UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): September
30, 1998
FACTUAL DATA CORP.
(Exact name of registrant as specified in its charter)
Colorado 0-24205 84-1449911
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation or No.)
organization)
5200 Hahns Peak Drive
Fort Collins, Colorado 80538
(Address of principal executive offices)
(970) 663-5700
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 30, 1998, Factual Data Corp. (the "Company") closed its acquisition
of the assets of Landmark Financial Services, Inc. ("Landmark") pursuant to an
Asset Purchase Agreement (the "Agreement") executed and effective September 30,
1998. The Company and its franchisees and licensees provide information
services, including mortgage credit reports, to mortgage and consumer lenders,
employment screening services ("EMPfacts") and credit and tenant screening
services ("QUICKpeek Tenant"). Landmark had been a franchisee of the Company
headquartered in the Dallas, Texas area and operating in Texas, New Mexico,
Arizona and Oklahoma.
Pursuant to the Agreement, the Company acquired the fixed assets, customer
lists, client agreements, contract rights, intellectual property rights to trade
names and computer software, personnel files, books and records, deposits,
prepaid assets and the goodwill of Landmark in exchange for $1,200,000 cash and
53,782 shares of the Company's restricted common stock valued at $400,000. The
Company also agreed to sublease, for $6,200 per month, 6,000 square feet of
office space from Landmark and intends to continue operations of Landmark at
such facility. In connection with the purchase, the Company entered into two
year non-competition agreements with William Loughborough, the controlling
shareholder of Landmark.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) It is impracticable to provide financial statements relative to Landmark at
this time. In accordance with Item 7(a)(4), the Company will file the
required financial statements as an amendment to this Form 8-K as soon as
practicable, but not later than 60 days after this report on Form 8-K must
be filed.
(b) It is impracticable to provide pro forma financial information relative to
Landmark and the Company at this time. In accordance with Item 7(a)(4), the
Company will file the required financial statements as an amendment to this
Form 8-K as soon as practicable, but not later than 60 days after this
report on Form 8-K must be filed.
(c) Exhibits.
2.1 Asset Purchase Agreement between Factual Data Corp.
and Landmark Financial Services, Inc., dated as of
September 30, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FACTUAL DATA CORP.
Date: October 14, 1998 By:/s/ Jerald H. Donnan
Jerald H. Donnan,
Chief Executive Officer
ASSET PURCHASE AGREEMENT
by and between
FACTUAL DATA CORP.
AND
LANDMARK FINANCIAL SERVICES, INC.
Dated as of September 30, 1998
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
RECITALS.....................................................1
ARTICLE I....................................................1
DEFINITIONS...............................................1
ARTICLE II...................................................3
ACQUISITION OF THE ASSETS.................................3
2.1 Delivery of Assets.................................3
2.2 Purchase Price of Assets...........................4
2.3 Assumed Liabilities................................4
ARTICLE III..................................................5
REPRESENTATIONS AND WARRANTIES OF SELLER..................5
3.1 Organization and Qualification of Seller...........5
3.2 Authorization......................................5
3.3 Reserved...........................................5
3.4 No Bulk Sale Law...................................5
3.5 No Conflicting Agreements .........................6
3.6 Compliance with Applicable Law.....................6
3.7 Material Misstatements or Omissions................6
3.8 No Known Adverse Effects...........................6
3.9 Consents and Approvals.............................6
3.10 Subsidiaries.......................................6
3.11 Litigation.........................................7
3.12 Brokers............................................7
3.13 Taxes..............................................7
3.14 Ownership..........................................7
3.15 Accounts...........................................7
3.16 License Agreements.................................8
3.17 Intellectual Property..............................8
3.18 Customers..........................................8
3.19 Contracts..........................................8
3.20 Financial Statements...............................8
3.21 Absence of Undisclosed or Contingent Liabilities...9
3.22 No Material Adverse Changes........................9
3.23 Absence of Developments............................9
3.24 Title to Properties................................9
3.25 Tax Matters.......................................10
3.26 Tax Notices.......................................10
3.27 Employees.........................................11
3.28 Employee Benefit Plans............................11
3.29 Gifts.............................................12
3.30 Employee Health and Safety........................12
3.31 Representations Concerning Solvency...............12
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ARTICLE IV..................................................13
PRE-CLOSING COVENANTS OF SELLER..........................13
4.1 Inspection of Properties and Books................13
4.2 Other Contracts...................................13
4.3 Ongoing Operations................................13
4.4 Indebtedness......................................13
4.5 Records...........................................14
4.6 Articles of Incorporation; Bylaws.................14
4.7 Distributions or Dividends........................14
4.8 Notice of Breach..................................14
4.9 Nondisclosure.....................................14
4.10 Employment Matters................................14
4.11 Insurance.........................................14
4.12 Preservation of Business..........................15
4.13 Regulatory Filings................................15
4.14 No Negotiations...................................15
4.15 Assignment of Contracts, Leases and Other
Agreements.......................................16
4.16 Commercially Reasonable Efforts...................16
4.17 Additional Disclosure.............................16
ARTICLE V...................................................16
POST-CLOSING COVENANTS...................................16
5.1 Further Assurances................................16
5.2 Litigation Support................................16
5.3 Employees of the Business.........................17
5.4 Intellectual Property Rights......................17
ARTICLE VI..................................................17
REPRESENTATIONS AND WARRANTIES OF PURCHASER..............17
6.1 Organization and Qualification of Purchaser.......17
6.2 Authorization.....................................18
6.3 No Conflicting Agreements.........................18
6.4 Compliance with Applicable Laws...................18
6.5 Litigation........................................18
6.6 Material Misstatements or Omissions...............18
6.7 No Known Adverse Effects..........................18
6.8 Consents and Approvals............................19
6.9 Brokers...........................................19
6.10 Representations as to Knowledge...................19
6.11 Authorization of Acquisition Stock................19
6.12 Purchaser's Public Documents and Access to
Information......................................19
6.13 Knowledge of Industry.............................20
6.14 Reports Under the Exchange Act....................20
6.15 Nasdaq Market Listing.............................20
6.16 Financial Statements..............................20
6.17 Absence of Undisclosed or Contingent Liabilities..20
6.18 No Material Adverse Changes.......................20
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ARTICLE VII.................................................21
COVENANTS OF PURCHASER...................................21
7.1 Other Contracts...................................21
7.2 Additional Disclosure.............................21
7.3 Notice of Breach..................................21
7.4 Nondisclosure.....................................21
7.5 Commercially Reasonable Efforts...................21
7.6 Regulatory Filings................................21
7.7 Reserved..........................................22
7.8 Non-Compete and Confidentiality Agreements........22
7.9 Lease and Office Expenses.........................22
ARTICLE VIII................................................22
CONDITIONS PRECEDENT TO CLOSING..........................22
8.1 Conditions Precedent to Obligations of Seller.....22
8.2 Conditions Precedent to Obligations or Purchaser..25
ARTICLES IX.................................................27
SURVIVIAL OF REPRESENTATIONS AND WARRANTIES..............27
ARTIXLE X...................................................28
INDEMNIFICATION..........................................28
10.1 Indemnification...................................28
10.2 Limitation of Liability...........................28
10.3 Method of Asserting Claims........................28
10.4 Payment of Claim..................................30
10.5 Other Rights and Remedies Not Affected............30
ARTIXLE XI..................................................30
AMENDMENT, TERMINATION AND BREACH........................30
11.1 Amendment and Modification........................30
11.2 Termination and Abandonment.......................30
ARTIXLE XII.................................................31
CLOSING..................................................31
12.1 Closing...........................................31
12.2 Allocations.......................................31
12.3 Seller's Deliveries at Closing....................31
12.4 Purchaser's Deliveries at Closing.................32
12.5 Forwarding of Receivables.........................33
12.6 Removal of Personal Effects Following Closing.....33
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ARTICLE XIII................................................33
MISCELLANEOUS............................................33
13.1 Notice..........................................34
13.2 Entire and Sole Agreement.......................34
13.3 Successors and Assigns..........................34
13.4 Expenses........................................34
13.5 Severability....................................34
13.6 Governing Law...................................34
13.7 Counterparts....................................34
13.8 Amendments......................................34
13.9 No Third Party Beneficiary......................34
13.10 Headings.......................................34
13.11 Disputes.......................................35
13.12 Delivery of Exhibits...........................35
<PAGE>
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into effective this 30th day of September,
1998, by and between Factual Data Corp., a Colorado corporation ("Purchaser"),
and Landmark Financial
Services, Inc. ("Seller").
RECITALS
WHEREAS, on or about August 19, 1998, Purchaser issued a term sheet to Seller
("Term Sheet") pursuant to which Purchaser indicated its desire to proceed with
the acquisition of certain assets of Seller; and
WHEREAS, the Term Sheet contemplated the parties would enter into a definitive
Asset Purchase Agreement which definitive agreement is as set forth below (the
"Agreement") and which shall supersede the Term Sheet in its entirety; and
WHEREAS, Purchaser desires to purchase, and Seller desires to sell, the assets
of Seller as described on Exhibit 2.1 hereto (the "Assets") and Purchaser
desires to assume the liabilities of Seller described on Exhibit 2.3 hereto
("Assumed Liabilities");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in reliance upon the representations and warranties
contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall, unless the context requires
otherwise, have the meanings designated below:
Assets means the assets of the Seller's credit reporting business set forth on
Exhibit 2.1 hereto.
Assumed Liabilities means the liabilities set forth on Exhibit 2.3 hereto which
may include but are not necessarily limited to, equipment or facility leases.
Claim Notice has the meaning given to it in Article 10.3(a).
Closing has the meaning given to it in Article 12.1.
Closing Date has the meaning given to it in Article 12.1.
Code means the Internal Revenue Code of 1986, as amended.
Communication means collectively any publicity release, security filing, private
placement memorandum or any other communication.
Damages means any and all damages, claims, deficiencies, losses and expenses, as
further defined in Article 10.1.
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ERISA means the Employee Retirement Income Security Act of 1974, as amended, and
any regulations, rules or orders promulgated thereunder.
Evaluation Material means Seller's documents, financial statements, information
and materials which shall be used in connection with a due diligence review.
Excluded Assets means cash, accounts receivables and assets set forth on Exhibit
2.2 which will be retained by Seller and not conveyed to Purchaser at Closing,
and includes all assets not related to the Seller's credit reporting business.
Purchaser shall receive a $7,000.00 credit on the Closing Statement for certain
equipment recently removed from the Assets. In addition, Seller has acquired
approximately $27,000.00 of new equipment such as software and laptop computers
during August and September, 1998 which are Excluded Assets that Purchaser shall
have the right to acquire from Seller within thirty (30) days of the Closing,
for fair market value in addition to the Purchaser Price.
Financial Statements has the meaning given to it in Article 3.21.
Indemnified Party means the party claiming indemnification under Article X.
Indemnifying Party means the party against whom indemnification claims are
asserted under Article X.
Intellectual Property means, in each case relating solely to the credit
reporting business of the Seller, (a) all trademarks, services marks, logos,
trade names and corporate names, together with all translations, adaptations,
derivations and combinations thereof and including all goodwill associated
therewith, and all applications, registrations and renewals in connection with
the Seller's credit reporting business.
Loss means Damages for which any claim may be asserted under Article X.
Other Company Agreements means the Non-Compete and
Confidentiality Agreements, Sublease, Transitional Services
Expense Reimbursement and Sublease Agreement and Termination
Agreement.
Notice means the thirty day period which the indemnifying party shall have from
the personal delivery or mailing of the Claim Notice.
OSHA means the Occupational Safety and Health Act of 1970, as amended, and any
regulations, rules or orders promulgated thereunder.
Purchase Price has the meaning given it in Article 2.2.
Purchaser means Factual Data Corp., a Colorado corporation, or its permitted
assigns.
Retained Accounts Receivable means the accounts receivable retained by Seller
and shall include receivables due for all work, labor and services performed by
Seller and billed by Seller in the normal course of business through and
including the day before Closing.
