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)
April 30, 1998
Triangle Imaging Group, Inc.,
(Exact name of registrant as specified in its charter)
Florida 2-96392-A 59-2493183
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
formation) No.)
4400 West Sample Road, Coconut Creek, Florida 33073
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (954) 968-2080
_____________________________________________________________
(Former name or former address, if changes since last report)
_____________________________________________________________
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Acquisition of Credit Bureau Services
On April 30, 1998, an Agreement and Plan of Merger (the "Merger
Agreement") was executed by and among Triangle Imaging Group, Inc. ("Triangle"),
QuickCredit Corp., a wholly owned subsidiary of Triangle ("QuickCredit"), CBS
Acquisition Corp, an indirect wholly owned subsidiary of Triangle ("CAC"),
Credit Bureau Services, Inc. ("CBS") and Kim A. Naimoli and Steven P. Naimoli
(collectively, the "Shareholders"), pursuant to which CBS was merged with and
into CAC (the "Merger"). CBS compiles, organizes and sells comprehensive credit
reports to its customers.
As consideration for the surrender and exchange of all outstanding
shares of capital stock of CBS by the Shareholders, QuickCredit (i) paid $50,000
in immediately available funds, (ii) agreed to pay $25,000 on the date which is
180 days following the date of closing (the "Closing Date"), (iii) agreed to pay
$25,000 on the date which is 270 days following the Closing Date, (iv) delivered
245,000 shares of Triangle's Common Stock (the "Triangle Shares"), 50,000 shares
of which were delivered to an escrow agent to be held for the benefit of and to
be released to QuickCredit, subject to certain conditions, in the event of a
breach of any representation or warranty of the Shareholders contained in the
Merger Agreement, and (v) agreed to pay an amount in immediately available funds
equal to the net receivables of CBS (amounts actually collected during the 90
day period following the Closing Date less trade payables and other expenses of
CBS as of the Closing Date). In addition, in the event that the closing bid
price for the shares of Common Stock of Triangle is less than $3.00 for not less
than five consecutive trading days during the one year period following the
Closing Date, the Shareholders have the right to require Triangle to repurchase
the Triangle Shares at a purchase price of $3.00 per share, subject, in certain
cases, to adjustment. The Merger Agreement contains other customary terms and
provisions, including representations, warranties, covenants and conditions. The
Merger will be accounted for under the purchase method of accounting.
In connection with the Merger, CAC entered into employment agreements
(the "Employment Agreements") with the Shareholders. Under the terms of the
Employment Agreements, the Shareholders shall for a period of two years manage
the business of CAC and report to the President of Quickcredit. Each of the
Shareholders shall earn a base salary of $60,000 and $36,000, respectively, plus
increases and bonuses based upon performance. The Employment Agreements contain
other customary terms and conditions.
Acquisition of Florida Credit Bureau, Inc.
On May 22, 1998, an Agreement and Plan of Merger (the "Merger
Agreement") was executed by and among Triangle Imaging Group, Inc. ("Triangle"),
QuickCredit Corp., a wholly owned subsidiary of Triangle ("QuickCredit"), FCB
Acquisition Corp, an indirect wholly owned subsidiary of Triangle ("FAC"),
Florida Credit Bureau, Inc. ("FCB") and Howard M. Watch (the "Shareholder"),
pursuant to which FCB was merged with and into FAC (the "Merger"). FCB compiles,
organizes and sells comprehensive credit reports to its customers.
As consideration for the surrender and exchange of all outstanding shares of
capital stock of FCB by the Shareholder, QuickCredit (i) paid $150,000 in
immediately available funds, (ii) delivered 50,000 shares of Triangle's Common
Stock (the "Triangle Shares"), 20,000 shares of which were delivered to an
escrow agent to be held for the benefit of and to be released to QuickCredit,
subject to certain conditions, in the event of a breach of any representation or
warranty of the Shareholder contained in the Merger Agreement, and (iii) agreed
to pay an amount in immediately available funds equal to the net receivables of
FCB (amounts actually collected during the 90 day period following the Closing
Date less trade payables and other expenses of FCB as of the Closing Date) In
addition, in the event that the closing bid price for the shares of Common Stock
of Triangle is less than $3.00 for not less than five consecutive trading days
during the one year period following the Closing Date, the Shareholders have the
right to require Triangle to repurchase the Triangle Shares at a purchase price
of $3.00 per share, subject, in certain cases, to adjustment. The Merger
Agreement contains other customary terms and provisions, including
representations, warranties, covenants and conditions. The Merger will be
accounted for under the purchase method of accounting.
In connection with the Merger, FAC entered into an employment
agreement (the "Employment Agreement") with the Shareholder. Under the terms of
the Employment Agreement, the Shareholder shall for a period of one year manage
the business of FAC and report to the President of QuickCredit. The Shareholder
shall earn a base salary of $60,000. The Employment Agreement contains other
customary terms and conditions.
Acquisition of EJG Services, Inc.
On May 22,1998, an Agreement and Plan of Merger (the "Merger
Agreement") was executed by and among Triangle Imaging Group, Inc. (the
"Triangle"), QuickCredit Corp., a wholly owned subsidiary of Triangle
("QuickCredit"), EJG Acquisition Corp, an indirect wholly owned subsidiary of
Triangle ("EAC"), EJG Services, Inc. ("EJG") and Keith Giordano (the
"Shareholder"), pursuant to which EJG was merged with and into EAC (the
"Merger"). EAC compiles, organizes and sells comprehensive credit reports to its
customers.
As consideration for the surrender and exchange of all outstanding
shares of capital stock of EJG by the Shareholder, QuickCredit (i) paid $50,000
in immediately available funds, (ii) agreed to pay $25,000 on the date which is
180 days following the date of closing (the "Closing Date"), (iii) agreed to pay
$25,000 on the date which is 270 days following the Closing Date, (iv) delivered
200,000 shares of Triangle's Common Stock (the "Triangle Shares"), 50,000 shares
of which were delivered to an escrow agent to be held for the benefit of and to
be released to QuickCredit, subject to certain conditions, in the event of a
breach of any representation or warranty of the Shareholder contained in the
Merger Agreement, and (v) agreed to pay an amount in immediately available funds
equal to the net receivables of EJG (amounts actually collected during the 90
day period following the Closing Date less trade payables and other expenses of
CBS as of the Closing Date). In addition, in the event that the closing bid
price for the shares of Common Stock of Triangle is less than $3.00 for not less
than five consecutive trading days during the one year period following the
Closing Date, the Shareholders have the right to require Triangle to repurchase
the Triangle Shares at a purchase price of $3.00 per share, subject, in certain
cases, to adjustment. The Merger Agreement contains other customary terms and
provisions, including representations, warranties, covenants and conditions. The
Merger will be accounted for under the purchase method of accounting.
In connection with the Merger, EAC entered into an employment
agreement (the "Employment Agreement") with the Shareholder. Under the terms of
the Employment Agreement, the Shareholder shall for a period of two years manage
the business of EAC and report to the President of QuickCredit. The Shareholder
shall earn a base salary of $60,000 plus increases and bonuses based upon
performance. The Employment Agreement contains other customary terms and
conditions.
Acquisition of Tri-Max Systems, Inc.
On May 29,1998, a Stock Purchase Agreement (the "Stock Purchase
Agreement") was executed by and among Triangle Imaging Group, Inc. ("Triangle"),
Thomas Secreto ("Secreto") and Arthur Marino ("Marino"), pursuant to which
Triangle acquired all of the outstanding capital stock of Tri-Max Systems, Inc.
("Tri-Max"). Tri-Max provides computer integration consulting services to
companies in various industries.
In exchange for all of the outstanding capital stock of Tri-Max,
Triangle paid an aggregate of 260,000 shares of Triangle's Common Stock (the
"Triangle Shares"). The Stock Purchase Agreement contains customary terms and
provisions, including representations, warranties, covenants and conditions.
In connection with the acquisition, Tri-Max entered into employment
agreements (the "Employment Agreements") with each of Secreto and Marino. Under
the terms of the Employment Agreements, Secreto and Marino shall for a period of
two years serve as the President and Vice President, respectively of Tri-Max and
report to the President of Triangle. Each of Secreto and Marino shall (i) earn a
base salary of $97,000 plus increases and bonuses based upon performance and
(ii) receive options to purchase 100,000 shares of Triangle's Common Stock at an
exercise price of $4.00, one half of which shall vest on each of the first two
annual anniversaries following date of grant. The Employment Agreements contain
other customary terms and conditions.
Acquisition of Multitask Computer Systems, Inc.
On May 29,1998, a Stock Purchase Agreement (the "Stock Purchase
Agreement") was executed by and between Triangle Imaging Group, Inc.
("Triangle") and Marios Roussos ("Roussos"), pursuant to which Triangle acquired
all of the outstanding capital stock of Multitask Computer Systems, Inc.
("Multitask"). Multiask provides computer integration consulting services to
companies in various industries.
In exchange for all of the outstanding capital stock of Multitask,
Triangle paid an aggregate of 130,000 shares of Triangle's Common Stock (the
"Triangle Shares"). The Stock Purchase Agreement contains customary terms and
provisions, including representations, warranties, covenants and conditions.
In connection with the acquisition, Tri-Max entered into an employment agreement
(the "Employment Agreement") with Roussos. Under the terms of the Employment
Agreement, Roussos shall for a period of two years serve as the Vice President
of Tri-Max? and report to the President and Chief Executive Officer of Tri-Max.
Roussos shall (i) earn a base salary of $97,000 plus increases and bonuses based
upon performance and (ii) receive options to purchase 100,000 shares of
Triangle's Common Stock at an exercise price of $4.00, one half of which shall
vest on each of the first two annual anniversaries following date of grant. The
Employment Agreement contain other customary terms and conditions.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The Registrant intends to file required financial statement disclosure
within 60 days following the date on which this Report on Form 8-K is required
to be filed.
(c) Exhibits.
(i) Agreement and Plan of Merger and Reorganization dated as of April 30,
1998 by and among Triangle Imaging Group, Inc., QuickCREDIT Corp., CBS
Acquisition Corp., Credit Bureau Services, Inc., and the Shareholders of Credit
Bureau Services, Inc.
(ii) Agreement and Plan of Merger and Reorganization dated as of May 22,
1998 by and among Triangle Imaging Group, Inc., QuickCREDIT Corp., EJG
Acquisition Corp., EJG Services, Inc. d/b/a Universal Mortgage Reporting, a
Missouri corporation, and the Shareholders of EJG Services, Inc. d/b/a Universal
Mortgage Reporting.
(iii) Agreement and Plan of Merger and Reorganization dated as of May 22,
1998 by and among Triangle Imaging Group, Inc., QuickCREDIT Corp., FCB
Acquisition Corp., and the Shareholders of Florida Credit Bureau, Inc.
(iv) Stock Purchase Agreement dated as of May 29, 1998 by and among Thomas
Secreto, Arthur Marino and Triangle Imaging Group, Inc.
(v) Stock Purchase Agreement dated as of May 29, 1998 by and between Marios
Roussos and Triangle Imaging Group, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly authorized and caused the undersigned to sign this
Report on the Registrant's behalf.
TRIANGLE IMAGING GROUP, INC.
By:____________________________________________
Vito A. Bellezza
Chief Executive Officer and
Chief Financial Officer
Dated: June ____, 1998
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
by and among:
TRIANGLE IMAGING GROUP, INC., a Florida corporation,
QUICKCREDIT CORP., a Florida corporation,
CBS ACQUISITION CORP., a Florida corporation,
CREDIT BUREAU SERVICES, INC., a Florida corporation
and
THE SHAREHOLDERS of CREDIT BUREAU SERVICES, INC.
__________________________
Dated as of April 30, 1998
__________________________
<PAGE>
Table of Contents Page
Section 1. DESCRIPTION OF TRANSACTION...................................1
1.1 Merger of CBS with CAC.......................................1
1.2 Effect of Merger.............................................1
1.3 Closing; Effective Time......................................2
1.4 Articles of Incorporation and Bylaws;
Directors and Officers.......................................2
1.5 Conversion of Shares.........................................2
1.6 Closing of Transfer Books of CBS.............................2
1.7 Exchange of Certificates.....................................3
1.8 Merger Consideration.........................................4
1.9 Right to Obligate Triangle to
Repurchase Merger Shares.....................................5
1.10 Tax Consequences.............................................6
1.11 Further Action...............................................6
Section 2. REPRESENTATIONS AND WARRANTIES OF CBS
AND THE SHAREHOLDERS.........................................6
2.1 Due Organization and Qualification6
2.2 Capitalization...............................................6
2.3 Options or Other Rights......................................7
2.4 Subsidiaries and Investments.................................7
2.5 Charter and Bylaws...........................................7
2.6 Books and Records............................................7
2.7 Authority; Binding Nature of Agreement.......................7
2.8 Financial Statements.........................................8
2.9 Absence of Undisclosed Liabilities...........................9
2.10 Absence of Changes...........................................9
2.11 Legal Proceedings; Orders...................................11
2.12 Tax Matters.................................................11
2.13 Title to Assets.............................................12
2.14 Compliance with Legal Requirements..........................13
2.15 Contracts...................................................13
2.16 Leases......................................................15
2.17 Accounts and Notes Receivable...............................15
2.18 Fixed Assets................................................15
2.19 Trade Names and Other Intangibles...........................16
2.20 Suppliers and Customers.....................................16
2.21 Payment of Wages and Salary.................................16
2.22 Employee Benefit Plans......................................17
2.23 Insurance...................................................18
2.24 Environmental Matters.......................................18
2.25 Officers, Directors and Key Employees.......................19
2.26 Restrictive Documents.......................................20
2.27 Licenses....................................................20
2.28 Transactions with Affiliated Parties........................20
2.29 Bank Accounts and Powers of Attorney........................20
2.30 Warranties..................................................20
2.31 Assets Complete.............................................20
2.32 No Changes Prior to Closing Date............................20
2.33 Disclosure..................................................21
2.34 Broker's or Finder's Fees...................................21
2.35 Copies of Documents.........................................21
Section 3. REPRESENTATIONS AND WARRANTIES OF TRIANGLE,
QUICKCREDIT AND CAC.........................................22
3.1 Due Organization and Qualification..........................22
3.2 Charter and By-Laws.........................................22
3.3 Authority; Binding Nature of Agreement......................22
3.4 Legal Proceedings; Orders...................................23
3.5 SEC Filings; Financial Statements...........................23
3.6 Valid Issuance..............................................24
3.7 Broker's or Finder's Fees...................................24
3.8 Broker's or Finder's Fees...................................24
Section 4. CERTAIN COVENANTS OF CBS AND THE SHAREHOLDERS...............24
4.1 Access and Investigation....................................24
4.2 Operation of the Business of CBS............................25
4.3 Notification; Updates to Schedules..........................26
4.4 Pooling of Interests........................................27
4.5 No Negotiation..............................................27
Section 5. ADDITIONAL COVENANTS OF THE PARTIES.........................27
5.1 Filings and Consents........................................27
5.2 Public Announcements........................................28
5.3 Best Efforts................................................28
5.4 Employment Agreements.......................................28
5.5 Restrictive Covenants Agreements............................28
5.6 Release.....................................................28
5.7 Share Subscription Agreement................................28
5.8 Termination of Employee Plans...............................28
5.9 Lease Agreement.............................................28
5.10 Payment of Notes; Guaranty..................................29
Section 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF
TRIANGLE, QUICKCREDIT AND CAC...............................29
6.1 Accuracy of Representations.................................29
6.2 Performance of Covenants....................................29
6.3 Consents....................................................29
6.4 Agreements and Documents....................................29
6.5 No Material Adverse Change..................................30
6.6 Termination of Employee Plans...............................30
6.7 Pooling Letter..............................................30
6.8 Rule 506....................................................30
6.9 No Restraints...............................................30
6.10 No Legal Proceedings........................................31
6.11 Completion of Due Diligence.................................31
6.12 Certificates of Merger......................................31
Section 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CBS
AND THE SHAREHOLDERS........................................31
7.1 Accuracy of Representations.................................31
7.2 Performance of Covenants....................................31
7.3 Consents....................................................31
7.4 Agreements and Documents....................................31
7.5 Cash Consideration..........................................32
7.6 No Restraints...............................................32
7.7 Certificates of Merger......................................32
Section 8. TERMINATION.................................................32
8.1 Termination Events..........................................32
8.2 Termination Procedures......................................33
8.3 Effect of Termination.......................................33
Section 9. INDEMNIFICATION, ETC........................................33
9.1 Survival of Representations and Warranties..................33
9.2 Shareholders' Indemnity Agreement...........................33
9.3 Indemnity Agreement of QuickCREDIT
and the Surviving Corporation...............................34
9.4 Indemnification Procedure...................................35
9.5 Pledge of Stock as Security.................................36
9.6 Set-off.....................................................36
Section 10. MISCELLANEOUS PROVISIONS....................................36
10.1 Further Assurances..........................................36
10.2 Fees and Expenses...........................................36
10.3 Attorneys' Fees.............................................37
10.4 Notices.....................................................37
10.5 Time of the Essence.........................................38
10.6 Headings....................................................38
10.7 Counterparts................................................38
10.8 Governing Law...............................................38
10.9 Successors and Assigns......................................38
10.10 Remedies Cumulative; Specific Performance...................38
10.11 Waiver......................................................39
10.12 Amendments..................................................39
10.13 Severability................................................39
10.14 Parties in Interest.........................................39
10.15 Entire Agreement............................................39
10.16 Construction................................................40
LIST OF EXHIBITS
Exhibit A -- Shareholders of CBS
Exhibit B -- Certain Definitions Used in this Agreement
Exhibit C -- Directors and Officers of the Surviving Corporation
Exhibit D -- Form of Employment Agreements
Exhibit E -- Form of Restrictive Covenants Agreement
Exhibit F -- Form of Release
Exhibit G -- Form of Share Subscription Agreement
Exhibit H -- Form of Lease Agreement
Exhibit I -- Form of Guaranty
Exhibit J -- Form of Opinion of Counsel to CBS and the Shareholders
Exhibit K -- Form of Opinion of Counsel to Triangle,
QuickCREDIT and CAC
Exhibit L -- Form of Escrow Agreement
LIST OF SCHEDULES
Schedule 2.1 -- Due Organization and Qualification
Schedule 2.2 -- Capitalization
Schedule 2.3 -- Options or Other Rights
Schedule 2.5 -- Charter and Bylaws
Schedule 2.7 -- Authority; Binding Nature of Agreement
Schedule 2.8 -- Financial Statements
Schedule 2.10 -- Absence of Changes
Schedule 2.11 -- Legal Proceedings; Orders
Schedule 2.12 -- Tax Matters
Schedule 2.13 -- Title to Assets
Schedule 2.14 -- Compliance with Legal Requirements
Schedule 2.15 -- Contracts
Schedule 2.16 -- Leases
Schedule 2.18 -- Fixed Assets
Schedule 2.19 -- Trade Names and Other Intangibles
Schedule 2.20 -- Suppliers and Customers
Schedule 2.22 -- Employee Benefit Plans
Schedule 2.23 -- Insurance
Schedule 2.24 -- Environmental Matters
Schedule 2.25 -- Officers, Directors and Key Employees
Schedule 2.27 -- Licenses
Schedule 2.28 -- Transactions with Affiliated Parties
Schedule 2.29 -- Bank Accounts and Powers of Attorney
Schedule 2.30 -- Warranties
Schedule 3.2 -- Charter and Bylaws
Schedule 3.4 -- Legal Proceedings; Orders
<PAGE>
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and
entered into as of this 30th day of April, 1998, by and among TRIANGLE IMAGING
GROUP, INC., a Florida corporation ("Triangle"); QUICKCREDIT CORP., a Florida
corporation and a wholly-owned subsidiary of Triangle ("QuickCREDIT"); CBS
Acquisition Corp., a Florida corporation and wholly-owned subsidiary of
QuickCREDIT ("CAC"); CREDIT BUREAU SERVICES, INC., a Florida corporation
("CBS"), Steven P. Naimoli and Kim A. Naimoli, individual residents of the State
of Florida (the "Shareholders"). Each of the Shareholders and their respective
ownership interests in CBS are set forth in Exhibit A. Certain capitalized terms
used in this Agreement are defined in Exhibit B.
RECITALS:
A. The parties intend to effect a merger of CBS with and into CAC (the
"Merger") in accordance with this Agreement and the Florida Business Corporation
Act (the "FBCA"). Upon consummation of the Merger, CBS will cease to exist, and
CAC will continue to exist as the surviving corporation of the Merger.
B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Code.
C. This Agreement has been adopted and approved by the respective
boards of directors of Triangle, QuickCREDIT and CAC and the board of directors
of CBS and the Shareholders.
D. The capitalization of CBS consists of 1,000 shares of voting common
stock, $5.00 par value per share, of which 1,000 shares are issued and
outstanding (the "CBS Common Stock").
E. It is intended that the Merger be treated as a "pooling of
interests" under generally accepted accounting principles and SEC rules.
AGREEMENT:
The parties to this Agreement agree as follows:
Section 1. DESCRIPTION OF TRANSACTION
Section 1.1 Merger of CBS with CAC. Upon the terms and subject to the conditions
set forth in this Agreement, at the Effective Time, CBS shall be merged with and
into CAC, and the separate existence of CAC shall cease. CAC will continue as
the surviving corporation in the Merger (the "Surviving Corporation").
Section 1.2 Effect of Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the FBCA.
Section 1.3 Closing; Effective Time. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of QuickCREDIT, 4400 West Sample Road, Suite 228, Coconut Creek, Florida 33073,
at 1:00 p.m. local time on April 30, 1998, or at such other time and date during
the period from May 1, 1998 through May 31, 1998 as the parties shall designate
(the "Scheduled Closing Time"; the date on which the Closing actually takes
place is referred to in this Agreement as the "Closing Date"). Contemporaneously
with or as promptly as practicable after the Closing, a properly executed
certificate of merger (the "Certificate of Merger") for the merger of CBS with
CAC, conforming to the requirements of the FBCA, shall be filed with the
Secretary of State of the State of Florida (the "Secretary of State"). The
Merger shall take effect at the time such Certificate of Merger is filed with
the Secretary of State (the "Effective Time").
Section 1.4 Articles of Incorporation and Bylaws; Directors and Officers. Unless
the parties agree otherwise prior to the Effective Time:
(a) the Articles of Incorporation of CAC shall continue as the Articles of
Incorporation of the Surviving Corporation;
(b) the Bylaws of CAC shall continue as the Bylaws of the Surviving Corporation;
(c) the directors and officers of the Surviving Corporation immediately after
the Effective Time shall be the individuals identified on Exhibit C; and
(d) the Surviving Corporation shall change its name to Credit Bureau Services,
Inc. promptly after the Closing.
Section 1.5 Conversion of Shares.
Subject to Section 1.7 of this Agreement, at the Effective Time, by
virtue of the Merger and without any further action on the part of Triangle,
QuickCREDIT, CBS or any Shareholder, each share of CBS Common Stock outstanding
immediately prior to the Effective Time shall be canceled and retired and
converted into the right to receive a pro rata share of the aggregate Merger
Consideration described in Section 1.8 of this Agreement.
Section 1.6 Closing of Transfer Books of CBS. At the Effective Time, the holders
of certificates representing shares of CBS Common Stock that were outstanding
immediately prior to the Effective Time shall cease to have any rights as
shareholders of CBS, and the stock transfer books of CBS shall be closed with
respect to all shares of such CBS Common Stock outstanding immediately prior to
the Effective Time. No further transfer of any such shares of capital stock of
CBS shall be made on such stock transfer books after the Effective Time. If,
after the Effective Time, a valid certificate previously representing any of
such shares of CBS Common Stock (a "CBS Stock Certificate") is presented to
QuickCREDIT, such CBS Stock Certificate shall be canceled and shall be exchanged
as provided in Section 1.7 of this Agreement.
Section 1.7 Exchange of Certificates.
(a) Each Shareholder, at the Closing or as soon thereafter as is practicable,
shall surrender his or her respective CBS Stock Certificate(s) to QuickCREDIT,
together with such transmittal documents as QuickCREDIT may reasonably require,
and QuickCREDIT shall deliver or cause Triangle to deliver to such Shareholder
such Shareholder's pro rata share of the aggregate Merger Consideration, to be
paid at Closing pursuant to, and as provided in, Section 1.8 of this Agreement.
(b) No fractional shares of common stock of Triangle, $.0001 par value
("Triangle Common Stock") shall be issued in connection with the Merger, and no
certificates for any such fractional shares shall be issued. In lieu of such
fractional shares, any Shareholder who would otherwise be entitled to receive a
fraction of a share of Triangle Common Stock (after aggregating all fractional
shares of Triangle Common Stock issuable to such holder) shall receive shares of
Triangle Common Stock rounded upward or downward to the nearest whole number of
shares.
(c) Until surrendered as contemplated by this Section 1.7, each CBS Stock
Certificate shall be deemed, from and after the Effective Time, to represent
only the right to receive a pro rata share of the Merger Consideration. If any
CBS Stock Certificate shall have been lost, stolen or destroyed, Triangle may,
in its discretion and as a condition precedent to the issuance of any
certificate representing Triangle Common Stock, require the owner of such lost,
stolen or destroyed CBS Stock Certificate, to provide an appropriate affidavit
and to deliver a bond (in such sum as Triangle may reasonably direct) as
indemnity against any claim that may be made against Triangle with respect to
such CBS Stock Certificate.
(d) The shares of Triangle Common Stock to be issued in the Merger shall be
characterized as "restricted securities" for purposes of Rule 144 under the
Securities Act, and each certificate representing any of such shares shall bear
a legend identical or similar in effect to the following legend (together with
any other legend or legends required by applicable state securities laws or
otherwise):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL SECURITIES ACT OF 1933, (THE "FEDERAL ACT") OR THE SECURITIES
LAWS OF ANY STATE (THE "STATE LAWS") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IF, IN THE OPINION OF
COUNSEL TO TRIANGLE, SUCH SALE OR TRANSFER WOULD BE (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR PURSUANT TO AN EXEMPTION FROM
SUCH REGISTRATION; AND (2) IN A TRANSACTION WHICH IS EXEMPT UNDER APPLICABLE
STATE LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE
STATE LAWS OR IN A TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH APPLICABLE
STATE LAWS.
(e) QuickCREDIT shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable to any holder or former holder of CBS Common
Stock pursuant to this Agreement such amounts as QuickCREDIT is required to
deduct or withhold therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
(f) Neither QuickCREDIT nor Triangle shall be liable to any holder or former
holder of CBS Common Stock for any shares of Triangle Common Stock (or dividends
or distributions with respect thereto), or for any cash amounts, delivered to
any public official pursuant to any applicable abandoned property, escheat or
similar law.
Section 1.8 Merger Consideration. The aggregate consideration to be delivered by
QuickCREDIT to the Shareholders in full consideration for the Merger (the
"Merger Consideration") shall be:
(i) a cash payment of Fifty Thousand and no/100s Dollars ($50,000) to be
delivered at Closing or, if later, upon the surrender of the applicable CBS
Common Stock;
(ii) a cash payment of Twenty-Five Thousand and no/100s Dollars ($25,000) to be
delivered on or before the date which is the later of the 180th day immediately
following the Closing Date or upon the surrender of the applicable CBS Common
Stock;
(iii) a cash payment of Twenty-Five Thousand and no/100s Dollars ($25,000) to be
delivered on or before the date which is the later of the 270th day immediately
following the Closing Date or upon the surrender of the applicable CBS Common
Stock;
(iv) Two Hundred Forty-Five Thousand (245,000) shares of Triangle Common Stock
(the "Merger Shares") to be delivered by Triangle (or its transfer agent) as
soon as is practicable following the date of the surrender of the applicable CBS
Common Stock, 50,000 shares of which shall be delivered by Triangle (or its
transfer agent) to Louis C. Anderson, Esquire, as escrow agent, to be held in
escrow pursuant to Section 9.5 of this Agreement (the "Escrow Shares"); and
(v) a cash payment to be made as soon as practicable following the date which is
the 90th day immediately following the Closing Date, in an amount which is equal
to (1) the aggregate of the accounts receivable of CBS that are (a) in existence
on the Closing Date and (b) actually collected by CAC during the period
beginning on the day immediately following the Closing Date and ending on the
date which is the 90th day immediately following the Closing Date, less (2) all
trade payable accounts and other overhead expenses of CBS existing on the
Closing Date.
Section 1.9 Right to Obligate Triangle to Repurchase Merger Shares. From the
Closing Date and for a period ending on the 365th day immediately thereafter
(the "Put Option Period"), the Shareholders shall have the right to require
Triangle to purchase all or any portion of the Merger Shares (the "Put Option")
at a purchase price of $3.00 per share (the "Repurchase Price") if, at any time
during the Put Option Period, the bid price of Triangle Common Stock is less
than $3.00 per share for five (5) or more consecutive trading days (the
"Triggering Event"); provided, however, that the Repurchase Price shall be
reduced by the amount of any cash dividends paid to the Shareholders during the
Put Option Period and shall be proportionately adjusted in the event of a change
in the number of shares of Triangle Common Stock issued and outstanding during
the Put Option Period as a result of a stock split, stock dividend,
recapitalization, reclassification or similar transaction with respect to such
Triangle Common Stock. The Shareholders may exercise the Put Option by giving
written notice of such intention of exercise to Triangle indicating the number
of shares to be repurchased by Triangle (the "Exercise Notice"), at any time
following the occurrence of the Triggering Event up to and including the fifth
business day following the last day of the Put Option Period. Within fifteen
(15) business days following receipt by Triangle of the Exercise Notice, subject
to confirmation by Triangle of the occurrence of a Triggering Event, (i) the
Shareholders exercising their Put Option shall deliver to Triangle certificates
representing the number of shares of Triangle Common Stock to be repurchased by
Triangle, as indicated in the Exercise Notice, duly endorsed in blank, or
accompanied by stock powers duly endorsed in blank, with all necessary transfer
tax and other revenue stamps acquired at the Shareholders' expense, affixed and
canceled, and (ii) Triangle shall deliver to each exercising Shareholder a cash
payment in the amount determined by multiplying the number of shares of Triangle
Common Stock to be repurchased by Triangle from such Shareholder by the
Repurchase Price, as reduced or adjusted pursuant to this Section 1.9 (the
"Repurchase Payment"); provided, however, that Triangle shall not be required to
deliver that portion of any Repurchase Payment attributable to the exercise of
the Put Option with respect to any Escrow Shares, unless and until the release
of such Escrow Shares from escrow in accordance with the terms of the Escrow
Agreement referenced in Section 9.5 of this Agreement, at which time, upon the
tender of share certificates duly endorsed in blank, or accompanied by a stock
power duly endorsed in blank, with all necessary revenue stamps acquired at the
exercising shareholders' expense, affixed and canceled, evidencing the Escrowed
Shares to be repurchased, Triangle shall be required to deliver to each
exercising Shareholder a cash payment determined by multiplying the Repurchase
Price, as reduced or adjusted pursuant to this Section 1.9 at the time of such
payment, by the lesser of (x) the number of shares of Triangle Common Stock
requested by each such Shareholder to be repurchased pursuant to the applicable
Exercise Notice or (y) the number of Escrow Shares to be released to such
Shareholder from escrow, as determined in accordance to the terms of the Escrow
Agreement referenced in Section 9.5 of this Agreement. The Put Option rights
granted to each Shareholder pursuant to this Section 1.9 shall be exercisable by
each respective Shareholder during his or her lifetime and shall not be
transferrable or assignable except by will, or the laws of descent and
distribution.
Section 1.10 Tax Consequences.For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
Section 1.11 Further Action. If, at any time after the Effective Time, any
further action is determined by Triangle, QuickCREDIT or CAC to be reasonably
necessary or desirable to carry out the purposes of this Agreement or to vest
CAC with full right, title and possession of and to all rights and property of
CBS, the officers and directors of Triangle, QuickCREDIT and CAC shall be fully
authorized (in the name of CBS and otherwise) to take such action.
Section 2. REPRESENTATIONS AND WARRANTIES OF CBS AND THE SHAREHOLDERS
As an inducement to Triangle, QuickCREDIT and CAC to enter into this
Agreement and to consummate the transactions contemplated hereby, and with the
knowledge that Triangle, QuickCREDIT and CAC shall rely thereon, CBS and each of
the Shareholders, jointly and severally, represents and warrants to Triangle,
QuickCREDIT And CAC the following (both as of the Closing Date and as of the
date hereof):
2.1 Due Organization and Qualification. CBS is a corporation duly organized and
validly existing under the laws of the State of Florida, has made all filings as
required under applicable filing and annual registration provisions of the FBCA
and has paid all filing fees due and payable thereunder. CBS has all necessary
corporate power and lawful authority to conduct its business in the manner in
which its business is currently being conducted and to own or lease and use its
assets in the manner in which it now owns, leases or uses its assets. CBS is not
qualified or otherwise authorized to do business as a foreign corporation in any
jurisdiction other than the jurisdictions identified in Schedule 2.1 annexed
hereto, which jurisdictions are the only jurisdictions in which such
qualification or authorization is required by law. Except as set forth on
Schedule 2.1 annexed hereto, CBS does not file and is not required to file
franchise, income or other tax returns in any other jurisdiction based upon the
ownership or use of property therein or the conduct of business or derivation of
income therefrom. CBS does not own or lease property or maintain any resident
employee in any jurisdiction other than the jurisdictions set forth on Schedule
2.1 annexed hereto.
2.2 Capitalization. The title, par value, number of authorized shares and number
of issued and outstanding shares of capital stock of CBS are described on
Schedule 2.2 annexed hereto. No other class of capital stock of CBS is issued
and outstanding and there are no shares of capital stock held in CBS's treasury.
All of the issued and outstanding shares of CBS Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable. The Shares
of capital stock of CBS owned of record and beneficially by each CBS shareholder
and the residence address of each such shareholder is set forth on Schedule 2.2
annexed hereto. Except as set forth on Schedule 2.2 no person or entity has, or
ever has had, any ownership interest in the property, capital stock, assets or
business of CBS.
2.3 Options or Other Rights. Except as described on Schedule 2.3 annexed hereto,
there is no (i) outstanding subscription, option, call, warrant, unsatisfied
preemptive right, commitment, conversion right or other agreement or right of
any kind pursuant to which any Person has the right or option (whether or not
currently exercisable) to acquire, or otherwise relating to, any shares of the
capital stock or any other security of CBS; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or any other security of CBS; (iii) contract
under which CBS is or may become obligated to sell or otherwise issue any shares
of its capital stock or any other securities; or (iv) condition or circumstance
that may give rise to or provide a basis for the assertion of a claim by any
Person to the effect that such Person is entitled to acquire or receive any
shares of capital stock or other securities of CBS. Except as set forth in
Schedule 2.3 annexed hereto, CBS has never issued or granted any option, call,
warrant or right to acquire, or otherwise relating to, any shares of its capital
stock or other securities.
2.4 Subsidiaries and Investments. CBS has no subsidiaries, and has never owned,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect interest of any nature in, any Entity.
2.5 Charter and Bylaws. Schedule 2.5 annexed hereto contains true, correct and
complete copies of (a) the articles of incorporation of CBS, including all
amendments thereto (certified by the Secretary of State of the State of
Florida), and (b) the bylaws of CBS, including all amendments thereto (certified
by the secretary or other executive officer of CBS).
2.6 Books and Records. The corporate minute books, stock certificate books,
stock registers and other corporate records of CBS are true, correct and
complete in all material respects, and the signatures appearing on all documents
contained therein are the true signatures of the persons purporting to have
signed the same. The corporate minute books of CBS contain true and complete
records of all of the meetings and other proceedings (including any actions
taken by written consent or otherwise without a meeting) of the board of
directors of CBS, any committee of the board of directors of CBS and the
shareholders of CBS since the date of incorporation of CBS. All actions
reflected in said books and records were duly and validly taken in compliance
with all Legal Requirements applicable to such matters and the provisions of
CBS's articles of incorporation or bylaws or of any resolution adopted by CBS's
shareholders, CBS's board of directors or any committee of CBS's board of
directors. None of CBS's records, systems, controls, data or information are
recorded, stored, maintained or operated by, or otherwise are wholly or partly
dependent upon or held by, any person, entity or media (including any
electronic, mechanical or photographic process) which are not under the
exclusive ownership and direct control (including all means of access) of CBS.
2.7 Authority; Binding Nature of Agreement.
(a) Each of the Shareholders has the full power and legal capacity to execute
and deliver the Shareholder Documents and to perform their respective
obligations under this Agreement. Each of the Shareholder Documents, when
executed, will constitute a valid and binding agreement of the Shareholder which
is a party thereto, enforceable against such Shareholder in accordance with its
terms.
(b) The execution, delivery and performance by CBS of the CBS Documents has been
duly authorized by all necessary action on the part of CBS and its board of
directors and shareholders. Each of the CBS Documents, when executed, will
constitute the legal, valid and binding obligation of CBS, enforceable against
CBS in accordance with its terms.
(c) Except as described in Schedule 2.7 annexed hereto, no consent,
authorization or approval of, or declaration, filing or registration with, any
Governmental Body, or any Consent of any other Person, is necessary in order to
enable the Shareholders or CBS to enter into and perform their respective
obligations under the Shareholder Documents or CBS Documents, and neither the
execution and delivery of the Shareholder Documents or CBS Documents nor the
consummation of the transactions contemplated thereby will:
(i) conflict with, require any consent under, result in the violation of, or
constitute a breach of any provision of the articles of incorporation or bylaws
of CBS;
(ii) conflict with, require any Consent under, result in the violation of,
constitute a breach of or a default under, or accelerate the performance
required on the part of the Shareholders or CBS by the terms of, any evidence of
indebtedness or Contract to which the Shareholders or CBS is a party, in each
case with or without notice or lapse of time or both, including any evidence of
Encumbrance to which any property either of CBS or CBS Common Stock is subject,
or permit the termination of any such Contract by another Person;
(iii) result in the creation or imposition of any Encumbrance upon, or
restriction on the use of, any property or assets of CBS or CBS Common Stock
under any Contract to which either CBS or the Shareholders are bound;
(iv) accelerate, or constitute an event entitling, or which would, on notice or
lapse of time or both, entitle the holder of any indebtedness of CBS or the
Shareholders to accelerate the maturity of any such indebtedness;
(v) conflict with or result in the breach or violation of any Legal Requirement
that is binding on either CBS or the Shareholders; or
(vi) violate or cause any revocation of or limitation on any Permit of CBS.
2.8 Financial Statements.
(a) CBS has delivered to QuickCREDIT copies of the following financial
statements (collectively, the "CBS Financial Statements"):
(i) the profit and loss statement of CBS for the fiscal years ended on December
31, 1994, 1995, 1996 and 1997 and for the quarter ended March 31, 1998; and
(ii) the unaudited balance sheet of CBS (the "Unaudited Balance Sheet") as of
March 31, 1998 (the "Balance Sheet Date").
(b) Copies of the CBS Financial Statements are annexed hereto as Schedule 2.8.
The CBS Financial Statements have been prepared from the books and records of
CBS in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods covered. The CBS Financial Statements
present fairly the financial condition of CBS as of the respective dates thereof
and the results of operations of CBS for the periods covered thereby, and,
except as indicated therein, reflect all claims against and all debts and
liabilities of CBS, whether fixed or contingent, as of the dates thereof.
2.9 Absence of Undisclosed Liabilities. All liabilities, commitments or
obligations of CBS with respect to CBS's business (whether secured or unsecured
and whether accrued, absolute, contingent, direct or indirect or otherwise and
whether due or to become due) are set forth or adequately reserved against in
the CBS Financial Statements, except for commercial liabilities and obligations
incurred since the Balance Sheet Date in the ordinary course of business and
consistent with past practice and none of which has or will have a material
adverse effect on the business, financial condition or results of operations of
CBS's business. The total of all liabilities in respect of accounts payable
incurred in the ordinary course of business (i.e., invoices received, approved
and authorized for payment) of CBS as set forth on Schedule 2.9. Except as and
to the extent described in the CBS Financial Statements, CBS has no knowledge of
any basis for the assertion against CBS's business or the business of any
predecessor to CBS of any liability, and there are no circumstances, conditions,
happenings, events or arrangements, contractual or otherwise, which may likely
give rise to liabilities, except commercial liabilities and obligations incurred
in the ordinary course of business and consistent with past practice.
2.10 Absence of Changes. Except as set forth in Schedule 2.10 annexed hereto and
since the Balance Sheet Date:
(a) there has not been any material adverse change in CBS's business, condition,
assets, liabilities, operations, financial performance or prospects, and no
event has occurred that will, or could reasonably be expected to, have a
Material Adverse Effect on CBS;
(b) there has not been any material loss, damage or destruction to, or any
material interruption in the use of, any of CBS's assets (whether or not covered
by insurance);
(c) CBS has not declared, accrued, set aside or paid any dividend or made any
other distribution in respect of any shares of capital stock, and has not
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities;
(d) CBS has not sold, issued or authorized the issuance of (i) any capital stock
or other security, (ii) any option, call, warrant or right to acquire, or
otherwise relating to, any capital stock or any other security, or (iii) any
instrument convertible into or exchangeable for any capital stock or other
security;
(e) there has been no amendment to CBS's articles of incorporation or bylaws,
and CBS has not effected or been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) CBS has not formed any subsidiary or acquired any equity interest or other
interest in any other Entity;
(g) CBS has not made any capital expenditure which, when added to all other
capital expenditures made by CBS, exceeds $5,000 in the aggregate;
(h) CBS has not (i) entered into or permitted any of the assets owned or used by
it to become bound by any Contract, or (ii) amended or prematurely terminated,
or waived any material right or remedy under, any Contract to which it is or was
party or under which it has or has had any rights or obligations;
(i) CBS has not (i) acquired, leased or licensed any right or other asset from
any other Person, (ii) sold or otherwise disposed of, or leased or licensed, any
right or other asset to any other Person, or (iii) waived or relinquished any
right, except for immaterial rights or other immaterial assets acquired, leased,
licensed or disposed of in the ordinary course of business and consistent with
CBS's past practices;
(j) CBS has not written off as uncollectible, or established any extraordinary
reserve with respect to, any account receivable or other indebtedness;
(k) CBS has not made any pledge of any of its assets or otherwise permitted any
of its assets to become subject to any Encumbrance, except for pledges of
immaterial assets made in the ordinary course of business and consistent with
CBS's past practices;
(l) CBS has not (i) lent money to any Person, or (ii) incurred or guaranteed any
indebtedness for borrowed money;
(m) CBS has not (i) established, adopted or amended any Plan, (ii) paid any
bonus or made any profit-sharing or similar payment to, or increased the amount
of the wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees, or (iii)
hired any new employee;
(n) CBS has not changed any of its methods of accounting or accounting practices
in any respect;
(o) CBS has not made any Tax election;
(p) CBS has not commenced or settled, whether or not commenced by it, any Legal
Proceeding;
(q) CBS has not entered into any material transaction or taken any other
material action outside the ordinary course of business or inconsistent with its
past practices; and
(r) CBS has not agreed or committed to take any of the actions referred to in
clauses "(c)" through "(q)" above.
2.11 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 2.11 annexed hereto, there is no pending
Legal Proceeding, and, to the knowledge of CBS and the Shareholders, no Person
has threatened to commence any Legal Proceeding, (i) that involves CBS or any of
the assets owned or used by CBS; or (ii) that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the Merger or any of the other transactions contemplated by this Agreement. To
the knowledge of CBS and the Shareholders, except as set forth in Schedule 2.11
annexed hereto, no event has occurred, and no claim, dispute or other condition
or circumstance exists, that will, or that could reasonably be expected to, give
rise to or serve as a basis for the commencement of any such Legal Proceeding.
(b) There is no order, writ, injunction, judgment or decree to which CBS, or any
of the assets owned or used by CBS, are subject. Neither the Shareholders nor
CBS is subject to any order, writ, injunction, judgment or decree that relates
to CBS's business or to any of the assets owned or used by CBS. To the knowledge
of CBS and the Shareholders, no officer or other employee of CBS is subject to
any order, writ, injunction, judgment or decree that prohibits such officer or
other employee from engaging in or continuing any conduct, activity or practice
relating to CBS's business.
2.12 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of CBS with any
Governmental Body with respect to any transaction occurring or any taxable
period ending on or before the Closing Date (i) have been or will be filed when
due and (ii) have been, or will be when filed, accurately and completely
prepared in compliance with all applicable Legal Requirements. All Taxes owed by
CBS (whether or not shown on any Tax Return) have been paid. Except as set forth
on Schedule 2.12 annexed hereto, CBS is not currently the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever been
made by a Governmental Body in a jurisdiction where CBS does not file Tax
Returns that CBS is or may be subject to taxation by that jurisdiction. There
are no Encumbrances on any of the assets of CBS that arose in connection with
any failure (or alleged failure) to pay any Tax.
(b) CBS has withheld and paid all Taxes required to have been withheld and paid
by it in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other Person.
(c) None of the Shareholders or any Representative of CBS (or any employee of
CBS responsible for Tax matters) has any reason to believe that any authority
may assess any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax liability of CBS either
(i) claimed or raised by any authority in writing or (ii) as to which any
Shareholder (or any employee of CBS responsible for Tax matters) has knowledge.
Schedule 2.12 annexed hereto lists all federal, state, local, and foreign income
Tax Returns filed with respect to CBS for taxable periods ended on or after
December 31, 1994 and indicates those Tax Returns that have been audited and
those Tax Returns that currently are the subject of an audit. CBS has delivered
to QuickCREDIT correct and complete copies of all federal income Tax Returns,
examination reports, and statements of deficiencies assessed against or agreed
to by CBS since December 31, 1994.
(d) CBS has not waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency.
(e) CBS has not (i) applied for any tax ruling, (ii) entered into a closing
agreement with any taxing authority, (iii) made any payments, or been a party to
an agreement (including this Agreement) that under any circumstances could
obligate it to make payments that will not be deductible because of Section 280G
of the Code, or (iv) been a party to any tax allocation or tax sharing
agreement. CBS has no liability for the Taxes of any Person or Entity (other
than CBS) under Reg. ss.1.1502-6 (or any similar Legal Requirement), as a
transferee or successor, by contract, or otherwise.
(f) The unpaid Taxes of CBS (i) did not, as of the Balance Sheet Date, exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the Unaudited Balance Sheet (rather than in any notes thereto)
and (ii) do not exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of CBS in
filing its Tax Returns.
2.13 Title to Assets. CBS has good and valid title to all of its material
properties and assets (both tangible and intangible), including without
limitation, all properties and assets shown on the Unaudited Balance Sheet and
all properties and assets purchased or acquired by CBS since the Balance Sheet
Date; in each case subject to no Encumbrances, except for (i) Encumbrances
reflected on the Unaudited Balance Sheet, (ii) liens for current taxes,
assessments or governmental charges or levies on property not yet due or
delinquent and (iii) Encumbrances described on Schedule 2.13 annexed hereto
("Permitted Liens"). Except for software licenses described in Schedule 2.15
annexed hereto, or leases or real and personal property described in Schedule
2.16, CBS owns outright and is in exclusive possession of all assets, properties
or rights currently used in its business.
2.14 Compliance with Legal Requirements. Except as described on Schedule 2.14
annexed hereto, CBS is not in violation of any Legal Requirement applicable to
the business of CBS. Without limiting the generality of the foregoing, except as
described on Schedule 2.14 annexed hereto, (i) there is not pending, or to the
knowledge of CBS or the Shareholders threatened, any notification of any
Governmental Body that CBS is not in compliance with applicable Legal
Requirements respecting employment and employment practices, occupational safety
and health laws and regulations, and laws or regulations relating to the quality
of the environment, and neither CBS nor the Shareholders know of any basis
therefor, and (ii) CBS has not received any such notification of past violations
of such Legal Requirements as can reasonably be expected to result in future
claims against CBS, and neither CBS nor the Shareholders know of any basis
therefor.
