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): May 5, 1999
FACTUAL DATA CORP.
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(Exact name of registrant as specified in its charter)
Colorado 0-24205 84-1449911
- -------------------------------- ----------- -----------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
5200 Hahns Peak Drive
Fort Collins, Colorado 80538
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(Address of principal executive offices)
(970) 663-5700
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(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 5, 1999, Factual Data Corp. (the "Company") closed its acquisitions
of the assets of F.D.D., Inc. and F.D.S.C., Inc. ("Sellers") pursuant to a
combined Asset Purchase Agreement ("Agreement"). The Company and its franchisees
and licensees provide information services, including mortgage credit reports,
to mortgage and consumer lenders, employment screening services and credit and
tenant screening services. The Sellers are headquartered in Denver, Colorado and
operate primarily in the State of Colorado.
Pursuant to the Agreement, the Company acquired the assets of the Sellers
and obtained a non-competition agreement with its only shareholder. The total
consideration paid to the Sellers was $2,680,000 in the form of $2,000,000 cash
and $680,000 in promissory notes payable over 12 quarters commencing June 30,
1999 with interest at 8% per annum.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) It is impracticable to provide financial statements of the Sellers 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 the Sellers 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 AssetPurchase Agreement between Factual Data Corp. and Sellers dated as
of May 5, 1999.
<PAGE>
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: May 17, 1999 By: /s/ Jerald H. Donnan
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Jerald H. Donnan,
Chief Executive Officer
ASSET PURCHASE AGREEMENT
by and between
FACTUAL DATA CORP.
and
F.D.D. INC. AND F.D.S.C., INC.
Dated as of May 5, 1999
<PAGE>
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
RECITALS.....................................................................1
ARTICLE I
DEFINITIONS...............................................................1
ARTICLE II
ACQUISITION OF THE ASSETS.................................................3
2.1 Delivery Of Assets...............................................3
2.2 Purchase Price for Assets........................................4
2.3 No Assumption of Liabilities.....................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND SHAREHOLDER.................5
3.1 Organization and Qualification Of Sellers........................5
3.2 Authorized Capitalization........................................5
3.3 Authorization....................................................6
3.4 Product Rights...................................................6
3.5 Bulk Sale Law....................................................6
3.6 No Conflicting Agreements........................................6
3.7 Compliance with Applicable Law...................................6
3.8 Material Misstatements or Omissions..............................7
3.9 No Known Adverse Effects.........................................7
3.10 Consents and Approvals...........................................7
3.11 Subsidiaries.....................................................7
3.12 Litigation.......................................................7
3.13 Brokers..........................................................7
3.14 Taxes............................................................8
3.15 Ownership........................................................8
3.16 Accounts.........................................................8
3.17 License Agreements...............................................8
3.18 Intellectual Property............................................8
3.19 Customers........................................................9
3.20 Contracts........................................................9
3.21 Financial Statements.............................................9
3.22 Absence of Undisclosed or Contingent Liabilities.................9
3.23 No Material Adverse Changes......................................9
3.24 Absence of Developments..........................................9
3.25 Title to Properties.............................................10
3.26 Tax Matters.....................................................10
3.27 Tax Notices.....................................................11
3.28 Employees.......................................................11
<PAGE>
3.29 Employee Benefit Plans..........................................12
3.30 Gifts...........................................................12
3.31 Employee Health and Safety......................................12
3.32 Representations as to Knowledge.................................13
3.33 Representations Concerning Solvency.............................13
3.34 Disclosures.....................................................13
ARTICLE IV
PRE-CLOSING COVENANTS OF SELLERS.........................................13
4.1 Inspection of Properties and Books..............................13
4.2 Other Contracts.................................................14
4.3 Ongoing Operation...............................................14
4.4 Indebtedness....................................................14
4.5 Records.........................................................14
4.6 Articles of Incorporation; Bylaws...............................14
4.7 Distributions or Dividends......................................14
4.8 Notice of Breach................................................15
4.9 Nondisclosure...................................................15
4.10 Employment Matters..............................................15
4.11 Insurance.......................................................15
4.12 Preservation of Business........................................15
4.13 Regulatory Filings..............................................16
4.14 No Negotiations.................................................16
4.15 Assignment of Contracts, Leases and Other Agreements............16
4.16 Best Efforts....................................................17
4.17 Additional Disclosure...........................................17
ARTICLE V
POST-CLOSING COVENANTS...................................................17
5.1 Further Assurances..............................................17
5.2 Litigation Support..............................................17
ARTICLE VI
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 Law..................................18
6.5 Litigation......................................................18
6.6 Material Misstatements or Omissions.............................18
6.7 Consents and Approvals..........................................18
6.8 Brokers.........................................................18
6.9 Representations as to Knowledge.................................19
6.10 SEC Filings.....................................................19
6.11 No Material Adverse Change......................................19
6.12 Absence of Undisclosed or Contingent Liabilities................19
6.13 Representations Concerning Solvency.............................19
6.14 Knowledge of Industry...........................................20
<PAGE>
ARTICLE VII.................................................................20
COVENANTS OF PURCHASER...................................................20
7.1 Other Contracts.................................................20
7.2 Additional Disclosure...........................................20
7.3 Notice of Breach................................................20
7.4 Nondisclosure...................................................20
7.5 Best Efforts....................................................20
7.6 Regulatory Filings..............................................21
7.7 Non-Compete and Confidentiality Agreements......................21
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING..........................................21
8.1 Conditions Precedent to Obligations of Sellers..................21
8.2 Conditions Precedent to Obligations of Purchaser................24
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES...............................26
ARTICLE X
INDEMNIFICATION..........................................................27
10.1 Indemnification.................................................27
10.2 Limitation of Liability.........................................27
10.3 Method of Asserting Claims......................................27
10.4 Payment of Claim................................................28
10.5 Other Rights and Remedies Not Affected..........................29
10.6 Post-Closing Adjustments and Right of Offset....................29
ARTICLE XI
AMENDMENT, TERMINATION AND BREACH........................................29
11.1 Amendment and Modification......................................29
11.2 Termination and Abandonment.....................................29
ARTICLE XII
CLOSING..................................................................30
12.1 Closing.........................................................30
12.2 Allocations.....................................................30
12.3 Sellers' Deliveries at Closing..................................30
12.4 Purchaser's Deliveries at Closing...............................32
12.5 Forwarding of Receivables.......................................32
12.6 Removal of Personal Effects Following Closing...................33
12.7 Cooperation; Premises...........................................33
ARTICLE XIII
MISCELLANEOUS............................................................33
13.1 Notice..........................................................33
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....................................................35
13.8 Amendments......................................................35
13.9 No Third Party Beneficiary......................................35
13.10 Headings........................................................35
13.11 Disputes........................................................35
13.12 Delivery of Exhibits............................................35
<PAGE>
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of May, 1999, by and
between Factual Data Corp., a Colorado corporation ("Purchaser"), and F.D.D.,
Inc. ("FDD") and F.D.S.C., Inc. ("FDSC") (collectively, the "Sellers").
