i) merger or consolidation of the Corporation with or
into any other corporation; or (ii) sale, lease, exchange or other disposition
of all or substantially all of the assets of the Corporation to any other
corporation, person or entity; or (iii) the dissolution of the Corporation.

ARTICLE XIII
Amendments

These Articles of Incorporation of the Corporation can only be amended
or repealed by the affirmative vote of the holders of at least two-thirds of
the shares entitled to vote thereon.

ARTICLE XIV
Bylaws

The Bylaws may be altered, amended or repealed, or new bylaws may be
adopted by the Board of Directors, subject to the right of the shareholders to
alter and/or repeal the bylaws or adopt new bylaws and provided that the
following sections of the bylaws shall only be altered, amended, repealed or
replaced by new bylaws upon the affirmative vote of the holders of at least
two-thirds of the shares entitled to vote thereon: Article II, Section 1.
Annual Meeting , and Section 11. No Informal Action by Shareholders; and
Article III, Section 2. Number, Tenure and Qualifications.

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ARTICLE XV
Incorporator

The name and address of the incorporator of the Corporation is as
follows:

Name Address

Samuel E. Wing 1625 Broadway, Suite 1600
Denver, Colorado 80202

FOURTH: By unanimous written action of the Board of Directors of the
Corporation, the Board of Directors duly advised the foregoing Restated and
Amended Articles of Incorporation, and by unanimous written action by the
stockholders of the Corporation, the stockholders duly approved said Restated
and Amended Articles of Incorporation.

FIFTH: The number of votes cast for the amendments contained in these
Restated and Amended Articles of Incorporation by each voting group entitled to
vote separately on the amendments was sufficient for approval by that voting
group.

IN WITNESS WHEREOF, Factual Data Corp. has caused these Restated and
Amended Articles of Incorporation to be signed in its name and on its behalf by
its President and attested to by its Secretary on this ___ day of March, 1998.

ATTEST: FACTUAL DATA CORP.

/s/ James N. Donnan /s/ Jerald H. Donnan
- -------------------------------- ----------------------------
James N. Donnan, Secretary Jerald H. Donnan, President

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<PAGE> 1
EXHIBIT 3.2

AMENDED BYLAWS

OF
FACTUAL DATA CORP.

ARTICLE I
OFFICES

SECTION 1. PRINCIPAL OFFICE. The principal office of the corporation
shall initially be located at 3665 JFK Parkway, Building Number 1, Ft. Collins,
Colorado 80525. The corporation may change the location of such principal office
and may have such other offices, either within or outside Colorado, as the board
of directors may designate, or as the business of the corporation may require
from time to time.

SECTION 2. REGISTERED OFFICE AND REGISTERED AGENT. The address of the
initial registered office of the corporation is 3665 JFK Parkway, Building
Number 1, Ft. Collins, Colorado 80525, and the name of the initial registered
agent at this address is Jerald H. Donnan. The registered office and the
registered agent may be changed by the board of directors at any time.

ARTICLE II
SHAREHOLDERS

SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall
be held on the second Tuesday in June in each year, beginning in the year 1999,
at 10:00 a.m. or at any other time on any other day that shall be fixed by the
board of directors, for the purpose of electing directors and for the
transaction of any other business that may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday in Colorado, the meeting
shall be held on the next succeeding business day. If the election of directors
shall not be held on the day designated in this Section 1 for an annual meeting
of the shareholders, or at any adjournment of the meeting, the board of
directors shall cause the election to be held at a special meeting of the
shareholders as soon thereafter as may be convenient.

SECTION 2. SPECIAL MEETING. Unless otherwise prescribed by statute,
special meetings of the shareholders may be called for any purpose by the
chairman of the board, the president, the board of directors, or by the holders
of not less than 10% of all outstanding shares of the corporation entitled
to vote at the meeting.

SECTION 3. PLACE OF MEETING. The board of directors may designate any
place, either within or without Colorado, as the place of meeting for any annual
or special meeting called by the board of directors. A waiver of notice signed
by all shareholders entitled to vote at a meeting may designate any place,
either within or without Colorado, as the place for the holding of the meeting.
If no designation is made, or if a special meeting is

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<PAGE> 2

otherwise called, the place of meeting shall be the principal office of the
Company in the State of Colorado.

SECTION 4. NOTICE OF MEETINGS. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall, unless otherwise prescribed by
statute, be delivered not less than ten nor more than sixty days before the date
of the meeting, either personally or by mail, by or at the direction of the
chairman of the board, the president, the secretary, or the officer or other
person authorized to give notice of the meeting, to each shareholder of record
entitled to vote at the meeting; except that if the number of authorized shares
are to be increased, at least thirty days' notice shall be given.

Notice of a special meeting shall include a description of the purpose
or purposes of the meeting. Notice of an annual meeting need not include a
description of the purpose or purposes of the meeting except the purpose or
purposes shall be stated with respect to: (i) an amendment to the articles of
incorporation of the corporation; (ii) a merger or share exchange in which the
corporation is a party and, with respect to a share exchange, in which the
corporation's shares will be required; (iii) a sale, lease, exchange or other
disposition, other than in the usual and regular course of business, of all or
substantially all of the property of the corporation or of another entity which
this corporation controls, in each case with or without the goodwill; (iv) a
dissolution of the corporation; (v) restatement of the articles of
incorporation; or (vi) any other purpose for which a statement of purpose is
required by the Colorado Business Corporation Act. Notice shall be given
personally or by mail, private carrier, telegraph, teletype, electronically
transmitted facsimile or other form of wire or wireless communication by or at
the direction of the chairman of the board, the president, the secretary, or the
officer or persons calling the meeting, to each shareholder of record entitled
to vote at such meeting. If mailed and if in a comprehensible form, such notice
shall be deemed to be given and effective when deposited in the United States
mail, properly addressed to the shareholder at his address as it appears in the
corporation's current record of shareholders, with first class postage prepaid.
If notice is given other than by mail, and provided that such notice is in a
comprehensible form, the notice is given and effective on the date actually
received by the shareholder.

If requested by the person or persons lawfully calling such meeting,
the secretary shall give notice thereof at corporate expense. No notice need be
sent to any shareholder if three successive notices mailed to the last known
address of such shareholder have been returned as undeliverable until such time
as another address for such shareholder is made known to the corporation by such
shareholder. In order to be entitled to receive notice of any meeting, a
shareholder shall advise the corporation in writing of any change in such
shareholder's mailing address as shown on the corporation's books and records.

When a meeting is adjourned to another date, time or place, notice need
not be given of the new date, time or place if the new date, time or place of
such meeting is announced before adjournment at the meeting at which the
adjournment is taken. At the

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adjourned meeting the corporation may transact any business which may have been
transacted at the original meeting. If the adjournment is for more than 120
days, or if a new record date is fixed for the adjournment meeting, a new notice
of the adjourned meeting shall be given to each shareholder of record entitled
to vote at the meeting as of the new record date.

A shareholder may waive notice of a meeting before or after the time
and date of the meeting by a writing signed by such shareholder. Such waiver
shall be delivered to the corporation for filing with the corporate records, but
this delivery and filing shall not be conditions to the effectiveness of the
waiver. Further, by attending a meeting either in person or by proxy, a
shareholder waives objection to lack of notice or defective notice of the
meeting unless the shareholder objects at the beginning of the meeting to the
holding of the meeting or the transaction of business at the meeting because of
lack of notice or defective notice. By attending the meeting, the shareholder
also waives any objection to consideration at the meeting of a particular matter
not within the purpose or purposes described in the meeting notice unless the
shareholder objects to considering the matter when it is presented.

SECTION 5. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment of a meeting, or shareholders entitled to receive payment of any
distribution, or in order to make a determination of shareholders for any other
proper purpose, the board of directors of the corporation may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than seventy days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken. If no
record date is fixed by the directors, the record date shall be the day before
the notice of the meeting is given to shareholders, or the date on which the
resolution of the board of directors providing for a distribution is adopted, as
the case may be. When a determination of shareholders entitled to vote at any
meeting of shareholders is made as provided in this Section 5, such
determination shall apply to any adjournment thereof unless the board of
directors fixes a new record date, which it must do if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.
Unless otherwise specified when the record date is fixed, the time of day for
such determination shall be as of the corporation's close of business on the
record date.

Notwithstanding the above, the record date for determining the
shareholders entitled to take action without a meeting or entitled to be given
notice of action so taken shall be the date a writing upon which the action is
taken is first received by the corporation. The record date for determining
shareholders entitled to demand a special meeting shall be the date of the
earliest of any of the demands pursuant to which the meeting is called.

SECTION 6. SHAREHOLDERS' LIST. The officer or agent having charge of
the stock transfer books for shares of the corporation shall make, before each
meeting of

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shareholders, a complete record of the shareholders entitled to vote at the
meeting or any adjournment of the meeting, arranged by voting groups and within
each voting group by class or series, in alphabetical order within each class or
series, with the address of, and the number of shares of each class or series
held by each shareholder. The shareholders' list shall be available for
inspection by any shareholder, beginning the earlier of ten days before the
meeting for which the list was prepared or two business days after the notice of
the meeting is given and continuing through the meeting, and any adjournment of
the meeting, at the principal office of the corporation or at a place identified
in the notice of the meeting in the city where the meeting will be held. The
shareholders' list shall be subject to inspection on the written demand of any
shareholder and, subject to restrictions of Colorado law, to copy the list
during regular business hours and during the period it is available for
inspection. The original stock transfer books shall be prima facie evidence as
to who are the shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders.

SECTION 7. QUORUM AND MANNER OF ACTING. Except as provided by law, by
the Articles of Incorporation of these Bylaws, one-third of the votes entitled
to be cast on a matter by a voting group represented in person or by proxy,
shall constitute a quorum of that voting group for action on the matter. In the
absence of a quorum at a meeting, a majority of the votes so represented may
adjourn the meeting from time to time without further notice, for a period not
to exceed 120 days for any one adjournment. If a quorum is present at such
adjourned meeting, any business may be transacted which might have been
transacted at the meeting as originally noticed. The shareholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal during such meeting of enough shareholders to
leave less than a quorum.

If a quorum exists, action on a matter other than the election of
directors by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast within the voting group opposing
the action, unless the vote of a greater number or voting by classes is required
by law or the articles of incorporation.

SECTION 8. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy by signing an appointment form or similar writing, either
personally or by his duly authorized attorney-in-fact. A shareholder may also
appoint a proxy by transmitting or authorizing the transmission of a telegram,
teletype, or other electronic transmission providing a written agreement of the
appointment of the proxy, a proxy solicitor, proxy support service organization,
or other person duly authorized by the proxy to receive appointments as agent
for the proxy, or to the corporation. The transmitted appointment shall set
forth or be transmitted with written evidence from which it can be determined
that the shareholder transmitted or authorized the transmission of the
appointment. The proxy appointment form or similar writing shall be filed with
the secretary of the corporation before or at the time of the meeting. The
appointment of a proxy is effective when received by the corporation and is
valid for eleven months unless a different period is expressly provided in the
appointment form or similar writing.

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<PAGE> 5

Any complete copy, including an electronically transmitted facsimile,
of an appointment of a proxy may be substituted for or used in lieu of the
original appointment for any purpose for which the original appointment could be
used.

Revocation of a proxy does not affect the right of the corporation to
accept the proxy's authority unless: (i) the corporation had notice that the
appointment was coupled with an interest and notice that such interest is
extinguished is received by the secretary or other officer or agent authorized
to tabulate votes before the proxy exercises his authority under the
appointment; or (ii) other notice of the revocation of the appointment is
received by the secretary or other officer or agent authorized to tabulate votes
before the proxy exercises his authority under the appointment. Other notice of
revocation may, in the discretion of the corporation, be deemed to include the
appearance at a shareholders' meeting of the shareholder who granted the proxy
and his voting in person on any matter subject to a vote at such meeting.

The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.

The corporation shall not be required to recognize an appointment made
irrevocable if it has received a writing revoking the appointment signed by the
shareholder (including a shareholder who is a successor to the shareholder who
granted the proxy) either personally or by his attorney-in-fact, notwithstanding
that the revocation may be a breach of an obligation of the shareholder to
another person not to revoke the appointment.

Subject to Section 10 of this Article II and any express limitation on
the proxy's authority appearing on the appointment form, the corporation is
entitled to accept the proxy's vote or other action as that of the shareholder
making the appointment.

SECTION 9. VOTING OF SHARES. Each outstanding share, regardless of
class, shall be entitled to one vote, except in the election of directors, and
each fractional share shall be entitled to a corresponding fractional vote on
each matter submitted to a vote at a meeting of shareholders, except to the
extent that the voting rights of the shares of any class or classes are limited
or denied by the articles of incorporation as permitted by the Colorado Business
Corporation Act. Cumulative voting shall not be permitted in the election of
directors or for any other purpose. Each record holder of stock shall be
entitled to vote in the election of directors and shall have as many votes for
each of the shares owned by him as there are directors to be elected and for
whose election he has the right to vote.

At each election of directors, that number of candidates equaling the
number of directors to be elected, having the highest number of votes cast in
favor of their election, shall be elected to the board of directors.

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Except as otherwise ordered by a court of competent jurisdiction upon a
finding that the purpose of this Section would not be violated in the
circumstances presented to the court, the shares of the corporation are not
entitled to be voted if they are owned, directly or indirectly, by a second
corporation, domestic or foreign, and the first corporation owns, directly or
indirectly, a majority of the shares entitled to vote for directors of the
second corporation except to the extent the second corporation holds the shares
in a fiduciary capacity.

Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to redeem the shares
has been deposited with a bank, trust company or other financial institution
under an irrevocable obligation to pay the holders the redemption price on
surrender of the shares.

SECTION 10. VOTING OF SHARES BY CERTAIN SHAREHOLDERS. If the name
signed on a vote, consent, waiver, proxy appointment, or proxy appointment
revocation corresponds to the name of a shareholder, the corporation, if acting
in good faith, is entitled to accept the vote, consent, waiver, proxy
appointment or proxy appointment revocation and give it effect as the act of the
shareholder. If the name signed on a vote, consent, waiver, proxy appointment or
proxy appointment revocation does not correspond to the name of a shareholder,
the corporation, if acting in good faith, is nevertheless entitled to accept the
vote, consent, waiver, proxy appointment or proxy appointment revocation and to
give it effect as the act of the shareholder if: (i) the shareholder is an
entity and the name signed purports to be that of an officer or agent of the
entity; (ii) the name signed purports to be that of an administrator, executor,
guardian or conservator representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to the corporation has been
presented with respect to the vote, consent, waiver, proxy appointment or proxy
appointment revocation; (iii) the name signed purports to be that of a receiver
or trustee in bankruptcy of the shareholder and, if the corporation requests,
evidence of this status acceptable to the corporation has been presented with
respect to the vote, consent, waiver, proxy appointment or proxy appointment
revocation; (iv) the name signed purports to be that of a pledgee, beneficial
owner or attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to sign for
the shareholder has been presented with respect to the vote, consent, waiver,
proxy appointment or proxy appointment revocation; (v) two or more persons are
the shareholder as co-tenants or fiduciaries and the name signed purports to be
the name of at least one of the co-tenants or fiduciaries, and the person
signing appears to be acting on behalf of all the co-tenants or fiduciaries; or
(vi) the acceptance of the vote, consent, waiver, proxy appointment or proxy
appointment revocation is otherwise proper under rules established by the
corporation that are not inconsistent with this Section 10.

The corporation is entitled to reject a vote, consent, waiver, proxy
appointment or proxy appointment revocation if the secretary or other officer or
agent authorized to

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tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.

Neither the corporation nor its officers nor any agent who accepts or
rejects a vote, consent waiver, proxy appointment or proxy appointment
revocation in good faith and in accordance with the standards of this Section 10
is liable in damages for the consequences of the acceptance or rejection.

SECTION 11. NO INFORMAL ACTION BY SHAREHOLDERS. Any action required or
permitted to be taken by shareholders of the corporation must be affected at a
duly called annual or special meeting of such shareholders and may not be
affected by consent in writing by such shareholders.

SECTION 12. MEETINGS BY TELECOMMUNICATION. Any or all of the
shareholders may participate in an annual or special shareholders' meeting by,
or the meeting may be conducted through the use of, any means of communication
by which all persons participating in the meeting may hear each other during the
meeting. A shareholder participating in a meeting by this means is deemed to be
present in person at the meeting.

SECTION 13. RECOGNITION PROCEDURE FOR BENEFICIAL OWNERS. The board of
directors may adopt by resolution a procedure whereby a shareholder of the
corporation may certify in writing to the corporation that all or a portion of
the shares registered in the name of such shareholder are held for the account
of a specified person or persons. The

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resolution may set forth: (i) the types of nominees to which it applies; (ii)
the rights or privileges that the corporation will recognize in a beneficial
owner, which may include rights and privileges other than voting; (iii) the form
of certification and the information to be contained therein; (iv) if the
certification is with respect to a record date, the time within which the
certification must be received by the Corporation; (v) the period for which the
nominee's use of the procedure is effective; and (vi) such other provisions with
respect to the procedure as the board deems necessary or desirable. Upon receipt
by the corporation of a certificate complying with the procedure established by
the board of directors, the persons specified in the certification shall be
deemed, for the purpose or purposes set forth in the certification, to be the
registered holders of the number of shares specified in place of the shareholder
making the certification.

ARTICLE III
BOARD OF DIRECTORS

SECTION 1. GENERAL POWERS. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the corporation shall
be managed under the direction of, its board of directors, except as otherwise
provided in the Colorado Business Corporation Act.

SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be fixed from time to time by a resolution of the board
of directors, but in no instance shall there be less than one director. No
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director. A director shall be a natural person who is eighteen
years of age or older. A director need not be a resident of Colorado or a
shareholder of the corporation.

The board of directors shall be divided into three classes, each class
to be nearly equal in number as possible. The terms of office of directors of
the first class are to expire at the first annual meeting of shareholders after
their election, that of the second class is to expire at the second annual
meeting after their election, and that of the third class is to expire at the
third annual meeting after their election. Thereafter, each director shall
serve for a term ending on the date of the third annual meeting of shareholders
following the annual meeting at which such director was elected. To alter or
repeal this staggered board provision, the affirmative vote of the holders of
at least two-thirds of the shares entitled to vote in the election of directors
is required.

Each director shall hold office until his successor shall have been
elected and qualified. Any director may be removed by the holders of not less
than two-thirds of the voting group that elected the director, with or without
cause, at a meeting called for that purpose. The notice of the meeting shall
state that the purpose or one of the purposes of the meeting is removal of the
director.

There shall be a chairman of the board, who has been elected from among
the directors. He shall preside at all meetings of the shareholders and of the
board of directors. He shall have such other powers and duties as may be
prescribed by the board of directors.

SECTION 3. REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without notice immediately after, and at the same place
as, the annual meeting of shareholders. The board of directors may provide, by
resolution, the time and place, either

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within or without Colorado, for the holding of additional regular meetings
without other notice.

SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the president
or any two directors. The person or persons authorized to call special meetings
of the board of directors may fix any place, either within or without Colorado,
as the place for holding any special meeting of the board of directors called by
them.

SECTION 5. NOTICE OF MEETING. Notice of the date, time and place of any
special meeting shall be given to each director at least two days prior to the
meeting by written notice either personally delivered or mailed to each director
at his business address, or by notice transmitted by private courier, telegraph,
telex, electronically transmitted facsimile or other form of wire or wireless
communication. If mailed, such notice shall be deemed to be given and to be
effective on the earlier of: (i) five days after such notice is deposited in the
United States mail, properly addressed, with first class postage prepaid; or
(ii) the date shown on the return receipt, if mailed by registered or certified
mail return receipt requested, provided that the receipt is signed by or on
behalf of the director to whom the notice is addressed. If notice is given by
telex, electronically transmitted facsimile or other similar form of wire or
wireless communication, such notice shall be deemed to be given and to be
effective when sent, and with respect to a telegram, such notice shall be deemed
to be given and to be effective when the telegram is delivered to the telegraph
company. If a director has designated in writing one or more reasonable
addresses or facsimile numbers for delivery of notice to him, notice sent by
mail, telegraph, telex, electronically transmitted facsimile or other form of
wire or wireless communication shall not be deemed to have been given or to be
effective unless sent to such addresses or facsimile numbers, as the case may
be.

A director may waive notice of a meeting before or after the time and
date of the meeting by a writing signed by such director. Such waiver shall be
delivered to the secretary for filing with the corporate records, but such
delivery and filing shall not be conditions to the effectiveness of the waiver.
Further, a director's attendance at or participation in a meeting waives any
required notice to him of the meeting unless at the beginning of the meeting, or
promptly upon his later arrival, the director objects to holding the meeting or
transacting business at the meeting because of lack of notice or defective
notice and does not thereafter vote for or assent to action taken at the
meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the board of directors need be specified in the
notice or waiver of notice of such meeting.

SECTION 6. QUORUM. A majority of the number of directors fixed by the
board of directors pursuant to Section 2 of this Article III or, if no number is
fixed, a majority of the number in office immediately before the meeting begins,
shall constitute a quorum for the transaction of business at any meeting of the
board of directors, but if less than the majority is present at a meeting, a
majority of the directors present may adjourn the

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meeting from time to time without further notice. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors.

SECTION 7. INFORMAL ACTION BY DIRECTORS. Any action required or
permitted to be taken at a meeting of the directors or any committee designated
by the board of directors may be taken without a meeting if a written consent
(or counterparts thereof) that sets forth the action so taken is signed by all
of the directors entitled to vote with respect to the action taken. Such consent
shall have the same force and effect as a unanimous vote of the directors or
committee members and may be stated as such in any document. Unless the consent
specifies a different effective time or date, action taken under this Section 7
is effective at the time of date the last director signs a writing describing
the action taken, unless, before such time, any director has revoked his consent
by a writing signed by the director and received by the chairman of the board,
the president or the secretary of the corporation.

SECTION 8. TELEPHONIC MEETINGS OF DIRECTORS. The board of directors may
permit any director (or any member of a committee designated by the board) to
participate in a regular or special meeting of the board of directors or a
committee thereof through the use of any means of communication by which all
directors participating in the meeting can hear each other during the meeting. A
director participating in a meeting in this manner is deemed to be present in
person at the meeting.

SECTION 9. VACANCIES. Any director may resign at any time by giving
written notice to the corporation. Such resignation shall take effect at the
time the notice is received by the corporation unless the notice specifies a
later effective date. Unless otherwise specified in the notice of resignation,
the corporation's acceptance of such resignation shall not be necessary to make
it effective. Any vacancy on the board of directors may be filled by the
affirmative vote of a majority of the board of directors or in any other manner
permitted by the Colorado Business Corporation Act. If the directors remaining
in office constitute fewer than a quorum of the board, the directors may fill
the vacancy by the affirmative vote of a majority of all the directors remaining
in office. The director shall hold office until the next annual shareholders'
meeting at which directors are elected.

SECTION 10. COMPENSATION. By resolution of the board of directors, any
director may be paid any one or more of the following: his expenses, if any, of
attendance at meetings, a fixed sum for attendance at each meeting, a stated
salary as director, or such other compensation as the corporation and the
director may reasonably agree upon. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor.

SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the board of directors or committee of the board at
which action on any corporate matter is taken shall be presumed to have assented
to all action taken at the meeting unless: (i) the director objects at the
beginning of the meeting, or promptly upon

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his arrival, to the holding of the meeting or the transaction of business at the
meeting and does not thereafter vote for or assent to any action taken at the
meeting; (ii) the director contemporaneously requests that his dissent or
abstention as to any specific action taken be entered in the minutes of the
meeting; or (iii) the director causes written notice of his dissent or
abstention as to any specific action to be received by the presiding officer of
the meeting before its adjournment or by the corporation promptly after the
adjournment of the meeting. A director may dissent to a specific action at a
meeting while assenting to others. The right to dissent to a specific action
taken at a meeting of the board of directors or a committee of the board shall
not be available to a director who voted in favor of such action.