Seller means Landmark Financial Services, Inc.
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Shareholders means the owners of all of the capital stock of Seller at the date
hereof and as of Closing.
Tax or Taxes means any federal, state, local or foreign income, gross receipt,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A), custom
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimating or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not.
Tax Return means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
Uniform Commercial Code means the Uniform Commercial Code applicable in the
state of organization of the Seller.
ARTICLE II
ACQUISITION OF THE ASSETS
Subject to the terms and conditions set forth in this Agreement:
2.1 Delivery of Assets. At the Closing, as defined below, Seller shall endorse
and deliver such instruments, documents, certificates or instructions as
may be necessary to vest title to the Assets set forth on Exhibit 2.1
hereto in Purchaser (the Assets shall not include the Excluded Assets).
Upon receipt of such documents, instruments, certificates or instructions,
and upon the Closing, Purchaser shall become the beneficial and record
holder of the Assets and entitled to all of the rights, benefits and
privileges with respect thereto. The Assets shall be delivered by Seller to
Purchaser at the Closing and will be free of all encumbrances, liens,
security interests or other claims, except for the Assumed Liabilities. At
the Closing, the Assets which will be transferred to Purchaser, and their
value, shall be as follows:
Asset Category Valuation(1)
Fixed assets......................... $___________
Contract rights(2)................... ___________
Intellectual property(2)............. ___________
Personnel files...................... ___________
Books and records.................... ___________
Non-compete and confidentiality
agreement............................ ___________
Deposits............................. ___________
Prepaid assets....................... ___________
Goodwill............................. ___________
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(1) The parties acknowledge and agree that the valuation of the Assets if not
determined at the date of execution of this Agreement, shall be made by the
parties not later than the Closing.
(2) To the extent assignable.
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Each of Seller and the Purchaser covenant that it will not take a position on
any income tax return or before any governmental agency or in any judicial
proceeding that is inconsistent in any way with this allocation.
2.2 Purchase Price for Assets The aggregate purchase price for the Assets shall
consist of $1,200,000.00 cash and $400,000.00 in Purchaser's Restricted
Stock which shall be delivered to Seller at the Closing subject to and upon
the terms and conditions hereof and the representations and warranties
contained herein, in the following manner:
(a) At the Closing, Purchaser shall pay an aggregate cash consideration of
$1,200,000.00 to the Seller, which shall be paid in the form of a wire
transfer to a financial institution designated by the Seller. Such
payment shall represent $1,200,000.00 in currency of the United States
of America.
(b) As quickly as possible after the Closing, Purchaser shall deliver to
Seller certificates representing $400,000.00 worth of Purchaser's
Restricted Stock (Restricted Stock), valued at the lower of the average
of the closing bid and ask prices of Purchaser's Common Stock on the
day immediately preceding the Closing Date or $8.50 per share. The
Restricted Stock received by the Seller will be restricted or
unregistered for a period not to exceed one year from the date of
Closing. At the Closing, the parties hereto will sign a standard
Registration Rights Agreement (piggyback) in a pre-approved form.
Purchaser shall be entitled to withhold stock certificates representing
ten (10 %) per cent of the Purchase Price until completion of the
Post-Closing audit of gross revenues for Seller's fiscal year ended
June 30, 1998. As promptly as practicable, but in no event later than
120 days following the Closing, the Purchaser may audit and calculate
the gross revenue from July 1, 1997, through the Closing (as well as
the prior fiscal year). The parties agree that the Seller has submitted
to Purchaser a statement of revenue prepared (except as agreed below)
in accordance with generally accepted accounting principles indicating
that gross revenues totaled $2,467,000.00 and for purposes of this
Agreement the parties agree that the $64,032.00 July, 1997 revenues
from Austin/San Antonio, Texas, operations acquired by Seller August 1,
1997 shall constitute gross revenue for Seller's 1998 fiscal year. In
the event of a material variation in gross revenues between the results
of Purchaser's audit for the period from July 1, 1997 to June 30, 1998
of the financial statements of Seller's credit reporting business and
the aforementioned $2,467,000.00 gross revenue amount (such material
variation in revenues to be defined as a variation of more than 1% of
gross revenues, then the Purchaser shall have the right to a
proportionate reduction in the purchase price to be offset against the
Restricted Stock withheld by Purchaser. There shall be no adjustment,
upward or downward, for any period after June 30, 1998.
(c) Procedures for Resolving Hold-Back. Purchaser and Seller have agreed to
certain procedures for resolving any Hold-Back as set forth on Exhibit
2.2(c) attached hereto.
(d) The parties contemplate that, subsequent to the Closing, an audit of
the gross revenue records of Seller's factual data division may be
performed in accordance with generally accepted accounting principles
by independent certified public accountants designated by the
Purchaser, and at Purchaser's sole cost and expense.
2.3 Assumed Liabilities As part of the consideration for the Assets, the
Purchaser shall assume and pay, perform and discharge the Assumed
Liabilities described on Exhibit 2.3 hereto. The Purchaser will pay,
perform and discharge the Assumed Liabilities as they become due.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the statements contained in
this Article III are true, correct and complete as of the date of this Agreement
and will, except as otherwise expressly provided in this Agreement (or the
exhibits and disclosure schedules hereto) be true, correct and complete on the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement) as follows:
3.1 Organization and Qualification Of Seller The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
state of incorporation, and is duly qualified and authorized to do business
as a foreign corporation and is in good standing in each jurisdiction, if
any, in which the nature of the business conducted by it or the properties
owned, leased or operated by it makes such qualification necessary or, if
not, then such lack of authorization will not have materially adversely
affected the Purchaser's use of the Assets. The Seller has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. The copies of the Articles
of Incorporation (certified by the Secretary of the State of the state of
incorporation) and the Bylaws of the Seller, both as amended to date, which
have been delivered to Purchaser and attached hereto as Exhibits 3.1(a) and
3.1(b), respectively, are complete and correct, and the Seller is not in
default under or in violation of any provision of its Articles of
Incorporation or Bylaws. The minute books (containing the records of
meeting of the shareholders, the board of directors and any committees of
the board of directors), the stock certificate books and the stock record
books of the Seller, as made available to Purchaser, are correct and
complete in all material respects.
3.2 Authorization This Agreement has been duly and validly executed and
delivered by Seller and the agreements, representations and warranties
contained herein constitute valid and binding obligations, representations
and warranties of Seller enforceable in accordance with their terms.
Attached hereto as Exhibit 3.2(a) is a Certificate which shall evidence the
approval and authorization of the shareholders of Seller and which shall be
attested to by the President of Seller. This Agreement and the consummation
of the transactions contemplated hereby and thereby have been duly and
unanimously approved by the board of directors of Seller. Attached hereto
as Exhibit 3.2(b) is a certified copy of the Directors' Consent or a
resolution passed pursuant to a duly and validly called meeting of the
Board of Directors. This Agreement constitutes, and all other agreements
contemplated hereby to be executed and delivered by the Seller will when
executed and delivered constitute, the legal, valid and binding obligations
of, and be enforceable in accordance with their respective terms against,
the Seller.
3.3 Reserved
3.4 No Bulk Sale Law Seller has advised Purchaser that there is no bulk sale
provision in the Texas Uniform Commercial Code.
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3.5 No Conflicting Agreements The execution and delivery of this Agreement by
Seller does not, and consummation by Seller of the transactions
contemplated hereby will not, (a) violate any existing term or provision of
any law, regulation, order, writ, judgment, injunction or decree applicable
to Seller or the Assets, (b) conflict with or result in a breach of any of
the terms, conditions or provisions of the Articles of Incorporation or
Bylaws of Seller result in a material breach of any material agreement or
instrument to which Seller is a party, or (c) result in the creation or
imposition of any lien, charge, security interest, encumbrance, restriction
or claim upon the Assets.
3.6 Compliance with Applicable Law Except as set forth in Exhibit 3.6(a),
Seller has not received any notice of any violation, probable violation or
default by Seller under any applicable law, regulation or order of any
governmental department, commission, board or agency or instrumentality,
domestic or foreign, having jurisdiction over Seller's operations which
could materially adversely affect the business, operations, financial
condition, properties or assets of Seller, or the ability to consummate the
transaction contemplated hereby. To Seller's knowledge after reasonable
inquiry, Seller has operated its business, and will continue to operate its
business, in compliance in all material respects with the Fair Credit
Reporting Act, the Real Estate Settlement Procedures Act, the Fair Debt
Collection Act and applicable state law. Additionally, Seller has given
notice of the sale of Assets to all government entities that require such
notice.
3.7 Material Misstatements or Omissions Neither this Agreement nor any other
document, certificate or statement furnished to Purchaser by or on behalf
of Seller in connection with this Agreement contains any untrue statement
of a material fact, or omits any material fact necessary to make the
statements contained herein or therein not misleading in light of the
context in which they were made.
3.8 No Known Adverse Effects Except as set forth on Exhibit 3.8, there is no
fact actually known to Seller, its officers, directors or employees which
materially adversely affects or will materially adversely affect the Assets
which has not been set forth in writing in this Agreement or disclosed in
the other documents, certificates or written statements furnished to
Purchaser by or on behalf of Seller in connection herewith.
3.9 Consents and Approvals The execution and delivery by Seller of this
Agreement, and the performance by Seller of its obligations hereunder, does
not require Seller to obtain any consent, approval, agreement, or action
of, or make any filing with or give any notice to, any corporation, person,
entity, or firm or any public, governmental or judicial authority except
(i) such as have been duly obtained or made, as the case may be, and or
will be duly obtained and made and in full force and effect as of the
Closing, (ii) those as to which the failure to obtain would have no
material adverse effect on the Assets or the transactions contemplated
hereby, and (iii) approval of the Seller's Shareholders, which shall be
obtained prior to the execution hereof.
3.10 Subsidiaries Except as set forth on Exhibit 3.10, Seller does not own, have
an ownership interest in, or control any corporation, partnership,
proprietorship or other entity.
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3.11 Litigation Except as described in Exhibit 3.11, there are no actions,
proceedings or investigations pending or to the actual conscious knowledge
of Seller threatened against Seller or the Assets before any court or
administrative agency which could result in any material adverse change in
the operations or financial condition of Seller other than as identified
therein.
3.12 Brokers All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by Seller directly with
representatives of Purchaser, without the intervention of any person in
such manner as to give rise to any valid claim by any person against
Purchaser for a finder's fee, brokerage commission, or similar payment. All
rights of indemnity under Article X hereof shall apply to any claim
relating to a Loss (hereinafter defined) arising out of this Agreement for
any fee, commission or similar payment.
3.13 Taxes Seller shall pay all Taxes of Seller arising out of the transfer of
the Assets and shall be responsible for all personal property taxes for the
business of Seller through the date of the Closing. Purchaser shall not be
responsible for any business, occupation, withholding or similar Tax, or
any Taxes of any kind related to the Assets or the business of Seller for
any period prior to the Closing.
3.14 Ownership Seller is the owner, beneficially and of record, of all of the
Assets as identified on Exhibit 2.1 hereto, free and clear of all liens,
encumbrances, equities, options, claims, charges and restrictions, except
as otherwise described on Exhibit 3.14 hereto.
3.15 Accounts The list of customers attached hereto as Exhibit 3.15(a)
represents the customers with which Seller now does or has done business,
principally in the area of mortgage credit reporting. The customers with
which Seller maintains a contract or agreement are identified on Exhibit
3.15(b) hereto. Except as described on Exhibit 3.15(c), all such contracts
or agreements are valid and enforceable against the Seller and are not
currently, and will not be at Closing, in material default, invalid or
unenforceable in any manner, or where termination is threatened or imminent
to the actual conscious knowledge of Seller. Seller has performed all of
its material obligations and material responsibilities as described under
each such contract or agreement, none of such contracts or agreements are
subject to any material counterclaim or set-off and such contracts are in
full force and effect and will continue in full force and effect following
the Closing (assuming continuing performance by Purchaser following the
Closing, which is not warranted or represented by Seller). Except as
described on Exhibit 3.15(d), Seller has no reason to believe that amounts
payable under such contracts or agreements, assuming due performance by
Purchaser in the future (which is not warranted or represented by Seller),
will not be paid substantially in accordance with the terms of such
contracts or agreements. Seller has not received any notices of default,
claims, or any other type of notice with respect to each such contract or
agreement or, if such notice has been received, a copy of any such notice
has been provided in writing to Purchaser.