RECITALS
WHEREAS, on or about April 19, 1999, Purchaser issued a term sheet to
Sellers ("Term Sheet") pursuant to which Purchaser indicated its desire to
proceed with the acquisition of the assets of Sellers; 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 Sellers desire to sell, the
assets of Sellers as described on Exhibit 2.1 hereto (the "Assets") and
Purchaser will assume only the liabilities of Sellers 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 set forth on Exhibits 2.1(A) and 2.1(B) hereto.
Assumed Liabilities means the liabilities set forth on Exhibits 2.3(A)and
2.3(B) hereto.
Claim Notice has the meaning given to it in Section 10.3(a).
Closing has the meaning given to it in Section 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 Section 10.1.
<PAGE>
Effective Date has the meaning given to it in Section 12.1.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and any regulations, rules or orders promulgated thereunder.
Evaluation Material means Sellers' documents, financial statements,
information and materials which shall be used in connection with a due diligence
review.
Excluded Assets shall mean cash on hand, notes receivable and Retained
Accounts Receivable as of the Effective Date.
Financial Statements has the meaning given to it in Section 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 (a) all trademarks, services marks, trade
dress, 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
connections therewith, (b) all copyrightable works, all copyrights and all
applications, registrations and renewals in connection therewith, (c) all mask
works and all applications, registration and renewals in connection therewith,
(d) all trade secrets and confidential business information (including ideas,
research and development, know-how, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (e) all computer software
(including data and related documentation), (f) all other proprietary rights,
and (g) all copies and tangible embodiments thereof (in whatever form or
medium).
Loss means Damages for which any claim may be asserted under Article X.
Notes shall have the meaning given to them in Section 2.2.
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 Prices has the meaning given in Section 2.2.
Purchaser means Factual Data Corp., a Colorado corporation, or its assigns.
<PAGE>
Retained Accounts Receivable means accounts receivable retained by Sellers
and shall include receivables due for all work, labor and services performed by
Sellers and billed by Sellers in the normal course of business through and
including the day before the Effective Date; provided that Sellers shall collect
all Retained Accounts Receivable directly during the 30 days after the Effective
Date and the Purchaser shall collect such receivables thereafter and remit such
collections along with a summary of accounts receivable activity to Sellers
promptly (each seven calendar days). All payments on accounts receivable will be
applied first to the oldest balances. Finance charges will belong to the owner
of the respective receivables. Sellers may audit Purchaser's collection of
Retained Accounts Receivable and should a dispute arise which cannot be resolved
by the parties, the provisions of Section 13.11 shall apply.
Sellers mean F.D.D., Inc. and F.D.S.C., Inc.
Shareholder means the owner of capital stock of Sellers at the date hereof
and as of Closing (to wit: James W. Guiffre--100% of each Seller).
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 Sellers.
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, Sellers shall endorse and deliver
such instruments, documents, certificates or instructions as may be necessary to
vest title to the Assets in Purchaser. 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 Sellers to Purchaser at the Closing and will be free of all
encumbrances, liens, security interests or other claims. Sellers will payoff all
equipment lease and loan obligations prior to Closing and tender such equipment
to Purchaser free of lease costs, liens and encumbrances of any kind, on the
Closing Date and will provide the Purchaser with recorded UCC-3 Termination
Statements to evidence such payoffs. At the Closing, the Assets which will be
transferred to Purchaser, and their value, shall be as follows:
<PAGE>
FDD FDSC
Asset Category Valuation Valuation
- ------------------------------- ----------- -----------
Fixed and operating assets...................... $ 22,600 $ 18,100
Contract rights, customer agreements
and customer lists............................ 1,603,228 1,019,600
Intellectual property, software and licenses(1). - -
Personnel files................................. - -
Books and records............................... - -
Non-Compete and Confidentiality Agreements...... 7,500 7,500
Deposits........................................ 1,472 -
Prepaid assets and supplies inventories......... - -
Goodwill and other intangibles.................. - -
Totals................................ $1,634,800 $1,045,200
========== ==========
(1) Includes Factual Data Corp. franchises.
Each of Sellers and 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 purchase price for the Assets of FDD
shall consist of $1,220,000 cash and a promissory note in the amount of $414,800
and the purchase price for the Assets of FDSC shall consist of $780,000 cash and
a promissory note in the amount of $265,200, which in each case shall be
delivered to Sellers 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 $2,000,000 to the Sellers, as divided above, which shall
be paid in the form of bank cleared funds or a wire transfer to a financial
institution designated by the Sellers.
(b) Purchaser shall deliver to Sellers two promissory notes in the
aggregate principal amount of $680,000 as divided above (the "Notes"). The
Notes shall be issued by Purchaser on the following terms and conditions:
(i) The Notes shall bear interest at the rate of 8% per annum and
shall be due and payable in 12 quarterly installments of principal and
interest in accordance with the amortization schedule attached to the
Notes with the first payment due June 30, 1999.
<PAGE>
(ii) The Notes, copies of which are attached hereto as Exhibits
2.2(A) and 2.2(B), shall be secured by perfected liens on all of the
Assets sold pursuant to this Agreement. If the Purchaser provides
substituted collateral reasonably acceptable to the Sellers, the liens
securing payment of the Notes shall be subordinated to any senior
institutional bank or credit arrangements secured by Purchaser at any
time prior to or after the execution of this Agreement and Sellers
agree to execute subordination agreements and intercreditor agreements
in form satisfactory to the senior debt lender at such time as a
senior credit facility is obtained by Purchaser. Security agreements
and UCC-1 financing statements setting forth the subordinated security
interests in the forms attached as Exhibits 2.2(C) and 2.2(D) shall be
executed at the Closing by Purchaser and filed by Sellers with the
Colorado Secretary of State or other required regulatory agencies or
governmental entities in each state and entity in which a UCC filing
may be required.
(c) Subsequent to the Closing and in accordance with Section 10.6, an
audit of the financial records of Sellers 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 No Assumption of Liabilities. The Purchaser does not and shall not
assume, pay, perform or discharge any liability of Sellers except as may be
specifically set forth on Exhibits 2.3(A) and 2.3(B) or covered under Section
12.2. Sellers will pay off all equipment leases and loan obligations prior to
Closing and tender the Assets to the Purchaser free and clear of liens and
encumbrances and will provide Purchaser with recorded UCC-3 Termination
Statements to evidence such payoffs.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS AND SHAREHOLDER
Each Seller and the Shareholder represent and warrant 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 be true, correct and complete on the Closing as follows:
3.1 Organization and Qualification Of Sellers. Each 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. Each 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 each
Seller, both as amended to date, and attached hereto as Exhibits 3.1(A) and
3.1(A)(A) and 3.1(B) and 3.1(B)(B), respectively, are complete and correct, and
neither Seller is in default under or in violation of any provision of its
Articles of Incorporation or Bylaws.
<PAGE>
3.2 Authorized Capitalization. The authorized capital stock of each Seller
consists of 1,000,000 shares of common stock. FDD has 5,000 shares and FDSC has
500 shares issued and outstanding as of the date of this Agreement. All shares
issued and outstanding as of the date of this Agreement have been duly
authorized and validly issued and are fully paid and nonassessable. No shares of
the Sellers' capital stock are held in treasury. The Sellers have no authorized
or outstanding stock or securities convertible into or exchangeable for, or any
authorized or outstanding option, warrant or other right to subscribe for or to
purchase, or convert any obligation into, any unissued shares. There are no
authorized or outstanding stock appreciation, phantom stock, profit
participation or similar rights with respect to the Sellers, except for a profit
participation held by Theresa Bux which will terminate on Closing. There are no
voting trusts, voting agreements, proxies or other agreements or understandings
with respect to the voting of the capital stock of either Seller.