SECTION 12. EXECUTIVE AND OTHER COMMITTEES. By resolution adopted by a
majority of all the directors in office when the action is taken, the board of
directors may designate from among its members an executive committee and one or
more other committees, and appoint one or more members of the board of directors
to serve on them. To the extent provided in the resolution, each committee shall
have all the authority of the board of directors, except that no such committee
shall have the authority to: (i) authorize distributions; (ii) approve or
propose to shareholders actions or proposals required by the Colorado Business
Corporation Act to be approved by shareholders; (iii) fill vacancies on the
board of directors or any committee thereof; (iv) amend the articles of
incorporation, (v) adopt, amend or repeal the bylaws; (vi) approve a plan of
merger not requiring shareholder approval; (vii) authorize or approve the
reacquisition of shares unless pursuant to a formula or method prescribed by the
board of directors; or (viii) authorize or approve the issuance or sale of
shares, or contract for the sale of shares or determine the designations and
relative rights, preferences and limitations of a class or series of shares,
except that the board of directors may authorize a committee to do so within
limits specifically prescribed by the board of directors. The committee shall
then have full power within the limits set by the board of directors to adopt
any final resolution setting forth all preferences, limitations and relative
rights of such class or series and to authorize an amendment of the articles of
incorporation stating the preferences, limitations and relative rights of a
class or series for filing with the Secretary of State under the Colorado
Business Corporation Act.

Sections 3, 4, 5, 6, 7, 8 or 11 of this Article III, which govern
meetings, notice, waiver of notice, quorum, voting requirements and action
without a meeting of the board of directors, shall apply to committees and their
members appointed under this Section 12.

Neither the designation of any such committee, the delegation of
authority to such committee, nor any action by such committee pursuant to its
authority shall alone constitute compliance by any member of the board of
directors or a member of the committee in question with his responsibility to
conform to the standard of care set forth in Section 13 of this Article III.

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SECTION 13. STANDARD OF CARE. A director shall perform his duties as a
director, including without limitation his duties as a member of any committee
of the board, in good faith, in a manner he reasonably believes to be in the
best interests of the corporation, and with the care an ordinarily prudent
person in a like position would exercise under similar circumstances. In
performing his duties, a director shall be entitled to rely on information,
opinions, reports or statements, including financial statements and other
financial data, in each case prepared or presented by the persons herein
designated. However, he shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reliance
to be unwarranted. A director shall not be liable to the corporation or its
shareholders for any action he takes or omits to take as a director if, in
connection with such action or omission, he performs his duties in compliance
with this Section 13.

The designated persons on whom a director is entitled to rely are: (i)
one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented; (ii)
legal counsel, public accountant, or other person as to matters which the
director reasonably believes to be within such person's professional or expert
competence; or (iii) a committee of the board of directors on which the director
does not serve if the director reasonably believes the committee merits
confidence.

SECTION 14. CONFLICTING INTEREST TRANSACTIONS. As used in this Section
14, "conflicting interest transaction" means any of the following: (i) a loan or
other assistance by the Corporation to a director of the Corporation or to an
entity in which a director of the Corporation is a director or officer or has a
financial interest; (ii) a guaranty by the Corporation of an obligation of a
director of the Corporation or of an obligation of an entity in which a director
of the Corporation is a director or officer or has a financial interest; or
(iii) a contract or transaction between the Corporation and a director of the
Corporation or between the Corporation and an entity in which a director of the
Corporation is a director or officer or has a financial interest. No conflicting
interest transaction shall be void or voidable, be enjoined, be set aside, or
give rise to an award of damages or other sanctions in a proceeding by a
shareholder or by or in the right of the Corporation, solely because the
conflicting interest transaction involves a director of the Corporation or an
entity in which a director of the Corporation is a director or officer or has a
financial interest, or solely because the director is present at or participates
in the meeting of the Corporation's board of directors or of the committee of
the board of directors which authorizes, approves or ratifies a conflicting
interest transaction, or solely because the director's vote is counted for such
purpose if: (A) the material facts as to the director's relationship or interest
and as to the conflicting interest transaction are disclosed or are known to the
board of directors or the committee, and the board of directors or committee in
good faith authorizes, approves or ratifies the conflicting interest transaction
by the affirmative vote of a majority of the disinterested directors, even
though the disinterested directors are less than a quorum; or (B) the material
facts as to the director's relationship or interest and as to the conflicting
interest transaction are disclosed or are known to the shareholders entitled to

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vote thereon, and the conflicting interest transaction is specifically
authorized, approved or ratified in good faith by a vote of the shareholders; or
(C) a conflicting interest transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified by the board of directors, a
committee thereof, or the shareholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the board of
directors or of a committee which authorizes, approves or ratifies the
conflicting interest transaction.

Neither the board of directors nor any committee thereof shall
authorize a loan by the Corporation to a director of the Corporation or to an
entity in which a director of the Corporation is a director or officer or has a
financial interest, or a guaranty by the Corporation of an obligation of a
director of the Corporation or of an obligation of an entity in which a director
of the Corporation is a director or officer or has a financial interest, until
at least ten days after written notice of the proposed authorization of the loan
or guaranty has been given to the shareholders who would be entitled to vote
thereon if the issue of the loan or guaranty were submitted to a vote of the
shareholders. The requirements of this paragraph are in addition to, and not in
substitution for, the provisions of the preceding paragraph of this Section 14.

ARTICLE IV
OFFICERS

SECTION 1. GENERAL. The officers of the corporation shall be a chairman
of the board, a president, a secretary and a treasurer, each of whom shall be
appointed by the board of directors and shall be a natural person eighteen years
of age or older. One person may hold more than one office. The board of
directors may appoint such other officers and assistant officers, including one
or more vice presidents, assistant secretaries and assistant treasurers, as they
may consider necessary.

SECTION 2. APPOINTMENT AND TERM OF OFFICE. The officers of the
corporation shall be appointed by the board of directors at each regular meeting
of the board held immediately after each annual meeting of the shareholders. If
the appointment of officers is not made at such meeting, such appointments shall
be made as determined by the board of directors. Each officer shall hold office
until the first of the following occurs: his successor shall have been duly
appointed and qualified, his death, his resignation, or his removal in the
manner provided in Section 3 of this Article IV. In the event that an officer is
employed by the corporation pursuant to an employment contract duly authorized
and approved by the board of directors, an officer may be appointed for the term
of, and in accordance with the provisions of, such employment contract.

SECTION 3. RESIGNATION AND REMOVAL. An officer may resign at any time
by giving written notice of resignation to the corporation. The resignation is
effective when the notice is received by the corporation unless the notice
specifies a later effective date.

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Any officer may be removed at any time with or without cause by the
board of directors. Such removal does not effect the contract rights, if any, of
the corporation or of the person so removed. The appointment of an officer shall
not in itself create contract rights.

SECTION 4. VACANCIES. A vacancy in any office, however occurring, may
be filled by the board of directors. If an officer resigns and his resignation
is made effective at a later date, the board of directors may permit the officer
to remain in office until the effective date and may fill the pending vacancy
before the effective date if the board of directors provide that the successor
shall not take office until the effective date. In the alternative, the board of
directors may remove the officer at any time before the effective date and may
fill the resulting vacancy.

SECTION 5. CHAIRMAN OF THE BOARD. The chairman of the board shall
preside at all meetings of shareholders and of the board of directors. He may
sign and execute all authorized instruments, contracts, or other obligations on
behalf of the corporation. He shall have such other powers and duties as may be
prescribed by the board of directors.

SECTION 6. PRESIDENT. In the absence of the chairman of the board, the
president shall preside at all meetings of shareholders and all meetings of the
board of directors. Subject to the direction and supervision of the board of
directors, the president shall be the chief executive officer of the
corporation, and shall have general and active control of its affairs and
business and general supervision of its officers, agents and employees. Unless
otherwise directed by the board of directors, the president shall attend in
person or by substitute appointed by him, or shall execute on behalf of the
corporation, written instruments appointing a proxy or proxies to represent the
corporation at, all meetings of the stockholders of any other corporation in
which the corporation holds any stock. On behalf of the corporation, the
president may in person or by substitute or by proxy execute written waivers of
notice and consents with respect to any such meetings. At all such meetings and
otherwise, the president, in person or by substitute or proxy, may vote the
stock held by the corporation, execute written consents and other instruments
with respect to such stock, and exercise any and all rights and powers incident
to the ownership of said stock, subject to the instructions, if any, of the
board of directors. The president may sign all instruments, contracts and other
obligations which the board of directors has authorized to be executed, and
shall have such additional authority and duties as are appropriate and customary
for the office of president and chief executed officer, except as the same may
be expanded or limited by the board of directors from time to time.

SECTION 7. VICE PRESIDENTS. If appointed by the board of directors, the
vice presidents shall assist the president and shall perform such duties as may
be assigned to them by the president or by the board of directors. In the
absence of the president, the vice president, if any (or, if more than one, the
vice presidents in the order designated by the board of directors, or if the
board makes no such designation, then the vice president designated by the
president, or if neither the board nor the president makes any such

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designation, the senior vice president as determined by first election to that
office), shall have the powers and perform the duties of the president.

SECTION 8. SECRETARY. The secretary shall: (i) prepare and maintain as
permanent records the minutes of the proceedings of the shareholders and the
board of directors, a record of all actions taken by the shareholders or board
of directors without a meeting, a record of all actions taken by a committee or
the board of directors in place of the board of directors on behalf of the
corporation, and a record of all waivers of notice of meetings of shareholders
and of the board of directors of any committee thereof; (ii) see that all
notices are duly given in accordance with the provisions of these bylaws and as
required by law; (iii) serve as custodian of the corporate records and of the
seal of the corporation and affix the seal to all documents when authorized by
the board of directors; (iv) keep at the corporation's registered office or
principal office a record containing the names and addresses of all shareholders
in a form that permits preparation of a list of shareholders arranged by voting
group and by class or series of shares within each voting group, that is
alphabetical within each class or series and that shows the address of, and the
number of shares of each class or series held by, each shareholder, unless such
a record shall be kept at the office of the corporation's transfer agent or
registrar; (v) maintain at the corporation's principal office the originals or
copies of the corporation's articles of incorporation, bylaws, minutes of all
shareholders' meetings and records of all action taken by shareholders without a
meeting for the past three years, all written communications within the past
three years to shareholders as a group or to the holders of any class or series
of shares as a group, a list of the names and business addresses of the current
directors and officers, a copy of the corporation's most recent corporate report
filed with the Secretary of State, and financial statements, if any, showing in
reasonable detail the corporation's assets and liabilities and results of
operations for the last three years; (vi) have general charge of the stock
transfer books of the corporation, unless the corporation has a transfer agent;
(vii) authenticate records of the corporation; and (viii) in general, perform
all duties incident to the office of secretary and such other duties as from
time to time may be assigned to him by the chairman of the board, the president
or by the board of directors. Assistant secretaries, if any, shall have the same
duties and powers, subject to supervision by the secretary. The directors and/or
shareholders may however respectively designate a person other than the
secretary or assistant secretary to keep the minutes of their respective
meetings.

Any books, records, or minutes of the corporation may be in written
form or in any form capable of being converted into written form within a
reasonable time.

SECTION 9. TREASURER. The treasurer shall be the principal financial
officer of the corporation, shall have the care and custody of all funds,
securities, evidences of indebtedness and other personal property of the
corporation and shall deposit the same in accordance with the instructions of
the board of directors. Subject to the limits imposed by the board of directors,
he shall receive and give receipts and acquittances for money paid in on account
of the corporation, and shall pay out of the corporation's funds on hand

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all bills, payrolls and other just debts of the corporation of whatever nature
upon maturity. He shall perform all other duties incident to the office of the
treasurer and, upon request of the board, shall make such reports to it as may
be required at any time. He shall, if required by the board, give the
corporation a bond in such sums and with such sureties as shall be satisfactory
to the board, conditioned upon the faithful performance of his duties and for
the restoration to the corporation of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation. He shall have such other powers and perform such other
duties as may from time to time be prescribed by the board of directors, the
chairman of the board, or the president. The assistant treasurers, if any, shall
have the same powers and duties, subject to the supervision of the treasurer.

The treasurer shall also be the principal accounting officer of the
corporation. He shall prescribe and maintain the methods and systems of
accounting to be followed, keep complete books and records of account as
required by the Colorado Business Corporation Act, prepare and file all local,
state and federal tax returns, prescribe and maintain an adequate system of
internal accounting controls and prepare and furnish to the chairman of the
board, the president and the board of directors statements of account showing
the financial position of the corporation and the results of its operations.

SECTION 10. SALARIES. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving a salary by reason of the fact that he is also a director of the
corporation.

ARTICLE V
CONTRACTS, LOANS AND CHECKS

SECTION 1. CONTRACTS. The board of directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.

SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.

SECTION 3. CHECKS AND DRAFTS. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in the manner that shall from time to time be
determined by resolution of the board of directors.

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ARTICLE VI
SHARES

SECTION 1. CERTIFICATES. The board of directors shall be authorized to
issue any of its classes of shares with or without certificates. The fact that
the shares are not represented by certificates shall have no effect on the
rights and obligations of shareholders. If the shares are represented by
certificates, such shares shall be represented by consecutively numbered
certificates signed, either manually or by facsimile, in the name of the
corporation by the chairman of the board, the president or one or more vice
presidents, and the secretary or an assistant secretary. In case any officer who
has signed or whose facsimile signature has been placed upon such certificate
shall have ceased to be such officer before such certificate is issued, such
certificate may nonetheless be issued by the corporation with the same effect as
if he were such officer at the date of its issue. All certificates shall be
consecutively numbered, and the names of the owners, the number of shares, and
the date of issue shall be entered on the books of the corporation. Each
certificate representing shares shall state upon its face: (i) that the
corporation is organized under the laws of Colorado; (ii) the name of the person
to whom issued; (iii) the number and class of the shares and the designation of
the series, if any, that the certificate represents; (iv) the par value, if any,
of each share represented by the certificate; (v) a conspicuous statement, on
the front or the back, that the corporation will furnish to the shareholder, on
request in writing and without charge, information concerning the designations,
preferences, limitations, and relative rights applicable to each class, the
variations in preferences, limitations, and rights determined for each series,
and the authority of the board of directors to determine variations for future
classes or series; and (vi) any restrictions imposed by the corporation under
the transfer of the shares represented by the certificate.

If shares are not represented by certificates, within a reasonable time
following the issue or transfer of such shares, the corporation shall send the
shareholder a complete written statement of all of the information required to
be provided to holders of uncertificated shares by the Colorado Business
Corporation Act.

SECTION 2. CONSIDERATION FOR SHARES. Certificated or uncertificated
shares shall not be issued until the shares represented thereby are fully paid.
The board of directors may authorize the issuance of shares for consideration
consisting of any tangible or intangible property or benefit to the corporation,
including cash, promissory notes, services performed or other securities of the
corporation. Future services shall not constitute payment or partial payment for
shares of the corporation. The promissory note of a subscriber or an affiliate
of a subscriber shall not constitute payment or partial payment for shares of
the corporation unless the note is negotiable and is secured by collateral,
other than the shares being purchased, having a fair market value at least equal
to the principal amount of the note. For purposes of this Section 2, a
"promissory note" means a negotiable instrument on which there is an obligation
to pay independent of collateral and does not include a non-recourse note.

SECTION 3. LOST CERTIFICATES. In case of the alleged loss, destruction
or mutilation of a certificate of stock, the board of directors may direct the
issuance of a new certificate

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in lieu thereof upon such terms and conditions in conformity with law as the
board may prescribe. The board of directors may in its discretion require an
affidavit of lost certificate and/or a bond in such form and amount and with
such surety as it may determine before issuing a new certificate.

SECTION 4. TRANSFER OF SHARES. Upon surrender to the corporation or to
a transfer agent of the corporation of a certificate of stock duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, and receipt of such documentary stamps as may be required by law and
evidence of compliance with all applicable securities laws and other
restrictions, the corporation shall issue a new certificate to the person
entitled thereto, and cancel the old certificate. Every such transfer of stock
shall be entered on the stock books of the corporation which shall be kept at
its principal office or by the person and at the place designated by the board
of directors.

Except as otherwise expressly provided in Sections 10 and 13 of Article
II of these bylaws, and except for the assertion of dissenters' rights to the
extent provided in the Colorado Business Corporation Act, the corporation shall
be entitled to treat the registered holder of any shares of the corporation as
the owner thereof for all purposes, and the corporation shall not be bound to
recognize any equitable or other claim to, or interest in, such shares or rights
deriving from such shares on the part of any person other than the registered
holder, including without limitation any purchaser, assignee or transferee of
such shares or rights deriving from such shares, unless and until such other
person becomes the registered holder of such shares, whether or not the
corporation shall have either actual or constructive notice of the claimed
interest of such other person.

SECTION 5. TRANSFER AGENT, REGISTRARS AND PAYING AGENTS. The board may
at its discretion appoint one or more transfer agents, registrars and agents for
making payment upon any class of stock, bond, debenture or other security of the
corporation. Such agents and registrars may be located either within or outside
Colorado. They shall have such rights and duties and shall be entitled to such
compensation as may be agreed.

SECTION 6. DISTRIBUTIONS TO SHAREHOLDERS. As used in this Section 6,
"distribution" means a direct or indirect transfer by the corporation of money
or other property, except its own shares, or incurrence of indebtedness by the
corporation, to or for the benefit of any of its shareholders in respect of any
of its shares. A distribution may be in any form, including a declaration or
payment of a dividend; a purchase, redemption, or other acquisition of shares;
or distribution of indebtedness. The board of directors may authorize, and the
corporation may make, distributions to the shareholders subject to the
limitations set forth in this Section 6. The board of directors may fix in
advance a date as the record date for determining shareholders entitled to a
distribution, other than one involving a purchase, redemption, or other
acquisition of the corporation's shares. If a record date is necessary but no
record date is so fixed in advance, the record date is the date the board of
directors authorizes the distribution.

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No distribution may be made if, after giving it effect: (i) the
corporation would not be able to pay its debts as they become due in the usual
course of business; or (ii) the corporation's total assets would be less than
the sum of its total liabilities plus (unless the articles of incorporation
permit otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution. The board of directors may base a determination that
a distribution is not prohibited either on financial statements prepared on the
basis of accounting practices and principles that are reasonable under the
circumstances or on a fair valuation or other method that is reasonable under
the circumstances.

Except as provided elsewhere in this Section 6, the time for measuring
the effect of a distribution under this Section 6 is: (i) in the case of
distribution by purchase, redemption, or other acquisition of the corporation's
shares, as of the earlier of: (A) the date money or other property is
transferred or debt is incurred by the corporation; or (B) the date the
shareholder ceases to be a shareholder with respect to the acquired shares; (ii)
in the case of any other distribution of indebtedness, as of the date the
indebtedness is distributed; and (iii) in all other cases, as of either: (A) the
date the distribution is authorized, if the payment occurs within one hundred
twenty days after the date of authorization; or (B) the date the payment is
made, if it occurs more than one hundred twenty days after the date of
authorization.

Indebtedness of a corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations under
this Section 6 if its terms provide that payment of principal and interest
thereon are made only if and to the extent that payment of a distribution to
shareholders could then be made under Section 7-106- 401 of the Colorado
Business Corporation Act. If the indebtedness is issued as a distribution, each
payment of principal or interest thereon is treated as a distribution the effect
of which is measured on the date the payment is actually made.

SECTION 7. SHARE OPTIONS AND OTHER RIGHTS. As used in this Section 7,
"rights" means rights, options, warrants, or convertible securities entitling
the holders thereof to purchase, receive, or acquire shares or fractions of
shares of the corporation or assets or debts or other obligations of the
corporation. The corporation may create and issue rights, except as precluded or
limited by provisions contained in the articles of incorporation at the time of
such creation or issuance. The board of directors shall determine the terms upon
which the rights are issued, their form and content, and the consideration, if
any, for which shares or fractions of shares, assets, or debts or other
obligations of the corporation are to be issued pursuant to the rights.

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ARTICLE VII
INDEMNIFICATION OF CERTAIN PERSONS

SECTION 1. INDEMNIFICATION. For purposes of this Article VII, a "Proper
Person" means any person (including the estate or personal representative of a
director) who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, and whether formal or informal, by
reason of the fact that he is or was a director, officer, employee, fiduciary or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, fiduciary or agent of any
foreign or domestic profit or nonprofit corporation or of any partnership, joint
venture, trust, profit or nonprofit unincorporated association, limited
liability company, or other enterprise or employee benefit plan. The corporation
shall indemnify any Proper Person against reasonably incurred expenses
(including attorneys' fees), judgments, penalties, fines (including any excise
tax assessed with respect to an employee benefit plan) and amounts paid in
settlement reasonably incurred by him in connection with such action, suit or
proceeding if it is determined by the groups set forth in Section 4 of this
Article VII that he conducted himself in good faith and that he reasonably
believed: (i) in the case of conduct in his official capacity with the
corporation, that his conduct was in the corporation's best interests; or (ii)
in all other cases (except criminal cases), that his conduct was at least not
opposed to the corporation's best interests; or (iii) in the case of any
criminal proceeding, that he had no reasonable cause to believe his conduct was
unlawful. Official capacity means, when used with respect to a director, the
office of director and, when used with respect to any other Proper Person, the
office in a corporation held by the officer or the employment, fiduciary or
agency relationship undertaken by the employee, fiduciary, or agent on behalf of
the corporation. Official capacity does not include service for any other
domestic or foreign corporation or other person or employee benefit plan.

A director's conduct with respect to an employee benefit plan for a
purpose the director reasonably believed to be in the interests of the
participants in or beneficiaries of the plan is conduct that satisfies the
requirement in (ii) of this Section 1. A director's conduct with respect to an
employee benefit plan for a purpose that the director did not reasonably believe
to be in the interests of the participants in or beneficiaries of the plan shall
be deemed not to satisfy the requirement of this section that he conduct himself
in good faith.

No indemnification shall be made under this Article VII to a Proper
Person with respect to any claim, issue or matter in connection with a
proceeding by or in the right of a corporation in which the Proper Person was
adjudged liable to the corporation or in connection with any proceeding charging
that the Proper Person derived an improper personal benefit, whether or not
involving action in an official capacity, in which he was adjudged liable on the
basis that he derived an improper personal benefit. Further, indemnification
under this Section in connection with a proceeding brought by or in the right of
the corporation shall be limited to reasonable expenses, including attorneys'
fees, incurred in connection with the proceeding.

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SECTION 2. RIGHT TO INDEMNIFICATION. The corporation shall indemnify
any Proper Person who was wholly successful, on the merits or otherwise, in
defense of any action, suit, or proceeding as to which he was entitled to
indemnification under Section 1 of this Article VII against expenses (including
attorneys' fees) reasonably incurred by him in connection with the proceeding
without the necessity of any action by the corporation other than the
determination in good faith that the defense has been wholly successful.

SECTION 3. EFFECT OF TERMINATION OF ACTION. The termination of any
action, suit or proceeding by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person seeking indemnification did not meet the standards
of conduct described in Section 1 of this Article VII. Entry of a judgment by
consent as part of a settlement shall not be deemed an adjudication of
liability, as described in Section 2 of this Article VII.

SECTION 4. GROUPS AUTHORIZED TO MAKE INDEMNIFICATION DETERMINATION.
Except where there is a right to indemnification as set forth in Sections 1 or 2
of this Article VII or where indemnification is ordered by a court in Section 5
of this Article VII, any indemnification shall be made by the corporation only
as determined in the specific case by a proper group that indemnification of the
Proper Person is permissible under the circumstances because he has met the
applicable standards of conduct set forth in Section 1 of this Article VII. This
determination shall be made by the board of directors by a majority vote of
those present at a meeting at which a quorum is present, which quorum shall
consist of directors not parties to the proceeding ("Quorum"). If a Quorum
cannot be obtained, the determination shall be made by a majority vote of a
committee of the board of directors designated by the board, which committee
shall consist of two or more directors not parties to the proceeding, except
that Directors who are parties to the proceeding may participate in the
designation of directors for the committee. If a Quorum of the board of
directors cannot be obtained and the committee cannot be established, or even if
a Quorum is obtained or the committee is designated and a majority of the
directors constituting such Quorum or committee so directs, the determination
shall be made by: (i) independent legal counsel selected by a vote of the board
of directors or the committee in the manner specified in this Section 4 or, if a
Quorum of the full board of directors cannot be obtained and a committee cannot
be established, by independent legal counsel selected by a majority vote of the
full board (including directors who are parties to the action); or (ii) a vote
of the shareholders.