2.15 Contracts.
(a) Schedule 2.15 annexed hereto contains a complete and accurate list of
all of the following Contracts to which CBS is a party or by or to which it or
its assets or properties are bound or subject or which are necessary for CBS to
conduct its business as presently conducted:
(i) Contracts with any current or former officer, director, employee,
consultant, agent or other representative or with any Person in which any of the
foregoing has an interest, including any "Affiliate" or "Associate" of such
Person, as such terms are defined in the Securities Act of 1933 and the rules
and regulations published thereunder;
(ii) Contracts with any labor union or association representing any
employee;
(iii) Contracts for the sale of any of CBS's assets or properties other
than in the ordinary course of business or for the grant to any person of any
preferential rights to purchase any of its assets or properties;
(iv) Contracts under which CBS agrees to indemnify any party or to share
the tax liability of any Person;
(v) Contracts of guaranty or relating to matters of suretyship;
(vi) Contracts that cannot be canceled without liability, premium or
penalty upon thirty (30) days' notice or less;
(vii) Contracts containing obligations or liabilities of any kind to
holders of CBS's securities as such (including, without limitation, an
obligation to register any of such securities under any Legal Requirement);
(viii) Contracts containing covenants of CBS not to compete in any line of
business or with any person in any geographical area or covenants of any other
Person not to compete with CBS in any line of business or in any geographical
area;
(ix) Contracts relating to the acquisition by CBS of any operating business
or the capital stock of any other Person;
(x) Contracts relating to Intellectual Property owned, licensed or used by
CBS in the course of its business;
(xi) Contracts requiring the payment to any Person of a royalty, override
or similar commission or fee;
(xii) Contracts relating to the borrowing of money by CBS or subjecting any
assets or properties of CBS to any Encumbrance;
(xiii) any Contract which might reasonably be expected to have a potential
adverse impact on the business or operations of CBS;
(xiv) any Contract not made in the ordinary course of business; or
(xv) any other material Contract whether or not made in the ordinary course
of business.
(b) CBS has delivered or made available to QuickCREDIT true and complete copies
of all of the Contracts described on Schedule 2.15. All of such Contracts are
valid and binding upon CBS in accordance with their terms, and CBS has performed
all contractual obligations required to be performed by it to date and is not in
default under any such contracts and has not taken any action which constitutes
or with notice or lapse of time or both would constitute a default under such
Contracts. To the knowledge of CBS and the Shareholders, no other party to any
such contract is in default in the performance of its obligations thereunder or
has taken any action which constitutes, or with notice or lapse of time or both
would constitute, a breach or anticipatory breach thereof. Except as separately
identified on Schedule 2.15 annexed hereto, no approval or consent of any Person
is needed in order that the contracts and other agreements set forth on Schedule
2.15 annexed hereto or on any other Schedule continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
(c) The Contracts identified on Schedule 2.15 annexed hereto collectively
constitute all of the Contracts necessary to enable CBS to conduct its business
in the manner in which its business is currently being conducted and in the
manner in which its business is proposed to be conducted.
(d) Schedule 2.15 annexed hereto identifies and provides a brief description of
each proposed Contract as to which any pending bid, offer or proposal has been
submitted or received by CBS.
2.16 Leases. Schedule 2.16 annexed hereto contains a complete and accurate list
of any real property lease binding CBS or to which CBS is a party ("Leases").
Each such Lease is in full force and effect, and CBS has fully performed all of
its obligations to be performed to date under said Leases. CBS is current with
respect to the payment of all rents and other charges due thereunder, and their
use and occupancy of the premises which are the subject matter of such leases
does not violate any of the terms of such Leases, is in conformity with all
applicable Legal Requirements and is not violative of the conditions of CBS's
respective policies of insurance. All of the buildings, structures and
appurtenances situated on such leased premises are, and as of the Closing Date,
will be, in good operating condition and state of maintenance and repair and
will be adequate and suitable for the purposes for which they are presently
being or are intended to be used, and CBS has adequate rights of ingress and
egress and utility services for the operation of their respective businesses in
the ordinary course. No lessor or landlord under any Lease is in default in the
performance of its obligations thereunder, and CBS has not received notice from
any such lessor or landlord of its intention to exercise any option thereunder
which would adversely affect or terminate CBS's use or occupancy of the demised
premises under such Lease. Except as specifically disclosed in Schedule 2.16,
all of the Leases permit the consummation of the transactions contemplated
hereby without modification of the terms thereof and without the consent of the
applicable lessor or landlord. CBS does not own, and has never owned, any real
property.
2.17 Accounts and Notes Receivable. All accounts and notes receivable reflected
on the Unaudited Balance Sheet, and all accounts and notes receivable arising
subsequent to the Balance Sheet Date, have arisen in the ordinary course of
business of CBS, represent valid obligations due to CBS and, subject only to the
reserve for bad debts shown on CBS's books and records and computed in a manner
consistent with generally accepted accounting principals and CBS's past
practice, are collectible in the ordinary course of business of CBS in the
aggregate recorded amounts thereof in accordance with their terms and in any
event not later than 90 days from the Closing Date. None of such notes and
accounts receivable or other debts is (or as of the Closing Date will be)
subject to any counterclaim or set-off except to the extent of the
aforementioned reserve, or is (or as of the Closing Date will be) subject to any
Encumbrance whatsoever. For purposes of this Section 2.17, the collectibility of
accounts and notes receivable shall be determined by applying customers'
remittances based upon the specific invoices to which such remittances relate,
or in the absence of any indication of same, on a first-in, first-out basis.
There has been no material change since the Balance Sheet Date in the amount of
accounts receivable or other debts due CBS or the reserves for bad debts
relating thereto from that reflected in the Unaudited Balance Sheet.
2.18 Fixed Assets. Schedule 2.18 annexed hereto contains a complete and accurate
list of all machinery, equipment, tools, furniture, leasehold improvements,
trade fixtures, vehicles, structures or any related capitalized items and other
tangible property material to the operation of the business of CBS (the "Fixed
Assets") all of which Fixed Assets are reflected in the Unaudited Balance Sheet
(except any such tangible property acquired since the Balance Sheet Date by
CBS). Since the Balance Sheet Date, CBS has not disposed of any Fixed Asset
except in the ordinary course of CBS's business. The Fixed Assets are in good
operating condition and repair, subject to normal wear and tear from normal use
thereof, and CBS has not received notice that any of the Fixed Assets or CBS's
use thereof is in violation of any existing law or any applicable Legal
Requirement.
2.19 Trade Names and Other Intangibles. Schedule 2.19 annexed hereto contains a
complete and accurate list of all patents, patent rights, licenses,
methodologies, know-how, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights or similar rights
("Intellectual Property") which are either (a) wholly or partly owned or
licensed by CBS or (b) used in the conduct of the business of CBS. Except as
described on Schedule 2.19 annexed hereto, no Person or Entity, other than CBS,
has any rights under or in respect of, and to the knowledge of CBS and the
Shareholders, no Person is infringing or otherwise acting adversely with respect
to, CBS's respective rights under or in respect of the Intellectual Property,
and CBS is the exclusive owner of such rights and there is no claim for damages
or any proceeding pending or, to the knowledge of CBS or the Shareholders,
threatened with respect thereto. CBS is not infringing or otherwise acting
adversely to the right of any Person or Entity under or in respect to
Intellectual Property, and there is no claim for damages or any proceeding
pending, or to the knowledge of CBS or the Shareholders threatened, with respect
thereto.
2.20 Suppliers and Customers. Schedule 2.20 annexed hereto contains a complete
and accurate list with respect to CBS of (a) any supplier from whom CBS
purchased or to which CBS paid $_________ or more during the last fiscal year of
CBS and the amount paid by CBS to each such supplier and (b) any customer or
client of CBS which purchased during the last fiscal year of CBS $_________ or
more in services from CBS. No customer required to be listed on Schedule 2.20
has notified CBS of such customer's intention to terminate or materially reduce
the use of CBS's services, and neither CBS nor the Shareholders have any reason
to believe any such customer is likely to terminate the services of CBS on
account of the transactions contemplated hereunder.
2.21 Payment of Wages and Salary. Other than amounts which have not yet become
payable in accordance with CBS's customary practices, which will be paid in a
timely manner, (i) CBS has paid in full to its full and part-time employees all
wages, salaries, commissions, bonuses and other direct compensation for all
services performed by them to date, and (ii) CBS has paid, or will pay in a
timely manner, all severance pay, if any, and benefits, FICA, withholding taxes
and vacation pay, if any, for all of its employees and is not subject to any
claim for non-payment or non-performance of any of the foregoing. CBS is in
compliance with all federal, state and local laws and regulations respecting
employment and employment practices, terms and conditions of employment and
wages and hours. CBS has not improperly characterized as an independent
contractor or consultant, any individual who should have been treated as an
employee of CBS for tax withholding or any other purpose.
2.22 Employee Benefit Plans.
(a) Except as described on Schedule 2.22 annexed hereto, CBS is not a party to,
nor makes or is required to make employer contributions to, nor has any current
or future obligation or liability with respect to, any pension, profit sharing,
retirement, deferred compensation, bonus, stock purchase, severance,
hospitalization, medical insurance, life insurance, vacation policy or other
employee benefit plan or program providing benefits for its current or former
employees, other than salaries or cash wages for straight time, overtime or
shift differential (a "Plan"). Except as described on Schedule 2.22 annexed
hereto, CBS has complied with all of its obligations under each Plan and, to the
knowledge of CBS and the Shareholders, all other parties have complied with all
of their respective obligations under each Plan. CBS has made or provided for
all payments due under or with respect to each Plan up to and including the
Closing Date, and all amounts properly accrued up to and including the Closing
Date as liabilities of CBS under each Plan have been recorded on the books of
CBS. Except as described on Schedule 2.22 annexed hereto, no Plan is a
"multiemployer plan" (within the meaning of Section 3(37) of ERISA), and, except
as so set forth, CBS has not made, or has been required to make, any
contributions to any "multiemployer plan" within the last five (5) years. Except
as described on Schedule 2.22 annexed hereto, no Plan listed on Schedule 2.22
(other than any "multiemployer plan") is subject to Title IV of ERISA.
(b) Each Plan listed on Schedule 2.22 has received a determination letter from
the Internal Revenue Service to the effect that it qualified under Section
401(a) of the Code, and that each trust established under such Plan is exempt
from taxation under Section 501(a) of the Code, and nothing has occurred which
would cause the loss of such qualifications or exemptions. No "reportable event"
(within the meaning of Section 4043(b) of ERISA) has occurred with respect to
any pension plan that is subject to Title IV of ERISA maintained by any trade or
business (whether or not incorporated) that is under common control with CBS,
within the meaning of Section 414(c) of the Code and the regulations thereunder
(hereinafter any such plan shall be referred to as an "Affiliate Plan" and any
such trade or business shall be referred to as an "ERISA Affiliate"), and no
"reportable event" will occur with respect to any Plan or Affiliate Plan as a
result of any transaction contemplated by this Agreement.
(c) CBS would not be subject to any withdrawal liability with respect to any
"multiemployer plan" listed on Schedule 2.22 if CBS were to withdraw from any
such plan as of the date hereof. Except as described on Schedule 2.22, CBS has
satisfied all material reporting and disclosure requirements and all other
requirements applicable to it under the Code or ERISA, and the Department of
Labor and the Internal Revenue Service regulations promulgated thereunder, with
respect to the Plans. Neither CBS nor, to the knowledge of CBS or the
Shareholders, any other "party in interest" or "disqualified person" (within the
meaning of Section 3(14) of ERISA or Section 4975(e)(2) of the Code,
respectively) with respect to any Plan has engaged in any "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) which could subject any Plan, CBS or any trustee, administrator or other
fiduciary of any Plan, to any penalty or excise tax imposed on prohibited
transactions by Section 502(i) of ERISA or Section 4975 of the Code. There are
no material actions, suits or claims pending (other than routine claims for
benefits) or, except as described on Schedule 2.22, to the knowledge of CBS or
the Shareholders, threatened, against any Plan or against the assets of any
Plan. No Plan which is subject to Part III of Subtitle B of Title I of ERISA or
Section 412 of the Code has incurred any "accumulated funding deficiency" (as
defined in ERISA), whether or not waived. Except as described on Schedule 2.22,
no Plan or Affiliate Plan that is or was subject to Title IV of ERISA has been
terminated and, to the knowledge of the Seller, no proceeding has been initiated
to terminate any such Plan or Affiliate Plan. Neither CBS, any ERISA Affiliates,
nor any Shareholder have incurred, nor reasonably expects to incur as a result
of any event occurring on or prior to the Closing Date, any liability to the
Pension Benefit Guaranty Corporation (except for required premium payments, none
of which payments are overdue) or any withdrawal liability under Title IV of
ERISA.
(d) With respect to each Plan that is an "employee benefit plan," within the
meaning of Section 3(3) of ERISA, true and complete copies of (i) the documents
embodying the Plan, any related trust and all amendments thereto, (ii) the
summary plan description and all modifications thereto, (iii) the last filed
Annual Report (Form 5500 Series) and Schedules A and B thereto, (iv) the most
recent Internal Revenue Service determination letter, if applicable, (v) the
most recent actuarial valuation report, if any, and (vi) the most recent annual
and periodic financial statements, have been delivered or made available to
QuickCREDIT and are correct in all material respects.
2.23 Insurance. Schedule 2.23 annexed hereto contains a list and brief
description (specifying the insurer, the policy number or covering note number
with respect to binders and the amount of any deductible, describing each
pending claim thereunder of more than $5,000, setting forth the aggregate
amounts paid out under each such policy through the date hereof and the
aggregate limit, if any, of the insurer's liability thereunder) of all policies
or binders of fire, liability, product liability, workmen's compensation,
vehicular, unemployment and other insurance held by or on behalf of CBS. Such
policies and binders are valid and enforceable in accordance with their terms,
are in full force and effect, and insure against risks and liabilities to the
extent and in the manner reasonably determined by CBS to be appropriate and
sufficient and are adequate to protect CBS and its assets and properties. CBS
has paid all premiums due thereon and is not in default with respect to any
provision contained in any such policy or binder and has not failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. Except for claims described on Schedule 2.23, there are no outstanding
unpaid claims under any such policy or binder. CBS has not received notice of
cancellation or non-renewal of any such policy or binder. None of the policies
listed on Schedule 2.23 provides that premiums paid in respect of the periods
prior to the Closing Date may be adjusted or recomputed based on claims-paying
experience of such policies or otherwise. CBS has no notice from any of its
insurance carriers that any insurance premiums will be increased in the future
or that any insurance coverage listed on Schedule 2.23 will not be available in
the future on the same terms as now in effect.
2.24 Environmental Matters.
(a) Except as described in Schedule 2.24, (i) CBS has never generated,
transported, used, stored, treated, disposed of, or managed any Hazardous Waste;
(ii) no Hazardous Material has ever been or is threatened to be spilled,
released, or disposed of at any site presently or formerly owned, operated,
leased or used by CBS, or has ever come to be located in the soil or groundwater
at any such site; (iii) no Hazardous Material has ever been transported by or at
the direction of CBS from any site presently or formerly owned, operated,
leased, or used by CBS for treatment, storage, or disposal at any other place;
and (iv) no Encumbrance has ever been imposed by any Governmental Body on any
property, facility, machinery, or equipment owned, operated, leased, or used by
CBS in connection with the presence of any Hazardous Material.
(b) (i) CBS has no liability under, nor has it ever violated, any Environmental
Law; (ii) CBS, any property owned, operated, leased, or used by CBS, and any
facilities and operations thereon, are presently in compliance with all
applicable Environmental Laws; (iii) CBS has never entered into or been subject
to any judgment, consent decree, compliance order, or administrative order with
respect to any environmental or health and safety matter or received any request
for information, notice, demand letter, administrative inquiry, or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law; and (iv) neither CBS
nor the Shareholders have any knowledge or reason to know that any of the items
enumerated in the immediately preceding clause of this paragraph will be
forthcoming.
(c) CBS has provided to QuickCREDIT copies of all documents, records, and
information available to CBS or the Shareholders concerning any environmental or
health and safety matter relevant to CBS, whether generated by CBS or others,
including, without limitation, environmental audits, environmental risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials, spill control plans, and reports, correspondence, permits,
licenses, approvals, consents, and other authorizations related to environmental
or health and safety matters issued by any governmental agency.
(d) For purposes of this Agreement, "Hazardous Material" shall mean and include
any hazardous waste, hazardous material, hazardous substance, petroleum product,
oil, toxic substance, pollutant, contaminant, or other substance which may pose
a threat to the environment or to human health or safety, as defined or
regulated under any Environmental Law; "Hazardous Waste" shall mean and include
any hazardous waste as defined or regulated under any Environmental Law;
"Environmental Law" shall mean any environmental or health and safety-related
Legal Requirement existing at any time prior to the Closing Date.
2.25 Officers, Directors and Key Employees. Schedule 2.25 annexed hereto
describes with respect to CBS the name and total annual compensation (and
benefit costs) of each officer and director of CBS and of each other employee,
consultant, agent or other representative of CBS whose current annual rate of
compensation exceeds $15,000. CBS has not made a commitment or agreement to
increase the compensation or to modify the conditions or terms of employment of
any such person. None of such persons has communicated to CBS or to the
Shareholders that such person intends to resign or otherwise terminate such
person's relationship with CBS.
2.26 Restrictive Documents. Neither CBS nor any of the Shareholders is subject
to, or a party to, any charter, bylaw, Permit, Contract, Legal Requirement or
any other restriction of any kind, which adversely affects the business
practices, operations or condition of CBS or any of its assets or property, or
which would prevent consummation of the transactions contemplated by this
Agreement, compliance by CBS or the Shareholders with the terms, conditions and
provisions hereof, or the continued operation of CBS's business after the date
hereof or the Closing Date on substantially the same basis as heretofore
operated or which would restrict the ability of CBS to acquire any property or
conduct business in any area.
2.27 Licenses. CBS possesses all concessions, permits, licenses, orders, and
other governmental authorizations and approvals ("Permits") required to permit
CBS to carry on its business as it is presently being conducted. All such
Permits are described on Schedule 2.27 annexed hereto, are in the name of CBS
and are in full force and effect, and no modification, termination, suspension
or cancellation of any of them is threatened. Except as described in Schedule
2.27 annexed hereto, all such Permits permit the consummation of the
transactions contemplated hereby without modification thereof and without the
consent of the issuing authority.
2.28 Transactions with Affiliated Parties. Except as described on Schedule 2.28
annexed hereto, no Associate or Affiliate of CBS or any of the Shareholders (a)
has any ownership interest, directly or indirectly, in any competitor, supplier
or customer of CBS, (b) has any outstanding loan to or receivable in either
event to or from CBS or (c) is a party to or has any interest in any contract or
agreement with CBS.
2.29 Bank Accounts and Powers of Attorney. Schedule 2.29 annexed hereto contains
an accurate and complete list showing (a) the name and address of each bank in
which CBS has an account or safe deposit box, the number of any such account or
any such box and the names of all persons authorized to draw thereon or to have
access thereto and (b) the names of all persons, if any, holding powers of
attorney from CBS and a summary statement of the terms thereof.
2.30 Warranties. Schedule 2.30 annexed hereto contains (a) a true and complete
description of all warranties granted or made with respect to services sold by
CBS during the three years prior to the date hereof; and (b) a true and complete
description of CBS's warranty experience for the same period. Neither CBS nor
the Shareholders have any reason to believe that warranty claims for CBS will,
in the foreseeable future, exceed historical levels to any material extent.
2.31 Assets Complete. Upon the Effective Time of the Merger, the Surviving
Corporation will own all of the assets and possess all of the rights necessary
for it to conduct the business of CBS in a manner consistent with the manner in
which CBS has conducted its business on and immediately prior to the Effective
Date.
2.32 No Changes Prior to Closing Date. During the period from the Balance Sheet
Date to and including the Closing Date, except as expressly contemplated hereby
or consented to in writing by QuickCREDIT in accordance with Section 4.2 hereof,
CBS will not have (a) incurred any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except in the ordinary
course of business, (b) permitted any of its assets to be subjected to any
Encumbrance, (c) sold, transferred or otherwise disposed of any of its assets,
(d) made any capital expenditure or commitment therefor, (e) declared or paid
any dividend or made any distribution on any shares of its capital stock, or
redeemed, purchased or otherwise acquired any shares of its capital stock or
granted or canceled any option, warrant or other right to purchase or acquire
any such shares, (f) made any bonus or profit sharing distribution or similar
payment of any kind, (g) increased its indebtedness for borrowed money, or made
any loan to any Person, (h) except in the ordinary course of business,
consistent with past practices of CBS, made or permitted any amendment or
termination of any contract, agreement or license to which CBS is a party or by
which it or any of its assets and properties are subject or bound, (i) entered
into any agreement or arrangement granting any preferential rights to purchase
any of CBS's assets or properties or requiring the consent of any party to the
transfer and assignment of any of CBS's assets or properties, (j) written off as
uncollectible any notes or accounts receivable, except write-offs in the
ordinary course of business charged to applicable reserves, none of which
individually or in the aggregate is material to CBS, (k) granted any increase in
the rate of wages, salaries, bonuses or other remuneration of any executive
employee or other employees, except in the ordinary course of business, (l)
canceled or waived any claims or rights of substantial value, (m) made any
change in any method of accounting or auditing practice, (n) otherwise conducted
its business or entered into any transaction, except in the usual and ordinary
manner and in the ordinary course of its business, or (o) agreed, whether or not
in writing, to do any of the foregoing.
2.33 Disclosure. Neither this Agreement, nor any Schedule, Exhibit or
certificate delivered in accordance with the terms hereof by or on behalf of CBS
or the Shareholders, or by any of CBS's Representatives, in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact, or omits or will omit any statement of a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to CBS or the Shareholders which materially
and adversely affects the business, prospects (financial or otherwise) or
financial condition of CBS or its properties or assets, which has not been set
forth in this Agreement or in the Schedules, Exhibits, certificates or other
documents furnished by or on behalf of CBS or the Shareholders, or by any of
CBS's Representatives, in connection with the transactions contemplated by this
Agreement.
2.34 Broker's or Finder's Fees. No agent, broker, person or firm acting on
behalf of the Shareholders or CBS is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
2.35 Copies of Documents. CBS has caused to be made available for inspection and
copying by QuickCREDIT and its Representatives, true, complete and correct
copies of all documents referred to in this Section 2 or in any Schedule
furnished by CBS or the Shareholders to Triangle or QuickCREDIT.
Section 3. REPRESENTATIONS AND WARRANTIES OF TRIANGLE,
QUICKCREDIT AND CAC
As an inducement to CBS and the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, and with the
knowledge that CBS and the Shareholders shall rely thereon, Triangle,
QuickCREDIT and CAC, jointly and severally, represent and warrant to CBS and the
Shareholders the following (both as of the Closing Date and as of the date
hereof):
3.1 Due Organization and Qualification. Each of Triangle, QuickCREDIT and CAC is
a corporation duly organized and validly existing under the laws of the State of
Florida, has made all filings as required under the FBCA and has paid all filing
fees due and payable thereunder. Each of Triangle, QuickCREDIT and CAC has all
necessary corporate power and lawful authority to conduct its respective
business in the manner in which such business is currently being conducted and
to own or lease and use its respective assets in the manner in which it now
owns, leases or uses its assets.
3.2 Charter and By-Laws. Schedule 3.2 annexed hereto contains true, correct and
complete copies of (a) the articles of incorporation of each of Triangle,
QuickCREDIT and CAC, including all amendments thereto (certified by the
Secretary of State of the State of Florida), and (b) the bylaws of each of
Triangle, QuickCREDIT and CAC, including all amendments thereto (certified by
the respective secretary or other executive officer of Triangle, QuickCREDIT and
CAC).
3.3 Authority; Binding Nature of Agreement.
(a) The execution, delivery and performance by Triangle, QuickCREDIT and CAC of
the Acquiror's Documents has been duly authorized by all necessary action on the
part of Triangle, QuickCREDIT and CAC and their respective boards of directors.
Each of the Acquiror's Documents constitutes the legal, valid and binding
obligation of Triangle, QuickCREDIT and CAC respectively, enforceable against
such entity in accordance with its respective terms.
(b) No consent, authorization or approval of, or declaration, filing or
registration with, any Governmental Body, or any consent, authorization or
approval of any other Person, is necessary in order to enable Triangle,
QuickCREDIT or CAC to enter into and perform their respective obligations under
the Acquiror's Documents, and neither the execution and delivery of the
Acquiror's Documents nor the consummation of the transactions contemplated
thereby will:
(i) conflict with, require any consent under, result in the violation of,
or constitute a breach of any provision of the articles or certificate of
incorporation or bylaws of Triangle, QuickCREDIT or CAC;
(ii) conflict with, require any Consent under, result in the violation of,
constitute a breach of, or accelerate the performance required on the part of
Triangle, QuickCREDIT or CAC by the terms of, any evidence of indebtedness or
Contract to which Triangle, QuickCREDIT or CAC is a party, in each case with or
without notice or lapse of time or both, including any evidence of Encumbrance
to which any property either of Triangle, QuickCREDIT or CAC is subject, or
permit the termination of any such Contract by another Person;
(iii) result in the creation or imposition of any Encumbrance upon, or
restriction on the use of, any property or assets of Triangle, QuickCREDIT or
CAC under any Contract to which either Triangle, QuickCREDIT or CAC is bound;
(iv) accelerate, or constitute an event entitling, or which would, on
notice or lapse of time or both, entitle the holder of any indebtedness of
Triangle, QuickCREDIT or CAC to accelerate the maturity of any such
indebtedness;
(v) conflict with or result in the breach or violation of any Legal
Requirement that is binding on Triangle, QuickCREDIT or CAC; or
(vi) violate or cause any revocation of or limitation on any Permit of
Triangle, QuickCREDIT or CAC.
3.4 Legal Proceedings; Orders. Except as set forth in Schedule 3.4 annexed
hereto, there is no pending Legal Proceeding, and, to the knowledge of Triangle
or QuickCREDIT, no Person has threatened to commence any Legal Proceeding that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Merger or any of the other transactions
contemplated by this Agreement. To the knowledge of Triangle, QuickCREDIT or
CAC, except as set forth in Schedule 3.4 annexed hereto, no event has occurred,
and no claim, dispute or other condition or circumstance exists, that will, or
that could reasonably be expected to, give rise to or serve as a basis for the
commencement of any such Legal Proceeding.
3.5 SEC Filings; Financial Statements.
(a) QuickCREDIT has delivered to CBS and the Shareholders accurate and complete
copies (excluding copies of exhibits) of each report, registration statement (on
a form other than Form S-8) and definitive proxy statement filed by Triangle
with the SEC between January 1, 1997 and the date of this Agreement (the
"Triangle SEC Documents"). As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing), (i) each of the Triangle SEC Documents complied in all
material respects with the applicable requirements of the Securities Act of 1933
or the Exchange Act of 1934 (as the case may be) and (ii) none of the Triangle
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The consolidated financial statements contained in the Triangle SEC
Documents (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered, except as may be indicated in the notes to
such financial statements and (in the case of unaudited statements) as permitted
by Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to normal and recurring year-end audit
adjustments (which will not, individually or in the aggregate, be material in
magnitude); and (iii) fairly present the consolidated financial position of
Triangle as of the respective dates thereof and the consolidated results of
operations of Triangle for the periods covered thereby.
3.6 Valid Issuance. The Triangle Common Stock to be issued as Merger
Consideration will, when issued in accordance with the provisions of this
Agreement, be validly issued, fully paid and non-assessable.
3.7 Broker's or Finder's Fees. No agent, broker, person or firm acting on behalf
of Triangle, QuickCREDIT or CAC is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
3.8 Representations True and Correct. No representation by Triangle, QuickCREDIT
or CAC in this Section 3 contains or will contain any untrue statement of a
material fact necessary to make the statements herein not misleading.
Section 4. CERTAIN COVENANTS OF CBS AND THE SHAREHOLDERS
4.1 Access and Investigation. During the period from the date of this Agreement
through the Effective Time (the "Pre-Closing Period"), CBS shall, and shall
cause its Representatives to (a) provide QuickCREDIT and its Representatives
with reasonable access to CBS's Representatives, personnel and assets and to all
existing books, records, Tax Returns, work papers and other documents and
information relating to CBS; and (b) provide QuickCREDIT and its Representatives
with such copies of the existing books, records, Tax Returns, work papers and
other documents and information relating to CBS, and with such additional
financial, operating and other data and information regarding CBS, as
QuickCREDIT may reasonably request. In the event that this Agreement shall be
terminated in accordance with Section 8 of this Agreement, QuickCREDIT shall
keep confidential, and not use in any manner, any information on documents
obtained from CBS pursuant to this Section 4.1. QuickCREDIT's investigation of,
or failure to investigate, the business and affairs of CBS at any time prior to
the Effective Date shall not for any purpose (i) diminish, obviate or otherwise
affect the representations and warranties of CBS and the Shareholders provided
in Section 2 of this Agreement or Triangle's or QuickCREDIT's right to rely upon
such representations and warranties or (ii) be deemed a waiver of or otherwise
affect in any way the rights of Triangle or QuickCREDIT set forth in Section 9
of this Agreement.
4.2 Operation of the Business of CBS. During the Pre-Closing Period, unless
Triangle and QuickCREDIT otherwise consent in writing:
(a) CBS shall conduct its business and operations in the ordinary course
and in substantially the same manner as such business and operations have been
conducted prior to the date of this Agreement;
(b) CBS shall use reasonable efforts to preserve intact its current
business organizations, keep available the services of its current officers and
employees and maintain its relations and goodwill with all suppliers, customers,
landlords, creditors, employees and other Persons having business relationships
with CBS;
(c) CBS shall keep in full force and effect all insurance policies
identified in Schedule 2.23 annexed hereto;
(d) CBS shall not declare, accrue, set aside or pay any dividend or make
any other distribution in respect of any shares of capital stock, and shall not
repurchase, redeem or otherwise reacquire any shares of capital stock or other
securities;
(e) CBS shall not sell, issue or authorize the issuance of (i) any capital
stock or other security, (ii) any option, call, warrant or right to acquire, or
relating to, any capital stock or other security, or (iii) any instrument
convertible into or exchangeable for any capital stock or other security;
(f) neither CBS nor any of the Shareholders shall amend or permit the
adoption of any amendment to CBS articles of incorporation or bylaws, or effect
or permit CBS to become a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(g) CBS shall not form any subsidiary or acquire any equity interest or
other interest in any other Entity;
(h) CBS shall not make any capital expenditure, except for capital
expenditures that, when added to all other capital expenditures made on behalf
of CBS during the Pre-Closing Period, do not exceed $5,000 in the aggregate;
(i) CBS shall not (i) enter into or become bound by, or permit any of the
assets owned or used by it to become bound by, any material Contract, or (ii)
amend or prematurely terminate, or waive any material right or remedy under, any
material Contract except as contemplated in Section 5.9 of this Agreement;
(j) CBS shall not, other than in the ordinary course of business consistent
with past practice (i) acquire, lease or license any right or other asset from
any other Person, (ii) sell or otherwise dispose of, or lease or license, any
right or other asset to any other Person, or (iii) waive or relinquish any
right, except for immaterial assets acquired, leased, licensed or disposed of by
CBS;
(k) CBS shall not (i) lend money to any Person, or (ii) incur or guarantee
any indebtedness, except that CBS may make routine borrowings in the ordinary
course of business under its respective existing lines of credit;
(l) CBS shall not (i) establish, adopt or amend any Plan, (ii) pay any
bonus or make any profit-sharing or similar payment to, or increase the amount
of the wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees, or (iii)
hire any new employee whose aggregate annual compensation is expected to exceed
$15,000;
(m) CBS shall not change any of its methods of accounting or accounting
practices in any respect;
(n) CBS shall not make any Tax election;
(o) CBS shall not commence or settle, whether or not commenced by CBS, any
Legal Proceeding;
(p) CBS shall not enter into any material transaction or take any other
material action outside the ordinary course of business or inconsistent with its
past practices; and
(q) CBS shall not agree or commit to take any of the actions described in
clauses "(d)" through "(p)" of this Section 4.2.
4.3 Notification; Updates to Schedules.
(a) During the Pre-Closing Period, CBS and the Shareholders shall promptly
notify QuickCREDIT in writing of:
(i) the discovery by CBS or the Shareholders of any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by CBS or any of the Shareholders in this
Agreement;
(ii) any event, condition, fact or circumstance that occurs, arises or
exists after the date of this Agreement and that would cause or constitute an
inaccuracy in or breach of any representation or warranty made by CBS or any of
the Shareholders in this Agreement if (A) such representation or warranty had
been made as of the time of the occurrence, existence or discovery of such
event, condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement;
(iii) any breach of any covenant or obligation of CBS or any of the
Shareholders; and
(iv) any event, condition, fact or circumstance that would make the timely
satisfaction of any of the conditions set forth in Section 6 or Section 7 of
this Agreement impossible or unlikely.
(b) If any event, condition, fact or circumstance that is required to be
disclosed pursuant to Section 4.3(a) of this Agreement requires any change in
any Schedule to this Agreement, or if any such event, condition, fact or
circumstance would require such a change assuming such Schedule were dated as of
the date of the occurrence, existence or discovery of such event, condition,
fact or circumstance, then CBS or the Shareholders shall promptly deliver to
QuickCREDIT an update to such Schedule specifying such change. No such update
shall be deemed to supplement or amend any Schedule for the purpose of (i)
determining the accuracy of any of the representations and warranties made by
CBS or any of the Shareholders in this Agreement, or (ii) determining whether
any of the conditions set forth in Section 6 of this Agreement has been
satisfied.
4.4 Pooling of Interests. Prior to the Closing, neither CBS nor any Shareholder
shall take any action which would have an adverse effect on the ability of
Triangle to account for the Merger as a "pooling of interests".
4.5 No Negotiation. During the Pre-Closing Period, neither CBS nor
any of the Shareholders shall, directly or indirectly:
(a) solicit or encourage the initiation of any inquiry, proposal or offer from
any Person (other than QuickCREDIT) relating to a possible Acquisition
Transaction;
(b) participate in any discussions or negotiations or enter into any agreement
with, or provide any non-public information to, any Person (other than
QuickCREDIT) relating to or in connection with a possible Acquisition
Transaction; or
(c) consider, entertain or accept any proposal or offer from any Person (other
than QuickCREDIT) relating to a possible Acquisition Transaction.
CBS shall promptly notify QuickCREDIT in writing of any inquiry, proposal or
offer relating to a possible Acquisition Transaction that is received by CBS or
any of the Shareholders during the Pre-Closing Period.
Section 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 Filings and Consents. As promptly as practicable after the execution of this
Agreement, each party to this Agreement (a) shall make all filings (if any) and
give all notices (if any) required to be made and given by such party in
connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use his, its or their best efforts to obtain each
Consent (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Merger or any of the other transactions contemplated by this Agreement. CBS
shall promptly deliver to QuickCREDIT a copy of each such filing made, each such
notice given and each such Consent obtained by CBS during the Pre-Closing
Period. QuickCREDIT shall promptly deliver to CBS a copy of each such filing
made, each such notice given and each such consent obtained by QuickCREDIT
during the Pre-Closing Period.
5.2 Public Announcements. During the Pre-Closing Period, (a) neither CBS nor any
of the Shareholders shall (and CBS shall not permit any of its Representatives
to) make any public statement regarding this Agreement or the Merger, or
regarding any of the other transactions contemplated by this Agreement, without
QuickCREDIT's prior written consent, and (b) QuickCREDIT will use reasonable
efforts to consult with CBS prior to issuing any press release or making any
public statement regarding the Merger.
5.3 Best Efforts. During the Pre-Closing Period, (a) CBS and the Shareholders
shall use their reasonable best efforts to cause the conditions set forth in
Section 6 of this Agreement to be satisfied on a timely basis, and (b)
QuickCREDIT shall use its reasonable best efforts to cause the conditions set
forth in Section 7 of this Agreement to be satisfied on a timely basis.
5.4 Employment Agreements. At the Closing, Steven P. Naimoli and Kim A. Naimoli
shall enter into employment agreements with the Surviving Corporation having
substantially the form as set forth in Exhibit D, attached hereto (the
"Employment Agreements").
5.5 Restrictive Covenants Agreements. At the Closing, Steven P. Naimoli and Kim
A. Naimoli shall enter into restrictive covenants agreements with the Surviving
Corporation having substantially the form as set forth in Exhibit E, attached
hereto (the "Restrictive Covenants Agreements").
5.6 Release. At the Closing, each of the Shareholders shall execute and deliver
to Triangle a Release in the form of Exhibit F attached hereto (the "Release").
5.7 Share Subscription Agreement. At the Closing, each of the Shareholders shall
execute and deliver to Triangle a Share Subscription Agreement in the form of
Exhibit G (the "Subscription Agreement").
5.8 Termination of Employee Plans. At the Closing, CBS shall terminate all Plans
under which any of its employees or former employees may have any rights, and
shall ensure that no employee or former employee of CBS has any rights
thereunder and that any liabilities of CBS thereunder (including any such
liabilities relating to services performed prior to the Closing) are fully
extinguished at no cost to CBS.
5.9 Lease Agreement. At the Closing, Steven P. Naimoli, Kim A. Naimoli and CBS
shall terminate any existing lease agreement between such parties respecting
that certain real property located at 3045 N. Federal Highway, Fort Lauderdale,
Florida 33306, and enter into a Lease Agreement in the form of Exhibit H (the
"Lease Agreement").
5.10 Payment of Notes; Guaranty. Steven P. Naimoli and Kim A. Naimoli covenant
and agree, jointly and severally, to make all payments of principal and
interest, when and as due, in accordance with the terms of that certain
promissory note dated October 4, 1994, in the original principal amount of
$200,000 (the "Promissory Note"), by and among William J. Tackett, Ethel K.
Tackett, CBS and Steven P. Naimoli, including, without limitation, any amount
due and payable monthly, any amount payable as a result of the acceleration of
the obligations due under the Promissory Note as a consequence of any default
thereunder, including any increase in the interest rate called for under the
Promissory Note and the costs of collection and reasonable attorneys fees
associated with any such default. Steven P. Naimoli and Kim A Naimoli further
covenant and agree to enter into a guarantee agreement in the form attached
hereto as Exhibit I (the "Guaranty") guaranteeing their obligations set forth in
this Section 5.11 and the obligations of the Surviving Corporation with respect
to the Promissory Note.
Section 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIANGLE, QUICKCREDIT AND
CAC
The obligations of Triangle, QuickCREDIT and CAC to effect the Merger
and otherwise consummate the transactions contemplated by this Agreement are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
6.1 Accuracy of Representations. Each of the representations and warranties made
by CBS and the Shareholders in this Agreement and in each of the other
agreements and instruments delivered to QuickCREDIT in connection with the
transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement, and shall be accurate in all
material respects as of the Closing Date as if made at the Closing Date (without
giving effect to any update to any Schedule to this Agreement).
6.2 Performance of Covenants. Each covenant or obligation that CBS or any of the
Shareholders is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects.
6.3 Consents. All Consents required to be obtained by CBS or the Shareholders in
connection with the Merger and the other transactions contemplated by this
Agreement shall have been obtained and shall be in full force and effect.
6.4 Agreements and Documents. QuickCREDIT shall have received the following
agreements and documents, each of which shall be in full force and effect:
(a) the Employment Agreements between each of Steven P. Naimoli and Kim A.
Naimoli and the Surviving Corporation;
(b) the Restrictive Covenants Agreements between each of Steven P. Naimoli
and Kim A. Naimoli and the Surviving Corporation;
(c) a Release, executed by each of the Shareholders;
(d) a Share Subscription Agreement, executed by each of the Shareholders;
(e) the Lease Agreement, executed by Steven P. Naimoli and Kim A. Naimoli;
(f) the Guaranty, executed by Steven P. Naimoli and Kim A. Naimoli;
(g) the Escrow Agreement executed by Steven P. Naimoli and Louis C.
Anderson, Esquire;
(h) a legal opinion of Louis C. Anderson, dated as of the Closing Date, in
the form of Exhibit J;
(i) a certificate executed by CBS and the Shareholders stating that each of the
representations and warranties set forth in Section 2 of this Agreement is
accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 6.1, 6.2, 6.3, 6.4
and 6.5 of this Agreement have been duly satisfied (the "CBS and Shareholders'
Closing Certificate"); and
(j) such other certified resolutions, documents or certificates as may be
reasonably requested by QuickCREDIT prior to the Closing Date.
6.5 No Material Adverse Change. There shall have been no material adverse change
in CBS business, condition, assets, liabilities, operations, financial
performance or prospects since the date of this Agreement.
6.6 Termination of Employee Plans. CBS shall have provided QuickCREDIT with
evidence, satisfactory to QuickCREDIT, as to the termination of the Plans
referred to in Section 2.10 of this Agreement.
6.7 Pooling Letter. Triangle shall have received evidence satisfactory to
Triangle or a letter from Mazars & Guerard, certified public accountants to
Triangle, dated the Closing Date, confirming that Triangle may account for the
Merger as a "pooling of interests" in accordance with generally accepted
accounting principles, Accounting Principles Board Opinion No. 16 and all
published rules, regulations and policies of the SEC.
6.8 Rule 506. All applicable requirements of Rule 506 under the Securities Act
shall have been satisfied.
6.9 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger shall have
been issued by any court of competent jurisdiction and remain in effect, and
there shall not be any Legal Requirement enacted or deemed applicable to the
Merger that makes consummation of the Merger illegal.
6.10 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by CBS of any material right pertaining to its ownership of stock
of the Surviving Corporation.
6.11 Completion of Due Diligence. QuickCREDIT shall have completed its due
diligence investigation of CBS and shall have been satisfied with the results
thereof.
6.12 Certificates of Merger. The parties shall have executed a Certificate of
Merger to be filed with the Secretary of State as contemplated in Section 1.3 of
this Agreement.
Section 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF CBS AND THE
SHAREHOLDERS
The obligations of CBS and the Shareholders to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of the following conditions:
7.1 Accuracy of Representations. Each of the representations and warranties made
by Triangle, QuickCREDIT and CAC in this Agreement and in each of the other
agreements and instruments delivered to CBS in connection with the transactions
contemplated by this Agreement shall have been accurate in all material respects
as of the date of this Agreement, and shall be accurate in all material respects
as of the Closing Date as if made at the Closing Date.
7.2 Performance of Covenants. All of the covenants and obligations that
Triangle, QuickCREDIT and CAC are required to comply with or to perform at or
prior to the Closing shall have been complied with and performed in all material
respects.
7.3 Consents. All Consents required to be obtained by Triangle, QuickCREDIT or
CAC in connection with the Merger and the other transactions contemplated by
this Agreement shall have been obtained and shall be in full force and effect.
7.4 Agreements and Documents. CBS and the Shareholders shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) a legal opinion of Smith, Gambrell & Russell, LLP in the form of
Exhibit K;
(b) a certificate executed by Triangle, QuickCREDIT and CAC stating that each of
the representations and warranties set forth in Section 3 of this Agreement are
accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 7.1, 7.2, 7.3 and 7.4
of this Agreement have been duly satisfied (the "Triangle Closing Certificate");
and
(c) such other certified resolutions, documents, or certificates as may be
reasonably requested by CBS prior to the Closing Date.
(d) a letter shall have been delivered to Securities Transfer Corp., the
transfer agent for Triangle (the "Transfer Agent") requesting that stock
certificates evidencing the shares of Triangle common stock to be delivered by
Triangle pursuant to Section 1.8 of this Agreement be issued in the name of each
of the Shareholders in the amount set forth in Section 1.8 of this Agreement.
7.5 Cash Consideration. The cash consideration to be paid to Shareholders at
Closing shall have been delivered to Shareholders.
7.6 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger by CBS shall
have been issued by any court of competent jurisdiction and remain in effect,
and there shall not be any Legal Requirement enacted or deemed applicable to the
Merger that makes consummation of the Merger by CBS illegal.
7.7 Certificates of Merger. The parties shall have executed a Certificate of
Merger to be filed with the Secretary of State as contemplated in Section 1.3 of
this Agreement.
Section 8. TERMINATION
8.1 Termination Events. This Agreement may be terminated prior to the Closing:
(a) by QuickCREDIT if QuickCREDIT reasonably determines that the timely
satisfaction of any condition set forth in Section 6 of this Agreement has
become impossible (other than as a result of any failure on the part of
Triangle, QuickCREDIT or CAC to comply with or perform any covenant or
obligation of Triangle, QuickCREDIT or CAC set forth in this Agreement), and
such condition has not been cured within ten (10) business days after receipt by
CBS of notice from QuickCREDIT of QuickCREDIT's intent to terminate this
Agreement;
(b) by CBS if CBS reasonably determines that the timely satisfaction of any
condition set forth in Section 7 of this Agreement has become impossible (other
than as a result of any failure on the part of CBS or any of the Shareholders to
comply with or perform any covenant or obligation set forth in this Agreement or
in any other agreement or instrument delivered to QuickCREDIT), and such
condition has not been cured within ten (10) business days after receipt by
QuickCREDIT of notice from CBS of CBS's intent to terminate this Agreement;
(c) by Triangle, QuickCREDIT or CAC at or after the Scheduled Closing Time if
any condition set forth in Section 6 of this Agreement has not been satisfied by
the Scheduled Closing Time;
(d) by CBS at or after the Scheduled Closing Time if any condition set forth in
Section 7 of this Agreement has not been satisfied by the Scheduled Closing
Time;
(e) by Triangle, QuickCREDIT or CAC if the Closing has not taken place on or
before May 31, 1998 (other than as a result of any failure on the part of
Triangle, QuickCREDIT or CAC to comply with or perform any covenant or
obligation of Triangle, QuickCREDIT or CAC set forth in this Agreement);
(f) by CBS if the Closing has not taken place on or before May 31, 1998 (other
than as a result of the failure on the part of CBS or any of the Shareholders to
comply with or perform any of their respective covenants or obligations set
forth in this Agreement or in any other agreement or instrument delivered to
Triangle, QuickCREDIT or CAC); or
(g) by the mutual consent of Triangle, QuickCREDIT, CAC and CBS.
8.2 Termination Procedures. If Triangle, QuickCREDIT or CAC wishes to terminate
this Agreement pursuant to Section 8.1(a), Section 8.1(c) or Section 8.1(e) of
this Agreement, Triangle, QuickCREDIT or CAC shall deliver to CBS a written
notice stating that Triangle, QuickCREDIT or CAC is terminating this Agreement
and setting forth a brief description of the basis on which Triangle,
QuickCREDIT or CAC is terminating this Agreement. If CBS wishes to terminate
this Agreement pursuant to Section 8.1(b), Section 8.1(d) or Section 8.1(f) of
this Agreement, CBS shall deliver to Triangle or QuickCREDIT a written notice
stating that CBS is terminating this Agreement and setting forth a brief
description of the basis on which CBS is terminating this Agreement.
8.3 Effect of Termination. If this Agreement is terminated pursuant to Section
8.1 of this Agreement, all further obligations of the parties under this
Agreement shall terminate; provided, however, that no party shall be relieved of
any obligation or liability arising from any prior breach by such party of any
provision of this Agreement.
Section 9. INDEMNIFICATION, ETC.
9.1 Survival of Representations and Warranties. All of the representations and
warranties of CBS, the Shareholders, Triangle, QuickCREDIT and CAC contained in
this Agreement shall survive the Closing.
9.2 Shareholders' Indemnity Agreement. Subject to Section 9.6 of this Agreement,
the Shareholders, jointly and severally, shall defend, indemnify and hold
harmless Triangle, QuickCREDIT and the Surviving Corporation (and their
respective directors, officers, employees, agents, affiliates, successors and
assigns) from and against any and all direct or indirect requests, demands,
claims, payments, defenses, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, liens, causes of action, suits,
proceedings, judgments, losses, Damages (including without limitation punitive,
exemplary or consequential damages, lost income and profits and interruptions of
business of the Surviving Corporation), liabilities, costs, and expenses of any
kind (including without limitation (i) interest, penalties and reasonable
attorneys' fees and expenses, (ii) attorneys' fees and expenses necessary to
enforce their rights to indemnification hereunder, and (iii) consultants' fees
and other costs of defending or investigating any claim hereunder), and interest
on any amount payable as a result of the foregoing, whether accrued, absolute,
contingent, known, unknown, or otherwise as of the Closing Date or thereafter
asserted against, imposed upon or incurred by Triangle, QuickCREDIT, the
Surviving Corporation or any of their respective directors, officers, employees,
agents, affiliates, successors or assigns (collectively, a "Loss of Triangle")
by reason of, resulting from, arising out of, based upon, awarded or asserted
against or otherwise in respect of:
(a) any period or periods of operation of CBS ending prior to the Closing and
which involve any claims against Triangle, QuickCREDIT, CAC, CBS, the Surviving
Corporation or their respective properties or assets, relating to actions or
inactions of CBS or its respective officers, directors, shareholders, employees
or agents prior to Closing, or the operation of the business of CBS prior to the
Closing unless such liability was disclosed on the CBS Financial Statements and
adequate reserves were established therefor;
(b) any breach of any representation and warranty contained in this Agreement or
any misrepresentation in or omission on the part of CBS or the Shareholders
contained in any certificate or other document furnished or to be furnished to
Triangle or QuickCREDIT by CBS or any of the Shareholders pursuant to this
Agreement;
(c) any breach or nonfulfillment on the part of CBS or any of the Shareholders
of any covenant contained in this Agreement;
(d) the failure of CBS or any of the Shareholders to obtain, prior to the
Closing Date, any consents of Governmental Bodies and other Persons as may be
necessary to permit the consummation of the Merger and to permit the Surviving
Corporation to continue to operate the business of CBS in the manner presently
conducted after the Closing Date;
(e) any federal, state, local or foreign taxes, including any interest and
penalties thereon, due from CBS or the Shareholders with respect to any period
prior to the Closing Date, other than amounts accrued therefor on CBS Financial
Statements.