3.3 Authorization. This Agreement has been duly and validly executed and
delivered by Sellers and the Shareholder and the agreements, representations and
warranties contained herein constitute valid and binding obligations,
representations and warranties of Sellers and the Shareholder enforceable in
accordance with their terms. Attached hereto as Exhibits 3.3(A) and 3.3(B) are
Certificates which shall evidence the approval and authorization of the
Shareholder of Sellers and which shall be attested to by the President of
Sellers. This Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly and unanimously approved by the board of
directors of Sellers. Attached hereto as Exhibits 3.3(AA) and 3.3(BB) are
certified copies of the Directors' Consent or a resolution passed pursuant to a
duly and validly called meeting of each Board of Directors. This Agreement
constitutes, and all other agreements contemplated hereby to be executed and
delivered by the Sellers will when executed and delivered constitute, the legal,
valid and binding obligations of, and be enforceable in accordance with their
respective terms against, the Sellers.
3.4 Product Rights. After the Closing, subject to those limitations set
forth in this Agreement, Sellers have no rights with respect to any trademarks
and trade names, particularly including the name "Factual Data" or any version
thereof.
3.5 Bulk Sale Law. Sellers have advised Purchaser that Colorado has no bulk
sales law.
3.6 No Conflicting Agreements. The execution and delivery of this Agreement
by each Seller does not, and consummation by each 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 the
respective 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 either Seller or of any agreement or instrument to which either Seller
is a party, or (c) except as set forth in Section 2.2(b)(ii) result in the
creation or imposition of any lien, charge, security interest, encumbrance,
restriction or claim upon the Assets which will materially adversely affect
Purchaser's ability to utilize the Assets.
<PAGE>
3.7 Compliance with Applicable Law. Except as set forth in Exhibit 3.7,
Sellers have not received any notice or information of any violation, probable
violation or default by Sellers under any applicable law, regulation or order of
any governmental department, commission, board or agency or instrumentality,
domestic or foreign, having jurisdiction over Sellers' operations which could
materially adversely affect the business, operations, financial condition,
properties or assets of Sellers, or the ability to consummate the transaction
contemplated hereby. To the best of Sellers' and the Shareholder's knowledge
after diligent inquiry, Sellers have operated their businesses, and will
continue to operate their businesses, in compliance with the Fair Credit
Reporting Act, the Real Estate Settlement Procedures Act, the Fair Debt
Collection Act and applicable state law. Additionally, Sellers have given notice
of the sale of Assets to all government entities that require such notice.
3.8 Material Misstatements or Omissions. Neither this Agreement nor any
other document, certificate or statement furnished to Purchaser by or on behalf
of Sellers 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.
3.9 No Known Adverse Effects. There is no fact known to Sellers, their
officers, directors or employees or the Shareholder 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
Sellers in connection herewith.
3.10 Consents and Approvals. The execution and delivery by Sellers of this
Agreement, and the performance by Sellers of their obligations hereunder, does
not require Sellers 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 Sellers' Shareholder
and their Boards of Directors, which shall be obtained prior to the execution
hereof.
3.11 Subsidiaries. Sellers do not own, have an ownership interest in, or
control any corporation, partnership, proprietorship or other entity.
3.12 Litigation. Except as described in Exhibit 3.12, there are no actions,
proceedings or investigations pending or threatened against Sellers or the
Assets before any court or administrative agency which could result in any
material adverse change in the operations or financial condition of Sellers
other than as identified therein.
3.13 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by Sellers 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.
<PAGE>
3.14 Taxes. Sellers shall pay all Taxes arising out of the transfer of the
Assets and shall be responsible for all personal property taxes for the business
of Sellers through the Effective Date. 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 Sellers for any period prior to the
Effective Date.
3.15 Ownership. Sellers are the owners, beneficially and of record, of all
of the Assets, free and clear of all liens, encumbrances, security agreements,
equities, options, claims, charges and restrictions, except as otherwise
described on Exhibit 3.15 hereto.
3.16 Accounts. The list of customers attached hereto as Exhibits 3.16(A)
and 3.16(B) represents the customers with which each Seller now does business,
principally in the area of mortgage credit reporting. The Sellers maintain a
contract or agreement with most but not all customers; such agreements shall be
delivered to Purchaser at Closing. Except as described on Exhibits 3.16(E) and
3.16(F), to the best of Sellers' knowledge and belief, all such contracts or
agreements are valid and enforceable contracts or agreements and are not
currently, and will not be at Closing, in material default, invalid or
unenforceable in any manner, nor is termination threatened or imminent to the
actual knowledge of Sellers. Sellers have performed all of their material
obligations and material responsibilities as described under each such contract
or agreement, none of such contracts or agreements are subject to any
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 Sellers). Except as described on Exhibits 3.16(G) or 3.16(H),
Sellers have 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 Sellers), will not be paid in accordance with the
terms of such contracts or agreements. Sellers have 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.
3.17 License Agreements. Attached as Exhibit 3.17 is a complete and
accurate list of any license agreements to which Sellers are a party as of the
date hereof. Also stated on Exhibit 3.17 is the expiration date of each such
license agreement. Except as described on Exhibit 3.17, all such license
agreements are valid and enforceable contracts or agreements and are not
currently, and will not be at Closing, in material default, invalid or
unenforceable in any manner. To the extent the transfer of any license agreement
hereunder requires the consent of any third party, Sellers and Shareholder shall
use their best efforts to obtain such consents. Sellers have not received any
written notices of default, claims or any other type of written notice 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. Notwithstanding
any provision to the contrary, Seller and Shareholder make no representation or
warranty concerning the right or power of Seller to assign to Purchaser any
license agreement or rights of Seller, except in accordance with the terms of
any license agreements to which Seller is a party.
<PAGE>
3.18 Intellectual Property. Attached as Exhibit 3.18 to this Agreement is a
schedule of all trade names, trademarks, service marks, copyrights, computer
software, source code and their registrations, owned by Sellers or in which
Sellers have any right, license, or for which Sellers have made application,
together with a brief description of each (hereinafter collectively the
"Intellectual Property"). To the best of Sellers' knowledge, Sellers have not
infringed, and by their use of their Intellectual Property, are not now
infringing on any United States or state trade name, trademark, service mark or
copyright belonging to any other person, firm or corporation and, to the best of
Sellers' knowledge, the use of the Intellectual Property by Purchaser will not
conflict with, infringe on or otherwise violate the rights of others.
3.19 Customers. Exhibits 3.19(A) and 3.19(B) to this Agreement set forth a
correct and current list of all customers of Sellers together with summaries of
the revenues from each customer during the most recent 12 months ending 30 days
prior to the date hereof.
3.20 Contracts. Except as set forth in Exhibit 3.20, Sellers are not
parties to, nor is the property of Sellers 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, security agreement, 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 Sellers as to any of such agreements
which will materially adversely affect the Purchaser's use of the Assets.