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3.16 License Agreements Attached as Exhibit 3.16 is a complete and accurate list
of any material license agreements to which Seller is a party as of the
date hereof relating to the Seller's credit reporting business. Also stated
on Exhibit 3.16 is the expiration date of each such license agreement.
Except as described on Exhibit 3.16, all such license agreements are valid
and enforceable against the Seller and are not currently, and will not be
at Closing, in material default, invalid or unenforceable in any material
respect. To the extent the transfer of any license agreement hereunder
requires the consent of any third party, Seller shall use its commercially
reasonable efforts to obtain such consents if so requested by Purchaser.
Seller has not received any written notices of default or claims with
respect to any license agreement or, if such written notice has been
received, a copy of such notice has been provided in writing to Purchaser.
3.17 Intellectual Property Attached as Exhibit 3.17 to this Agreement is a
schedule of all material trade names, trademarks, service marks, and their
registrations, if any, owned by Seller or in which Seller has any material
right, license, or for which Seller has made application, together with a
brief description of each (hereinafter collectively the "Intellectual
Property"). To Seller's actual conscious knowledge, Seller has not
infringed, and by its use of its Intellectual Property, is not now
infringing on any United States or Texas trade name, trademark, service
mark or copyright belonging to any other person, firm or corporation.
3.18 Customers Exhibit 3.18 to this Agreement sets forth a correct and current
list of all customers of Seller together with summaries of the revenues
from each such customer during the most recent 12 months ending 30 days
prior to the date hereof.
3.19 Contracts Except as set forth in Exhibit 3.19, Seller is not a party to,
nor are the Assets bound by, any contract, distributorship agreement,
license agreement, agency agreement or output or requirements agreement, or
any other agreement, indenture, mortgage, deed of trust, lease, loan
agreement or instrument which Purchaser would succeed to by its purchase of
the Assets, nor will the purchase of the Assets by Purchaser create any
default by Seller as to any of such agreements which will materially
adversely affect the Purchaser's use of the Assets.
3.20 Financial Statements Seller has delivered to Purchaser copies of Seller's
list of the Assets as of the Closing Date and the statements of revenue for
the fiscal year ended June 30, 1998 and, to the extent available, the
interim period ending within 60 days prior to the date hereof
(collectively, the "Financial Statements"). Seller has submitted to
Purchaser a statement of revenues prepared (except as agreed below) in
accordance with generally accepted accounting principles indicating that
revenues totaled $2,467,000.00 (and for purposes of this Agreement the
parties agree that the $64,032.00 July 1997 revenue from Austin/San
Antonio, Texas, operations acquired by Seller August 1, 1997 shall
constitute gross revenues for Seller's 1998 fiscal year) for the period
from July 1, 1997 to June 30, 1998. The Financial Statements are based upon
the information contained in the books and records of Seller and fairly and
accurately present, in all material respects, the Assets of Seller as of
the dates thereof and revenue for the periods referred to therein. The
monthly financial statements generated by Seller from and after the interim
period delivered to Purchaser will be prepared on a basis consistent in all
material respects with the methods and procedures used to prepare the
Financial Statements. If requested by Purchaser, in writing, Seller will
deliver such monthly financial statements from and after the interim period
to Purchaser within 60 days of the end of each month from the date hereof
to Closing.
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3.21 Absence of Undisclosed or Contingent Liabilities Seller has no liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise, whether
due or to become due, whether known or unknown, and regardless of when
asserted in excess of $50,000.00 except as otherwise set forth in the
Financial Statements, the monthly financial statements and Exhibit 3.21
hereto.
3.22 No Material Adverse Changes Since the date of the most recent Financial
Statements, there has been no change materially adverse to Seller in its
Assets, financial condition, gross profit, operating results, customer,
employee or supplier relations, business condition or prospects, except as
otherwise disclosed on Exhibit 3.22 hereto.
3.23 Absence of Developments Since the date of the Term Sheet by and between
Seller and Purchaser, Seller has and will until Closing: (a) Conducted its
business and operations only in the regular and ordinary course; maintained
reasonable business insurance; committed no material waste of the Assets;
disposed or otherwise changed in any material respect the nature of any
Asset such that cash or accounts receivable are increased (other than in
the ordinary course of business), nor created or suffered to exist any
material lien, charge or encumbrance on any Asset or incurred any
indebtedness for borrowed money (other than in the ordinary course) which
is secured by one or more of the Assets; and has used its reasonable
commercial efforts to maintain and preserve in all material respects its
business organization intact and maintain in all material respects its
relationships with suppliers, employees, customers and others; (b)
Refrained from making capital expenditures or commitments for additions to
the property, plant or equipment or entered into transactions which could
reasonably be expected to materially alter or affect operations, except as
otherwise have been approved in writing by Purchaser; (c) Except for the
Excluded Assets, refrained from paying the officers or directors or their
affiliates, whether in the capacities of shareholders, directors, officers
or employees, any dividends or any bonuses or any other forms of
compensation except for non-bonus compensation in accordance with current
practice; and (d) Maintained title to, and refrained from making or
permitting, any material transfer, sale, pledge, encumbrance on, lien or
other material disposition of the Assets of Seller except in the ordinary
course of business.
3.24 Title to Properties Seller does not own any real property. The lease to
which Seller is a party, a true and complete copy of which is attached
hereto as Exhibit 3.24, is in full force and effect, and Seller holds a
valid and existing leasehold interest in such lease for the term set forth
in such lease. Seller shall utilize its reasonable commercial efforts to
obtain an assignment of the property lease if requested to do so by
Purchaser. Seller shall have delivered complete and accurate copies of such
lease to Purchaser, and such lease shall not have been modified in any
material respect except to the extent that such modifications are disclosed
in writing delivered to Purchaser. Seller is not in default in any material
respect, and no circumstances exist which, if unremedied would, either with
or without notice or the passage of time or both, result in a default in
any material respect under such lease. The fixed assets necessary for the
conduct of Seller's businesses are in good condition and repair, ordinary
wear and tear excepted, and are usable in the ordinary course of business.
There are no defects in such fixed assets or other conditions relating
thereto which, in the aggregate, materially adversely affect the operation
or value of such fixed assets. Seller owns, or leases under valid leases,
all equipment and other tangible assets necessary for the conduct of its
business.
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3.25 Tax Matters
(a) The Seller has filed all Tax Returns that it was required to file. All
such Tax Returns were correct and complete in all material respects.
All Taxes owed by the Seller (whether or not shown on any Tax Return)
have been paid. The Seller is not currently the beneficiary of any
extension of time within which to file any Tax Return. No claim has
ever been made to Seller by an authority in a jurisdiction where the
Seller does not file Tax Returns that it is or may be subject to
taxation by that jurisdiction. There are no encumbrances on any of the
Assets of the Seller that arose in connection with any failure (or
alleged failure) to pay any Taxes.
(b) The Seller has withheld and paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder or other third
party.
(c) To Seller's actual knowledge, there is no basis for any authority to
assess any additional Taxes for any period for which Tax Returns have
been filed. There is no dispute or claim concerning any liability for
Taxes of the Seller (i) claimed or raised by any authority in writing
with any directors, officers or employees of the Seller, or (ii) as to
which any such person has actual knowledge based upon personal contact
with any agent of such authority. Exhibit 3.25 lists all federal,
state, local and foreign income Tax Returns filed with respect to the
Seller for taxable periods ended after December 31, 1996, indicates
those Tax Returns that have been audited, if any, and indicates those
Tax Returns that currently are the subject of audit, if any. The Seller
has made available to the Purchaser correct and complete copies of all
federal income Tax Returns, examination reports, if any, and statements
of deficiencies filed, assessed against or agreed to by the Seller
since December 31,1996.
3.26 Tax Notices Except as set forth on Exhibit 3.26 hereto, no deficiency for
any Taxes has been proposed, asserted or assessed against Seller that has
not been resolved and paid in full. No waiver, extension or comparable
consent given by Seller regarding the application of the statute of
limitations with respect to any Taxes is outstanding, nor is any request
for any such waiver or consent pending. Except as described in Exhibit 3.26
hereto, there has been no tax audit or other administrative proceeding or
court proceeding with respect to any Taxes, nor is any such Tax audit or
other proceeding pending, nor has there been any written notice to Seller
by any taxing authority regarding any such Tax, audit or other proceeding
or, to the actual conscious knowledge of Seller, is any such Tax audit or
other proceeding threatened with regard to any Taxes. Seller does not
expect the assessment of any additional Taxes for any periods completed
prior to Closing and is not aware of any unresolved questions, claims or
disputes concerning the liability for Taxes for any periods completed prior
to Closing which would exceed the estimated reserves established on its
books and records. For the purposes hereof, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, withholding, payroll,
employment, workmen's compensation, social security, unemployment, excise,
estimated, severance, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever including,
without limitation, all interest and penalties thereon, and additions to
tax or additional amounts imposed by any taxing authority, domestic or
foreign, upon Seller.
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3.27 Employees Except as described on Exhibit 3.27, (a) Seller has no actual
notice that any executive employee of Seller or any group of Seller's
employees has any plan or intention to terminate his, her or its employment
following the Closing; (b) Seller has complied in all material respects
with all laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining
and the payment of social security and other taxes; (c) to Seller's actual
conscious knowledge, Seller has no material labor relations problem pending
and its labor relations are satisfactory; (d) there are no workmen's
compensation, sexual harassment, discrimination or claims pending against
Seller nor is Seller aware of any facts that would give rise to such
claims; (e) to Seller's actual conscious knowledge, no employee of Seller
is subject to any secrecy or non-competition agreement or any other
agreement or restriction of any kind that would impede in any way the
ability of such employee to carry out fully all activities of such employee
in furtherance of the business of Seller; and (f) to Seller's actual
conscious knowledge, no employee or former employee of Seller has any claim
with respect to any intellectual property rights of Seller.
3.28 Employee Benefit Plans
(a) Except as provided in writing to Purchaser and as listed on Exhibit
3.28, with respect to all employees and former employees of Seller and
all dependents and beneficiaries of such employees and former
employees, (I) Seller does not maintain or contribute to any
non-qualified deferred compensation or retirement plans, contracts or
arrangements, (ii) Seller does not maintain or contribute to any
qualified defined contribution plans as defined in Section 3(34) of
ERISA or Section 414(I) of the Code, (iii) Seller does not maintain or
contribute to any qualified defined benefit plans as defined in Section
3(35) of ERISA or Section 414(j) of the Code, and (iv) Seller does not
maintain or contribute to any employee welfare benefit plans as defined
in Section 3(1) of ERISA.
(b) To Seller's actual conscious knowledge, to the extent required (either
as a matter of law or to obtain the intended tax treatment and tax
benefits), all employee benefit plans as defined in Section 3(3) of
ERISA which Seller does maintain or to which it does contribute
(collectively, the "Plans") comply in all material respects with the
requirements of ERISA and the Code. With respect to the Plans, (I) all
required contributions which are due have been made and a proper
accrual has been made for all contributions due in the current fiscal
year, (ii) there are no actions, suits or claims pending, other than
routine uncontested claims for benefits, and (iii) to Seller's actual
conscious knowledge, there have been no prohibited transactions as
defined in Section 406 of ERISA or Section 4975 of the Code.