9.3 Indemnity Agreement of QuickCREDIT and the Surviving Corporation.
QuickCREDIT and the Surviving Corporation shall, jointly and severally,
indemnify and hold harmless the Shareholders (and their respective successors
and assigns) from and against any and all direct or indirect requests, demands,
claims, payments, defenses, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, liens, causes of action, suits,
proceedings, judgments, losses, Damages (including without limitation punitive,
exemplary or consequential damages and lost income and profits and interruptions
of business), liabilities, costs, and expenses of any kind (including without
limitation (i) interest, penalties and reasonable attorneys' fees and expenses,
(ii) attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim hereunder, and interest on any amount
payable as a result of the foregoing) whether accrued, absolute, contingent,
known, unknown or otherwise as of the Closing Date or thereafter asserted
against, imposed upon or incurred by the Shareholders or their respective
representatives or assigns, (a "Loss of the Shareholders") by reason of,
resulting from, arising out of, based upon, awarded or asserted against in
respect of or otherwise in respect of:
(a) any period or periods of operation of the Surviving Corporation beginning
after the Closing and which involve any claims against the Shareholders or their
respective assets relating to actions or inactions of QuickCREDIT or the
Surviving Corporation or their respective officers, directors, shareholders,
employees or agents after the Closing, or the operation of the Surviving
Corporation after the Closing (except to the extent any of the foregoing arise
from the acts or omissions of the Shareholders); and
(b) any breach of any representation and warranty or nonfulfillment of any
covenant or agreement on the part of Triangle, QuickCREDIT or CAC contained in
this Agreement, or any misrepresentation in or omission from or nonfulfillment
of any covenant on the part of the Triangle, QuickCREDIT or CAC contained in any
certificate furnished or to be furnished to the Shareholders by Triangle,
QuickCREDIT or CAC pursuant to this Agreement.
9.4 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, the party to be indemnified hereunder (the
"Indemnitee") shall promptly notify the indemnifying party hereunder (the
"Indemnitor") in writing of any damage, claim, loss, liability or expense or
other matter which the Indemnitee has determined has given or could give rise to
a claim for which indemnification rights are granted hereunder (such written
notice referred to as the "Notice of Claim"). The Notice of Claim shall specify,
in all reasonable detail, the nature and estimated amount of any such claim
giving rise to a right of indemnification, to the extent the same can reasonably
be estimated. Any failure on the part of an Indemnitee to give timely notice to
the Indemnitor of a claim shall not affect the right of the Indemnitee to obtain
indemnification from the Indemnitor with respect to such claim unless the
Indemnitor is actually harmed by such failure to notify, and only to the extent
of such actual harm.
(b) With respect to any matter set forth in a Notice of Claim relating to a
third party claim the Indemnitor shall defend, in good faith and at its expense,
any such claim or demand, and the Indemnitee, at its expense, shall have the
right to participate in the defense of any such third party claim. So long as
Indemnitor is defending, in good faith, any such third party claim, the
Indemnitee shall not settle or compromise such third party claim. The Indemnitee
shall make available to the Indemnitor or its representatives all records and
other materials reasonably required by them for use in contesting any third
party claim and shall cooperate fully with the Indemnitor in the defense of all
such claims. If the Indemnitor does not defend any such third party claim or if
the Indemnitor does not provide the Indemnitee with prompt and reasonable
assurances that the Indemnitor will satisfy the third party claim, the
Indemnitee may, at its option, elect to defend any such third party claim, at
the Indemnitor's expense, but subject to the Indemnitor's right to assume such
defense from the Indemnitee at any time. An Indemnitor may not settle or
compromise any claim without obtaining a full and unconditional release of the
Indemnitee, unless the Indemnitee consents in writing to such settlement or
compromise. Notwithstanding the foregoing, if there is a reasonable probability
that a third party claim for which Triangle, QuickCREDIT or the Surviving
Corporation has indemnification rights against the Shareholders hereunder which
will materially and adversely affect Triangle, QuickCREDIT or the Surviving
Corporation other than as a result of money damages or other payments, Triangle,
QuickCREDIT or the Surviving Corporation shall be entitled to participate in the
defense of such claim at the Shareholders' expense.
9.5 Pledge of Stock as Security. As security for the payment of any and all sums
in respect of which the Shareholders may be liable pursuant to Section 9.2 of
this Agreement, the Shareholders agree to pledge 50,000 shares of Triangle
Common Stock to be held in escrow by the law firm of Louis C. Anderson, 224
Commercial Boulevard, Suite 310, Lauderdale-by-the-Sea, Florida 33308, with
Louis C. Anderson to act as the escrow agent therefor in accordance with the
terms of that certain Escrow Agreement attached hereto as Exhibit L.
9.6 Set-off. Triangle, QuickCREDIT and the Surviving Corporation shall have the
right to set-off and apply against the shares of Triangle Common Stock pledged
by the Shareholders pursuant to Section 9.5 of this Agreement and any other
amounts owing from Triangle, QuickCREDIT or the Surviving Corporation to the
Shareholders under any other agreement between Triangle, QuickCREDIT or the
Surviving Corporation and the Shareholders, all sums in respect of which the
Shareholders may be liable pursuant to Section 9.2 of this Agreement, such right
of set-off to be in addition to and not in lieu of or an election against any
and all other remedies available to Triangle, QuickCREDIT and the Surviving
Corporation under this Agreement or at law or in equity.
Section 10. MISCELLANEOUS PROVISIONS
10.1 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
10.2 Fees and Expenses. Subject to Section 9 of this Agreement, all fees, costs
and expenses (including legal fees and accounting fees) that have been incurred
or that are incurred in the future by each party in connection with the
transactions contemplated by this Agreement, including all fees, costs and
expenses incurred by such party in connection with or by virtue of (a) any
investigation and review conducted by such party of the other parties' business
(and the furnishing of information in connection with such investigation and
review), (b) the negotiation, preparation and review of this Agreement and all
agreements, certificates, opinions and other instruments and documents delivered
or to be delivered in connection with the transactions contemplated by this
Agreement, (c) the preparation and submission of any filing or notice required
to be made or given in connection with any of the transactions contemplated by
this Agreement, and the obtaining of any Consent required to be obtained in
connection with any of such transactions, and (d) the consummation of the Merger
shall be paid by Triangle, QuickCREDIT or CAC, if incurred by Triangle,
QuickCREDIT or CAC, and by the Shareholders, if incurred by CBS or the
Shareholders.
10.3 Attorneys' Fees. If any action or proceeding relating to this Agreement or
the enforcement of any provision of this Agreement is brought against any party
hereto, the prevailing party shall be entitled to recover reasonable attorneys'
fees, costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
10.4 Notices. All notices and other communications required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed to have been given only if and when (a) personally delivered, or (b)
three (3) business days after mailing, postage prepaid, by certified mail, or
(c) when delivered (and receipted for) by an overnight delivery service, or (d)
when first sent by e-mail, telecopier or other means of instantaneous
communication provided such communication is promptly confirmed by personal
delivery, mail or an overnight delivery service as provided above, addressed in
each case as follows:
if to Triangle, QuickCREDIT, CAC or the Surviving Corporation:
QuickCREDIT Corp.
4400 West Sample Road
Suite 228
Coconut Creek, Florida 33073
Attention: Van Saliba
Facsimile: (954) 975-7559
with a copy to:
Smith, Gambrell & Russell, LLP
Promenade II, Suite 3100
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309-3592
Attention: Peter B. Barlow, Esq.
Facsimile: (404) 685-6972
if to CBS :
Credit Bureau Services, Inc.
3045 N. Federal Highway
Suite 60
Fort Lauderdale, Florida 33306
Attention: Steven P. Naimoli
Facsimile: (954) ________
with a copy to:
Louis C. Anderson, Esquire
224 Commercial Boulevard, Suite 310
Lauderdale-by-the-Sea, Florida 33308
Facsimile: (954) 491-3739
if to the Shareholders:
Steven P. Naimoli and Kim A. Naimoli
1400 Dayview Drive
Ft. Lauderdale, Florida 33304
10.5 Time of the Essence. Time is of the essence of this Agreement.
10.6 Headings. The bold-faced Section headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
10.7 Counterparts. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
10.8 Governing Law. This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Florida.
10.9 Successors and Assigns. This Agreement shall be binding upon: CBS and its
successors and assigns (if any); the Shareholders and their respective personal
representatives, executors, administrators, estates, heirs, successors and
assigns (if any); Triangle and its successors and assigns (if any); QuickCREDIT
and its successors and assigns (if any); and CAC and its successors and assigns
(if any). This Agreement shall inure to the benefit of: CBS, the Shareholders,
Triangle, QuickCREDIT, CAC and the respective successors, heirs personal
representatives and assigns (if any) of the foregoing. Following the Merger,
Triangle, QuickCREDIT and CAC may freely assign any or all of their respective
rights under this Agreement (including their indemnification rights under
Section 9 of this Agreement), in whole or in part, to any other Person without
obtaining the consent or approval of any other party hereto or of any other
Person; provided, however, that no assignment by Triangle, QuickCREDIT or CAC of
any or all of their respective rights under this Agreement shall relieve
Triangle, QuickCREDIT or CAC of any of their respective obligations under this
Agreement (including any indemnification obligation under Section 9 of this
Agreement).
10.10 Remedies Cumulative; Specific Performance. The rights and remedies of the
parties hereto shall be cumulative (and not alternative). The parties to this
Agreement agree that, in the event of any breach or threatened breach by any
party to this Agreement of any covenant, obligation or other provision set forth
in this Agreement for the benefit of any other party to this Agreement, such
other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
10.11 Waiver.
(a) No failure on the part of any party to exercise any power, right, privilege
or remedy under this Agreement, and no delay on the part of any party in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.
(b) No party shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
10.12 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
10.13 Severability. In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of circumstances, shall
be determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent permitted by
law.
10.14 Parties in Interest. Except for the provisions of Section 9 of this
Agreement, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective successors, heirs, personal representatives and assigns (if any).
10.15 Entire Agreement. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties hereto relating to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, written or oral, among or between any of the parties relating to
the subject matter hereof and thereof.
10.16 Construction.
(a) For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to
"Sections," "Exhibits" and "Schedules" are intended to refer to Sections,
Exhibits and Schedules to this Agreement. All Schedules and Exhibits are
integral parts of this Agreement and are incorporated into this Agreement by
reference.
<PAGE>
The parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.
"TRIANGLE"
TRIANGLE IMAGING GROUP, INC.
__________________________________________________
By: Vito A. Bellezza
Title: Chairman of the Board and
Chief Executive Officer
"QUICKCREDIT"
QUICKCREDIT CORP.
__________________________________________________
By: Van Saliba
Title: President
"CAC"
CBS ACQUISITION CORP.
__________________________________________________
By: Van Saliba
Title: President
"CBS"
CREDIT BUREAU SERVICES, INC.
__________________________________________________
By: Steven P. Naimoli
Title: President
THE "SHAREHOLDERS"
____________________________________________(SEAL)
Steven P. Naimoli
____________________________________________(SEAL)
Kim A. Naimoli
<PAGE>
EXHIBIT A
SHAREHOLDERS OF CREDIT BUREAU SERVICES, INC.
Shareholder Number and Class of Shares Owned
Steven P. Naimoli 500 shares of CBS Common Stock
Kim A. Naimoli 500 shares of CBS Common Stock
<PAGE>
EXHIBIT B
CERTAIN DEFINITIONS USED IN THIS AGREEMENT
For purposes of the Agreement (including this Exhibit B):
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale, license, disposition or acquisition of all or a material
portion of CBS's business or assets;
(b) the issuance, disposition or acquisition of (i) any capital stock
or other equity security of CBS; (ii) any option, call, warrant or right
(whether or not immediately exercisable) to acquire, or otherwise relating to,
any capital stock or other equity security of CBS; or (iii) any security,
instrument or obligation that is or may become convertible into or exchangeable
for any capital stock or other equity security of CBS; or
(c) any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving CBS.
Affiliate. "Affiliate" shall have the meaning specified in Section
2.15(a)(i) of this Agreement.
Affiliate Plan. "Affiliate Plan" shall have the meaning specified in
Section 2.22(b) of this Agreement.
Agreement. "Agreement" shall mean the Agreement and Plan of Merger to which
this Exhibit B is attached (including all Exhibits and Schedules), as it may be
amended from time to time.
Associate. "Associate" shall have the meaning specified in Section
2.15(a)(i) of this Agreement.
Balance Sheet Date. "Balance Sheet Date" shall have the meaning specified
in Section 2.8(a)(ii) of this Agreement.
Certificate of Merger. "Certificate of Merger" shall have the meaning
specified in Section 1.3 of this Agreement.
Closing. "Closing" shall have the meaning specified in Section 1.3 of this
Agreement.
Closing Date. "Closing Date" shall have the meaning specified in Section
1.3 of this Agreement.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
CBS Common Stock. "CBS Common Stock" shall have the meaning specified in
the Recitals to this Agreement.
CBS Documents. "CBS Documents" shall mean this Agreement and the other
documents and agreements required to be executed and delivered by CBS hereunder.
CBS Financial Statements. "CBS Financial Statements" shall have the meaning
specified in Section 2.8(a) of this Agreement.
CBS and Shareholders' Closing Certificate. "CBS and Shareholders'
Closing Certificate" shall have the meaning specified in Section 6.4(i) of this
Agreement.
CBS Stock Certificate. "CBS Stock Certificate" shall have the meaning
specified in Section 1.6 of this Agreement.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking of
any nature.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
Effective Time. "Effective Time" shall have the meaning specified in
Section 1.3 of this Agreement.
Employment Agreements. "Employment Agreements" shall have the meaning
specified in Section 5.4 of this Agreement.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security), any restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Environmental Law. "Environmental Law" shall have the meaning specified in
Section 2.24(d) of this Agreement.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
ERISA Affiliate. "ERISA Affiliate" shall have the meaning specified in
Section 2.22(b) of this Agreement.
FBCA. "FBCA" shall mean the Florida Business Corporation Act.
Fixed Assets. "Fixed Assets" shall have the meaning specified in Section
2.18 of this Agreement.
Governmental Body. "Governmental Body" shall mean any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city, local or other political subdivision.
Guaranty. "Guaranty" shall have the meaning specified in Section 5.11 of
this Agreement.
Hazardous Material. "Hazardous Material" shall have the meaning specified
in Section 2.24(d) of this Agreement.
Hazardous Waste. "Hazardous Waste" shall have the meaning specified in
Section 2.24(d) of this Agreement.
Indemnitor. "Indemnitor" shall have the meaning specified in Section 9.4(a)
of this Agreement.
Indemnitee. "Indemnitee" shall have the meaning specified in Section 9.4(a)
of this Agreement.
Intellectual Property. "Intellectual Property" shall have the meaning
specified in Section 2.19 of this Agreement.
Investment Letter. "Investment Letter" shall have the meaning specified in
Section 5.7 of this Agreement.
Lease Agreement. "Lease Agreement" shall have the meaning specified in
Section 5.10 of this Agreement.
Leases. "Leases" shall have the meaning specified in Section 2.16 of this
Agreement.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitute, principle of common
law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body.
Loss of the Shareholders. "Loss of the Shareholders" shall have the meaning
specified in Section 9.3 of this Agreement.
Loss of Triangle. "Loss of Triangle" shall have the meaning specified in
Section 9.2 of this Agreement.
Material Adverse Effect. A violation or other matter will be deemed to
have a "Material Adverse Effect" on CBS if such violation or other matter
(considered together with all other matters that would constitute exceptions to
the representations and warranties set forth in the Agreement or in CBS's and
Shareholders' Closing Certificate but for the presence of "Material Adverse
Effect" or other materiality qualifications, or any similar qualifications, in
such representations and warranties) would have a material adverse effect on
CBS's business, condition, assets, liabilities, operations, financial
performance or prospects.
Merger. "Merger" shall have the meaning specified in the Recitals to this
Agreement.
Merger Consideration. "Merger Consideration" shall have the meaning
specified in Section 1.8 of this Agreement.
Notice of Claim. "Notice of Claim" shall have the meaning specified in
Section 9.4(a) of this Agreement.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Permit. "Permit" shall have the meaning specified in Section 2.27 of this
Agreement.
Permitted Liens. "Permitted Liens" shall have the meaning specified in
Section 2.13 of this Agreement.
Plan. "Plan" shall have the meaning specified in Section 2.22(a) of this
Agreement.
Pre-Closing Period. "Pre-Closing Period" shall have the meaning specified
in Section 4.1 of this Agreement.
Release. "Release" shall have the meaning specified in Section 5.6 of this
Agreement.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accounts, advisors and representatives.
Restrictive Covenants Agreement. "Restrictive Covenants Agreement" shall
have the meaning specified in Section 5.5 of this Agreement.
Scheduled Closing Time. "Scheduled Closing Time" shall have the meaning
specified in Section 1.3 of this Agreement.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
Secretary of State. "Secretary of State" shall have the meaning specified
in Section 1.3 of this Agreement.
Securities Act. "Securities Act" shall mean the Securities Act of 1933.
Share Subscription Agreement. "Share Subscription Agreement" shall have the
meaning specified in Section 5.7 of this Agreement.
Shareholder Documents. "Shareholder Documents" shall mean this Agreement
and the other documents and agreements required to be executed and delivered by
the Shareholders hereunder.
Escrow Agreement. "Escrow Agreement" shall have the meaning specified in
Section 9.5 of this Agreement.
Surviving Corporation. "Surviving Corporation" shall have the meaning
specified in Section 1.1 of the Agreement.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
Triangle Common Stock. "Triangle Common Stock" shall have the meaning
specified in Section 1.7(b) of this Agreement.
Triangle Closing Certificate. "Triangle Closing Certificate" shall have the
meaning specified in Section 7.4(b) of this Agreement.
Triangle Documents. "Triangle Documents" shall mean this Agreement and the
other documents and agreements required to be executed and delivered by Triangle
or CAC hereunder.
Triangle SEC Documents. "Triangle SEC Documents" shall have the meaning
specified in Section 3.5(a) of this Agreement.
Unaudited Balance Sheet. Unaudited Balance Sheet shall have the meaning
specified in Section 2.8(a)(ii) of this Agreement.
<PAGE>
EXHIBIT C
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
1. Directors:
Vito A. Bellezza
2. Officers:
President: Van Saliba
Secretary: Harold S. Fischer
<PAGE>
EXHIBIT D
FORM OF EMPLOYMENT AGREEMENT WITH
STEVEN P. NAIMOLI AND KIM A. NAIMOLI
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 30th day of April, 1998, by and between CBS ACQUISITION CORP., a
Florida corporation (the "Company"), and KIM A. NAIMOLI, an individual resident
of the State of Florida ("Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to that certain Agreement
and Plan of Merger and Reorganization, dated as of April 30, 1998 (the "Merger
Agreement"), which contemplates the execution of this Agreement; and
WHEREAS, the Company desires to retain Employee, and Employee desires
to be retained by the Company, all in accordance with the terms and conditions
of the Merger Agreement and as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises,
covenants and agreements set forth herein and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions set forth in this Agreement, the Company
shall employ Employee, and Employee shall serve the Company as Sales Executive.
Employee shall report to, and be subject to the supervisory authority of the
chief executive officer (the "CEO") of the Company or such other person as the
CEO may designate.
(b) At all times during the term hereof, Employee shall, for the benefit of the
Company, use her skills, knowledge and specialized training to perform the
duties and exercise the powers, functions and discretions incident to her
position as Sales Executive (including preserving the Company's current base of
clients) or which from time to time, consistent with such position may be
assigned to or vested in her by the CEO or board of directors of the Company
(the "Board"), in an efficient and competent manner and on such terms and
subject to such restrictions as the CEO or the Board may from time to time
reasonably impose.
(c) At all times during the term hereof, Employee shall during normal working
hours, devote such time and attention as are reasonably necessary to her duties
hereunder (reasonable vacation time and absence for sickness or similar
disability excepted).
2. Term. The term of this Agreement shall begin as of the date hereof
(the "Effective Date") and shall end on the second anniversary date following
the Effective Date unless terminated earlier as provided in this Agreement.
Following expiration of the initial term, this Agreement shall continue on a
month-to-month basis, terminable by either party with or without cause upon
thirty (30) days written notice to the other party.
3. Compensation.
(a) Subject to the terms of this Agreement, as base
compensation for Employee's services, the Company shall pay Employee an annual
salary of not less than $36,000 per year. Employee's base salary shall be
payable to Employee on the regularly reoccurring pay period established by the
Company, but not less than monthly. Said salary may be increased, in the
Company's discretion, based upon Employee's performance, industry standards and
other factors the Company deems relevant. In addition to Employee's base
compensation, the Company shall pay Employee commission income based on certain
production levels established by the Company as set forth on Exhibit "A"
attached hereto and made a part hereof. Employee's base salary and commission
income shall be subject to all required withholdings.
(b) In addition to the salary described in subsection 3(a)
above, Employee shall be entitled to reimbursement by the Company for all
actual, reasonable and direct expenses incurred by her in the performance of her
duties hereunder, provided such expenses (i) are business expenses that are
properly tax deductible for the Company (ii) were pre-approved by an appropriate
officer of the Company and (iii) were otherwise incurred in accordance with the
policies and procedures established by the Company from time to time. Employee
shall provide the Company with written documentation of any expenses submitted
for reimbursement as required by Company policy, and reimbursement for each item
of approved expense shall be made within a reasonable time.
4. Employment Benefits.
(a) Employee shall have the right to participate in any and
all employee benefit programs established or maintained by the Company from time
to time for its employees generally, in accordance with the terms and conditions
of such employee benefit programs. The Company reserves the right, in its sole
discretion, to alter, amend or discontinue any of such employee benefit programs
at any time.
(b) Employee acknowledges that the Company may adopt employee
handbooks, policies and procedures from time to time and Employee agrees to
adhere to the terms of any handbook, policy or procedures which the Company may
adopt. The Company reserves the right, in its sole discretion, to alter, amend
or terminate any handbook, policy or procedure.
(c) Employee shall also be entitled to company benefits and
vacation days set forth on Exhibit "B" attached hereto and made a part hereof.
5. Termination of Employment.
(a) If the Company terminates Employee's employment With Cause (as hereinafter
defined), all obligations of Company to provide compensation and benefits under
this Agreement shall cease as of the effective date of, and Employee shall have
no claim against the Company for damages or otherwise by reason of, such
termination.
(b) If during the initial two-year term of this Agreement, the Company
terminates Employee's employment Without Cause (as hereinafter defined), then
Employee will be entitled to continue to receive Employee's salary on the
regularly reoccurring pay period of the Company until the end of the second
anniversary of the Effective Date ("Post-termination Compensation") as
liquidated damages and in lieu of any other compensation or claims in connection
with such termination or Employee's employment with the Company; provided,
however, that the Company may, in its sole discretion, elect to pay Employee's
post-termination Compensation in one payment. Provided, further, that Employee's
Post-termination Compensation shall cease to accrue and Employee shall have no
further entitlement to the same from and after the earlier of the Employee's
death, or the date of a material breach by Employee of any of the
post-employment covenants set forth in this Agreement or of any of the
representations, warranties and covenants of Employee contained in the Merger
Agreement which breach results in any harm, loss or expense, whether direct or
indirect, to the Company. The Company may condition payment of Post-termination
Compensation, whether such payments are made in accordance with the Company's
regularly reoccurring pay schedule or are paid in a single payment, upon
Employee's execution of an unconditional release in favor of the Company.
(c) "With Cause" means the termination of employment resulting from:
(i) any act or omission which constitutes a material breach by Employee of her
obligations under this Agreement or of the representations, warranties and
covenants under the Merger Agreement which results in any harm, cost or expense,
whether direct or indirect, to the Company;
(ii) the conviction of Employee in a court of competent jurisdiction of a felony
or any crime involving moral turpitude, fraud or dishonesty;
(iii) the perpetration by Employee of any act of material misconduct or
dishonesty whether relating to the Company, the Company's employees or
otherwise, including, without limitation, entering into any secret agreement,
orally or in writing, with a competitor of the Company or with a client of the
Company;
(iv) the use of illegal drugs by the Employee, or drunkenness or substance abuse
by the Employee which interferes with the performance of her duties hereunder;
(v) gross incompetence on the part of Employee in the performance of her
duties hereunder;
(vi) Employee's failure, refusal or inability to follow any lawful directives of
the Board, the CEO or any person designated by the CEO to serve as Employee's
supervisor;
(vii) taking secret charges on transactions between the Company and third
parties; or
(viii) any other act or omission (other than an act or omission resulting from
the exercise by Employee of good faith business judgment) which materially
impairs the financial condition or business reputation of the Company.
Prior to the Company's termination of Employee "With Cause", the
Company shall give Employee written notice of any violation by Employee of any
of the provisions of this Section 5(c) after the receipt of which Employee shall
have 20 days to cure or correct such violation.
(d) "Without Cause" means the termination of employment resulting from any
reason other than those enumerated in subsection (c) above.
(e) Employee may terminate her employment hereunder by giving 60 days written
notice to President of Company and her compensation shall be paid through the
date of termination.
(f) Any termination hereunder shall be communicated by written notice to the
other party which shall indicate the specific termination provisions in the
Contract relied upon and shall set forth in reasonable detail the facts and
circumstance claimed to provide the basis for termination of employment.
6. Final Settlement and Effect of Termination.
(a) Upon termination of this Agreement and payment to Employee of all amounts
due Employee hereunder, Employee or her representative shall execute and deliver
to the Company, on a form prepared by the Company and reasonably acceptable to
Employee's attorney, if any, a receipt for such sums and a release of all claims
for payment due pursuant to this Agreement, except such claims as may have been
submitted pursuant to the terms of this Agreement and which remain unpaid.
(b) The provisions of this Agreement shall survive the termination of this
Agreement and the termination of Employee's employment with the Company to the
extent required to give full effect to the covenants and agreements contained
herein.
7. Confidentiality.
(a) Employee agrees that, both during the term of her employment and after the
termination of her employment for any reason, Employee shall not directly or
indirectly use or disclose, except as authorized by the Company in connection
with the performance of Employee's duties, any Confidential Information, as
defined hereinafter, that Employee may have or acquire (whether or not developed
or compiled by Employee and whether or not Employee has been authorized to have
access to such Confidential Information) during the term of this Agreement. The
term "Confidential Information" as used in this Agreement shall mean and include
any information, data and know-how relating to the business of the Company that
is disclosed to Employee by the Company or known by her as a result of her
relationship with the Company and not within the public domain (whether
constituting a trade secret or not), including without limitation, the following
information:
(i) financial information, such as Company's earnings, assets, debts, prices,
fee structure, volumes of purchases or sales or other financial data, whether
relating to Company generally, or to particular products, services, geographic
areas, or time periods;
(ii) marketing information, such as details about ongoing or proposed marketing
programs or agreements by or on behalf of Company, marketing forecasts or
results of marketing efforts or information about impending transactions;
(iii) intellectual property information, such as formulas, design details or
parameters, software source code, proprietary programs, devises, techniques and
processes, ongoing or planned activities in intellectual property development,
ongoing or planned joint venture activities, and licensing terms or conditions;
(iv) personnel information, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed promotions,
hiring, resignations, disciplinary actions, terminations or reasons therefor,
training methods, performance, or other employee information;
(v) customer information, such as any compilation of past, existing or
prospective customers, customer proposals or agreements between customers and
Company, status of customer accounts or credit, or related information about
actual or prospective customers; or
(vi) information with respect to any customer affairs that the Company
agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenant contained in this Section 7 shall survive the termination of
Employee's employment with the Company for any reason for a period of two (2)
years; provided, however, that with respect to those items of Confidential
Information which constitute trade secrets under applicable law, Employee's
obligations of confidentiality and non-disclosure as set forth in this Section 7
shall continue to survive after such two (2) year period for as long as such
items remain trade secrets under applicable law. These rights of the Company are
in addition to those rights the Company has under the common law or applicable
statutes for the protection of trade secrets.
8. Rights to Materials. All records, files, memoranda, reports, price lists,
customer lists, drawings, plans, sketches, documents and the like (together with
all copies thereof) relating to the business of the Company, which Employee
shall use or prepare or come in contact with in the course of, or as a result
of, her employment shall, as between the parties hereto, remain the sole
property of the Company. Upon the termination of her employment or upon the
prior demand of the Company, she shall immediately return all such materials and
shall not thereafter cause removal thereof from the premises of the Company.
9. Works Made for Hire. The Company and Employee acknowledge that in the course
of Employee's employment by the Company, Employee may from time to time create
for the Company copyrightable works. Such works may consist of manuals,
pamphlets, instructional materials, computer programs, films, tapes or other
copyrightable material, or portions thereof, and may be created within or
without the Company's facilities and before, during or after normal business
hours. All such works related to or useful in the business of the Company are
specifically intended to be works made for hire and shall be the property of the
Company, and Employee shall cooperate with the Company in the protection of the
Company's copyrights therein and, to the extent deemed desirable by the Company,
the registration of such copyrights.
10. Discoveries. Employee agrees that any inventions, discoveries or
improvements that Employee may develop or conceive during the course of
Employee's employment shall be the sole property of the Company. Employee agrees
to promptly disclose to the Company in writing all such inventions, discoveries
and improvements, whether directly or indirectly related to the business of the
Company or whether made solely by the Employee or in conjunction with others. At
the Company's request and expense, both during and after Employee's employment,
Employee will promptly execute a specific assignment of title to the Company (or
any specified member thereof) of each invention, discovery or improvement
described in the preceding paragraph, and perform all other acts reasonably
necessary to enable the Company to secure a patent therefor in the United States
and in foreign countries and to maintain, defend and assert such patents. This
obligation shall survive the termination or expiration of this Agreement.
11. Severability. Except as noted below, should any provision of this Agreement
be declared or determined by any court of competent jurisdiction to be
unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the
invalid or unenforceable part, term or provision shall be deemed not to be a
part of this Agreement. The covenants set forth in this Agreement are to be
reformed pursuant to Section 12 if held to be unreasonable or enforceable, in
whole or in part, and, as written and as reformed, shall be deemed to be part of
this Agreement.
12. Reformation. If any of the covenants or promises of this Agreement are
determined by any court of law or equity, with jurisdiction over this matter, to
be overly broad and therefore unenforceable, in whole or in part, as written,
Employee hereby consents to and affirmatively requests that said court narrow
the scope of the covenant or promise so as to be reasonable and enforceable and
that said court enforce the covenant or promise as so reformed.
13. Injunctive Relief. Employee understands, acknowledges and agrees that in the
event of a breach or threatened breach of any of the covenants and promises
contained in Sections 7, 8, 9 and 10, the Company will suffer irreparable injury
for which there is no adequate remedy at law and the Company will therefore be
entitled to injunctive relief enjoining said breach or threatened breach.
Employee further acknowledges, however, that the Company shall have the right to
seek a remedy at law as well as or in lieu of equitable relief in the event of
any such breach.
14. Assignment. This Agreement is a contract for personal services and shall not
be assigned by the Company or Employee in any manner or by operation of law
except by mutual written consent of the parties hereto; provided, however, that
this restriction against assignment shall not preclude assignment by the Company
without the consent of Employee as a result of a merger into, consolidation
with, or sale of substantially all of the assets of the Company to another
entity. The terms and provisions of this Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns, and upon
Employee and her heirs and personal representatives. The term "Company" as used
in this Agreement shall be deemed to include the successors and assigns of the
original or any subsequent entity constituting the Company as well as any and
all divisions, subsidiaries, or affiliates thereof.
15. Waiver. The waiver by any party to this Agreement of a breach of any of the
provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent or simultaneous breach.
16. Applicable Law. This Agreement shall be governed by, interpreted and
construed under the internal laws of the State of Florida without reference to
its conflict of laws principles.
17. Headings and Captions. The headings and captions used in this Agreement are
for convenience of reference only, and shall in no way define, limit, expand or
otherwise affect the meaning or construction of any provision of this Agreement.
18. Notice. Any notice required or permitted to be given pursuant to this
Agreement shall be deemed sufficiently given when delivered in person or when
deposited, properly addressed, in the United States mail, first class postage
prepaid, return receipt requested.
19. Gender. All pronouns or any variations thereof contained in this Agreement
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.
20. Entire Agreement. This Agreement constitutes the entire agreement between
the Company and Employee with respect to the subject matter of this Agreement
and supersedes any prior agreements or understandings between the Company and
Employee with respect to such subject matter. No amendment or waiver of this
Agreement or any provision hereof shall be effective unless in writing signed by
both of the parties. Notwithstanding the foregoing, Employee acknowledges that
she is entering into this Agreement in connection with the acquisition of Credit
Bureau Services, Inc. ("CBS"), by the Company pursuant to the Merger Agreement,
to which Employee is a party. In the event of any direct or irreconcilable
conflict between this Agreement and the Merger Agreement, the Merger Agreement
shall control.
21. Termination of Merger Agreement. In the event the Merger Agreement is
terminated in accordance with its terms prior to consummation of the Merger,
this Agreement shall be null and void.
IN WITNESS WHEREOF, the Company and Employee have caused this Agreement
to be executed, under seal, as of the date and year first above written.
"COMPANY"
CBS ACQUISITION CORP.
a Florida corporation
By:__________________________________
Name: Van Saliba
Title: President
[CORPORATE SEAL]
"EMPLOYEE"
_______________________________(L.S.)
KIM A. NAIMOLI
<PAGE>
EXHIBIT "A"
QuickCREDIT Corp.
COMMISSION PLAN - FISCAL YEAR 1998
The following is the commission plan for QuickCREDIT Corp., for fiscal year
1998. Executive Management reserves the right to change or alter any of the
published rates at any time during the fiscal year. Commissions will be
payable in the month following the accepted transaction.
1. For the sale of infile Credit Reporting, the commission rate is 8% per credit
report for all credit reports sold above the minimum approved level of
individual single, double, or triple merge.
2. For the sale of an RMCR, at $50,00 per RMCR or higher, the commission rate is
10% per RMCR, which is payable after the month ending the net billing to that
client.
3. For All contracts which are received, executed and delivered upon during
Calendar Year/Fiscal Year 1998, a minimum of six(6) months commission will be
paid on those transactions.
______________________________________ ____________________________________
QuickCREDIT Corp. Sales Executive
_________________ _________________
Date Date
<PAGE>
EXHIBIT "B"
COMPANY BENEFITS
The normal benefits enjoyed by all Triangle employees, including life,
medical, dental, disability insurance and participation in the Triangle 401(k)
Plan.
<PAGE>
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of the 30th day of April, 1998, by and between CBS ACQUISITION CORP., a Florida
corporation (the "Company"), and STEVEN P. NAIMOLI, an individual resident of
the State of Florida ("Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to that certain Agreement
and Plan of Merger and Reorganization, dated as of April 30, 1998 (the "Merger
Agreement"), which contemplates the execution of this Agreement; and
WHEREAS, the Company desires to retain Employee, and Employee desires to
be retained by the Company, all in accordance with the terms and conditions of
the Merger Agreement and as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises,
covenants and agreements set forth herein and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions set forth in this Agreement, the Company
shall employ Employee, and Employee shall serve the Company as office manager.
Employee shall report to, and be subject to the supervisory authority of the
chief executive officer (the "CEO") of the Company or such other person as the
CEO may designate.
(b) At all times during the term hereof, Employee shall, for the benefit of the
Company, use his skills, knowledge and specialized training to perform the
duties and exercise the powers, functions and discretions incident to his
position as office manager (including preserving the Company's current base of
clients) or which from time to time, consistent with such position may be
assigned to or vested in him by the CEO or board of directors of the Company
(the "Board"), in an efficient and competent manner and on such terms and
subject to such restrictions as the CEO or the Board may from time to time
reasonably impose.
(c) At all times during the term hereof, Employee shall during normal working
hours, devote such time and attention as are reasonably necessary to his duties
hereunder (reasonable vacation time and absence for sickness or similar
disability excepted).
2. Term. The term of this Agreement shall begin as of the date hereof
(the "Effective Date") and shall end on the second anniversary date following
the Effective Date unless terminated earlier as provided in this Agreement.
Following expiration of the initial term, this Agreement shall continue on a
month-to-month basis, terminable by either party with or without cause upon
thirty (30) days written notice to the other party.
3. Compensation.
(a) Subject to the terms of this Agreement, as base compensation
for Employee's services, the Company shall pay Employee an annual salary of not
less than $60,000 per year. Employee's base salary shall be payable to Employee
on the regularly reoccurring pay period established by the Company, but not less
than monthly. Said salary may be increased, in the Company's discretion, based
upon Employee's performance, industry standards and other factors the Company
deems relevant. In addition to Employee's base compensation, the Company shall
pay Employee a bonus upon the satisfaction of the criteria set forth on and in
accordance with Exhibit "A" attached hereto. Employee's base salary and bonus
shall be subject to all required withholdings.
(b) In addition to the salary described in subsection 3(a)
above, Employee shall be entitled to reimbursement by the Company for all
actual, reasonable and direct expenses incurred by him in the performance of his
duties hereunder, provided such expenses (i) are business expenses that are
properly tax deductible for the Company (ii) were pre-approved by an appropriate
officer of the Company and (iii) were otherwise incurred in accordance with the
policies and procedures established by the Company from time to time. Employee
shall provide the Company with written documentation of any expenses submitted
for reimbursement as required by Company policy, and reimbursement for each item
of approved expense shall be made within a reasonable time.
4. Employment Benefits.
(a) Employee shall have the right to participate in any and all
employee benefit programs established or maintained by the Company from time to
time for its employees generally, in accordance with the terms and conditions of
such employee benefit programs. The Company reserves the right, in its sole
discretion, to alter, amend or discontinue any of such employee benefit programs
at any time.
(b) Employee acknowledges that the Company may adopt employee
handbooks, policies and procedures from time to time and Employee agrees to
adhere to the terms of any handbook, policy or procedures which the Company may
adopt. The Company reserves the right, in its sole discretion, to alter, amend
or terminate any handbook, policy or procedure.
(c) Employee shall also be entitled to company benefits and
vacation days set forth on Exhibit "B" attached hereto and made a part hereof.
5. Termination of Employment.
(a) If the Company terminates Employee's employment With Cause
(as hereinafter defined), all obligations of Company to provide compensation and
benefits under this Agreement shall cease as of the effective date of, and
Employee shall have no claim against the Company for damages or otherwise by
reason of, such termination.
(b) If during the initial two-year term of this Agreement, the
Company terminates Employee's employment Without Cause (as hereinafter defined),
then Employee will be entitled to continue to receive Employee's salary and
bonus on the regularly reoccurring pay period of the Company until the end of
the second anniversary of the Effective Date ("Post-termination Compensation")
as liquidated damages and in lieu of any other compensation or claims in
connection with such termination or Employee's employment with the Company;
provided, however, that the Company may, in its sole discretion, elect to pay
Employee's post-termination Compensation in one payment. Provided, further, that
Employee's Post-termination Compensation shall cease to accrue and Employee
shall have no further entitlement to the same from and after the earlier of
0.(i) the Employee's death, or 0.(ii) the date of a material breach by Employee
of any of the post-employment covenants set forth in this Agreement or of any of
the representations, warranties and covenants of Employee contained in the
Merger Agreement which breach results in any harm, cost or expense, whether
direct or indirect, to the Company. The Company may condition payment of
Post-termination Compensation, whether such payments are made in accordance with
the Company's regularly reoccurring pay schedule or are paid in a single
payment, upon Employee's execution of an unconditional release in favor of the
Company.
(c) "With Cause" means the termination of employment resulting
from:
(i) any act or omission which constitutes a material breach by Employee of
his obligations under this Agreement or of the representations, warranties
and covenants under the Merger Agreement which results in any harm, cost or
expense, whether direct or indirect, to the Company;
(ii) the conviction of Employee in a court of competent jurisdiction of a
felony or any crime involving moral turpitude, fraud or dishonesty;
(i) the perpetration by Employee of any act of material misconduct or dishonesty
whether relating to the Company, the Company's employees or otherwise,
including, without limitation, entering into any secret agreement, orally or in
writing, with a competitor of the Company or with a client of the Company;
(ii) the use of illegal drugs by the Employee, or drunkenness or substance abuse
by the Employee which interferes with the performance of his duties hereunder;
(iii) gross incompetence on the part of Employee in the performance of his
duties hereunder;
(iv) Employee's failure, refusal or inability to follow any lawful directives of
the Board, the CEO or any person designated by the CEO to serve as Employee's
supervisor;
(v) taking secret charges on transactions between the Company and third
parties; or
(vi) any other act or omission (other than an act or omission resulting from the
exercise by Employee of good faith business judgment) which materially impairs
the financial condition or business reputation of the Company.
Prior to the Company's termination of Employee "With Cause", the Company
shall give Employee written notice of any violation by Employee of any of the
provisions of this Section 5(c) after the receipt of which Employee shall have
20 days to cure or correct such violation.
(d) "Without Cause" means the termination of employment resulting from any
reason other than those enumerated in subsection (c) above.
(e) Employee may terminate his employment hereunder by giving 60 days written
notice to the President of Company and his compensation shall be paid through
the date of termination.
(f) Any termination hereunder shall be communicated by written notice to the
other party which shall indicate the specific termination provisions in the
Contract relied upon and shall set forth in reasonable detail the facts and
circumstance claimed to provide the basis for termination of employment.
6. Final Settlement and Effect of Termination.
(a) Upon termination of this Agreement and payment to Employee
of all amounts due Employee hereunder, Employee or his representative shall
execute and deliver to the Company, on a form prepared by the Company, a receipt
for such sums and a release of all claims for payment due pursuant to this
Agreement, except such claims as may have been submitted pursuant to the terms
of this Agreement and which remain unpaid.
(b) The provisions of this Agreement shall survive the
termination of this Agreement and the termination of Employee's employment with
the Company to the extent required to give full effect to the covenants and
agreements contained herein.
7. Confidentiality.
(a) Employee agrees that, both during the term of his employment
and after the termination of his employment for any reason, Employee shall not
directly or indirectly use or disclose, except as authorized by the Company in
connection with the performance of Employee's duties, any Confidential
Information, as defined hereinafter, that Employee may have or acquire (whether
or not developed or compiled by Employee and whether or not Employee has been
authorized to have access to such Confidential Information) during the term of
this Agreement. The term "Confidential Information" as used in this Agreement
shall mean and include any information, data and know-how relating to the
business of the Company that is disclosed to Employee by the Company or known by
him as a result of his relationship with the Company and not within the public
domain (whether constituting a trade secret or not), including without
limitation, the following information:
(i) financial information, such as Company's earnings, assets, debts, prices,
fee structure, volumes of purchases or sales or other financial data, whether
relating to Company generally, or to particular products, services, geographic
areas, or time periods;
(ii) marketing information, such as details about ongoing or proposed marketing
programs or agreements by or on behalf of Company, marketing forecasts or
results of marketing efforts or information about impending transactions;
(iii) intellectual property information, such as formulas, design details or
parameters, software source code, proprietary programs, devises, techniques and
processes, ongoing or planned activities in intellectual property development,
ongoing or planned joint venture activities, and licensing terms or conditions;
(iv) personnel information, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed promotions,
hiring, resignations, disciplinary actions, terminations or reasons therefor,
training methods, performance, or other employee information;
(v) customer information, such as any compilation of past, existing or
prospective customers, customer proposals or agreements between customers and
Company, status of customer accounts or credit, or related information about
actual or prospective customers; or
(vi) information with respect to any customer affairs that the Company
agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenant contained in this Section 7 shall survive the
termination of Employee's employment with the Company for any reason for a
period of two (2) years; provided, however, that with respect to those items of
Confidential Information which constitute trade secrets under applicable law,
Employee's obligations of confidentiality and non-disclosure as set forth in
this Section 7 shall continue to survive after such two (2) year period for as
long as such items remain trade secrets under applicable law. These rights of
the Company are in addition to those rights the Company has under the common law
or applicable statutes for the protection of trade secrets.
8. Rights to Materials. All records, files, memoranda, reports, price
lists, customer lists, drawings, plans, sketches, documents and the like
(together with all copies thereof) relating to the business of the Company,
which Employee shall use or prepare or come in contact with in the course of, or
as a result of, his employment shall, as between the parties hereto, remain the
sole property of the Company. Upon the termination of his employment or upon the
prior demand of the Company, he shall immediately return all such materials and
shall not thereafter cause removal thereof from the premises of the Company.
9. Works Made for Hire. The Company and Employee acknowledge that in the
course of Employee's employment by the Company, Employee may from time to time
create for the Company copyrightable works. Such works may consist of manuals,
pamphlets, instructional materials, computer programs, films, tapes or other
copyrightable material, or portions thereof, and may be created within or
without the Company's facilities and before, during or after normal business
hours. All such works related to or useful in the business of the Company are
specifically intended to be works made for hire and shall be the property of the
Company, and Employee shall cooperate with the Company in the protection of the
Company's copyrights therein and, to the extent deemed desirable by the Company,
the registration of such copyrights.
10. Discoveries. Employee agrees that any inventions, discoveries or
improvements that Employee may develop or conceive during the course of
Employee's employment shall be the sole property of the Company. Employee agrees
to promptly disclose to the Company in writing all such inventions, discoveries
and improvements, whether directly or indirectly related to the business of the
Company or whether made solely by the Employee or in conjunction with others. At
the Company's request and expense, both during and after Employee's employment,
Employee will promptly execute a specific assignment of title to the Company (or
any specified member thereof) of each invention, discovery or improvement
described in the preceding paragraph, and perform all other acts reasonably
necessary to enable the Company to secure a patent therefor in the United States
and in foreign countries and to maintain, defend and assert such patents. This
obligation shall survive the termination or expiration of this Agreement.
11. Severability. Except as noted below, should any provision of this
Agreement be declared or determined by any court of competent jurisdiction to be
unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the
invalid or unenforceable part, term or provision shall be deemed not to be a
part of this Agreement. The covenants set forth in this Agreement are to be
reformed pursuant to Section 12 if held to be unreasonable or enforceable, in
whole or in part, and, as written and as reformed, shall be deemed to be part of
this Agreement.
12. Reformation. If any of the covenants or promises of this Agreement
are determined by any court of law or equity, with jurisdiction over this
matter, to be overly broad and therefore unenforceable, in whole or in part, as
written, Employee hereby consents to and affirmatively requests that said court
narrow the scope of the covenant or promise so as to be reasonable and
enforceable and that said court enforce the covenant or promise as so reformed.
13. Injunctive Relief. Employee understands, acknowledges and agrees
that in the event of a breach or threatened breach of any of the covenants and
promises contained in Sections 7, 8, 9 and 10, the Company will suffer
irreparable injury for which there is no adequate remedy at law and the Company
will therefore be entitled to injunctive relief enjoining said breach or
threatened breach. Employee further acknowledges, however, that the Company
shall have the right to seek a remedy at law as well as or in lieu of equitable
relief in the event of any such breach.
14. Assignment. This Agreement is a contract for personal services and
shall not be assigned by the Company or Employee in any manner or by operation
of law except by mutual written consent of the parties hereto; provided,
however, that this restriction against assignment shall not preclude assignment
by the Company without the consent of Employee as a result of a merger into,
consolidation with, or sale of substantially all of the assets of the Company to
another entity. The terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns, and
upon Employee and his heirs and personal representatives. The term "Company" as
used in this Agreement shall be deemed to include the successors and assigns of
the original or any subsequent entity constituting the Company as well as any
and all divisions, subsidiaries, or affiliates thereof.
15. Waiver. The waiver by any party to this Agreement of a breach of any
of the provisions of this Agreement shall not operate or be construed as a
waiver of any subsequent or simultaneous breach.
16. Applicable Law. This Agreement shall be governed by, interpreted and
construed under the internal laws of the State of Florida without reference to
its conflict of laws principles.