3.21 Financial Statements. Sellers have delivered to Purchaser copies of
each Seller's balance sheet as of December 31, 1998 and the statements of income
and retained earnings for the two years then ended and for the interim period
commencing January 1, 1999 and ending March 31, 1999 (collectively, the
"Financial Statements"). The Financial Statements are based upon the information
contained in the books and records of Sellers and fairly and accurately present
the financial condition of Sellers as of the dates thereof and results of
operations for the periods referred to therein. The monthly financial statements
generated by Sellers from and after March 31, 1999 delivered to Purchaser will
be prepared on a basis consistent with the methods and procedures used to
prepare the Financial Statements.
3.22 Absence of Undisclosed or Contingent Liabilities. Sellers have no
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise,
whether due or to become due, whether known or unknown, and regardless of when
asserted) except as otherwise set forth in the Financial Statements and Exhibit
3.22 hereto.
3.23 No Material Adverse Changes. Since the date of the most recent
Financial Statements, there has been no change materially adverse to Sellers in
their Assets, financial condition, gross profit, operating results, customer,
employee or supplier relations, business condition or prospects, except as
otherwise disclosed on Exhibit 3.23 hereto.
3.24 Absence of Developments. Since the date of the Term Sheet by and
between Sellers and Purchaser, Sellers have, and will until Closing:
<PAGE>
(a) Conducted their business and operations only in the regular and
ordinary course; maintained reasonable business insurance; committed no
waste of the Assets; disposed or otherwise changed 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 best efforts to maintain and
preserve its business organization intact and maintain 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 materially alter or affect operations, except as otherwise have
been approved in writing by Purchaser;
(c) Except for the assets to be retained by Sellers, 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
transfer, sale, pledge, encumbrance on, lien or other disposition of the
Assets of Sellers except in the ordinary course of business.
3.25 Title to Properties. Sellers do not own any real property. The office
leases to which Sellers are a party, true and complete copies of which are
attached hereto as Exhibits 3.25(A) and 3.25(B), are in full force and effect,
and Sellers hold a valid and existing leasehold interest in such leases for the
terms set forth in such leases. The fixed assets necessary for the conduct of
Sellers' business are in good condition and repair, ordinary wear and tear
excepted, and are usable in the ordinary course of business. There are no
material 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. Sellers own, or lease under valid leases, all equipment and
other tangible assets necessary for the conduct of their business.
3.26 Tax Matters.
(a) The Sellers have filed all Tax Returns that they were required to
file. All such Tax Returns were correct and complete in all respects. All
Taxes owed by the Sellers (whether or not shown on any Tax Return) have
been paid. The Sellers are not currently the beneficiary of any extension
of time within which to file any Tax Return. No claim has ever been made by
an authority in a jurisdiction where the Sellers do not file Tax Returns
that they are or may be subject to taxation by that jurisdiction. There are
no encumbrances on any of the Assets of the Sellers that arose in
connection with any failure (or alleged failure) to pay any Taxes.
(b) The Sellers have 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.
<PAGE>
(c) 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 Sellers (i) claimed or
raised by any authority in writing or orally with any directors, officers
or employees of the Sellers, or (ii) as to which any such person has
knowledge based upon personal contact with any agent of such authority.
Exhibits 3.26(A) and 3.26(B) list all federal, state, local and foreign
income Tax Returns filed with respect to the Sellers for taxable periods
ended on or after December 31, 1996, indicates those Tax Returns that have
been audited and indicates those Tax Returns that currently are the subject
of audit. The Sellers have delivered to the Purchaser correct and complete
copies of all federal income Tax Returns, examination reports, and
statements of deficiencies filed, assessed against or agreed to by the
Sellers since December 31, 1996.
3.27 Tax Notices. Except as set forth on Exhibit 3.27 hereto, no deficiency
for any Taxes has been proposed, asserted or assessed against Sellers that has
not been resolved and paid in full. No waiver, extension or comparable consent
given by Sellers 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 3.27 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 notice to Sellers by any taxing authority regarding any such Tax, audit
or other proceeding or, to the best knowledge of Sellers, is any such Tax audit
or other proceeding threatened with regard to any Taxes. Sellers do not expect
the assessment of any additional Taxes and are not aware of any unresolved
questions, claims or disputes concerning the liability for Taxes 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 Sellers.
<PAGE>
3.28 Employees. Except as described on Exhibit 3.28, (a) Sellers have no
actual or constructive notice that any executive employee of either Seller or
any group of Seller's employees has any plan or intention to terminate his, her
or its employment following the Closing; (b) each Seller has complied 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 the best of each Seller's knowledge,
such 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 either Seller nor is such
Seller aware of any facts that would give rise to such claims; (e) to the best
of each Seller's knowledge, no employee of either 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 such
Seller; and (f) to the best of both Sellers' knowledge, no employee or former
employee of either Seller has any claim with respect to any intellectual
property rights of such Seller. Within two weeks following the Closing, Sellers
intend to pay to all of their former employees a termination bonus, the amount
of which will vary among employees.
3.29 Employee Benefit Plans.
(a) Except as provided in writing to Purchaser and as listed on
Exhibit 3.29, with respect to all employees and former employees of Sellers
and all dependents and beneficiaries of such employees and former
employees, (i) Sellers do not maintain or contribute to any non-qualified
deferred compensation or retirement plans, contracts or arrangements, (ii)
Sellers do 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) Sellers do 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) Sellers do not maintain or contribute to any employee
welfare benefit plans as defined in Section 3(1) of ERISA.
(b) To the best of each Seller's 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 such 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) there have been no prohibited
transactions as defined in Section 406 of ERISA or Section 4975 of the
Code.
(c) Sellers do not contribute (and have not ever contributed) to any
multi-employer plan, as defined in Section 3(37) of ERISA. Sellers have no
actual or potential liabilities under Section 4201 of ERISA for any
complete or partial withdrawal from a multi-employer plan. Sellers have 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.
3.30 Gifts. Neither Sellers nor any of their 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 Sellers in connection with any actual
or proposed business transaction.
3.31 Employee Health and Safety. Sellers have not violated and have no
liability, and have 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 the best of each Seller's knowledge, regulating
or otherwise affecting employee health and safety.
<PAGE>
3.32 Representations as to Knowledge. The representations and warranties
contained in Article III hereof shall in each and every event whereby an
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.
3.33 Representations Concerning Solvency. Neither Seller has incurred, and,
prior to and until the Closing, does 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. Each Seller has, and, prior to and until the Closing,
will continue to have, assets greater than each 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 either Seller is or will become insolvent as a
result of the transactions contemplated hereby. Each Seller has undertaken the
transactions described herein in good faith, considering its obligations to any
person or entity to whom such 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. Each Seller will not, and has not,
concealed this transaction or the proceeds of such transaction from any of its
creditors. Each 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 such Seller in
the ordinary course. Neither Seller contemplates 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.
3.34 Disclosures. The Shareholder hereby individually represents and
acknowledges to the Purchaser that Shareholder has received a disclosure package
containing the Purchaser's SEC documents and has further received all
information regarding the Purchaser requested by Shareholder and such disclosure
package has been carefully reviewed by Shareholder and his legal and tax
counsel.
ARTICLE IV
PRE-CLOSING COVENANTS OF SELLERS
Sellers hereby covenant and agree that, between the date hereof and the
Closing, they will comply with the provisions of this Article IV, except to the
extent Purchaser may otherwise consent in writing.