Authorization of indemnification and advance of expenses shall be made
in the same manner as the determination that indemnification or advance of
expenses is permissible except that, if the determination that indemnification
or advance of expenses is permissible is made by independent legal counsel,
authorization of indemnification and advance of expenses shall be made by the
body that selected such counsel.

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<PAGE> 22

SECTION 5. COURT-ORDERED INDEMNIFICATION. Any Proper Person may apply
for indemnification to the court conducting the proceeding or to another court
of competent jurisdiction for mandatory indemnification under Section 2 of this
Article VII, including indemnification for reasonable expenses incurred to
obtain court-ordered indemnification. If the court determines that the Proper
Person is entitled to indemnification under Section 2 of this Article VII, the
court shall order indemnification, including the Proper Person's reasonable
expenses incurred to obtain court-ordered indemnification. If the court
determines that such Property Person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not he met
the standards of conduct set forth in Section 1 of this Article VII or was
adjudged liable in the proceeding, the court may order such indemnification as
the court deems proper except that if the Proper Person has been adjudged
liable, indemnification shall be limited to reasonable expenses incurred in
connection with the proceeding and reasonable expenses incurred to obtain
court-ordered indemnification.

SECTION 6. ADVANCE OF EXPENSES. Reasonable expenses (including
attorneys' fees) incurred in defending an action, suit or proceeding as
described in Section 1 of this Article VII may be paid by the corporation to any
Proper Person in advance of the final disposition of such action, suit or
proceeding upon receipt of: (i) a written affirmation of such Proper Person's
good faith belief that he has met the standards of conduct prescribed by Section
1 of this Article VII; (ii) a written undertaking, executed personally or on the
Proper Person's behalf, to repay such advances if it is ultimately determined
that he did not meet the prescribed standards of conduct (the undertaking shall
be an unlimited general obligation of the Proper Person but need not be secured
and may be accepted without reference to financial ability to make repayment);
and (iii) a determination is made by the proper group (as described in Section 4
of this Article VII) that the facts as then known to the group would not
preclude indemnification. Determination and authorization of payments shall be
made in the same manner specified in Section 4 of this Article VII.

SECTION 7. ADDITIONAL INDEMNIFICATION TO CERTAIN PERSONS OTHER THAN
DIRECTORS. In addition to the indemnification provided to officers, employees,
fiduciaries or agents because of their status as Proper Persons under this
Article VII, the corporation may also indemnify and advance expenses to them if
they are not directors of the corporation to a greater extent than is provided
in these bylaws, if not inconsistent with public policy, and if provided for by
general or specific action of its board of directors or shareholders or by
contract.

SECTION 8. WITNESS EXPENSES. The sections of this Article VII do not
limit the corporation's authority to pay or reimburse expenses incurred by a
director in connection with an appearance as a witness in a proceeding at a time
when he has not been made or named as a defendant or respondent in the
proceeding.

SECTION 9. REPORT TO SHAREHOLDERS. Any indemnification of or advance of
expenses to a director in accordance with this Article VII, if arising out of a
proceeding by

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<PAGE> 23

or on behalf of the corporation, shall be reported in writing to the
shareholders with or before the notice of the next shareholders' meeting. If the
next shareholder action is taken without a meeting at the instigation of the
board of directors, such notice shall be given to the shareholders at or before
the time the first shareholder signs a writing consenting to such action.

ARTICLE VIII
INSURANCE AND BENEFITS

SECTION 1. INSURANCE. By action of the board of directors,
notwithstanding any interest of the directors in the action, the corporation may
purchase and maintain insurance, in such scope and amounts as the board of
directors deems appropriate, on behalf of any person who is or was a director,
officer, employee, fiduciary or agent of the corporation, or who, while a
director, officer, employee, fiduciary or agent of the corporation, is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee, fiduciary or agent of any other foreign or domestic profit or
nonprofit corporation or of any partnership, joint venture, trust, profit or
nonprofit unincorporated association, limited liability company, or other
enterprise or employee benefit plan, against any liability asserted against, or
incurred by, him in that capacity or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against such
liability under the provisions of Article VII of these bylaws or applicable law.
Any such insurance may be procured from any insurance company designated by the
board of directors of the corporation, whether such insurance company is formed
under the laws of Colorado or any other jurisdiction of the United States or
elsewhere, including any insurance company in which the corporation has an
equity interest or any other interest, through stock ownership or otherwise.

SECTION 2. BENEFITS. The board of directors shall have authority to
provide for, or to delegate authority to an appropriate committee to provide
for, any and all manner of benefits or payments, however characterized or
described, to directors, officers and employees and to their estates, families,
dependents or beneficiaries on account of services rendered by the directors,
officers and employees to the corporation.

ARTICLE IX
MISCELLANEOUS

SECTION 1. SEAL. The board of directors may adopt a corporate seal,
which shall be circular in form and shall contain the name of the corporation,
the state of incorporation, and the words "Corporate Seal".

SECTION 2. FISCAL YEAR. The fiscal year of the corporation shall be as
established by the board of directors.

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<PAGE> 24

SECTION 3. AMENDMENTS. The board of directors shall have power, to the
maximum extent permitted by the Colorado Business Corporation Act, to make,
amend and repeal the bylaws of the corporation at any regular or special meeting
of the board unless the shareholders, in making, amending or repealing a
particular bylaw, expressly provide that the directors may not amend or repeal
such bylaw. The shareholders also shall have the power to make, amend or repeal
the bylaws of the corporation at any annual meeting or at any special meeting
called for that purpose.

SECTION 4. RECEIPT OF NOTICES BY THE CORPORATION. Notices, shareholder
writings consenting to action, and other documents or writings shall be deemed
to have been received by the corporation when they are actually received: (i) at
the registered office of the corporation in Colorado; (ii) at the principal
office of the corporation (as that office is designated in the most recent
document filed by the corporation with the Secretary of State designating a
principal office); (iii) by the secretary of the corporation wherever the
secretary may be found; or (iv) by any other person authorized from time to time
by the board of directors or the president to receive such writings, wherever
such person is found.

SECTION 5. GENDER. The masculine gender is used in these bylaws as a
matter of convenience only and shall be interpreted to include the feminine and
neuter genders as the circumstances indicate.

SECTION 6. CONFLICTS. In the event of any irreconcilable conflict
between these bylaws and either the corporation's articles of incorporation or
applicable law, the latter shall control.

SECTION 7. DEFINITIONS. Except as otherwise specifically provided in
these bylaws, all terms used in these bylaws shall have the same definition as
in the Colorado Business Corporation Act.

The foregoing amended bylaws are the true and correct bylaws of Factual Data
Corp. as of February 16, 1998.

/s/ JERALD H. DONNAN
--------------------
Jerald H. Donnan,
Chief Executive Officer

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<PAGE> 1
EXHIBIT 4.3

THE REPRESENTATIVE'S OPTIONS EVIDENCED AND REPRESENTED BY THIS CERTIFICATE (THE
"REPRESENTATIVE'S OPTIONS") AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
(THE "WARRANT SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF CERTAIN STATES
UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES. HOWEVER, NEITHER THE
REPRESENTATIVE'S OPTIONS NOR SUCH WARRANT SHARES MAY BE SOLD, TRANSFERRED,
PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (I) A POST-EFFECTIVE AMENDMENT TO
SUCH REGISTRATION STATEMENT, (II) A SEPARATE REGISTRATION STATEMENT UNDER SUCH
ACT, OR (III) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND UNDER THE
APPLICABLE BLUE SKY LAWS.

THIS REPRESENTATIVE'S OPTION MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS REPRESENTATIVE'S OPTION, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
REPRESENTATIVE'S OPTION EXCEPT AS OTHERWISE PROVIDED HEREIN.

FACTUAL DATA CORP.

Representative's Option for the Purchase of Common Stock

No. UW-001 120,000 Representative's Options

THIS CERTIFIES that, for receipt in hand of $50 and other value
received, SCHNEIDER SECURITIES, INC. (the "Holder"), is entitled to subscribe
for and purchase from FACTUAL DATA CORP., a Colorado corporation (the
"Company"), upon the terms and conditions set forth herein, at any time, or from
time to time, after _________, 1999, and before 5:00 p.m. Mountain time on
__________, 2003 (the "Exercise Period"), 120,000 shares of Common Stock (the
"Warrant Shares"), at a price of $_________ per Warrant Share (the "Exercise
Price"), or _____% of the offering price of Common Stock to be sold by the
Company in a public offering (the "Public Offering") at or prior to the date
hereof.

The term the "Holder" as used herein shall include any transferee to
whom this Representative's Option has been transferred in accordance with the
above. As used herein the term "this Representative's Option" shall mean and
include this Representative's Option and any Representative's Option or
Representative's Options hereafter issued as a consequence of the exercise or
transfer of this Representative's Option in whole or in part, and the term
"Common Stock" shall mean and include the Company's Common Stock with ordinary
voting power, which class at the date hereof is publicly traded.

1. This Representative's Option may not be sold, transferred, assigned,
pledged or hypothecated until ________, 1999 (12 months from the Effective Date
of the Registration Statement on which it is initially registered) except that
it may be transferred, in whole or in part, (i) to one or more officers or
partners of the Holder (or the officers or partners of any such partner); (ii)
to a member of the underwriting syndicate and/or its officers or partners;

<PAGE> 2

of the Company; or (iii) by operation of law. After _________, 1999, this
Representative's Option may be sold, transferred, assigned or hypothecated in
accordance with applicable law. Not withstanding any language to the contrary
elsewhere herein, in the event of transfer of this Representatives Warrant, the
transferee agrees that he, she or it will, upon receipt hereof, exercise this
Representatives Warrant not more than 72 hours after completion of such
transfer.

2. a. This Representative's Option may be exercised during the
Exercise Period as to the whole or any lesser number of Warrant
Shares, by the surrender of this Representative's Option (with the
election attached hereto duly executed) to the Company at its office
at 3665 JFK Parkway, Building 1, Suite 200, Fort Collins, Colorado
80525, or such other place as is designated in writing by the Company,
together with a certified or bank cashier's check payable to the order
of the Company in an amount equal to the Exercise Price multiplied by
the number of Warrant Shares for which this Representative's Option is
being exercised.

b. Upon written request of the Holder, and in lieu of payment
for the Warrant Shares by check in accordance with paragraph 2(a)
hereof, the Holder may exercise the Representative's Option (or any
portion thereof) for and receive the number of Warrant Shares equal to
a fraction, the numerator of which equals (i) the amount by which the
Current Market Price of the Common Stock for the ten (10) trading days
preceding the date of exercise exceeds the Exercise Price per Share,
multiplied by (ii) the number of Warrant Shares to be purchased; the
denominator of which equals the Current Market Price.

c. For the purposes of any computation under this
Representative's Option, the "Current Market Price" at any date shall
be the closing price of the Common Stock on the business day next
preceding the event requiring an adjustment hereunder. If the principal
trading market for such securities is an exchange, the closing price
shall be the reported last sale price on such exchange on such day
provided if trading of such Common Stock is listed on any consolidated
tape, the closing price shall be the reported last sale price set forth
on such consolidated tape. If the principal trading market for such
securities is the over-the-counter market, the closing price shall be
the last reported sale price on such date as set forth by The Nasdaq
Stock Market, Inc., or, if the security is not quoted on such market,
the average closing bid and asked prices as set forth in the National
Quotation Bureau pink sheet or the Electronic Bulletin Board System for
such day. Notwithstanding the foregoing, if there is no reported last
sale price or average closing bid and asked prices, as the case may be,
on a date prior to the event requiring an adjustment hereunder, then
the current market price shall be determined as of the latest date
prior to such day for which such last sale price or average closing bid
and asked price is available.

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<PAGE> 3

3. Upon each exercise of this Representative's Option, the Holder shall
be deemed to be the holder of record of the Warrant Shares issuable upon such
exercise, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing such Warrant Shares shall not then have been
actually delivered to the Holder. As soon as practicable after each such
exercise of this Representative's Option, the Company shall issue and deliver to
the Holder a certificate or certificates for the Warrant Shares issuable upon
such exercise, registered in the name of the Holder or its designee. If this
Representative's Option should be exercised in part only, the Company shall,
upon surrender of this Representative's Option for cancellation, execute and
deliver a new Representative's Option evidencing the right of the Holder to
purchase the balance of the Warrant Shares (or portions thereof) subject to
purchase hereunder.

4. The Representative's Options shall be registered in a
Representative's Option Register as they are issued. The Company shall be
entitled to treat the registered holder of any Representative's Option on the
Representative's Option Register as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Representative's Option on the part of any other person. The
Representative's Options shall be transferable only on the books of the Company
upon delivery thereof duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. In all cases of transfer by an attorney,
executor, administrator, guardian or other legal representative, duly
authenticated evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Representative's
Option or Representative's Options to the person entitled thereto. The
Representative's Options may be exchanged, at the option of the Holder thereof,
for another Representative's Option, or other Representative's Options of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Warrant Shares (or portions thereof) upon
surrender to the Company or its duly authorized agent. Notwithstanding the
foregoing, the Company shall have no obligation to cause Representative's
Options to be transferred on its books to any person if, in the opinion of
counsel to the Company, such transfer does not comply with the provisions of the
Securities Act of 1933, as amended (the "Act"), or applicable state blue sky
laws and the rules and regulations thereunder.

3
<PAGE> 4

The Company covenants that all Warrant Shares issuable upon exercise of this
Representative's Option shall be validly issued, fully paid, nonassessable, and
free of preemptive rights.

6. a. In case the Company shall sell or issue hereafter either
its Common Stock or any rights, options, warrants or obligations or securities
containing the right to subscribe for or purchase any Common Stock ("Options")
or exchangeable for or convertible into Common Stock ("Convertible Securities"),
at a price per share, as determined pursuant to paragraph (b) of this section,
less than the Exercise Price then in effect on the date of such sale or
issuance, then the number of Warrant Shares thereafter purchasable upon exercise
of this Representative's Option shall be determined by multiplying the number of
Warrant Shares theretofore purchasable upon exercise of this Representative's
Option by a fraction, (i) the numerator of which shall be the number of shares
of Common Stock outstanding on the date of issuance of such Common Stock,
Options or Convertible Securities and (ii) the denominator of which shall be the
number of shares of Common Stock outstanding on the date prior to the date of
issuance of such Common Stock or Convertible Securities plus the number of
shares of Common Stock which the aggregate consideration received by the Company
upon such issuance would purchase on such date at the Exercise Price then in
effect.

b. The following provisions, in addition to other provisions
of this section shall be applicable in determining any adjustment under
(a) above:

i. In case of the issuance or sale of Common Stock
part or all of which shall be for cash, the cash consideration
received by the Company therefor shall be deemed to be the
amount of cash proceeds of such sale of shares less any
compensation paid or discount allowed in the sale,
underwriting or purchase thereof by underwriters or dealers or
others performing similar services or any expenses incurred in
connection therewith, plus the amounts, if any, determined as
provided in (b)(ii) below.

ii. In case of the issuance or sale of Common Stock
wholly or partly for a consideration , the amount of the
consideration other than cash received by the Company for
such Common Stock shall be deemed to be the fair value of
such consideration as determined by a resolution adopted by
the Board of Directors of the Company acting in good faith,
less any compensation paid or incurred by the Company for
any underwriting of, or otherwise in connection with such
issuance, provided, however, the amount of such
consideration other than cash

4
<PAGE> 5

shall in no event exceed the cost thereof as recorded on the
books of the Company. In case of the issuance or sale of
Common Stock (otherwise than upon conversion or exchange)
together with other stock or securities or other assets of
the Company for a consideration which is received for both
such Common Stock and other securities or assets, the Board
of Directors of the Company acting in good faith shall
determine what part of the consideration so received is to
be deemed to be the consideration for the issuance of such
Common Stock, less any compensation paid or incurred by the
Company for any underwriting of, or otherwise in connection
with such issuance, provided, however, the amount of such
consideration other than cash shall in no event exceed the
cost thereof as recorded on the books of the Company. In
case at any time the Company shall declare a dividend or
make any other distribution upon any stock of the Company
payable in Common Stock then such Common Stock issuable in
payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration.

iii. The price per share of any Common Stock sold or
issued by the Company (other than pursuant to Options or
Convertible Securities) shall be equal to a price calculated
by dividing (A) the amount of the consideration received by
the Company, as determined pursuant to (b)(i) and (b)(ii)
above, upon such sale or issuance by (B) the number of shares
of Common Stock sold or issued.

iv. In case the Company shall at any time after the
date hereof issue any Options or Convertible Securities, the
following provisions shall apply in making any adjustment:

(A) The price per share for which Common
Stock is issuable upon the exercise of the Options or
upon conversion or exchange of the Convertible
Securities shall be determined by (1) dividing the
total amount, if any, received or receivable by the
Company as consideration for the issuance of such
Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any,
payable to the Company upon exercise of such Options
or the conversion or exchange of such Convertible
Securities, by (2) the aggregate maximum number of
shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of
such Convertible Securities.

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<PAGE> 6

(B) In determining the price per share for
which Common Stock is issuable upon exercise of the
Options or conversion or exchange of the Convertible
Securities as set forth above and in computing any
adjustment pursuant to (a) above: the aggregate
maximum number of shares of Common Stock issuable
upon the exercise of such Convertible Securities
shall be considered to be outstanding at the time
such Options or Convertible Securities were issued
and to have been issued for such price per share as
determined pursuant to (b)(iv)(A), and the
consideration for the issuance of such Options or
Convertible Securities and the amount of additional
consideration payable to the Company upon exercise of
such Options or upon the conversion or exchange of
such Convertible Securities shall be determined in
the same manner as the consideration received upon
the issuance or sale of Common Stock as provided in
paragraphs (b)(i) and (b)(ii).

(C) On the expiration of such Options or the
termination of any right to convert or exchange any
Convertible Securities, the number of Warrant Shares
subject to this Representative's Option shall
forthwith be readjusted to such number of Warrant
Shares as would have been obtained had the
adjustments made upon the issuance of such Options or
Convertible Securities been made upon the basis of
the delivery of only the number of shares of Common
Stock actually delivered upon the exercise of such
Options or upon conversion or exchange of such
Convertible Securities.

(D) If the minimum purchase price per share
of Common Stock provided for in any Option, or the
rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock,
shall change or a different purchase price or rate
shall become effective at any time or from time to
time (other than pursuant to any anti-dilution
provisions of such Options or Convertible Securities)
then upon such change becoming effective, the number
of Warrant Shares subject to this Representative's
Option shall forthwith be increased or decreased to
such number of Warrant Shares as would have been
obtained had the adjustments made upon the granting
or issuance of such Options or Convertible Securities
been made upon the basis of (1) the issuance of the
number of shares of Common Stock theretofore

6
<PAGE> 7
actually delivered upon the exercise of such Options
or upon the conversion or exchange of such
Convertible Securities, and the total consideration
received therefor, and (2) the granting or issuance
at the time of such change of any such Options or
Convertible Securities then still outstanding for the
consideration, if any, received by the Company
therefor and to be received on the basis of such
changed price or rate of exchange or conversion.

v. Except as otherwise specifically provided herein,
the date of issuance or sale of Common Stock shall be deemed
to be the date the Company is legally obligated to issue
such Common Stock or the date the Company is legally
obligated to issue any Option or Convertible Security. If
the Company shall take a record date for the purpose of
determining holders of Common Stock entitled to (A) receive
a dividend or other distribution payable in Common Stock or
in Options or Convertible Securities or (B) subscribe for or
purchase Common Stock, Options or Convertible Securities,
such record date shall be deemed to be the date of issue or
sale of the Common Stock, Options or Convertible Securities.

vi. The number of shares of Common Stock outstanding
at any given time shall not include treasury shares but the
disposition of any such treasury shares shall be considered an
issue or sale of Common Stock for the purposes of this
section.

vii. Anything hereinabove to the contrary
notwithstanding, no adjustment shall be made pursuant to (a)
above to the Exercise Price or to the number of Warrant Shares
purchasable upon:

(A) The issuance or sale by the Company of
any Common Stock pursuant to these Representative's
Options, the issuance or sale of Warrants or Common
Stock on exercise of a separate Representative's
Option to purchase Warrants, any securities offered
in a public offering underwritten by Schneider
Securities, Inc., any shares, Options or Convertible
Securities issued and outstanding at the effective
date of such public offering, any shares issuable
pursuant to the Company's stock option plan currently
in effect, provided the total number of shares
issuable pursuant to such plan does not exceed
200,000 shares.

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<PAGE> 8

(B) The issuance or sale by the Company of
any Common Stock pursuant to any Options or
Convertible Securities issued and outstanding prior
to the date of Effective Date of the Registration
Statement.

(C) The issuance or sale of Common Stock
pursuant to the exercise of Options or conversion or
exchange of Convertible Securities hereinafter issued
for which an adjustment has been made (or was not
required to be made) pursuant to the provisions
hereof.

(D) The increase in the number of shares of
Common Stock subject to any Option or Convertible
Security referred to in subsections (A), (B) or (C)
hereof pursuant to the provisions of such Option or
Convertible Securities designed to protect against
dilution.

c. If the Company shall at any time subdivide its outstanding
Common Stock by recapitalization, reclassification or split-up thereof,
the number of Warrant Shares subject to this Representative's Option
immediately prior to such subdivision shall be proportionately
increased, and if the Company shall at any time combine the outstanding
Common Stock by recapitalization, reclassification or combination
thereof, the number of Warrant Shares subject to this Representative's
Option immediately prior to such combination shall be proportionately
decreased. Any corresponding adjustment to the Exercise Price shall
become effective at the close of business on the record date for such
subdivision or combination.

d. If the Company after the date hereof shall distribute to
the holders of its Common Stock any securities or other assets (other
than a distribution of Common Stock or a cash distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be required
to make such equitable adjustment in the Exercise Price in effect
immediately prior to the record date of such distribution as may be
necessary to preserve the rights substantially proportionate to those
enjoyed hereunder by the Holder immediately prior to such distribution.
Any such adjustment made in good faith by the Board of Directors shall
be final and binding upon the Holder and shall become effective as of
the record date for such distribution.

e. No adjustment in the number of Warrant Shares subject to
this Representative's Option shall be required unless such adjustment
would require an increase or decrease in such number of Warrant Shares
of at least 1% of the then adjusted number

8
<PAGE> 9

of Warrant Shares issuable upon exercise of this Representative's
Option, provided, however, that any adjustments which by reason of the
foregoing are not required at the time to be made shall be carried
forward and taken into account and included in determining the amount
of any subsequent adjustment; and provided further, however, that in
case the Company shall at any time subdivide or combine the
outstanding Common Stock or issue any additional Common Stock as a
dividend, said percentage shall forthwith be proportionately increased
in the case of a combination or decreased in the case of a subdivision
or dividend of Common Stock so as to appropriately reflect the same.
If the Company shall make a record of the holders of its Common Stock
for the purpose of entitling them to receive any dividend or
distribution and legally abandon its plan to pay or deliver such
dividend or distribution then no adjustment in the number of Warrant
Shares subject to this Representative's Option shall be required by
reason of the making of such record.

f. Whenever the number of Warrant Shares purchasable upon the
exercise of this Representative's Option is adjusted as provided
herein, the Exercise Price shall be adjusted (to the nearest one tenth
of a cent) by respectively multiplying such Exercise Price immediately
prior to such adjustment by a fraction, the numerator of which shall be
the number of Warrant Shares purchasable upon the exercise of this
Representative's Option immediately prior to such adjustment, and the
denominator of which shall be the number of Warrant Shares purchasable
immediately thereafter.

g. In case of any reclassification of the outstanding Common
Stock (other than a change covered by (c) hereof or which solely
affects the par value of such Common Stock) or in the case of any
merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company
is the continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding Common
Stock), or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or
substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Representative's Option shall have the
right thereafter (until the expiration of the right of exercise of
this Representative's Option) to receive upon the exercise hereof, for
the same aggregate Exercise Price payable hereunder immediately prior
to such event, the kind and amount of shares of stock or other
securities or property receivable upon such reclassification, capital
reorganization, merger or consolidation, or upon the dissolution
following any sale or other transfer, by a holder of

9
<PAGE> 10

the number of Warrant Shares obtainable upon the exercise of this
Representative's Option immediately prior to such event; and if any
reclassification also results in a change in Common Stock covered by
(c) above, then such adjustment shall be made pursuant to both this
paragraph (g) and paragraph (c). The provisions of this paragraph (g)
shall similarly apply to successive re-classifications, or capital
reorganizations, mergers or consolidations, sales or other transfers.