17. Headings and Captions. The headings and captions used in this
Agreement are for convenience of reference only, and shall in no way define,
limit, expand or otherwise affect the meaning or construction of any provision
of this Agreement.
18. Notice. Any notice required or permitted to be given pursuant to
this Agreement shall be deemed sufficiently given when delivered in person or
when deposited, properly addressed, in the United States mail, first class
postage prepaid, return receipt requested.
19. Gender. All pronouns or any variations thereof contained in this
Agreement refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
20. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and Employee with respect to the subject matter of this
Agreement and supersedes any prior agreements or understandings between the
Company and Employee with respect to such subject matter. No amendment or waiver
of this Agreement or any provision hereof shall be effective unless in writing
signed by both of the parties. Notwithstanding the foregoing, Employee
acknowledges that he is entering into this Agreement in connection with the
acquisition of Credit Bureau Services, Inc. ("CBS"), by the Company pursuant to
the Merger Agreement, to which Employee is a party. In the event of any direct
or irreconcilable conflict between this Agreement and the Merger Agreement, the
Merger Agreement shall control.
21. Termination of Merger Agreement. In the event the Merger Agreement
is terminated in accordance with its terms prior to consummation of the Merger,
this Agreement shall be null and void.
IN WITNESS WHEREOF, the Company and Employee have caused this Agreement
to be executed, under seal, as of the date and year first above written.
"COMPANY"
CBS ACQUISITION CORP.
a Florida corporation
By:__________________________________
Name: Van Saliba
Title: President
[CORPORATE SEAL]
"EMPLOYEE"
________________________________(L.S.)
Steven P. Naimoli
<PAGE>
EXHIBIT "A"
BONUS ACHIEVEMENT REQUIREMENTS
<PAGE>
EXHIBIT "B"
COMPANY BENEFITS
The normal benefits enjoyed by all Triangle employees, including life,
medical, dental, disability insurance and participation in the Triangle 401(k)
Plan.
<PAGE>
EXHIBIT E
FORM OF RESTRICTIVE COVENANTS AGREEMENT
THIS RESTRICTIVE COVENANTS AGREEMENT (this "Agreement") is dated as of
April 30, 1998, by and among Triangle Imaging Group, Inc., a Florida corporation
("Triangle"), QuickCREDIT Corp., a Florida corporation ("QuickCREDIT"), CBS
Acquisition Corp., a Florida corporation ("CAC") (Triangle, QuickCREDIT and CAC
collectively referred to as "Acquirors") and _________________________, an
individual resident of the State of Florida ("Shareholder").
W I T N E S S E T H:
WHEREAS, Triangle, QuickCREDIT, CAC and Shareholder have entered into an
Agreement and Plan of Merger and Reorganization (the "Merger Agreement")
providing for the merger of Credit Bureau Services, Inc. (the "CBS") with and
into CAC, with CAC being the surviving corporation of such merger (the
"Surviving Corporation"); and
WHEREAS, Shareholder is a shareholder and executive officer of CBS, and
such position has placed Shareholder in a position of confidence and trust with
respect to CBS; and
WHEREAS, the Merger Agreement requires that Shareholder enter into this
Agreement as a condition precedent to the merger of CBS and CAC; and
WHEREAS, in consideration of Acquiror's covenants in the Merger
Agreement and to induce Buyer to acquire CBS, the Shareholder is willing to
enter into this Agreement and to comply with the restrictive covenants contained
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements of the parties hereto, and for other good and valuable consideration,
including, without limitation, Shareholder's prorata portion of the Merger
Consideration, as defined in the Merger Agreement, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. The following terms shall have the meanings set forth below
for purposes of this Agreement:
(a) The term "Area" shall mean the state of Florida.
(b) The term "Confidential Information" shall mean and include
any information, data and know-how relating to CBS and not generally within the
public domain (whether constituting a trade secret or not) including without
limitation the following information:
(i) financial information, such as the earnings, assets, debts, prices, fee
structures, projections, budgets, margins, tax information or other
financial data of CBS, whether relating to CBS generally, or to particular,
services, geographic areas or time periods;
(ii) product and service information, such as information concerning the
goods and services used or purchased by CBS, know-how, techniques, codes,
development plans, manuals, the identities of suppliers and consultants,
terms of supply and consulting contracts, or of particular transactions, or
related information about potential suppliers and consultants, to the
extent that such information is not generally known to the public, and to
the extent that the combination of suppliers or use of a particular
supplier or consultant, though generally known or available, yields
advantages to CBS the details of which are not generally known;
(iii) marketing information, such as details about ongoing or proposed
marketing programs, strategies or agreements by or on behalf of CBS,
marketing forecasts or strategies or results of marketing efforts or
information about impending transactions;
(iv) personnel information, such as employees' personal or medical
histories, compensation or other terms of employment, actual or
proposed promotions, hirings, resignations, disciplinary actions,
terminations or reasons therefor, training methods, performance, or
other employee information;
(v) customer information, such as any compilations or lists of past,
existing or prospective customers, proposals, bids or agreements
between customers and CBS, status of customer accounts or credit, or
related information about actual or prospective customers; and
(vi) operations information, such as software, systems, techniques used and
developed by CBS, operations manuals and personnel manuals.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of CBS.
(c) The term "Competing Business" shall mean and include any
proprietorship, partnership, joint venture, business trust, corporation,
association or other entity or person (other than Triangle, QuickCREDIT or the
Surviving Corporation and any successor of Triangle, QuickCREDIT or the
Surviving Corporation) engaged at the time of such determination in the business
of credit reporting.
(d) The term "Customer" or "Customers" shall mean any person,
partnership, association, firm, corporation or other entities which at the time
of determination has purchased, during the previous two year period, any
services or products from CBS or Triangle, QuickCREDIT or the Surviving
Corporation or which has been actively sought as a prospective customer of CBS
during such period.
2. Acknowledgments. The Shareholder acknowledges that this Agreement is
being executed and delivered ancillary to the acquisition of CBS for separately
bargained-for consideration. The Shareholder further acknowledges that CBS is a
highly competitive business, strongly dependent upon personal contacts with
Customers and potential Customers and the establishment of trust and confidence
in relationships between the owners and executive officers of CBS and its
Customers. The Shareholder agrees that Triangle, QuickCREDIT and the Surviving
Corporation would suffer great loss and damage if the Shareholder, on
Shareholder's own behalf or on behalf of any Competing Business, were to engage
in a business competitive with CBS.
3. Covenants. Recognizing the need of Triangle, QuickCREDIT and the
Surviving Corporation to protect their legitimate business interests, including
the goodwill of CBS, and to induce Triangle, QuickCREDIT and the Surviving
Corporation to enter into and perform their respective obligations under the
Merger Agreement, Shareholder covenants and agrees with Triangle, QuickCREDIT
and the Surviving Corporation as follows:
(a) that Shareholder will not from the date of this Agreement
until two (2) years following the date hereof, for whatever reason, either
directly or indirectly:
(i) within the Area, solicit the sale or lease on Shareholder's own behalf
or in the service of or on behalf of any Competing Business, any product or
service similar to or in competition with the existing products or services of
Triangle, QuickCREDIT or the Surviving Corporation or any successor to the
business of Triangle, QuickCREDIT or the Surviving Corporation;
(ii) within the Area, either directly or indirectly, engage, participate,
invest in (other than to hold 1% or less of any class of securities of a public
company) or assist, as owner, part-owner, stockholder, partner, director,
officer, trustee, employee, agent, consultant or any other capacity, any
Competing Business;
(iii) solicit or attempt to solicit, directly or by assisting others, any
business from a Customer of Triangle, QuickCREDIT or the Surviving Corporation
for purposes of providing products or services in competition with CBS.
(iv) employ or attempt to employ or assist anyone else in employing in any
Competing Business any employee of the Triangle, QuickCREDIT or the Surviving
Corporation (whether or not such employment is full or part time or pursuant to
a written or oral contract).
(b) that Shareholder will not for a period of ten (10) years
from the date hereof, for whatever reason, disclose or use or otherwise exploit
for Shareholder's own benefit, for the benefit of any other person, or for the
benefit of any Competing Business, any Confidential Information; provided,
however, that to the extent any Confidential Information constitutes a trade
secret under applicable law, the restrictions contained in this Section 3(b)
shall continue to apply for so long as such information remains a trade secret.
4. Remedies. Shareholder acknowledges that irreparable loss and injury
would result to Triangle, QuickCREDIT and the Surviving Corporation upon any
breach by Shareholder of any of the covenants contained in this Agreement and
that damages arising out of such breach would be difficult to ascertain.
Shareholder agrees that, in addition to all other remedies provided at law or in
equity, either Triangle, QuickCREDIT and the Surviving Corporation , or each of
them, may petition and obtain from a court of law or equity, without bond, both
temporary and permanent injunctive relief to prevent a breach by Shareholder of
any such covenant.
5. Miscellaneous.
(a) The terms and provisions of this Agreement shall inure to
the benefit of and be binding upon Buyer, and its successors and assigns, and
upon the Shareholder and Shareholder's heirs and personal representatives. The
rights of Triangle, QuickCREDIT and the Surviving Corporation hereunder may be
assigned, without the consent of Shareholder, by Triangle, QuickCREDIT and the
Surviving Corporation to any successor to the business of Triangle, QuickCREDIT,
or the surviving Corporation, whether by merger, sale of stock, sale of assets
or other transaction.
(b) This Agreement constitutes the entire Agreement between the
parties hereto concerning the subject matter hereof. This Agreement shall not be
altered, modified, amended or terminated except by written instrument executed
by the parties hereto.
(c) This Agreement, and the rights and liabilities of the
parties hereto, shall be construed in all respects in accordance with the laws
of the State of Florida.
(d) The covenants contained in this Agreement are separate and
severable and the invalidity or unenforceability of any one or more covenants,
shall not affect the validity or enforceability of any other covenant contained
herein. It is the intention of the parties hereto that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the laws and
public policies of each jurisdiction in which such enforcement is sought, but
that the enforceability (or judicial modification to conform with such laws and
public policies, which the parties hereby expressly authorize), of any provision
hereof shall not render unenforceable or impair the remainder of this agreement,
which shall be deemed amended to delete or modify, as necessary, the invalid or
unenforceable portions. The parties hereto acknowledge and agree that for
purposes of judicial interpretation or enforcement of this Agreement, this
Agreement shall be deemed to have been executed and delivered ancillary to the
sale of a business.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TRIANGLE IMAGING GROUP, INC.
___________________________________________
By: Vito A. Bellezza
Title: Chairman and Chief Executive Officer
QUICKCREDIT CORP.
___________________________________________
By: Van Saliba
Title: President
CBS ACQUISITION CORP.
___________________________________________
By: Van Saliba
Title: President
SHAREHOLDER
___________________________________________
By:
<PAGE>
EXHIBIT F
Form of Release
THIS RELEASE (the "Agreement") is executed and delivered as of April 30,
1998 by ________________________, an individual resident of the State of Florida
(the "Shareholder") in favor of, and for the benefit of, Triangle Imaging Group,
Inc., a Florida corporation ("Triangle"), QuickCREDIT Corp., a Florida
corporation ("QuickCREDIT"), CBS Acquisition Corp., a Florida corporation
("CAC"), and the Representatives of the foregoing corporations (as defined
below).
WHEREAS, the Shareholder has entered into an Agreement and Plan of Merger
and Reorganization, dated as of April 30, 1998 (the "Merger Agreement"), by and
among, Triangle, QuickCREDIT, CAC, Credit Bureau Services, Inc., a Florida
corporation ("CBS"), and the Shareholder, whereby CBS shall merge with and into
CAC at which time CBS shall cease to exist (the "Merger"); and
WHEREAS, pursuant to the requirements of Section 5.6 of the Merger
Agreement, and as a condition to closing and effecting the Merger, the
Shareholder is required to release and forever discharge Triangle, QuickCREDIT
and CAC and each of their respective directors, officers, agents and employees,
attorneys and stockholders (collectively, "Representatives"), and the
Shareholder is willing to so release and discharge Triangle, QuickCREDIT and CAC
and each of their respective past, present and future Representatives in
consideration of the direct personal benefit to be derived by the Shareholder
from the Merger;
NOW, THEREFORE, for and in consideration of the premises and the promises,
undertakings and covenants set forth herein, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Release by the Shareholder. The Shareholder, for himself and his respective
heirs, personal representatives, successors and assigns, hereby releases and
forever discharges Triangle, QuickCREDIT and CAC, their respective affiliates,
successors and assigns, and each of their respective past, present or future
Representatives, of and from any and all causes of action and claims for relief
of any kind and nature whatsoever, known and unknown, anticipated and
unanticipated, absolute or contingent, past, present and future, for or on
account of any and all losses, injuries, or damages, including all
consequential, incidental, and derivative damages of any kind and nature,
arising on or before the Effective Date (as defined in the Merger Agreement),
resulting or to result from or in any way growing out of the previous employment
relationship between the Shareholder and CBS prior to the Effective Date, and
all other matters of every type or nature which, directly or indirectly, relate
to or concern any relationship between the Shareholder and CBS and their
respective affiliates, successors and assigns, and each of their respective
past, present or future Representatives, prior to the Effective Date, except (i)
claims for regular compensation and benefits accrued and payable to the
Shareholder with respect to periods beginning prior to the Effective Date, as
applicable, in each case consistent with CBS's normal policies for such payments
as disclosed to Triangle, QuickCREDIT and CAC, (ii) claims against Triangle,
QuickCREDIT and CAC for breach of the Merger Agreement, and (iii) claims for
indemnification for actions taken by the Shareholder in its capacity as an
officer or director of CBS to the extent CBS is otherwise legally obligated to
so indemnify the Shareholder (collectively, the "Unreleased Claims").
2. Representations of the Shareholder. The Shareholder hereby represents and
warrants to Triangle, QuickCREDIT and CAC that the Shareholder has not at any
time assigned any claim that the Shareholder may have had, now has, or may
hereafter have against Triangle, QuickCREDIT, CAC, CBS or their respective
affiliates, successors or assigns, or each of their past, present or future
Representatives, and for themselves and their respective heirs, personal
representatives, successors and assigns, hereby covenant and agree with
Triangle, QuickCREDIT and CAC, that they shall not hereafter take any action to
assign or assist in the assignment of any such claim, other than an Unreleased
Claim.
3. Governing Law. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Florida.
4. Severability of Provisions. Wherever possible, each provision of this
Agreement shall be interpreted to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, said provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
5. Counterparts. This Agreement may be executed in one or more counterparts,
each of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed and delivered under seal as of the day and year first written above.
________________________________________(SEAL)
Name:
<PAGE>
EXHIBIT G
FORM OF SHARE SUBSCRIPTION AGREEMENT
IMPORTANT INFORMATION FOR SUBSCRIBER
THE SECURITIES PURCHASED PURSUANT TO THE SUBSCRIPTION AGREEMENT SET FORTH BELOW
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, AS AMENDED (COLLECTIVELY, THE
"ACTS"), OR ANY OTHER APPLICABLE BLUE SKY LAW, AND CANNOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS SUCH SECURITIES (i) ARE REGISTERED UNDER SUCH ACTS, (ii) IN
THE OPINION OF LEGAL COUNSEL AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE OR
(iii) THE REQUEST FOR TRANSFER IS ACCOMPANIED BY NO-ACTION LETTERS FROM THE
SECURITIES AND EXCHANGE COMMISSION AND THE APPLICABLE STATE SECURITIES
COMMISSION. BECAUSE THE SECURITIES ARE NOT REGISTERED UNDER THE ACTS,
SUBSCRIBERS MUST BEAR THE ECONOMIC RISK OF INVESTMENT IN SUCH SECURITIES FOR AN
INDEFINITE PERIOD OF TIME. CERTIFICATES REPRESENTING SUCH SECURITIES WILL BEAR A
LEGEND BRIEFLY DESCRIBING RESTRICTIONS WITH RESPECT TO THE TRANSFER THEREOF AND
A STOP-TRANSFER ORDER WITH RESPECT TO SUCH SECURITIES WILL BE PLACED WITH THE
CORPORATION'S TRANSFER AGENT (OR NOTED IN THE CORPORATION'S RECORDS) BEFORE
CERTIFICATES REPRESENTING ANY SECURITIES SUBSCRIBED WILL BE ISSUED.
SHARE SUBSCRIPTION AGREEMENT
TO THE BOARD OF DIRECTORS OF Triangle Imaging Group, Inc., a
corporation organized and incorporated under the laws of the State of Florida
(the "Corporation"):
1. Subscription. The undersigned, ___________________________________
("Subscriber"), hereby subscribes for __________ shares of common stock of the
Corporation, $.0001 par value (the "Shares"), for the aggregate consideration
described in that certain Agreement and Plan of Merger and Reorganization (the
"Merger Agreement") dated as of _____________________, 1998, by and among the
Corporation, QuickCREDIT Corp., a Florida corporation and wholly-owned
subsidiary of the Corporation ("QuickCREDIT"), CBS Acquisition Corp., a Florida
corporation and wholly-owned subsidiary of QuickCREDIT, and
______________________________, a Florida corporation, and Subscriber.
2. Restrictions. Subscriber understands that the Shares have not been
registered under the Acts, or any other applicable "blue sky" law, and will be
issued in reliance upon certain exemptions from registration thereunder.
Subscriber understands that the statutory basis for such exemptions is dependent
upon Subscriber's undertaking to acquire the Shares for purposes of investment
for its own account, not as a nominee or agent, and without the intent of
reselling or disposing of the Shares, or otherwise participating directly or
indirectly in a distribution thereof. Subscriber further understands that by
reason of the exemptions to be relied upon in connection with their issuance,
the Shares issued to Subscriber will not be freely transferable and that any
proposed sale or other transfer of the Shares may be prohibited and will in any
event be subject to significant restrictions. Any certificates representing the
Shares will bear a legend to such effect, and a stop-transfer order with respect
to the Shares will be placed with the Corporation's transfer agent (or noted in
the Corporation's records if the Corporation acts as its own transfer agent in
respect of the Shares).
3. Representations and Warranties of Subscriber. Subscriber hereby
represents and warrants to, and agrees with, the Corporation as follows:
(a) The Shares are being acquired by Subscriber for Subscriber's own
account, not as a nominee or agent, and not with a view to, or for, resale,
transfer or distribution;
(b) Subscriber has no intention of participating directly or indirectly in
a distribution of the Shares;
(c) Subscriber has such knowledge and experience in financial and business
matters that Subscriber is capable of evaluating the merits and risks of this
investment;
(d) Subscriber has received and reviewed copies of the Corporation's
filings with the United States Securities and Exchange Commission listed on
Exhibit A hereto.
(e) Subscriber has had access during the course of the transactions as
contemplated in the Merger Agreement and prior to its acquisition of the Shares
to such additional information relating to the Corporation as Subscriber has
desired and has been given the opportunity to (i) ask questions of, and receive
answers from, the Corporation and its representatives concerning the Corporation
and the terms and conditions of the issuance of the Shares, and (ii) obtain any
additional information that the Corporation possesses or can reasonably obtain
that is necessary to verify the accuracy of information furnished by the
Corporation in connection herewith;
(f) Subscriber is an accredited investor as that term is defined in Section
501(a) under Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act of 1933. Subscriber is capable of bearing the economic
risks of the investment in the Shares, including loss of the entire investment,
and if Subscriber deems it necessary to do so, has reviewed the merits of the
investment with his tax and legal counsel and with investment adviser(s), and
Subscriber understands the merits and risks of this investment; and
(g) Subscriber has accurately completed the accredited Investor
Questionnaire attached hereto as Exhibit B and has executed such Questionnaire,
and any applicable exhibits thereto, where required.
(h) Subscriber has evaluated the risks of this investment and has
determined the Corporation is a suitable investment.
4. Representations of the Corporation. The Corporation hereby
represents and warrants to Subscriber as follows:
(a) The Corporation is a corporation organized and in good standing under
the laws of the State of Florida;
(b) All corporate action on the part of the Corporation necessary for
authorization in respect of the Corporation's issuance of the Shares as
contemplated hereunder has been (or shall be) taken prior to the date of the
Corporation's execution of this Share Subscription Agreement;
(c) The Corporation's execution of this Share Subscription Agreement and
issuance of the Shares as contemplated hereunder will not conflict with or
violate any provision of the Certificate of Incorporation or Bylaws of the
Corporation or any material agreement to which the Corporation is bound; and
(d) Upon execution of this Share Subscription Agreement and receipt by the
Corporation of the consideration for the Shares as described herein, the Shares
shall be deemed to be validly issued and outstanding, fully paid and
nonassessable.
5. Consideration. Subscriber hereby agrees and understands that the
consideration for the Shares shall not be delivered by Subscriber to the
Corporation until the share subscription contained herein shall have been
accepted; provided, however, that such consideration shall be delivered promptly
thereafter in accordance with the terms and conditions of the Merger Agreement
and prior to the issuance by the Corporation of the Shares. Subscriber
understands and agrees that the undersigned shall not be entitled to
certificates for, nor shall the undersigned be entitled to vote the Shares until
the consideration set forth herein has been delivered to the Corporation as
contemplated in the Merger Agreement.
Executed as of the _______ day of _______________, 1998.
Very truly yours,
_________________________________(L.S.)
ACCEPTED AND AGREED TO:
TRIANGLE IMAGING GROUP, INC.
By:__________________________________________
Name: Vito A. Bellezza
Title: Chairman of the Board of Directors
and Chief Executive Officer
Date: ________, 1998
<PAGE>
EXHIBIT A
INDEX TO SEC FILINGS
I. The Corporation's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997;
II. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997;
III. The Corporation's Registration Statement on Form S-8 filed on August
15, 1997;
IV. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997;
V. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1997;
VI. The Corporation's Quarterly Report on Form 10-KSB for the year ended
December 31, 1996;
VII. The Corporation's Amendment to its Current Report on Form 8-K/A filed
March 4, 1997;
VIII. The Corporation's Current Report on Form 8-K filed January 3, 1997;
IX. The Corporation's Registration Statement on Form S-8 filed December 24,
1996;
X. The Corporation's Current Report on Form 8-K filed December 20, 1996;
XI. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996;
XII. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
XIII. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
XIV. The Corporation's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
<PAGE>
EXHIBIT B
TRIANGLE IMAGING GROUP, INC.
ACCREDITED INVESTOR QUESTIONNAIRE
Purpose of This Questionnaire
The undersigned has met with certain principals of Triangle Imaging
Group, Inc. (the "Company"), and has been provided certain information with
regard to a proposed investment in the Company. Certain of the Company's
securities will be offered to the undersigned as an "accredited investor"
without registration under the Securities Act of 1933, as amended (the "1933
Act"), or the securities laws of any state, in reliance on the exemption
contained in Section 3(b) and/or 4(2) and/or 4(6) of the 1933 Act in reliance on
Regulation D of the Securities and Exchange Commission thereunder and on similar
exemptions under applicable state laws. Under Section 4(2) and/or certain state
laws, the Company may be required to determine that an individual, or an
individual together with a "purchaser representative" or each individual equity
owner of an "investing entity" meets certain suitability requirements before
selling securities to such individual or entity. This Questionnaire will enable
the Company to make investor qualification determinations and discharge its
responsibilities under federal and state securities laws and the Company will
rely upon the information contained herein. SECURITIES WILL NOT BE SOLD OR
ISSUED TO THE UNDERSIGNED UNTIL A QUESTIONNAIRE HAS BEEN FILLED OUT AS
THOROUGHLY AS POSSIBLE. IN THE CASE OF AN INVESTOR THAT IS A PARTNERSHIP, TRUST
OR CORPORATION WHICH DOES NOT QUALIFY AS AN ACCREDITED INVESTOR, EACH EQUITY
OWNER MUST COMPLETE A QUESTIONNAIRE TO DETERMINE ACCREDITED STATUS. This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security.
Instructions:
The Company will not issue securities to the undersigned until one (1)
copy of this Questionnaire has been completed, signed, dated and delivered to
the Company.
Your answers will be kept strictly confidential at all times. The
Company may, however, present this Questionnaire to such parties as it deems
appropriate in order to assure itself that the offer and sale of the securities
will not result in a violation of the registration provisions of the 1933 Act or
a violation of the securities laws of any state.
All questions must be answered. If the appropriate answer is "None" or
"Not applicable," please so state. Please print or type your answers to all
questions and attach additional sheets if necessary to complete your answer to
any item.
Name(s):________________________________________________________________________
Social Security Number or Taxpayer Identification Number:_______________________
Home Address:___________________________________________________________________
________________________________________________________________________________
Business Address:_______________________________________________________________
________________________________________________________________________________
Home Telephone:_________________________________________________________________
Business Telephone:_____________________________________________________________
Occupation/Business:____________________________________________________________
Place and date of formation (if an entity):_____________________________________
If the undersigned is an individual, please CHECK whichever of the following
statements, (a)-(e) below, is applicable to you:
___ (a) The undersigned has had an individual income in excess of $200,000
in each of the two most recent calendar years and reasonably expects to have an
individual income in excess of $200,000 in the current calendar year;
___ (b) The undersigned has had joint income with his or her spouse in
excess of $300,000 in each of the two most recent calendar years and reasonably
expects to have joint income with his or her spouse in excess of $300,000 in the
current calendar year;
___ (c) The undersigned has an individual net worth, or joint net worth
with his or her spouse, in excess of $1,000,000;
___ (d) The undersigned is a director or executive officer of the Company;
___ (e) None of the above.
For purposes of this Accredited Investor Questionnaire, the following
definitions apply:
"Individual income" means "adjusted gross income" as reported for
federal income tax purposes, less any income attributable to a spouse or to
property owned by a spouse, increased by the following amounts (but not
including any amounts attributable to a spouse or to property owned by a
spouse): (i) the amount of any interest income received which is tax-exempt
under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) the amount of any losses claimed as a limited partner in a limited
partnership (as reported on Schedule E of Form 1040) and (iii) any deduction
claimed for depletion under Section 611 et seq. of the Code.
"Joint income" means "adjusted gross income" of you and your spouse as
reported for federal income tax purposes, increased by the following amounts:
(i) the amount of any interest income received which is tax-exempt under Section
103 of the Code, (ii) the amount of losses claimed as a limited partner in a
limited partnership (as reported on Schedule E of Form 1040) and (iii) any
deduction claimed for depletion under Section 611 et seq.
of the Code.
"Net worth" means the excess of total assets at fair market value,
including home and personal property, over total liabilities, including
mortgages and income taxes on unrealized appreciation of assets.
If the undersigned is a corporation, partnership, employee benefit plan,
individual retirement account or trust, please CHECK whichever of the following
statements (a)-(n) is applicable:
___ (a) The undersigned is a self-directed individual retirement account or
401(k) Plan (if this statement is checked, the participant must also check
whichever of statements 9(a)-(e), above are applicable);
___ (b) The undersigned is a bank as defined in section 3(a)(2) of the 1933
Act, or a savings and loan association or other institution as defined in
section 3(a)(5)(A) of the 1933 Act, whether acting in an individual or fiduciary
capacity;
___ (c) The undersigned is a broker or dealer registered pursuant to
section 15 of the Securities Exchange Act of 1934;
___ (d) The undersigned is an insurance company as defined in section 2(13)
of the 1933 Act;
___ (e) The undersigned is an investment company registered under the
Investment Company Act of 1940;
___ (f) The undersigned is a business development company as defined in
section 2(a)(48) of the Investment Company Act of 1940;
___ (g) The undersigned is a Small Business Investment Company licensed by
the U.S. Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
___ (h) The undersigned is a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees if such plan has total
assets in excess of $5,000,000;
___ (i) The undersigned is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, provided that
the investment decision is made by a plan fiduciary, as defined in section 3(21)
of such Act, and the plan fiduciary is either a bank, savings and loan
association, insurance company or registered investment adviser or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, the investment decisions are made solely by persons that are
accredited investors.
___ (j) The undersigned is a private business development company as
defined in section 202(a)(22) of the Investment Advisers Act of 1940;
___ (k) The undersigned is an organization described in section 501(c)(3)
of the Code, a corporation, a Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities,
with total assets in excess of $5,000,000;
___ (l) The undersigned is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities,
whose purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Securities Act;
___ (m) The undersigned is an entity, each of whose stockholders, partners
or beneficiaries meets at least one of the conditions set forth under 9(a)-(d),
above with respect to individuals or 10(b)-(l), above with respect to
corporations, partnerships, trusts or other entities; or
___ (n) None of the above.
IF YOU CHECK THE STATEMENT NOTED AS 10(m) ABOVE AND DO NOT CHECK ANY OTHER
STATEMENT, A COMPLETED QUESTIONNAIRE FOR EACH STOCKHOLDER OF THE SUBSCRIBING
CORPORATION, EACH PARTNER OF THE SUBSCRIBING PARTNERSHIP OR EACH BENEFICIARY OF
THE SUBSCRIBING EMPLOYEE BENEFIT PLAN MUST ACCOMPANY THIS QUESTIONNAIRE.
To the best of my knowledge and belief, the above information supplied by
me is true and correct in all respects.
Dated: _______________________ _______________________________________
Signature
_______________________________________
Title (if an entity)
<PAGE>
ALL PURCHASERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the undersigned has executed this Accredited Investor
Questionnaire on this _______ day of ____________________, 1998.
______________________ x $______________ per share = $__________________________
Shares to be Purchased Purchase Price
Manner in which Title is to be held (Please Check One):
1. _____ Individual 7. ______ Trust/Estate/Pension or
Profit Sharing Plan
Date Opened:___________
2. _____ Joint Tenants With
Right of Survivorship
8. ______ As a Custodian for
3. _____ Community Property
________________________________
Under the Uniform Gift to Minors
4. _____ Tenants in Common Act of the State of_____________
5. _____ Corporation/Partnership 9. ______ Married with Separate
Property
6. _____ IRA 10. ______ Keogh
INDIVIDUAL PURCHASERS MUST COMPLETE PAGE 6; PURCHASERS WHICH
ARE ENTITIES MUST COMPLETE PAGE 7.
<PAGE>
FOR EXECUTION BY A PURCHASER WHO IS A NATURAL PERSON
________________________________________________________________________________
Exact Name in Which Title is to be Held
________________________________________________________________________________
(Signature)
________________________________________________________________________________
Name (Please Print)
________________________________________________________________________________
Residence Address: Number and Street
________________________________________________________________________________
City State Zip Code
________________________________________________________________________________
Social Security Number
Accepted this ________ day of _________________, 1998, on behalf of the Company.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
<PAGE>
FOR EXECUTION BY A PURCHASER WHICH IS AN ENTITY
(Corporation, Partnership, Trust, Etc.)
________________________________________________________________________________
Name of Entity (Please Print)
By:_________________________________________
Title:______________________________________
Attest:_____________________________________
Title:______________________________________
[SEAL]
____________________________________________
____________________________________________
____________________________________________
Address
____________________________________________
Taxpayer Identification Number
ACCEPTED, this ______ day of __________________, 1998, on behalf of the Company.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
<PAGE>
EXHIBIT H
FORM OF LEASE AGREEMENT
<PAGE>
EXHIBIT I
FORM OF GUARANTY
THIS GUARANTY (the "Guaranty") is executed as of the 30th day of April,
1998 by STEVEN P. NAIMOLI and KIM A. NAIMOLI, individual residents of the State
of Florida (the "Guarantors"), in favor of CBS ACQUISITION CORP., a Florida
corporation ("CAC").
WHEREAS, CAC and Guarantors are parties to that certain Agreement and
Plan of Merger and Reorganization dated April 30, 1998 pursuant to which Credit
Bureau Services, Inc., a Florida corporation ("CBS") will merge with and into
CAC (the "Merger") and CAC will continue as the surviving corporation of the
Merger; and
WHEREAS, CBS and Steven P. Naimoli are indebted to William J. Tackett
and Ethel K. Tackett (the "Tacketts") pursuant to the terms of that certain
promissory note dated October 4, 1994, in the original principal amount of
$200,000 (the "Note") a copy of which is attached hereto as Exhibit A; and
WHEREAS, pursuant to Section 5.11 of the Merger Agreement Steven P.
Naimoli and Kim A. Naimoli covenant and agree to make all payments of principal
and interest, when and as due, in accordance with the terms of the Note, all as
more fully set forth in said Section 5.11 of the Merger Agreement;
WHEREAS, it is a condition precedent to the obligation of CAC to enter
into the Merger that this Guaranty be executed by Guarantors; and
WHEREAS, Guarantors have determined that execution of this Guaranty will
be of benefit to Guarantors and Guarantors are therefore willing to execute this
Guaranty to induce CAC to enter into the Merger;
NOW THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Guarantors, the Guarantors agree as follows:
i. Guaranty. For good and valuable consideration (the receipt and sufficiency of
which Guarantors hereby acknowledge) and for the purpose of seeking to induce
CAC to enter into the Merger Agreement (the completion of which Guarantors
acknowledge to be to the interest and advantage of Guarantors), Guarantors
hereby unconditionally, absolutely and irrevocably guarantee to CAC and CAC's
successors and assigns, the full and prompt payment, in lawful money of the
United States when due, whether by acceleration or otherwise, with such interest
as may accrue thereon, either before or after the termination thereof, of any
and all past, present and future obligations of CBS or the Guarantors or any of
its or his affiliates, whether now or hereafter existing, arising under the Note
and/or Section 5.11 of the Merger Agreement, together with any renewals,
modifications, amendments and extensions thereof. This Guaranty uses the term
"obligations" (hereinafter collectively referred to as the "Obligations") in its
most comprehensive sense, including any and all obligations and liabilities of
CBS or the Guarantors arising out of or in any way relating to the Note.
2. Assignment. This Guaranty is assignable by CAC, and any assignment hereof or
any transfer or assignment of the Guaranty or portions thereof by CAC shall
operate to vest in any such assignee, to the extent so assigned, all rights and
powers herein conferred upon and granted to CAC.
IN WITNESS WHEREOF, Guarantors have signed and sealed this Guaranty as
of the date first written above. Guarantors:
By: _______________________________
Steven P. Naimoli
By: _______________________________
Kim A. Naimoli
<PAGE>
EXHIBIT J
FORM OPINION OF COUNSEL TO CBS AND THE SHAREHOLDERS
April 30, 1998
Triangle Imaging Group, Inc.
4400 West Sample Road, Suite 228
Coconut Creek, Florida 33073
Ladies and Gentlemen:
This opinion is rendered to you pursuant to the requirements of the
Agreement and Plan of Merger and Reorganization, dated as of April 30, 1998 (the
"Merger Agreement"), by and among Credit Bureau Services, Inc., a Florida
corporation (the "Company"), Steven P. Naimoli and Kim A. Naimoli, each an
individual resident of the State of Florida (the "Shareholders"), Triangle
Imaging Group, Inc., a Florida corporation ("Triangle"), QuickCREDIT Corp., a
Florida corporation ("QuickCREDIT"), and CBS Acquisition Corp., a Florida
corporation (the "Subsidiary").
We have acted as counsel to the Company and the Shareholders in
connection with the entry into and performance by the Company and the
Shareholders of the transactions contemplated in the Merger Agreement. In the
capacity described above, we are familiar with the corporate minute book of the
Company, including the articles of incorporation, bylaws and stock transfer
records of the Company, and we are further familiar with the corporate
proceedings of the Company relating to the Merger Agreement and the transactions
contemplated therein. We have also examined originals or copies certified, or
otherwise identified to our satisfaction, of the following documents:
1. the Merger Agreement;
2. the Share Subscription Agreements, each dated April 30, 1998,
executed by each of the Shareholders in favor of Triangle;
3. the Releases, each dated April 30, 1998, executed by each of the
Shareholders;
4. the Employment Agreements, each dated April 30, 1998, executed by the
Shareholders;
5. the Restrictive Covenants Agreements, each dated April 30, 1998,
executed by each of the Shareholders;
6. the Escrow Agreement, dated April 30, 1998, executed by the
Shareholders;
7. a certificate, dated April ____, 1998, issued by the Secretary of State
of the State of Florida with respect to the corporate existence of the Company
(the "Certificate of Existence"); and
8. the Certificate of Merger of the Company into the Subsidiary dated
April 30, 1998, to be filed with the Secretary of State of the State of Florida
(the "Certificate of Merger").
The documents referenced in items 1 through 8 above are hereinafter
collectively referred to as the "Merger Documents".
This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord of the ABA Section of Business Law
(1991) (the "Accord"). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. Capitalized terms used in this
opinion letter and not otherwise defined shall have the meanings assigned to
such terms in the Accord and the Merger Agreement. If there should be any
conflict between the definition contained in the Accord and the Merger
Agreement, the definition contained in the Accord shall control.
The opinions expressed herein are limited to the laws of the State of
Florida and the federal laws of the United States of America.
In connection with the opinions set forth below, we have assumed the
genuineness of all signatures, other than those on behalf of the Company and
those of the Shareholders, and the authenticity, completeness and accuracy of
all materials examined. As to questions of fact material to our opinions, we
have relied, without independent verification of the accuracy or completeness
thereof, solely on the following: (i) the contents of the corporate minute book
and stock transfer records of the Company; (ii) the statements and
representations contained in the Certificate of Existence; and (iii) the
respective statements, representations and warranties of the Company and the
Shareholders contained in the Merger Agreement. We have made no other factual
investigation for the purpose of rendering this opinion letter.
The use of the term "Actual Knowledge" shall have the meaning given to
such term in the Accord, but shall not be taken that we have made, and in fact
we have not made, any independent investigation concerning the accuracy or
veracity of any representation, warranty or statement of fact other than as
described in the preceding paragraphs. We have made no independent search of any
public records in connection with our rendering of the opinions contained
herein.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida and has all necessary
corporate power and lawful authority to own, operate and lease its properties
and carry on its business as and where such business is now being conducted. As
used herein, the term "in good standing" shall mean that all filings have been
made as required under applicable filing and annual registration provisions of
the Florida Business Corporation Act and all filing fees due and payable
thereunder have been paid.
2. The issued and outstanding shares of the Company are as set forth on
Schedule 2.2 to the Merger Agreement. All the shares of the Company identified
on such Schedule are duly authorized, validly issued, fully paid and
nonassessable. Except as set forth on Schedule 2.2 to the Merger Agreement,
there is no outstanding capital stock of the Company, and, to our Actual
Knowledge, except as set forth on Schedule 2.3 to the Merger Agreement, there
are no outstanding options, warrants or other rights to acquire common stock or
other securities of the Company.
3. Each of the Shareholders is the sole record and beneficial owner of
the shares set forth beside his or her name on Exhibit A to the Merger
Agreement, and, to our Actual Knowledge, has good and valid title to such
shares, free and clear of all liens, claims, encumbrances, equities or claims.
4. The Company has duly and validly executed each Merger Document to
which it is a party, and each such Merger Document is the valid, binding and
enforceable obligation of the Company. Each of the Shareholders has duly and
validly executed each Merger Document to which such Shareholder is a party, and
each such Merger Document is the valid, binding and enforceable obligation of
such Shareholder.
5. The execution, delivery and performance of the Merger Documents to
which the Company is a party by the Company are within the Company's corporate
powers and have been duly authorized by all necessary corporate action on the
part of the Company. The execution, delivery and performance of the Merger
Documents to which either Shareholder is a party are within such Shareholder's
full power and legal capacity. Except as disclosed in the Merger Documents, the
execution, delivery and performance of the Merger Documents by the Company or
either Shareholder, do not: (i) conflict with, require any consent under, result
in the violation of, or constitute a breach of any provision of the articles or
certificate of incorporation or bylaws of the Company; (ii) to our Actual
Knowledge, conflict with, require any Consent under, result in the violation of,
constitute a breach of, or accelerate the performance required on the part of
either Shareholder or the Company by the terms of, any evidence of indebtedness
or Contract to which either Shareholder or the Company is a party, in each case
with or without notice or lapse of time or both, or permit the termination of
any such Contract by another Person; (iii) to our Actual Knowledge, result in
the creation or imposition of any Encumbrance upon, or restriction on the use
of, any property or assets of the Company or the Company Common Stock under any
Contract to which either the Company or either Shareholder is bound; (iv) to our
Actual Knowledge, accelerate, or constitute an event entitling, or which would,
on notice or lapse of time or both, entitle the holder of any indebtedness of
the Company or either Shareholder to accelerate the maturity of any such
indebtedness; (v) conflict with or result in the breach or violation of any
Legal Requirement that is binding on either the Company or either Shareholder;
or (vi) violate or cause any revocation of or limitation on any Permit of the
Company.
6. Except as disclosed in Schedule 2.7 to the Merger Agreement, no
authorization, consent or approval or other action by, and no notice to or
filing with, any Governmental Body or any other Person is required to be
obtained or made by the Company or either of the Shareholders for the due
execution, delivery and performance by them of the Merger Documents.
7. Under the laws of the State of Florida, the Merger will be effective
upon the filing of the Certificate of Merger with the Secretary of State of
Florida.
8. This letter is given solely for the benefit of the addressees hereof
and may only be relied upon for matters arising out of the transactions
described herein. Without our prior written consent, this letter may not be used
or relied upon by any other person or entity for any purpose whatsoever.
Very truly yours,
By: ____________________________________________
<PAGE>
EXHIBIT K
FORM OF OPINION OF COUNSEL TO TRIANGLE, QUICKCREDIT AND CAC
April 30, 1998
Credit Bureau Services, Inc.
3045 N. Federal Highway, Suite 60
Fort Lauderdale, Florida 33306
Ladies and Gentlemen:
This opinion is rendered to you pursuant to the requirements of Section
7.4 of the Agreement and Plan of Merger and Reorganization, dated as of April
30, 1998 (the "Merger Agreement"), by and among Credit Bureau Services, Inc., a
Florida corporation (the "CBS"), Steven P. Naimoli and Kim A. Naimoli, each an
individual resident of the State of Florida (the "Shareholders"), Triangle
Imaging Group, Inc., a Florida corporation ("Triangle"), QuickCREDIT Corp., a
Florida corporation ("QuickCREDIT"), and CBS Acquisition Corp., a Florida
corporation ("CAC").
We have acted as special counsel to Triangle, QuickCREDIT and CAC
(collectively, the "Parties") in connection with the negotiation of the Merger
Agreement and the consummation by the Parties of the transactions contemplated
in the Merger Agreement. In the capacity described above, we are familiar with
the records of the corporate proceedings of the Parties relating to the Merger
Agreement and the transactions contemplated therein. We have also examined
originals or copies, certified, or otherwise identified, to our satisfaction, of
the following documents:
1. the Merger Agreement;
2. the Share Subscription Agreements, each dated April 30, 1998,
executed by each of the Shareholders in favor of Triangle;
3. the Releases, each dated April 30, 1998, executed by each of the
Shareholders;
4. the Restrictive Covenants Agreements, each dated April 30, 1998,
executed by each of the Shareholders;
5. the Employment Agreements, each dated April 30, 1998, executed by the
Shareholders;
6. the Escrow Agreement by and among the Parties, CBS and the
Shareholders, dated as of April 30, 1998;
7. certificates of recent date, issued by the Secretary of State of the
State of Florida with respect to the corporate existence of each of the Parties
(the "Certificates of Existence"); and
8. the Certificate of Merger of CBS with and into CAC, dated April 30,
1998, to be filed with the Secretary of State of the State of Florida (the
"Certificate of Merger").
The documents referenced in items 1 through 8 above are hereinafter
collectively referred to as the "Merger Documents".
This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord of the ABA Section of Business Law
(1991) (the "Accord"). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. Capitalized terms used in this
opinion letter and not otherwise defined shall have the meanings assigned to
such terms in the Accord and the Merger Agreement. If there should be any
conflict between the definition contained in the Accord and the Merger
Agreement, the definition contained in the Accord shall control.
The opinions expressed herein are limited to the federal laws of the
United States of America, the laws of the State of Georgia, as currently in
effect, and the provisions of the Florida Business Corporation Act, as reported
in standard compilations of corporation statutes (excluding any case law
annotations contained therein). We are admitted to the Bar of the State of
Georgia and do not purport to be experts in the laws of any other state.
In connection with the opinions set forth below, we have, with your
permission, assumed the genuineness of all signatures and the authenticity,
completeness and accuracy of all materials examined. As to questions of fact
material to our opinions, we have relied, with your permission and without
independent verification of the accuracy or completeness thereof, solely on the
following: (i) the records of the corporate proceedings of the Parties relating
to the Merger Agreement and the transactions contemplated therein; (ii) the
statements and representations contained in the Certificates of Existence; (iii)
the respective statements, representations and warranties of the Parties
contained in the Merger Documents; and (iv) an officer's certificate of each of
the Parties, each dated April 30, 1998, with respect to certain factual matters.
We have made no other factual investigation, including any independent search of
any public records, for the purpose of rendering this opinion letter.
Based upon and subject to the foregoing, we are of the opinion that:
1. Each of the Parties has duly authorized the execution and delivery of
the Merger Documents to which it is a party and the performance of all of its
obligations thereunder.
2. Each of the Parties has the requisite corporate power to execute and
deliver the Merger Documents to which it is a party.
3. The shares of Triangle Common Stock to be delivered under the Merger
Agreement (the "Merger Shares") have been duly authorized and, when delivered
against surrender of the issued and outstanding shares of CBS Common Stock, in
accordance with the provisions of the Merger Agreement, will be validly issued,
fully paid and nonassessable.
This letter is given solely for the benefit of the addressees hereof and
may only be relied upon for matters arising out of the transactions described
herein. Without our prior written consent, this letter may not be used or relied
upon by any other person or entity for any purpose whatsoever.
Very truly yours,
SMITH, GAMBRELL & RUSSELL, LLP
By: ____________________________________________
W. Thomas King
<PAGE>
EXHIBIT L
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT dated as of April 30, 1998, by and among TRIANGLE
IMAGING GROUP, INC., a Florida corporation ("Triangle"), QUICKCREDIT CORP., a
Florida corporation ("QuickCREDIT"), CBS ACQUISITION CORP., ("CAC") (Triangle,
QuickCREDIT and CAC each an "Acquiror" and collectively "Acquirors"), Steven P.
Naimoli and Kim A. Naimoli, individual residents of Florida ("Sellers") and
Louis C. Anderson, Esquire, an individual resident of Florida and a member in
good standing of the State Bar of Florida ("Escrow Agent").
W I T N E S S E T H:
WHEREAS, Acquirors, Sellers and Credit Bureau Services, Inc. ("CBS"), a
Florida corporation, have entered into an Agreement (the "Merger Agreement")
pursuant to which, among other things, (i) CBS will be merged with and into CAC,
with CAC as the surviving entity (the "Merger") and (ii) each issued and
outstanding share of the common stock of CBS, $5.00 par value per share (the
"CBS Common Stock"), will be converted into the right to receive the merger
consideration set forth in Section 1.8 of the Merger Agreement (the "Merger
Consideration"), which Merger Consideration includes 245,000 shares (the "Merger
Shares") of common stock of Triangle, $.0001 par value per share;
WHEREAS, the Merger Agreement requires as a condition to consummation of
the transactions described therein that Acquirors, Sellers and Escrow Agent
enter into this Agreement, and that Acquiror deposit 50,000 shares of the Merger
Shares with Escrow Agent (the "Escrow Shares"), in order to provide a fund for
indemnity payments which Sellers may become obligated to make to Acquirors as
and to the extent provided in Section 9 of the Merger Agreement ("Indemnity
Claims");
WHEREAS, the parties hereto desire that Escrow Agent be appointed as
escrow agent to act in accordance with the terms and conditions hereof;
WHEREAS, Escrow Agent is willing to serve as the escrow agent and hold
the Escrow Shares in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration for the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Appointment of Escrow Agent.
Sellers hereby irrevocably appoint Escrow Agent as escrow agent, to
receive, hold, administer and deliver the Escrow Funds (as defined below) at any
time held by Escrow Agent pursuant to this Escrow Agreement in accordance with
this Escrow Agreement, and Escrow Agent hereby accepts such appointment, all
subject to and upon the terms and conditions hereinafter set forth.
2. Deposit of Escrow Shares.
Sellers hereby agree that the Escrow Shares shall be deposited by the
Acquirors with Escrow Agent immediately upon the later to occur of (i) the
Closing described in the Merger Agreement or (ii) receipt by Acquirors from the
Acquirors' stock transfer agent, of a share certificate evidencing the Escrow
Shares. Escrow Agent hereby agrees to hold the Escrow Shares upon receipt in
accordance with this Escrow Agreement. Escrow Agent has no obligation to collect
all or any portion of the Escrow Shares and shall incur no obligations under
this Escrow Agreement until the Escrow Shares are received by Escrow Agent.