<PAGE>
4.1 Inspection of Properties and Books. Sellers shall assist any individual
or individuals designated by Purchaser with reasonable prior notice to visit or
inspect any property of Sellers, at reasonable times acceptable to both parties,
including books of accounts and records of Sellers, to make extracts or copies
of such books and records and to discuss the affairs, finances and accounts of
Sellers with their officers, and shall use their best efforts to obtain access
for Purchaser to Sellers' accountants' work papers. As a condition to the
Closing, the parties acknowledge and agree that Sellers 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 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 shall be returned to Sellers, within ten days of a request therefor,
with the understanding that Purchaser shall retain no copies of the Evaluation
Material 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
Sellers 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 Contracts. Except in the ordinary course of business, Sellers
shall not enter into or become subject, and shall not cause Sellers to enter
into or become subject, to any agreement, transaction, or commitment which would
restrict or in any way impair the obligation or ability of Sellers to comply
with all of the terms of this Agreement.
4.3 Ongoing Operation. Sellers shall carry on their business diligently and
substantially in the same manner as heretofore conducted. The businesses of
Sellers shall be conducted only in the ordinary course and neither the
Shareholder of Sellers nor Sellers shall take any action except in the ordinary
course of the Sellers' businesses, on an arms-length basis and in accordance in
all material respects with all applicable laws, rules and regulations and
Sellers' past custom and industry practice.
4.4 Indebtedness. Sellers will not create, incur, assume, guarantee or
otherwise become liable with respect to any indebtedness related or connected
with, or secured by, the Assets, except in the ordinary course of their
business. Except in the ordinary course of their business, Sellers will not
sell, pledge, encumber or otherwise subject the Assets to any claim or
indebtedness.
4.5 Records. Sellers shall maintain their books, accounts and records in
the usual, regular and ordinary manner.
4.6 Articles of Incorporation; Bylaws. Sellers will not amend their
Articles of Incorporation or Bylaws or otherwise alter its corporate existence
or powers.
4.7 Distributions or Dividends. Sellers will not declare or pay any
dividend, make any distribution on shares of their capital stock or repurchase
any shares of their capital stock.
<PAGE>
4.8 Notice of Breach. In the event of and promptly after becoming aware of
the occurrence or threatened occurrence of any event which would cause or
constitute a breach of any warranty, representation, covenant or agreement of
Sellers contained herein, Sellers shall give notice in writing of such event or
threatened event to Purchaser and use all 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, whether written or oral,
identifying this proposed transaction shall not identify Sellers at any time
prior to Closing unless required by applicable securities laws or regulations.
Sellers shall timely review and approve any public communication prepared by
Purchaser before its dissemination and release.
4.10 Employment Matters. Sellers shall not, directly or indirectly, except
in the ordinary course of business and with prior notice to Purchaser, (i) enter
into or modify any employment, severance or similar agreements or arrangements
with, or grant any bonuses, salary increases, severance or termination pay to,
any officers or directors or consultants, or (ii) take any action with respect
to the grant of any bonuses, salary increases, severance or termination pay or
with respect to any increase of benefits payable in effect on the date hereof.
Sellers 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,
Sellers shall not cancel or terminate their 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 Sellers have paid premiums for insurance coverage that will continue in
effect on a post-Effective Date basis, the Purchaser will reimburse Sellers
within 15 days of Closing the prorated portion of post-Effective Date insurance
coverage based upon the time period covered by such insurance both prior to, and
subsequent to, the Effective Date. Sellers shall purchase tail coverage covering
Sellers and their officers and directors for any error and omission policy
maintained by Sellers prior to Closing.
<PAGE>
4.12 Preservation of Business. Sellers and the Shareholder shall (i) use
their best efforts to preserve intact Sellers' business organization and
goodwill, keep available the services of Sellers' officers and employees as a
group and maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with Sellers, (ii) confer on
a regular and 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 may be
expected to render, any representation or warranty made by Sellers in the
Agreement untrue at the Closing, (iv) notify Purchaser of any emergency or other
change in the normal course of Sellers' business or in the operation of Sellers'
properties and of any governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated) if
such emergency, change, complaint, investigation or hearing would be material,
individually or in the aggregate, to the business, operations or financial
condition of Sellers or the ability of Sellers to consummate the transactions
contemplated by this Agreement, and (v) promptly notify Purchaser in writing if
Sellers or their representatives shall discover that any representation or
warranty made by Sellers in this Agreement was when made, or has subsequently
become, untrue in any respect.
4.13 Regulatory Filings. Sellers are 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 Sellers for the consummation of the
transactions contemplated herein. Sellers shall make all filings necessary such
that, at the Closing, Purchaser may file for and obtain use of each Seller's
corporate name identified on page one of this Agreement. Purchaser has advised
Sellers 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 Sellers to the United
States Securities and Exchange Commission. Sellers hereby consent to the
inclusion of disclosure concerning Sellers, the financial statements of Sellers
and the representations and warranties made by Sellers 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. Prior to
making any such disclosure, Purchaser shall afford Sellers an opportunity to
review and comment thereon.
4.14 No Negotiations. None of Sellers, their officers, directors or the
Shareholder shall cause Sellers 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, either Seller,
or any similar transaction or business combination involving either 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. Sellers 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.
4.15 Assignment of Contracts, Leases and Other Agreements. Sellers agree
that, prior to the Closing, they will use their best efforts to secure the
approval of all parties with which Sellers have 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, Sellers shall use their best 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 Sellers under
such contracts, leases, agreements or rights.
<PAGE>
4.16 Best Efforts. Sellers agree to use their best efforts in good faith to
satisfy the various conditions to Closing and to consummate the transactions
provided for herein as expeditiously as possible. Sellers 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 their representations
and warranties contained herein to be or become untrue.
4.17 Additional Disclosure. From the date of this Agreement to and
including the Closing, Sellers 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
involving the Sellers, 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).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers 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 Closing as follows:
6.1 Organization and Qualification of Purchaser. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado and has the full corporate power and authority to own and
operate its properties and to carry on its business.
<PAGE>
6.2 Authorization. This Agreement has been duly and validly executed by
Purchaser, as certified in Exhibit 6.2 hereto, and the agreements,
representations, and warranties contained herein constitute valid and binding
obligations, representations, and warranties of Purchaser enforceable in
accordance with their terms.
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 of any 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. Purchaser has not received any notice
or information 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.
6.5 Litigation. There are no material 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 Sellers 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 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, and (ii) those which the failure to obtain would have no material
adverse effect on the transactions contemplated hereby.
<PAGE>
6.8 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by representatives of
Purchaser directly with Sellers, 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 Sellers 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.
6.9 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.
6.10 SEC Filings. Purchaser has filed in a timely manner all reports
required to be filed by Purchaser with the Securities and Exchange Commission
(the "SEC") pursuant to the Securities Exchange Act of 1934, as amended (the "34
Act"). As of their respective filing dates, all registration statements and
reports filed by Purchaser with the SEC pursuant to the Securities Act of 1933,
as amended (the "33 Act") or the 34 Act (the "SEC Filings") complied in all
material respects with the requirements of the 33 Act or the 34 Act, as the case
may be, and none of the SEC Filings contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, except to the extent corrected by a document
subsequently filed by Purchaser with the SEC. The financial statements of
Purchaser, including the notes thereto, included in the SEC Filings (the
"Purchaser Financial Statements") comply as to form in all material respects
with applicable accounting requirements and with the rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles consistently applied, and present fairly the
financial position of Purchaser as of the dates thereof and the results of
Purchaser's operations and cash flows for the periods then ended. There has been
no change in Purchaser's accounting policies except as described in the notes to
the Purchaser Financial Statements.