If the Company after the date hereof shall issue or agree to
issue Common Stock, Options or Convertible Securities, other than as
described herein, and such issuance or agreement would in the opinion
of the Board of Directors of the Company materially affect the rights
of the Holders of the Representative's Options, the Exercise Price and
the number of Warrant Shares purchasable upon exercise of the
Representative's Options shall be adjusted in such matter, if any, and
at such time as the Board of Directors of the Company, in good faith,
may determine to be equitable in the circumstances. The minutes or
unanimous consent approving such action shall set forth the Board of
Director's determination as to whether an adjustment is warranted and
the manner of such adjustment. In the absence of such determination,
any Holder may request in writing that the Board of Directors make such
determination. Any such determination made in good faith by the Board
of Directors shall be final and binding upon the Holders. If the Board
fails, however, to make such determination within sixty (60) days after
such request, such failure shall be deemed a determination that an
adjustment is required.

h. i. Upon occurrence of each event requiring an
adjustment of the Exercise Price and of the number of
Warrant Shares purchasable upon exercise of this
Representative's Option in accordance with, and as required
by, the terms hereof, the Company shall forthwith employ a
firm of certified public accountants (who may be the regular
accountants for the Company) who shall compute the adjusted
Exercise Price and the adjusted number of Warrant Shares
purchasable at such adjusted Exercise Price by reason of
such event in accordance herewith. The Company shall give to
each Holder of the Representative's Options a copy of such
computation which shall be conclusive and shall be binding
upon such Holders unless contested by Holders by written
notice to the Company within thirty (30) days after receipt
thereof.

10
<PAGE> 11

ii. In case the Company after the date hereof shall
propose (A) to pay any dividend payable in stock to the
holders of its Common Stock or to make any other distribution
(other than cash dividends) to the holders of its Common Stock
or to grant rights to subscribe to or purchase any additional
shares of any class or any other rights or options, (B) to
effect any reclassification involving merely the subdivision
or combination of outstanding Common Stock, or (C) any capital
reorganization or any consolidation or merger, or any sale,
transfer or other disposition of its property, assets and
business substantially as an entirety, or the liquidation,
dissolution or winding up of the Company, then in each such
case, the Company shall obtain the computation described above
and if an adjustment to the Exercise Price is required, the
Company shall notify the Holders of the Representative's
Options of such proposed action, which shall specify the
record date for any such action or if no record date is
established with respect thereto, the date on which such
action shall occur or commence, or the date of participation
therein by the holders of Common Stock if any such date is to
be fixed, and shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the
effect of such action on the Exercise Price and the number, or
kind, or class of shares or other securities or property
obtainable upon exercise of this Representative's Option after
giving effect to any adjustment which will be required as a
result of such action. Such notice shall be given at least
twenty (20) days prior to the record date for determining
holders of the Common Stock for purposes of any such action,
and in the case of any action for which a record date is not
established then such notice shall be mailed at least twenty
(20) days prior to the taking of such proposed action.

iii. Failure to file any certificate or notice or to
give any notice, or any defect in any certificate or notice,
shall not effect the legality or validity of the adjustment in
the Exercise Price or in the number, or kind, or class of
shares or other securities or property obtainable upon
exercise of the Representative's Options or of any transaction
giving rise thereto.

i. The Company shall not be required to issue fractional
Warrant Shares upon any exercise of the Representative's Options. As
to any final fraction of a Share which the Holder of a
Representative's Option would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of
such final fraction in an

11
<PAGE> 12

amount equal to the same fraction of the market price of a share of
such stock on the business day preceding the day of exercise. The
Holder of a Representative's Option, by his acceptance of a
Representative's Option, expressly waives any right to receive any
fractional Warrant Shares.

j. Regardless of any adjustments pursuant to this section in
the Exercise Price or in the number, or kind, or class of shares or
other securities or other property obtainable upon exercise of a
Representative's Option, a Representative's Option may continue to
express the Exercise Price and the number of Warrant Shares obtainable
upon exercise at the same price and number of Warrant Shares as are
stated herein.

k. The number of Warrant Shares, the Exercise Price and all
other terms and provisions of the Company's agreement with the Holder
of this Representative's Option shall be determined exclusively
pursuant to the provisions hereof.

l. The above provisions of this section 6 shall similarly
apply to successive transactions which require adjustments.

m. Notwithstanding any other language to the contrary herein,
(i) the anti-dilution terms of this Representative's Option will not be
enforced so as to provide the Holder the right to receive, or for the
accrual of, cash dividends prior to the exercise of this
Representative's Option, and (ii) the anti-dilution terms of this
Representative's Option will not be enforced in such a manner as to
provide the Holder with disproportionate rights, privileges and
economic benefits not provided to purchasers of the Common Stock in the
Public Offering.

7. The issuance of any Warrant Shares or other securities upon the
exercise of this Representative's Option and the delivery of certificates or
other instruments representing such securities, or other securities, shall be
made without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not be
required to issue or deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

8. a. If, at any time after _____________, 1998 (the Effective
Date of the Registration Statement), and ending ____________, 2005 (seven years
after the Effective Date

12
<PAGE> 13
of the Registration Statement), the Company shall file a registration
statement (other than on Form S-4, Form S-8, or any successor form)
with the Securities and Exchange Commission (the "Commission") while
Warrant Shares are available for purchase upon exercise of this
Representative's Option or while any Warrant Shares (collectively, the
"Representative's Options and the underlying Warrant Shares, the
"Representative's Securities") are outstanding, the Company shall, on
two occasions only, give the Holder and all the then holders of such
Representative's Securities at least 30 days prior written notice of
the filing of such registration statement. If requested by the Holder
or by any such holder in writing within 20 days after receipt of any
such notice, the Company shall, at the Company's sole expense (other
than the fees and disbursements of counsel for the Holder or such
holder and the underwriting discounts, if any, payable in respect of
the securities sold by the Holder or any such holder), register or
qualify the Representative's Securities of the Holder or any such
holders who shall have made such request concurrently with the
registration of such other securities, all to the extent requisite to
permit the public offering and sale of the Representative's Securities
requested to be registered, and will use its best efforts through its
officers, directors, auditors and counsel to cause such registration
statement to become effective as promptly as practicable.
Notwithstanding the foregoing, if the managing underwriter of any such
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Representative's Securities
requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely
affect the distribution of such securities by the Company for its own
account, then the Holder or any such holder who shall have requested
registration of his or its Representative's Securities shall delay the
offering and sale of such Representative's Securities (or the portions
thereof so designated by such managing underwriter) for such period,
not to exceed 90 days, as the managing underwriter shall request,
provided that no such delay shall be required as to any
Representative's Securities if any securities of the Company are
included in such registration statement for the account of any person
other than the Company and the Holder unless the securities included in
such registration statement for such other person shall have been
reduced pro rata to the reduction of the Representative's Securities
which were requested to be included in such registration.

b. If at any time after __________, 1998 (the Effective Date
of the Registration Statement), and before ___________, 2003 (five
years after the Effective Date of the

13
<PAGE> 14

Registration Statement), the Company shall receive a written request
from holders of Representative's Securities who, in the aggregate, own
(or upon exercise of all Warrant Shares will own) a majority of the
total number of Warrant Shares, the Company shall, as promptly as
practicable, prepare and file with the Commission a registration
statement sufficient to permit the public offering and sale of the
Representative's Securities, and will use its best efforts through its
officers, directors, auditors and counsel to cause such registration
statement to become effective as promptly as practicable; provided,
however, that the Company shall only be obligated to file and obtain
effectiveness of one such registration statement for which all
expenses incurred in connection with such registration (other than the
fees and disbursements of counsel for the Holder or such holders and
underwriting discounts, if any, payable in respect of the
Representative's Securities sold by the Holder or any such holder)
shall be borne by the Company. In addition to the one demand
registration provided for hereinabove, the holders of the
Representative's Securities who, in the aggregate, own (or upon
exercise of all Representative's Options will own) a majority of the
total number of Warrant Shares issued or issuable upon exercise of the
Representative's Options may request that the Company prepare and file
a registration statement to permit the public offering and sale of the
Representative's Securities on two additional occasions only, but the
costs of preparation and filing of such additional registration
statements shall be at the then holders' cost and expense unless the
Company elects to register additional shares of Common Stock, in which
case the cost and expense of such registration statements will be
prorated between the Company and the holders of the Representative's
Securities according to the aggregate sales price of the securities
being issued.

c. In the event of a registration pursuant to the provisions
of this paragraph 8, the Company shall use its best efforts to cause
the Representative's Securities so registered to be registered or
qualified for sale under the securities or blue sky laws of such
jurisdictions as the Holder or such holders may reasonably request;
provided, however, that the Company shall not be required to qualify to
do business in any state by reason of this paragraph 8(c) in which it
is not otherwise required to qualify to do business and provided
further, that the Company has no obligation to qualify the
Representative's Securities where such qualification would cause any
unreasonable delay or expenditure by the Company.

d. The Company shall keep effective any registration or
qualification contemplated by this paragraph 8 and shall from time to
time amend or supplement each

14
<PAGE> 15

applicable registration statement, preliminary prospectus, final
prospectus, application, document and communication for such period of
time as shall be required to permit the Holder or such holders to
complete the offer and sale of the Representative's Securities covered
thereby. The Company shall in no event be required to keep any such
registration or qualification in effect for a period in excess of nine
months from the date on which the Holder and such holders are first
free to sell such Representative's Securities; provided, however, that
if the Company is required to keep any such registration or
qualification in effect with respect to securities other than the
Representative's Securities beyond such period, the Company shall keep
such registration or qualification in effect as it relates to the
Representative's Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of
such other securities.

e. In the event of a registration pursuant to the provisions
of this paragraph 8, the Company shall furnish to the Holder and to
each such holder such reasonable number of copies of the registration
statement and of each amendment and supplement thereto (in each case,
including all exhibits), such reasonable number of copies of each
prospectus contained in such registration statement and each supplement
or amendment thereto (including each preliminary prospectus), all of
which shall conform to the requirements of the Act and the rules and
regulations thereunder, and such other documents as the Holder or such
holders may reasonably request in order to facilitate the disposition
of the Representative's Securities included in such registration.

f. In the event of a registration pursuant to the provisions
of this paragraph 8, the Company shall furnish the Holder and each
holder of any Representative's Securities so registered with an
opinion of its counsel to the effect that (i) the registration
statement has become effective under the Act and no order suspending
the effectiveness of the registration statement, preventing or
suspending the use of the registration statement, any preliminary
prospectus, any final prospectus, or any amendment or supplement
thereto has been issued, nor to such counsel's actual knowledge has
the Securities and Exchange Commission or any securities or blue sky
authority of any jurisdiction instituted or threatened to institute
any proceedings with respect to such an order and (ii) the
registration statement and each prospectus forming a part thereof
(including each preliminary prospectus), and any amendment or
supplement thereto, complies as to form with the Act and the rules and
regulations thereunder. Such counsel shall also provide a Blue Sky
Memorandum setting

15
<PAGE> 16

forth the jurisdictions in which the Representative's Securities
have been registered or qualified for sale pursuant to the
provisions of paragraph 8(c).

g. The Company agrees that until all the Representative's
Securities have been sold under a registration statement or pursuant to
Rule 144 under the Act, it shall keep current in filing all reports,
statements and other materials required to be filed with the Commission
to permit holders of the Representative's Securities to sell such
securities under Rule 144.

h. The Holder and any holders who propose to register their
Representative's Securities under the Act shall execute and deliver to
the Company a selling stockholder questionnaire on a form to be
provided by the Company.

i. In addition to the rights above provided, the Company will
cooperate with the then holders of the Representative's Options and
Representative's Securities in preparing and signing a registration
statement, on two occasions only in addition to the registration
statements discussed above, required in order to sell or transfer the
Representative's Securities and will supply all information required
therefor, but such additional registration statements shall be at the
then Holders' cost and expense unless the Company elects to register
additional shares of the Company's Common Stock in which case the cost
and expense of such registration statements will be prorated between
the Company and the Holders of the Representative's Options and
Representative's Securities according to the aggregate sales prices of
the securities being sold.

16
<PAGE> 17

from time to time amended and supplemented), or any amendment or
supplement thereto, or (B) in any application or other document or
communication (in this Section 9 collectively called an "application")
executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to register or qualify any of the
Representative's Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities exchange; or
any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance
upon and in conformity with written information furnished to the
Company with respect to the Holder or any holder of any of the
Representative's Securities by or on behalf of such person expressly
for inclusion in any registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be, or (ii) any breach of any
representation, warranty, covenant or agreement of the Company
contained in this Representative's Option. The foregoing agreement to
indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this
Representative's Option.

If any action is brought against the Holder or any holder of
any of the Representative's Securities or any of its officers,
directors, partners, employees, agents or counsel, or any controlling
persons of such person (an "indemnified party") in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, such indemnified party or parties shall promptly notify the
Company in writing of the institution of such action (but the failure
so to notify shall not relieve the Company from any liability it may
otherwise have to Holder or any holder of any of the Representative's
Securities) and the Company shall promptly assume the defense of such
action, including the employment of counsel (reasonably satisfactory
to such indemnified party or parties) and payment of expenses. Such
indemnified party or parties shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties
unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action
or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties to have charge of
the defense of such action or such indemnified party or parties shall
have reasonably concluded that there may be one

17
<PAGE> 18

or more legal defenses available to it or them or to other indemnified
parties which are different from or additional to those available to
the Company, in any of which events such fees and expenses shall be
borne by the Company and the Company shall not have the right to
direct the defense of such action on behalf of the indemnified party
or parties. Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of
any such claim or action effected without its written consent.

b. The Holder and each holder agrees to indemnify and hold
harmless the Company, each director of the Company, each officer of the
Company who shall have signed any registration statement covering the
Representative's Securities held by the Holder and each holder and each
other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to the Holder and
each holder in paragraph 9(a), but only with respect to statements or
omissions, if any, made in any registration statement, preliminary
prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written
information furnished to the Company with respect to the Holder and
each holder by or on behalf of the Holder and each holder expressly for
inclusion in any such registration statement, preliminary prospectus,
or final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be. If any action shall be brought against
the Company or any other person so indemnified based on any such
registration statement, preliminary prospectus, or final prospectus, or
any amendment or supplement thereto, or in any application, and in
respect of which indemnity may be sought against the Holder and each
holder pursuant to this paragraph 9(b), the Holder and each holder
shall have the rights and duties given to the Company, and the Company
and each other person so indemnified shall have the rights and duties
given to the indemnified parties, by the provisions of paragraph 9(a).

18
<PAGE> 19

the indemnification provided for in this Section 9 is for any reason
held to be unenforceable by the Company and the Holder and any holder,
then the Company (including for this purpose any contribution made by
or on behalf of any director of the Company, any officer of the
Company who signed any such registration statement and any controlling
person of the Company), as one entity, and the Holder and any holder
of any of the Representative's Securities included in such
registration in the aggregate (including for this purpose any
contribution by or on behalf of the Holder or any holder), as a second
entity, shall contribute to the losses, liabilities, claims, damages
and expenses whatsoever to which any of them may be subject, on the
basis of relevant equitable considerations such as the relative fault
of the Company and the Holder or any such holder in connection with
the facts which resulted in such losses, liabilities, claims, damages
and expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission, shall be
determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information
supplied by the Company, by the Holder or by any holder of
Representative's Securities included in such registration, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, alleged statement,
omission or alleged omission. The Company and the Holder agree that it
would be unjust and inequitable if the respective obligations of the
Company and the Holder for contribution were determined by pro rata or
per capita allocation of the aggregate losses, liabilities, claims,
damages and expenses (even if the Holder and the other indemnified
parties were treated as one entity for such purpose) or by any other
method of allocation that does not reflect the equitable
considerations referred to in this paragraph 9(c). No person guilty of
a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. For purposes of this
paragraph 9(c), each person, if any, who controls the Holder or any
holder of any of the Representative's Securities within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent and counsel of each such
person, shall have the same rights to contribution as such person and
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed any such registration
statement, and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to the provisions

19
<PAGE> 20

of this paragraph 9(c). Anything in this paragraph 9(c) to the
contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without
its written consent. This paragraph 9(c) is intended to supersede any
right to contribution under the Act, the Exchange Act or otherwise.

10. Unless the Representative's Securities have been registered or an
exemption from such registration is available, the Warrant Shares issued upon
exercise of the Representative's Options shall be subject to a stop transfer
order and the certificate or certificates evidencing any such Warrant Shares
shall bear the following legend:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, NOR HAVE THEY BEEN REGISTERED UNDER THE SECURITIES ("BLUE SKY")
LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, OR HYPOTHECATED UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND UNDER THE APPLICABLE STATE SECURITIES
("BLUE SKY") LAWS OR UNLESS THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND LAWS IS ESTABLISHED TO THE SATISFACTION
OF THE COMPANY, WHICH MAY NECESSITATE A WRITTEN OPINION OF SELLER'S
COUNSEL SATISFACTORY TO COMPANY COUNSEL.

11. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Representative's Option (and upon
surrender of any Representative's Option if mutilated), and upon reimbursement
of the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Representative's Option of like date, tenor
and denomination.

12. The Holder of any Representative's Option shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Representative's Option.

13. This Representative's Option shall be construed in accordance with
the laws of the State of Colorado, without giving effect to conflict of laws.

Dated: _____________, 1998

FACTUAL DATA CORP.

By:
-----------------------------------------
Jerald H. Donnan, Chief Executive Officer

[SEAL]

<PAGE> 21

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Representative's Option.)

FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________ Representative's Options to
purchase __________ shares of Common Stock of Factual Data Corp. (the
"Company"), together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ____________________________ attorney to
transfer such Representative's Options on the books of the Company, with full
power of substitution.

Dated:
---------------------

Signature:
--------------------------------------

Signature Guaranteed:

NOTICE

The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.

<PAGE> 22

ELECTION TO EXERCISE

(To be executed by the holder if such holder desires to
exercise the attached Representative's Option)

The undersigned hereby exercises his or its rights to subscribe for
__________ shares of Common Stock covered by the within Representative's Option
(each as defined in the within Representative's Option) and tenders payment
herewith in the amount of $__________ in accordance with the terms thereof, and
requests that certificates for such Warrants be issued in the name of, and
delivered to:

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Print Name, Address and Social Security or
Tax Identification Number)

and, if such number of Warrants (or portions thereof) shall not be all the
Warrants covered by the within Representative's Option, that a new
Representative's Option for the balance of the Representative's Options (or
portions thereof) covered by the within Representative's Option be registered in
the name of, and delivered to, the undersigned at the address stated below.

Name:
---------------------------------------------------------------------------
(Print)

Address:
------------------------------------------------------------------------

- ------------------------------------
(Signature)

Dated: Signature Guaranteed:
------------------------------

NOTICE

<PAGE> 1
EXHIBIT 4.3A

THE REPRESENTATIVE'S OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE "SECURITIES") HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF CERTAIN STATES
UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES. HOWEVER,
NEITHER THE REPRESENTATIVE'S OPTIONS NOR SUCH SECURITIES MAY BE SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (I) A
POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (II) A
SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (III) AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND UNDER THE APPLICABLE BLUE SKY
LAWS.

THIS REPRESENTATIVE'S OPTION MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
EXCEPT AS OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS
REPRESENTATIVE'S OPTION, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL
NOT SELL, TRANSFER OR ASSIGN THIS REPRESENTATIVE'S OPTION EXCEPT AS
OTHERWISE PROVIDED HEREIN.

FACTUAL DATA CORP.

Representative's Option for the Purchase of Warrants

No. UWW-001 120,000 Representative's Options

THIS CERTIFIES that, for receipt in hand of $50 and other value
received (the "Purchase Price"), SCHNEIDER SECURITIES, INC. (the "Holder"), is
entitled to subscribe for and purchase from FACTUAL DATA CORP., a Colorado
corporation (the "Company"), upon the terms and conditions set forth herein, at
any time, or from time to time, after __________, 1999 (12 months from the
Effective Date, as defined below) and before 5:00 p.m. Mountain time on
__________, 2003 (the "Exercise Period"), 120,000 Warrants (a "Warrant" or the
"Warrants") of the Company at an exercise price of $______ per Representative's
Option or 120% of the offering price of Warrants sold by the Company in the
Public Offering (hereinafter defined). Each Warrant shall be identical to the
Warrants sold in the public offering to be underwritten by the Holder (the
"Public Offering"). Each Warrant shall be exercisable to purchase one share of
Common Stock (a "Warrant Share") at a price of $________ (130% of the price of
the Common Stock sold in the Public Offering; the "Exercise Price") until
___________, 2001, which is three years from the date on which the Company's
Registration Statement on Form SB-2, Registration No. 333- (the
"Registration Statement") is declared effective by the Securities and Exchange
Commission (the "Effective Date"). The terms and provisions of the Warrants,
except with respect to redemption, shall be governed by a warrant agreement
between the Company and its transfer agent (the "Warrant Agreement").

The term the "Holder" as used herein shall include any transferee to
whom this Representative's Option has been transferred in accordance with the
above. As used herein the term
<PAGE> 2
"this Representative's Option" shall mean and include this Representative's
Option and any Representative's Option or Representative's Options hereafter
issued as a consequence of the exercise or transfer of this Representative's
Option in whole or in part, but shall exclude the Warrants, and the term
"Common Stock" shall mean and include the Company's Common Stock with ordinary
voting power, which class at the date hereof is publicly traded.

1. This Representative's Option may not be sold, transferred,
assigned, pledged or hypothecated until _____________, 1999 (12 months from the
Effective Date of the Registration Statement) except that it may be transferred,
in whole or in part, (i) to one or more officers or partners of the Holder (or
the officers or partners of any such partner); (ii) to a member of the
underwriting syndicate and/or its officers or partners; or (iii) by operation of
law. After ___________, 1999, this Representative's Option may be sold,
transferred, assigned or hypothecated in accordance with applicable law. Not
withstanding any language to the contrary elsewhere herein, in the event of
transfer of this Representatives Warrant, the transferee agrees that he, she or
it will, upon receipt hereof, exercise this Representative's Warrant not more
than 72 hours after completion of such transfer.

2. a. This Representative's Option may be exercised during
the Exercise Period as to the whole or any lesser number of Warrants,
by the surrender of this Representative's Option (with the election
attached hereto duly executed) to the Company at its office at 3665
JFK Parkway, Building 1, Suite 200, Fort Collins, Colorado 80525, or
such other place as is designated in writing by the Company, together
with a certified or bank cashier's check payable to the order of the
Company in an amount equal to the Purchase Price.

b. Following exercise of this Representative's Option,
and at anytime thereafter through and until expiration of the
Warrants, the Holder may exercise the Warrants underlying this
Representative's Option by tendering a notice of exercise, together
with a certified or bank cashier's check payable to the order of the
Company, in an amount equal to the Exercise Price multiplied by the
number of Warrant Shares as to which such exercise relates.

c. Upon written request of the Holder, and in lieu of
payment of the Exercise Price of the Warrants by check in accordance
with paragraph 2(b) hereof, the Holder may exercise the Warrants (or
any portion thereof) for and receive the number of Warrants equal to a
fraction, the numerator of which equals (i) the amount by which the
Current Market Price of the Common Stock for the ten (10) trading days
preceding the date of exercise exceeds the Exercise Price per Warrant,
multiplied by (ii) the number of Warrant Shares to be purchased; the
denominator of which equals the Current Market Price.