3. Investment.
(a) The Escrow Agent shall invest and reinvest all available cash dividends and
other amounts distributed or paid from time to time by Triangle and delivered to
Escrow Agent in respect of the Escrow Shares, as directed in writing by Sellers
and Acquirors jointly, in any of the following kinds of investments, or in any
combination thereof: (i) bonds or other obligations of, or guaranteed by, the
government of the United States of America, or agencies of any of the foregoing,
having maturities of not greater than ninety (90) days (or, if earlier, the
Release Date, as hereinafter defined); (ii) commercial paper rated, at the time
of the Escrow Agent's investment therein, at least P-1 by Moody's Investors
Service, Inc. and A-1 by Standard & Poor's Corporation and having maturities of
not greater than ninety (90) days (or, if earlier, the Release Date); (iii)
demand or time deposits in, certificates of deposit of or bankers' acceptances
issued by (A) a depository institution or trust company incorporated under the
laws of the United States of America, any State thereof or the District of
Columbia or (B) a United States branch office or agency of a foreign depository
institution or trust company if, in any such case, the depository institution,
trust company or office or agency has combined capital and surplus of not less
than one hundred million dollars ($100,000,000) (any such institution being
herein called a "Permitted Bank") having maturities of not greater than ninety
(90) days (or, if earlier, the Release Date); (iv) repurchase obligations of a
Permitted Bank or securities dealer (acting as principal) meeting the capital
and surplus requirements specified for a Permitted Bank with respect to any bond
or other obligation referred to in clause (i) above; (v) any money market fund
substantially all of which is invested in the foregoing investment categories;
or (vi) such other investments as Acquirors and Sellers shall jointly approve in
writing. The Escrow Shares and any amounts paid thereon while on deposit with
Escrow Agent shall be referred to hereinafter collectively as the "Escrow
Funds".
(b) All taxes in respect of earnings on the Escrow Amount shall be the
obligation of and shall be paid when due by Sellers, who shall jointly and
severally indemnify and hold Acquirors and the Escrow Agent harmless from and
against all such taxes.
4. Custody and Release of Escrow Funds.
Escrow Agent shall hold and disburse the Escrow Funds in
accordance with the following:
(a) In the event Acquirors believe Acquirors are entitled to
receive all or a portion of the Escrow Funds on account of an Indemnity Claim,
Acquirors shall deliver to Escrow Agent a written certificate stating that
Acquirors are entitled to payment from the Escrow Funds on account of a valid
Indemnity Claim (the "Claim Certificate"). The Claim Certificate shall state the
amount of the payment from the Escrow Funds to which Acquirors believe Acquirors
are entitled. Within 5 business days following Escrow Agent's receipt of any
Claim Certificate, Escrow Agent shall send notice to Sellers of Escrow Agent's
receipt of such Claim Certificate ("Claim Notice"). The Claim Notice shall
include a copy of the Claim Certificate.
(b) If Escrow Agent does not, within 15 business days following
receipt of the Claim Notice by Sellers, receive from Sellers a written notice
objecting to payment of all or any portion of the claim(s) specified in the
Claim Certificate ("Objection Notice"), Escrow Agent shall deliver to Acquirors
an amount from the Escrow Funds equal to the lesser of (i) the amount specified
in the Claim Certificate or (ii) the full remaining balance of the Escrow Funds.
(c) If Sellers elect to deliver an Objection Notice within the
15 day period specified in subparagraph 4(b) above, Sellers shall specify in
such Objection Notice whether Sellers disputes all or a portion of the amount
claimed in the Claim Certificate. If Sellers do not dispute the entire amount
claimed in the Claim Certificate, Sellers shall specify the amount which Sellers
disputes, and upon receipt of the Objection Notice, Escrow Agent shall pay any
undisputed portion claimed in the Claim Certificate to Acquirors in accordance
with subparagraph 4(b). Within 5 business days following Escrow Agent's receipt
of any Objection Notice, Escrow Agent shall notify Acquirors of Escrow Agent's
receipt of such Objection Notice and shall provide to Acquirors a copy of the
Objection Notice with such notification.
(d) Any portion of the Escrow Funds claimed by Acquirors
pursuant to a Claim Notice delivered to Escrow Agent in accordance with
subparagraph 4(a) and disputed by Sellers pursuant to an Objection Notice
delivered to Escrow Agent in accordance with subparagraph 4(b) ("Disputed
Amounts") shall be retained by Escrow Agent until Escrow Agent shall have
received either of the following:
(i) a written directive executed jointly by Acquirors and Sellers directing
Escrow Agent to pay all or a portion of the Disputed Amounts to Acquirors or to
Sellers and specifying the amounts to be paid, in which case Escrow Agent shall
promptly pay such amounts to Acquirors from the Escrow Funds in accordance with
such directive; or
(ii) a certified copy of a final, non-appealable order of a court of
competent jurisdiction ordering Escrow Agent to deliver all or a portion of the
Disputed Amounts, in which case Escrow Agent shall promptly comply with the
terms of such court order.
(e) If, on the date which is the 365th day immediately
following the Closing Date (the "Release Date"), the amount of Escrow Funds
remaining in control of Escrow Agent exceeds the aggregate amount of Disputed
Claims and Pending Claims, as hereafter defined, as of such date, Escrow Agent
shall release to Sellers all Escrow Funds remaining in excess of such aggregate
sum.
A "Pending Claim" for purposes of this Subsection (e)
shall be any amount of the Escrow
Funds which is the subject of a Notice of Claim delivered within 15 days prior
to the Release Date with respect to which the Escrow Agent has not received an
Objection Notice as of the Release Date.
(f) No Claim Certificate may be delivered by Acquirors to
Escrow Agent after the date which is two business days prior to the Release Date
(the "Bar Date"). Any Claim Certificate delivered to Escrow Agent after the Bar
Date shall be void and shall be disregarded by Escrow Agent. Subject to the
other terms and conditions of this Agreement, following the Release Date, Escrow
Agent shall continue to hold any Disputed Amounts or Pending Amounts beyond the
Release Date until disbursement in accordance with subparagraphs 4(b) or (d), as
the case may be.
(g) Anything in this Escrow Agreement to the contrary
notwithstanding:
(i) Escrow Agent may deposit all or any portion of the Escrow Funds with
the clerk of any court of competent jurisdiction upon commencement of an action
in the nature of interpleader or in the course of any court proceedings.
(ii) If at any time Escrow Agent receives an order of a court of competent
jurisdiction, or (subject to subparagraph 5(b) below) written instructions
signed by both Acquirors and Sellers directing delivery of all or a portion of
the Escrow Funds, Escrow Agent shall comply with such order or instructions.
(h) The Escrow Funds shall not be subject to lien or attachment
by any creditor of any party hereto and shall be used solely for the purposes
set forth in this Escrow Agreement. The Escrow Funds shall not be available to,
and shall not be used by, Escrow Agent to set off any obligation of Acquirors or
Sellers to Escrow Agent.
(i) Upon any delivery or deposit of all of the Escrow Funds
pursuant to this Section 4, Escrow Agent shall thereupon be released and
discharged from any and all further obligations arising in connection with this
Escrow Agreement.
5. Concerning Escrow Agent.
Escrow Agent has been induced to accept its obligations under
this Escrow Agreement by the following terms, conditions, representations and
warranties:
(a) Escrow Agent shall not be liable, except for his own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against Escrow Agent. Acquirors and Sellers jointly and severally shall
indemnify and hold harmless Escrow Agent (and any successor escrow agent) from
and against any and all claims, liabilities, losses, damages, costs, reasonable
attorneys' fees and other expenses whatsoever arising out of or in connection
with Escrow Agent's service as Escrow Agent under this Escrow Agreement. Without
limiting the foregoing, in no event shall Escrow Agent be liable except for his
own gross negligence or willful misconduct for any matter or thing relating to
his investment or reinvestment of the Escrow Funds, including, without
limitation, any failure to earn interest, any claim that a higher rate of return
could have been obtained, any delays in the investment or reinvestment of any
amounts paid by Triangle with respect to the Escrow Shares, including without
limitation, any failure to earn interest, any claim that a higher rate of return
could have been obtained, any delays in the investment or reinvestment of such
dividends or any loss of interest incident to any such delays.
(b) In the event of any disagreement among the parties to this
Escrow Agreement, or among them or any one of them and any other person,
resulting in adverse claims or demands being made in connection with all or any
part of the Escrow Funds, or in the event that Escrow Agent in good faith is in
doubt as to what action it should take hereunder, Escrow Agent may, at its
option, refuse to comply with any claims or demands on it (but nothing herein
shall obligate Escrow Agent so to do) until (i) Escrow Agent shall have received
an order of a court of competent jurisdiction directing delivery of all or any
part of the Escrow Funds or (ii) all differences shall have been adjusted and
all doubt resolved by written agreement executed by the parties to such
disagreement and delivered to Escrow Agent.
(c) Escrow Agent shall be entitled to rely upon any judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity of the service thereof and
may act in reliance upon any instrument or signature believed by it to be
genuine and may assume that any person purporting to give any notice or receipt
or advice or make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so.
(d) Each of the Acquirors represents and warrants to Escrow
Agent that Acquirors have full power and authority to act as representative of
any and all of the other Acquirors for all purposes with respect to this Escrow
Agreement and the Escrow Funds. Escrow Agent shall be entitled to rely
conclusively on the authority of any Acquiror to make Indemnity Claims on behalf
of any of the Acquirors and Escrow Agent shall make payment with respect to any
such claim directly to any Acquiror as agent and trustee of such other
Acquiror(s). Escrow Agent shall have no obligation to communicate directly with
any Acquiror or to honor or acknowledge any directives or communications given
or purportedly given by any Acquiror, other than those provided by an Acquiror
in accordance with the terms of this Escrow Agreement.
(e) Neither Acquirors nor Sellers shall have any right or
standing to make a claim, provide any notice or receive any payment by, through
or under this Agreement except in accordance with the procedures described
herein. Escrow Agent shall have no obligation to communicate directly with
Acquirors or Sellers or to honor or acknowledge any directives or communications
given or purportedly given by Acquirors or Sellers, except those provided by
Acquirors or Sellers in accordance with this Agreement.
(f) Escrow Agent may seek the advice of legal counsel selected
with reasonable care in the event of any dispute or question as to the
construction of any of the provisions of this Escrow Agreement or its duties
hereunder, and it shall incur no liability and shall be fully protected in
respect of any action taken, omitted or suffered by it in good faith in
accordance with the opinion of such counsel;
(g) This Escrow Agreement expressly sets forth all the duties
of Escrow Agent with respect to any and all matters pertinent hereto.
6. Successor Escrow Agent.
Escrow Agent (and any successor escrow agent) may at any time
resign as such by delivering the Escrow Funds to any successor escrow agent
mutually designated by Acquirors and Sellers in writing, or to any court of
competent jurisdiction. Escrow Agent may be removed by Acquirors and Sellers by
signing and delivering to Escrow Agent a joint directive stating that Escrow
Agent has been removed and designating a successor Escrow Agent, in which case
Escrow Agent shall promptly deliver the Escrow Funds to the successor escrow
agent. Escrow Agent shall be discharged of and from any and all further
obligations arising in connection with this Escrow Agreement following any
resignation or removal immediately upon delivery of the Escrow Funds to such
court or such successor escrow agent.
7. Notices.
Any notices, certificates or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given only if and when (i) delivered by messenger and receipted for, or (ii)
when delivered and receipted for by an overnight mail service, or (iii) when
delivered and receipted for by U.S. certified mail, addressed in each case as
follows:
If to Acquirors, to:
QuickCREDIT Corp.
4400 West Sample Road, Suite 228
Coconut Creek, Florida 33073
Attention: Van Saliba
with a copy to:
Smith, Gambrell & Russell, LLP
1230 Peachtree Street, N.E.
Suite 3100
Atlanta, Georgia 30309
Attention: Peter B. Barlow, Esquire
If to Sellers to:
Steven P. Naimoli and
Kim A. Naimoli
1400 Dayview Drive
Ft. Lauderdale, Florida 33304
with a copy to:
Louis C. Anderson, Esquire
224 Commercial Boulevard, Suite 317
Lauderdale-by-the-Sea, Florida 33308
If to Escrow Agent to:
Louis C. Anderson, Esquire
224 Commercial Boulevard, Suite 317
Lauderdale-by-the-Sea, Florida 33308
Any address set forth above may be changed by notice given pursuant to this
Section 7.
8. Miscellaneous.
(a) Any provision of this Escrow Agreement which may be determined by
any court of competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. It is expressly understood, however, that the parties hereto
intend each and every provision of this Escrow Agreement to be valid and
enforceable and hereby knowingly waive all rights to object to any provision of
this Escrow Agreement.
(b) This Escrow Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and their respective successors and permitted
assigns, and shall not be enforceable by or inure to the benefit of any third
party. No party may assign its rights or obligations under this Escrow Agreement
without the written consent of the other parties. In no event shall Escrow Agent
be required to act upon, or be bound by, any notice, instruction, confirmation
or other communication given by a person other than Acquirors or Sellers nor
shall Escrow Agent be required to deliver the Escrow Funds to any person other
than Acquirors or Sellers or a successor escrow agent designated by Acquirors
and Sellers in accordance with Paragraph 6.
(c) This Escrow Agreement shall be construed in accordance with and
governed by the internal laws of the State of Florida.
(d) This Escrow Agreement constitutes the entire understanding among
the parties with respect to the subject matter hereof. This Escrow Agreement may
only be modified or terminated by a writing signed by all of the parties hereto,
and no waiver hereunder shall be effective unless in writing signed by the party
to be charged.
(e) The fees of Escrow Agent shall be paid 50% by Acquirors and 50% by
Sellers, as and when billed by Escrow Agent in accordance with the schedule of
fees described on Exhibit "A" hereto.
(f) This Escrow Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts of this Escrow Agreement taken
together shall constitute but one and the same instrument.
(g) A "business day" for purposes of this Agreement shall mean any day
on which commercial banks in Ft. Lauderdale, Florida are open for regular
business.
(h) The section headings used herein are for convenience of reference
only and shall not define or limit the provisions of this Escrow Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement on the date first above written.
ACQUIRORS SELLERS
TRIANGLE IMAGING GROUP, INC.
_________________________________________ ___________________________________
By: Vito A. Bellezza By: Steven P. Naimoli
Title: Chairman of the Board of Directors
and Chief Financial Officer
_________________________________________ ___________________________________
By: Harold S. Fischer By: Kim A. Naimoli
Title: President
ESCROW AGENT
QUICKCREDIT CORP. ___________________________________
By: Louis C. Anderson, Esquire
_________________________________________
By: Van Saliba
Title: President
CBS ACQUISITION CORP.
_________________________________________
By: Van Saliba
Title: President
<PAGE>
EXHIBIT A
SCHEDULE OF ESCROW AGENT FEES
Annual Charge $1,000.00
Any out-of-pocket expenses, or extraordinary fees or expenses such as
attorneys fees or messenger costs, are additional and are not included in the
above schedule.
<PAGE>
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
by and among:
TRIANGLE IMAGING GROUP, INC., a Florida corporation,
QUICKCREDIT CORP., a Florida corporation
EJG ACQUISITION CORP., a Florida corporation,
EJG SERVICES, INC. d/b/a Universal Mortgage Reporting,
a Missouri corporation,
and
THE SHAREHOLDERS OF EJG SERVICES, INC.
d/b/a Universal Mortgage Reporting
________________________
Dated as of May 22, 1998
________________________
<PAGE>
Table of Contents Page
Section 1. DESCRIPTION OF TRANSACTION...................................1
1.1 Merger of EJG with EAC.......................................1
1.2 Effect of Merger.............................................1
1.3 Closing; Effective Time......................................2
1.4 Articles of Incorporation and Bylaws;
Directors and Officers.......................................2
1.5 Conversion of Shares.........................................2
1.6 Closing of Transfer Books of EJG.............................2
1.7 Exchange of Certificates.....................................3
1.8 Merger Consideration.........................................4
1.9 Right to Obligate Triangle to Repurchase Merger Shares.......5
1.10 Tax Consequences.............................................6
1.11 Further Action...............................................6
Section 2. REPRESENTATIONS AND WARRANTIES OF EJG
AND THE SHAREHOLDERS.........................................6
2.1 Due Organization and Qualification...........................6
2.2 Capitalization...............................................6
2.3 Options or Other Rights......................................7
2.4 Subsidiaries and Investments.................................7
2.5 Charter and Bylaws...........................................7
2.6 Books and Records............................................7
2.7 Authority; Binding Nature of Agreement.......................7
2.8 Financial Statements.........................................8
2.9 Absence of Undisclosed Liabilities...........................9
2.10 Absence of Changes...........................................9
2.11 Legal Proceedings; Orders...................................11
2.12 Tax Matters.................................................11
2.13 Title to Assets.............................................13
2.14 Compliance with Legal Requirements..........................13
2.15 Contracts...................................................13
2.16 Leases......................................................15
2.17 Accounts and Notes Receivable...............................15
2.18 Fixed Assets................................................16
2.19 Trade Names and Other Intangibles...........................16
2.20 Suppliers and Customers.....................................16
2.21 Payment of Wages and Salary.................................16
2.22 Employee Benefit Plans......................................17
2.23 Insurance...................................................18
2.24 Environmental Matters.......................................19
2.25 Officers, Directors and Key Employees.......................20
2.26 Restrictive Documents.......................................20
2.27 Licenses....................................................20
2.28 Transactions with Affiliated Parties........................20
2.29 Bank Accounts and Powers of Attorney........................20
2.30 Warranties..................................................20
2.31 Assets Complete.............................................21
2.32 No Changes Prior to Closing Date............................21
2.33 Disclosure..................................................21
2.34 Broker's or Finder's Fees...................................21
2.35 Copies of Documents.........................................22
2.36 Disclosure Schedules........................................22
Section 3. REPRESENTATIONS AND WARRANTIES OF TRIANGLE,
QUICKCREDIT AND EAC.........................................22
3.1 Due Organization and Qualification..........................22
3.2 Charter and By-Laws.........................................22
3.3 Authority; Binding Nature of Agreement......................22
3.4 Legal Proceedings; Orders...................................23
3.5 SEC Filings; Financial Statements...........................24
3.6 Valid Issuance..............................................24
3.7 Broker's or Finder's Fees...................................24
Section 4. CERTAIN COVENANTS OF EJG AND THE SHAREHOLDERS...............24
4.1 Access and Investigation....................................25
4.2 Operation of the Business of EJG............................25
4.3 Notification; Updates to Schedules..........................27
4.4 Pooling of Interests........................................27
4.5 No Negotiation..............................................27
Section 5. ADDITIONAL COVENANTS OF THE PARTIES.........................28
5.1 Filings and Consents........................................28
5.2 Public Announcements........................................28
5.3 Best Efforts................................................28
5.4 Employment Agreement........................................28
5.5 Restrictive Covenants Agreement.............................28
5.6 Share Subscription Agreement................................29
5.7 Termination of Employee Plans...............................29
5.8 Assumption of Notes Payable.................................29
Section 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF
TRIANGLE AND QUICKCREDIT....................................29
6.1 Accuracy of Representations.................................29
6.2 Performance of Covenants....................................29
6.3 Consents....................................................29
6.4 Agreements and Documents....................................29
6.5 No Material Adverse Change..................................30
6.6 Termination of Employee Plans...............................30
6.7 Pooling Letter..............................................30
6.8 Rule 506....................................................30
6.9 No Restraints...............................................30
6.10 No Legal Proceedings........................................31
6.11 Completion of Due Diligence.................................31
6.12 Certificates of Merger......................................31
Section 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
EJG AND THE SHAREHOLDERS....................................31
7.1 Accuracy of Representations.................................31
7.2 Performance of Covenants....................................31
7.3 Consents....................................................31
7.4 Agreements and Documents....................................31
7.5 No Restraints...............................................32
7.6 Certificates of Merger......................................32
Section 8. TERMINATION.................................................32
8.1 Termination Events..........................................32
8.2 Termination Procedures......................................33
8.3 Effect of Termination.......................................33
Section 9. INDEMNIFICATION, ETC........................................33
9.1 Survival of Representations and Warranties..................33
9.2 Shareholders' Indemnity Agreement...........................33
9.3 Indemnity Agreement of QuickCREDIT and
the Surviving Corporation...................................34
9.4 Indemnification Procedure...................................35
9.5 Pledge of Stock as Security.................................36
9.6 Set-off.....................................................36
Section 10. MISCELLANEOUS PROVISIONS....................................36
10.1 Further Assurances..........................................36
10.2 Fees and Expenses...........................................36
10.3 Attorneys' Fees.............................................36
10.4 Notices.....................................................37
10.5 Time of the Essence.........................................38
10.6 Headings....................................................38
10.7 Counterparts................................................38
10.8 Governing Law...............................................38
10.9 Successors and Assigns......................................38
10.10 Remedies Cumulative; Specific Performance...................38
10.11 Waiver......................................................39
10.12 Amendments..................................................39
10.13 Severability................................................39
10.14 Parties in Interest.........................................39
10.15 Entire Agreement............................................39
10.16 Construction................................................39
LIST OF EXHIBITS
Exhibit A -- Shareholders of EJG
Exhibit B -- Certain Definitions Used in this Agreement
Exhibit C -- Directors and Officers of the Surviving Corporation
Exhibit D -- Form of Employment Agreement with Keith Giordano
Exhibit E -- Form of Restrictive Covenants Agreement with
Keith Giordano
Exhibit F -- Form of Share Subscription Agreement
Exhibit G -- Form of Opinion of Counsel to Triangle
and QuickCREDIT
Exhibit H -- Form of Opinion of Counsel to EJG and the
Shareholders
Exhibit I -- Form of Escrow Agreement
LIST OF SCHEDULES
Schedule 2.1 -- Due Organization and Qualification
Schedule 2.2 -- Capitalization
Schedule 2.3 -- Options or Other Rights
Schedule 2.5 -- Charter and Bylaws
Schedule 2.7 -- Authority; Binding Nature of Agreement
Schedule 2.8 -- Financial Statements
Schedule 2.10 -- Absence of Changes
Schedule 2.11 -- Legal Proceedings; Orders
Schedule 2.12 -- Tax Matters
Schedule 2.13 -- Title to Assets
Schedule 2.14 -- Compliance with Legal Requirements
Schedule 2.15 -- Contracts
Schedule 2.16 -- Leases
Schedule 2.18 -- Fixed Assets
Schedule 2.19 -- Trade Names and Other Intangibles
Schedule 2.20 -- Suppliers and Customers
Schedule 2.21 -- Payment of Wages and Salary
Schedule 2.22 -- Employee Benefit Plans
Schedule 2.23 -- Insurance
Schedule 2.24 -- Environmental Matters
Schedule 2.25 -- Officers, Directors and Key Employees
Schedule 2.27 -- Licenses
Schedule 2.28 -- Transactions with Affiliated Parties
Schedule 2.29 -- Bank Accounts and Powers of Attorney
Schedule 2.30 -- Warranties
Schedule 2.32 -- No Charges Prior to Closing
Schedule 3.2 -- Charter and Bylaws
Schedule 3.4 -- Legal Proceedings; Orders
<PAGE>
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and
entered into as of this 22 day of May, 1998, by and among TRIANGLE IMAGING
GROUP, INC., a Florida corporation ("Triangle"); QUICKCREDIT CORP., a Florida
corporation and a wholly-owned subsidiary of Triangle ("QuickCREDIT"); EJG
ACQUISITION CORP., a Florida corporation and wholly-owned subsidiary of
QuickCREDIT ("EAC"); EJG SERVICES, INC, d/b/a Universal Mortgage Reporting, a
Missouri corporation ("EJG") and the shareholders of EJG identified on Exhibit A
hereto (the "Shareholders"). Certain capitalized terms used in this Agreement
are defined in Exhibit B.
RECITALS:
A. The parties intend to effect a merger of EJG with EAC (the "Merger")
in accordance with this Agreement the Florida Business Corporation Act (the
"FBCA") and the General and Business Corporation Law of Missouri (the "GBCLM").
Upon consummation of the Merger, EJG will cease to exist and EAC will continue
to exist as the surviving corporation of the Merger.
B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Code.
C. This Agreement has been adopted and approved by the respective
boards of directors of Triangle, QuickCREDIT and EAC and the board of directors
and the shareholders of EJG.
D. The capitalization of EJG consists of 30,000 shares of voting common
stock, no par value per share, of which 6,000 shares are issued and outstanding
(the "EJG Common Stock").
E. It is intended that the Merger be treated as a "pooling of
interests" under generally accepted accounting principles and SEC rules.
AGREEMENT:
The parties to this Agreement agree as follows:
Section 1. DESCRIPTION OF TRANSACTION
1.1 Merger of EJG with EAC. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time, EJG shall be merged with and
into EAC, and the separate existence of EJG shall cease. EAC will continue as
the surviving corporation in the Merger (the "Surviving Corporation").
1.2 Effect of Merger. The Merger shall have the effects set forth in this
Agreement and in the applicable provisions of the FBCA.
1.3 Closing; Effective Time. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of
QuickCREDIT, 4400 West Sample Road, Suite 228, Coconut Creek, Florida 33073, at
10:00 a.m. local time on April 30, 1998, or at such other time on or before May
31, 1998 as the parties shall designate (the "Scheduled Closing Time"; the date
on which the Closing actually takes place is referred to in this Agreement as
the "Closing Date"). Contemporaneously with or as promptly as practicable after
the Closing, a properly executed certificate of merger (the "Certificate of
Merger") for the merger of EJG with EAC, conforming to the requirements of the
FBCA, shall be filed with the Secretary of State of the State of Florida (the
"Secretary of State"). The Merger shall take effect at the time such Certificate
of Merger is filed with the Secretary of State (the "Effective Time").
1.4 Articles of Incorporation and Bylaws; Directors and Officers. Unless the
parties agree otherwise prior to the Effective Time:
(a) the Articles of Incorporation of EAC shall continue as the Articles of
Incorporation of the Surviving Corporation;
(b) the Bylaws of EAC shall continue as the Bylaws of the Surviving Corporation;
(c) the directors and officers of the Surviving Corporation immediately after
the Effective Time shall be the individuals identified on Exhibit C; and
(d) the Surviving Corporation shall change its name to EJG Services, Inc. d/b/a
Universal Mortgage Reporting promptly after the Closing.
1.5 Conversion of Shares.
Subject to Section 1.7 of this Agreement, at the Effective Time, by
virtue of the Merger and without any further action on the part of Triangle,
QuickCREDIT, EJG or any Shareholder, each share of EJG Common Stock outstanding
immediately prior to the Effective Time shall be canceled and retired and
converted into the right to receive a pro rata share of the aggregate Merger
Consideration described in Section 1.8 of this Agreement.
1.6 Closing of Transfer Books of EJG. At the Effective Time, the holders of
certificates representing shares of EJG Common Stock that were outstanding
immediately prior to the Effective Time shall cease to have any rights as
shareholders of EJG, and the stock transfer books of EJG shall be closed with
respect to all shares of such EJG Common Stock outstanding immediately prior to
the Effective Time. No further transfer of any such shares of capital stock of
EJG shall be made on such stock transfer books after the Effective Time. If,
after the Effective Time, a valid certificate previously representing any of
such shares of EJG Common Stock (an "EJG Stock Certificate") is presented to
QuickCREDIT, such EJG Stock Certificate shall be canceled and shall be exchanged
as provided in Section 1.7 of this Agreement.
1.7 Exchange of Certificates.
(a) Each Shareholder, at the Closing or as soon thereafter as is practicable,
shall surrender its, his or her respective EJG Stock Certificate(s) to
QuickCREDIT, together with such transmittal documents as QuickCREDIT may
reasonably require, and QuickCREDIT shall deliver or cause Triangle to deliver
to such Shareholder such Shareholder's pro rata share of the aggregate Merger
Consideration, pursuant to, and as provided in, Section 1.8 of this Agreement.
(b) No fractional shares of Triangle Common Stock shall be issued in connection
with the Merger, and no certificates for any such fractional shares shall be
issued. In lieu of such fractional shares, any Shareholder who would otherwise
be entitled to receive a fraction of a share of Triangle Common Stock (after
aggregating all fractional shares of Triangle Common Stock issuable to such
holder) shall receive shares of Triangle Common Stock rounded upward or downward
to the nearest whole number of shares.
(c) Until surrendered as contemplated by this Section 1.7, each EJG Stock
Certificate shall be deemed, from and after the Effective Time, to represent
only the right to receive a pro rata share of the Merger Consideration. If any
EJG Stock Certificate shall have been lost, stolen or destroyed, Triangle may,
in its discretion and as a condition precedent to the issuance of any
certificate representing Triangle Common Stock, require the owner of such lost,
stolen or destroyed EJG Stock Certificate to provide an appropriate affidavit
and to deliver a bond (in such sum as Triangle may reasonably direct) as
indemnity against any claim that may be made against Triangle with respect to
such EJG Stock Certificate.
(d) The shares of Triangle Common Stock to be issued in the Merger shall be
characterized as "restricted securities" for purposes of Rule 144 under the
Securities Act, and each certificate representing any of such shares shall bear
a legend identical or similar in effect to the following legend (together with
any other legend or legends required by applicable state securities laws or
otherwise):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL SECURITIES ACT OF 1933, (THE "FEDERAL ACT") OR THE SECURITIES
LAWS OF ANY STATE (THE "STATE LAWS") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IF, IN THE OPINION OF
COUNSEL TO TRIANGLE, SUCH SALE OR TRANSFER WOULD BE (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR PURSUANT TO AN EXEMPTION FROM
SUCH REGISTRATION; AND (2) IN A TRANSACTION WHICH IS EXEMPT UNDER APPLICABLE
STATE LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE
STATE LAWS OR IN A TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH APPLICABLE
STATE LAWS.
(e) QuickCREDIT shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable to any holder or former holder of EJG Common
Stock pursuant to this Agreement such amounts as QuickCREDIT is required to
deduct or withhold therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
(f) Neither QuickCREDIT nor Triangle shall be liable to any holder or former
holder of EJG Common Stock for any shares of Triangle Common Stock (or dividends
or distributions with respect thereto), or for any cash amounts, delivered to
any public official pursuant to any applicable abandoned property, escheat or
similar law.
1.8 Merger Consideration. The aggregate consideration to be delivered by
QuickCREDIT to the Shareholders in full consideration for the Merger (the
"Merger Consideration") shall be:
(i) a cash payment of Fifty Thousand and no/100s Dollars ($50,000) to be
delivered at Closing or, if later, upon the surrender of the applicable EJG
Common Stock;
(ii) a cash payment of Twenty-Five Thousand and no/100s Dollars ($25,000) to be
delivered on or before the date which is the later of the 180th day immediately
following the Closing Date or the date of surrender of the applicable EJG Common
Stock;
(iii) a cash payment of Twenty-Five Thousand and no/100s Dollars ($25,000) to be
delivered on or before the date which is the later of the 270th day immediately
following the Closing Date or the date of surrender of the applicable EJG Common
Stock;
(iv) Two Hundred Thousand (200,000) shares of Triangle Common Stock (the "Merger
Shares") to be delivered by Triangle (or its transfer agent) as soon as is
practicable following the date of the surrender of the applicable EJG Common
Stock, 50,000 shares of which shall be delivered by the Shareholders to Glenn
Allen, Esq., as escrow agent, to be held in escrow pursuant to Section 9.5 of
this Agreement (the "Escrow Shares"); and
(v) a cash payment to be made as soon as practicable following the date which is
the 90th day immediately following the Closing Date (the "Payment Date"), in an
amount which is equal to (1) the aggregate of the accounts receivable of EJG
("EJG Receivables") that are (x) in existence at 5:00 p.m. on the day before the
Closing Date and (y) actually collected by EAC ("EAC Receipts") during the
period beginning on the Closing Date and ending on the Payment Date less (2) all
accounts payable and other overhead expenses of EJG existing at 5:00 p.m. on the
day before the Closing Date ("EJG Expenses"); provided that all EJG Receivables
remaining on the Payment Date shall be written off by EAC and assigned to
Shareholders
1.9 Right to Obligate Triangle to Repurchase Merger Shares. From the Closing
Date and for a period ending on the 365th day immediately thereafter (the "Put
Option Period"), the Shareholders shall have the right to require Triangle to
purchase all or any portion of the Merger Shares (the "Put Option") at a
purchase price of $3.00 per share (the "Repurchase Price") if, at any time
during the Put Option Period, the bid price of Triangle Common Stock is less
than $3.00 per share for five (5) or more consecutive trading days (the
"Triggering Event"); provided, however, that the Repurchase Price shall be
reduced by the amount of any cash dividends paid to the Shareholders during the
Put Option Period and shall be proportionately adjusted in the event of a change
in the number of shares of Triangle Common Stock issued and outstanding during
the Put Option Period as a result of a stock split, stock dividend,
recapitalization, reclassification or similar transaction with respect to such
Triangle Common Stock. The Shareholders may exercise the Put Option by giving
written notice of such intention of exercise to Triangle indicating the number
of shares to be repurchased by Triangle (the "Exercise Notice"), at any time
following the occurrence of the Triggering Event up to and including the fifth
business day following the last day of the Put Option Period. Within fifteen
(15) business days following receipt by Triangle of the Exercise Notice, subject
to confirmation by Triangle of the occurrence of a Triggering Event, (i) the
Shareholders exercising their Put Option shall deliver to Triangle certificates
representing the number of shares of Triangle Common Stock to be repurchased by
Triangle, as indicated in the Exercise Notice, duly endorsed in blank, or
accompanied by stock powers duly endorsed in blank, with all necessary transfer
tax and other revenue stamps acquired at the Shareholders' expense, affixed and
canceled, and (ii) Triangle shall deliver to each exercising Shareholder a cash
payment in the amount determined by multiplying the number of shares of Triangle
Common Stock to be repurchased by Triangle from such Shareholder by the
Repurchase Price, as reduced or adjusted pursuant to this Section 1.9 (the
"Repurchase Payment"); provided, however, that Triangle shall not be required to
deliver that portion of any Repurchase Payment attributable to the exercise of
the Put Option with respect to any Escrow Shares, unless and until the release
of such Escrow Shares from escrow in accordance with the terms of the Stock
Pledge and Escrow Agreement referenced in Section 9.5 of this Agreement, at
which time, upon the tender of share certificates duly endorsed in blank, or
accompanied by a stock power duly endorsed in blank, with all necessary revenue
stamps acquired at the exercising Shareholders' expense, affixed and canceled,
evidencing the Escrowed Shares to be repurchased, Triangle shall be required to
deliver to each exercising Shareholder a cash payment determined by multiplying
the Repurchase Price, as reduced or adjusted pursuant to this Section 1.9 at the
time of such payment, by the lesser of (x) the number of shares of Triangle
Common Stock requested by each such Shareholder to be repurchased pursuant to
the applicable Exercise Notice or (y) the number of Escrow Shares to be released
to such Shareholder from escrow, as determined in accordance with terms of the
Stock Pledge and Escrow Agreement referenced in Section 9.5 of this Agreement.
The Put Option rights granted to each Shareholder pursuant to this Section 1.9
shall be exercisable by each respective Shareholder during his or her lifetime
and shall not be transferrable or assignable except by will or the laws of
descent and distribution.
1.10 Tax Consequences. For federal income tax purposes, the Merger is intended
to constitute a reorganization within the meaning of Section 368 of the Code.
The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.11 Further Action. If, at any time after the Effective Time, any further
action is determined by Triangle or QuickCREDIT to be necessary or desirable to
carry out the purposes of this Agreement or to vest QuickCREDIT with full right,
title and possession of and to all rights and property of EJG, the officers and
directors of Triangle and QuickCREDIT shall be fully authorized (in the name of
EJG and otherwise) to take such action.
Section 2. REPRESENTATIONS AND WARRANTIES OF EJG AND THE SHAREHOLDERS
As an inducement to Triangle and QuickCREDIT to enter into this
Agreement and to consummate the transactions contemplated hereby, and with the
knowledge that Triangle and QuickCREDIT shall rely thereon, EJG and each of the
Shareholders, jointly and severally, represents and warrants to Triangle and
QuickCREDIT the following (both as of the Closing Date and as of the date
hereof):
2.1 Due Organization and Qualification. EJG is a corporation duly organized and
validly existing under the laws of the State of Florida, has made all filings as
required under applicable filing and annual registration provisions of the FBCA
and has paid all filing fees due and payable thereunder. EJG has all necessary
corporate power and lawful authority to conduct its business in the manner in
which its business is currently being conducted and to own or lease and use its
assets in the manner in which it now owns, leases or uses its assets. EJG is not
qualified or otherwise authorized to do business as a foreign corporation in any
jurisdiction other than the jurisdictions identified in Schedule 2.1 annexed
hereto, which jurisdictions are the only jurisdictions in which such
qualification or authorization is required by law. Except as set forth on
Schedule 2.1 annexed hereto, EJG does not file and is not required to file
franchise, income or other tax returns in any other jurisdiction based upon the
ownership or use of property therein or the conduct of business or derivation of
income therefrom. EJG does not own or lease property or maintain any resident
employee in any jurisdiction other than the jurisdictions set forth on Schedule
2.1 annexed hereto.
2.2 Capitalization. The title, par value, number of authorized shares and number
of issued and outstanding shares of capital stock of EJG are described on
Schedule 2.2 annexed hereto. No other class of capital stock of EJG is issued
and outstanding and there are no shares of capital stock held in EJG's treasury.
All of the issued and outstanding shares of EJG Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable. The Shares
of capital stock of EJG owned of record and beneficially by each EJG shareholder
and the residence address of each such shareholder is set forth on Schedule 2.2
annexed hereto. Except as set forth on Schedule 2.2 no person or entity has, or
ever has had, any ownership interest in the property, capital stock, assets or
business of EJG.
2.3 Options or Other Rights. Except as described on Schedule 2.3 annexed hereto,
there is no (i) outstanding subscription, option, call, warrant, unsatisfied
preemptive right, commitment, conversion right or other agreement or right of
any kind pursuant to which any Person has the right or option (whether or not
currently exercisable) to acquire, or otherwise relating to, any shares of the
capital stock or any other security of EJG; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or any other security of EJG; (iii) contract
under which EJG is or may become obligated to sell or otherwise issue any shares
of its capital stock or any other securities; or (iv) condition or circumstance
that may give rise to or provide a basis for the assertion of a claim by any
Person to the effect that such Person is entitled to acquire or receive any
shares of capital stock or other securities of EJG. Except as set forth in
Schedule 2.3 annexed hereto, EJG has never issued or granted any option, call,
warrant or right to acquire, or otherwise relating to, any shares of its capital
stock or other securities.
2.4 Subsidiaries and Investments. EJG has no subsidiaries, and has never owned,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect interest of any nature in, any Entity.
2.5 Charter and Bylaws. Schedule 2.5 annexed hereto contains true, correct and
complete copies of (a) the articles of incorporation of EJG, including all
amendments thereto (certified by the Secretary of State of the State of
Florida), and (b) the bylaws of EJG, including all amendments thereto (certified
by the secretary or other executive officer of EJG).
2.6 Books and Records. The corporate minute books, stock certificate books,
stock registers and other corporate records of EJG are true, correct and
complete in all material respects, and the signatures appearing on all documents
contained therein are the true signatures of the persons purporting to have
signed the same. The corporate minute books of EJG contain true and complete
records of all of the meetings and other proceedings (including any actions
taken by written consent or otherwise without a meeting) of the board of
directors of EJG, any committee of the board of directors of EJG and the
shareholders of EJG since the date of incorporation of EJG. All actions
reflected in said books and records were duly and validly taken in compliance
with all Legal Requirements applicable to such matters and the provisions of
EJG's articles of incorporation or bylaws or of any resolution adopted by EJG's
shareholders, EJG's board of directors or any committee of EJG's board of
directors. None of EJG's records, systems, controls, data or information are
recorded, stored, maintained or operated by, or otherwise are wholly or partly
dependent upon or held by, any person, entity or media (including any
electronic, mechanical or photographic process) which are not under the
exclusive ownership and direct control (including all means of access) of EJG.
2.7 Authority; Binding Nature of Agreement.
(a) Each of the Shareholders has the full power and legal capacity to execute
and deliver the Shareholder Documents and to perform their respective
obligations under this Agreement. Each of the Shareholder Documents, when
executed, will constitute a valid and binding agreement of the Shareholder which
is a party thereto, enforceable against such Shareholder in accordance with its
terms.
(b) The execution, delivery and performance by EJG of the EJG Documents has been
duly authorized by all necessary action on the part of EJG and its board of
directors and shareholders. Each of the EJG Documents, when executed, will
constitute the legal, valid and binding obligation of EJG, enforceable against
EJG in accordance with its terms.
(c) Except as described in Schedule 2.7 annexed hereto, no consent of any other
Person and, to the knowledge of each of the Shareholders, no authorization or
approval of, or declaration, filing or registration with, any Governmental Body,
is necessary in order to enable the Shareholders or EJG to enter into and
perform their respective obligations under the Shareholder Documents or EJG
Documents, and neither the execution and delivery of the Shareholder Documents
or EJG Documents nor the consummation of the transactions contemplated thereby
will:
(i) conflict with, require any consent under, result in the violation of, or
constitute a breach of any provision of the articles of incorporation or bylaws
of EJG;
(ii) conflict with, require any Consent under, result in the violation of,
constitute a breach of or a default under, or accelerate the performance
required on the part of the Shareholders or EJG by the terms of, any evidence of
indebtedness or Contract to which the Shareholders or EJG is a party, in each
case with or without notice or lapse of time or both, including any evidence of
Encumbrance to which any property either of EJG or EJG Common Stock is subject,
or permit the termination of any such Contract by another Person;
(iii) result in the creation or imposition of any Encumbrance upon, or
restriction on the use of, any property or assets of EJG or EJG Common Stock
under any Contract to which either EJG or the Shareholders are bound;
(iv) accelerate, or constitute an event entitling, or which would, on notice or
lapse of time or both, entitle the holder of any indebtedness of EJG or the
Shareholders to accelerate the maturity of any such indebtedness;
(v) conflict with or result in the breach or violation of any Legal Requirement
that is binding on either EJG or the Shareholders; or
(vi) violate or cause any revocation of or limitation on any Permit of EJG.
2.8 Financial Statements.
(a) EJG has delivered to QuickCREDIT copies of the following financial
statements (collectively, the "EJG Financial Statements"):
(i) the unaudited balance sheets and related statements of income, Shareholders'
equity and cash flow of EJG as of and for the fiscal years ended on December 31,
1995, December 31, 1996 and December 31, 1997; and
(ii) the unaudited balance sheet of EJG (the "Unaudited Balance Sheet") as of
January 31, 1998 (the "Balance Sheet Date") and the related unaudited statements
of income, shareholders' equity and cash flow of EJG for the 3-month period then
ended.
(b) Copies of the EJG Financial Statements are annexed hereto as Schedule 2.8.
The EJG Financial Statements have been prepared from the books and records of
EJG in accordance with generally accepted principles of tax basis of accounting
applied on a consistent basis throughout the periods covered [except that the
unaudited EJG Financial Statements for the 3-month period ended March 31, 1998
do not contain footnotes and are subject to normal and recurring year-end audit
adjustments, which will not, individually or in the aggregate, be material in
magnitude.] The EJG Financial Statements present fairly the financial condition
of EJG as of the respective dates thereof and the results of operations and cash
flows of EJG for the periods covered thereby, and, except as indicated therein,
reflect all claims against and all debts and liabilities of EJG, whether fixed
or contingent, as of the dates thereof.
2.9 Absence of Undisclosed Liabilities. All liabilities, commitments or
obligations of EJG with respect to EJG's business (whether secured or unsecured
and whether accrued, absolute, contingent, direct or indirect or otherwise and
whether due or to become due) are set forth or adequately reserved against in
the EJG Financial Statements, except for commercial liabilities and obligations
incurred since the Balance Sheet Date in the ordinary course of business and
consistent with past practice and none of which has or will have a material
adverse effect on the business, financial condition or results of operations of
EJG's business. The total of all liabilities in respect of accounts payable
incurred in the ordinary course of business (i.e., invoices received, approved
and authorized for payment) of EJG do not exceed, and as of the Closing Date
will not exceed, $40,000 in value. Except as and to the extent described in the
EJG Financial Statements, EJG has no knowledge of any basis for the assertion
against EJG's business or the business of any predecessor to EJG of any
liability, and there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may likely give rise to
liabilities, except commercial liabilities and obligations incurred in the
ordinary course of business and consistent with past practice.
2.10 Absence of Changes. Except as set forth in Schedule 2.10 annexed hereto and
since the Balance Sheet Date:
(a) there has not been any material adverse change in EJG's business, condition,
assets, liabilities, operations, financial performance or, to the knowledge of
Shareholders, prospects, and no event has occurred that will, or could
reasonably be expected to, have a Material Adverse Effect on EJG;
(b) there has not been any material loss, damage or destruction to, or any
material interruption in the use of, any of EJG's assets (whether or not covered
by insurance);
(c) EJG has not declared, accrued, set aside or paid any dividend or made any
other distribution in respect of any shares of capital stock, and has not
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities;
(d) EJG has not sold, issued or authorized the issuance of (i) any capital stock
or other security, (ii) any option, call, warrant or right to acquire, or
otherwise relating to, any capital stock or any other security, or (iii) any
instrument convertible into or exchangeable for any capital stock or other
security;
(e) there has been no amendment to EJG's articles of incorporation or bylaws,
and EJG has not effected or been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) EJG has not formed any subsidiary or acquired any equity interest or other
interest in any other Entity;
(g) EJG has not made any capital expenditure which, when added to all other
capital expenditures made by EJG, exceeds $5,000 in the aggregate;
(h) EJG has not (i) entered into or permitted any of the assets owned or used by
it to become bound by any Contract, or (ii) amended or prematurely terminated,
or waived any material right or remedy under, any Contract to which it is or was
party or under which it has or has had any rights or obligations;
(i) EJG has not (i) acquired, leased or licensed any right or other asset from
any other Person, (ii) sold or otherwise disposed of, or leased or licensed, any
right or other asset to any other Person, or (iii) waived or relinquished any
right, except for immaterial rights or other immaterial assets acquired, leased,
licensed or disposed of in the ordinary course of business and consistent with
EJG's past practices;
(j) EJG has not written off as uncollectible, or established any extraordinary
reserve with respect to, any account receivable or other indebtedness;
(k) EJG has not made any pledge of any of its assets or otherwise permitted any
of its assets to become subject to any Encumbrance, except for pledges of
immaterial assets made in the ordinary course of business and consistent with
EJG's past practices;
(l) EJG has not (i) lent money to any Person, or (ii) incurred or guaranteed any
indebtedness for borrowed money;
(m) EJG has not (i) established, adopted or amended any Plan, (ii) paid any
bonus or made any profit-sharing or similar payment to, or increased the amount
of the wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees, or (iii)
hired any new employee;
(n) EJG has not changed any of its methods of accounting or accounting
practices in any respect;
(o) EJG has not made any Tax election;
(p) EJG has not commenced or settled, whether or not commenced by it, any
Legal Proceeding;
(q) EJG has not entered into any material transaction or taken any other
material action outside the ordinary course of business or inconsistent with its
past practices; and
(r) EJG has not agreed or committed to take any of the actions referred to in
clauses "(c)" through "(q)" above.
2.11 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 2.11 annexed hereto, there is no pending
Legal Proceeding, and, to the knowledge of EJG and the Shareholders, no Person
has threatened to commence any Legal Proceeding, (i) that involves EJG or any of
the assets owned or used by EJG; or (ii) that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the Merger or any of the other transactions contemplated by this Agreement. To
the knowledge of EJG and the Shareholders, except as set forth in Schedule 2.11
annexed hereto, no event has occurred, and no claim, dispute or other condition
or circumstance exists, that will, or that could reasonably be expected to, give
rise to or serve as a basis for the commencement of any such Legal Proceeding.
(b) There is no order, writ, injunction, judgment or decree to which EJG, or any
of the assets owned or used by EJG, are subject. Neither the Shareholders nor
EJG is subject to any order, writ, injunction, judgment or decree that relates
to EJG's business or to any of the assets owned or used by EJG. To the knowledge
of EJG and the Shareholders, no officer or other employee of EJG is subject to
any order, writ, injunction, judgment or decree that prohibits such officer or
other employee from engaging in or continuing any conduct, activity or practice
relating to EJG's business.