6.11 No Material Adverse Change. Since the date of the balance sheet
included in Purchaser's most recent report on Form 10-KSB as filed with the SEC,
Purchaser has conducted its business in the ordinary course and there has not
occurred (i) any material adverse change in the financial condition,
liabilities, assets or business of Purchaser, (ii) any amendment or change in
the Articles of Incorporation or Bylaws of Purchaser, or (iii) any damage to, or
destruction or loss of, any assets of Purchaser that materially and adversely
affects the financial condition, business or prospects of Purchaser.
6.12 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 except as otherwise set forth in its SEC Reports.
<PAGE>
6.13 Representations Concerning Solvency. The Purchaser 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.
Purchaser has paid, and will pay, its debts as they become due. Sellers may rely
on such representations in asserting that Sellers have no reasonable cause to
believe that Purchaser is or will become insolvent as a result of the
transactions contemplated hereby. Purchaser has undertaken the transactions
described herein in good faith, considering its obligations to any person or
entity to whom Purchaser 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. Purchaser will not, and has not, concealed this
transaction from any of its creditors. Purchaser 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 Purchaser in the ordinary course. Purchaser 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 purchase price being paid to Sellers.
6.14 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.
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
Sellers 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 aware of
the occurrence or threatened occurrence of any event which would cause or
constitute a 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 Sellers and use all 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, whether written or oral,
identifying this proposed transaction shall not identify Sellers any time prior
to Closing unless required by applicable securities laws or regulations.
<PAGE>
7.5 Best Efforts. Purchaser agrees to use its best 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 has advised Sellers 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 disclosure concerning, and the
financial statements of, Sellers. Purchaser agrees to provide Sellers upon
request a copy of such periodic report or any amendment thereto. Purchaser will
make all required filings with the Securities and Exchange Commission that
relate to this transaction.
7.7 Non-Compete and Confidentiality Agreements. At or prior to Closing,
each Seller and the Shareholder shall enter into non-compete and confidentiality
agreements with Purchaser substantially in the form of Exhibit 7.7 hereto.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
8.1 Conditions Precedent to Obligations of Sellers. The obligations of
Sellers to consummate and effect this Agreement are subject to the satisfaction
in all material respects, on or before Closing, of the following conditions
(unless waived by Sellers in writing in the manner provided in Section 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 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) Sellers
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.
(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 Sellers with copies of all
consents or resolutions adopted or executed by Purchaser in connection with
such actions, certified by the Secretary of Purchaser.
<PAGE>
(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 Sellers, or to compel Sellers
or Purchaser to dispose of or to hold separately all or a material portion
of the business or assets of Sellers, 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 result in any material adverse change in the business,
operations, financial condition or properties of Purchaser.
(d) Waiver of Conditions Precedent. Sellers 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) 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.
(f) Discovery of Facts or Circumstances. Sellers shall not have
discovered any fact or circumstance existing as of the date of this
Agreement which has not been disclosed to Sellers 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.
(g) Opinion of Counsel. Sellers shall have received from Jones &
Keller, P.C., counsel to Purchaser, an opinion dated the Closing, to the
following effect:
(i) Purchaser is a corporation duly organized, validly existing
in a good standing under the laws of the State of Colorado.
<PAGE>
(ii) Execution and delivery of this Agreement and the Notes and
the consummation of the transactions contemplated hereby have been
duly and validly authorized by all necessary action, corporate and
otherwise, by Purchaser; this Agreement is a valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms except as enforcement can be limited by general
equitable principles or bankruptcy, insolvency or similar laws
affecting creditor's rights generally.
(iii) The execution and delivery of the Agreement and the Notes
will not violate or conflict with the Articles of Incorporation or
Bylaws of Purchaser or any agreement known to such counsel 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 and the Notes 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 material 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.
(h) 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.
(i) Litigation. 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
change in the business, operations, financial condition or properties of
Purchaser.
(j) Breach or Violation. Purchaser shall have obtained, or caused to
be obtained, 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 Purchaser or any license, franchise or permit
of or affecting Purchaser.
(k) 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 Sellers pursuant to applicable
securities laws).
<PAGE>
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 Closing, of the following
conditions (unless waived by Purchaser in writing in the manner provided in
Section 8.2(f) hereof):
(a) Representations and Warranties of Sellers and Shareholder;
Performance by Sellers. (i) The representations and warranties of Sellers
and their Shareholder 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) Sellers shall have
performed all obligations and complied with all covenants required to be
performed or to be complied with by them under this Agreement prior to the
Closing; (iii) Purchaser shall have received certificates dated as of the
Closing and signed by the President of Sellers to the effect that the
representations and warranties made by Sellers 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
Exhibits 8.2(A) and 8.2(B); and (iv) Purchaser shall have entered into
non-compete and confidentiality agreements with each Seller and the
Shareholder in the form attached as Exhibit 7.7, which shall commence by
their 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 Sellers and the consummation of the
transactions contemplated hereby shall have been duly and validly taken by
Sellers. Sellers shall have furnished Purchaser with copies of all consents
or resolutions adopted or executed by Sellers in connection with such
actions, certified by the Secretaries of Sellers.
(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 in Exhibit 3.7, 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 businesses or assets of Sellers, or to compel Purchaser or Sellers
to dispose of or to hold separately all or a material portion of the
businesses or assets of Sellers, 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 either 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 result in any material adverse change in the business,
operations, financial condition or properties of either Seller or the
Assets.
(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 either Seller or
its Assets.
(e) Litigation. Except as described on Exhibit 3.12, there shall be no
actions, proceedings or investigations pending, threatened against either
Seller or their 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 either Seller or its Assets.
<PAGE>
(f) Waiver of Conditions Precedent. Purchaser may waive any or all of
the conditions precedent set forth in this Section 8.2, either
prospectively or retroactively, by giving written notice of such waiver to
Sellers. No waiver of any condition precedent pursuant to this Section
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. Sellers 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 Sellers or any
license, franchise or permit of or affecting either 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
Sellers (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
Sellers which is, individually or in the aggregate with other such facts
and circumstances, materially adverse to either Seller or the value of its
Assets.
(j) Damage. There shall have been no damage, destruction or loss of or
to any property or properties owned or used by either 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 such
Seller.
(k) Opinion of Counsel. Purchaser shall have received from
Heppenstall, Savage, Trower, & Muller, LLC counsel to Sellers, an opinion
dated the Closing, to the following effect:
(i) Each Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado.
(ii) Upon the consummation of the transactions described herein,
Purchaser will own the Assets free and clear of all adverse claims and
charges, encumbrances, claims, liens or other encumbrances whatsoever,
except as otherwise disclosed herein.