2
<PAGE> 3
d. For the purposes of any computation under this
Representative's Option, the "Current Market Price" at any date shall
be the closing price of the Common Stock on the business day next
preceding the event requiring an adjustment hereunder. If the
principal trading market for such securities is an exchange, the
closing price shall be the reported last sale price on such exchange
on such day provided if trading of such Common Stock is listed on any
consolidated tape, the closing price shall be the reported last sale
price set forth on such consolidated tape. If the principal trading
market for such securities is the over-the-counter market, the closing
price shall be the last reported sale price on such date as set forth
by The Nasdaq Stock Market, Inc., or, if the security is not quoted on
such market, the average closing bid and asked prices as set forth in
the National Quotation Bureau pink sheet or the Electronic Bulletin
Board System for such day. Notwithstanding the foregoing, if there is
no reported last sale price or average closing bid and asked prices,
as the case may be, on a date prior to the event requiring an
adjustment hereunder, then the Current Market Price shall be
determined as of the latest date prior to such day for which such last
sale price or average closing bid and asked price is available.

3. Upon each exercise of this Representative's Option, the Holder
shall be deemed to be the holder of record of the Warrants issuable upon such
exercise, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing such Warrants shall not then have been
actually delivered to the Holder. As soon as practicable after each such
exercise of this Representative's Option, the Company shall issue and deliver
to the Holder a certificate or certificates for the Warrants issuable upon such
exercise, registered in the name of the Holder or its designee. If this
Representative's Option should be exercised in part only, the Company shall,
upon surrender of this Representative's Option for cancellation, execute and
deliver a new Representative's Option evidencing the right of the Holder to
purchase the balance of the Warrants (or portions thereof) subject to purchase
hereunder.

4. Any warrants, other than the Warrants, issued upon the
transfer or exercise in part of this Representative's Option (together with
this Representative's Option, the "Representative's Options") shall be numbered
and shall be registered in a Representative's Option Register as they are
issued. The Company shall be entitled to treat the registered holder of any
Representative's Option on the Representative's Option Register as the owner in
fact thereof for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in such Representative's Option on the part of
any other person. The Representative's Options shall be transferable only on
the

3
<PAGE> 4
books of the Company upon delivery thereof duly endorsed by the Holder or by
his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer. In all cases of
transfer by an attorney, executor, administrator, guardian or other legal
representative, duly authenticated evidence of his or its authority shall be
produced. Upon any registration of transfer, the Company shall deliver a new
Representative's Option or Representative's Options to the person entitled
thereto. The Representative's Options may be exchanged, at the option of the
Holder thereof, for another Representative's Option, or other Representative's
Options of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Warrants (or portions thereof)
upon surrender to the Company or its duly authorized agent. Notwithstanding
the foregoing, the Company shall have no obligation to cause Representative's
Options to be transferred on its books to any person if, in the opinion of
counsel to the Company, such transfer does not comply with the provisions of
the Securities Act of 1933, as amended (the "Act"), or applicable state blue
sky laws and the rules and regulations thereunder.

5. The Company shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for the purpose of
providing for the exercise of this Representative's Option and the Warrants
purchasable upon exercise of this Representative's Option, such number of
shares of Common Stock as shall, from time to time, be sufficient therefor.
The Company covenants that all shares of Common Stock issuable upon exercise of
Warrants underlying this Representative's Option shall be validly issued, fully
paid, nonassessable, and free of preemptive rights.

6. The rights and privileges of the Warrants issuable on exercise
of this Representative's Option shall be as provided in the warrant certificate
(the "Warrant Certificate") to be delivered to the Holder on exercise of this
Representative's Option. All anti-dilution and other rights shall be as
provided for in the Warrant Certificate and as set forth in the warrant
agreement by and between the Company and the Warrant Agent for the Company (the
"Warrant Agreement"). The provisions of the Warrant Agreement relating to
anti-dilution rights and any other rights and privileges granted to holders of
publicly traded Warrants are incorporated by reference herein as if more fully
set forth herein. Notwithstanding any other language to the contrary herein or
in the Warrant Agreement by and between the Company and the Warrant Agent, in
the event, prior to the exercise of this Warrant, Holders of publicly-traded
Warrants shall be entitled to the benefit of any anti-dilution provisions of
the Warrant Agreement or the Warrant Certificate then, in such event, the
Warrants issuable upon exercise of this Representative's Option shall be
adjusted in accordance with the provisions of the

4
<PAGE> 5
anti-dilution provisions of the Warrant Certificate and the Warrant Agreement
in a manner identical to the adjustments made pursuant to the anti-dilution
provisions and other rights and privileges applicable to publicly-traded
warrants. Any such adjustment may be made at or immediately following the date
of exercise hereof. Notwithstanding any other language to the contrary herein,
(i) the anti-dilution terms of this Representative's Option will not be
enforced so as to provide the Holder the right to receive, or for the accrual
of, cash dividends prior to the exercise of this Representative's Option, and
(ii) the anti-dilution terms of this Representative's Option will not be
enforced in such a manner as to provide the Holder with disproportionate
rights, privileges and economic benefits not provided to purchasers of Warrants
in the Public Offering.

7. The issuance of any Warrants or other securities upon the
exercise of this Representative's Option or any Warrant Shares upon the
exercise of the Warrants, and the delivery of certificates or other instruments
representing such securities, or other securities, shall be made without charge
to the Holder for any tax or other charge in respect of such issuance. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required
to issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.

8. a. If, at any time after ___________, 1998 (the
Effective Date of the Registration Statement), and ending
____________, 2005 (seven years after the Effective Date of the
Registration Statement), the Company shall file a registration
statement (other than on Form S-4, Form S-8, or any successor form)
with the Securities and Exchange Commission (the "Commission") while
Warrants are available for purchase upon exercise of this
Representative's Option or while any Warrants or Warrant Shares
(collectively, the "Representative's Securities") are outstanding, the
Company shall, on two occasions only, give the Holder and all the then
holders of such Representative's Options and Representative's
Securities at least 30 days prior written notice of the filing of such
registration statement. If requested by the Holder or by any such
holder in writing within 20 days after receipt of any such notice, the
Company shall, at the Company's sole expense (other than the fees and
disbursements of counsel for the Holder or such holder and the
underwriting discounts, if any, payable in respect of the securities
sold by the Holder or any such holder), register or qualify the
Representative's Securities of the Holder or any such

5
<PAGE> 6
holders who shall have made such request concurrently with the
registration of such other securities, all to the extent requisite to
permit the public offering and sale of the Representative's
Securities, and will use its best efforts through its officers,
directors, auditors and counsel to cause such registration statement
to become effective as promptly as practicable. Notwithstanding the
foregoing, if the managing underwriter of any such offering shall
advise the Company in writing that, in its opinion, the distribution
of all or a portion of the Representative's Securities requested to be
included in the registration concurrently with the securities being
registered by the Company would materially adversely affect the
distribution of such securities by the Company for its own account,
then the Holder or any such holder who shall have requested
registration of his or its Representative's Securities shall delay the
offering and sale of such Representative's Securities (or the portions
thereof so designated by such managing underwriter) for such period,
not to exceed 90 days, as the managing underwriter shall request,
provided that no such delay shall be required as to any
Representative's Securities if any securities of the Company are
included in such registration statement for the account of any person
other than the Company and the Holder unless the securities included
in such registration statement for such other person shall have been
reduced pro rata to the reduction of the Representative's Securities
which were requested to be included in such registration.

b. If at any time after _____________, 1998 (the
Effective Date of the Registration Statement), and before ___________,
2003 (five years after the Effective Date of the Registration
Statement), the Company shall receive a written request from holders
of Representative's Securities who, in the aggregate, own (or upon
exercise of all Representative's Options will own) a majority of the
total number of Warrants or underlying shares of Common Stock issued
or issuable upon exercise of the Representative's Options or
underlying Warrants, the Company shall, as promptly as practicable,
prepare and file with the Commission a registration statement
sufficient to permit the public offering and sale of the
Representative's Securities, and will use its best efforts through its
officers, directors, auditors and counsel to cause such registration
statement to become effective as promptly as practicable; provided,
however, that the Company shall only be obligated to file and obtain
effectiveness of one such registration statement for which all
expenses incurred in connection with such registration (other than the
fees and disbursements of counsel for the Holder or such holders and
underwriting discounts, if any, payable in respect of the

6
<PAGE> 7
Representative's Securities sold by the Holder or any such holder)
shall be borne by the Company. In addition to the one demand
registration provided for hereinabove, the holders of the
Representative's Securities who, in the aggregate, own (or upon
exercise of all Representative's Options will own) a majority of the
total number of Warrants issued or issuable upon exercise of the
Representative's Options may request that the Company prepare and file
a registration statement to permit the public offering and sale of the
Representative's Securities on two additional occasions only, but the
costs of preparation and filing of such additional registration
statements shall be at the then holders' cost and expense unless the
Company elects to register additional shares of Common Stock, in which
case the cost and expense of such registration statements will be
prorated between the Company and the holders of the Representative's
Securities according to the aggregate sales price of the securities
being issued.

c. In the event of a registration pursuant to the
provisions of this paragraph 8, the Company shall use its best efforts
to cause the Representative's Securities so registered to be
registered or qualified for sale under the securities or blue sky laws
of such jurisdictions as the Holder or such holders may reasonably
request; provided, however, that the Company shall not be required to
qualify to do business in any state by reason of this paragraph 8(c)
in which it is not otherwise required to qualify to do business and
provided further, that the Company has no obligation to qualify the
Representative's Securities where such qualification would cause any
unreasonable delay or expenditure by the Company.

d. The Company shall keep effective any registration or
qualification contemplated by this paragraph 8 and shall from time to
time amend or supplement each applicable registration statement,
preliminary prospectus, final prospectus, application, document and
communication for such period of time as shall be required to permit
the Holder or such holders to complete the offer and sale of the
Representative's Securities covered thereby. The Company shall in no
event be required to keep any such registration or qualification in
effect for a period in excess of nine months from the date on which
the Holder and such holders are first free to sell such
Representative's Securities; provided, however, that if the Company is
required to keep any such registration or qualification in effect with
respect to securities other than the Representative's Securities
beyond such period, the Company shall keep such registration or
qualification in effect as it relates to the

7
<PAGE> 8
Representative's Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of
such other securities.

e. In the event of a registration pursuant to the
provisions of this paragraph 8, the Company shall furnish to the
Holder and to each such holder such reasonable number of copies of the
registration statement and of each amendment and supplement thereto
(in each case, including all exhibits), such reasonable number of
copies of each prospectus contained in such registration statement and
each supplement or amendment thereto (including each preliminary
prospectus), all of which shall conform to the requirements of the Act
and the rules and regulations thereunder, and such other documents as
the Holder or such holders may reasonably request in order to
facilitate the disposition of the Representative's Securities included
in such registration.

f. In the event of a registration pursuant to the
provisions of this paragraph 8, the Company shall furnish the Holder
and each holder of any Representative's Securities so registered with
an opinion of its counsel to the effect that (i) the registration
statement has become effective under the Act and no order suspending
the effectiveness of the registration statement, preventing or
suspending the use of the registration statement, any preliminary
prospectus, any final prospectus, or any amendment or supplement
thereto has been issued, nor to such counsel's actual knowledge has
the Securities and Exchange Commission or any securities or blue sky
authority of any jurisdiction instituted or threatened to institute
any proceedings with respect to such an order and (ii) the
registration statement and each prospectus forming a part thereof
(including each preliminary prospectus), and any amendment or
supplement thereto, complies as to form with the Act and the rules and
regulations thereunder. Such counsel shall also provide a Blue Sky
Memorandum setting forth the jurisdictions in which the
Representative's Securities have been registered or qualified for sale
pursuant to the provisions of paragraph 8(c).

g. The Company agrees that until all the
Representative's Securities have been sold under a registration
statement or pursuant to Rule 144 under the Act, it shall keep current
in filing all reports, statements and other materials required to be
filed with the Commission to permit holders of the Representative's
Securities to sell such securities under Rule 144.

8
<PAGE> 9
h. The Holder and any holders who propose to register
their Representative's Securities under the Act shall execute and
deliver to the Company a selling stockholder questionnaire on a form
to be provided by the Company.

i. In addition to the rights above provided, the Company
will cooperate with the then holders of the Representative's Options
and underlying Representative's Securities in preparing and signing a
registration statement, on two occasions only in addition to the
registration statements discussed above, required in order to sell or
transfer the Representative's Securities and will supply all
information required therefor, but such additional registration
statements shall be at the then Holders' cost and expense unless the
Company elects to register additional shares of the Company's Common
Stock in which case the cost and expense of such registration
statements will be prorated between the Company and the Holders of the
Representative's Options and Representative's Securities according to
the aggregate sales prices of the securities being sold.

9. a. Subject to the conditions set forth below, the
Company agrees to indemnify and hold harmless the Holder, any holder
of any of the Representative's Securities, their officers, directors,
partners, employees, agents and counsel, and each person, if any, who
controls any such person within the meaning of Section 15 of the Act
or Section 20(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all loss, liability,
charge, claim, damage and expense whatsoever (which shall include, for
all purposes of this Section 9, but not be limited to, attorneys' fees
and any and all expense whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), as and when incurred, arising
out of, based upon, or in connection with (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any
registration statement, preliminary prospectus or final prospectus (as
from time to time amended and supplemented), or any amendment or
supplement thereto, or (B) in any application or other document or
communication (in this Section 9 collectively called an "application")
executed by or on behalf of the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to register or qualify any of the
Representative's Securities under the securities or blue sky laws
thereof or filed with the Commission or any securities exchange; or
any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the

9
<PAGE> 10
statements therein not misleading, unless such statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company with respect to the Holder or any holder of
any of the Representative's Securities by or on behalf of such person
expressly for inclusion in any registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (ii) any breach
of any representation, warranty, covenant or agreement of the Company
contained in this Representative's Option. The foregoing agreement to
indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this
Representative's Option.

10
<PAGE> 11
b. The Holder and each holder agrees to indemnify and
hold harmless the Company, each director of the Company, each officer
of the Company who shall have signed any registration statement
covering the Representative's Securities held by the Holder and each
holder and each other person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, to the same extent as the foregoing indemnity from the Company to
the Holder and each holder in paragraph 9(a), but only with respect to
statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, or
in any application, in reliance upon and in conformity with written
information furnished to the Company with respect to the Holder and
each holder by or on behalf of the Holder and each holder expressly
for inclusion in any such registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be. If any action
shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary
prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, and in respect of which indemnity may
be sought against the Holder and each holder pursuant to this
paragraph 9(b), the Holder and each holder shall have the rights and
duties given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of paragraph 9(a).

c. To provide for just and equitable contribution, if
(i) an indemnified party makes a claim for indemnification pursuant to
paragraph 9(a) or 9(b) (subject to the limitations thereof) but it is
found in a final judicial determination, not subject to further
appeal, that such indemnification may not be enforced in such case,
even though this Agreement expressly provides for indemnification in
such case, or (ii) any indemnified or indemnifying party seeks
contribution under the Act, the Exchange Act or otherwise because the
indemnification provided for in this Section 9 is for any reason held
to be unenforceable by the Company and the Holder and any holder, then
the Company (including for this purpose any contribution made by or on
behalf of any director of the Company, any officer of the Company who
signed any such registration statement and any controlling person of
the Company), as one entity, and the Holder and any holder of any of
the Representative's Securities included in such registration in the
aggregate (including for this purpose any

11
<PAGE> 12
contribution by or on behalf of the Holder or any holder), as a second
entity, shall contribute to the losses, liabilities, claims, damages
and expenses whatsoever to which any of them may be subject, on the
basis of relevant equitable considerations such as the relative fault
of the Company and the Holder or any such holder in connection with
the facts which resulted in such losses, liabilities, claims, damages
and expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission, shall be
determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information
supplied by the Company, by the Holder or by any holder of
Representative's Securities included in such registration, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, alleged statement,
omission or alleged omission. The Company and the Holder agree that
it would be unjust and inequitable if the respective obligations of
the Company and the Holder for contribution were determined by pro
rata or per capita allocation of the aggregate losses, liabilities,
claims, damages and expenses (even if the Holder and the other
indemnified parties were treated as one entity for such purpose) or by
any other method of allocation that does not reflect the equitable
considerations referred to in this paragraph 9(c). No person guilty
of a fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation. For purposes of this
paragraph 9(c), each person, if any, who controls the Holder or any
holder of any of the Representative's Securities within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent and counsel of each such
person, shall have the same rights to contribution as such person and
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed any such registration
statement, and each director of the Company shall have the same rights
to contribution as the Company, subject in each case to the provisions
of this paragraph 9(c). Anything in this paragraph 9(c) to the
contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without
its written consent. This paragraph 9(c) is intended to supersede any
right to contribution under the Act, the Exchange Act or otherwise.

12
<PAGE> 13
10. The securities issued upon exercise of the Representative's
Options shall be subject to a stop transfer order and the certificate or
certificates evidencing any such securities shall bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF (THE "SECURITIES") HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF CERTAIN STATES
UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES. HOWEVER,
NEITHER THE REPRESENTATIVE'S OPTIONS NOR SUCH SECURITIES MAY BE SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (I) A
POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (II) A
SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (III) AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND UNDER THE APPLICABLE BLUE SKY
LAWS.

11. Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of any Representative's Option (and upon
surrender of any Representative's Option if mutilated), and upon reimbursement
of the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Representative's Option of like date, tenor
and denomination.

12. The Holder of any Representative's Option shall not have,
solely on account of such status, any rights of a stockholder of the Company,
either at law or in equity, or to any notice of meetings of stockholders or of
any other proceedings of the Company, except as provided in this
Representative's Option.

13. This Representative's Option shall be construed in accordance
with the laws of the State of Colorado, without giving effect to conflict of
laws.

Dated: ____________, 1998

FACTUAL DATA CORP.

By:
-----------------------------------------
Jerald H. Donnan, Chief Executive Officer

[SEAL]

13
<PAGE> 14
FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Representative's Option.)

FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________ Representative's Options to
purchase __________ Warrants of Factual Data Corp. (the "Company"), together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ____________________________ attorney to transfer such
Representative's Options on the books of the Company, with full power of
substitution.

Dated:
-----------------

Signature:
----------------------------

Signature Guaranteed:

NOTICE

The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must
be guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.

14
<PAGE> 15
ELECTION TO EXERCISE

(To be executed by the holder if such holder desires to
exercise the attached Representative's Option)

The undersigned hereby exercises his or its rights to subscribe for
__________ Warrants covered by the within Representative's Option (each as
defined in the within Representative's Option) and tenders payment herewith in
the amount of $__________ in accordance with the terms thereof, and requests
that certificates for such Warrants be issued in the name of, and delivered to:

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(Print Name, Address and Social Security or
Tax Identification Number)

and, if such number of Warrants (or portions thereof) shall not be all the
Warrants covered by the within Representative's Option, that a new
Representative's Option for the balance of the Representative's Options (or
portions thereof) covered by the within Representative's Option be registered
in the name of, and delivered to, the undersigned at the address stated below.

Name:
---------------------------------------------------------------------------
(Print)

Address:
------------------------------------------------------------------------

- --------------------------------------
(Signature)

Dated: Signature Guaranteed:
--------------------------------

NOTICE

The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must
be guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.

<PAGE> 1
EXHIBITS 5.1
AND 23.2

April ___, 1998

Factual Data Corp.
5200 Hahns Peak Drive
Loveland, Colorado 80538

Re: Units, Common Stock and Warrants of Factual Data Corp.

Ladies/Gentlemen:

We have examined the Registration Statement (No. 333-47051, as
amended) on Form SB-2 (the "Registration Statement") filed on February 27, 1998
by Factual Data Corp. (the "Company") with the Securities and Exchange
Commission (the "Commission") in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of 1,200,000 of the
Company's Units (the "Units"), each consisting of one share of the Company's
common stock and one of the Company's redeemable common stock purchase
warrants, including up to 180,000 shares of common stock and redeemable common
stock purchase warrants subject to over-allotment options granted by the
Company to the underwriters, and the registration under the Securities Act of
120,000 of the Company's Units, including common stock, redeemable common stock
purchase warrants and underlying shares of common stock, issuable pursuant to
options granted by the Company to the representative of the underwriters. We
are familiar with the proceedings taken and proposed to be taken by the Company
in connection with the proposed authorization, issuance and sale of the Units,
common stock, redeemable common stock purchase warrants and underlying shares
of common stock.

We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary for the purposes of this opinion,
including the following: (a) the Restated and Amended Articles of
Incorporation of the Company; (b) the Amended Bylaws of the Company; and (c)
resolutions by unanimous written consent of the Board of Directors of the
Company dated as of February 25, 1998.

For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies, and the authenticity of the originals of
all documents submitted to us as copies. We have also assumed the genuineness
of the signatures of persons signing all documents in connection with which
this opinion is rendered, the authority of such persons signing on behalf of
the parties thereto other than the Company, and the due authorization,
execution and delivery of all documents by the parties thereto other than the
Company.

<PAGE> 2
Factual Data Corp.
April ___, 1998
Page 2

Based upon the foregoing, we are of the opinion that: when, as and if
(i) the Registration Statement shall have become effective pursuant to the
provisions of the Securities Act, (ii) the Company shall have received payment
in full for the Units, common stock and redeemable warrants to purchase common
stock, (iii) the Units, common stock and redeemable warrants to purchase common
stock shall have been issued in the form and containing the terms described in
the Registration Statement, and (iv) any legally required consents, any other
regulatory authorities shall have been obtained, the Units, common stock and
redeemable warrants to purchase common stock, when sold will be legally issued,
fully paid and nonassessable.

We consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement.

We are admitted to practice law in the State of Colorado and we
express no opinions as to the matters under or involving any laws other than
the laws of the State of Colorado and the federal laws of the United States of
America.

This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.

Very truly yours,

JONES & KELLER, P.C.

<PAGE> 1

EXHIBIT 10.6H

ASSET PURCHASE AGREEMENT

between

Factual Data Corp

and

C B Unlimited, Inc.

January 5, 1996

<PAGE> 2

ASSET PURCHASE AGREEMENT

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS 1

ARTICLE 1 - PURCHASE AND SALE

Section 1.1 - Assets to be Purchased 1
Section 1.2 - Purchase Price 4

ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF SELLER

Section 2.1 - Organization and Authority of Seller 4
Section 2.2 - Profit and Loss Statements 4
Section 2.3 - Properties 5
Section 2.4 - Contracts 5
Section 2.5 - Inventories 6
Section 2.6 - Taxes 6
Section 2.7 - No Adverse Change 6
Section 2.8 - Contracts and Commitments 6
Section 2.9 - Litigation 7
Section 2.10 - Curtailment Notices 7
Section 2.11 - No Change in Condition 7
Section 2.12 - Assets Complete 8
Section 2.13 - Compliance with Law 8
Section 2.14 - Hazardous Substances 9
Section 2.15 - Other Government Payments;
Utility Payments 10
Section 2.16 - Insurance Policies 10
</TABLE>

-i-

<PAGE> 3

<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF BUYER

Section 3.1 - Organization and Authority 11

ARTICLE 4 - COVENANTS OF SELLER PENDING CLOSING DATE

Section 4.1 - Covenants 12

ARTICLE 5 - COVENANTS OF BUYER PENDING CLOSING DATE

Section 5.1 - Covenants 13

ARTICLE 6 - CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS

Section 6.1 - Approval 14
Section 6.2 - Compliance 14

ARTICLE 7 - CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

Section 7.1 - Approvals 14
Section 7.2 - Compliance 14
Section 7.3 - Assurances 15
Section 7.4 - Loss or Damage to Assets 16

ARTICLE 8 - CLOSING

Section 8.1 - Closing Date 16
Section 8.2 - Actions 16

ARTICLE 9 - ADDITIONAL COVENANTS OF SELLER AND BUYER

Section 9.1 - Consents 17
Section 9.2 - Additional Assistance 17
Section 9.3 - Ratings and Deposits 18
Section 9.4 - Costs 18
</TABLE>

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<PAGE> 4

<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 9.5 - Records 18
Section 9.6 - Additional Commitments 19
Section 9.7 - Claims 19

ARTICLE 10- INDEMNIFICATION; EXPIRATION OF CLAIMS; SET-OFF

Section 10.1 - Indemnity by Seller 20
Section 10.2 - Indemnity by Buyer 20
Section 10.3 - Expiration of Warranty Claims
and Limitations 21
Section 10.4 - Set-Off 21

ARTICLE 11- TERMINATION OF AGREEMENT

Section 11.1 - Basis for Termination 21
Section 11.2 - Notice of Termination 22
Section 11.3 - Costs 22

ARTICLE 12- MISCELLANEOUS PROVISIONS

Section 12.1 - Orderly Transition 23
Section 12.2 - Notices 23
Section 12.3 - Headings 24
Section 12.4 - Nonwaiver 24
Section 12.5 - Assignment 24
Section 12.6 - Binding Effect 24
Section 12.7 - Severability 25
Section 12.8 - Applicable Law 25
Section 12.9 - Entire Agreement 25
Section 12.10 - Amendment and Modification 25
Section 12.11 - Counterparts 26

SIGNATURES 26
</TABLE>

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<PAGE> 5

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement is entered into as of January 5, 1996
between Factual Data Corp, a Colorado corporation (the "Seller"), and C B
Unlimited, Inc., an Ohio corporation (the "Buyer").