(c) Seller does not contribute (and has not ever contributed) to any
multi-employer plan, as defined in Section 3(37) of ERISA. Seller has
no actual or potential liabilities under Section 4201 of ERISA for any
complete or partial withdrawal from a multi-employer plan. Seller has
no actual or potential liability for death or medical benefits after
separation from employment, other than (I) death benefits under the
employee benefit plans or programs (whether or not subject to ERISA)
that will be set forth in writing to Purchaser, and (ii) health care
continuation benefits described in Section 4980B of the Code.
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3.29 Gifts Neither Seller nor, to Seller's actual conscious knowledge, any of
its officers, directors or shareholders has made or agreed to make gifts of
money, other property or similar benefits (other than incidental gifts of
articles of nominal value) to any actual or potential customer, supplier,
governmental employee, political party, candidate for office, governmental
agency or instrumentality or any other person in a position to assist or
hinder Seller in connection with any actual or proposed business
transaction.
3.30 Employee Health and Safety To Seller's actual conscious knowledge, Seller
has not violated and has no liability, and has not received a notice or
charge asserting any violation of or liability under, OSHA or any other
federal or state acts (including rules and regulations thereunder) and, to
Seller's actual conscious knowledge, regulating or otherwise affecting
employee health and safety.
3.31 Representations Concerning Solvency The Seller has not incurred, and does
not intend to incur, and has no reasonable basis to believe that it will
incur, any debts beyond its ability to pay such debts as they become due.
Seller has, and will continue to have, assets greater than Seller's debts,
based upon a fair valuation and has paid, and will pay, its debts as they
become due. Purchaser may rely on such representations in asserting that
Purchaser has no reasonable cause to believe that Seller is or will become
insolvent as a result of the transactions contemplated hereby. Seller has
undertaken the transactions described herein in good faith, considering its
obligations to any person or entity to whom Seller owes a right to payment,
whether or not the right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured and has undertaken the transaction
described herein without any intent to hinder, delay or defraud its
creditors. Seller will not, and has not, concealed this transaction or the
proceeds of such transaction from any of its creditors. Seller has not
removed or concealed any assets from its creditors and will not incur debt
in connection with the assets or business that is significantly greater
than the normal and customary debts of Seller in the ordinary course.
Seller does not contemplate and has no reason to contemplate it will seek
protection under the bankruptcy laws and believes in good faith that it
will receive consideration reasonably equivalent to the value of the Assets
being purchased by the Purchaser.
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ARTICLE IV
PRE-CLOSING COVENANTS OF SELLER
Seller hereby covenants and agrees that, between the date hereof and the
Closing, it will comply with the provisions of this Article IV, except to the
extent Purchaser may otherwise consent in writing.
4.1 Inspection of Properties and Books Seller shall assist any individual or
individuals designated by Purchaser with reasonable prior notice to visit
or inspect any property of Seller, at reasonable times acceptable to both
parties, including books of accounts and records of Seller, to make
extracts or copies of such books and records and to discuss the affairs,
finances and accounts of Seller with its officers, and shall use its
reasonable commercial efforts to obtain access for Purchaser to Seller's
accountants' work papers. As a condition to the Closing, the parties
acknowledge and agree that Seller shall furnish to Purchaser Evaluation
Material which shall be used in connection with a due diligence review. The
parties agree that Purchaser shall treat the Evaluation Material
confidentially, and shall not disclose to any party, except as otherwise
set forth herein, the Evaluation Material or any information set forth
therein; provided, however, that Purchaser is authorized to disclose the
Evaluation Material to its investment banker, counsel and accountants for
their review. Purchaser shall instruct its officers, directors, employees,
agents or representatives (including investment banker, counsel and
accountants) of the confidential nature of the Evaluation Material and
shall be responsible for ensuring that the Evaluation Material is kept
confidential by such persons. In the event the Closing is not consummated,
all Evaluation Material and derivative works shall be returned to Seller
(or in the case of derivative works destroyed), within ten days of a
request therefor, with the understanding that Purchaser shall retain no
copies of the Evaluation Material or any derivative works and shall not
disclose to any other party the Evaluation Material or information
contained therein, with the exception of (i) information which becomes
generally available to the public other than as a result of disclosure by
Purchaser, or (ii) information included in the Evaluation Material which is
first disclosed by a third party not bound by a confidentiality agreement
with Seller and (iii) information required to be disclosed in any
registration statement or periodic report under the disclosure requirements
of applicable federal and state securities laws.
4.2 Other ContractsExcept in the ordinary course of business, Seller shall not
enter into or become subject to any agreement, transaction, or commitment
which would restrict or in any way impair the obligation or ability of
Seller to comply with all of the terms of this Agreement.
4.3 Ongoing Operation. Seller shall carry on its business substantially in the
same manner as heretofore conducted. The business of Seller shall be
conducted only in the ordinary course and Seller shall not take any action
except in the ordinary course of Seller's business, on an arm-length basis
and in accordance in all material respects with all applicable laws, rules
and regulations and Seller's past custom and industry practice.
4.4 Indebtedness Seller will not create, incur, assume, guarantee or otherwise
become liable with respect to any funded indebtedness related or connected
with, or secured by, the Assets, except in the ordinary course of its
business and subject to prior written notice to Purchaser. Except in the
ordinary course of its business, and subject to prior written notice to
Purchaser, Seller will not sell, pledge, encumber or otherwise subject the
Assets to any claim or indebtedness.
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4.5 Records Seller shall maintain its books, accounts and records in the usual,
regular and ordinary manner.
4.6 Articles of Incorporation; Bylaws Seller will not amend its Articles of
Incorporation or Bylaws or otherwise alter its corporate existence or
powers.
4.7 Distributions or Dividends Seller will not declare or pay any dividend,
make any distribution on shares of its capital stock or repurchase any
shares of its capital stock.
4.8 Notice of Breach In the event of and promptly after becoming actually aware
of the occurrence or threatened occurrence of any event which would cause
or constitute a material breach of any warranty, representation, covenant
or agreement of Seller contained herein, Seller shall give notice in
writing of such event or threatened event to Purchaser and use all
commercially reasonable efforts to prevent or promptly remedy such breach
or threatened breach.
4.9 Nondisclosure The parties agree that any publicity release, security
filing, memorandum or any other communication (collectively
"Communication"), whether written or oral, identifying this proposed
transaction shall not identify Seller at any time prior to Closing unless
required by applicable securities laws or regulations. Seller shall timely
review and approve any public communication prepared by Purchaser before
its dissemination and release.
4.10 Employment Matters Seller shall not, directly or indirectly, except in the
ordinary course of business, (i) enter into or modify any employment,
severance or similar agreements or arrangements with, or grant any bonuses,
salary increases, severance or termination paid to, any officers or
directors or consultants, or (ii) take any material action with respect to
the grant of any bonuses, salary increases, severance or termination pay or
with respect to any material increase of benefits payable in effect on the
date hereof. Seller shall not adopt or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, trust, fund or group arrangement
for the benefit or welfare of any employees or any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or
arrangements for the benefit or welfare of any director.
4.11 Insurance Without providing Purchaser 30 days' prior written notice, Seller
shall not cancel or terminate its current insurance policies or cause any
of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies providing coverage
equal to or greater than the coverage under the cancelled, terminated or
lapsed policies for substantially similar premiums are in full force and
effect. To the extent Seller has paid premiums for insurance coverage that
will continue in effect on a post-Closing basis, the Purchaser will
reimburse Seller within 15 days of Closing the prorated portion of
post-Closing insurance coverage based upon the time period covered by such
insurance both prior to, and subsequent to, Closing.
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4.12 Preservation of Business Seller shall (i) use its commercially reasonable
efforts to preserve intact Seller's business organization and goodwill,
keep available the services of Seller's officers and employees as a group
and maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with Seller up to the
Closing, at Seller's expense, (ii) confer on a weekly basis with
representatives of Purchaser to report operational matters and the general
status of ongoing operations, (iii) not intentionally take any action which
would render, or which reasonably would be expected to render, any
representation or warranty made by Seller in the Agreement untrue in any
material respect at the Closing, (iv) notify Purchaser of any emergency or
other change in the normal course of Seller's business or in the operation
of Seller's properties and of any governmental or third party complaints,
investigations or hearings (or communications indicating that the same may
be contemplated) if, in each case, such emergency, change, complaint,
investigation or hearing would be material, individually or in the
aggregate, to the business, operations or financial condition of Seller or
the ability of Seller to consummate the transactions contemplated by this
Agreement, (v) promptly notify Purchaser in writing if Seller or its
representatives shall discover that any representation or warranty made by
Seller in this Agreement was when made, or has subsequently become, untrue
in any material respect, and (vi) Seller's division known as Landmark
Mortgage shall, for a period of at least one year from the date of Closing,
purchase all of its credit reports from Purchaser so long as they are
provided at standard industry rates, such rates being reviewed quarterly.
4.13 Regulatory Filings Seller is not required, and shall not be required prior
to or following Closing, to make any filings or submissions under any laws
or regulations applicable to Seller for the consummation of the
transactions contemplated herein. Seller shall make all filings necessary
such that, at the Closing, Purchaser may file for and obtain use of
Seller's corporate name identified on page one of this Agreement. Purchaser
has advised Seller that the execution of this Agreement and closing of the
transaction contemplated hereby may require the Purchaser to provide
certain disclosure concerning the business and the financial statements of
Seller to the United States Securities and Exchange Commission. Seller
hereby consents to the inclusion of such disclosure concerning Seller, the
financial statements of Seller's credit reporting division, as audited by
Purchaser's independent certified public accountant, and the
representations and warranties made by Seller in the course of this
transaction, in a periodic report or any amendment thereto, in order to
allow Purchaser to discharge its disclosure obligations under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.
4.14 No Negotiations None of Seller, its officers, directors or the Shareholder
shall cause Seller to, directly or indirectly, through any officer,
director, agent or otherwise, solicit, initiate or encourage submission of
any proposal or offer from any person or entity (including any of its or
their officers or employees) relating to any liquidation, dissolution,
recapitalization, merger, consolidation or acquisition or the purchase of
all or a material portion of the assets of, or any equity interest in,
Seller, or any similar transaction or business combination involving
Seller, or participate in any negotiations regarding, or furnish to any
other person, any information with respect to, or otherwise cooperate in
any way with, or assist or participate in, facilitate or encourage, any
effort or attempt by any other person or entity to do or seek any of the
foregoing. Seller shall within five business days notify Purchaser of any
such proposal or offer, or any inquiry from or contact with any person with
respect thereto, and shall promptly provide Purchaser with such information
regarding such proposal, offer, inquiry or contact as Purchaser may
request.
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4.15 Assignment of Contracts, Leases and Other Agreements Seller agrees that,
prior to the Closing, unless otherwise consented to by Purchaser, it will
secure the approval of all parties with which Seller has customer, supplier
or other agreements as to which consent is expressly required and
assignment is contemplated to Purchaser and, should Purchaser desire to
assume any other contract, lease, agreement or right, Seller shall use its
commercially reasonable efforts to secure the approval of the remaining
party to the contract, lease, agreement or right such that Purchaser may
succeed to rights and obligations of Seller under such contracts, leases,
agreements or rights.
4.16 Commercially Reasonable Efforts Seller agrees to use its commercially
reasonable efforts in good faith to satisfy the various conditions to
Closing and to consummate the transactions provided for herein as
expeditiously as possible. Seller will not take or knowingly permit to be
taken any action that would be in breach of the terms or provisions of this
Agreement or that would cause any of its representations and warranties
contained herein to be or become untrue in any material respect.
4.17 Additional Disclosure From the date of this Agreement to and including the
Closing Date, Seller promptly upon the occurrence thereof, will advise
Purchaser of each event subsequent to the date hereof which would have had
to be disclosed on any exhibit to this Agreement had it occurred prior to
the date hereof.
ARTICLE V
POST-CLOSING COVENANTS
The parties agree as follows with respect to the period following the Closing.
5.1 Further Assurances In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each
of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other party
reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor
under Article X).