(iii) Execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary action, corporate or
otherwise, by Sellers, and by their Shareholder; this Agreement is a
valid and binding obligation of Sellers, enforceable against Sellers
in accordance with its terms except as enforcement can be limited by
general equitable principles or bankruptcy, insolvency or similar laws
affecting creditor's rights generally.
<PAGE>
(iv) The execution and delivery of this Agreement and the sale of
the Assets by Sellers will not violate or conflict with the Articles
of Incorporation or Bylaws of Sellers or any agreement or instrument
to which Sellers are a party or by which Sellers or their Assets are
bound.
(v) 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 Sellers for the sale of the
Assets pursuant to this Agreement, except such as have been obtained
or made.
(vi) Except as disclosed in this Agreement or the Exhibits hereto
and based on certificates of Seller's officers, 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 either Seller or any
of its officers or directors, and such counsel does not know of any
legal matter or government proceedings regarding either Seller.
<PAGE>
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 two (2) years. The
foregoing shall be subject to the exception that any claims relating to tax
matters covered in Sections 3.26 and 3.27 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.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification. Subject to the provisions of Article IX and this
Article X, each of the Sellers and the Shareholder agree to indemnify in respect
of, and hold Purchaser harmless against, any and all damages, claims,
deficiencies, losses, and expenses (collectively "Damages") resulting from (i)
any misrepresentation, breach of warranty, or nonfulfillment or failure to
perform any covenant or agreement on the part of Sellers or the Shareholder 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 (ii) each 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 Sellers
harmless against, any and all Damages resulting from (i) 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
Sellers and waived in writing by Sellers as of the Closing and (ii) Purchaser's
operation of the purchased business after the date of Closing. 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 $10,000 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:
<PAGE>
(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 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 Section 13.11.
<PAGE>
10.4 Payment of Claim. Upon the determination of the liability of Sellers
or the Shareholder or Purchaser under Section 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 Other Rights and Remedies Not Affected. 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
any 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.
10.6 Post-Closing Adjustments and Right of Offset. As promptly as
practicable, but in no event later than 120 days following the Closing, the
Purchaser may audit and calculate the actual results of Sellers' combined
operations (including an audit of gross revenues) from January 1, 1998 through
the Closing and the prior fiscal year ended December 31, 1997. In the event of a
material variation in Sellers' combined gross revenues between the results of
such audit and the representation as to combined gross revenues made by Sellers
to Purchaser in Exhibit 10.6 hereto (such material variation in revenues to be
defined as a variation of more than $10,000), then the Purchaser shall have the
right within such 120 day period to offset 65% of the amount of such material
variation in excess of the above-described amount against the Notes in whatever
proportion the Purchaser determines. In addition, the amount of any such offset
shall also be increased by interest calculated at the rate of 18% per annum from
the date of the Closing to the date the offset is taken.
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 Sellers.
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 Sellers;
(b) Automatically if the Closing has not occurred by May 31, 1999.
<PAGE>
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).
ARTICLE XII
CLOSING
12.1 Closing. The closing of this Agreement (the "Closing") shall be May 5,
1999 or as soon thereafter as practicable but not later than May 31, 1999,
unless a later date is mutually agreed upon by the parties, provided for
accounting and allocation purposes, this Agreement shall be deemed to be
effective at 12:01 a.m. on the first day of the month in which the Closing
occurs ("Effective Date").
12.2 Allocations. Not later than seven days after Closing (i) Sellers will
pay Purchaser for all vacation pay accrued for their respective employees as of
the Effective Date; (ii) Sellers will pay Purchaser the amount of all accounts
receivable credit balances existing on the Effective Date; and (iii) the parties
shall allocate or prorate all the portion attributable to Sellers of the water,
sewer, electric, other utilities, rent and other usual operating expenses
through the Effective Date. For purposes of income and expense, all income and
expenses incurred on or before the Effective Date shall be billed and collected
by, and paid for, respectively, by Sellers except that not later than ten days
after the Closing Sellers shall present to Purchaser a list of expenses which
have been paid before Closing, and evidence of payment, for future benefits and
for which Sellers claim the right to a refund from Purchaser, such as, by way of
example only and not limitation, unused credit balances on Sellers' postage
meters and payments made by Sellers for a future business convention, and
Purchaser agrees to refund amounts so claimed and backed up by evidence of
payment. Purchaser shall be solely responsible for payment of all Sellers'
operating expenses incurred after May 1, 1999. Sellers shall not be required to
pay any transfer or termination fees with respect to the franchises held by them
and previously granted by Purchaser. Finally, Purchaser shall reimburse Sellers
an aggregate of $6,000 for Fannie Mae sign-up fees heretofore paid by Sellers.
12.3 Sellers' Deliveries at Closing. At the Closing Sellers and Shareholder
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) Bills of Sale. Bills of Sale for the Assets in the form described
in Exhibits 12.3(A) and 12.3(B) 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 Sellers 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.
(b) Assignment of Intellectual Property. Assignment of Intellectual
Property described in Exhibit 3.18 together with assurances and other
documents as may be required to transfer all of Sellers' right, title and
interest in the Intellectual Property.
<PAGE>
(c) Assignment of Contracts, Leases and Other Agreements. Assignment
of contracts, leases and other agreements, described in Exhibit 3.20
together with assurances and other documents as may be required to transfer
all of Sellers' right, title and interest in the contracts, leases and
other agreements.
(d) Opinion of Counsel. An opinion from Heppenstall, Savage, Trower &
Muller, LLC, counsel to Sellers, dated the Closing, in the form described
in Section 8.2 of this Agreement.
(e) 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 Sellers are subject, bound or a party, or by which Sellers or any of
their properties are 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 Sellers of any of the
terms thereof.
(f) Certificates. Certificate of good standing for Sellers from the
Secretary of State of the state of incorporation of Sellers dated as of a
date reasonably prior to the Closing.
(g) Resolutions. Certified copy of resolutions of the Board of
Directors and the Shareholder of Sellers authorizing, inter alia, the
execution and delivery of this Agreement, the sales of the Assets and the
other transactions contemplated under this Agreement.
(h) Non-Compete and Confidentiality Agreements. The non-compete
agreements of each Seller and the Shareholder in the form set forth in
Exhibit 7.7 hereto.
(i) Delivery of Corporate and Business Records. Such other corporate
and business records related to the 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.
(j) Officer's Certificate in the form described in Section 8.2 of this
Agreement.
(k) Other documents. Such other documents, instruments, certificates
and agreements including assignment of space lease to Purchaser, as
Purchaser and its counsel may reasonably request.
(l) License Agreement. The license or franchise agreement by and
between each Seller and the Purchaser shall be delivered to Purchaser and,
upon such delivery, Sellers shall be released from any and all further
obligation and liability under such license or franchise agreement and
shall have no further rights thereunder.
<PAGE>
12.4 Purchaser's Deliveries at Closing. At the Closing, Purchaser shall
deliver the following documents to Sellers all of which shall be in a form
reasonably acceptable to Sellers and their counsel:
(a) Purchase Price. The purchase price for the Assets referred to in
Section 2.2 including the cash portion and the Notes.
(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 Jones & Keller, P.C., counsel
to the Purchaser, dated the Closing Date, in the form described in Section
8.1 of this Agreement.
(d) Resolutions. Certified copy of resolutions of the Board of
Directors of the Purchaser authorizing, inter alia, the execution and
delivery of this Agreement and the Note, the purchase of the Assets, and
the other transactions contemplated hereby.