RECITALS

A. The Seller has developed and now owns and franchises a credit review
and reporting business known as "Factual Data". The Seller itself owns and
operates the Factual Data franchise for the territory of the State of Indiana
and runs that franchise out of offices in Indianapolis, Indiana at 931 East 86th
Street, Suite 203, Indianapolis, Indiana 46240. The Seller desires to appoint
the Buyer as the Factual Data franchisee for the territories of Indiana, western
Pennsylvania, and West Virginia, and the Buyer desires to accept that
appointment, by a separate franchise agreement. The Seller also desires to
appoint the Buyer as a franchisee for its "Outsource" and "EmpFacts" products,
and the Buyer desires to accept those appointments, by separate agreements. The
Seller desires to sell to the Buyer certain assets of the current Factual Data
franchise operation for Indiana now owned by the Seller on the terms and
conditions of this Agreement.

B. The Buyer desires to purchase those Indiana Factual Data franchise
assets on the terms and conditions of this Agreement.

ARTICLE 1

PURCHASE AND SALE

1.1 Assets to be Purchased.

(a) The Seller agrees to sell to the Buyer, and the Buyer agrees to
purchase from the Seller, the following assets, as they shall exist at the
Closing Date defined below, of the Seller's operation of Factual Data in the
territory of

<PAGE> 6

Indiana, except as they may be covered by the Factual Data franchise agreement
for the Indiana territory between the Seller and the Buyer (the "Assets"). The
effective date of the purchase and sale of the Assets shall be January 1, 1996.

i) All equipment, furniture, and other personal property.

ii) All supplies.

iii) All work-in-process and completed, but unbilled, work.

iv) All records, data, documents, and information concerning the
business of the Seller, including without limitation customer
and supplier lists and files, sales brochures, marketing
materials and records, price lists, costing procedures,
production records, pricing formulas, sales orders unfulfilled
at the Closing Date, manuals, and any other tangible property
used in connection with the business of the Seller.

v) All intangible property used in or related to the business
conducted by the Seller, including without limitation good
will.

vi) Everything else used in connection with the business of the
Seller or either necessary for the effective and profitable
operation of the business or held for disposition, use, or
consumption in the business conducted by the Seller.

(b) There shall be excluded from the Assets listed above to be sold and
purchased the following items related to the Indiana Factual Data business of
the Seller.

i) All corporate records, minute books, stock record books, and
corporate seals of the Seller.

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<PAGE> 7

ii) All the tax returns and supporting schedules of the Seller.

iii) Any and all rights which accrue to, or will in the future
accrue to, the Seller under this Agreement.

iv) All cash, prepaid expenses, accounts receivable, and life
insurance policies.

v) All items covered by the Factual Data franchise agreement for
the Indiana territory between the Seller and the Buyer.

(c) The Assets shall be transferred by the Seller to the Buyer free and
clear of all liabilities, obligations, liens, and encumbrances and in their
present state or condition, ordinary wear and tear excepted.

(d) The Seller shall prepare and deliver to the Buyer by the Closing
complete list(s) of all the personal property being purchased and sold, as
requested by the Buyer.

1.2 Purchase Price.

(a) As full payment for the Assets and of the initial franchise fees
for the franchise agreements to be executed at the Closing, the Buyer shall pay
the Seller in cash $250,000.00 on or before January 19, 1996 and $230,000.00 on
or before March 15, 1997. The obligation of the Buyer to pay these amounts to
the Seller shall be further evidenced by a promissory note to be executed by the
Buyer at the Closing, which note shall contain a discount off the total purchase
price for periodic payments made during 1996 and before its maturity date.

(b) The Buyer shall not assume nor agree to pay any other debts,
liabilities, or obligations of the Seller, including without limitation any
amounts owing to any governmental entities, any employee liabilities, or any
unfunded pension plan liabilities.

(c) The Buyer shall not be responsible for paying any brokerage fees or
commissions in connection with this purchase and sale transaction.

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<PAGE> 8

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF SELLER

The Seller represents, warrants, and covenants as follows.

2.1 Organization and Authority of Seller.

(a) Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Colorado.

(b) With respect to the Indiana Factual Data business, the Seller has
full corporate power and authority to own or hold under lease or similar
agreement properties and assets it now owns or holds under lease or agreement
and to carry on its business as it is now being conducted.

(c) Seller has full corporate power and authority, and has received all
requisite approval by its board of directors and its shareholders, to enter into
this Agreement and to carry out the transaction contemplated by it.

(d) The execution and delivery of this Agreement and the consummation
of the transaction contemplated by it do not and will not violate any provision
of Seller's certificate of incorporation or by-laws, or any provision of, or
result in the acceleration of any obligation under, any mortgage, lien, lease,
agreement, franchise agreement, instrument, court or administrative order,
arbitration award, judgment, or decree to which Seller is a party or by which it
is bound and will not violate any other restriction of any kind to which it is
subject.

2.2 Profit and Loss Statements.

The Seller has delivered to the Buyer copies of its profit and loss
statements for 1993, 1994, and January through October 1995 inclusive, for its
Indiana Factual Data business. These statements present fairly the profits and
losses for the periods covered.

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2.3 Properties.

With respect to its Indiana Factual Data business, the Seller has good
and marketable title to all its properties and assets owned, and good right to
use and occupy such properties and assets leased, both real and personal, free
and clear of all liens, charges, and encumbrances, except (i) such imperfections
of title, liens, charges, easements, and encumbrances as are not material to the
business operations or financial condition of Seller, (ii) for liens for taxes
not yet due and payable or being contested in good faith by appropriate
proceedings, and (iii) for liens already disclosed to the Buyer. The current use
of said real properties and the improvements thereon are not in violation of any
applicable zoning laws, ordinances, or regulations, or, to the best of Seller's
knowledge, any other applicable laws, ordinances or regulations.

2.4 Contracts.

With respect to its Indiana Factual Data business, the Seller has not
breached any material provision of, or is not in default in any material respect
under the terms of, any contract, agreement, plan, lease, or license, a breach
of which, or a default under which, would have a material adverse effect upon
the business or financial condition of Seller's Indiana Financial Data
operations. Seller shall furnish to Buyer upon request before the Closing a
schedule that describes all material contracts, plans, leases, licenses,
judgments, decrees, joint venture agreements, or other arrangements to which
Seller is a party, and under which consent or approval may be required from
third parties in order that no default thereunder or breaches thereof will occur
as a consequence of consummation of the transaction provided for herein or in
order effectively to transfer to or vest in Buyer good and sufficient title to
assets or property rights of Seller, or in order otherwise duly to effect the
succession of Buyer to the status and position of Seller with respect thereto.

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<PAGE> 10

2.5 Inventories.

The supplies inventories of Seller consist of items, valued at cost or
market, whichever is lower, that are saleable or usable in the ordinary course
of business in quantities and amounts not in excess of the reasonable needs of
the business.

2.6 Taxes.

With respect to the Seller's Indiana Factual Data business, the Seller
has filed all state, local and other governmental tax returns and similar
reports are as required to be filed, and has made all state, local, and other
governmental tax payments as are required to be made.

2.7 No Adverse Change.

Since the dates of the above profit and loss statements there has not
been any material adverse change in the business or financial condition of the
Seller.

2.8 Contracts and Commitments.

With respect to the Seller's Indiana Factual Data business, the Seller
shall deliver to Buyer upon request before the Closing a list showing all of the
following types of material contracts and commitments to which Seller is a
party. Except as set forth on such list or contemplated by this Agreement,
Seller is not a party to any written or oral (i) contract for the employment of
any officer or any individual employee1 or any consulting or similar agreement,
not terminable by it without liability upon thirty (30) days or less notice,
(ii) contract with any labor union, (iii) pension, profit-sharing, bonus,
retirement, stock option, or similar plan or arrangement, (iv) contract for the
future purchase of materials, supplies, or equipment or for the receipt of
services in excess of its requirements for its normal business operations, (v)
contract not made in the ordinary course of business for the sale of products or
lease of products or equipment or rendition of services to others of more than
one year from the date hereof, (vi) loan or financing agreement or arrangement,
(vii) contract or arrangement under which Seller has assumed, guaranteed, or
endorsed or otherwise become liable in connection with the obligation by any
third party,

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<PAGE> 11

(vii) lease of any real or personal property from others not terminable by
Seller without liability upon thirty (30) days or less notice, (ix) continuing
obligations under third-party lease arrangements, or (x) material contracts not
made in the ordinary course of business.

2.9 Litigation.

There is no litigation, arbitration, proceeding, or governmental
investigation pending or, to the knowledge of Seller's officers, threatened, the
outcome of which would materially adversely affect the business, financial
condition, or operations of Seller's Indiana Factual Data operations. There is
no outstanding citation, order, writ, injunction, or decree of any court,
government, or governmental agency against or affecting Seller, or the assets or
business of Seller, which might have a material adverse effect on the business
or financial condition of Seller's Indiana Factual Data operations.

2.10 Curtailment Notices.

Seller has not received any notice from suppliers, including utilities,
of curtailment of services or supplies.

2.11 No Change in Condition.

With respect to the Indiana Factual Data business, since the dates of
the above profit and loss statements the Seller has not suffered any
extraordinary loss or waived any right of substantial value; nor has Seller,
except in the ordinary course of business:

i) Incurred any material liability or obligation, under
agreements or otherwise, or issued or agreed to issue any
promissory notes;

ii) Sold or transferred any material tangible or intangible asset;
mortgaged, pledged, or subjected to any lien, charge, or other
encumbrance any such asset; entered into any material lease of
real property, equipment,

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<PAGE> 12

or building; or cancelled any material debts or claim; or

iii) Entered into any material transaction, except in connection
with the execution and performance of this Agreement or the
transaction contemplated by this Agreement.

2.12 Assets Complete.

Except as otherwise contemplated by or provided for in this Agreement,
the Assets to be sold and purchased include all the assets being used in the
conduct of or related to the Indiana Factual Data business of the Seller as
presently conducted, except the assets covered by the Financial Data franchise
agreement between the Seller and the Buyer.

2.13 Compliance with Law.

The Seller's Indiana Factual Data business, properties, and offices do
not exist or operate in violation of any federal, state, or local code, law,
regulation, or ordinance regulating zoning, city planning, fire safety,
environmental protection, health, welfare, sanitation, hazardous waste, toxic
material, occupational safety and health, building codes, equal employment
opportunity, or similar matters applicable to its Indiana Factual Data business,
properties, or operations as presently conducted. All permits, licenses,
franchises, consents, and other authorizations necessary for the conduct of the
Seller's Indiana Factual Data business have been timely obtained and are
currently in effect. The Seller is not in violation of any term or provision of
any such permit, license, franchise, consent, or other authorization. The Seller
is not aware of any proposed laws, rules, regulations, ordinances, orders,
judgments, decrees, government takings, condemnations, or other proceedings
which would be applicable to its Indiana Factual Data business, operations, or
properties and which might adversely affect its properties, assets, liabilities,
operations, or prospects, either before or after the Closing. Seller shall
deliver to Buyer upon request before the closing a list showing all licenses and
permits issued by applicable governmental authorities presently held by the
Seller with respect to its Indiana Factual Data operations.

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<PAGE> 13

2.14 Hazardous Substances.

With respect to the Seller's Indiana Factual Data business:

(a) No "Hazardous Substance" (as defined below) has been disposed of
on, generated on, treated on, buried beneath, or percolated beneath, and no such
disposal, generation, treatment, burial, or percolation has been threatened in
or near, any real estate owned or leased by the Seller or any improvements
thereon (collectively, the "real Property"), nor has a "reportable quantity" (as
defined below) of any hazardous Substance ever been removed from and stored
off-site of the Real Property. There has been no "Release" (as defined below) of
a reportable quantity of any Hazardous Substance on or from the Real Property.
The Seller and all owners and users of the Real Property are in compliance with
all applicable federal, state and local laws, administrative rulings and
regulations of any court, administrative agency, or other governmental or
quasi-governmental authority relating to the protection of the environment,
including, but not limited to, laws prohibiting the creation of a public
nuisance. Neither the Seller nor any owner or user of the Real Property is a
potentially responsible party under Section 107 of the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
("CERCLA") or Section 7003 of the Resource Conservation and Recovery Act of
1976, as amended ("RCRA"), and the Company has not received notification from
any federal, state or local government agency or regulatory body of a violation
under any federal, state or local law regulating the disposal or discharge of
any toxic, explosive, or other Hazardous Substance. For purposes of this
section:

i) "Hazardous Substance" means any one or more of the following:
(a) any substance deemed hazardous under Section 101(14) of
CERCLA; (b) any other substance deemed hazardous by the United
States Environmental Protection Agency pursuant to Section
102(a) of CERCLA; (c) petroleum, including crude oil

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<PAGE> 14

or any fraction thereof; (d) any substance deemed hazardous
pursuant to Section 1004(5) of RCRA; or (e) any other
hazardous or toxic substance, materials, compound mixture,
solution, element, pollutant, or waste regulated under any
federal, state or local statute, ordinance, or regulation.

ii) "Release" shall have the meaning given to such term in Section
101(22) of CERCLA.

iii) "Reportable quantity" shall have the meaning given to such
term in, and shall be those quantities specified by the
Administrator of the United States Environmental Protection
Agency pursuant to, Section 102 of CERCLA.

(b) The properties of the Seller are free from the presence and/or
harmful effects of asbestos or asbestos-containing materials.

2.15 Other Government Payments; Utility Payments.

With respect to its Indiana Factual Data business, the Seller has made
all federal FICA payments, all federal, state and local withholding payments,
all federal, state, and local unemployment compensation payments, all state and
local sales tax payments, all worker's compensation premiums, and all gas,
electric, water, and other utility payments.

2.16 Insurance Policies.

Seller maintains insurance policies in effect in such types and amounts
and with such carriers as are appropriate for its Indiana Factual Data business.

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<PAGE> 15

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF BUYER

The Buyer represents, warrants, and covenants as follows.

3.1 Organization and Authority

(a) Buyer is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Ohio. Buyer is authorized or
qualified to transact business in Indiana, Pennsylvania, and West Virginia, or
shall become so as soon as possible following the execution of this Agreement.

(b) Buyer has full corporate power and authority, and has received all
requisite approval by its board of directors and its shareholders, to enter into
this Agreement and to carry out the transactions contemplated by it.

(c) The execution and delivery of this Agreement and the consummation
of the transaction contemplated by it do not and will not violate any provision
of Buyer's certificate of incorporation or by-laws, or any provision of, or
result in the acceleration of any obligation under, any mortgage, lien, lease,
agreement, instrument, court order, arbitration award, judgment, or decree to
which Buyer is a party or by which it is bound and will not violate any other
restriction of any kind to which it is subject.

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<PAGE> 16

ARTICLE 4

COVENANTS OF SELLER PENDING CLOSING DATE

4.1 Covenants.

From the date of this Agreement until the Closing Date, the Seller
shall, with respect to its Indiana Factual Data business:

i) Continue to conduct its business in its usual manner;

ii) Give Buyer's representatives full access, during normal
business hours and upon reasonable notice, to all Seller's
assets, properties, books, records, agreements, and
commitments, and furnish Buyer's representatives during such
period with all such information concerning Seller's affairs
as Buyer may reasonably request; provided, however, that any
furnishing of such information to Buyer or any investigation
by Buyer shall not affect Buyer's right to rely on the
representations and warranties made by Seller in the
Agreement; Buyer agrees to exercise the same care in handling
such information as it would exercise with similar information
of its own; and, if the acquisition contemplated by this
Agreement is not consummated, to use its best efforts to
return to Seller all documents which Seller supplied to Buyer;

iii) Maintain in full force and effect insurance policies providing
coverage and amounts of coverage comparable to the coverage
and amounts of coverage provided under its policies of
insurance now in effect;

iv) Use its best efforts to take all necessary corporate and other
action and to obtain all

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<PAGE> 17

consents, approvals, and amendments of agreements required of
it to carry out the transaction contemplated by this Agreement
and to satisfy the conditions specified herein;

v) Use its best efforts to assist the Buyer in obtaining an
adequate and capable work force to continue the business of
the Seller on terms satisfactory to the Buyer; and

vi) Immediately prior to the Closing, the Seller shall terminate
all employees of its Indiana Factual Data business.

ARTICLE 5

COVENANTS OF BUYER PENDING CLOSING DATE

5.1 Covenants.

From the date of this Agreement until the Closing Date the Buyer shall:

i) Use its best efforts to take all necessary corporate and other
action and to obtain all consents, approvals, and amendments
of agreements required of it to carry out the transaction
contemplated by this Agreement and to satisfy the conditions
specified herein; and

ii) Use its best efforts to obtain an adequate and capable work
force to continue the business of the Seller on terms
satisfactory to the Buyer.

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ARTICLE 6

CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS

The obligations of the Seller under this Agreement are subject to
satisfaction of the following conditions at or before the Closing.

6.1 Approvals.

The transaction shall have been approved by the shareholders and
directors of the Buyer.

6.2 Compliance.

All of the covenants, terms, and conditions of this Agreement to be
complied with and performed by Buyer at or before the Closing Date shall have
been complied with and performed in all material respects, and the
representations and warranties made by Buyer in this Agreement shall be correct
in all material respects at and as of the Closing Date with the same force and
effect as though such representations and warranties had been made at and as of
the Closing Date. Any representation or warranty which by its terms is made with
reference to a specific date shall have been correct in all material respects as
of such date. Buyer shall have delivered to Seller a certificate, dated the
Closing Date, signed by the President of Buyer, certifying, to the best of his
knowledge after reasonable investigation, to the fulfillment of the requirements
referred to in this Section.

ARTICLE 7

CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS

The obligations of the Buyer under this Agreement are subject to
satisfaction of the following conditions at or before the Closing Date.

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<PAGE> 19

7.1 Approvals.

The transaction shall have been approved by the shareholders and
directors of the Seller.

7.2 Compliance.

All of the covenants, terms, and conditions of this Agreement to be
complied with and performed by Seller at or before the Closing Date shall have
been complied with and performed in all material respects, and the
representations and warranties made by Seller in this Agreement shall be true
and correct in all material respects, at and as of the Closing Date, with the
same force and effect as though such representations and warranties had been
made at and as of the Closing Date. Any representation or warranty which by its
terms is made with reference to a specific date shall have been correct in all
material respects as of such date. Seller shall have delivered to Buyer a
certificate of Seller, dated the Closing Date, signed by the President or the
Executive Vice President of Seller, certifying to the fulfillment of the
requirements referred to in this Section.

7.3 Assurances.

Buyer (i) shall have been assured of retaining an adequate and capable
work force to continue the Indiana Factual Data business of the Seller on terms
satisfactory to it and (ii) shall have received bank financing for the
transaction and for working capital purposes following the purchase in amount(s)
and on terms satisfactory to it.

7.4 Loss or Damage to Assets.

There shall be no loss or damage to the Assets except in the ordinary
course of business. In the event that there is any loss or damage to the Assets
not in the ordinary course of business, the Buyer shall have the option of (i)
requiring the Seller to pay the cost of repairing such damage and/or receiving
the proceeds of insurance payable by reason thereof and consummating the
transaction contemplated by this Agreement at no reduction in the purchase price
set forth above, or (ii) terminating this Agreement, in which latter event the
parties shall be released from further obligations to each other.

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ARTICLE 8

CLOSING

8.1 Closing Date.

The sale and purchase of the Assets (the "Closing") shall take place at
such time, of such date, and at such place as shall be agreed by the parties.
Such date and time of closing are referred to as the "Closing Date".

8.2 Actions.

At the Closing on the Closing Date the following actions shall take
place.

i) The Seller shall deliver the Assets to the Buyer. The sale,
transfer, and delivery of the Assets to the Buyer shall be
effected by appropriate bills of sale, assignments,
endorsements, or other appropriate instruments as the Buyer or
its counsel shall request. The Buyer shall be entitled to
physical possession of the Assets as of the time of Closing.

ii) The Buyer shall sign and deliver to the Seller the promissory
note referred to in Subsection 1.2(a) above.

iii) The Buyer and the Seller shall each deliver to the other the
certificates required by Articles 6 and 7 above.

iv) The Seller and the Buyer shall enter into (a) a franchise
agreement for the Factual Data franchise for the territories
of Indiana, western Pennsylvania, and West Virginia, and (b)
agreements for the Seller's "Outsource" and "EmpFacts"
products.

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ARTICLE 9

ADDITIONAL COVENANTS OF SELLER AND BUYER

9.1 Consents.

To the extent that the assignment of any contract, license, lease,
commitment, sales order, or purchase order to be assigned to Buyer shall require
the consent of the other party thereto, this Agreement shall not constitute an
agreement to assign the same if an attempted assignment would constitute a
breach hereof. Seller shall use its best efforts in each case to obtain the
consent of the other party to the assignment to Buyer. If such consent is not
obtained, Seller will cooperate with Buyer in any reasonable arrangement
designed to provide for Buyer the benefits under any such contracts, licenses,
leases, commitments, sales orders, or purchase orders. In the event reasonable
arrangements cannot be made to provide Buyer such benefits, Buyer shall not
assume or have any liability thereunder and an adjustment shall be made in the
purchase price of the Assets.

9.2 Additional Assistance.

The Seller shall, at any time and from time to time at and after the
Closing Date, upon request of Buyer, take any and all steps necessary to place
Buyer in possession and operating control of the Assets and business to be
transferred hereunder and will do, execute, acknowledge, and deliver all such
further acts, deeds, assignments, transfers, conveyances, powers of attorney,
and assurances as may be required for the better transferring and confirming to
Buyer the Assets. Buyer shall execute and deliver such instruments of assumption
and other documents as are reasonably requested by Seller confirming the
assumption by Buyer of the liabilities, obligations, and commitments assumed or
agreed to be performed by Buyer under this Agreement.

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9.3 Ratings and Deposits.

The Seller shall take all action reasonably requested by Buyer to
enable it to succeed to the Workmen's Compensation and Unemployment Insurance
ratings and other interests of Seller and other ratings for insurance or other
purposes established by Seller. Buyer shall not be obligated to succeed to any
such rating, deposit, or other interest, except as it may elect to do so.

9.4 Costs.

The Buyer and the Seller shall each pay its own costs and expenses
incident to the preparation of this Agreement and the consummation of the
transaction contemplated by it, including any sales, use, or deed recording,
transfer or similar taxes, if any, imposed upon it by law.

9.5 Records.

Seller shall, and shall cause its counsel and its certified public
accountants to, afford to the representatives of Buyer, including its counsel
and accountants, reasonable access to any records retained by it. Buyer shall,
and shall cause its counsel and its certified public accountants to, afford to
the representatives of Seller, including its counsel and accountants, reasonable
access to all records, files, and documents transferred by Seller to Buyer in
order to permit Seller to prepare its federal and state income tax returns and
for other reasonable purposes and shall afford Seller reasonable assistance in
connection therewith or in connection with claims and litigation. The parties
shall cause such records to be retained for not less than six (6) years after
the Closing Date, and neither Seller nor Buyer shall dispose of any such records
without first offering them in writing to the other party.