2.12 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of EJG with any
Governmental Body with respect to any transaction occurring or any taxable
period ending on or before the Closing Date (i) have been or will be filed when
due and (ii) have been, or will be when filed, accurately and completely
prepared in compliance with all applicable Legal Requirements. Except as set
forth on Schedule 2.12, all Taxes owed by EJG (whether or not shown on any Tax
Return) have been paid. Except as set forth on Schedule 2.12 annexed hereto, EJG
is not currently the beneficiary of any extension of time within which to file
any Tax Return. No claim has ever been made by a Governmental Body in a
jurisdiction where EJG does not file Tax Returns that EJG is or may be subject
to taxation by that jurisdiction. There are no Encumbrances on any of the assets
of EJG that arose in connection with any failure (or alleged failure) to pay any
Tax.
(b) EJG has withheld and paid all Taxes required to have been withheld and paid
by it in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other Person.
(c) None of the Shareholders or any Representative of EJG (or any employee of
EJG responsible for Tax matters) has any reason to believe that any authority
may assess any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax liability of EJG either
(i) claimed or raised by any authority in writing or (ii) as to which any
Shareholder (or any employee of EJG responsible for Tax matters) has knowledge.
Schedule 2.12 annexed hereto lists all federal, state, local, and foreign income
Tax Returns filed with respect to EJG for taxable periods ended on or after
December 31, 1994 and indicates those Tax Returns that have been audited and
those Tax Returns that currently are the subject of an audit. EJG has delivered
to QuickCREDIT correct and complete copies of all federal income Tax Returns,
examination reports, and statements of deficiencies assessed against or agreed
to by EJG since December 31, 1994.
(d) EJG has not waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency.
(e) EJG has not (i) applied for any tax ruling, (ii) entered into a closing
agreement with any taxing authority, (iii) made any payments, or been a party to
an agreement (including this Agreement) that under any circumstances could
obligate it to make payments that will not be deductible because of Section 280G
of the Code, or (iv) been a party to any tax allocation or tax sharing
agreement. EJG has no liability for the Taxes of any Person or Entity (other
than EJG) under Reg. ss.1.1502-6 (or any similar Legal Requirement), as a
transferee or successor, by contract, or otherwise.
(f) The unpaid Taxes of EJG (i) did not, as of the Balance Sheet Date, exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the Unaudited Balance Sheet (rather than in any notes thereto)
and (ii) do not exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of EJG in
filing its Tax Returns.
2.13 Title to Assets. Except as set forth on Exhibit 2.13, EJG has good and
valid title to all of its material properties and assets (both tangible and
intangible), including without limitation, all properties and assets shown on
the Unaudited Balance Sheet and all properties and assets purchased or acquired
by EJG since the Balance Sheet Date; in each case subject to no Encumbrances,
except for (i) Encumbrances reflected on the Unaudited Balance Sheet, (ii) liens
for current taxes, assessments or governmental charges or levies on property not
yet due or delinquent and (iii) Encumbrances described on Schedule 2.13 annexed
hereto ("Permitted Liens"). Except for software licenses described in Schedule
2.15 annexed hereto, or leases or real and personal property described in
Schedule 2.15, EJG owns outright and is in exclusive possession of all assets,
properties or rights currently used in its business.
2.14 Compliance with Legal Requirements. Except as described on Schedule 2.14
annexed hereto, EJG is not in violation of any Legal Requirement applicable to
the business of EJG. Without limiting the generality of the foregoing, except as
described on Schedule 2.14 annexed hereto, (i) there is not pending, or to the
knowledge of EJG or the Shareholders threatened, any notification of any
Governmental Body that EJG is not in compliance with applicable Legal
Requirements respecting employment and employment practices, occupational safety
and health laws and regulations, and laws or regulations relating to the quality
of the environment, and neither EJG nor the Shareholders know of any basis
therefor, and (ii) EJG has not received any such notification of past violations
of such Legal Requirements as can reasonably be expected to result in future
claims against EJG, and neither EJG nor the Shareholders know of any basis
therefor.
2.15 Contracts.
(a) Schedule 2.15 annexed hereto contains a complete and accurate list of all of
the following Contracts to which EJG is a party or by or to which it or its
assets or properties are bound or subject or which are necessary for EJG to
conduct its business as presently conducted:
(i) Contracts with any current or former officer, director, employee,
consultant, agent or other representative or with any Person in which any of the
foregoing has an interest, including any "Affiliate" or "Associate" of such
Person, as such terms are defined in the Securities Act of 1933 and the rules
and regulations published thereunder;
(ii) Contracts with any labor union or association representing any
employee;
(iii) Contracts for the sale of any of EJG's assets or properties other than in
the ordinary course of business or for the grant to any person of any
preferential rights to purchase any of its assets or properties;
(iv) Contracts under which EJG agrees to indemnify any party or to share
the tax liability of any Person;
(v) Contracts of guaranty or relating to matters of suretyship;
(vi) Contracts that cannot be canceled without liability, premium or
penalty upon thirty (30) days' notice or less;
(vii) Contracts containing obligations or liabilities of any kind to holders of
EJG's securities as such (including, without limitation, an obligation to
register any of such securities under any Legal Requirement);
(viii) Contracts containing covenants of EJG not to compete in any line of
business or with any person in any geographical area or covenants of any other
Person not to compete with EJG in any line of business or in any geographical
area;
(ix) Contracts relating to the acquisition by EJG of any operating business or
the capital stock of any other Person;
(x) Contracts relating to Intellectual Property owned, licensed or used by EJG
in the course of its business;
(xi) Contracts requiring the payment to any Person of a royalty, override
or similar commission or fee;
(xii) Contracts relating to the borrowing of money by EJG or subjecting any
assets or properties of EJG to any Encumbrance;
(xiii) any Contract which might reasonably be expected to have a potential
adverse impact on the business or operations of EJG;
(xiv) any Contract not made in the ordinary course of business; or
(xv) any other material Contract whether or not made in the ordinary course
of business.
(b) EJG has delivered or made available to QuickCREDIT true and complete copies
of all of the Contracts described on Schedule 2.15. All of such Contracts are
valid and binding upon EJG in accordance with their terms, and EJG has performed
all contractual obligations required to be performed by it to date and is not in
default under any such contracts and has not taken any action which constitutes
or with notice or lapse of time or both would constitute a default under such
Contracts. To the knowledge of EJG and the Shareholders, no other party to any
such contract is in default in the performance of its obligations thereunder or
has taken any action which constitutes, or with notice or lapse of time or both
would constitute, a breach or anticipatory breach thereof. Except as separately
identified on Schedule 2.15 annexed hereto, no approval or consent of any Person
is needed in order that the contracts and other agreements set forth on Schedule
2.15 annexed hereto or on any other Schedule continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
(c) The Contracts identified on Schedule 2.15 annexed hereto collectively
constitute all of the Contracts necessary to enable EJG to conduct its business
in the manner in which its business is currently being conducted and in the
manner in which its business is proposed to be conducted.
(d) Schedule 2.15 annexed hereto identifies and provides a brief description of
each proposed Contract as to which any pending bid, offer or proposal has been
submitted or received by EJG.
2.16 Leases. Schedule 2.16 annexed hereto contains a complete and accurate list
of any real property lease binding EJG or to which EJG is a party ("Leases").
Each such Lease is in full force and effect, and EJG has fully performed all of
its obligations to be performed to date under said Leases. EJG is current with
respect to the payment of all rents and other charges due thereunder, and their
use and occupancy of the premises which are the subject matter of such leases
does not violate any of the terms of such Leases, is in conformity with all
applicable Legal Requirements and is not violative of the conditions of EJG's
respective policies of insurance. All of the buildings, structures and
appurtenances situated on such leased premises are, and as of the Closing Date,
will be, in good operating condition and state of maintenance and repair and
will be adequate and suitable for the purposes for which they are presently
being or are intended to be used, and EJG has adequate rights of ingress and
egress and utility services for the operation of their respective businesses in
the ordinary course. No lessor or landlord under any Lease is in default in the
performance of its obligations thereunder, and EJG has not received notice from
any such lessor or landlord of its intention to exercise any option thereunder
which would adversely affect or terminate EJG's use or occupancy of the demised
premises under such Lease. Except as specifically disclosed in Schedule 2.16,
all of the Leases permit the consummation of the transactions contemplated
hereby without modification of the terms thereof and without the consent of the
applicable lessor or landlord. EJG does not own, and has never owned, any real
property.
2.17 Accounts and Notes Receivable. All accounts and notes receivable reflected
on the Unaudited Balance Sheet, and all accounts and notes receivable arising
subsequent to the Balance Sheet Date and prior to the Closing Date, have arisen
in the ordinary course of business of EJG, represent valid obligations due to
EJG and, subject only to the reserve for bad debts shown on EJG's books and
records and computed in a manner consistent with generally accepted accounting
principals and EJG's past practice, are collectible in the ordinary course of
business of EJG in the aggregate recorded amounts thereof in accordance with
their terms and in any event not later than 90 days from the Closing Date. None
of such notes and accounts receivable or other debts is (or as of the Closing
Date will be) subject to any counterclaim or set-off except to the extent of the
aforementioned reserve, or is (or as of the Closing Date will be) subject to any
Encumbrance whatsoever. For purposes of this Section 2.17, the collectibility of
accounts and notes receivable shall be determined by applying customers'
remittances based upon the specific invoices to which such remittances relate,
or in the absence of any indication of same, on a first-in, first-out basis.
There has been no material change since the Balance Sheet Date in the amount of
accounts receivable or other debts due EJG or the reserves for bad debts
relating thereto from that reflected in the Unaudited Balance Sheet.
2.18 Fixed Assets. Schedule 2.18 annexed hereto contains a complete and accurate
list of all machinery, equipment, tools, furniture, leasehold improvements,
trade fixtures, vehicles, structures or any related capitalized items and other
tangible property material to the operation of the business of EJG (the "Fixed
Assets") all of which Fixed Assets are reflected in the Unaudited Balance Sheet
(except any such tangible property acquired since the Balance Sheet Date by
EJG). Since the Balance Sheet Date, EJG has not disposed of any Fixed Asset
except in the ordinary course of EJG's business. The Fixed Assets are in good
operating condition and repair, subject to normal wear and tear from normal use
thereof, and EJG has not received notice that any of the Fixed Assets or EJG's
use thereof is in violation of any existing law or any applicable Legal
Requirement.
2.19 Trade Names and Other Intangibles. Schedule 2.19 annexed hereto contains a
complete and accurate list of all patents, patent rights, licenses,
methodologies, know-how, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights or similar rights
("Intellectual Property") which are either (a) wholly or partly owned or
licensed by EJG or (b) used in the conduct of the business of EJG. Except as
described on Schedule 2.19 annexed hereto, no Person or Entity, other than EJG,
has any rights under or in respect of, and to the knowledge of EJG and the
Shareholders, no Person is infringing or otherwise acting adversely with respect
to, EJG's respective rights under or in respect of the Intellectual Property,
and EJG is the exclusive owner of such rights and there is no claim for damages
or any proceeding pending or, to the knowledge of EJG or the Shareholders,
threatened with respect thereto. EJG is not infringing or otherwise acting
adversely to the right of any Person or Entity under or in respect to
Intellectual Property, and there is no claim for damages or any proceeding
pending, or to the knowledge of EJG or the Shareholders threatened, with respect
thereto.
2.20 Suppliers and Customers. Schedule 2.20 annexed hereto contains a complete
and accurate list with respect to EJG of (a) any supplier from whom EJG
purchased or to which EJG paid $_________ or more during the last fiscal year of
EJG and the amount paid by EJG to each such supplier and (b) any customer or
client of EJG which purchased during the last fiscal year of EJG $_________ or
more in services from EJG. No customer required to be listed on Schedule 2.20
has notified EJG of such customer's intention to terminate or materially reduce
the use of EJG's services, and neither EJG nor the Shareholders have any reason
to believe any such customer is likely to terminate the services of EJG on
account of the transactions contemplated hereunder.
2.21 Payment of Wages and Salary. Except as set forth on Schedule 2.21, other
than amounts which have not yet become payable in accordance with EJG's
customary practices, which will be paid in a timely manner, (i) EJG has paid in
full to its full and part-time employees all wages, salaries, commissions,
bonuses and other direct compensation for all services performed by them to
date, and (ii) EJG has paid, or will pay in a timely manner, all severance pay,
if any, and benefits, FICA, withholding taxes and vacation pay, if any, for all
of its employees and is not subject to any claim for non-payment or
non-performance of any of the foregoing. EJG is in compliance with all federal,
state and local laws and regulations respecting employment and employment
practices, terms and conditions of employment and wages and hours. EJG has not
improperly characterized as an independent contractor or consultant, any
individual who should have been treated as an employee of EJG for tax
withholding or any other purpose.
2.22 Employee Benefit Plans.
(a) Except as described on Schedule 2.22 annexed hereto, EJG is not a party to,
nor makes or is required to make employer contributions to, nor has any current
or future obligation or liability with respect to, any pension, profit sharing,
retirement, deferred compensation, bonus, stock purchase, severance,
hospitalization, medical insurance, life insurance, vacation policy or other
employee benefit plan or program providing benefits for its current or former
employees, other than salaries or cash wages for straight time, overtime or
shift differential (a "Plan"). Except as described on Schedule 2.22 annexed
hereto, EJG has complied with all of its obligations under each Plan and, to the
knowledge of EJG and the Shareholders, all other parties have complied with all
of their respective obligations under each Plan. EJG has made or provided for
all payments due under or with respect to each Plan up to and including the
Closing Date, and all amounts properly accrued up to and including the Closing
Date as liabilities of EJG under each Plan have been recorded on the books of
EJG. Except as described on Schedule 2.22 annexed hereto, no Plan is a
"multiemployer plan" (within the meaning of Section 3(37) of ERISA), and, except
as so set forth, EJG has not made, or has been required to make, any
contributions to any "multiemployer plan" within the last five (5) years. Except
as described on Schedule 2.22 annexed hereto, no Plan listed on Schedule 2.22
(other than any "multiemployer plan") is subject to Title IV of ERISA.
(b) Each Plan listed on Schedule 2.22 has received a determination letter from
the Internal Revenue Service to the effect that it qualified under Section
401(a) of the Code, and that each trust established under such Plan is exempt
from taxation under Section 501(a) of the Code, and nothing has occurred which
would cause the loss of such qualifications or exemptions. No "reportable event"
(within the meaning of Section 4043(b) of ERISA) has occurred with respect to
any pension plan that is subject to Title IV of ERISA maintained by any trade or
business (whether or not incorporated) that is under common control with EJG,
within the meaning of Section 414(c) of the Code and the regulations thereunder
(hereinafter any such plan shall be referred to as an "Affiliate Plan" and any
such trade or business shall be referred to as an "ERISA Affiliate"), and no
"reportable event" will occur with respect to any Plan or Affiliate Plan as a
result of any transaction contemplated by this Agreement.
(c) EJG would not be subject to any withdrawal liability with respect to any
"multiemployer plan" listed on Schedule 2.22 if EJG were to withdraw from any
such plan as of the date hereof. Except as described on Schedule 2.22, EJG has
satisfied all material reporting and disclosure requirements and all other
requirements applicable to it under the Code or ERISA, and the Department of
Labor and the Internal Revenue Service regulations promulgated thereunder, with
respect to the Plans. Neither EJG nor, to the knowledge of EJG or the
Shareholders, any other "party in interest" or "disqualified person" (within the
meaning of Section 3(14) of ERISA or Section 4975(e)(2) of the Code,
respectively) with respect to any Plan has engaged in any "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) which could subject any Plan, EJG or any trustee, administrator or other
fiduciary of any Plan, to any penalty or excise tax imposed on prohibited
transactions by Section 502(i) of ERISA or Section 4975 of the Code. There are
no material actions, suits or claims pending (other than routine claims for
benefits) or, except as described on Schedule 2.22, to the knowledge of EJG or
the Shareholders, threatened, against any Plan or against the assets of any
Plan. No Plan which is subject to Part III of Subtitle B of Title I of ERISA or
Section 412 of the Code has incurred any "accumulated funding deficiency" (as
defined in ERISA), whether or not waived. Except as described on Schedule 2.22,
no Plan or Affiliate Plan that is or was subject to Title IV of ERISA has been
terminated and, to the knowledge of the Seller, no proceeding has been initiated
to terminate any such Plan or Affiliate Plan. Neither EJG, any ERISA Affiliates,
nor any Shareholder have incurred, nor reasonably expects to incur as a result
of any event occurring on or prior to the Closing Date, any liability to the
Pension Benefit Guaranty Corporation (except for required premium payments, none
of which payments are overdue) or any withdrawal liability under Title IV of
ERISA.
(d) With respect to each Plan that is an "employee benefit plan," within the
meaning of Section 3(3) of ERISA, true and complete copies of (i) the documents
embodying the Plan, any related trust and all amendments thereto, (ii) the
summary plan description and all modifications thereto, (iii) the last filed
Annual Report (Form 5500 Series) and Schedules A and B thereto, (iv) the most
recent Internal Revenue Service determination letter, if applicable, (v) the
most recent actuarial valuation report, if any, and (vi) the most recent annual
and periodic financial statements, have been delivered or made available to
QuickCREDIT and are correct in all material respects.
2.23 Insurance. Schedule 2.23 annexed hereto contains a list and brief
description (specifying the insurer, the policy number or covering note number
with respect to binders and the amount of any deductible, describing each
pending claim thereunder of more than $2,500, setting forth the aggregate
amounts paid out under each such policy through the date hereof and the
aggregate limit, if any, of the insurer's liability thereunder) of all policies
or binders of fire, liability, product liability, workmen's compensation,
vehicular, unemployment and other insurance held by or on behalf of EJG. Such
policies and binders are valid and enforceable in accordance with their terms,
are in full force and effect, and insure against risks and liabilities to the
extent and in the manner reasonably determined by EJG to be appropriate and
sufficient and are adequate to protect EJG and its assets and properties. EJG
has paid all premiums due thereon and is not in default with respect to any
provision contained in any such policy or binder and has not failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. Except for claims described on Schedule 2.23, there are no outstanding
unpaid claims under any such policy or binder. EJG has not received notice of
cancellation or non-renewal of any such policy or binder. None of the policies
listed on Schedule 2.23 provides that premiums paid in respect of the periods
prior to the Closing Date may be adjusted or recomputed based on claims-paying
experience of such policies or otherwise. EJG has no notice from any of its
insurance carriers that any insurance premiums will be increased in the future
or that any insurance coverage listed on Schedule 2.23 will not be available in
the future on the same terms as now in effect.
2.24 Environmental Matters.
(a) Except as described in Schedule 2.24, (i) EJG has never generated,
transported, used, stored, treated, disposed of, or managed any Hazardous Waste;
(ii) no Hazardous Material has ever been or is threatened to be spilled,
released, or disposed of at any site presently or formerly owned, operated,
leased or used by EJG, or has ever come to be located in the soil or groundwater
at any such site; (iii) no Hazardous Material has ever been transported by or at
the direction of EJG from any site presently or formerly owned, operated,
leased, or used by EJG for treatment, storage, or disposal at any other place;
and (iv) no Encumbrance has ever been imposed by any Governmental Body on any
property, facility, machinery, or equipment owned, operated, leased, or used by
EJG in connection with the presence of any Hazardous Material.
(b) (i) EJG has no liability under, nor has it ever violated, any Environmental
Law; (ii) EJG, any property owned, operated, leased, or used by EJG, and any
facilities and operations thereon, are presently in compliance with all
applicable Environmental Laws; (iii) EJG has never entered into or been subject
to any judgment, consent decree, compliance order, or administrative order with
respect to any environmental or health and safety matter or received any request
for information, notice, demand letter, administrative inquiry, or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law; and (iv) neither EJG
nor the Shareholders have any knowledge or reason to know that any of the items
enumerated in the immediately preceding clause of this paragraph will be
forthcoming.
(c) EJG has provided to QuickCREDIT copies of all documents, records, and
information available to EJG or the Shareholders concerning any environmental or
health and safety matter relevant to EJG, whether generated by EJG or others,
including, without limitation, environmental audits, environmental risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials, spill control plans, and reports, correspondence, permits,
licenses, approvals, consents, and other authorizations related to environmental
or health and safety matters issued by any governmental agency.
(d) For purposes of this Agreement, "Hazardous Material" shall mean and include
any hazardous waste, hazardous material, hazardous substance, petroleum product,
oil, toxic substance, pollutant, contaminant, or other substance which may pose
a threat to the environment or to human health or safety, as defined or
regulated under any Environmental Law; "Hazardous Waste" shall mean and include
any hazardous waste as defined or regulated under any Environmental Law;
"Environmental Law" shall mean any environmental or health and safety-related
Legal Requirement existing at any time prior to the Closing Date.
2.25 Officers, Directors and Key Employees. Schedule 2.25 annexed hereto
describes with respect to EJG the name and total annual compensation (and
benefit costs) of each officer and director of EJG and of each other employee,
consultant, agent or other representative of EJG whose current annual rate of
compensation exceeds $15,000. EJG has not made a commitment or agreement to
increase the compensation or to modify the conditions or terms of employment of
any such person. None of such persons has communicated to EJG or to the
Shareholders that such person intends to resign or otherwise terminate such
person's relationship with EJG.
2.26 Restrictive Documents. Neither EJG nor any of the Shareholders is subject
to, or a party to, any charter, bylaw, Permit, Contract, Legal Requirement or
any other restriction of any kind, which adversely affects the business
practices, operations or condition of EJG or any of its assets or property, or
which would prevent consummation of the transactions contemplated by this
Agreement, compliance by EJG or the Shareholders with the terms, conditions and
provisions hereof, or the continued operation of EJG's business after the date
hereof or the Closing Date on substantially the same basis as heretofore
operated or which would restrict the ability of EJG to acquire any property or
conduct business in any area.
2.27 Licenses. Except as set forth on Schedule 2.27, EJG possesses all
concessions, permits, licenses, orders, and other governmental authorizations
and approvals ("Permits") required to permit EJG to carry on its business as it
is presently being conducted. All such Permits are described on Schedule 2.27
annexed hereto, are in the name of EJG and are in full force and effect, and no
modification, termination, suspension or cancellation of any of them is
threatened. Except as described in Schedule 2.27 annexed hereto, all such
Permits permit the consummation of the transactions contemplated hereby without
modification thereof and without the consent of the issuing authority.
2.28 Transactions with Affiliated Parties. Except as described on Schedule 2.28
annexed hereto, no Associate or Affiliate of EJG or any of the Shareholders (a)
has any ownership interest, directly or indirectly, in any competitor, supplier
or customer of EJG, (b) has any outstanding loan to or receivable in either
event to or from EJG or (c) is a party to or has any interest in any contract or
agreement with EJG.
2.29 Bank Accounts and Powers of Attorney. Schedule 2.29 annexed hereto contains
an accurate and complete list showing (a) the name and address of each bank in
which EJG has an account or safe deposit box, the number of any such account or
any such box and the names of all persons authorized to draw thereon or to have
access thereto and (b) the names of all persons, if any, holding powers of
attorney from EJG and a summary statement of the terms thereof.
2.30 Warranties. Schedule 2.30 annexed hereto contains (a) a true and complete
description of all warranties granted or made with respect to services sold by
EJG during the three years prior to the date hereof; and (b) a true and complete
description of EJG's warranty experience for the same period. Neither EJG nor
the Shareholders have any reason to believe that warranty claims for EJG will,
in the foreseeable future, exceed historical levels to any material extent.
2.31 Assets Complete. Upon the Effective Time of the Merger, the Surviving
Corporation will own all of the assets and possess all of the rights necessary
for it to conduct the business of EJG in a manner consistent with the manner in
which EJG has conducted its business on and immediately prior to the Effective
Date.
2.32 No Changes Prior to Closing Date. Except as set forth on Schedule 2.32,
during the period from the Balance Sheet Date to and including the Closing Date,
except as expressly contemplated hereby or consented to in writing by
QuickCREDIT in accordance with Section 4.2 hereof, EJG will not have, except in
the ordinary course of business, (a) incurred any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise),(b) permitted any of
its assets to be subjected to any Encumbrance, (c) sold, transferred or
otherwise disposed of any of its assets, (d) made any capital expenditure or
commitment therefor, (e) declared or paid any dividend or made any distribution
on any shares of its capital stock, or redeemed, purchased or otherwise acquired
any shares of its capital stock or granted or canceled any option, warrant or
other right to purchase or acquire any such shares, (f) made any bonus or profit
sharing distribution or similar payment of any kind, (g) increased its
indebtedness for borrowed money, or made any loan to any Person, (h) except in
the ordinary course of business, consistent with past practices of EJG, made or
permitted any amendment or termination of any contract, agreement or license to
which EJG is a party or by which it or any of its assets and properties are
subject or bound, (i) entered into any agreement or arrangement granting any
preferential rights to purchase any of EJG's assets or properties or requiring
the consent of any party to the transfer and assignment of any of EJG's assets
or properties, (j) written off as uncollectible any notes or accounts
receivable, except write-offs in the ordinary course of business charged to
applicable reserves, none of which individually or in the aggregate is material
to EJG, (k) granted any increase in the rate of wages, salaries, bonuses or
other remuneration of any executive employee or other employees, except in the
ordinary course of business, (l) canceled or waived any claims or rights of
substantial value, (m) made any change in any method of accounting or auditing
practice, (n) otherwise conducted its business or entered into any transaction,
except in the usual and ordinary manner and in the ordinary course of its
business, or (o) agreed, whether or not in writing, to do any of the foregoing.
2.33 Disclosure. Neither this Agreement, nor any Schedule, Exhibit or
certificate delivered in accordance with the terms hereof by or on behalf of EJG
or the Shareholders, or by any of EJG's Representatives, in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact, or omits or will omit any statement of a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to EJG or the Shareholders which materially
and adversely affects the business, prospects (financial or otherwise) or
financial condition of EJG or its properties or assets, which has not been set
forth in this Agreement or in the Schedules, Exhibits, certificates or other
documents furnished by or on behalf of EJG or the Shareholders, or by any of
EJG's Representatives, in connection with the transactions contemplated by this
Agreement.
2.34 Broker's or Finder's Fees. No agent, broker, person or firm acting on
behalf of the Shareholders or EJG is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
2.35 Copies of Documents. EJG has caused to be made available for inspection and
copying by QuickCREDIT and its Representatives, true, complete and correct
copies of all documents referred to in this Section 2 or in any Schedule
furnished by EJG or the Shareholders to Triangle or QuickCREDIT.
2.36 Disclosure Schedules. Shareholders have prepared, or will cause to be
prepared, and have delivered, or will cause to be delivered, to Triangle,
QuickCREDIT and EAC at Closing, separate disclosure schedules providing the
information responsive to each disclosure schedule identified in this Section 2.
Notwithstanding the foregoing, the inadvertent failure of Shareholders to
disclose on any disclosure schedule any information responsive to such schedule
shall be deemed provided thereon when such information is included in any other
disclosure schedule provided incident to this Section 2.
Section 3. REPRESENTATIONS AND WARRANTIES OF TRIANGLE,
QUICKCREDIT AND EAC
As an inducement to EJG and the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, and with the
knowledge that EJG and the Shareholders shall rely thereon, Triangle,
QuickCREDIT and EAC, jointly and severally, represent and warrant to EJG and the
Shareholders the following (both as of the Closing Date and as of the date
hereof):
3.1 Due Organization and Qualification. Each of Triangle, QuickCREDIT and EAC is
a corporation duly organized and validly existing under the laws of the State of
Florida, has made all filings as required under the FBCA and has paid all filing
fees due and payable thereunder. Each of Triangle, QuickCREDIT and EAC has all
necessary corporate power and lawful authority to conduct its respective
business in the manner in which such business is currently being conducted and
to own or lease and use its respective assets in the manner in which it now
owns, leases or uses its assets.
3.2 Charter and By-Laws. Schedule 3.2 annexed hereto contains true, correct and
complete copies of (a) the articles of incorporation of each of Triangle,
QuickCREDIT and EAC, including all amendments thereto (certified by the
Secretary of State of the State of Florida), and (b) the bylaws of each of
Triangle, QuickCREDIT and EAC, including all amendments thereto (certified by
the respective secretary or other executive officer of Triangle, QuickCREDIT and
EAC).
3.3 Authority; Binding Nature of Agreement.
(a) The execution, delivery and performance by Triangle, QuickCREDIT and EAC of
the Acquiror's Documents has been duly authorized by all necessary action on the
part of Triangle, QuickCREDIT and EAC and their respective boards of directors.
Each of the Acquiror's Documents constitutes the legal, valid and binding
obligation of Triangle, QuickCREDIT and EAC respectively, enforceable against
such entity in accordance with its respective terms.
(b) No consent, authorization or approval of, or declaration, filing or
registration with, any Governmental Body, or any consent, authorization or
approval of any other Person, is necessary in order to enable Triangle,
QuickCREDIT or EAC to enter into and perform their respective obligations under
the Acquiror's Documents, and neither the execution and delivery of the
Acquiror's Documents nor the consummation of the transactions contemplated
thereby will:
(i) conflict with, require any consent under, result in the violation of, or
constitute a breach of any provision of the articles or certificate of
incorporation or bylaws of Triangle, QuickCREDIT or EAC;
(ii) conflict with, require any Consent under, result in the violation of,
constitute a breach of, or accelerate the performance required on the part of
Triangle, QuickCREDIT or EAC by the terms of, any evidence of indebtedness or
Contract to which Triangle, QuickCREDIT or EAC is a party, in each case with or
without notice or lapse of time or both, including any evidence of Encumbrance
to which any property either of Triangle, QuickCREDIT or EAC is subject, or
permit the termination of any such Contract by another Person;
(iii) result in the creation or imposition of any Encumbrance upon, or
restriction on the use of, any property or assets of Triangle, QuickCREDIT or
EAC under any Contract to which either Triangle, QuickCREDIT or EAC is bound;
(iv) accelerate, or constitute an event entitling, or which would, on notice or
lapse of time or both, entitle the holder of any indebtedness of Triangle,
QuickCREDIT or EAC to accelerate the maturity of any such indebtedness;
(v) conflict with or result in the breach or violation of any Legal Requirement
that is binding on Triangle, QuickCREDIT or EAC; or
(vi) violate or cause any revocation of or limitation on any Permit of
Triangle, QuickCREDIT or EAC.
3.4 Legal Proceedings; Orders. Except as set forth in Schedule 3.4 annexed
hereto, there is no pending Legal Proceeding, and, to the knowledge of Triangle
or QuickCREDIT, no Person has threatened to commence any Legal Proceeding that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Merger or any of the other transactions
contemplated by this Agreement. To the knowledge of Triangle, QuickCREDIT or
EAC, except as set forth in Schedule 3.4 annexed hereto, no event has occurred,
and no claim, dispute or other condition or circumstance exists, that will, or
that could reasonably be expected to, give rise to or serve as a basis for the
commencement of any such Legal Proceeding.
3.5 SEC Filings; Financial Statements.
(a) QuickCREDIT has delivered to EJG and the Shareholders accurate and complete
copies (excluding copies of exhibits) of each report, registration statement (on
a form other than Form S-8) and definitive proxy statement filed by Triangle
with the SEC between January 1, 1997 and the date of this Agreement (the
"Triangle SEC Documents"). As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing), (i) each of the Triangle SEC Documents complied in all
material respects with the applicable requirements of the Securities Act of 1933
or the Exchange Act of 1934 (as the case may be) and (ii) none of the Triangle
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The consolidated financial statements contained in the Triangle SEC
Documents (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered, except as may be indicated in the notes to
such financial statements and (in the case of unaudited statements) as permitted
by Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to normal and recurring year-end audit
adjustments (which will not, individually or in the aggregate, be material in
magnitude); and (iii) fairly present the consolidated financial position of
Triangle as of the respective dates thereof and the consolidated results of
operations of Triangle for the periods covered thereby.
3.6 Valid Issuance. The Triangle Common Stock to be issued as Merger
Consideration will, when issued in accordance with the provisions of this
Agreement, be validly issued, fully paid and non-assessable.
3.7 Broker's or Finder's Fees. No agent, broker, person or firm acting on behalf
of Triangle, QuickCREDIT or EAC is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
Section 4. CERTAIN COVENANTS OF EJG AND THE SHAREHOLDERS
4.1 Access and Investigation. During the period from the date of this Agreement
through the Closing Date (the "Pre-Closing Period"), EJG shall, and shall cause
its Representatives to (a) provide QuickCREDIT and its Representatives with
reasonable access to EJG's Representatives, personnel and assets and to all
existing books, records, Tax Returns, work papers and other documents and
information relating to EJG; and (b) provide QuickCREDIT and its Representatives
with such copies of the existing books, records, Tax Returns, work papers and
other documents and information relating to EJG, and with such additional
financial, operating and other data and information regarding EJG, as
QuickCREDIT may reasonably request. In the event that this Agreement shall be
terminated in accordance with Section 8 of this Agreement, QuickCREDIT shall
keep confidential, and not use in any manner, any information on documents
obtained from EJG pursuant to this Section 4.1. QuickCREDIT's investigation of,
or failure to investigate, the business and affairs of EJG at any time prior to
the Effective Date shall not for any purpose (i) diminish, obviate or otherwise
affect the representations and warranties of EJG and the Shareholders provided
in Section 2 of this Agreement or Triangle's or QuickCREDIT's right to rely upon
such representations and warranties or (ii) be deemed a waiver of or otherwise
affect in any way the rights of Triangle or QuickCREDIT set forth in Section 9
of this Agreement.
4.2 Operation of the Business of EJG. During the Pre-Closing Period, unless
Triangle and QuickCREDIT otherwise consent in writing:
(a) EJG shall conduct its business and operations in the ordinary course and in
substantially the same manner as such business and operations have been
conducted prior to the date of this Agreement;
(b) EJG shall use reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers and employees
and maintain its relations and goodwill with all suppliers, customers,
landlords, creditors, employees and other Persons having business relationships
with EJG;
(c) EJG shall keep in full force and effect all insurance policies
identified in Schedule 2.23 annexed hereto;
(d) EJG shall not declare, accrue, set aside or pay any dividend or make any
other distribution in respect of any shares of capital stock, and shall not
repurchase, redeem or otherwise reacquire any shares of capital stock or other
securities;
(e) EJG shall not sell, issue or authorize the issuance of (i) any capital stock
or other security, (ii) any option, call, warrant or right to acquire, or
relating to, any capital stock or other security, or (iii) any instrument
convertible into or exchangeable for any capital stock or other security;
(f) neither EJG nor any of the Shareholders shall amend or permit the adoption
of any amendment to EJG articles of incorporation or bylaws, or effect or permit
EJG to become a party to any Acquisition Transaction, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
(g) EJG shall not form any subsidiary or acquire any equity interest or
other interest in any other Entity;
(h) EJG shall not make any capital expenditure, except for capital expenditures
that, when added to all other capital expenditures made on behalf of EJG during
the Pre-Closing Period, do not exceed $1,000 in the aggregate;
(i) EJG shall not (i) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any material Contract, or (ii) amend or
prematurely terminate, or waive any material right or remedy under, any material
Contract except as contemplated in Section 5.9 of this Agreement;
(j) EJG shall not, other than in the ordinary course of business consistent with
past practice (i) acquire, lease or license any right or other asset from any
other Person, (ii) sell or otherwise dispose of, or lease or license, any right
or other asset to any other Person, or (iii) waive or relinquish any right,
except for immaterial assets acquired, leased, licensed or disposed of by EJG;
(k) EJG shall not (i) lend money to any Person, or (ii) incur or guarantee any
indebtedness, except that EJG may make routine borrowings in the ordinary course
of business under its respective existing lines of credit;
(l) EJG shall not (i) establish, adopt or amend any Plan, (ii) pay any bonus or
make any profit-sharing or similar payment to, or increase the amount of the
wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees, or (iii)
hire any new employee whose aggregate annual compensation is expected to exceed
$15,000;
(m) EJG shall not change any of its methods of accounting or accounting
practices in any respect;
(n) EJG shall not make any Tax election;
(o) EJG shall not commence or settle, whether or not commenced by EJG, any
Legal Proceeding;
(p) EJG shall not enter into any material transaction or take any other material
action outside the ordinary course of business or inconsistent with its past
practices; and
(q) EJG shall not agree or commit to take any of the actions described in
clauses "(d)" through "(p)" of this Section 4.2.
4.3 Notification; Updates to Schedules.
(a) During the Pre-Closing Period, EJG and the Shareholders shall promptly
notify QuickCREDIT in writing of:
(i) the discovery by EJG or the Shareholders of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes an inaccuracy in or breach of any representation
or warranty made by EJG or any of the Shareholders in this Agreement;
(ii) any event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement and that would cause or constitute an
inaccuracy in or breach of any representation or warranty made by EJG or any of
the Shareholders in this Agreement if (A) such representation or warranty had
been made as of the time of the occurrence, existence or discovery of such
event, condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement;
(iii) any breach of any covenant or obligation of EJG or any of the
Shareholders; and
(iv) any event, condition, fact or circumstance that would make the timely
satisfaction of any of the conditions set forth in Section 6 or Section 7 of
this Agreement impossible or unlikely.
(b) If any event, condition, fact or circumstance that is required to be
disclosed pursuant to Section 4.3(a) of this Agreement requires any change in
any Schedule to this Agreement, or if any such event, condition, fact or
circumstance would require such a change assuming such Schedule were dated as of
the date of the occurrence, existence or discovery of such event, condition,
fact or circumstance, then EJG or the Shareholders shall promptly deliver to
QuickCREDIT an update to such Schedule specifying such change. No such update
shall be deemed to supplement or amend any Schedule for the purpose of (i)
determining the accuracy of any of the representations and warranties made by
EJG or any of the Shareholders in this Agreement, or (ii) determining whether
any of the conditions set forth in Section 6 of this Agreement has been
satisfied.
4.4 Pooling of Interests. From the date of this Agreement up to the Closing
Date, neither EJG nor any Shareholder shall take any action which would have an
adverse effect on the ability of Triangle to account for the Merger as a
"pooling of interests."
4.5 No Negotiation. During the Pre-Closing Period, neither EJG nor
any of the Shareholders shall, directly or indirectly:
(a) solicit or encourage the initiation of any inquiry, proposal or offer from
any Person (other than QuickCREDIT) relating to a possible Acquisition
Transaction;
(b) participate in any discussions or negotiations or enter into any agreement
with, or provide any non-public information to, any Person (other than
QuickCREDIT) relating to or in connection with a possible Acquisition
Transaction; or
(c) consider, entertain or accept any proposal or offer from any Person (other
than QuickCREDIT) relating to a possible Acquisition Transaction.
EJG shall promptly notify QuickCREDIT in writing of any inquiry, proposal or
offer relating to a possible Acquisition Transaction that is received by EJG or
any of the Shareholders during the Pre-Closing Period.
Section 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 Filings and Consents. As promptly as practicable after the execution of this
Agreement, each party to this Agreement (a) shall make all filings (if any) and
give all notices (if any) required to be made and given by such party in
connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use his, its or their best efforts to obtain each
Consent (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Merger or any of the other transactions contemplated by this Agreement. EJG
shall promptly deliver to QuickCREDIT a copy of each such filing made, each such
notice given and each such Consent obtained by EJG during the Pre-Closing
Period. QuickCREDIT shall promptly deliver to EJG a copy of each such filing
made, each such notice given and each such consent obtained by QuickCREDIT
during the Pre-Closing Period.
5.2 Public Announcements. During the Pre-Closing Period, (a) neither EJG nor any
of the Shareholders shall (and EJG shall not permit any of its Representatives
to) make any public statement regarding this Agreement or the Merger, or
regarding any of the other transactions contemplated by this Agreement, without
QuickCREDIT's prior written consent, and (b) QuickCREDIT will use reasonable
efforts to consult with EJG prior to issuing any press release or making any
public statement regarding the Merger.
5.3 Best Efforts. During the Pre-Closing Period, (a) EJG and the Shareholders
shall use their reasonable best efforts to cause the conditions set forth in
Section 6 of this Agreement to be satisfied on a timely basis, and (b)
QuickCREDIT shall use its reasonable best efforts to cause the conditions set
forth in Section 7 of this Agreement to be satisfied on a timely basis.
5.4 Employment Agreement. At the Closing, Keith Giordano shall enter into an
employment agreement with the Surviving Corporation having substantially the
form as set forth in Exhibit D attached hereto (the "Employment Agreement").
5.5 Restrictive Covenants Agreement. At the Closing, Keith Giordano shall enter
into a restrictive covenants agreement with the Surviving Corporation having
substantially the form as set forth in Exhibit E attached hereto (the
"Restrictive Covenants Agreement").
5.6 Share Subscription Agreement. At the Closing, each of the Shareholders shall
execute and deliver to Triangle a Share Subscription Agreement in the form of
Exhibit F (the "Subscription Agreement").
5.7 Termination of Employee Plans. At the Closing, EJG shall terminate all Plans
identified on Schedule 2.22 under which any of its employees or former employees
may have any rights, and shall ensure that no employee or former employee of EJG
has any rights thereunder and that any liabilities of EJG thereunder (including
any such liabilities relating to services performed prior to the Closing) are
fully extinguished at no cost to EJG.
5.8 Assumption of Notes Payable. The Shareholders, at the Closing, shall, and do
hereby, assume full liability for the repayment of all notes payable to banks
and other lenders entered into by EJG on or prior to the Closing Date and shall
take such steps and shall provide such further assurances as are necessary to
obtain the release of any and all assets of FCB from all liens and encumbrances
securing said notes payable. Further, the Shareholder shall indemnify FAC, to
the full extent contemplated by Section 9.2 of this Agreement, with respect to
any default under, or breach of, the terms of said notes payable and any
collateral documents.
Section 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIANGLE AND QUICKCREDIT
The obligations of Triangle and QuickCREDIT to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions:
6.1 Accuracy of Representations. Each of the representations and warranties made
by EJG and the Shareholders in this Agreement and in each of the other
agreements and instruments delivered to QuickCREDIT in connection with the
transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement, and shall be accurate in all
material respects as of the Closing Date as if made at the Closing Date (without
giving effect to any update to any Schedule to this Agreement).
6.2 Performance of Covenants. Each covenant or obligation that EJG or any of the
Shareholders is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects.
6.3 Consents. All Consents required to be obtained by EJG or the Shareholders in
connection with the Merger and the other transactions contemplated by this
Agreement shall have been obtained and shall be in full force and effect.
6.4 Agreements and Documents. QuickCREDIT shall have received the following
agreements and documents, each of which shall be in full force and effect:
(a) the Employment Agreement between Keith Giordano and the Surviving
Corporation;
(b) the Restrictive Covenants Agreement between Keith Giordano and the
Surviving Corporation;
(c) a Share Subscription Agreement, executed by each of the Shareholders;
(d) an Affiliate Agreement, executed by each of the Shareholders and each Person
who would reasonably be considered an Affiliate of EJG under the Securities Act
of 1933;
(e) a legal opinion of Glenn Allen, Esquire, dated as of the Closing Date,
in the form of Exhibit G;
(f) a certificate executed by EJG and the Shareholders stating that each of the
representations and warranties set forth in Section 2 of this Agreement is
accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 6.1, 6.2, 6.3, 6.4
and 6.5 of this Agreement have been duly satisfied (the "EJG and Shareholders'
Closing Certificate"); and
(g) such other certified resolutions, documents or certificates as may be
reasonably requested by QuickCREDIT prior to the Closing Date.
6.5 No Material Adverse Change. There shall have been no material adverse change
in EJG business, condition, assets, liabilities, operations, financial
performance or prospects since the date of this Agreement.
6.6 Termination of Employee Plans. EJG shall have provided QuickCREDIT with
evidence, satisfactory to QuickCREDIT, as to the termination of the Plans
referred to in Section 2.22 of this Agreement.
6.7 Pooling Letter. Triangle shall have received evidence satisfactory to
Triangle or a letter from Mazars & Guerard, certified public accountants to
Triangle, dated the Closing Date, confirming that Triangle may account for the
Merger as a "pooling of interests" in accordance with generally accepted
accounting principles, Accounting Principles Board Opinion No. 16 and all
published rules, regulations and policies of the SEC.
6.8 Rule 506. All applicable requirements of Rule 506 under the Securities Act
shall have been satisfied.
6.9 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger shall have
been issued by any court of competent jurisdiction and remain in effect, and
there shall not be any Legal Requirement enacted or deemed applicable to the
Merger that makes consummation of the Merger illegal.
6.10 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by EJG of any material right pertaining to its ownership of stock
of the Surviving Corporation.
6.11 Completion of Due Diligence. Triangle shall have completed its due
diligence investigation of EJG and shall have been satisfied with the results
thereof.
6.12 Certificates of Merger. The parties shall have executed a Certificate of
Merger to be filed with the Secretary of State as contemplated in Section 1.3 of
this Agreement.
Section 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
EJG AND THE SHAREHOLDERS
The obligations of EJG and the Shareholders to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of the following conditions:
7.1 Accuracy of Representations. Each of the representations and warranties made
by Triangle and QuickCREDIT in this Agreement and in each of the other
agreements and instruments delivered to EJG in connection with the transactions
contemplated by this Agreement shall have been accurate in all material respects
as of the date of this Agreement, and shall be accurate in all material respects
as of the Closing Date as if made at the Closing Date.
7.2 Performance of Covenants. All of the covenants and obligations that Triangle
and QuickCREDIT are required to comply with or to perform at or prior to the
Closing shall have been complied with and performed in all material respects.
7.3 Consents. All Consents required to be obtained by Triangle or QuickCREDIT in
connection with the Merger and the other transactions contemplated by this
Agreement shall have been obtained and shall be in full force and effect.
7.4 Agreements and Documents. EJG and the Shareholders shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) a legal opinion of Smith, Gambrell & Russell, LLP in the form of
Exhibit H;
(b) a certificate executed by Triangle and QuickCREDIT stating that each of the
representations and warranties set forth in Section 3 of this Agreement are
accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 7.1, 7.2, 7.3 and 7.4
of this Agreement have been duly satisfied (the "Triangle Closing Certificate");
and
(c) such other certified resolutions, documents, or certificates as may be
reasonably requested by EJG prior to the Closing Date.
7.5 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger by EJG shall
have been issued by any court of competent jurisdiction and remain in effect,
and there shall not be any Legal Requirement enacted or deemed applicable to the
Merger that makes consummation of the Merger by EJG illegal.
7.6 Certificates of Merger. The parties shall have executed a Certificate of
Merger to be filed with the Secretary of State as contemplated in Section 1.3 of
this Agreement.
Section 8. TERMINATION
8.1 Termination Events. This Agreement may be terminated prior to the Closing:
(a) by QuickCREDIT if QuickCREDIT reasonably determines that the timely
satisfaction of any condition set forth in Section 6 of this Agreement has
become impossible (other than as a result of any failure on the part of Triangle
or QuickCREDIT to comply with or perform any covenant or obligation of Triangle
or QuickCREDIT set forth in this Agreement);
(b) by EJG if EJG reasonably determines that the timely satisfaction of any
condition set forth in Section 7 of this Agreement has become impossible (other
than as a result of any failure on the part of EJG or any of the Shareholders to
comply with or perform any covenant or obligation set forth in this Agreement or
in any other agreement or instrument delivered to QuickCREDIT);
(c) by Triangle or QuickCREDIT at or after the Scheduled Closing Time if any
condition set forth in Section 6 of this Agreement has not been satisfied by the
Scheduled Closing Time;
(d) by EJG at or after the Scheduled Closing Time if any condition set forth in
Section 7 of this Agreement has not been satisfied by the Scheduled Closing
Time;
(e) by Triangle or QuickCREDIT if the Closing has not taken place on or before
May 31, 1998 (other than as a result of any failure on the part of Triangle or
QuickCREDIT to comply with or perform any covenant or obligation of Triangle or
QuickCREDIT set forth in this Agreement);
(f) by EJG if the Closing has not taken place on or before May 31, 1998 (other
than as a result of the failure on the part of EJG or any of the Shareholders to
comply with or perform any of their respective covenants or obligations set
forth in this Agreement or in any other agreement or instrument delivered to
QuickCREDIT); or
(g) by the mutual consent of Triangle, QuickCREDIT and EJG.
8.2 Termination Procedures. If Triangle or QuickCREDIT wishes to terminate this
Agreement pursuant to Section 8.1(a), Section 8.1(c) or Section 8.1(e) of this
Agreement, Triangle or QuickCREDIT shall deliver to EJG a written notice stating
that Triangle or QuickCREDIT is terminating this Agreement and setting forth a
brief description of the basis on which Triangle or QuickCREDIT is terminating
this Agreement. If EJG wishes to terminate this Agreement pursuant to Section
8.1(b), Section 8.1(d) or Section 8.1(f) of this Agreement, EJG shall deliver to
Triangle or QuickCREDIT a written notice stating that EJG is terminating this
Agreement and setting forth a brief description of the basis on which EJG is
terminating this Agreement.