5.2 Litigation Support In the event and for so long as any party actively is
contesting or defending against any action, suit, proceedings, hearing,
investigation, charge, complaint, claim or demand in connection with (a)
any transaction contemplated by this Agreement, or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence,
event, incident, action, failure to act or transaction on or prior to the
Closing Date involving the Seller, each of the other parties will cooperate
with each other and counsel in the contest or defense, make available their
personnel, and provide such testimony and access to their books and records
as shall be necessary in connection with the contest or defense, all at the
sole cost and expense of the contesting or defending party (unless the
contesting or defending party is entitled to indemnification therefor under
Article X).
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5.3 Employees of the Business
(a) Purchaser shall use commercially reasonable efforts to employ all of
the employees of the Seller's credit reporting division actively
employed by Seller as of the Closing Date upon such terms and
conditions and with such benefits as Purchaser generally provides to
its employees. Each such individual employed by Purchaser shall be
considered "newly hired," and Purchaser shall have no liability
whatsoever with respect to any matters relating to the employment of
such persons by Seller prior to the Closing Date, except as otherwise
expressly provided in Section 5.3(b).
(b) Purchaser shall take all commercially reasonable actions necessary to
permit the employees of Seller employed by Purchaser to participate as
soon as practicable after the Closing Date in the standard employee
benefit plans and programs of Purchaser for which they otherwise are
eligible. Purchaser shall credit employees of Seller hired by Purchaser
with all of the vacation pay and other nonqualified benefits accrued
through the Closing Date which are shown on Exhibit 5.3(b) (the dollar
amount of which is referred to as the "Accrued Benefits"). Seller
agrees to pay to Purchaser all vacation pay benefits accrued to the
date of Closing (or to provide Purchaser an equivalent credit on the
Closing Statement.)
(c) The provisions of this Section 5.3 shall inure solely to the benefit of
Seller, and no third party (including, without limitation, any employee
of Seller) shall be permitted to rely hereon as a third party
beneficiary or otherwise.
5.4 Intellectual Property Rights After the Closing, Seller will have no rights
with respect to any trademarks, trade names or trade dress associated with
its FACTUAL DATA operation involving credit reporting.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that the statements contained in
this Article VI are true, correct and complete as of the date of this Agreement
and will, except as otherwise expressly provided in this Agreement be true,
correct and complete on the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement) as follows:
6.1 Organization and Qualification of Purchaser Purchaser a corporation duly
organized, validly existing and in good standing under the laws of the
state of Colorado, and is duly qualified and authorized to do business as a
foreign corporation and is in good standing in each jurisdiction, if any,
in which the nature of the business conducted by it or the properties
owned, leased or operated by it makes such qualification necessary or, if
not, then such lack of authorization will not have materially adversely
affected the Purchaser. The Purchaser has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as now being conducted. Purchaser is not in default under or in
violation of any provision of its Articles of Incorporation or Bylaws.
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6.2 Authorization This Agreement has been duly and validly executed and
delivered by Purchaser and the agreements, representations and warranties
contained herein constitute valid and binding obligations, representations
and warranties of Purchaser enforceable in accordance with their terms.
This Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and unanimously approved by the board of
directors of Seller. Attached hereto as Exhibit 6.2 is a certified copy of
the Directors' Consent or a resolution passed pursuant to a duly and
validly called meeting of the Board of Directors. This Agreement
constitutes, and all other agreements contemplated hereby to be executed
and delivered by the Purchaser will when executed and delivered constitute,
the legal, valid and binding obligations of, and be enforceable in
accordance with their respective terms against, the Purchaser.
6.3 No Conflicting Agreements The execution and delivery of this Agreement by
Purchaser does not, and consummation by Purchaser of the transactions
contemplated hereby will not, (a) violate any existing term or provision of
any law, regulation, order, writ, judgment, injunction or decree applicable
to Purchaser, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of the Articles of Incorporation or Bylaws of
Purchaser or result in material breach of any material agreement or
instrument to which Purchaser is a party, or (c) result in the creation or
imposition of any lien, charge, security interest, encumbrance, restriction
or claim upon Purchaser or any of its assets.
6.4 Compliance with Applicable Law Except as set forth in Exhibit 6.4,
Purchaser has not received any notice of any violation, probable violation
or default by Purchaser under any applicable law, regulation or order of
any governmental department, commission, board or agency or
instrumentality, domestic or foreign, having jurisdiction over Purchaser's
operations which could materially adversely affect the business,
operations, financial condition, properties or assets of Purchaser, or the
ability to consummate the transaction contemplated hereby. To Purchaser's
knowledge after reasonable inquiry, Purchaser has operated its business,
and will continue to operate its business, in compliance in all material
respects with the Fair Credit Reporting Act, the Real Estate Settlement
Procedures Act, the Fair Debt Collection Act and applicable state law.
Additionally, Purchaser has given notice of the acquisition of a portion of
Seller's Assets to all government entities that require such notice.
6.5 Litigation Except as set forth on Exhibit 6.5, there are no actions,
proceedings or investigations pending, or to the knowledge of Purchaser,
threatened against Purchaser or its officers or directors, before any court
or administrative agency or administrative officer.
6.6 Material Misstatements or Omissions Neither this Agreement nor any other
document, certificate or statement furnished to Seller by or on behalf of
Purchaser in connection with this Agreement contains any untrue statement
of a material fact, or omits any material fact necessary to make the
statements contained herein and therein not misleading in light of the
context in which they were made.
6.7 No Known Adverse Effects Except as set forth on Exhibit 6.7, there is no
fact actually known to Purchaser, its officers or directors which
materially adversely affects or will materially adversely affect the
Purchaser which has not been set forth in writing in this Agreement or
disclosed in the other documents, certificates or written statements
furnished to Seller by or on behalf of Purchaser in connection herewith.
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6.8 Consents and Approvals The execution and delivery by Purchaser of this
Agreement, and the performance by Purchaser of Purchaser's obligations
hereunder, do not require Purchaser to obtain any consent, approval or
action of, or make any filing with or give any notice to, any corporation,
person or firm or any public, governmental or judicial authority except (i)
such as have been duly obtained or made, as the case may be, and are in
full force and effect on the date hereof and will continue to be in full
force and effect on the Closing Date, and (ii) those which the failure to
obtain would have no material adverse effect on the transactions
contemplated hereby.
6.9 Brokers All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by representatives of Purchaser
directly with Seller, without the intervention of any person on behalf of
Purchaser in such manner as to give rise to any valid claim by any person
against Seller for a finder's fee, brokerage commission or similar payment.
All rights of indemnity under Article X hereof shall apply to any claim
relating to a Loss (hereinafter defined) arising out of this Agreement for
any fee, commission or similar payment.
6.10 Representations as to Knowledge The representations and warranties
contained in Article VI hereof shall in each and every event whereby and
exercise of discretion or a statement to the "best knowledge", "best of
knowledge" or "knowledge" is required on behalf of any party to this
Agreement be deemed to require that such exercise of discretion or
statement be in good faith, with due diligence, to the best efforts of each
such party and be exercised always in a reasonable manner and within
reasonable times.
6.11 Authorization of Acquisition Stock The shares of Acquisition Stock to be
issued to the Seller pursuant to Section 2.2(b) will be duly authorized,
fully paid and nonassessable shares of Purchaser's common stock.
6.12 Purchaser's Public Documents and Access to Information Purchaser has
delivered to Seller a true and complete copy of (i) Purchaser's definitive
prospectus dated May 13, 1998, its 10-Q Reports for the quarters ended
March 31, 1998, and June 30, 1998, and three 8-K Reports, two dated August
10 and one dated 11, 1998, which represent all material filing made with
the Securities and Exchange Commission to the date hereof (collectively,
the "SEC Documents"). Purchaser agrees to provide to the Seller a true and
complete copy of each other document filed with the SEC between the date
hereof and the date of the Closing ("Current SEC Documents"). The SEC
Documents, together with Current SEC Documents when filed, constitute all
of the documents that Purchaser was, or will be, required by applicable
securities laws and regulations to file with the SEC since May 13, 1998. In
addition to the SEC Documents and the Current SEC Documents, Purchaser will
provide, through its Chief Financial Officer, the Seller with opportunities
to become familiar with the business, financial condition, management,
prospects and operations of Purchaser, including reasonable opportunities
to ask questions of, receive answers from and obtain information regarding
Purchaser and its business which is material to their investment decision.
Neither the SEC Documents nor the Current SEC Documents contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statement therein not misleading.
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6.13 Knowledge of Industry Purchaser has been engaged in the business of credit
reporting for several years and except for the express warranties and
representations set forth in this Agreement is buying the Assets on an "as
is, where is" basis.
6.14 Reports Under the Exchange Act With a view to make available to the Seller
the benefits of Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), and any other rules or regulation of the
SEC that may at any time permit Seller to sell the Acquisition Stock to the
public without registration, Purchaser agrees to:
(a) File with the SEC in a timely manner all reports and other documents
required of the Purchaser under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
(b) Furnish to the Seller, forthwith upon request (i) a written statement
by Purchaser that it has complied with the reporting requirements of
Rule 144 and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report on the Purchaser and such other reports or documents
so filed by Purchaser, and (iii) such other information as may be
reasonably requested in availing the Seller of any rule or regulation
of the SEC which permits the selling of any such securities without
registration; and
(c) Take any other action reasonably within Purchaser's control to make the
benefits of Rule 144 available to the Seller.
6.15 Nasdaq Market Listing Purchaser shall cause, as soon as possible after
Closing, the shares of Acquisition Stock issuable to the Seller hereunder
to be authorized for listing on the Nasdaq Market upon official notice of
issuance.
6.16 Financial Statements Purchaser has delivered to Seller copies of
Purchaser's 10-Q Reports as set forth in Article 6.12 above ("the
Reports"). The Reports are based upon the information contained in the
books and records of Seller and fairly and accurately present, in all
material respects, the matters represented therein.
6.17 Absence of Undisclosed or Contingent Liabilities Purchaser has no
liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due, whether known or unknown, and
regardless of when asserted in excess of $50,000.00 except as otherwise set
forth in the Reports.
6.18 No Material Adverse Changes Since the date of the most recent Reports,
there has been no change materially adverse to Purchaser, its financial
condition, gross profit, operating results, business condition or
prospects, except as otherwise disclosed on Exhibit 6.18 hereto.
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ARTICLE VII
COVENANTS OF PURCHASER
Purchaser covenants and agrees as follows:
7.1 Other Contracts From and after the date of this Agreement, Purchaser will
not enter into or become subject to any agreement or commitment which would
restrict or in any way impair the obligation of Purchaser to comply with
all of the terms of this Agreement.
7.2 Additional Disclosure From the date of this Agreement to and including the
Closing, Purchaser will, promptly upon the occurrence thereof, advise
Seller of each event subsequent to the date hereof which would have had to
be disclosed by Purchaser on any exhibit to this Agreement had it occurred
prior to the date hereof.
7.3 Notice of Breach In the event of and promptly after becoming actually aware
of the occurrence or threatened occurrence of any event which would cause
or constitute a material breach of any warranty, representation, covenant
or agreement of Purchaser contained herein, Purchaser shall give notice in
writing of such event or threatened event to Seller and use all
commercially reasonable efforts to prevent or promptly remedy such breach
or threatened breach.
7.4 Nondisclosure The Purchaser agrees that any publicity release, security
filing, or any other communication (collectively "Communications"), whether
written or oral, identifying this proposed transaction shall not identify
Seller any time prior to Closing unless required by applicable securities
laws or regulations.
7.5 Commercially Reasonable Efforts Purchaser agrees to use its commercially
reasonable efforts in good faith to satisfy the various conditions to
Closing and to consummate the transactions provided for herein as
expeditiously as possible. Purchaser will not take or knowingly permit to
be taken any action that would be contrary to or in breach of the terms or
provisions of this Agreement or that would cause any of the representations
and warranties of Purchaser contained herein to be or become untrue.