9.6 Additional Commitments.

(a) With respect to the Factual Data franchise for the territory of
Ohio, for so long as the Factual Data franchise agreement between the Seller and
the Buyer for the territories of Indiana, western Pennsylvania, and West
Virginia shall remain

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in effect, and the Buyer shall not be in material breach of that agreement:

i) If the Buyer and the franchisee for the Ohio Factual Data
franchise agree that the Buyer will purchase that franchise,
the Seller shall consent to that purchase; and

ii) If the franchisee for the Ohio Factual Data franchise offers
or proposes to sell or transfer that franchise to the Seller,
the Seller shall notify the Buyer of the proposal or offer
promptly upon receipt from the franchisee and shall give the
Buyer a right of first refusal to meet the terms of the
proposal or offer with a reasonable amount of time to do so.

(b) Following the Closing the Seller and the Buyer shall negotiate in
good faith an agreement covering the Buyer's right to use the Seller's
"CORPdata" and "second mortgage" products.

9.7 Claims.

The Seller shall be solely responsible for all costs, expenses, losses,
and damages resulting from claims regarding work done by the Seller prior to the
Closing.

ARTICLE 10

INDEMNIFICATION; EXPIRATION OF CLAIMS; SET-OFF

10.1 Indemnity by Seller

Seller shall indemnify and hold Buyer harmless after the Closing Date
against any and all loss, cost, damage, or deficiency, including reasonable
attorneys fees, resulting from, arising out of, or connected with any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on the
part of Seller under this Agreement and from any misrepresentation in, or
occasioned by, any certificate furnished or to be furnished by Seller to Buyer.
In the event that any third person, including any governmental taxing authority,
shall assert any claim against Buyer which, if successful, might result in a

-19-

<PAGE> 24

breach or default by Seller in a representation, covenant, or warranty, Seller
shall have the right to participate in the defense and to be represented, at
Seller's expense, by advisory counsel to be selected by Seller, and Buyer agrees
not to compromise or settle such claim without first consulting with Seller.

10.2 Indemnity by Buyer.

Buyer shall indemnify and hold Seller harmless after the Closing Date
against any and all loss, cost, damage, or deficiency, including reasonable
attorneys fees, resulting from, arising out of, or connected with any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on the
part of Buyer under this Agreement, and from any misrepresentation in, or
occasioned by, any certificate or other instrument furnished or to be furnished
by Buyer to Seller. In the event that any third person, including any
governmental taxing authority, shall assert any claim against Seller which, if
successful, might result in a breach or default by Buyer, Buyer shall have the
right to participate in the defense and to be represented, at Buyer's expense,
by advisory counsel to be selected by Buyer and Seller agrees not to compromise
or settle such claim without first consulting with Buyer.

10.3 Expiration of Warranty Claims and Limitations.

All claims for damages for breach of warranties, representations, or
covenants, whether contained in this Agreement or in any writing, schedule, bill
of sale, assignment, or other documents of transfer, or other writings or
documents in any way relating to this transaction, shall expire one (l)year
after the Closing Date, except for written itemized claims specifying each
alleged breach and amount of claimed damages for each alleged breach, filed
prior to such expiration date.

10.4 Set-Off.

In the event that the Buyer suffers any loss, cost, damages or
deficiency as a result of any misrepresentation, breach of warranty, breach of a
covenant, or nonfulfillment of any agreement by the Seller under this Agreement,
the Buyer shall be entitled to set off that amount against any payments which
may be due from the Buyer to the Seller under this Agreement.

-20-

<PAGE> 25

ARTICLE 11

TERMINATION OF AGREEMENT

11.1 Basis for Termination.

This Agreement may be terminated at any time after its full execution
but before the Closing Date as follows.

i) By the mutual consent of the Seller and the Buyer.

ii) If the Closing has not taken place by January 19, 1996, by
either the Buyer or the Seller.

iii) If any of the conditions provided in Article 6 have not been
met by the Closing Date and have not been waived by the
Seller.

iv) If any of the conditions provided in Section 7 have not been
met by the Closing Date and have not been waived by the Buyer.

v) If any list or schedule to be delivered by the Seller to the
Buyer under this Agreement before the Closing Date discloses,
in the opinion of the Buyer, any matter which would have a
material adverse effect upon the Assets or Indiana Factual
Data business of the Seller, considered as a whole, and if
following notice by the Buyer to the Seller the Seller has not
corrected the matter so as to eliminate the material adverse
effect to the satisfaction of the Buyer before the Closing
Date, this Agreement may be terminated by the Buyer.

-21-

<PAGE> 26

vi) If there is a material adverse change in the Indiana Factual
Data business or future prospects, or in the levels of work or
orders, of the Seller, by the Buyer.

11.2 Notice of Termination.

The termination of this Agreement by either the Seller or the Buyer
under this Article 11 shall be accomplished by the provision of written notice
to that effect by one party to the other.

11.3 Costs.

In the event of the termination of this Agreement under this Article,
neither the Seller nor the Buyer shall have any liability to the other party for
any of costs, expenses, losses, damages, or otherwise.

ARTICLE 12

MISCELLANEOUS PROVISIONS

12.1 Orderly Transition.

The parties shall cooperate fully to provide a smooth and orderly
transition of the Assets and Indiana Factual Data business from the Seller to
the Buyer.

12.2 Notices.

All notices, requests, demands, and other communications required or
permitted by this Agreement shall be in writing and shall be considered to have
been given when delivered by hand or sent by certified mail, return receipt
requested, to the following addresses:

-22-
<PAGE> 27

(i) In the case of Seller, to:

Mr. J. H. Donnan
President
Factual Data Corp
3665 J.F.K. Parkway
Building One, Suite 200
Fort Collins, Colorado 80525

With a copy to:

Ramsey D. Myatt, Esq.
March & Myatt
110 East Oak Street
Fort Collins, Colorado 80524

(ii) In the case of Buyer, to:

Mr. John F. Boyle, Jr.
President
C B Unlimited, Inc.
32200 Woodsdale Lane
Solon, Ohio 44139

With a copy to:

John W. Waldeck, Esq.
Porter, Wright, Morris & Arthur
1760 Huntington Building
Cleveland, Ohio 44115-1483

or to such other person or address as either party shall notify the
other party in writing as set forth above.

12.3 Headings.

The headings of the sections in this Agreement are inserted for
convenience only and shall not constitute a part of this Agreement.

-23-
<PAGE> 28

12.4 Nonwaiver.

No delay or failure by any party to this Agreement to exercise any
right under it, and no partial or single exercise of any right, shall constitute
a waiver of that or any other right.

12.5 Assignment.

This Agreement may not be assigned, in whole or in part, by either
party without the express written consent of the other party.

12.6 Binding Effect.

This Agreement shall be binding upon, and shall inure to the benefit
of, the successors, representatives, heirs, and assigns of the parties.

12.7 Severability.

If any term or condition of this Agreement shall to any extent be
invalid or unenforceable, the remainder of this Agreement shall not be affected
thereby. Each term and condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.

12.8 Applicable Law.

This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Colorado.

12.9 Entire Agreement.

This document embodies the entire agreement among the parties to it
with respect to the transaction contemplated by it. There have never been and
are no agreements, representations, or warranties among the parties other than
those set forth or provided for in it. This Agreement supersedes any prior
agreements, understandings, or letters of intent between or among the parties
with respect to the subject matter of it.

-24-

<PAGE> 29

12.10 Amendment and Modification.

The parties may amend, modify, and supplement this Agreement in any
manner as may be mutually agreed upon among them in writing.

12.11 Counterparts.

This Agreement may be executed in more than one counterpart, each of
which shall be considered an original but all of which together shall constitute
one and the same document.

THIS ASSET PURCHASE AGREEMENT has been executed by the duly authorized
representatives of the parties as of the date first written above.

FACTUAL DATA CORP

By: /s/ J.H. Donnan
----------------------
J.H. Donnan
President

C B UNLIMITED, INC.

By: /s/ John F. Boyle, Jr.
----------------------
John F. Boyle, Jr.
President

-25-
<PAGE> 30
MODIFICATION AND EXTENSION AGREEMENT

This Modification and Extension Agreement is made effective as of the
15th day of March, 1997, between FACTUAL DATA CORP ("Payee") and C B Limited,
Inc., an Ohio Corporation and John F. Boyle, Jr. ("Makers").

RECITALS

1. On January 5, 1996 the parties entered into an Asset Purchase
Agreement by which Makers acquired from Payee certain assets of the Factual Data
franchise operation for Indiana and by separate documents Makers also acquired
from Payee franchises for Factual Data, Outsource and EmpFacts products, all of
which will be referred to collectively as the "Assets".

2. As part of the purchase price for the Assets, Makers signed a
Promissory Note dated January 16, 1996 in the principal amount of $230,000.00
payable, without interest, on March 15, 1997, with Makers reserving the right to
make prepayment including periodic installment payments as shown by the terms of
said Promissory Note. No prepayments were made on the Promissory Note and the
unpaid principal balance is still $230,000.00.

3. Makers have requested an extension of time for paying the principal
amount and Payee is willing to modify and extend the Promissory Note upon the
conditions set forth below.

4. Payee was intending to pay its corporate income tax liabilities to
various states and to the Internal Revenue Service for itself and related
entities with the proceeds from

<PAGE> 31

the Promissory Note payment. Payee will now be unable to make such payments in a
timely manner and will be assessed a one percent (1%) nonpayment penalty per
month and one percent (1%) per month interest on all taxes due.("The Late
Payment Penalties and Interest")

NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree to be bound as
follows:

Payment of Principal: The unpaid principal balance of $230,000.00 shall
be paid as follows: Prior to March 15, 1997, Makers shall pay the sum of
$35,000.00 to Payee. The remaining unpaid principal balance of $195,000.00 shall
be due and payable on or before September 30, 1997.

Payment of Interest: The unpaid principal balance of $195,000.00 shall
accrue interest at the rate of 18% per annum commencing March 15, 1997. Interest
payments shall be made monthly commencing April 15, 1997 and continuing on the
15th of each month thereafter until the principal has been paid in full. The
remaining accrued and unpaid interest shall be due and payable, together with
the remaining unpaid principal balance, on September 30, 1997.

Late Payment Penalties and Interest: As further consideration for the
extension of the due date under the terms of the Promissory Note, Makers agree
to pay the actual Late Payment Penalties and Interest incurred by Payee to
various states and to the Internal Revenue Service, limited, however, to such
penalties which accrue between March 15, 1997 and the date final payment due
under the Promissory Note, as modified herein, is made by Makers to Payee.

<PAGE> 32

Continuation of Security Interests: Makers agree to insure that Payee's
security interests in the Assets are continued by having their attorneys take
any necessary steps to extend all recorded UCC-l Financing Statements which
perfected Payee's security interests in the Assets.

Additional Event of Default: In addition to the events of default
listed in the Promissory Note, the failure by Debtor to make any payment
required by the terms of this Modification and Extension Agreement will be a
default.

Default of Principal Payment - Remedy: In the event Makers default on
the principal payment due September 30, 1997, they agree to allow Payee to
immediately assume possession and ownership of the Assets transferred to Makers
by the terms of the Asset Purchase Agreement, by peaceably turning possession
thereof over to Payee on October 1, 1997 and by executing all necessary Bills of
Sale, Assignments of Franchise Agreements and the like in order to revest
ownership of the Assets in Payee's name.

Continuation of Promissory Note: All terms and conditions of the
Promissory Note, except as specifically modified herein, shall continue in full
force and effect.

PAYEE: FACTUAL DATA CORP

By: /s/ J.H. Donnan
---------------------

3
<PAGE> 33

STATE OF COLORADO )
) ss.
COUNTY OF LARIMER )

The foregoing instrument was acknowledged before me this 14th day of
March 1997, by: /s/ J.H. Donnan , President of FACTUAL DATA CORP.
-----------------

My commission expires:
7-31-2000 By: /s/ Faith K. Webb
- --------- --------------------
Notary Public

MAKERS: C B Limited, Inc.,
an Oho Corporation

By: /s/ John F. Boyle, Jr.
----------------------------
John F. Boyle, Jr., President

By: /s/ John F. Boyle, Jr.
----------------------------
John F. Boyle, Jr., Individually

STATE OF OHIO )
) ss.
COUNTY OF CUYAHOGA )

The foregoing instrument was acknowledged before me this day of
March,1997, by John F. Boyle, Jr., President of C B Limited, Inc., an Ohio
Corporation, and John F. Boyle, Jr., Individually.

My commission expires:
August 18, 2001 /s/ Gaynell Jorden
- --------------- -----------------------
Notary Public

4
<PAGE> 34

MODIFICATION AND EXTENSION AGREEMENT

This Modification and Extension Agreement is made effective as of the
31st day of October 1997, between FACTUAL DATA CORP("Payee")and C B Limited,
Inc., an Ohio Corporation and John F. Boyle, Jr.("Makers").

RECITALS

1. On January 5, 1996 the parties entered into an Asset Purchase
Agreement by which Makers acquired from Payee certain assets of the Factual Data
franchise operation for Indiana and by separate documents Makers also acquired
from Payee franchises for Factual Data, Outsource and EmpFacts products all of
which will be referred to collectively as the "Assets".

2. As part of the purchase price for the Assets, Makers signed a
Promissory Note dated January 16, 1996 in the principal amount of $230,000.00
payable, without interest, on March 15, 1997.

3. By Modification and Extension Agreements dated effective March 15,
1997 and September 30, 1997, respectively, the parties hereto extended the due
date and modified the terms of the Promissory Note.

4. Makers have requested an additional extension of time for paying the
balance of the principal amount and Payee is willing to further extend the due
date of the Promissory Note upon the conditions set forth below.

<PAGE> 35

NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree to be bound as
follows:

Payment of Principal: The remaining unpaid principal balance of
$195,000.00 shall be due and payable as follows:

$150,000.00 shall be paid on or before October 31, 1997; and $45,000
shall be paid on or before June 30, 1998.

Payment of Interest: The unpaid principal balance shall continue to
accrue interest at the rate of 18% per annum. An interest payment shall be made
together with the principal payment of $150,000.00 and monthly thereafter. All
accrued and unpaid interest shall be due and payable, together with the
remaining unpaid principal balance, on June 30, 1998.

Continuation of Security Interests: Makers agree to insure that Payee's
security interests in the Assets are continued by having their attorneys take
any necessary steps to extend all recorded UCC-1 Financing Statements which
perfected Payee's security interests in the Assets.

Default of Principal Payment - Remedy: In the event Makers default on
the principal payment due October 31, 1997, they agree to allow Payee to
immediately assume possession and ownership of the Assets transferred to Makers
by the terms of

2
<PAGE> 36

the Asset Purchase Agreement, by peaceably turning possession thereof over to
Payee on November 1, 1997 and by executing all necessary Bills of Sale,
Assignments of Franchise Agreements and the like in order to revest ownership of
the Assets in Payee's name.

Continuation of Promissory Note: All terms and conditions of the
Promissory Note, except as specifically modified herein, shall continue in full
force and effect.

PAYEE: FACTUAL DATA CORP

By: /s/ J.H. Donnan
---------------------

STATE OF COLORADO )
)ss.
COUNTY OF LARIMER )

The foregoing instrument was acknowledged before me this 30th day of
October, 1997, by: /s/ Faith K. Webb of FACTUAL DATA CORP.

My commission expires:
7-31-2000 By: /s/ Faith K. Webb
- --------- ---------------------
Notary Public

MAKERS: C B Limited, Inc.,
an Oho Corporation

By: /s/ John F. Boyle, Jr.
-----------------------
John F. Boyle, Jr., President

/s/ John F. Boyle, Jr.
-----------------------
John F. Boyle, Jr., Individually

3
<PAGE> 37

STATE OF OHIO )
) ss.
COUNTY OF CUYAHOGA )

The foregoing instrument was acknowledged before me this 24TH day of
November,1997, by John F. Boyle, Jr., President of C B Limited, Inc., an Ohio
Corporation, and John F. Boyle, Jr., Individually.

My commission expires:
December 22, 1998 By: /s/ Stephen J. Ferenczy
- ---------------- -----------------------
Notary Public

<PAGE> 1

EXHIBIT 10.6I

PURCHASE AGREEMENT

BY AND BETWEEN

LANDMARK FINANCIAL SERVICES, INC.

AND

FACTUAL DATA CORP.

<PAGE> 2

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (the "Agreement") is entered into as of January
6, 1997 by and between Landmark Financial Services, Inc., a Texas corporation
("Purchaser") and Factual Data Corp., a Colorado corporation ("Seller").

WITNESSETH:

WHEREAS Seller owns and operators a nation-wide business headquartered
in Fort Collins, Colorado which provides mortgage credit reports, employee
screening reports titled EMPfacts and business credit reports titled CORPdata;
and

WHEREAS Seller has determined that it is in its best interest to sell
the nonexclusive right to operate its employee screening reports business and
business credit reports business and the exclusive right to operate its mortgage
credit reporting business within the territories of: Arizona, New Mexico,
Houston, Dallas-Ft.Worth, Oklahoma (collectively, "Exclusive Territories"), and

WHEREAS Purchaser desires to purchase from Seller the exclusive and
nonexclusive rights described above; and

WHEREAS each of Seller and Purchaser has approved this Agreement and
the transactions contemplated hereby;

NOW, THEREFORE, in consideration of these premises and the
representations, warranties and agreements herein contained, and intending to be
legally bound, Seller and Purchaser hereby agree as follows:

ARTICLE 1 AGREEMENT TO PURCHASE AND SELL

Section 1.1 Purchase and Sale of Assets. At the closing of the
transactions contemplated by this Agreement (the "Closing"), Seller will sell to
Purchaser, and Purchaser will purchase from Seller, the credit reporting
business in the Exclusive Territories, certain accounts related thereto, and the
exclusive right to continue credit reporting business in those Exclusive
Territories under separate agreement.

Section 1.2 Purchased Assets. The assets to be conveyed to Purchaser by
Seller at the Closing (the "Purchased Assets") are the following:

1.2.1 All customers, customer listings and customer
relationships relating to the Exclusive Territories;

1.2.2 All invoiced and pending accounts receivable,
customer orders and work in process. Such accounts shall not be in an amount
less than $128,000;

<PAGE> 3

1.2.3 All right, title and interest in and to the
contracts, agreements and documents related to the Purchased Assets, together
with all modifications, supplements and addenda thereto, and all rights to
payments thereunder, if any.

1.2.4 At the Closing, Seller shall provide by computer modem
all data to which Purchaser is entitled pertaining to the Purchased Assets,
which includes software which provides customer and account receivable records
and history.

Section 1.3 Assumed Liabilities. Purchaser shall assume no liabilities
of Seller.

ARTICLE 2 PURCHASE PRICE

Section 2.1 In consideration of Seller's conveyance of' the Purchased
Assets to Purchaser, Purchaser shall pay Seller the sum of $110,000 cash (less
any Interim Payment) at Closing (the "Purchase Price"). Purchaser agrees, under
separate agreement, to pay an initial license fee of $600,000 and an ongoing
licensing fee to Seller for continued business operation within the Exclusive
Territories.

Section 2.2 Purchaser and Seller agree that upon: (i) presentation by
Seller to Purchaser of' a current accounts receivable listing of the Exclusive
Territories (the "A/R Listing"), and (ii) payment of $100,000 cash by Purchaser
to Seller prior to the Closing Date ("Interim Payment"), Purchaser shall be
entitled to all collections, effective January 1, 1997, less the Management Fee
(as defined below) arising from the business(es) of the Purchased Assets prior
to the Closing. Seller understands that upon receipt of' the Interim Payment,
all collections of relating to the Exclusive Territories shall be promptly
turned over to Purchaser. Purchaser understands that such Interim Payment shall
be non-refundable unless Seller elects not to Close; if Seller elects not to
Close, then the Interim Payment shall be refunded promptly to Purchaser, and
Purchaser shall promptly turn over to Seller all collections of accounts
receivable pertaining to the A/R Listing. If, through no fault of' Seller, the
closing does not take place, Seller shall retain the Interim Payment and
Purchaser shall promptly return to Seller any collections of' accounts
receivable pertaining to the A/R Listings.

Section 2.3 Purchaser and Seller agree that while Seller operates and
maintains the business(es) of the Exclusive Territories, Seller shall be
entitled to 65% of gross bona fide billings (the "Management Fee"). Such
Management Fee shall be paid no later than the 20th day following the end of
each month. Purchaser and Seller agree that the Management Fee shall no longer
accrue after Purchaser commences operation and control of the Exclusive
Territories.

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to and covenants and agrees with Purchaser as
follows:

Section 3.1 Organization; Corporate Power; Etc. Seller is a corporation
duly organized, validly existing in good standing under the laws of the State of
Colorado. Seller has

<PAGE> 4

all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted.

Section 3.2 Licenses and Permits. Seller has all licenses,
certificates, franchises, rights and permits that are necessary for the conduct
of its business, and such licenses, certificates, franchises, right and permits
are in full force and effect, except for any lack or failure to be in full force
and effect that would not, individually or in the aggregate, have a material
adverse effect on Seller. The business of the Seller has been conducted, and
will be conducted until the Closing Date, in all material respects, in
compliance with all applicable licenses, certificates, franchises, rights and
permits.

Section 3.3 Authorization of Agreement; No Conflicts.

3.3.1 The execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby have been dully authorized
by all necessary corporate action on the part of' Seller. This Agreement has
been duly executed and delivered by Seller and constitutes a valid and binding
obligation of Seller, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of banks generally and by general
equitable principles.

3.3.2 The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby do not and will not conflict with, or
result in any violation of or default or loss of' a material benefit under, any
provision of' the articles or bylaws of Seller or any mortgage, indenture,
lease, agreement or other instrument or any permit, concession, grant,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Seller or its properties, other than any such conflict,
violation, default or loss which will not have a material adverse effect on the
business, assets, operations, or condition of' the Purchased Assets.

Section 3.4 Compliance with Applicable Laws. Seller's activities are
not in violation of' any law, ordinance, or regulation, except for violations
which individually or in the aggregate would not have a material adverse effect
on the business, assets, liabilities, operations, or condition of the Purchased
Assets. Neither Seller nor its agents have knowledge of any past operations or
activities in which the Purchased Assets has been engaged, or those of the
Seller which bear a relationship to the Purchased Assets, which have violated
any state or federal statute, regulation, rule or order or common law holding,
except for violations which have been previously disclosed to Purchaser or which
individually or in the aggregate would not have a material adverse effect on the
business, assets, liabilities, operations, or condition of the Purchased Assets.

Section 3.5 Litigation. There is no suit, action or proceeding pending
or, to the knowledge of Seller, threatened against or affecting Seller or the
Purchased Assets which, if adversely determined, would have a material adverse
effect on the business, assets, liabilities, operations, or condition of the
Purchased Assets; nor is there any judgement, decree, injunction, rule or order
of any Governmental Entity or arbitrator outstanding regarding Seller or the
Purchased Assets having such effect.

<PAGE> 5

Section 3.6 Title to Assets. Seller owns and has good and marketable
title to the Purchased Assets owned by Seller free and clear of all mortgages,
liens, encumbrances, pledges or charges of any kind or nature. Seller is not in
any default with respect to any contracts, agreements, or leases constituting or
related to any Purchased Assets.

Section 3.7 Brokers and Finders. Seller is not a party to or obligated
under any agreement with any broker or finder relating to the transactions
contemplated hereby, and neither the execution of' this Agreement nor the
consummation of the transactions provided for herein will result in any
liability to any broker or finder.

Article 3.8 Information. To the best of Seller's knowledge, the
information regarding the transaction contemplated by this Agreement which
Seller has heretofore supplied Purchaser and that to be made available by Seller
to Purchaser for its investigation is true and correct in all material respects
and complete as to the subjects involved. To the best of Seller's knowledge, the
books and records of the Exclusive Territories constituting part of the
Purchased Assets are complete and are true and correct in all material respects.
Seller represents: that the revenues as recognized and accounted are true and
correct in all material respects; that there are no undisclosed liabilities; and
that accounts receivable are collectible in consistence with previous collection
experience. Seller represents that there have been no material adverse changes
since the date of' the latest financial statements.

Article 3.9 Employees. There are no employment agreements in effect,
offered, or promised to any employees of the Exclusive Territories, and they are
all employees at will. To the best of Seller's knowledge, no employee of the
Exclusive Territories has any basis for any claims or suit against the Seller.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller that:

Section 4.1 Organization; Corporate Power; Etc. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of' Texas. Purchaser has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently conducted.