8.3 Effect of Termination. If this Agreement is terminated pursuant to Section
8.1 of this Agreement, all further obligations of the parties under this
Agreement shall terminate; provided, however, that no party shall be relieved of
any obligation or liability arising from any prior breach by such party of any
provision of this Agreement.
Section 9. INDEMNIFICATION, ETC.
9.1 Survival of Representations and Warranties. All of the representations and
warranties of EJG, the Shareholders, Triangle and QuickCREDIT contained in this
Agreement shall survive the Closing for a period of eighteen (18) months.
9.2 Shareholders' Indemnity Agreement. Subject to Section 9.6 of this Agreement,
the Shareholders, jointly and severally, shall defend, indemnify and hold
harmless Triangle, QuickCREDIT and the Surviving Corporation (and their
respective directors, officers, employees, agents, affiliates, successors and
assigns) from and against any and all direct or indirect requests, demands,
claims, payments, defenses, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, liens, causes of action, suits,
proceedings, judgments, losses, Damages (including without limitation punitive,
exemplary or consequential damages, lost income and profits, interruptions of
business and diminution in the value of the Surviving Corporation), liabilities,
costs, and expenses of any kind (including without limitation (i) interest,
penalties and reasonable attorneys' fees and expenses, (ii) attorneys' fees and
expenses necessary to enforce their rights to indemnification hereunder, and
(iii) consultants' fees and other costs of defending or investigating any claim
hereunder), and interest on any amount payable as a result of the foregoing,
whether accrued, absolute, contingent, known, unknown, or otherwise as of the
Closing Date or thereafter asserted against, imposed upon or incurred by
Triangle, QuickCREDIT, the Surviving Corporation or any of their respective
directors, officers, employees, agents, affiliates, successors or assigns
(collectively, a "Loss of Triangle") by reason of, resulting from, arising out
of, based upon, awarded or asserted against or otherwise in respect of:
(a) any period or periods of operation of EJG ending prior to the Closing and
which involve any claims against Triangle, QuickCREDIT, EJG, the Surviving
Corporation or their respective properties or assets, relating to actions or
inactions of EJG or its respective officers, directors, shareholders, employees
or agents prior to Closing, or the operation of the business of EJG prior to the
Closing unless such liability was disclosed on the EJG Financial Statements and
adequate reserves were established therefor;
(b) any breach of any representation and warranty contained in this Agreement or
any misrepresentation in or omission on the part of EJG or the Shareholders
contained in any certificate or other document furnished or to be furnished to
Triangle or QuickCREDIT by EJG or any of the Shareholders pursuant to this
Agreement;
(c) any breach or nonfulfillment on the part of EJG or any of the Shareholders
of any covenant contained in this Agreement;
(d) the failure of EJG or any of the Shareholders to obtain, prior to the
Closing Date, any consents of Governmental Bodies and other Persons as may be
necessary to permit the consummation of the Merger and to permit the Surviving
Corporation to continue to operate the business of EJG in the manner presently
conducted after the Closing Date;
(e) any federal, state, local or foreign taxes, including any interest and
penalties thereon, due from EJG or the Shareholders with respect to any period
prior to the Closing Date, other than amounts accrued therefor on EJG Financial
Statements.
The Shareholders' obligation to indemnify Triangle, QuickCREDIT, and
the Surviving Corporation against any loss of Triangle pursuant to this Section
9.2 shall not exceed, in the aggregate amount of all payments made or set-offs
exercised with respect to any claim for indemnity pursuant to this Section 9.2,
the total cash value calculated as of the Closing Date, of the Merger
Consideration set forth in Section 1.8 of this Agreement.
9.3 Indemnity Agreement of QuickCREDIT and the Surviving Corporation.
QuickCREDIT and the Surviving Corporation shall, jointly and severally,
indemnify and hold harmless the Shareholders (and their respective successors
and assigns) from and against any and all direct or indirect requests, demands,
claims, payments, defenses, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, liens, causes of action, suits,
proceedings, judgments, losses, Damages (including without limitation punitive,
exemplary or consequential damages and lost income and profits and interruptions
of business), liabilities, costs, and expenses of any kind (including without
limitation (i) interest, penalties and reasonable attorneys' fees and expenses,
(ii) attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim hereunder, and interest on any amount
payable as a result of the foregoing) whether accrued, absolute, contingent,
known, unknown or otherwise as of the Closing Date or thereafter asserted
against, imposed upon or incurred by the Shareholders or their respective
representatives or assigns, (a "Loss of the Shareholders") by reason of,
resulting from, arising out of, based upon, awarded or asserted against in
respect of or otherwise in respect of:
(a) any period or periods of operation of the Surviving Corporation beginning
after the Closing and which involve any claims against the Shareholders or their
respective assets relating to actions or inactions of QuickCREDIT or the
Surviving Corporation or their respective officers, directors, shareholders,
employees or agents after the Closing, or the operation of the Surviving
Corporation after the Closing (except to the extent any of the foregoing arise
from the acts or omissions of the Shareholders); and
(b) any breach of any representation and warranty or nonfulfillment of any
covenant or agreement on the part of Triangle or QuickCREDIT contained in this
Agreement, or any misrepresentation in or omission from or nonfulfillment of any
covenant on the part of the Triangle or QuickCREDIT contained in any certificate
furnished or to be furnished to the Shareholders by Triangle or QuickCREDIT
pursuant to this Agreement.
9.4 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, the party to be indemnified hereunder (the
"Indemnitee") shall promptly notify the indemnifying party hereunder (the
"Indemnitor") in writing of any damage, claim, loss, liability or expense or
other matter which the Indemnitee has determined has given or could give rise to
a claim for which indemnification rights are granted hereunder (such written
notice referred to as the "Notice of Claim"). The Notice of Claim shall specify,
in all reasonable detail, the nature and estimated amount of any such claim
giving rise to a right of indemnification, to the extent the same can reasonably
be estimated. Any failure on the part of an Indemnitee to give timely notice to
the Indemnitor of a claim shall not affect the right of the Indemnitee to obtain
indemnification from the Indemnitor with respect to such claim unless the
Indemnitor is actually harmed by such failure to notify, and only to the extent
of such actual harm.
(b) With respect to any matter set forth in a Notice of Claim relating to a
third party claim the Indemnitor shall defend, in good faith and at its expense,
any such claim or demand, and the Indemnitee, at its expense, shall have the
right to participate in the defense of any such third party claim. So long as
Indemnitor is defending, in good faith, any such third party claim, the
Indemnitee shall not settle or compromise such third party claim. The Indemnitee
shall make available to the Indemnitor or its representatives all records and
other materials reasonably required by them for use in contesting any third
party claim and shall cooperate fully with the Indemnitor in the defense of all
such claims. If the Indemnitor does not defend any such third party claim or if
the Indemnitor does not provide the Indemnitee with prompt and reasonable
assurances that the Indemnitor will satisfy the third party claim, the
Indemnitee may, at its option, elect to defend any such third party claim, at
the Indemnitor's expense, but subject to the Indemnitor's right to assume such
defense from the Indemnitee at any time. An Indemnitor may not settle or
compromise any claim without obtaining a full and unconditional release of the
Indemnitee, unless the Indemnitee consents in writing to such settlement or
compromise. Notwithstanding the foregoing, if there is a reasonable probability
that a third party claim for which Triangle, QuickCREDIT or the Surviving
Corporation has indemnification rights against the Shareholders hereunder which
will materially and adversely affect Triangle, QuickCREDIT or the Surviving
Corporation other than as a result of money damages or other payments, Triangle,
QuickCREDIT or the Surviving Corporation shall be entitled to participate in the
defense of such claim at the Shareholders' expense.
9.5 Pledge of Stock as Security. As security for the payment of any and all sums
in respect of which the Shareholders may be liable pursuant to Section 9.2 of
this Agreement, the Shareholders agree to pledge 50,000 shares of Triangle
Common Stock to be held in escrow by the law firm of Glenn Allen, Esquire, which
firm shall act as the escrow agent therefor in accordance with the terms of that
certain Stock Pledge and Escrow Agreement (the "Stock Pledge and Escrow
Agreement") attached hereto as Exhibit I.
9.6 Set-off. Triangle, QuickCREDIT and the Surviving Corporation shall have the
right to set-off and apply against the shares of Triangle Common Stock pledged
by the Shareholders pursuant to Section 9.5 of this Agreement (the number of
shares of Triangle Common Stock to be determined based upon the closing bid
price of Triangle Common Stock or the date of such set-off to be against any
liability of the Shareholders pursuant to Section 9.2 of this Agreement and any
other amounts owing from Triangle, QuickCREDIT or the Surviving Corporation to
the Shareholders under any other agreement between Triangle, QuickCREDIT or the
Surviving Corporation and the Shareholders, all sums in respect of which the
Shareholders may be liable pursuant to Section 9.2 of this Agreement, such right
of set-off to be in addition to and not in lieu of or an election against any
and all other remedies available to Triangle, QuickCREDIT and the Surviving
Corporation under this Agreement or at law or in equity.
Section 10. MISCELLANEOUS PROVISIONS
10.1 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
10.2 Fees and Expenses. Subject to Section 9 of this Agreement, all fees, costs
and expenses (including legal fees and accounting fees) that have been incurred
or that are incurred in the future by each party in connection with the
transactions contemplated by this Agreement, including all fees, costs and
expenses incurred by such party in connection with or by virtue of (a) any
investigation and review conducted by such party of the other parties' business
(and the furnishing of information in connection with such investigation and
review), (b) the negotiation, preparation and review of this Agreement and all
agreements, certificates, opinions and other instruments and documents delivered
or to be delivered in connection with the transactions contemplated by this
Agreement, (c) the preparation and submission of any filing or notice required
to be made or given in connection with any of the transactions contemplated by
this Agreement, and the obtaining of any Consent required to be obtained in
connection with any of such transactions, and (d) the consummation of the Merger
shall be paid by QuickCREDIT, if incurred by Triangle or QuickCREDIT, and by the
Shareholders, if incurred by EJG or the Shareholders.
10.3 Attorneys' Fees. If any action or proceeding relating to this Agreement or
the enforcement of any provision of this Agreement is brought against any party
hereto, the prevailing party shall be entitled to recover reasonable attorneys'
fees, costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
10.4 Notices. All notices and other communications required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed to have been given only if and when (a) personally delivered, or (b)
three (3) business days after mailing, postage prepaid, by certified mail, or
(c) when delivered (and receipted for) by an overnight delivery service, or (d)
when first sent by e-mail, telecopier or other means of instantaneous
communication provided such communication is promptly confirmed by personal
delivery, mail or an overnight delivery service as provided above, addressed in
each case as follows:
if to Triangle, QuickCREDIT or the Surviving Corporation:
QuickCREDIT Corp.
4400 West Sample Road
Suite 228
Coconut Creek, Florida 33073
Attention: Van Saliba
Facsimile: (954) 975-7559
with a copy to:
Smith, Gambrell & Russell, LLP
Promenade II, Suite 3100
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309-3592
Attention: W. Thomas King, Esq.
Facsimile: (404) 685-6972
if to EJG :
EJG Services, Inc.
d/b/a Universal Mortgage Reporting
103 Century 21 Dr., Suite 120
Jacksonville, Florida 32216
Attention: Keith Giordano
with a copy to:
Glenn Allen, Esquire
353 E. Forsyth Street
Jacksonville, Florida 32202
Facsimile: (904) 353-8814
if to the Shareholders:
Keith Giordano
1302 Woodhill Place
Jacksonville, Florida 32256
10.5 Time of the Essence. Time is of the essence of this Agreement.
10.6 Headings. The bold-faced Section headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
10.7 Counterparts. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
10.8 Governing Law. This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Florida.
10.9 Successors and Assigns. This Agreement shall be binding upon: EJG and its
successors and assigns (if any); the Shareholders and their respective personal
representatives, executors, administrators, estates, heirs, successors and
assigns (if any); Triangle and its successors and assigns (if any); and
QuickCREDIT and its successors and assigns (if any). This Agreement shall inure
to the benefit of: EJG, the Shareholders, Triangle, QuickCREDIT, and the
respective successors, heirs personal representatives and assigns (if any) of
the foregoing. Following the Merger, Triangle and QuickCREDIT may freely assign
any or all of their respective rights under this Agreement (including their
indemnification rights under Section 9 of this Agreement), in whole or in part,
to any other Person without obtaining the consent or approval of any other party
hereto or of any other Person; provided, however, that no assignment by Triangle
or QuickCREDIT of any or all of their respective rights under this Agreement
shall relieve Triangle or QuickCREDIT of any of their respective obligations
under this Agreement (including any indemnification obligation under Section 9
of this Agreement).
10.10 Remedies Cumulative; Specific Performance. The rights and remedies of the
parties hereto shall be cumulative (and not alternative). The parties to this
Agreement agree that, in the event of any breach or threatened breach by any
party to this Agreement of any covenant, obligation or other provision set forth
in this Agreement for the benefit of any other party to this Agreement, such
other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
10.11 Waiver.
(a) No failure on the part of any party to exercise any power, right, privilege
or remedy under this Agreement, and no delay on the part of any party in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.
(b) No party shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
10.12 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
10.13 Severability. In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of circumstances, shall
be determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent permitted by
law.
10.14 Parties in Interest. Except for the provisions of Section 9 of this
Agreement, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective successors, heirs, personal representatives and assigns (if any).
10.15 Entire Agreement. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties hereto relating to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, written or oral, among or between any of the parties relating to
the subject matter hereof and thereof.
10.16 Construction.
(a) For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to
"Sections," "Exhibits" and "Schedules" are intended to refer to Sections,
Exhibits and Schedules to this Agreement. All Schedules and Exhibits are
integral parts of this Agreement and are incorporated into this Agreement by
reference.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
"TRIANGLE"
TRIANGLE IMAGING GROUP, INC.
________________________________________________________
By: Vito A. Bellezza
Title: Chairman of the Board and Chief Executive Officer
________________________________________________________
By: Harold S. Fischer
Title: President
"QUICKCREDIT"
QUICKCREDIT Corp.
________________________________________________________
By: Van Saliba
Title: President
"EJG"
EJG SERVICES, INC. D/B/A
UNIVERSAL MORTGAGE REPORTING
________________________________________________________
By: Keith Giordano
Title: President
THE "SHAREHOLDERS"
__________________________________________________(SEAL)
Keith Giordano
<PAGE>
Exhibit A
Shareholders of EJG
Services, Inc. d/b/a Universal Mortgage Reporting
Shareholder Number and Class of Shares Owned
Keith Giordano 6000 shares of EJG Common Stock
<PAGE>
Exhibit B
Certain Definitions Used in This Agreement
For purposes of the Agreement (including this Exhibit B):
AAA. "AAA" shall mean the American Arbitration Association.
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale, license, disposition or acquisition of all or a material
portion of EJG's business or assets;
(b) the issuance, disposition or acquisition of (i) any capital stock
or other equity security of EJG; (ii) any option, call, warrant or right
(whether or not immediately exercisable) to acquire, or otherwise relating to,
any capital stock or other equity security of EJG; or (iii) any security,
instrument or obligation that is or may become convertible into or exchangeable
for any capital stock or other equity security of EJG; or
(c) any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving EJG.
Affiliate. "Affiliate" shall have the meaning specified in Section
2.15(a)(i) of this Agreement.
Affiliate Agreement. "Affiliate Agreement" shall have the meaning specified
in Section 5.7 of this Agreement.
Affiliate Plan. "Affiliate Plan" shall have the meaning specified in
Section 2.22(b) of this Agreement.
Agreement. "Agreement" shall mean the Agreement and Plan of Merger to which
this Exhibit B is attached (including all Exhibits and Schedules), as it may be
amended from time to time.
Associate. "Associate" shall have the meaning specified in Section
2.15(a)(i) of this Agreement.
Balance Sheet Date. "Balance Sheet Date" shall have the meaning specified
in Section 2.8(a)(ii) of this Agreement.
Certificate of Merger. "Certificate of Merger" shall have the meaning
specified in Section 1.3 of this Agreement.
Closing. "Closing" shall have the meaning specified in Section 1.3 of this
Agreement.
Closing Date. "Closing Date" shall have the meaning specified in Section
1.3 of this Agreement.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
EJG Common Stock. "EJG Common Stock" shall have the meaning specified in
the Recitals to this Agreement.
EJG Documents. "EJG Documents" shall mean this Agreement and the other
documents and agreements required to be executed and delivered by EJG hereunder.
EJG Financial Statements. "EJG Financial Statements" shall have the meaning
specified in Section 2.8(a) of this Agreement.
EJG and Shareholders' Closing Certificate. "EJG and Shareholders'
Closing Certificate" shall have the meaning specified in Section 6.4(h) of this
Agreement.
EJG Stock Certificate. "EJG Stock Certificate" shall have the meaning
specified in Section 1.6 of this Agreement.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking of
any nature.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
Effective Time. "Effective Time" shall have the meaning specified in
Section 1.3 of this Agreement.
Florida Certificate. " Certificate" shall have the meaning specified in
Section 1.3 of this Agreement.
Employment Agreements. "Employment Agreements" shall have the meaning
specified in Section 5.4 of this Agreement.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security), any restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Environmental Law. "Environmental Law" shall have the meaning specified in
Section 2.24(e) of this Agreement.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amend
ERISA Affiliate. "ERISA Affiliate" shall have the meaning specified in
Section 2.22(b) of this Agreement.
FBCA. "FBCA" shall mean the Florida Business Corporation Act.
Fixed Assets. "Fixed Assets" shall have the meaning specified in Section
2.18 of this Agreement.
Governmental Body. "Governmental Body" shall mean any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city, local or other political subdivision.
Hazardous Material. "Hazardous Material" shall have the meaning specified
in Section 2.24(d) of this Agreement.
Hazardous Waste. "Hazardous Waste" shall have the meaning specified in
Section 2.24(d) of this Agreement.
Indemnitor. "Indemnitor" shall have the meaning specified in Section 9.4(a)
of this Agreement.
Indemnitee. "Indemnitee" shall have the meaning specified in Section 9.4(a)
of this Agreement.
Intellectual Property. "Intellectual Property" shall have the meaning
specified in Section 2.19 of this Agreement.
Leases. Leases shall have the meaning specified in Section 2.16 of this
Agreement.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitute, principle of common
law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body.
Loss of the Shareholders. "Loss of the Shareholders" shall have the meaning
specified in Section 9.3 of this Agreement.
Loss of Triangle. "Loss of Triangle" shall have the meaning specified in
Section 9.2 of this Agreement.
Material Adverse Effect. A violation or other matter will be deemed to
have a "Material Adverse Effect" on EJG if such violation or other matter
(considered together with all other matters that would constitute exceptions to
the representations and warranties set forth in the Agreement or in EJG's and
Shareholders' Closing Certificate but for the presence of "Material Adverse
Effect" or other materiality qualifications, or any similar qualifications, in
such representations and warranties) would have a material adverse effect on
EJG's business, condition, assets, liabilities, operations, financial
performance or prospects.
Merger. "Merger" shall have the meaning specified in the Recitals to this
Agreement.
Merger Consideration. "Merger Consideration" shall have the meaning
specified in Section 1.8 of this Agreement.
Notice of Claim. "Notice of Claim" shall have the meaning specified in
Section 9.4(a) of this Agreement.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Permit. "Permit" shall have the meaning specified in Section 2.27 of this
Agreement.
Permitted Liens. "Permitted Liens" shall have the meaning specified in
Section 2.13 of this Agreement.
Plan. "Plan" shall have the meaning specified in Section 2.22(a) of this
Agreement.
Pre-Closing Period. "Pre-Closing Period" shall have the meaning specified
in Section 4.1 of this Agreement.
Release. "Release" shall have the meaning specified in Section 5.5 of this
Agreement.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accounts, advisors and representatives.
Restrictive Covenants Agreement. "Restrictive Covenants Agreement" shall
have the meaning specified in Section 6.4(b) of this Agreement.
Scheduled Closing Time. "Scheduled Closing Time" shall have the meaning
specified in Section 1.3 of this Agreement.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
Secretary of State. "Secretary of State" shall have the meaning specified
in Section 1.3 of this Agreement.
Securities Act. "Securities Act" shall mean the Securities Act of 1933.
Share Subscription Agreement. "Share Subscription Agreement" shall have the
meaning specified in Section 5.6 of this Agreement.
Shareholder Documents. "Shareholder Documents" shall mean this Agreement
and the other documents and agreements required to be executed and delivered by
the Shareholders hereunder.
Surviving Corporation. "Surviving Corporation" shall have the meaning
specified in Section 1.1 of the Agreement.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
Triangle Common Stock. "Triangle Common Stock" shall have the meaning
specified in Section 1.7(b) of this Agreement.
Triangle Closing Certificate. "Triangle Closing Certificate" shall have the
meaning specified in Section 7.4(b) of this Agreement.
Triangle Documents. "Triangle Documents" shall mean this Agreement and the
other documents and agreements required to be executed and delivered by Triangle
or EAC hereunder.
Triangle SEC Documents. "Triangle SEC Documents" shall have the meaning
specified in Section 3.5(a) of this Agreement.
Unaudited Balance Sheet. Unaudited Balance Sheet shall have the meaning
specified in Section 2.8(a)(ii) of this Agreement.
<PAGE>
Exhibit C
Directors and Officers of
the Surviving Corporation After the Merger
1. Directors
Vito A. Bellezza
2. Officers
President: Keith Giordano
Secretary: Harold S. Fischer
<PAGE>
Exhibit D
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the _____ day of May, 1998, by and between EJG ACQUISITION CORP., a
Florida corporation (the "Company"), and KEITH GIORDANO, an individual resident
of the State of Florida ("Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to that certain Agreement
and Plan of Merger and Reorganization, dated as of May _____, 1998 (the "Merger
Agreement"), which contemplates the execution of this Agreement; and
WHEREAS, the Company desires to retain Employee, and Employee desires
to be retained by the Company, all in accordance with the terms and conditions
of the Merger Agreement and as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises,
covenants and agreements set forth herein and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions set forth in this Agreement, the Company
shall employ Employee, and Employee shall serve the Company as its President.
Employee shall report to, and be subject to the supervisory authority of the
chief executive officer (the "CEO") of the Company or such other person as the
CEO may designate.
(b) At all times during the term hereof, Employee shall, for the benefit of the
Company, use his skills, knowledge and specialized training to perform the
duties and exercise the powers, functions and discretions incident to his
position as office manager (including preserving the Company's current base of
clients) or which from time to time, consistent with such position may be
assigned to or vested in him by the CEO or board of directors of the Company
(the "Board"), in an efficient and competent manner and on such terms and
subject to such restrictions as the CEO or the Board may from time to time
reasonably impose.
(c) At all times during the term hereof, Employee shall during normal working
hours, devote such time and attention as are reasonably necessary to his duties
hereunder (reasonable vacation time and absence for sickness or similar
disability excepted).
2. Term. The term of this Agreement shall begin as of the date hereof (the
"Effective Date") and shall end on the second anniversary date following the
Effective Date unless terminated earlier as provided in this Agreement.
Following expiration of the initial term, this Agreement shall continue on a
month-to-month basis, terminable by either party with or without cause upon
thirty (30) days written notice to the other party.
3. Compensation.
(a) Subject to the terms of this Agreement, as base compensation for Employee's
services, the Company shall pay Employee an annual salary of $60,000 per year.
Employee's base salary shall be payable to Employee on the regularly reoccurring
pay period established by the Company, but not less than monthly. Said salary
may be increased, in the Company's discretion, based upon Employee's
performance, industry standards and other factors the Company deems relevant. In
addition to Employee's base compensation, the Company shall pay Employee a bonus
in the amount of and upon the satisfaction of the criteria set forth on and in
accordance with Exhibit "A" attached hereto for each calendar quarter in which
Employee is employed with the Company. Employee's base salary and bonus shall be
subject to all required withholdings.
(b) In addition to the salary described in subsection 3(a) above, Employee shall
be entitled to reimbursement by the Company for all actual, reasonable and
direct expenses incurred by him in the performance of his duties hereunder,
provided such expenses (i) are business expenses that are properly tax
deductible for the Company (ii) were pre-approved by an appropriate officer of
the Company and (iii) were otherwise incurred in accordance with the policies
and procedures established by the Company from time to time. Employee shall
provide the Company with written documentation of any expenses submitted for
reimbursement as required by Company policy, and reimbursement for each item of
approved expense shall be made within a reasonable time.
4. Employment Benefits.
(a) Employee shall have the right to participate in the employee benefit
programs set forth on Exhibit "B" attached hereto, in accordance with the terms
and conditions of such employee benefit program. The Company reserves the right,
in its sole discretion, to alter, amend or discontinue any of such employee
benefit programs at any time.
(b) Employee acknowledges that the Company may adopt employee handbooks,
policies and procedures from time to time and Employee agrees to adhere to the
terms of any handbook, policy or procedures which the Company may adopt. The
Company reserves the right, in its sole discretion, to alter, amend or terminate
any handbook, policy or procedure.
5. Termination of Employment.
(a) If the Company terminates Employee's employment With Cause (as hereinafter
defined), all obligations of Company to provide compensation and benefits under
this Agreement shall cease as of the effective date of, and Employee shall have
no claim against the Company for damages or otherwise by reason of, such
termination.
(b) If during the initial two-year term of this Agreement, the Company
terminates Employee's employment Without Cause (as hereinafter defined), then
Employee will be entitled to continue to receive Employee's salary and bonus on
the regularly reoccurring pay period of the Company until the end of the second
anniversary of the Effective Date ("Post-Termination Compensation") as
liquidated damages and in lieu of any other compensation or claims in connection
with such termination or Employee's employment with the Company; provided,
however, that the Company may, in its sole discretion, elect to pay Employee's
Post-Termination Compensation in one payment. Provided, further, that Employee's
Post-Termination Compensation shall cease to accrue and Employee shall have no
further entitlement to the same from and after the earlier of the Employee's
death, or the date of a material breach by Employee of any of the
post-employment covenants set forth in this Agreement or of any of the
representations, warranties and covenants of Employee contained in the Merger
Agreement which breach results in any harm, cost or expense, whether direct or
indirect, to the Company. The Company may condition payment of Post-Termination
Compensation, whether such payments are made in accordance with the Company's
regularly reoccurring pay schedule or are paid in a single payment, upon
Employee's execution of an unconditional release in favor of the Company.
(c) "With Cause" means the termination of employment resulting from:
(i) any act or omission which (a) constitutes a breach by Employee of his
obligations under Section 7 of this Agreement or (b) a breach by the Employee of
the Shareholder's representations, warranties and covenants under the Merger
Agreement or which results in any material harm, cost or expense, whether direct
or indirect, to the Company;
(ii) the conviction of Employee in a court of competent jurisdiction of a felony
or any crime involving moral turpitude, fraud or dishonesty;
(iii) the perpetration by Employee of any act of material misconduct or
dishonesty whether relating to the Company, the Company's employees or
otherwise, including, without limitation, entering into any secret agreement,
orally or in writing, with a competitor of the Company or with a client of the
Company;
(iv) the use of illegal drugs by the Employee, or drunkenness or substance abuse
by the Employee which interferes with the performance of his duties hereunder;
(v) gross incompetence on the part of Employee in the performance of his
duties hereunder;
(vi) Employee's failure, refusal or inability to follow any reasonable and
lawful directives of the Board, the CEO or any person designated by the CEO to
serve as Employee's supervisor;
(vii) taking secret charges on transactions between the Company and third
parties; or
(viii) any other act or omission (other than an act or omission resulting from
the exercise by Employee of good faith business judgment) which constitutes
gross negligence and which impairs the financial condition or business
reputation of the Company.
Prior to the Company's termination of Employee "With Cause", the
Company shall give Employee written notice of any violation by Employee of any
of the provisions of this Section 5(c) after the receipt of which Employee shall
have 30 days to cure or correct such violation.
(d) "Without Cause" means the termination of employment resulting from any
reason other than those enumerated in subsection (c) above.
(e) Employee may terminate his employment hereunder by giving 60 days written
notice to the President of Company and his compensation shall be paid through
the date of termination.
(f) Any termination hereunder shall be communicated by written notice to the
other party which shall indicate the specific termination provisions in the
Contract relied upon and shall set forth the facts and circumstances which
provide the basis for termination of employment.
6. Final Settlement and Effect of Termination.
(a) Upon termination of this Agreement and payment to Employee of all amounts
due Employee hereunder, Employee or his representative shall execute and deliver
to the Company, on a form prepared by the Company, a receipt for such sums and a
release of all claims for payment due pursuant to this Agreement, except such
claims as may have been submitted pursuant to the terms of this Agreement and
which remain unpaid.
(b) The provisions of this Agreement shall survive the termination of this
Agreement and the termination of Employee's employment with the Company to the
extent required to give full effect to the covenants and agreements contained
herein.
7. Confidentiality.
(a) Employee agrees that, both during the term of his employment and after the
termination of his employment for any reason, Employee shall not directly or
indirectly use or disclose, except as authorized by the Company in connection
with the performance of Employee's duties, any Confidential Information, as
defined hereinafter, that Employee may have or acquire (whether or not developed
or compiled by Employee and whether or not Employee has been authorized to have
access to such Confidential Information) during the term of this Agreement. The
term "Confidential Information" as used in this Agreement shall mean and include
any information, data and know-how relating to the business of the Company that
is disclosed to Employee by the Company or known by him as a result of his
relationship with the Company and not within the public domain (whether
constituting a trade secret or not), including without limitation, the following
information:
(i) financial information, such as Company's earnings, assets, debts, prices,
fee structure, volumes of purchases or sales or other financial data, whether
relating to Company generally, or to particular products, services, geographic
areas, or time periods;
(ii) marketing information, such as details about ongoing or proposed marketing
programs or agreements by or on behalf of Company, marketing forecasts or
results of marketing efforts or information about impending transactions;
(iii) intellectual property information, such as formulas, design details or
parameters, software source code, proprietary programs, devises, techniques and
processes, ongoing or planned activities in intellectual property development,
ongoing or planned joint venture activities, and licensing terms or conditions;
(iv) personnel information, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed promotions,
hiring, resignations, disciplinary actions, terminations or reasons therefor,
training methods, performance, or other employee information;
(v) customer information, such as any compilation of past, existing or
prospective customers, customer proposals or agreements between customers and
Company, status of customer accounts or credit, or related information about
actual or prospective customers; or
(vi) information with respect to any customer affairs that the Company
agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenant contained in this Section 7 shall survive the termination of
Employee's employment with the Company for any reason for a period of two (2)
years; provided, however, that with respect to those items of Confidential
Information which constitute trade secrets under applicable law, Employee's
obligations of confidentiality and non-disclosure as set forth in this Section 7
shall continue to survive after such two (2) year period for as long as such
items remain trade secrets under applicable law. These rights of the Company are
in addition to those rights the Company has under the common law or applicable
statutes for the protection of trade secrets.
8. Rights to Materials. All records, files, memoranda, reports, price lists,
customer lists, drawings, plans, sketches, documents and the like (together with
all copies thereof) relating to the business of the Company, which Employee
shall use or prepare or come in contact with in the course of, or as a result
of, his employment shall, as between the parties hereto, remain the sole
property of the Company. Upon the termination of his employment or upon the
prior demand of the Company, he shall immediately return all such materials and
shall not thereafter cause removal thereof from the premises of the Company.
9. Works Made for Hire. The Company and Employee acknowledge that in the course
of Employee's employment by the Company, Employee may from time to time create
for the Company copyrightable works. Such works may consist of manuals,
pamphlets, instructional materials, computer programs, films, tapes or other
copyrightable material, or portions thereof, and may be created within or
without the Company's facilities and before, during or after normal business
hours. All such works related to or useful in the business of the Company are
specifically intended to be works made for hire and shall be the property of the
Company, and Employee shall cooperate with the Company in the protection of the
Company's copyrights therein and, to the extent deemed desirable by the Company,
the registration of such copyrights.
10. Discoveries. Employee agrees that any inventions, discoveries or
improvements that Employee may develop or conceive during the course of
Employee's employment shall be the sole property of the Company. Employee agrees
to promptly disclose to the Company in writing all such inventions, discoveries
and improvements, whether directly or indirectly related to the business of the
Company or whether made solely by the Employee or in conjunction with others. At
the Company's request and expense, both during and after Employee's employment,
Employee will promptly execute a specific assignment of title to the Company (or
any specified member thereof) of each invention, discovery or improvement
described in the preceding paragraph, and perform all other acts reasonably
necessary to enable the Company to secure a patent therefor in the United States
and in foreign countries and to maintain, defend and assert such patents. This
obligation shall survive the termination or expiration of this Agreement.
11. Severability. Except as noted below, should any provision of this Agreement
be declared or determined by any court of competent jurisdiction to be
unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the
invalid or unenforceable part, term or provision shall be deemed not to be a
part of this Agreement. The covenants set forth in this Agreement are to be
reformed pursuant to Section 12 if held to be unreasonable or enforceable, in
whole or in part, and, as written and as reformed, shall be deemed to be part of
this Agreement.
12. Reformation. If any of the covenants or promises of this Agreement are
determined by any court of law or equity, with jurisdiction over this matter, to
be overly broad and therefore unenforceable, in whole or in part, as written,
Employee hereby consents to and affirmatively requests that said court narrow
the scope of the covenant or promise so as to be reasonable and enforceable and
that said court enforce the covenant or promise as so reformed.
13. Injunctive Relief. Employee understands, acknowledges and agrees that in the
event of a breach or threatened breach of any of the covenants and promises
contained in Sections 7, 8, 9 and 10, the Company will suffer irreparable injury
for which there is no adequate remedy at law and the Company will therefore be
entitled to injunctive relief enjoining said breach or threatened breach.
Employee further acknowledges, however, that the Company shall have the right to
seek a remedy at law as well as or in lieu of equitable relief in the event of
any such breach.
14. Assignment. This Agreement is a contract for personal services and shall not
be assigned by the Company or Employee in any manner or by operation of law
except by mutual written consent of the parties hereto; provided, however, that
this restriction against assignment shall not preclude assignment by the Company
without the consent of Employee as a result of a merger into, consolidation
with, or sale of substantially all of the assets of the Company to another
entity. The terms and provisions of this Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns, and upon
Employee and his heirs and personal representatives. The term "Company" as used
in this Agreement shall be deemed to include the successors and assigns of the
original or any subsequent entity constituting the Company as well as any and
all divisions, subsidiaries, or affiliates thereof.
15. Waiver. The waiver by any party to this Agreement of a breach of any of the
provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent or simultaneous breach.
16. Applicable Law. This Agreement shall be governed by, interpreted and
construed under the internal laws of the State of Florida without reference to
its conflict of laws principles.
17. Headings and Captions. The headings and captions used in this Agreement are
for convenience of reference only, and shall in no way define, limit, expand or
otherwise affect the meaning or construction of any provision of this Agreement.
18. Notice. Any notice required or permitted to be given pursuant to this
Agreement shall be deemed sufficiently given when delivered in person or when
deposited, properly addressed, in the United States mail, first class postage
prepaid, return receipt requested.
19. Gender. All pronouns or any variations thereof contained in this Agreement
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.
20. Entire Agreement. This Agreement constitutes the entire agreement between
the Company and Employee with respect to the subject matter of this Agreement
and supersedes any prior agreements or understandings between the Company and
Employee with respect to such subject matter. No amendment or waiver of this
Agreement or any provision hereof shall be effective unless in writing signed by
both of the parties. Notwithstanding the foregoing, Employee acknowledges that
he is entering into this Agreement in connection with the acquisition of EJG
Services, Inc. ("EJG"), by the Company pursuant to the Merger Agreement, to
which Employee is a party. In the event of any direct or irreconcilable conflict
between this Agreement and the Merger Agreement, the Merger Agreement shall
control.
21. Termination of Merger Agreement. In the event the Merger Agreement is
terminated in accordance with its terms prior to consummation of the Merger,
this Agreement shall be null and void.
IN WITNESS WHEREOF, the Company and Employee have caused this Agreement
to be executed, under seal, as of the date and year first above written.
"COMPANY"
EJG ACQUISITION CORP.
a Florida corporation
By:__________________________________
Name: Van Saliba
Title: President
[CORPORATE SEAL]
"EMPLOYEE"
_______________________________(L.S.)
KEITH GIORDANO
<PAGE>
EXHIBIT "A"
BONUS ACHIEVEMENT REQUIREMENTS
Employee's bonus, to be payable in quarterly increments for each calendar
quarter in which such bonus is earned based upon the attainment of certain
achievement levels established by Harold S. Fischer and Van Saliba, shall be up
to:
1. $6,000 for each calendar quarter, or any portion thereof, in the period
beginning hereof on the date and ending on the date which is the 365th day
immediately following the date hereof (for a total annual bonus not to exceed
$24,000); and
2. $8,000 for each calendar quarter, or any portion thereof, in the period
beginning on the date which is the 366th day immediately following the date
hereof and ending on the date which is the 731st day immediately following the
date hereof (for a total annual bonus not to exceed $32,000).
<PAGE>
EXHIBIT "B"
COMPANY BENEFITS
The normal benefits enjoyed by all Triangle employees, including life,
medical, dental, disability insurance and participation in the Triangle 401(k)
Plan.
<PAGE>
Exhibit E
RESTRICTIVE COVENANTS AGREEMENT
THIS RESTRICTIVE COVENANTS AGREEMENT (this "Agreement") is dated as of
May _____, 1998, by and among Triangle Imaging Group, Inc., a Florida
corporation ("Triangle"), QuickCREDIT Corp., a Florida corporation
("QuickCREDIT"), EJG Acquisition Corp., a Florida corporation ("EAC") (Triangle,
QuickCREDIT and EAC collectively referred to as "Acquirors") and Keith Giordano,
an individual resident of the State of Florida ("Shareholder").
W I T N E S S E T H:
WHEREAS, Triangle, QuickCREDIT, EJG Services, Inc. ("EJG") and
Shareholder have entered into an Agreement and Plan of Merger and Reorganization
(the "Merger Agreement") providing for the merger of EJG with and into EAC, with
EAC being the surviving corporation of such merger (the "Surviving
Corporation"); and
WHEREAS, Shareholder is the sole shareholder and executive officer of
EJG, and such position has placed Shareholder in a position of confidence and
trust with respect to EJG; and
WHEREAS, the Merger Agreement requires that Shareholder enter into this
Agreement as a condition precedent to the merger of EJG and EAC; and
WHEREAS, in consideration of Acquirors' covenants in the Merger
Agreement and to induce Acquirors to acquire EJG, the Shareholder is willing to
enter into this Agreement and to comply with the restrictive covenants contained
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements of the parties hereto, and for other good and valuable consideration,
including, without limitation, the Merger Consideration, as defined in the
Merger Agreement, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Definitions. The following terms shall have the meanings set forth
below for purposes of this Agreement:
(a) The term "Area" shall mean the state of Florida.
(b) The term "Confidential Information" shall mean and include any information,
data and know-how relating to EJG, Triangle, QuickCREDIT or the Surviving
Corporation and not generally within the public domain (whether constituting a
trade secret or not) including without limitation the following information:
(i) financial information, such as the earnings, assets, debts, prices, fee
structures, projections, budgets, margins, tax information or other financial
data of EJG, Triangle, QuickCREDIT or the Surviving Corporation whether relating
to EJG, Triangle, QuickCREDIT or the Surviving Corporation generally, or to
particular, services, geographic areas or time periods;
(ii) product and service information, such as information concerning the goods
and services used or purchased by EJG, Triangle, QuickCREDIT or the Surviving
Corporation, know-how, techniques, codes, development plans, manuals, the
identities of suppliers and consultants, terms of supply and consulting
contracts, or of particular transactions, or related information about potential
suppliers and consultants, to the extent that such information is not generally
known to the public, and to the extent that the combination of suppliers or use
of a particular supplier or consultant, though generally known or available,
yields advantages to EJG, Triangle, QuickCREDIT or the Surviving Corporation the
details of which are not generally known;
(iii) marketing information, such as details about ongoing or proposed marketing
programs, strategies or agreements by or on behalf of EJG, Triangle, QuickCREDIT
or the Surviving Corporation, marketing forecasts or strategies or results of
marketing efforts or information about impending transactions;
(iv) personnel information, such as personal or medical histories, compensation
or other terms of employment, actual or proposed promotions, hirings,
resignations, disciplinary actions, terminations or reasons therefor, training
methods, performance, or other employee information relating to employees of
EJG, Triangle, QuickCREDIT or the Surviving Corporation;
(v) customer information, such as any compilations or lists of past, existing or
prospective customers, proposals, bids or agreements between customers and EJG,
Triangle, QuickCREDIT or the Surviving Corporation, status of customer accounts
or credit, or related information about actual or prospective customers; and
(vi) operations information, such as software, systems and techniques used and
developed by EJG, Triangle, QuickCREDIT or the Surviving Corporation and
operations manuals and personnel manuals of EJG, Triangle, QuickCREDIT or the
Surviving Corporation.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of EJG, Triangle,
QuickCREDIT or the Surviving Corporation.
(c) The term "Competing Business" shall mean and include any proprietorship,
partnership, joint venture, business trust, corporation, association or other
entity or person (other than Triangle, QuickCREDIT or the Surviving Corporation
and any successor of Triangle, QuickCREDIT or the Surviving Corporation) engaged
at the time of such determination in the business of credit reporting.
(d) The term "Customer" or "Customers" shall mean any person, partnership,
association, firm, corporation or other entities which at the time of
determination has purchased, during the previous two year period, any services
or products from EJG, QuickCREDIT or the Surviving Corporation or which has been
actively sought as a prospective customer of EJG, QuickCREDIT or the Surviving
Corporation during such period.
2. Acknowledgments. The Shareholder acknowledges that this Agreement is being
executed and delivered ancillary to the acquisition of EJG for separately
bargained-for consideration. The Shareholder further acknowledges that the
business of EJG and QuickCREDIT is, and following the Merger the business of the
Surviving Corporation will be, highly competitive and strongly dependent upon
personal contacts with Customers and potential Customers and the establishment
of trust and confidence in relationships between the owners and executive
officers of each such business and its Customers. The Shareholder agrees that
QuickCREDIT and the Surviving Corporation would suffer great loss and damage if
the Shareholder, on Shareholder's own behalf or on behalf of any Competing
Business, were to engage in a business competitive with EJG, QuickCREDIT or the
Surviving Corporation.
3. Covenants. Recognizing the need of Triangle, QuickCREDIT and the Surviving
Corporation to protect their legitimate business interests, including the
goodwill of such entities and the goodwill of EJG, and to induce Triangle,
QuickCREDIT and the Surviving Corporation to enter into and perform their
respective obligations under the Merger Agreement, Shareholder covenants and
agrees with Triangle, QuickCREDIT and the Surviving Corporation as follows:
(a) that Shareholder will not from the date of this Agreement until two (2)
years following the date hereof, for whatever reason, either directly or
indirectly:
(i) within the Area, solicit the sale or lease on Shareholder's own behalf or in
the service of or on behalf of any Competing Business, any product or service
similar to or in competition with the existing products or services of
QuickCREDIT or the Surviving Corporation or any successor to the business of
QuickCREDIT or the Surviving Corporation;
(ii) within the Area, either directly or indirectly, engage, participate, invest
in (other than to hold 1% or less of any class of securities of a public
company) or assist, as owner, part-owner, stockholder, partner, director,
officer, trustee, employee, agent, consultant or in any other capacity, any
Competing Business;
(iii) solicit or attempt to solicit, directly or by assisting others, any
business from a Customer of QuickCREDIT or the Surviving Corporation, or any
Customer of EJG prior to the Merger which does not become or remain a Customer
of the Surviving Corporation, for purposes of providing products or services in
competition with QuickCREDIT or the Surviving Corporation.
(iv) employ or attempt to employ or assist anyone else in employing in any
Competing Business any employee of QuickCREDIT or the Surviving Corporation
(whether or not such employment is full or part time or pursuant to a written or
oral contract).
(b) that Shareholder will not for a period of five (5) years from the date
hereof, for whatever reason, disclose or use or otherwise exploit for
Shareholder's own benefit, for the benefit of any other person, or for the
benefit of any Competing Business, any Confidential Information; provided,
however, that to the extent any Confidential Information constitutes a trade
secret under applicable law, the restrictions contained in this Section 3(b)
shall continue to apply for so long as such information remains a trade secret.
4. Remedies. Shareholder acknowledges that irreparable loss and injury would
result to Triangle, QuickCREDIT and the Surviving Corporation upon any breach by
Shareholder of any of the covenants contained in this Agreement and that damages
arising out of such breach would be difficult to ascertain. Shareholder agrees
that, in addition to all other remedies provided at law or in equity, Triangle,
QuickCREDIT and the Surviving Corporation , or any of them, may petition from a
court of law or equity, without bond, both temporary and permanent injunctive
relief to prevent a breach by Shareholder of any such covenant.
5. Miscellaneous.
(a) The terms and provisions of this Agreement shall inure to the benefit of and
be binding upon Acquirors, and their successors and assigns, and upon the
Shareholder and Shareholder's heirs and personal representatives. The rights of
Triangle, QuickCREDIT and the Surviving Corporation hereunder may be assigned,
without the consent of Shareholder, by Triangle, QuickCREDIT and the Surviving
Corporation to any successor to the business of Triangle, QuickCREDIT, or the
surviving Corporation, whether by merger, sale of stock, sale of assets or other
transaction.
(b) This Agreement constitutes the entire Agreement between the parties hereto
concerning the subject matter hereof. This Agreement shall not be altered,
modified, amended or terminated except by written instrument executed by the
parties hereto.
(c) This Agreement, and the rights and liabilities of the parties hereto, shall
be construed in all respects in accordance with the laws of the State of
Florida.
(d) The covenants contained in this Agreement are separate and severable and the
invalidity or unenforceability of any one or more covenants, shall not affect
the validity or enforceability of any other covenant contained herein. It is the
intention of the parties hereto that the provisions of this Agreement shall be
enforced to the fullest extent permissible under the laws and public policies of
each jurisdiction in which such enforcement is sought, but that the
enforceability (or judicial modification to conform with such laws and public
policies, which the parties hereby expressly authorize), of any provision hereof
shall not render unenforceable or impair the remainder of this agreement, which
shall be deemed amended to delete or modify, as necessary, the invalid or
unenforceable portions. The parties hereto acknowledge and agree that for
purposes of judicial interpretation or enforcement of this Agreement, this
Agreement shall be deemed to have been executed and delivered ancillary to the
sale of a business.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TRIANGLE IMAGING GROUP, INC.
___________________________________________
By: Vito A. Bellezza
Title: Chairman and Chief Executive Officer
QUICKCREDIT CORP.
___________________________________________
By: Van Saliba
Title: President
EJG ACQUISITION CORP.
___________________________________________
By: Van Saliba
Title: President
SHAREHOLDER
___________________________________________
By: Keith Giordano
<PAGE>
Exhibit F
IMPORTANT INFORMATION FOR SUBSCRIBER
THE SECURITIES PURCHASED PURSUANT TO THE SUBSCRIPTION AGREEMENT SET FORTH BELOW
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, AS AMENDED (COLLECTIVELY, THE
"ACTS"), OR ANY OTHER APPLICABLE BLUE SKY LAW, AND CANNOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS SUCH SECURITIES (i) ARE REGISTERED UNDER SUCH ACTS, (ii) IN
THE OPINION OF LEGAL COUNSEL AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE OR
(iii) THE REQUEST FOR TRANSFER IS ACCOMPANIED BY NO-ACTION LETTERS FROM THE
SECURITIES AND EXCHANGE COMMISSION AND THE APPLICABLE STATE SECURITIES
COMMISSION. BECAUSE THE SECURITIES ARE NOT REGISTERED UNDER THE ACTS,
SUBSCRIBERS MUST BEAR THE ECONOMIC RISK OF INVESTMENT IN SUCH SECURITIES FOR AN
INDEFINITE PERIOD OF TIME. CERTIFICATES REPRESENTING SUCH SECURITIES WILL BEAR A
LEGEND BRIEFLY DESCRIBING RESTRICTIONS WITH RESPECT TO THE TRANSFER THEREOF AND
A STOP-TRANSFER ORDER WITH RESPECT TO SUCH SECURITIES WILL BE PLACED WITH THE
CORPORATION'S TRANSFER AGENT (OR NOTED IN THE CORPORATION'S RECORDS) BEFORE
CERTIFICATES REPRESENTING ANY SECURITIES SUBSCRIBED WILL BE ISSUED.