7.6 Regulatory Filings Purchaser shall make any filings or submissions under
any laws or regulations applicable to Purchaser for the consummation of the
transactions contemplated herein. Purchaser has advised Seller that the
transaction contemplated hereby will require Purchaser to file disclosure,
in the form of a periodic report or amendments thereto, with the United
States Securities and Exchange Commission, which report may include such
disclosure concerning, and the financial statements of, Seller. Seller
hereby consents to the inclusion of disclosure concerning Seller, the
financial statements of Seller and the representations and warranties made
by Seller in the course of this transaction, in such periodic report or
amendment, in order to allow Purchaser to discharge its disclosure
obligations under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder. Purchaser agrees to provide Seller upon
request a copy of such periodic report or any amendment thereto at least
three business days prior to filing. Purchaser will make all required
filings with the Securities and Exchange Commission that relate to this
transaction.
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7.7 Reserved
7.8 Non-Compete and Confidentiality Agreements At or prior to Closing, all
executive officers of the Seller shall enter into non-compete and
confidentiality agreements with Purchaser substantially in the form of
Exhibit 7.8 hereto.
7.9 Lease and Office Expenses Purchaser agrees to lease from Seller 6,000
square feet of office space, furniture, fixtures and telecommunications
equipment and will assume certain office expenses, or reimburse Seller in
accordance with the terms of separate agreements entitled "Sublease
Agreement" and "Transition Services, Expense Reimbursement and Sublease
Agreement (collectively, the "Sublease Agreements"). Either party may
cancel such Sublease Agreements at any time upon giving a 120 day prior
written notice.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Obligations of Seller The obligations of Seller to
consummate and effect this Agreement are subject to the satisfaction in all
material respects, on or before the Closing Date, of the following
conditions (unless waived by Seller in writing in the manner provided in
Paragraph 8.1(d) hereof):
(a) Representations and Warranties of Purchaser;
Performance by Purchaser. (i) The representations and warranties of
Purchaser set forth in Article VI hereof shall (except where stated to
be as of an earlier date) be accurate in all material respects on and
as of the Closing as though made on and as of the Closing, except for
any changes resulting from activities or transactions which may have
taken place after the date hereof which are expressly permitted by this
Agreement or which have been entered into in the ordinary course of
business and are not expressly prohibited by this Agreement; (ii)
Purchaser shall have, in all material respects, performed all
obligations and complied with all covenants required to be performed or
to be complied with by Purchaser under this Agreement prior to or at
the Closing Date including the delivery of all documents required at
the Closing; and (iii) Seller shall have received a certificate dated
the Closing and signed by the President of Purchaser to the effect that
the representations and warranties made by Purchaser in this Agreement
are true and accurate in all material respects as of the Closing (or,
where applicable, as of the earlier specified date), which certificate
shall be in the form of Exhibit 8.1(a).
(b) Action. All action necessary to authorize the execution, delivery and
performance of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby shall have been duly and validly taken
by Purchaser. Purchaser shall have furnished Seller with copies of all
consents or resolutions adopted or executed by Purchaser in connection
with such actions, certified by the Secretary of Purchaser.
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(c) No Action or Proceeding. As of the Closing, no action or proceeding by
any public authority or person shall be pending before any court or
administrative body or overtly threatened to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the
transactions contemplated herein. There shall not be threatened,
instituted or pending any action or proceeding, before any court or
governmental authority or agency, domestic or foreign, (i) challenging
or seeking to make illegal, or to delay or otherwise directly or
indirectly restrain or prohibit, the consummation of the transactions
contemplated hereby or seeking to obtain material damages in connection
with such transactions, (ii) seeking to prohibit direct or indirect
ownership or operation by Purchaser of all or a material portion of the
business or Assets of Seller, or to compel Seller or Purchaser to
dispose of or to hold separately all or a material portion of the
business or assets of Seller, as a result of the transactions
contemplated hereby, (iii) seeking to require direct or indirect
transfer or sale by Purchaser of any of the Assets, (iv) seeking to
invalidate or render unenforceable any material provision of this
Agreement or any of the other agreements attached hereto as Exhibits,
or otherwise contemplated hereby, (v) seeking relief against Purchaser
under any federal or state law or regulation relating to bankruptcy,
insolvency, reorganization or moratorium or creditors' rights
generally, (vi) otherwise relating to and materially adversely
affecting the transactions contemplated hereby, or (vii) which could
reasonably be expected to result in any material adverse change in the
business, operations, financial condition or properties of Purchaser.
(d) Waiver of Conditions Precedent. Seller may waive any or all of the
conditions precedent set forth in this Article VIII, either
prospectively or retroactively, by giving written notice of such waiver
to Purchaser. No waiver of any condition precedent pursuant to this
paragraph 8.1(d) shall, unless otherwise expressly stated in such
written notice of waiver, extend to any covenant or agreement contained
herein or to any other condition precedent.
(e) Breach or Violation. Purchaser shall have obtained, or caused to be
obtained, each consent and approval necessary in order that the
transactions contemplated herein not constitute a breach or violation
of, or result in a right of termination or acceleration of, any
agreement, arrangement or undertaking of or affecting Purchaser or any
license, franchise or permit of or affecting Purchaser.
(f) Governmental Filings. All material governmental filings, authorizations
and approvals that are required for the consummation of the
transactions contemplated hereby shall have been duly made and obtained
by Purchaser (except filings required by Purchaser pursuant to
applicable securities laws).
(g) No Adverse Changes. There shall have been no event or change occurring
between the execution of this Agreement and the Closing which in the
aggregate may be deemed to have a material adverse effect on the
business, operations, financial condition or properties of Purchaser.
(h) Litigation. Except as described on Exhibit 6.5, there shall be no
actions, proceedings or investigations pending, threatened against
Purchaser or its officers or directors before any court, any
administrative agency or administrative officer or executive, which
could result in any material adverse change in the business,
operations, financial condition or properties of Purchaser.
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(i) No Damage. There shall have been no damage, destruction or loss of or
to any property or properties owned or used by Purchaser whether or not
covered by insurance which, in the aggregate, has or would be
reasonably likely to have, a material adverse effect on Purchaser.
(j) Discovery of Facts or Circumstances. Seller shall not have discovered
any fact or circumstance existing as of the date of this Agreement
which has not been disclosed to Seller as of the date of this Agreement
regarding the business, assets, liabilities, properties, condition
(financial or otherwise), results of operations or prospects of
Purchaser which is, individually or in the aggregate with other such
facts and circumstances, materially adverse to Purchaser.
(k) Opinion of Counsel. Seller shall have received from counsel to
Purchaser, an opinion dated the Closing, to the following effect:
(i) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado.
(ii) Execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, on the part of
Purchaser, this Agreement is a legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its
terms except as enforcement can be limited by general equitable
principles and by bankruptcy, insolvency or similar laws affecting
creditor's rights generally.
(iii)The execution and delivery of the Agreement will not violate or
conflict with the Articles of Incorporation or Bylaws of Purchaser
or any agreement, identified to such counsel by Purchaser as all
of its material agreements, to which Purchaser is a party or by
which Purchaser or its assets are bound.
(iv) No consent, approval, authorization or order of, and no notice to
or filing with, any governmental agency or body or any court is
required to be obtained or made by Purchaser pursuant to this
Agreement except such as has been obtained or made.
(v) Except as disclosed in this Agreement or the Exhibits
hereto, such counsel is not aware of any pending or threatened
action, suit, proceeding or investigation before any court or
any public, regulatory or governmental agency, authority or
body, involving Purchaser or any of its officers or directors,
and such counsel does not know of any legal matter or government
proceedings regarding Purchaser.
(iv) The Restricted Stock to be issued to Seller pursuant to
Section2.2(b) are all duly authorized, fully paid and
nonassessable shares of Purchaser's common stock and shall not be
subject to any preemptive rights.
(l) Listing. Purchaser shall file an application to list the
Restricted Stock on The Nasdaq SmallCap Market no later than 5
days following the Closing of this transaction.
(m) Miscellaneous. No party shall have initiated action seeking
monetary damages or claims in connection with, or seeking to
prohibit or enjoin the transactions described in this Agreement.
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8.2 Conditions Precedent to Obligations of Purchaser The obligation of
Purchaser to consummate and effect this Agreement are subject to the
satisfaction in all material respects, on or before the Closing Date, of
the following conditions (unless waived by Purchaser in writing in the
manner provided in paragraph 8.2(f) hereof):
(a) Representations and Warranties of Seller;
Performance by Seller. (i) The representations and warranties of Seller
set forth in Article III hereof shall (except where stated to be as of
an earlier date) be accurate in all material respects on and as of the
Closing as though made on and as of the Closing, except for any changes
resulting from activities or transactions which may have taken place
after the date hereof which are expressly permitted by this Agreement
or which have been entered into in the ordinary course of business and
are not expressly prohibited by this Agreement; (ii) Seller shall have,
in all material respects, performed all obligations and complied with
all covenants required to be performed or to be complied with by it
under this Agreement prior to the Closing; (iii) Purchaser shall have
received a certificate dated as of the Closing and signed by the
President of Seller to the effect that the representations and
warranties made by Seller in this Agreement are true and accurate in
all material respects as of the Closing (or, where applicable, as of
the earlier specified date) in the form attached as Exhibit 8.2(a); and
(iv) Purchaser shall have entered into non-compete and confidentiality
agreements with all executive officers of Seller in the form attached
as Exhibit 7.8 , which shall commence by its terms on Closing of the
purchase of the Assets.
(b) Action. All action necessary to authorize the execution, delivery and
performance of this Agreement by Seller and the consummation of the
transactions contemplated hereby shall have been duly and validly taken
by Seller. Seller shall have furnished Purchaser with copies of all
consents or resolutions adopted or executed by Seller in connection
with such actions, certified by the Secretary of Seller.
(c) No Action or Proceeding. As of the Closing, no action or proceeding by
any public authority or person shall be pending before any court or
administrative body or overtly threatened to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the
transactions contemplated herein. Further, except as described on
Exhibit 3.6(a), there shall not be threatened, instituted or pending
any action or proceeding, before any court or governmental authority or
agency, domestic or foreign, (i) challenging or seeking to make
illegal, or to delay or otherwise directly or indirectly restrain or
prohibit, the consummation of the transactions contemplated hereby or
seeking to obtain material damages in connection with such
transactions, (ii) seeking to prohibit direct or indirect ownership or
operation by Purchaser of all or a material portion of the business or
assets of Seller, or to compel Purchaser or Seller to dispose of or to
hold separately all or a material portion of the business or assets of
Seller, as a result of the transactions contemplated hereby, (iii)
seeking to require direct or indirect transfer or sale by Purchaser of
any of the Assets, (iv) seeking to invalidate or render unenforceable
any material provision of this Agreement or any of the other agreements
attached hereto as Exhibits, or otherwise contemplated hereby, (v)
seeking relief against Seller under any federal or state law or
regulation relating to bankruptcy, insolvency, reorganization or
moratorium or creditors' rights generally, (vi) otherwise relating to
and materially adversely affecting the transactions contemplated
hereby, or (vii) which could reasonably be expected to result in any
material adverse change in the business, operations, financial
condition or properties of Seller or the Assets.
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(d) No Adverse Changes. There shall have been no event or change occurring
between the execution of this Agreement and the Closing which in the
aggregate may be deemed to have a material adverse effect on the
business, operations, financial condition or properties of Seller or
the Assets.
(e) Litigation. Except as described on Exhibit 3.11, there shall be no
actions, proceedings or investigations pending, threatened against
Seller or its officers or directors before any court, any
administrative agency or administrative officer or executive, which
could result in any material adverse change in the business,
operations, financial condition or properties of Seller or the Assets.
(f) Waiver of Conditions Precedent. Purchaser may waive any or all of the
conditions precedent set forth in this Article 8.2, either
prospectively or retroactively, by giving written notice of such waiver
to Seller. No waiver of any condition precedent pursuant to this
paragraph 8.2(f) shall, unless otherwise expressly stated in such
written notice of waiver, extend to any other covenant or agreement
contained herein or to any other condition precedent.