(e) Officer's Certificate in the form described in Section 8.1 of this
Agreement.
(f) Non-Compete and Confidentiality Agreements. The non-compete
agreements of each Seller and the Shareholder in the form set forth in
Exhibit 7.7 hereto.
(g) Other Documents. Such other documents, instruments, certificates
and agreements including without limitation, if assumed, the assumption of
the lease, as Sellers and their counsel may reasonably request. During the
first 30 days following Closing, Sellers shall collect Retained Accounts
Receivable.
12.5 Forwarding of Receivables. During the first 30 days following Closing,
Sellers shall collect Retained Accounts Receivable. Thereafter, in the event the
Purchaser receives payment of Retained Accounts Receivable, the Purchaser shall
take prompt action (defined to mean not less than every seven calendar days), to
forward to Sellers such checks or other remittances as Purchaser shall have
received and which are the property of Sellers. Likewise, in the event payments
are received by Sellers which are the property of Purchaser and which relate to
receivables created after the purchase of the Assets, the Sellers shall promptly
forward (not later than seven calendar days after receipt thereof) such checks
or other remittances to the Purchaser representing payments on receivables which
are the property of Purchaser. Finance charges will belong to the owner of the
respective receivables. Sellers may audit Purchaser's collection of Retained
Accounts Receivable.
<PAGE>
12.6 Removal of Personal Effects Following Closing. In the event the
Sellers maintains asset which are the personal property of Sellers on the
premises and Sellers desire to remove such personal property, the Sellers shall
have a period of sixty days following the Closing to remove such personal
property. As to any such personal property removed, the Sellers shall provide
the Purchaser with a schedule of such property prior to the removal of the same
from the premises.
12.7 Cooperation; Premises. For a period of 90 days following the Closing
Date, Sellers, at no cost to Purchaser, agree to use their best efforts to
assist Purchaser in the retention of Sellers' customers and employees, if
necessary, and perform any other duties Purchaser may reasonably request.
Purchaser agrees to give Sellers and Shareholder reasonable advance notice of
any duties and the time for performance thereof requested and such duties will
be limited to no more than 40 hours per month in the case of the Shareholder.
Purchaser acknowledges that the Shareholder will be out of the country from June
14 through June 25, 1999 and will be available by phone only. Purchaser agrees
to reimburse Sellers for any out-of-pocket expenses incurred in the performance
of their duties. Sellers may offer employment to Carol Issacson without
violating this Section.
FDD currently leases 2,800 square feet of space in Denver at $1,888.82 per
month. the lease expires on February 1, 2001. FDD will obtain permission of
landlord to sublease or assign the current office space to Purchaser in the form
of Exhibit 12.7(A). If the facilities are to be relocated, FDD agrees to attempt
to obtain written approval from the landlord authorizing termination of the
lease within 120 days following the Closing.
FDSC leases 3,038 square feet of space in Colorado Springs at $12.00 per
square foot. The lease is month-to-month. The space is rented from an LLC
controlled by the Shareholder. At Closing, Purchaser will lease the space for a
period of six months at $12.00 per square foot with an option to extend the
lease for an additional six months. FDSC will prepare an appropriate form of
lease to be included as Exhibit 12.7(B) hereto.
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
With a copy to: Samuel E. Wing
Jones & Keller, P.C.
1625 Broadway, Suite 1600
Denver, Colorado 80202
<PAGE>
If to Sellers: James W. Guiffre
Post Office Box 370775
Denver, Colorado 80237
With a copy to: Edward M. Heppenstall
Heppenstall, Savage, Trower & Muller, LLC
155 South Madison Street
Suite 326
Denver, Colorado 80209
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.
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.
<PAGE>
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 Section 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.
13.10 Headings. The headings in this Agreement are for purposes of
convenience and easy reference only and shall not limit or otherwise affect the
meaning hereof.
13.11 Disputes. 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 Denver, Colorado 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.
13.12 Delivery of Exhibits. All Exhibits to be delivered by any of the
parties hereto shall be delivered to the other party prior to 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
<PAGE>
SELLERS:
F.D.D., INC.
By:
---------------------------------------
James W. Guiffre, President
F.D.S.C., INC.
By:
---------------------------------------
James W. Guiffre, President
SHAREHOLDER, but only with respect
to Articles III and X
---------------------------------------
` James W. Guiffre
<PAGE>
TABLE OF ATTACHMENTS
Exhibit Description
- ------- ---------------------------------------------------------------------
2.1(A) List of Acquired Assets--FDD
2.1(B) List of Acquired Assets--FDSC
2.2(A) Form of Promissory Note and Amortization Schedule--FDD
2.2(B) Form of Promissory Note and Amortization Schedule--FDSC
2.2(C) Form of Security Agreement--FDD
2.2(D) Form of Security Agreement--FDSC
2.3(A) List of Assumed Liabilities--FDD
2.3(B) List of Assumed Liabilities--FDSC
3.1(A) Articles of Incorporation of FDD
3.1(AA) Bylaws of FDD
3.1(B) Articles of Incorporation of FDSC
3.1(BB) Bylaws of FDSC
3.3(A) Certificate of FDD re: Shareholder Approval
3.3(B) Certificate of FDSC re: Shareholder Approval
3.3(AA) Director's Consent of FDD
3.3(BB) Director's Consent of FDSC
3.7 Governmental NoticeS
3.12 Litigation
3.15 Exceptions to Title of Assets
3.16(A) Customer Accounts--FDD
3.16(B) Customer Accounts--FDSC
3.16(C) Customer Contracts or Agreements--FDD--To Be Delivered at Closing
3.16(D) Customer Contracts or Agreements--FDSC--To Be Delivered at Closing
3.16(E) Impaired Customer Contracts--FDD
3.16(F) Impaired Customer Contracts--FDSC
3.16(G) Delinquent Contracts or Agreements--FDD
3.16(H) Delinquent Contracts or Agreements--FDSC
3.17 License Agreements
3.18 Intellectual Property
3.19(A) Seller's Customers Revenues--FDD
3.19(B) Seller's Customers Revenues--FDSC
3.20 Contracts
3.22(A) Liabilities not on Financial Statements--FDD
3.22(B) Liabilities not on Financial Statements--FDSC
3.23 No Material Adverse Changes
3.25(A) Leases--FDD
3.25(B) Leases--FDSC
3.26(A) Tax Returns--FDD
3.26(B) Tax Returns--FDSC
3.27 Tax Notices
3.28 Employment Matters
<PAGE>
3.29 Employee Benefit Plans
6.2 Directors' Consent of Purchaser
7.7 Non-Compete and Confidentiality Agreements
8.1 Form of Certificate of Purchaser
8.1(g) Opinion of Jones & Keller, P.C.
8.2(A) Form of Certificate of FDD
8.2(B) Form of Certificate of FDSC
8.2(k) Opinion of Heppenstall, Savage, Trower & Muller, LLC
10.6 Sellers' and Shareholder's Representation as to Gross Revenues
12.3(A) Bill of Sale and Assignment--FDD
12.3(B) Bill of Sale and Assignment--FDSC
12.7(A) Landlord Consent--FDD
12.7(B) Addendum to Lease Agreement--FDSC