Section 4.2 Licenses and Permits. Purchaser has all material licenses
and permits that are necessary for the conduct of' its businesses, and such
licenses and permits are in full force and effect, except for any failure to be
in full force and effect that would not, individually or in the aggregate, have
a material adverse effect on Purchaser.

<PAGE> 6

Section 4.3 Authorization of Agreement; No Conflicts.

4.3.1 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Purchaser. This agreement
has been duly executed and delivered by Purchaser and constitutes a legal, valid
and binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.

4.3.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with, or
result in any violation of or default or loss of a material benefit under, any
provision of the articles or bylaws of any permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, or ordinance, rule or regulation
applicable to Purchaser, other than any such conflict, violation, default or
loss which (i) will not have a material adverse effect on Purchaser; or (ii)
will be cured or waived prior to the Closing.

Section 4.4 Brokers and Finders. Purchaser is not a party to or
obligated under any agreement with any broker or finder relating to the
transactions contemplated hereby and neither the execution of this Agreement
nor the transactions provided for herein will result in any liability to any
broker or finder. However, Purchase acknowledges his obligation to Argus Capital
Corporation relating to the transactions contemplated hereby.

ARTICLE 5 ADDITIONAL AGREEMENTS

Section 5.1 Access to Information, etc.

5.1.1 For a period of one year following the Closing and
upon reasonable notice to Seller, Seller shall allow Purchaser and its
accountants, counsel and other representatives reasonable access to its
officers, employees, properties, books, contracts, commitments and records
relating to the Purchased Assets from the date hereof through the Closing Date.
Seller agrees to cooperate with Purchaser's investigation of the Purchased
Assets.

5.1.2 Following the Closing, during normal business hours,
Purchaser will afford Seller, its counsel, accountants and other agents, full
access to any books, records or documents acquired by Purchaser pursuant to this
Agreement as Seller may reasonably request. If Purchaser intends to destroy any
such books, records or documents within three years of the Closing Date,
Purchaser will notify Seller of such fact and retain them or deliver them to
Seller as Seller shall determine.

5.1.3 Seller agrees to allow Purchaser's auditors, at
Purchaser's sole expense and in the event it is deemed necessary (at Purchaser's
sole discretion) for a subsequent securities offering of any kind to investigate
the related business affairs of Seller.

5.1.4 Purchaser agrees to allow Seller's auditors, at
Seller's sole expense and in the event it is deemed necessary (at Seller's sole
discretion) for a subsequent securities offering of any kind, to investigate
the related business affairs of Purchaser.

<PAGE> 7

Section 5.2 Taking of Necessary Action

5.2.1. Each of the parties hereto agrees to use all
reasonable efforts promptly to take or cause to be taken all action and promptly
to do or cause to be done all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the foregoing,
Purchaser and Seller will use their best efforts to obtain all consents of
third parties necessary or, in the reasonable opinion of Purchaser or Seller,
advisable for the consummation of the transactions contemplated by this
Agreement. In case at any time after the Closing Date any further action is
necessary or desirable to carry out the purposes of this Agreement or to vest
the Purchaser with full title to the Purchased Assets, the proper officers or
directors of Purchaser or Seller, as the case may be, shall take all such
necessary action.

Section 5.3 Expenses. Whether or not the transactions contemplated by
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring the same.

Section 5.4 Notification of Certain Events.. The parties shall promptly
advise each other in writing of any change or event which could reasonably be
expected to have a adverse effect on the transactions contemplated by this
Agreement.

Section 5.5 Purchased Assets Assessment. Purchaser shall have the right
to conduct, at its expense, such other investigations of the Purchased Assets
and related matters as it deems necessary ("Purchased Assets Assessment").

Section 5.6 Employees. If applicable, on or before the Closing Date
and contingent on closing the contemplated transaction, Purchaser will offer at
will employment to each of Seller's employees who are employed by Seller and
involved in the operations of the Purchased Assets on the date of this Agreement
at salaries comparable to those paid on such date by Seller to such employees.
Such employees shall be offered the same benefits available to Purchaser's other
employees in comparable positions subject to the terms and conditions of
Purchaser's benefit plans and policies. With the exception of the provisions
relating to Purchase Price in Article 2, the Purchaser is under no obligation to
continue the employment of any employee for any period of time. However,
Purchaser will utilize its best efforts to maintain employees at the time of
Closing on existing terms.

Section 5.7 Personal, Property and Sales Taxes. The Purchaser shall be
responsible to pay all personal property or sales taxes, if any, arising out of
the sale of the Purchased Assets.

Section 5.8 Survival of Representations and Warranties, and
Indemnifications. All representations, warranties and indemnifications of Seller
and Purchaser contained or made pursuant to this Agreement shall survive the
Closing for a period of four years with the exception of representations
concerning the ownership and transferability of assets sold under this
Agreement.

<PAGE> 8

ARTICLE 6 SELLER'S CONDUCT OF BUSINESS

During the period from the date of execution of' this Agreement through the
Closing Date or the earlier termination of this Agreement pursuant to Article
10, Seller agrees (except to the extent Purchaser shall otherwise consent in
writing or as may be required by law or regulation), to carry on its business
involving the Purchased Assets in the ordinary course and in substantially the
manner in which heretofore conducted.

ARTICLE 7 CONDITIONS PRECEDENT TO CLOSING

Section 7.1 Conditions to the Parties' Obligations. The obligations of
all the parties to this Agreement to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment of the following conditions:

7.1.1 There shall not be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
transactions contemplated by this Agreement, by any entity which makes the
consummation of' the purchase and sale illegal.

Section 7.2 Conditions to Purchaser's Obligations. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment of the following conditions:

7.2.1 The representations and warranties of Seller contained
in Article 3 shall be true in all material respects as of' the Closing Date as
though made at and as of the Closing Date, except to the extent they expressly
refer to an earlier time and except where the failure to be true, individually
or in the aggregate, would not have or would not be reasonably likely to have, a
material adverse effect on Seller, the Purchased Assets, or the Purchaser, or
upon the consummation of the transactions contemplated hereby; Seller shall have
duly performed and complied in all material respects with all agreements,
covenants and conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing Date, except where the failure to so
perform and comply, individually or in the aggregate, would not have or would
not be reasonably likely to have, a material adverse effect on the Purchased
Assets, or the Purchaser, or upon the consummation of the transactions
contemplated hereby.

7.2.2 Any consent required for the consummation of the
transactions contemplated by this Agreement under any agreement, contract, lease
or license to which Seller is a party or by or under which it is bound or
licensed, the withholding of which may reasonably be expected to have a material
adverse effect on Purchaser or the office, shall have been obtained on the terms
and conditions acceptable to Purchaser in its good faith judgment.

7.2.3 If necessary in the sole opinion of' Purchaser and at
Purchaser's sole expense shall have received from legal counsel to Seller an
opinion in form and substance customary for transactions of this nature,
including, but not limited to: 1) an opinion that all required consents relating
to identified contracts, permits and licenses have been obtained; and 2) an
opinion that all conveyance documents are sufficient to transfer title to the
purchased assets to the purchaser.

<PAGE> 9

7.2.4 If necessary in the sole opinion of Purchaser and at
Purchaser's sole expense, Counsel for Purchaser shall have approved, in the
exercise of counsel's discretion, the validity of all transactions herein
contemplated, as well as the form and substance of all opinions, certificates,
instruments of transfer and other documents to be delivered to Purchaser
hereunder.

7.2.5 There shall not have occurred and be continuing any
change or circumstance relating to the Purchased Assets which individually or in
the aggregate would have or would be reasonably likely to have a material
adverse effect on the business, operations, properties, assets, or condition
(financial or other), of the Purchased Assets.

7.2.6 Seller and Purchaser shall have entered into mutually
agreeable contracts for Seller to provide Purchaser with software services
necessary to conduct the business of the Purchased Assets.

Section 7.3 Conditions to Sellers Obligations. The obligation of
Seller to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment of the following conditions:

7.3.1 The representations and warranties of Purchaser
contained in Article 4 shall be true in all material respects as of the Closing
Date as though made at and as of the Closing Date, except to the extent they
expressly refer to an earlier time and except where the failure to be true,
individually or in the aggregate, would not have or would not be reasonably
likely to have, a material adverse effect on Purchaser or upon the consummation
of the transactions contemplated hereby; Purchaser shall have duly performed and
complied in all material respects with all agreements, covenants and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date, except where the failure to so perform and comply,
individually or in the aggregate, would not have or would not be reasonably
likely to have, a material adverse effect on Purchaser or upon the consummation
of the transactions contemplated hereby.

7.3.2 Counsel for Seller shall have approved, in the
exercise of counsel's reasonable discretion, the validity of all transactions
herein contemplated, as well as the form and substance of all opinions,
certificates, instruments of transfer and other documents to be delivered to
Seller hereunder.

ARTICLE 8 INDEMNIFICATION

Section 8.1 Indemnification by Seller. For a period of one year from
and after the Closing Date, Seller shall indemnify, defend and hold harmless
Purchaser, Purchaser's parent company, and each of their directors, officers,
employees and agents from and against any and all damages, losses, obligations,
deficiencies, liabilities, claims, encumbrances, penalties, costs, and expenses,
including reasonable attorneys' fees (collectively, a "Loss"), resulting from,
related to, or arising out of: (a) any breach of the representations and
warranties contained in Article 3 of this Agreement; and (b) all Loss other
than any Loss constituting Assumed

<PAGE> 10

Liabilities which Loss is based in whole or part upon facts, events, conditions,
acts, or omissions pertaining to the Purchased Assets or its properties or
operations from which a cause of action arose prior to the Closing Date. This
indemnification shall apply regardless of any investigations and assessments
made or not made by Purchaser prior to the Closing Date as to all liabilities
arising out of the operation of the Purchased Assets which are not Assumed
Liabilities. The Seller retains liability on all liabilities not explicitly
assumed by Purchaser.

Section 8.2 Indemnification by Purchaser. From and after the Closing
Date, Purchaser shall indemnify, defend hold harmless Seller, and its parent
company, and each of their directors, officers, employees and agents from and
against any Loss resulting from, related to, or arising out of, (a) the
imposition of any liability on Seller after the Closing Date which constitutes
Assumed Liabilities; (b) any breach of the representations and warranties
contained in Article 4 of this Agreement; or (c) all Loss which is based in
whole or part upon facts, events, conditions, acts, or omissions pertaining to
the Purchased Assets or operations from which a cause of action arose on or
after the Closing.

Section 8.3 Notice. Promptly after acquiring knowledge of any Loss or
any action, suit, investigation, proceeding, demand, assessment, audit, judgment
or claim which may give rise to a Loss against which Seller or Purchaser (an "
Indemnifying Party"), has indemnified a party to this Agreement (an "Indemnified
Party"), such Indemnified Party shall give the Indemnifying Party written notice
thereof. The indemnifying party shall, at its own expense, promptly defend,
contest or otherwise protect against any such Loss or any such action, suit,
investigation, proceeding, demand, assessment, audit, judgment or claim and
shall receive from the Indemnified Party all necessary and reasonable
cooperation in said defense including, but not limited to, the services of
employees of such Indemnified Party who are familiar with the transactions out
of which any such Loss, action, suit, investigation, proceeding, demand,
assessment, audit, judgment or claim may have arisen. In the event that the
Indemnifying Party shall undertake to compromise or defend any such asserted
liability, it shall promptly notify the Indemnified Party of its intention to do
so. In the event that the Indemnifying Party, after written notice from an
Indemnified Party, fails to take timely action to defend the subject matter of
such notice, the Indemnified Party shall have the right to defend the same by
counsel of its own choosing, but at the cost and expense of the Indemnifying
Party. Unless permitted in writing by Purchaser, Seller is restricted from
initiating any litigation with the suppliers or customers existing at Closing
exclusively within the Exclusive Territories.

Section 8.4 Limitation of Indemnity. Notwithstanding any provisions in
this Agreement to the contrary, the remedies provided by this Article 8 shall be
the parties' sole and exclusive remedies for the recovery of any damages
resulting from or arising out of or related to misrepresentations, breaches of
warranties, and nonfulfillment of obligations under this Agreement, except
those arising from or arising out of or related to fraud; the provisions of this
Section 8.4 shall not limit the ability of any party to seek injunctive or
similar relief pursuant to this Section 8.4 hereof. Furthermore:

8.4.1 Before an Indemnified Party may assert a claim for
indemnity under this Section 8, the Indemnified Party must give or cause to be
given the written notice required by subsection 8.3 of this Section 8.

<PAGE> 11

8.4.2 The indemnity obligation of any Indemnifying Party
under this Section 8 shall not apply until the aggregate amount of claims
asserted or demands made that would, with notice, give rise to an obligation to
indemnify, reaches ten thousand dollars ($10,000), and then only with respect to
any amounts in excess thereof. The foregoing minimum aggregate amounts of claims
do not include any losses associated with a willful breach by Seller.

8.4.3 The indemnity obligation of any Indemnifying Party
under this Section 8 shall be net of any tax benefits realized by the
Indemnified Party attributable thereto and net of any proceeds actually
received with respect thereto by the Indemnified Party under any policy of
insurance maintained by the Indemnified Party (other than under a program of
self insurance).

8.4.4 After the Closing Date, the combined aggregate
liability of either of Seller or Purchaser relating to the transactions
contemplated under this indemnification agreement shall not exceed the Purchase
Price.

ARTICLE 9 CLOSING

Section 9.1 Closing. The Closing shall be held as soon as practicable,
but in any event no later than January 31, 1997 (the "Closing Date"), and shall
be held at such place as the parties may mutually agree. The following actions
shall occur at the Closing:

Section 9.2 Purchase Price and Offsetting Cash. Purchaser shall deliver
to Seller, in immediately available funds, cash due at the Closing Date defined
in Purchase Price. Seller shall notify Purchaser in writing no less than three
(3) business days prior to the Closing Date of the appropriate wire transfer
instructions.

Section 9.3 Conveyance and Transfer; Assumption. Seller shall deliver
to Purchaser such instruments of conveyance and transfer, in form and substance
satisfactory to Purchaser's counsel, as shall be effective to vest in Purchaser
marketable title to all the Purchased Assets free and clear of all mortgages,
liens, encumbrances, pledges, and charges and objections as provided in Sections
3.6. Seller shall reasonably cooperate with Purchaser to put Purchaser in actual
possession and operating control of the Purchased Assets, including all files
and documents related to the Purchased Assets.

Section 9.4 Certificate. Purchaser shall deliver to Seller, and Seller
shall deliver to Purchaser, a certificate, signed by a duly authorized officer
of the delivering corporation, representing and warranting that the
representations and warranties made by it hereunder were true and correct when
made and have continued true and correct through the Closing, for this purpose
substituting the Closing Date for the date of this Agreement, except where such
representations or warranties expressly refer to an earlier time, and that the
delivering corporation has performed all obligations required to be performed by
it hereunder.

<PAGE> 12

ARTICLE 10 TERMINATION, AMENDMENTS AND WAIVERS

Section 10.1 Termination. This Agreement may be terminated in writing
at any time prior to the Closing Date:

10.1.1 by mutual consent of Seller and Purchaser;

10.1.2 by either Seller or Purchaser if the Closing shall
not have occurred by the close of business on January 31, 1997.

10.1.3 by either Seller or Purchaser if there shall have
been a material breach of any of the representations or warranties set forth in
this Agreement on the part of the other party, which breach by its nature
cannot be cured prior to the Closing and which breach would in the reasonable
opinion of the non-breaching party, individually or in the aggregate, have, or
be reasonably likely to have, a material adverse effect on the non-breaching
party or upon the consummation of the transactions contemplated hereby;

10.1.4 by either Seller or Purchaser if there shall have
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party, which breach shall not have been cured
within twenty business days following receipt by the breaching party of written
notice of such breach from the other party hereto;

10.1.5 by either Seller or Purchaser upon the failure to
satisfy any of the conditions specified in Section 7.1 of this Agreement.

10.1.6 by Purchaser upon failure to satisfy any conditions
specified in Section 7.2.

10.1.7 by Seller upon failure to satisfy any conditions
specified in Section 7.3

10.1.8 by Purchaser if there has been a material adverse
effect on the business, operation, properties, assets or condition, financial or
other (of the Purchased Assets).

Section 10.2 Effect of Termination; Survival. No termination of this
Agreement as provided in Section 10.1 for any reason or in any manner shall
release, or be construed as so releasing, any party hereto from its obligations
pursuant to Sections 2.2, 5.3, 11.5 or 11.9 hereto or from any liability or
damage to any other party hereto arising out of, in connection with or otherwise
relating to, directly or indirectly, said party's material breach or failure in
performance of any of its covenants, agreements, duties or obligations arising
hereunder, or any material breaches of any representation or warranty contained
herein arising prior to the date of termination of this Agreement.

<PAGE> 13

Section 10.3 Amendment. This Agreement may be amended by mutual written
agreement of the parties hereto authorized by their respective boards of
directors or their duly authorized officers.

Section 10.4 Waiver. Any term or provision of this Agreement may be
waived in writing at any time by the party which is entitled to the benefits of
such term or provision.

ARTICLE 11 GENERAL PROVISIONS

Section 11.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail (return receipt requested), or sent by confirmed
overnight courier on the date such notice is so delivered, mailed or sent, as
the case may be, to the parties at the following addresses or (or any such other
address for a party as shall be specified by like notice):

If to Seller at:

Factual Data Corp
Mr. J.H. Donnan
3665 JFK Parkway
Building I (80525)
P.O. Box 270458
Ft. Collins, Colorado 80527-0458

If to Purchaser at:

Landmark Financial Services, Inc.
Mr. W.B. Loughborough, President
5001 Spring Valley Road
Suite 258W
Dallas, Texas 75244

Section 11.2 Counterparts. This Agreement may be executed in one or
more 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 and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.

Section 11.3 Entire Agreement/No Third Party Rights/Assignment. This
Agreement (including the documents and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements,
representations, warranties and understandings, both written and oral, among the
parties with respect to the subject matter hereof, (b) is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder;
(c) shall not be assigned by a party, by operation of law or otherwise, without
the consent of the other parties and (d) subject to the foregoing, shall be
binding upon and shall inure to the benefit of the parties hereto and their
permitted successors and assigns.

<PAGE> 14

Section 11.4 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas, without regard to
any applicable conflicts of law. The parties agree that any action or
proceeding related to this agreement shall be brought only within a court of
competent jurisdiction located in the County of Dallas, State of Texas, and no
proceedings shall be initiated in any form outside the State of Texas.

Section 11.5 Non-disclosure of Agreement. Purchaser and Seller agree,
except as required by law upon the written advice of counsel, to not issue any
public notice, disclosure or press release with respect to the transactions
contemplated by this Agreement until after Closing or without seeking the
consent of the other party, which consent shall not be unreasonably withheld.

Section 11.6 Headings/Table of Contents. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.

Section 11.7 Enforcement of Agreement. The parties hereto agree that
irreparable damage will occur in the event that any of the provisions of this
Agreement is not performed in accordance with its specific terms or is otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provision hereof in any court of the United States or
any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.

Section 11.8 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable of any of the terms
or provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.

Section 11.9 Confidentiality. The parties hereto agree that prior to
closing they will keep all information (not in the public domain or available by
other means) provided by Seller and all terms and conditions of this Agreement
in confidence and will not disclose such information to any third party, except
to their respective professional advisors and as required to comply with law,
requests or requirements of entities and as may be required in judicial or
regulatory proceedings, without the written consent of the other parties.
Nothing in this Section is intended to limit or restrict Purchaser's rights of
access under Section 5.1.

<PAGE> 15

IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all
as of the date first above written.

PURCHASER:

Landmark Financial Services, Inc.

By: /s/ WILLIAM B. LOUGHBOROUGH 1/7/97
-----------------------------------
By: William B. Loughborough
Its: President

SELLER:

Factual Data Corp.

By: /s/ J.H. DONNAN
----------------
By: J.H. Donnan
Its: President
<PAGE> 16
ADDENDUM

The following is an addendum to that Software System Contract ("Contract")
entered into as of January 6, 1997 between Lenders Resource, Inc. ("Provider")
and Landmark Financial Services, Inc. ("User" or "Client"):

1. User agrees to pay an initial, one-time license fee of $600,000 in
connection with this Contract and in connection with the related Purchase
Agreement and the exclusive right for User to provide FACTUAL
EXPRESS/BUNDLED SERVICES in the territories of': Arizona, New Mexico,
Houston, Dallas-Ft. Worth and Oklahoma.

2. Provider agrees that in addition to the training allowed in the Contract,
additional training at User's location shall be provided at User's expense.

3. Provider and User agree that Paragraph IV of the contract shall allow a 60
day period of non-payment by User for services prior to any action by
Provider against User. Provider and User further agree that User shall be
notified pursuant to the notification provisions of Paragraph XI of the
Contract prior to any action taken by Provider against User. Further,
Provider and User agree that upon notification, User shall have the right
to cure payment default prior to any adverse action taken by Provider
against User.

4. Provider and User agree that pursuant to paragraph V of the Contract that
the contract, may be terminated by giving 120 days notice. All other
conditions of this paragraph shall apply. In the event of such termination,
Provider shall agree to a one year non-compete in the exclusive territories
defined in the Contract.

5. Pursuant to Paragraph V(A) of the Contract, Provider understands that User
is currently a user of other mortgage reporting software and shall allow
User a period of 180 days from the effective date of this Contract in order
to comply with this provision (the "Grace Period").

6. Provider and User agree that the Grace Period shall apply to the provision
of paragraph V(B) of the Contract.

7. Provider and User agree that the bundled service described in paragraph
V(B) of the Contract shall apply only to mortgage credit services.

8. Provider and User agree that the Escrow Instructions described in
paragraph VI of the Contract shall be provided to User at User's request.

9. Provider and User agree that the willful misconduct and gross negligence
described in paragraph VII. (B) of the Contract refers to Provider.

10. Provider and User agree that the notice described in paragraph XI of the
Contract shall be by United States mail certified postage prepaid.

<PAGE> 17

11. Provider and User agree that the Exhibit A map described in paragraph
XII(A) of the Contract shall be supplied to User by Provider prior to
execution of the Contract.

12. Provider and User agree pursuant to paragraph XII(C ) of' the Contract that
(i ) that the reports issued using the Factual Express\Bundled Services
Software do not have to be issued on Factual Data Secure paper, (ii) that
the written consent of Provider for User to utilize Factual Data as part of
a corporate name shall not be unreasonably withheld, and (iii) User may,
and Provider agrees, that may utilize the Factual Data name in connection
with the following services: consumer rate information gathering,
publishing and advertising.

13. Provider and User agree pursuant to paragraph XVI of the Contract that such
provisions relating to standards shall apply only to Factual Data services.

14. Provider and User agree pursuant to paragraph XVII of the Contract that
User is not obligated to use Factual Data Secure Forms.

Agreed:

Client or User:
Landmark Financial Services, Inc.

By: /s/ WILLIAM B. LOUGHBOROUGH 1/7/97
-----------------------------------
By: William B. Loughborough
Its: President

Provider:
Lender's Resource, Inc.

By: /s/ J.H. DONNAN 01/08/97
-------------------------
By: J.H. Donnan
Its: President

<PAGE> 1
EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the use in the Pre-Effective Amendment No. 1 to the Registration
Statement of Factual Data Corp. on Form SB-2 (333-47051) of our report dated
January 27, 1998 on the financial statements of Factual Data Corp. appearing in
the Prospectus, which is part of the Registration Statement.

We consent to the use in the Pre-Effective Amendment No. 1 to the Registration
Statement of Factual Data Corp. on Form SB-2, (333-47051) of our report dated
January 10, 1998 on the financial statements of Mirocon, Inc. appearing in the
Prospectus, which is part of the Registration Statement.

We also consent to the reference to us under the headings "Selected Financial
Data" and "Experts" in such Prospectus.

/s/ Ehrhardt Keefe Steiner & Hottman PC

Ehrhardt Keefe Steiner & Hottman PC

April 8, 1998
Denver, Colorado