(g) Breach or Violation. Seller shall have obtained, or caused to be
obtained, each consent and approval necessary in order that the
transactions contemplated herein not constitute a breach or violation
of, or result in a right of termination or acceleration of, or creation
of any encumbrance on any of the Assets, pursuant to the provisions of
any agreement, arrangement or undertaking of or affecting Seller or any
license, franchise or permit of or affecting Seller.
(h) Governmental Filings. All material governmental filings, authorizations
and approvals that are required for the consummation of the
transactions contemplated hereby shall have been duly made and obtained
by Seller (except filings required by Purchaser pursuant to applicable
securities laws).
(i) Discovery of Facts or Circumstances. Purchaser shall not have
discovered any fact or circumstance existing as of the date of this
Agreement which has not been disclosed to Purchaser as of the date of
this Agreement regarding the business, assets, liabilities, properties,
condition (financial or otherwise), results of operations or prospects
of Seller which is, individually or in the aggregate with other such
facts and circumstances, materially adverse to Seller or the value of
the Assets.
(j) Damage. There shall have been no damage, destruction or loss of or to
any property or properties owned or used by Seller, or to the Assets,
whether or not covered by insurance which, in the aggregate, has or
would be reasonably likely to have, a material adverse effect on
Seller.
(k) Opinion of Counsel. Purchaser shall have received from counsel to
Seller, an opinion dated the Closing, to the following effect:
(i) Seller is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Texas.
(ii) Execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action, on the part of
Seller; this Agreement is a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms
except as enforcement can be limited by general equitable
principles and by bankruptcy, insolvency or similar laws affecting
creditor's rights generally.
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(iii)The execution and delivery of this Agreement and the sale of the
Assets by Seller will not violate or conflict with the Articles of
Incorporation or Bylaws of Seller or any agreements or instruments
identified to such counsel by Seller as all of its material
agreements to which Seller is a party or by which Seller or its
Assets are bound, except as may be listed in the Seller's
Disclosure Schedules.
(iv) No consent, approval, authorization or order of, and no notice to
or filing with, any governmental agency or body or any court is
required to be obtained or made by Seller for the sale of the
Assets, except such as have been obtained or made.
(v) Except as disclosed in this Agreement or the Exhibits hereto, such
counsel is not aware of any pending or threatened action, suit,
proceeding or investigation before any court or any public,
regulatory or governmental agency, authority or body, involving
Seller or any of its officers or directors.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Except as otherwise stated below, the representations, warranties, covenants and
agreements made by the respective parties in this Agreement or in a certificate
executed and delivered in connection with the transactions contemplated hereby
shall survive the Closing for a period of six (6) months. The foregoing shall be
subject to the exception that any claims relating to tax matters covered in
paragraphs 3.25 and 3.26 hereof shall survive for the period of the applicable
statute of limitations pertaining to tax claims. All covenants, agreements,
representations and warranties made herein or pursuant hereto shall be deemed to
be material and to have been relied upon by the parties hereto, notwithstanding
any investigation heretofore or hereinafter made by or on behalf of the parties
prior to the Closing, provided, however, that no legal remedy, at law or in
equity, shall be available with respect to any loss, liability, or breach of
agreement or warranty or misrepresentation if the party alleging such loss,
liability, breach, or misrepresentation had actual knowledge of the existence,
nature and extent thereof on the Closing and, despite such knowledge, proceeded
with the Closing without objection.
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ARTICLE X
INDEMNIFICATION
10.1 Indemnification Subject to the provisions of Article IX and this Article X,
Seller agrees to indemnify in respect of, and hold Purchaser harmless
against, any and all damages, claims, deficiencies, losses, and expenses
(collectively "Damages") resulting from any misrepresentation, breach of
warranty, or nonfulfillment or failure to perform any covenant or agreement
on the part of Seller made as a part of or contained in this Agreement or
in any certificate executed and delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby, except for Damages
resulting from any such misrepresentations, breach of warranty or
nonfulfillment or failure to perform any such covenant or agreement known
to Purchaser and waived in writing by Purchaser as of the Closing and
Seller's operation of its business through the date of Closing. Subject to
the provisions of Article IX and this Article X, Purchaser agrees to
indemnify in respect of, and hold Seller harmless against, any and all
Damages resulting from any misrepresentation, breach of warranty, or
nonfulfillment or failure to perform any covenant or agreement on the part
of Purchaser made as a part of or contained in this Agreement or in any
certificate executed and delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby except for Damages
resulting from any such misrepresentations, breach of warranty or
nonfulfillment or failure to perform any such covenant or agreement known
to Seller and waived in writing by Seller as of the Closing and Purchaser's
operation of the purchased business after the date of Closing and for the
assumed liabilities. The party claiming indemnification hereunder is
hereinafter referred to as the "Indemnified Party" and the party against
whom such claims are asserted hereunder is hereinafter referred to as the
"Indemnifying Party". Damages for which a claim or action may be asserted
hereunder are hereinafter referred to as a "Loss".
10.2 Limitation of Liability Neither party shall be liable to the other party to
this Agreement except to the extent that the aggregate amount of Losses for
which they would otherwise (but for this provision) be liable under this
Article X exceeds in the aggregate the sum of $25,000 and then only to the
extent of such excess. Claims for indemnification by either party shall be
limited to the greater of (i) the amount of the Purchase Price, or (ii) the
amount of any damages, claims, deficiencies, losses and expenses paid by
the Indemnified Party to a third party.
10.3 Method of Asserting Claims All claims for indemnification by any
Indemnified Party under this Article X shall be asserted and resolved as
follows:
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(a) In the event that any claim or demand for which an Indemnifying Party
would be liable to an Indemnified Party hereunder is asserted against
or sought to be collected from such Indemnified Party by a third party,
said Indemnified Party shall, within twenty (20) days of such claim or
demand being made, notify the Indemnifying Party of such claim or
demand, specifying the nature of and specific basis for such claim or
demand and the amount or the estimated amount thereof to the extent
then feasible (the "Claim Notice"). The estimate of Loss contained in
the Claim Notice shall not limit the amount of the Indemnifying Party's
ultimate liability under the claim. The Indemnifying Party shall not be
obligated to indemnify the Indemnified Party with respect to any such
claim or demand if the Indemnified Party fails to notify the
Indemnifying Party thereof in accordance with the provisions of this
Agreement within said twenty (20) day period. The Indemnifying Party
shall have thirty (30) days from the personal delivery or mailing of
the Claim Notice (the "Notice Period") to notify the Indemnified Party
(i) whether or not the liability of the Indemnifying Party to the
Indemnified Party hereunder with respect to such claim or demand is
disputed, and (ii) whether or not the Indemnifying Party desires, at
the sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such claim or demand; provided, however, that
any Indemnified Party is hereby authorized prior to and during the
Notice Period to file any motion, answer or other pleading which it
shall deem necessary or appropriate to protect its interest or those of
the Indemnifying Party and not unreasonably prejudicial to the
Indemnifying Party. In the event that the Indemnifying Party notifies
the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, then, except
as hereinafter provided, the Indemnifying Party shall have the right to
defend by all appropriate proceedings, which proceedings shall be
promptly settled or prosecuted by it to a final conclusion. If the
Indemnified Party desires to participate in, but not control, any such
defense or settlement it may do so at its sole cost and expense. If
requested by the Indemnifying Party, the Indemnified Party agrees to
cooperate with the Indemnifying Party and its counsel in contesting any
claim or demand which the Indemnifying Party elects to contest, or, if
appropriate and related to the claim in question, in making any
counterclaim against the person asserting the third party claim or
demand, or any cross complaint against any person but in any such case
at the sole cost and expense of the Indemnifying Party. No claim may be
settled without the consent of the Indemnifying Party, unless such
settlement includes the complete release of the Indemnifying Party.
(b) In the event any Indemnified Party should have a claim against any
Indemnifying Party hereunder which does not involve a claim or demand
being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall send a Claim Notice with respect to
such claim to the Indemnifying Party. If the Indemnifying Party does
not notify the Indemnified Party within the Notice Period that it
disputes such claim, the amount of such claim shall be conclusively
deemed a liability of the Indemnifying Party hereunder. If the
Indemnifying Party has disputed such claim, as provided above, such
dispute shall be resolved by arbitration as provided in Article 13.11.
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10.4 Payment of Claim Upon the determination of the liability of Seller or
Purchaser under Article 10.1, 10.2 and 10.3, as the case may be, after
payment by the Indemnified Party of, or upon entry of final judgment or
reaching of a settlement in respect of, an Indemnifiable Claim, or
determination of a Loss to the Indemnified Party occasioned by the breach
of a representation and warranty by the Indemnifying Party, and notice
thereof to the Indemnifying Party, the Indemnifying Party shall within
thirty (30) days after receipt of such notice pay to the Indemnified Party
the amount of the payment, judgment, settlement or Loss, as the case may
be.
10.5 Sole Rights and Remedies The indemnification rights of the parties under
this Article X are independent of and in addition to such rights and
remedies as the parties may have at law or in equity or otherwise for an
misrepresentation, breach of warranty or failure to fulfill any agreement
or covenant hereunder on the part of any party hereto including without
limitation the right to seek specific performance, rescission or
restitution, none of which rights or remedies shall be affected or
diminished hereby. The rights and remedies the parties are, however,
limited by the specific terms of this Agreement, including, but not limited
to those set forth in Article 10.2.
ARTICLE XI
AMENDMENT, TERMINATION AND BREACH
11.1 Amendment and Modification This Agreement may be amended, modified or
supplemented only by an instrument in writing, executed after the date
hereof, making specific reference to this Article and to each Article and
paragraph hereof to which such amendment, modification or supplement
applies, which document shall be signed by an authorized officer of
Purchaser and by Seller.
11.2 Termination and Abandonment This Agreement may be terminated and the
transaction provided for by this Agreement may be abandoned without
liability on the part of any party to any other party:
(a) At any time before the Closing Date, by mutual
consent of Purchaser and Seller;
(b) Commencing five days prior to Closing and until the Closing, by
Purchaser, if any of the conditions provided for in paragraph 8.2 of
this Agreement have not been met and have not been waived by Purchaser
in writing;
(c) Commencing five days prior to Closing and until the Closing, by Seller,
if any of the conditions of Paragraph 8.1 of this Agreement have not
been met and have not been waived by Seller in writing; and
(d) By either party if the mutual conditions to Closing provided for in
paragraph 8.2 of this Agreement have not been met at time of Closing.
In the event of the termination and abandonment of this Agreement by
any party as above provided in this Article XI, written notice shall
forthwith be given to the other party, and each party shall be solely
responsible to pay its own expenses incident to preparation for the
consummation of this Agreement and the transactions contemplated
hereunder (except as otherwise provided herein).
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ARTICLE XII
CLOSING
12.1 Closing The closing of this Agreement (the "Closing") shall become
effective September 30, 1998, unless a later time and date is mutually
agreed upon by the parties hereto (the "Closing Date").
12.2 Allocations At the closing, the parties shall allocate or prorate all the
portion attributable to Seller of the water, sewer, electric, other
utilities and rent through the date of Closing and shall make closing
adjustments, if necessary, to take into account such allocations and
prorations. For purposes of income and expense all income and expenses
incurred on or before the day of Closing shall be billed and collected by,
and paid for, respectively, by Seller. The effective time of the Closing
shall be 12:01 a.m. on the day following the Closing date.
12.3 Seller's Deliveries at Closing At the Closing Seller will deliver the
following documents to the Purchaser all of which shall be reasonably
satisfactory in form and substance to the Purchaser and its counsel:
(a) Bill of Sale. Bill of Sale for the Assets in the
form annexed as Exhibit 12.3 hereto, together with such deeds,
instruments, conveyances, certificates of title, assignments,
assurances and other documents as may be required to sell, convey and
transfer title to the Assets from Seller to the Purchaser free and
clear of any and all liens, claims, charges, taxes, encumbrances,
pledges, security interests, options or other restrictions of any kind,
except those which are to be assumed by Purchaser.
(b) Assumption Agreement. An assumption agreement by which Purchaser
assumes certain of Seller's liabilities as identified therein.
(c) Subleases. Subleases by which, for the consideration recited therein,
Purchaser will acquire the temporary use of real and personal property
under the control of Seller.
(d) Transitional Services, Expense Reimbursement and Sublease Agreement. A
Transitional Services, Expense Reimbursement and Sublease Agreement by
which , for the consideration recited therein, Purchaser will acquire
the temporary use of certain services and personal property under the
control of Seller.
(e) Opinion of Counsel. An opinion from counsel to Seller, dated the
Closing Date, in the form described in Article 8.2 of this Agreement.
(f) Consents and Approvals. All consents, approvals and authorizations, all
notices and all registrations and filings required to be obtained,
given or made under any law, statute, rule, regulation, judgment,
order, injunction, contract, agreement or other instrument to which
Seller is subject, bound or a party, or by which Seller or any of its
properties is bound or subject, in each case which is required to
permit the consummation of the transactions contemplated by the
Agreement without contravention, violation or breach by the Seller of
any of the terms thereof.
(g) Certificates. Certificate of good standing for Seller from the
Secretary of State of the state of incorporation of Seller dated as of
a date reasonably prior to the Closing Date.
(h) Resolutions. Certified copy of resolutions of the Board of Directors
and the Shareholders of Seller authorizing, inter alia, the execution
and delivery of this Agreement, the sale of the Assets and the other
transactions contemplated under this Agreement.
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<PAGE>
(i) Non-Compete and Confidentiality Agreements. The non-compete agreements
of all executive officers of Seller in the form annexed as Exhibit 7.8
hereto.
(j) Delivery of Corporate and Business Records. Such other corporate and
business records related to the Assets (other than the Excluded Assets)
as may be reasonably requested by the Purchaser including without
limitation employee and personnel folders and applications, payroll,
tax related records and financial data.
(k) Officer's Certificate in the form described in Article 8.2 of this
Agreement.
(l) Other documents. Such other documents, instruments, certificates and
agreements including assignment of space lease to Purchaser, as
Purchaser and its counsel may reasonably request.
(m) License and Franchise Agreements. The license agreement by and between
the Seller and the Purchaser shall be delivered to Purchaser and, upon
such delivery, Seller shall be released from any and all further
obligation and liability under such license agreement. The franchise
agreement shall be terminated and Purchaser shall release Seller from
any further obligations and liability under such franchise agreement.
12.4 Purchaser's Deliveries at Closing At the Closing,
Purchaser shall deliver the following documents to
Seller all of which shall be in a form reasonably
acceptable to Seller and their counsel:
(a) Purchase Price. The purchase price for the Assets
referred to in Article 2.2 including the cash
portion and the Restricted Stock.
(b) Consents and Approval. All consents, approvals and authorizations, all
notices and all registrations and filings required to be obtained,
given or made under any law, statute, rule, regulation, judgment,
order, injunction, contract, agreement or other instrument to which the
Purchaser is a party, or by which it or any of its properties is bound
or subject, in each case which is required to permit the consummation
of the transactions contemplated by this Agreement without
contravention, violation or breach by the Purchaser of any of the terms
thereof.
(c) Opinion of Counsel. An opinion from counsel to the Purchaser, dated the
Closing Date, in the form described in Article 8.1 of this Agreement.
(d) Certificates. Certificate of good standing, dated as of a date
reasonably prior to the date of Closing, from the Secretary of State of
the State of Colorado as to the good standing of the Purchaser.
(e) Resolutions. Certified copy of resolutions of the Board of Directors of
the Purchaser authorizing, inter alia, the execution and delivery of
this Agreement, the purchase of the Assets, and the other transactions
contemplated hereby.
(f) Officer's Certificate in the form described in Article 8.1 of this
Agreement.
(g) Other Documents. Such other documents, instruments, certificates and
agreements including without limitation, if assumed, the assumption of
the lease, as Seller and its counsel may reasonably request.
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<PAGE>
12.5 Forwarding of Receivables Following the Closing, in the event the Purchaser
receives payment of receivables which were billed by Seller, and are the
property of Seller, the Purchaser shall take prompt action (defined to mean
not less than every three calendar days), to forward to Seller such checks
or other remittances as Purchaser shall have received and which are the
property of Seller. Likewise, in the event payments are received by Seller
which are the property of Purchaser and which relate to receivables created
after the purchase of the Assets, the Seller shall promptly forward (not
later than three calendar days after receipt thereof) such checks or other
remittances to the Purchaser representing payments on receivables which are
the property of Purchaser. Notwithstanding the foregoing, Purchaser has
agreed to purchase Seller's accounts receivable from Seller's credit
reporting business in a separate agreement to be negotiated in good faith
and signed after Closing. If for any reason such agreement is not
consummated, then following the Closing, the Purchaser and Seller agree to
provide to each other mutual weekly reporting for the first three months
and monthly reporting for the subsequent nine months.
12.6 Removal of Personal Effects Following Closing In the event the Seller
maintains assets which are the personal property of Seller on the premises
and Seller desires to remove such personal property, the Seller shall have
a period of sixty days following the Closing to remove such personal
property. As to any such personal property removed, the Seller shall
provide the Purchaser with a schedule of such property prior to the removal
of the same from the premises.
ARTICLE XIII
MISCELLANEOUS
13.1 Notice All notices and communications required or permitted to be given
hereunder shall be in writing, signed by the sender, and delivered by
personal delivery overnight courier service or by registered or certified
mail to:
If to Purchaser: Jerald H. Donnan, President
Factual Data Corp.
5200 Hahns Peak Drive
Loveland, Colorado 80538
If to Seller: William B. Loughborough, President
Landmark Financial Services, Inc.
Parkway Center, Suite 220
2901 N. Dallas Parkway
Plano, TX 75093
With a copy to: Joseph A. Hoffman
Arter & Hoffman LLP
1717 Main Street, Suite 4100
Dallas, TX 75201
or such other address as shall have been furnished in writing. Receipt by, or
filing with, the respective parties of any communications shall be deemed to
have occurred for the purpose of this Agreement, when personally delivered, or
next business day if sent by overnight courier, or two days after deposit
thereof, postage prepaid, properly addressed, in the United States mail.
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<PAGE>
13.2 Entire and Sole Agreement This Agreement, including all Exhibits hereto
(which by this reference shall incorporate herein all such Exhibits as if
more fully set forth herein), constitutes the entire agreement between the
parties and as of Closing supersedes all agreements, representations,
warranties, statements, promises and understandings, whether oral or
written, with respect to the subject matter hereof. After Closing neither
party shall be bound by or charged with any oral or written agreements,
representations, warranties, statements, promises or understandings not
specifically set forth in this Agreement or in the certificates or
documents delivered in connection herewith.
13.3 Successors and Assigns Except as otherwise provided in this Agreement, all
covenants and agreements of the parties contained in this Agreement shall
be binding upon and inure to the benefit of the respective successors and
permitted assigns of the parties hereto and the heirs, personal
representatives, executors and assigns of the Shareholder. This Agreement
may not be assigned by any party hereto without the prior express written
consent of the other parties hereto.
13.4 Expenses Whether or not the transactions contemplated hereby shall be
consummated, each party shall be solely responsible for payment of all
expenses incurred by it in connection with the consummation of this
Agreement and the transactions contemplated hereunder except as otherwise
provided herein.
13.5 Severability Should any one or more of the provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions of this
Agreement shall be given effect separately from the provision or provisions
determined to be illegal or unenforceable and shall not be affected
thereby.
13.6 Governing Law This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Colorado without regard to
conflicts of laws principles.
13.7 Counterparts This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Agreement.
13.8 Amendments Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in
writing in accordance with paragraph 11.1 hereof.
13.9 No Third Party Beneficiary The terms and provisions of this Agreement are
intended solely for the benefit of the parties hereto, and it is not the
intention of the parties to confer third-party beneficiary rights upon any
other person or entity.
13.10Headings The headings in this Agreement are for purposes of convenience
and easy reference only and shall not limit or otherwise affect the meaning
hereof.
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<PAGE>
13.11Disputes In the event of any dispute which arises between the parties and
which relates to the subject matter of this Agreement, the parties
acknowledge and agree that any such dispute shall be submitted for binding
arbitration in Dallas, Texas, in accordance with the Arbitration Commercial
Rules procedures established by the American Arbitration Association or, if
such association is not then in existence, an independent association of
arbitrators which may be designated by agreement of the parties. In the
event the parties are unable to agree on an independent association of
arbitrators from which arbitrators may be drawn, either party may apply to
a court of competent jurisdiction for appointment of arbitrators, however,
such application will only be made in the event the American Arbitration
Association is not then in existence. The arbitrator(s) shall make detailed
written findings to support their award. The prevailing party in any such
arbitration proceeding shall be awarded such costs and expenses (including
reasonable attorney's and expert witness' fees) as were incurred by the
prevailing party as a result of the institution and prosecution of the
arbitration proceeding including all costs and expenses (including
reasonable attorney's and expert witness fees) to enter judgment upon or
enforce any such award including all appellate proceedings.
13.12Delivery of Exhibits All Exhibits to be delivered by either of the parties
hereto upon execution of this Agreement which are not so delivered shall be
delivered to the other party not later than 20 days from the date of the
execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
PURCHASER:
FACTUAL DATA CORP.
By:
Jerald H. Donnan, President
SELLER:
Landmark Financial Services, Inc.
By:
William B. Loughborough, President
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<PAGE>
TABLE OF ATTACHMENTS
Exhibit Description
* 2.1 List of Acquired Assets
2.1(a) Fixed Assets
2.1(b) Data Stat Agreement
2.1(c) Employment Agreement/Offers
2.1(d) Customer List (only column 2)
* 2.2 Excluded Assets
2.2(c) Procedures for Resolving Hold-Back
* 2.3 List of Assumed Liabilities
* 3.1 Organization and Qualification of Seller
* 3.1(a) Articles of Incorporation
* 3.1(b) Bylaws of Seller
* 3.2(a) Certificate of Seller Shareholder Approval
* 3.2 Authorization
* 3.2(b) Directors' Consent
* 3.5 No Conflicting Agreements
* 3.6 Compliance with Applicable Law
* 3.6(a) Governmental Notices
3.8 Adverse Effects
* 3.9 Consents and Approvals
* 3.10 Subsidiaries
* 3.11 Litigation
* 3.14 Ownership/Exceptions to Title of Assets
* 3.15 Accounts
* 3.15(a) Customer List - See Exhibit 2.1(d) - second
column
* 3.15(b) List of Customers with Agreements - See
Exhibit 2.1(d) -
First column for hand
indication
* 3.15(c) Exceptions to Valid and Enforceable
Agreements/Impaired Customer Contracts
* 3.15(d) Nonfulfillment of Contracts/Slow Pay
Contracts or Agreements -
See Exhibit 2.1(d)
Aging
* 3.16 License Agreements
* 3.17 Intellectual Property
* 3.18 Customers
* 3.19 Assumed Contracts
* 3.21 Undisclosed/Contingent Liabilities
* 3.22 Material Adverse Changes
* 3.23 Absence of Developments
* 3.24 Titles to Properties - Lease
* 3.25 Tax Returns
* 3.26 Tax Notices
* 3.27 Employees/Employment Matters
<PAGE>
* 3.28 Employee Benefit Plans
* 5.3(b) Accrued Benefits
6.2 Certified Copy of the Directors' Consent
6.4 Compliance with Applicable Law
6.5 Litigation
6.7 Adverse Effects
6.8 Material Adverse Changes
7.8 Non-Compete and Confidentiality Agreements
8.1(a) Form of Certificate of Purchaser
8.2(a) Form of Certificate of Seller
12.3 Bill of Sale
*These Exhibits are contained within the Disclosure Schedule
of Exhibits