SHARE SUBSCRIPTION AGREEMENT
TO THE BOARD OF DIRECTORS OF Triangle Imaging Group, Inc., a
corporation organized and incorporated under the laws of the State of Florida
(the "Corporation"):
1. Subscription. The undersigned, KEITH GIORDANO ("Subscriber"), hereby
subscribes for 200,000 shares of common stock of the Corporation, $.0001 par
value (the "Shares"), for the aggregate consideration described in that certain
Agreement and Plan of Merger and Reorganization (the "Merger Agreement"), dated
as of May _____, 1998, by and among the Corporation, QuickCREDIT Corp., a
Florida corporation and wholly-owned subsidiary of the Corporation
("QuickCREDIT"), EJG Acquisition Corp., a Florida corporation and wholly-owned
subsidiary of QuickCREDIT, and EJG Services, Inc., a Missouri corporation
("EJG"), and Subscriber, an individual resident of the State of Florida and the
sole shareholder of EJG.
2. Restrictions. Subscriber understands that the Shares have not been
registered under the Acts, or any other applicable "blue sky" law, and will be
issued in reliance upon certain exemptions from registration thereunder.
Subscriber understands that the statutory basis for such exemptions is dependent
upon Subscriber's undertaking to acquire the Shares for purposes of investment
for its own account, not as a nominee or agent, and without the intent of
reselling or disposing of the Shares, or otherwise participating directly or
indirectly in a distribution thereof. Subscriber further understands that by
reason of the exemptions to be relied upon in connection with their issuance,
the Shares issued to Subscriber will not be freely transferable and that any
proposed sale or other transfer of the Shares may be prohibited and will in any
event be subject to significant restrictions. Any certificates representing the
Shares will bear a legend to such effect, and a stop-transfer order with respect
to the Shares will be placed with the Corporation's transfer agent (or noted in
the Corporation's records if the Corporation acts as its own transfer agent in
respect of the Shares).
3. Representations and Warranties of Subscriber. Subscriber hereby
represents and warrants to, and agrees with, the Corporation as follows:
(a) The Shares are being acquired by Subscriber for
Subscriber's own account, not as a nominee or agent, and not with a view to, or
for, resale, transfer or distribution;
(b) Subscriber has no intention of participating directly or indirectly in
a distribution of the Shares;
(c) Subscriber has such knowledge and experience in financial
and business matters that Subscriber is capable of evaluating the merits and
risks of this investment;
(d) Subscriber has received and reviewed copies of the
Corporation's filings with the United States Securities and Exchange Commission
listed on Exhibit A hereto.
(e) Subscriber has had access during the course of the
transactions as contemplated in the Merger Agreement and prior to its
acquisition of the Shares to such additional information relating to the
Corporation as Subscriber has desired and has been given the opportunity to (i)
ask questions of, and receive answers from, the Corporation and its
representatives concerning the Corporation and the terms and conditions of the
issuance of the Shares, and (ii) obtain any additional information that the
Corporation possesses or can reasonably obtain that is necessary to verify the
accuracy of information furnished by the Corporation in connection herewith;
(f) Subscriber is an accredited investor as that term is
defined in Section 501(a) under Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933. Subscriber is capable of
bearing the economic risks of the investment in the Shares, including loss of
the entire investment, and if Subscriber deems it necessary to do so, has
reviewed the merits of the investment with his tax and legal counsel and with
investment adviser(s), and Subscriber understands the merits and risks of this
investment;
(g) Subscriber has accurately completed the accredited
Investor Questionnaire attached hereto as Exhibit B and has executed such
Questionnaire, and any applicable exhibits thereto, where required; and
(h) Subscriber has evaluated the risks of this investment and
has determined the Corporation is a suitable investment.
4. Representations of the Corporation. The Corporation hereby
represents and warrants to Subscriber as follows:
(a) The Corporation is a corporation organized and in good standing under
the laws of the State of Florida;
(b) All corporate action on the part of the Corporation
necessary for authorization in respect of the Corporation's issuance of the
Shares as contemplated hereunder has been (or shall be) taken prior to the date
of the Corporation's execution of this Share Subscription Agreement;
(c) The Corporation's execution of this Share Subscription
Agreement and issuance of the Shares as contemplated hereunder will not conflict
with or violate any provision of the Certificate of Incorporation or Bylaws of
the Corporation or any material agreement to which the Corporation is bound; and
(d) Upon execution of this Share Subscription Agreement and
receipt by the Corporation of the consideration for the Shares as described
herein, the Shares shall be deemed to be validly issued and outstanding, fully
paid and nonassessable.
5. Consideration. Subscriber hereby agrees and understands that the
consideration for the Shares shall not be delivered by Subscriber to the
Corporation until the share subscription contained herein shall have been
accepted; provided, however, that such consideration shall be delivered promptly
thereafter in accordance with the terms and conditions of the Merger Agreement
and prior to the issuance by the Corporation of the Shares. Subscriber
understands and agrees that the undersigned shall not be entitled to
certificates for, nor shall the undersigned be entitled to vote the Shares until
the consideration set forth herein has been delivered to the Corporation as
contemplated in the Merger Agreement.
Executed as of the _____ day of May, 1998.
Very truly yours,
____________________________________(L.S.)
Keith Giordano
ACCEPTED AND AGREED TO:
TRIANGLE IMAGING GROUP, INC.
By:_________________________________________
Name: Vito A. Bellezza
Title: Chairman of the Board of Directors
and Chief Executive Officer
Date: May _____, 1998
<PAGE>
EXHIBIT A
INDEX TO SEC FILINGS
1. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
2. The Corporation's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997;
3. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997;
4. The Corporation's Registration Statement on Form S-8 filed on August 15,
1997;
5. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997;
6. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1997;
7. The Corporation's Quarterly Report on Form 10-KSB for the year ended
December 31, 1996;
8. The Corporation's Amendment to its Current Report on Form 8-K/A filed
March 4, 1997;
9. The Corporation's Current Report on Form 8-K filed January 3, 1997;
10. The Corporation's Registration Statement on Form S-8 filed December 24,
1996;
11. The Corporation's Current Report on Form 8-K filed December 20, 1996;
12. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996;
13. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
14. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
15. The Corporation's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
<PAGE>
EXHIBIT B
TRIANGLE IMAGING GROUP, INC.
ACCREDITED INVESTOR QUESTIONNAIRE
Purpose of This Questionnaire
The undersigned has met with certain principals of Triangle Imaging
Group, Inc. (the "Company"), and has been provided certain information with
regard to a proposed investment in the Company. Certain of the Company's
securities will be offered to the undersigned as an "accredited investor"
without registration under the Securities Act of 1933, as amended (the "1933
Act"), or the securities laws of any state, in reliance on the exemption
contained in Section 3(b) and/or 4(2) and/or 4(6) of the 1933 Act in reliance on
Regulation D of the Securities and Exchange Commission thereunder and on similar
exemptions under applicable state laws. Under Section 4(2) and/or certain state
laws, the Company may be required to determine that an individual, or an
individual together with a "purchaser representative" or each individual equity
owner of an "investing entity" meets certain suitability requirements before
selling securities to such individual or entity. This Questionnaire will enable
the Company to make investor qualification determinations and discharge its
responsibilities under federal and state securities laws and the Company will
rely upon the information contained herein. SECURITIES WILL NOT BE SOLD OR
ISSUED TO THE UNDERSIGNED UNTIL A QUESTIONNAIRE HAS BEEN FILLED OUT AS
THOROUGHLY AS POSSIBLE. IN THE CASE OF AN INVESTOR THAT IS A PARTNERSHIP, TRUST
OR CORPORATION WHICH DOES NOT QUALIFY AS AN ACCREDITED INVESTOR, EACH EQUITY
OWNER MUST COMPLETE A QUESTIONNAIRE TO DETERMINE ACCREDITED STATUS. This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security.
Instructions:
The Company will not issue securities to the undersigned until one (1)
copy of this Questionnaire has been completed, signed, dated and delivered to
the Company.
Your answers will be kept strictly confidential at all times. The
Company may, however, present this Questionnaire to such parties as it deems
appropriate in order to assure itself that the offer and sale of the securities
will not result in a violation of the registration provisions of the 1933 Act or
a violation of the securities laws of any state.
All questions must be answered. If the appropriate answer is "None" or
"Not applicable," please so state. Please print or type your answers to all
questions and attach additional sheets if necessary to complete your answer to
any item.
Name(s):________________________________________________________________________
Social Security Number or Taxpayer Identification Number:_______________________
Home Address:___________________________________________________________________
________________________________________________________________________________
Business Address:_______________________________________________________________
________________________________________________________________________________
Home Telephone:_________________________________________________________________
Business Telephone:_____________________________________________________________
Occupation/Business:____________________________________________________________
Place and date of formation (if an entity):
If the undersigned is an individual, please CHECK whichever of the following
statements, (a)-(e) below, is applicable to you:
___ (a) The undersigned has had an individual income in excess of
$200,000 in each of the two most recent calendar years and reasonably expects to
have an individual income in excess of $200,000 in the current calendar year;
___ (b) The undersigned has had joint income with his or her spouse in
excess of $300,000 in each of the two most recent calendar years and reasonably
expects to have joint income with his or her spouse in excess of $300,000 in the
current calendar year;
___ (c) The undersigned has an individual net worth, or joint net worth
with his or her spouse, in excess of $1,000,000;
___ (d) The undersigned is a director or executive officer of the Company;
___ (e) None of the above.
For purposes of this Accredited Investor Questionnaire, the following
definitions apply:
"Individual income" means "adjusted gross income" as reported for
federal income tax purposes, less any income attributable to a spouse or to
property owned by a spouse, increased by the following amounts (but not
including any amounts attributable to a spouse or to property owned by a
spouse): (i) the amount of any interest income received which is tax-exempt
under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) the amount of any losses claimed as a limited partner in a limited
partnership (as reported on Schedule E of Form 1040) and (iii) any deduction
claimed for depletion under Section 611 et seq. of the Code.
"Joint income" means "adjusted gross income" of you and your spouse as
reported for federal income tax purposes, increased by the following amounts:
(i) the amount of any interest income received which is tax-exempt under Section
103 of the Code, (ii) the amount of losses claimed as a limited partner in a
limited partnership (as reported on Schedule E of Form 1040) and (iii) any
deduction claimed for depletion under Section 611 et seq.
of the Code.
"Net worth" means the excess of total assets at fair market value,
including home and personal property, over total liabilities, including
mortgages and income taxes on unrealized appreciation of assets.
If the undersigned is a corporation, partnership, employee benefit plan,
individual retirement account or trust, please CHECK whichever of the following
statements (a)-(n) is applicable:
___ (a) The undersigned is a self-directed individual retirement account or
401(k) Plan (if this statement is checked, the participant must also check
whichever of statements 9(a)-(e), above are applicable);
___ (b) The undersigned is a bank as defined in section 3(a)(2) of the 1933
Act, or a savings and loan association or other institution as defined in
section 3(a)(5)(A) of the 1933 Act, whether acting in an individual or fiduciary
capacity;
___ (c) The undersigned is a broker or dealer registered pursuant to
section 15 of the Securities Exchange Act of 1934;
___ (d) The undersigned is an insurance company as defined in section 2(13)
of the 1933 Act;
___ (e) The undersigned is an investment company registered under the
Investment Company Act of 1940;
___ (f) The undersigned is a business development company as defined in
section 2(a)(48) of the Investment Company Act of 1940;
___ (g) The undersigned is a Small Business Investment Company licensed by
the U.S. Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
___ (h) The undersigned is a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees if such plan has total
assets in excess of $5,000,000;
___ (i) The undersigned is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, provided that
the investment decision is made by a plan fiduciary, as defined in section 3(21)
of such Act, and the plan fiduciary is either a bank, savings and loan
association, insurance company or registered investment adviser or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, the investment decisions are made solely by persons that are
accredited investors.
___ (j) The undersigned is a private business development company as
defined in section 202(a)(22) of the Investment Advisers Act of 1940;
___ (k) The undersigned is an organization described in section 501(c)(3)
of the Code, a corporation, a Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities,
with total assets in excess of $5,000,000;
___ (l) The undersigned is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities,
whose purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Securities Act;
___ (m) The undersigned is an entity, each of whose stockholders, partners
or beneficiaries meets at least one of the conditions set forth under 9(a)-(d),
above with respect to individuals or 10(b)-(l), above with respect to
corporations, partnerships, trusts or other entities; or
___ (n) None of the above.
IF YOU CHECK THE STATEMENT NOTED AS 10(m) ABOVE AND DO NOT CHECK ANY OTHER
STATEMENT, A COMPLETED QUESTIONNAIRE FOR EACH STOCKHOLDER OF THE SUBSCRIBING
CORPORATION, EACH PARTNER OF THE SUBSCRIBING PARTNERSHIP OR EACH BENEFICIARY OF
THE SUBSCRIBING EMPLOYEE BENEFIT PLAN MUST ACCOMPANY THIS QUESTIONNAIRE.
To the best of my knowledge and belief, the above information supplied
by me is true and correct in all respects.
Dated: _______________________ ____________________________________________
Signature
____________________________________________
Title (if an entity)
<PAGE>
ALL PURCHASERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the undersigned has executed this Accredited Investor
Questionnaire on this _______ day of __________________, 1998.
__________________________ x $______________ per share = $______________________
Shares to be Purchased Purchase Price
Manner in which Title is to be held (Please Check One):
1. ___ Individual 7. ___ Trust/Estate/Pension or
Profit Sharing Plan
Date Opened:___________
2. ___ Joint Tenants With
Right of Survivorship
8. ___ As a Custodian for
3. ___ Community Property
_______________________________
Under the Uniform Gift to
4. ___ Tenants in Common Act of the State of ___________
5. ___ Corporation/Partnership 9. ___ Married with Separate
Property
6. ___ IRA 10. ___ Keogh
INDIVIDUAL PURCHASERS MUST COMPLETE PAGE 6; PURCHASERS WHICH
ARE ENTITIES MUST COMPLETE PAGE 7.
<PAGE>
FOR EXECUTION BY A PURCHASER WHO IS A NATURAL PERSON
________________________________________________________________________________
Exact Name in Which Title is to be Held
________________________________________________________________________________
(Signature)
________________________________________________________________________________
Name (Please Print)
________________________________________________________________________________
Residence Address: Number and Street
________________________________________________________________________________
City State Zip Code
________________________________________________________________________________
Social Security Number
Accepted this _______ day of __________________, 1998, on behalf of the Company.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
FOR EXECUTION BY A PURCHASER WHICH IS AN ENTITY
(Corporation, Partnership, Trust, Etc.)
________________________________________________________________________________
Name of Entity (Please Print)
By:_______________________________________
Title:____________________________________
Attest:___________________________________
Title:____________________________________
[SEAL]
________________________________________--
__________________________________________
__________________________________________
Address
__________________________________________
Taxpayer Identification Number
ACCEPTED, this _____ day of ___________________, 1998, on behalf of the Company.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
Exhibit G
Form of Opinion of Counsel To The Company and The Shareholders
May ___, 1998
Triangle Imaging Group, Inc.
4400 West Sample Road, Suite 228
Coconut Creek, Florida 33073
Ladies and Gentlemen:
This opinion is rendered to you pursuant to the requirements of the
Agreement and Plan of Merger and Reorganization, dated as of May ___, 1998 (the
"Merger Agreement"), by and among EJG Services, Inc., a Florida corporation (the
"Company"), Keith Giordano, an individual resident of the State of Florida (the
"Shareholder"), Triangle Imaging Group, Inc., a Florida corporation
("Triangle"), QuickCREDIT Corp., a Florida corporation ("QuickCREDIT"), and EJG
Acquisition Corp., a Florida corporation (the "Subsidiary").
We have acted as counsel to the Company and Shareholder in connection
with the entry into and performance by the Company and Shareholder of the
transactions contemplated in the Merger Agreement. In the capacity described
above, we are familiar with the corporate minute book of the Company, including
the articles of incorporation, bylaws and stock transfer records of the Company,
and we are further familiar with the corporate proceedings of the Company
relating to the Merger Agreement and the transactions contemplated therein. We
have also examined originals or copies certified, or otherwise identified to our
satisfaction, of the following documents:
1. the Merger Agreement;
2. the Share Subscription Agreement, dated May ___, 1998, executed by
Shareholder in favor of Triangle;
3. the Release, dated May ___, 1998, executed by Shareholder;
4. the Restrictive Covenants Agreement, dated May ___, 1998, executed by
Shareholder;
5. the Employment Agreement, dated May ___, 1998, executed by Shareholders;
6. a certificate, dated May ___, 1998, issued by the Secretary of State
of the State of Missouri with respect to the corporate existence of the Company
(the "Certificate of Existence");
7. a certificate, dated May ___, 1998, issued by the Secretary of State
of the State of Florida with respect to the foreign qualification of the Company
to do business in the State of Florida (the "Foreign Qualification
Certificate"); and
8. the Certificate of Merger of the Company into the Subsidiary dated
May ___, 1998, to be filed with the Secretary of State of the State of Florida
(the "Certificate of Merger").
The documents referenced in items 1 through 5 above are hereinafter
collectively referred to as the "Merger Documents".
This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord of the ABA Section of Business Law
(1991) (the "Accord"). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. Capitalized terms used in this
opinion letter and not otherwise defined shall have the meanings assigned to
such terms in the Accord and the Merger Agreement. If there should be any
conflict between the definition contained in the Accord and the Merger
Agreement, the definition contained in the Accord shall control.
The opinions expressed herein are limited to the laws of the State of
Florida and the federal laws of the United States of America.
In connection with the opinions set forth below, we have assumed the
genuineness of all signatures, other than those on behalf of the Company and
that of Shareholder, and the authenticity, completeness and accuracy of all
materials examined. As to questions of fact material to our opinions, we have
relied, without independent verification of the accuracy or completeness
thereof, solely on the following: (i) the contents of the corporate minute book
and stock transfer records of the Company; (ii) the statements and
representations contained in the Certificate of Existence; and (iii) the
respective statements, representations and warranties of the Company and
Shareholder contained in the Merger Agreement. We have made no other factual
investigation for the purpose of rendering this opinion letter.
The use of the term "Actual Knowledge" shall have the meaning given to
such term in the Accord, but shall not be taken that we have made, and in fact
we have not made, any independent investigation concerning the accuracy or
veracity of any representation, warranty or statement of fact other than as
described in the preceding paragraphs. We have made no independent search of any
public records in connection with our rendering of the opinions contained
herein.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Missouri and has all necessary
corporate power and lawful authority to own, operate and lease its properties
and carry on its business as and where else such business is now being
conducted, including, without limitation, the State of Florida. As used herein,
the term "in good standing" shall mean that all filings have been made as
required under applicable filing and annual registration provisions of the
[Missouri Corporate Code] and the Florida Business Corporation Act and all
filing fees due and payable thereunder have been paid.
2. The issued and outstanding shares of the Company are as set forth on
Schedule 2.2 to the Merger Agreement. All the shares of the Company identified
on such Schedule are duly authorized, validly issued, fully paid and
nonassessable. Except as set forth on Schedule 2.2 to the Merger Agreement,
there is no outstanding capital stock of the Company, and, to our Actual
Knowledge, except as set forth on Schedule 2.3 to the Merger Agreement, there
are no outstanding options, warrants or other rights to acquire common stock or
other securities of the Company.
3. Shareholder is the sole record and beneficial owner of the shares set
forth beside his name on Exhibit A to the Merger Agreement, and, to our Actual
Knowledge, has good and valid title to such shares, free and clear of all liens,
claims, encumbrances, equities or claims.
4. The Company has duly and validly executed each Merger Document to
which it is a party, and each such Merger Document is the valid, binding and
enforceable obligation of the Company. Shareholder has duly and validly executed
each Merger Document to which he is a party, and each such Merger Document is
the valid, binding and enforceable obligation of Shareholder.
5. The execution, delivery and performance of the Merger Documents to
which the Company is a party by the Company are within the Company's corporate
powers and have been duly authorized by all necessary corporate action on the
part of the Company. The execution, delivery and performance of the Merger
Documents to which Shareholder is a party are within Shareholder's full power
and legal capacity. Except as disclosed in the Merger Documents, the execution,
delivery and performance of the Merger Documents by the Company or Shareholder,
do not: (i) conflict with, require any consent under, result in the violation
of, or constitute a breach of any provision of the articles or certificate of
incorporation or bylaws of the Company; (ii) to our Actual Knowledge, conflict
with, require any Consent under, result in the violation of, constitute a breach
of, or accelerate the performance required on the part of Shareholder or the
Company by the terms of, any evidence of indebtedness or Contract to which
Shareholder or the Company is a party, in each case with or without notice or
lapse of time or both, or permit the termination of any such Contract by another
Person; (iii) to our Actual Knowledge, result in the creation or imposition of
any Encumbrance upon, or restriction on the use of, any property or assets of
the Company or the Company Common Stock under any Contract to which either the
Company or Shareholder is bound; (iv) to our Actual Knowledge, accelerate, or
constitute an event entitling, or which would, on notice or lapse of time or
both, entitle the holder of any indebtedness of the Company or Shareholder to
accelerate the maturity of any such indebtedness; (v) conflict with or result in
the breach or violation of any Legal Requirement that is binding on either the
Company or Shareholder; or (vi) violate or cause any revocation of or limitation
on any Permit of the Company.
6. Except as disclosed in Schedule 2.7 to the Merger Agreement, no
authorization, consent or approval or other action by, and no notice to or
filing with, any Governmental Body or any other Person is required to be
obtained or made by the Company or Shareholder for the due execution, delivery
and performance by them of the Merger Documents.
7. Under the laws of the State of Florida, the Merger will be effective
upon the filing of the Certificate of Merger with the Secretary of State of
Florida.
8. This letter is given solely for the benefit of the addressees hereof
and may only be relied upon for matters arising out of the transactions
described herein. Without our prior written consent, this letter may not be used
or relied upon by any other person or entity for any purpose whatsoever.
By:_______________________________________
<PAGE>
Exhibit H
FORM OF OPINION OF COUNSEL TO TRIANGLE AND QUICKCREDIT
May 22, 1998
EJGServices, Inc.
103 Century 21 Drive, Suite 120
Jacksonville, Florida 32216
Ladies and Gentlemen:
This opinion is rendered to you pursuant to the requirements of Section
7.4 of the Agreement and Plan of Merger and Reorganization, dated as of May 22,
1998 (the "Merger Agreement"), by and among EJG Services, Inc., a Missouri
corporation ("EJG"), Keith Giordano, an individual resident of the State of
Florida (the "Shareholder"), Triangle Imaging Group, Inc., a Florida corporation
("Triangle"), QuickCREDIT Corp., a Florida corporation ("QuickCREDIT"), and EJG
Acquisition Corp., a Florida corporation ("EAC").
We have acted as special counsel to Triangle, QuickCREDIT and EAC
(collectively, the "Parties") in connection with the negotiation of the Merger
Agreement and the consummation by the Parties of the transactions contemplated
in the Merger Agreement. In the capacity described above, we are familiar with
the records of the corporate proceedings of the Parties relating to the Merger
Agreement and the transactions contemplated therein. We have also examined
originals or copies, certified, or otherwise identified, to our satisfaction, of
the following documents:
1. the Merger Agreement;
2. the Share Subscription Agreement, dated May 22, 1998, executed by
Shareholder in favor of Triangle;
3. the Release, dated May 22, 1998, executed by Shareholder;
4. the Restrictive Covenants Agreement, dated May 22, 1998, executed by
Shareholder;
5. the Employment Agreement, dated May 22, 1998, executed by Shareholder;
6. the Escrow Agreement by and among the Parties and the Shareholder, dated
as of May 22, 1998;
7. certificates of recent date, issued by the Secretary of State of the
State of Florida with respect to the corporate existence of each of the Parties
(the "Certificates of Existence");
8. the Certificate of Merger of EJG with and into EAC, dated May 22,
1998, to be filed with the Secretary of State of each of the State of Florida
and the State of Missouri (the "Certificate of Merger"); and
9. The Agreement Incident to Merger of EAC, dated as of May 22, 1998.
The documents referenced in items 1 through 8 above are hereinafter
collectively referred to as the "Merger Documents".
This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord of the ABA Section of Business Law
(1991) (the "Accord"). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. Capitalized terms used in this
opinion letter and not otherwise defined shall have the meanings assigned to
such terms in the Accord and the Merger Agreement. If there should be any
conflict between the definition contained in the Accord and the Merger
Agreement, the definition contained in the Accord shall control.
The opinions expressed herein are limited to the federal laws of the
United States of America, the laws of the State of Georgia, as currently in
effect, and the provisions of the Florida Business Corporation Act, as reported
in standard compilations of corporation statutes (excluding any case law
annotations contained therein). We are admitted to the Bar of the State of
Georgia and do not purport to be experts in the laws of any other state.
In connection with the opinions set forth below, we have, with your
permission, assumed the genuineness of all signatures and the authenticity,
completeness and accuracy of all materials examined. As to questions of fact
material to our opinions, we have relied, with your permission and without
independent verification of the accuracy or completeness thereof, solely on the
following: (i) the records of the corporate proceedings of the Parties relating
to the Merger Agreement and the transactions contemplated therein; (ii) the
statements and representations contained in the Certificates of Existence; (iii)
the respective statements, representations and warranties of the Parties
contained in the Merger Documents; and (iv) an officer's certificate of each of
the Parties, each dated May 22, 1998, with respect to certain factual matters.
We have made no other factual investigation, including any independent search of
any public records, for the purpose of rendering this opinion letter.
Based upon and subject to the foregoing, we are of the opinion that:
1. Each of the Parties has duly authorized the execution and delivery of
the Merger Documents to which it is a party and the performance of all of its
obligations thereunder.
2. Each of the Parties has the requisite corporate power to execute and
deliver the Merger Documents to which it is a party.
3. The shares of Triangle Common Stock to be delivered under the Merger
Agreement (the "Merger Shares") have been duly authorized and, when delivered
against surrender of the issued and outstanding shares of EJG Common Stock, in
accordance with the provisions of the Merger Agreement, upon the Effective Date,
will be validly issued, fully paid and nonassessable.
This letter is given solely for the benefit of the addressees hereof and
may only be relied upon for matters arising out of the transactions described
herein. Without our prior written consent, this letter may not be used or relied
upon by any other person or entity for any purpose whatsoever.
Very truly yours,
SMITH, GAMBRELL & RUSSELL, LLP
By:_____________________________________________
W. Thomas King
<PAGE>
Exhibit I
FORM OF ESCROW AGREEMENT
ESCROW AGREEMENT (the "Agreement") dated as of May _____, 1998, by and
among TRIANGLE IMAGING GROUP, INC., a Florida corporation ("Triangle"),
QUICKCREDIT CORP., a Florida corporation ("QuickCREDIT"), EJG ACQUISITION CORP.,
("EAC") (Triangle, QuickCREDIT and EAC each an "Acquiror" and collectively
"Acquirors"), Keith Giordano, an individual resident of Florida ("Seller") and
Glen Allen, Esquire, an individual resident of Florida and a member in good
standing of the State Bar of Florida ("Escrow Agent").
W I T N E S S E T H:
WHEREAS, Acquirors, Seller and EJG Services, Inc. ("EJG"), a Missouri
corporation, have entered into that certain Agreement and Plan of Merger and
Reorganization, dated as of May ___, 1998, by and among Triangle, QuickCREDIT,
EAC, EJG and Seller (the "Merger Agreement") pursuant to which, among other
things, (i) EJG will be merged with and into EAC, with EAC as the surviving
entity (the "Merger") and (ii) each issued and outstanding share of the common
stock of EJG, $1.00 par value per share (the "EJG Common Stock"), will be
converted into the right to receive the merger consideration set forth in
Section 1.8 of the Merger Agreement (the "Merger Consideration"), which Merger
Consideration includes 200,000 shares (the "Merger Shares") of common stock of
Triangle, $.0001 par value per share;
WHEREAS, the Merger Agreement requires as a condition to consummation of
the transactions described therein that Acquirors, Seller and Escrow Agent enter
into this Agreement, and that Acquiror deposit 50,000 shares of the Merger
Shares with Escrow Agent (the "Escrow Shares"), in order to provide a fund for
indemnity payments which Seller may become obligated to make to Acquirors as and
to the extent provided in Section 9 of the Merger Agreement ("Indemnity
Claims");
WHEREAS, the parties hereto desire that Escrow Agent be appointed as
escrow agent to act in accordance with the terms and conditions hereof;
WHEREAS, Escrow Agent is willing to serve as the escrow agent and hold
the Escrow Shares in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration for the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Appointment of Escrow Agent.
Seller hereby irrevocably appoints Escrow Agent as escrow agent, to
receive, hold, administer and deliver the Escrow Funds (as defined below) at any
time held by Escrow Agent pursuant to this Escrow Agreement in accordance with
this Escrow Agreement, and Escrow Agent hereby accepts such appointment, all
subject to and upon the terms and conditions hereinafter set forth.
2. Deposit of Escrow Shares.
Seller hereby agrees that the Escrow Shares shall be deposited by the
Acquirors with Escrow Agent immediately upon the later to occur of (i) the
Closing described in the Merger Agreement or (ii) receipt by Acquirors from the
Acquirors' stock transfer agent, of a share certificate evidencing the Escrow
Shares. Escrow Agent hereby agrees to hold the Escrow Shares upon receipt in
accordance with this Escrow Agreement. Escrow Agent has no obligation to collect
all or any portion of the Escrow Shares and shall incur no obligations under
this Escrow Agreement until the Escrow Shares are received by Escrow Agent.
3. Investment.
(a) The Escrow Agent shall invest and reinvest all available cash dividends and
other amounts distributed or paid from time to time by Triangle and delivered to
Escrow Agent in respect of the Escrow Shares, as directed in writing by Seller
and Acquirors jointly, in any of the following kinds of investments, or in any
combination thereof: (i) bonds or other obligations of, or guaranteed by, the
government of the United States of America, or agencies of any of the foregoing,
having maturities of not greater than ninety (90) days (or, if earlier, the
Release Date, as hereinafter defined); (ii) commercial paper rated, at the time
of the Escrow Agent's investment therein, at least P-1 by Moody's Investors
Service, Inc. and A-1 by Standard & Poor's Corporation and having maturities of
not greater than ninety (90) days (or, if earlier, the Release Date); (iii)
demand or time deposits in, certificates of deposit of or bankers' acceptances
issued by (A) a depository institution or trust company incorporated under the
laws of the United States of America, any State thereof or the District of
Columbia or (B) a United States branch office or agency of a foreign depository
institution or trust company if, in any such case, the depository institution,
trust company or office or agency has combined capital and surplus of not less
than one hundred million dollars ($100,000,000) (any such institution being
herein called a "Permitted Bank") having maturities of not greater than ninety
(90) days (or, if earlier, the Release Date); (iv) repurchase obligations of a
Permitted Bank or securities dealer (acting as principal) meeting the capital
and surplus requirements specified for a Permitted Bank with respect to any bond
or other obligation referred to in clause (i) above; (v) any money market fund
substantially all of which is invested in the foregoing investment categories;
or (vi) such other investments as Acquirors and Seller shall jointly approve in
writing. The Escrow Shares and any amounts paid thereon while on deposit with
Escrow Agent shall be referred to hereinafter collectively as the "Escrow
Funds".
(b) All taxes in respect of earnings on the Escrow Amount shall be the
obligation of and shall be paid when due by Seller, who shall jointly and
severally indemnify and hold Acquirors and the Escrow Agent harmless from and
against all such taxes.
4. Custody and Release of Escrow Funds.
Escrow Agent shall hold and disburse the Escrow Funds in
accordance with the following:
(a) In the event Acquirors believe Acquirors are entitled to receive all or a
portion of the Escrow Funds on account of an Indemnity Claim, Acquirors shall
deliver to Escrow Agent a written certificate stating that Acquirors are
entitled to payment from the Escrow Funds on account of a valid Indemnity Claim
(the "Claim Certificate"). The Claim Certificate shall state the amount of the
payment from the Escrow Funds to which Acquirors believe Acquirors are entitled.
Within 5 business days following Escrow Agent's receipt of any Claim
Certificate, Escrow Agent shall send notice to Seller of Escrow Agent's receipt
of such Claim Certificate ("Claim Notice"). The Claim Notice shall include a
copy of the Claim Certificate.
(b) If Escrow Agent does not, within 15 business days following receipt of the
Claim Notice by Seller, receive from Seller a written notice objecting to
payment of all or any portion of the claim(s) specified in the Claim Certificate
("Objection Notice"), Escrow Agent shall deliver to Acquirors an amount from the
Escrow Funds equal to the lesser of (i) the amount specified in the Claim
Certificate or (ii) the full remaining balance of the Escrow Funds.
(c) If Seller elects to deliver an Objection Notice within the 15 day period
specified in subparagraph 4(b) above, Seller shall specify in such Objection
Notice whether Seller disputes all or a portion of the amount claimed in the
Claim Certificate. If Seller does not dispute the entire amount claimed in the
Claim Certificate, Seller shall specify the amount which Seller disputes, and
upon receipt of the Objection Notice, Escrow Agent shall pay any undisputed
portion claimed in the Claim Certificate to Acquirors in accordance with
subparagraph 4(b). Within 5 business days following Escrow Agent's receipt of
any Objection Notice, Escrow Agent shall notify Acquirors of Escrow Agent's
receipt of such Objection Notice and shall provide to Acquirors a copy of the
Objection Notice with such notification.
(d) Any portion of the Escrow Funds claimed by Acquirors pursuant to a Claim
Notice delivered to Escrow Agent in accordance with subparagraph 4(a) and
disputed by Seller pursuant to an Objection Notice delivered to Escrow Agent in
accordance with subparagraph 4(b) ("Disputed Amounts") shall be retained by
Escrow Agent until Escrow Agent shall have received either of the following:
(i) a written directive executed jointly by Acquirors and Seller directing
Escrow Agent to pay all or a portion of the Disputed Amounts to Acquirors or to
Seller and specifying the amounts to be paid, in which case Escrow Agent shall
promptly pay such amounts to Acquirors from the Escrow Funds in accordance with
such directive; or
(ii) a certified copy of a final, non-appealable order of a court of
competent jurisdiction ordering Escrow Agent to deliver all or a portion of the
Disputed Amounts, in which case Escrow Agent shall promptly comply with the
terms of such court order.
(e) If, on the date which is the 365th day immediately following the Closing
Date (the "Release Date"), the amount of Escrow Funds remaining in control of
Escrow Agent exceeds the aggregate amount of Disputed Claims and Pending Claims,
as hereafter defined, as of such date, Escrow Agent shall release to Seller all
Escrow Funds remaining in excess of such aggregate sum.
A "Pending Claim" for purposes of this Subsection (e) shall be any amount
of the Escrow Funds which is the subject of a Notice of Claim delivered within
15 days prior to the Release Date with respect to which the Escrow Agent has not
received an Objection Notice as of the Release Date.
(f) No Claim Certificate may be delivered by Acquirors to Escrow Agent after the
date which is two business days prior to the Release Date (the "Bar Date"). Any
Claim Certificate delivered to Escrow Agent after the Bar Date shall be void and
shall be disregarded by Escrow Agent. Subject to the other terms and conditions
of this Agreement, following the Release Date, Escrow Agent shall continue to
hold any Disputed Amounts or Pending Amounts beyond the Release Date until
disbursement in accordance with subparagraphs 4(b) or (d), as the case may be.
(g) Anything in this Escrow Agreement to the contrary notwithstanding:
(i) Escrow Agent may deposit all or any portion of the Escrow Funds with
the clerk of any court of competent jurisdiction upon commencement of an action
in the nature of interpleader or in the course of any court proceedings.
(ii) If at any time Escrow Agent receives an order of a court of competent
jurisdiction, or (subject to subparagraph 5(b) below) written instructions
signed by both Acquirors and Seller directing delivery of all or a portion of
the Escrow Funds, Escrow Agent shall comply with such order or instructions.
(h) The Escrow Funds shall not be subject to lien or attachment by any creditor
of any party hereto and shall be used solely for the purposes set forth in this
Escrow Agreement. The Escrow Funds shall not be available to, and shall not be
used by, Escrow Agent to set off any obligation of Acquirors or Seller to Escrow
Agent.
(i) Upon any delivery or deposit of all of the Escrow Funds pursuant to this
Section 4, Escrow Agent shall thereupon be released and discharged from any and
all further obligations arising in connection with this Escrow Agreement.
5. Concerning Escrow Agent.
Escrow Agent has been induced to accept its obligations under
this Escrow Agreement by the following terms, conditions, representations and
warranties:
(a) Escrow Agent shall not be liable, except for his own gross negligence or
willful misconduct and, except with respect to claims based upon such gross
negligence or willful misconduct that are successfully asserted against Escrow
Agent. Acquirors and Seller jointly and severally shall indemnify and hold
harmless Escrow Agent (and any successor escrow agent) from and against any and
all claims, liabilities, losses, damages, costs, reasonable attorneys' fees and
other expenses whatsoever arising out of or in connection with Escrow Agent's
service as Escrow Agent under this Escrow Agreement. Without limiting the
foregoing, in no event shall Escrow Agent be liable except for his own gross
negligence or willful misconduct for any matter or thing relating to his
investment or reinvestment of the Escrow Funds, including, without limitation,
any failure to earn interest, any claim that a higher rate of return could have
been obtained, any delays in the investment or reinvestment of any amounts paid
by Triangle with respect to the Escrow Shares, including without limitation, any
failure to earn interest, any claim that a higher rate of return could have been
obtained, any delays in the investment or reinvestment of such dividends or any
loss of interest incident to any such delays.
(b) In the event of any disagreement among the parties to this Escrow Agreement,
or among them or any one of them and any other person, resulting in adverse
claims or demands being made in connection with all or any part of the Escrow
Funds, or in the event that Escrow Agent in good faith is in doubt as to what
action it should take hereunder, Escrow Agent may, at its option, refuse to
comply with any claims or demands on it (but nothing herein shall obligate
Escrow Agent so to do) until (i) Escrow Agent shall have received an order of a
court of competent jurisdiction directing delivery of all or any part of the
Escrow Funds or (ii) all differences shall have been adjusted and all doubt
resolved by written agreement executed by the parties to such disagreement and
delivered to Escrow Agent.
(c) Escrow Agent shall be entitled to rely upon any judgment, certification,
demand, notice, instrument or other writing delivered to it hereunder without
being required to determine the authenticity or correctness of any fact stated
therein or the propriety or validity of the service thereof and may act in
reliance upon any instrument or signature believed by it to be genuine and may
assume that any person purporting to give any notice or receipt or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
(d) Each of the Acquirors represents and warrants to Escrow Agent that Acquirors
have full power and authority to act as representative of any and all of the
other Acquirors for all purposes with respect to this Escrow Agreement and the
Escrow Funds. Escrow Agent shall be entitled to rely conclusively on the
authority of any Acquiror to make Indemnity Claims on behalf of any of the
Acquirors and Escrow Agent shall make payment with respect to any such claim
directly to any Acquiror as agent and trustee of such other Acquiror(s). Escrow
Agent shall have no obligation to communicate directly with any Acquiror or to
honor or acknowledge any directives or communications given or purportedly given
by any Acquiror, other than those provided by an Acquiror in accordance with the
terms of this Escrow Agreement.
(e) Neither Acquirors nor Seller shall have any right or standing to make a
claim, provide any notice or receive any payment by, through or under this
Agreement except in accordance with the procedures described herein. Escrow
Agent shall have no obligation to communicate directly with Acquirors or Seller
or to honor or acknowledge any directives or communications given or purportedly
given by Acquirors or Seller, except those provided by Acquirors or Seller in
accordance with this Agreement.
(f) Escrow Agent may seek the advice of legal counsel selected with reasonable
care in the event of any dispute or question as to the construction of any of
the provisions of this Escrow Agreement or its duties hereunder, and it shall
incur no liability and shall be fully protected in respect of any action taken,
omitted or suffered by it in good faith in accordance with the opinion of such
counsel;
(g) This Escrow Agreement expressly sets forth all the duties of Escrow Agent
with respect to any and all matters pertinent hereto.
6. Successor Escrow Agent.
Escrow Agent (and any successor escrow agent) may at any time
resign as such by delivering the Escrow Funds to any successor escrow agent
mutually designated by Acquirors and Seller in writing, or to any court of
competent jurisdiction. Escrow Agent may be removed by Acquirors and Seller by
signing and delivering to Escrow Agent a joint directive stating that Escrow
Agent has been removed and designating a successor Escrow Agent, in which case
Escrow Agent shall promptly deliver the Escrow Funds to the successor escrow
agent. Escrow Agent shall be discharged of and from any and all further
obligations arising in connection with this Escrow Agreement following any
resignation or removal immediately upon delivery of the Escrow Funds to such
court or such successor escrow agent.
7. Notices.
Any notices, certificates or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given only if and when (i) delivered by messenger and receipted for, or (ii)
when delivered and receipted for by an overnight mail service, or (iii) when
delivered and receipted for by U.S. certified mail, addressed in each case as
follows:
If to Acquirors, to:
QuickCREDIT Corp.
4400 West Sample Road, Suite 228
Coconut Creek, Florida 33073
Attention: Van Saliba
with a copy to:
Smith, Gambrell & Russell, LLP
1230 Peachtree Street, N.E.
Suite 3100, Promenade II
Atlanta, Georgia 30309
Attention: W. Thomas King, Esquire
If to Seller to:
Keith Giordano
1302 Woodhill Place
Jacksonville, Florida 32256
with a copy to:
Glen Allen, Esquire
353 E. Forsyth Street
Jacksonville, Florida 32202
If to Escrow Agent to:
Glen Allen, Esquire
353 E. Forsyth Street
Jacksonville, Florida 32202
Any address set forth above may be changed by notice given pursuant to this
Section 7.
8. Miscellaneous.
(a) Any provision of this Escrow Agreement which may be determined by any court
of competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. It
is expressly understood, however, that the parties hereto intend each and every
provision of this Escrow Agreement to be valid and enforceable and hereby
knowingly waive all rights to object to any provision of this Escrow Agreement.
(b) This Escrow Agreement shall be binding upon and inure solely to the benefit
of the parties hereto and their respective successors and permitted assigns, and
shall not be enforceable by or inure to the benefit of any third party. No party
may assign its rights or obligations under this Escrow Agreement without the
written consent of the other parties. In no event shall Escrow Agent be required
to act upon, or be bound by, any notice, instruction, confirmation or other
communication given by a person other than Acquirors or Seller nor shall Escrow
Agent be required to deliver the Escrow Funds to any person other than Acquirors
or Seller or a successor escrow agent designated by Acquirors and Seller in
accordance with Paragraph 6.
(c) This Escrow Agreement shall be construed in accordance with and governed by
the internal laws of the State of Florida.
(d) This Escrow Agreement constitutes the entire understanding among the parties
with respect to the subject matter hereof. This Escrow Agreement may only be
modified or terminated by a writing signed by all of the parties hereto, and no
waiver hereunder shall be effective unless in writing signed by the party to be
charged.
(e) The fees of Escrow Agent shall be paid 50% by Acquirors and 50% by Seller,
as and when billed by Escrow Agent in accordance with the schedule of fees
described on Exhibit "A" hereto.
(f) This Escrow Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts of this Escrow Agreement taken together shall constitute
but one and the same instrument.
(g) A "business day" for purposes of this Agreement shall mean any day on which
commercial banks in Ft. Lauderdale, Florida are open for regular business.
(h) The section headings used herein are for convenience of reference only and
shall not define or limit the provisions of this Escrow Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement on the date first above written.
ACQUIRORS SELLER
TRIANGLE IMAGING GROUP, INC.
_________________________________________ ________________________________
By: Vito A. Bellezza By: Keith Giordano
Title: Chairman of the Board of Directors
and Chief Financial Officer
ESCROW AGENT
_________________________________________
By: Harold S. Fischer
Title: President ________________________________
By: Glen Allen, Esquire
QUICKCREDIT CORP.
_________________________________________
By: Van Saliba
Title: President
EJG ACQUISITION CORP.
_________________________________________
By: Van Saliba
Title: President
<PAGE>
EXHIBIT A
SCHEDULE OF ESCROW AGENT FEES
Annual Charge $_____________
Any out-of-pocket expenses, or extraordinary fees or expenses such as
attorneys fees or messenger costs, are additional and are not included in the
above schedule.
<PAGE>
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
by and among:
TRIANGLE IMAGING GROUP, INC., a Florida corporation,
QUICKCREDIT CORP., a Florida corporation,
FCB ACQUISITION CORP., a Florida corporation,
FLORIDA CREDIT BUREAU, INC., a Florida corporation
and
THE SHAREHOLDERS of FLORIDA CREDIT BUREAU, INC.
________________________
Dated as of May 22, 1998
________________________
<PAGE>
Table of Contents Page
Section 1. DESCRIPTION OF TRANSACTION...................................1
1.1 Merger of FCB with FAC.......................................1
1.2 Effect of Merger.............................................1
1.3 Closing; Effective Time......................................2
1.4 Articles of Incorporation and Bylaws;
Directors and Officers.......................................2
1.5 Conversion of Shares.........................................2
1.6 Closing of Transfer Books of FCB.............................2
1.7 Exchange of Certificates.....................................3
1.8 Merger Consideration.........................................4
1.9 Right to Obligate Triangle to Repurchase Merger Shares.......5
1.10 Tax Consequences.............................................6
1.11 Further Action...............................................6
Section 2. REPRESENTATIONS AND WARRANTIES OF
FCB AND THE SHAREHOLDERS.....................................6
2.1 Due Organization and Qualification...........................6
2.2 Capitalization...............................................7
2.3 Options or Other Rights......................................7
2.4 Subsidiaries and Investments.................................7
2.5 Charter and Bylaws...........................................7
2.6 Books and Records............................................8
2.7 Authority; Binding Nature of Agreement.......................8
2.8 Financial Statements.........................................9
2.9 Absence of Undisclosed Liabilities...........................9
2.10 Absence of Changes..........................................10
2.11 Legal Proceedings; Orders...................................11
2.12 Tax Matters.................................................12
2.13 Title to Assets.............................................13
2.14 Compliance with Legal Requirements..........................13
2.15 Contracts...................................................13
2.16 Leases......................................................15
2.17 Intentionally Left Blank....................................15
2.18 Fixed Assets................................................16
2.19 Trade Names and Other Intangibles...........................16
2.20 Suppliers and Customers.....................................16
2.21 Payment of Wages and Salary.................................16
2.22 Employee Benefit Plans......................................17
2.23 Insurance...................................................18
2.24 Environmental Matters.......................................19
2.25 Officers, Directors and Key Employees.......................20
2.26 Restrictive Documents.......................................20
2.27 Licenses....................................................20
2.28 Transactions with Affiliated Parties........................20
2.29 Bank Accounts and Powers of Attorney........................20
2.30 Warranties..................................................20
2.31 Assets Complete.............................................21
2.32 No Changes Prior to Closing Date............................21
2.33 Disclosure..................................................21
2.34 Broker's or Finder's Fees...................................21
2.35 Copies of Documents.........................................22
Section 3. REPRESENTATIONS AND WARRANTIES OF TRIANGLE,
QUICKCREDIT AND FAC.........................................22
3.1 Due Organization and Qualification..........................22
3.2 Charter and By-Laws.........................................22
3.3 Authority; Binding Nature of Agreement......................22
3.4 Legal Proceedings; Orders...................................23
3.5 SEC Filings; Financial Statements...........................23
3.6 Valid Issuance..............................................24
3.7 Broker's or Finder's Fees...................................24
3.8 Disclosure..................................................24
Section 4. CERTAIN COVENANTS OF FCB AND THE SHAREHOLDERS...............24
4.1 Access and Investigation....................................24
4.2 Operation of the Business of FCB............................25
4.3 Notification; Updates to Schedules..........................26
4.4 Pooling of Interests........................................27
4.5 No Negotiation..............................................27
Section 5. ADDITIONAL COVENANTS OF THE PARTIES.........................28
5.1 Filings and Consents........................................28
5.2 Public Announcements........................................28
5.3 Best Efforts................................................28
5.4 Employment Agreements.......................................28
5.5 Restrictive Covenants Agreements............................28
5.6 Release.....................................................28
5.7 Share Subscription Agreement................................29
5.8 Termination of Employee Plans...............................29
5.9 Software Assignment and License Agreement...................29
5.10 National Telephone Service Collection Indemnity.............29
Section 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIANGLE,
QUICKCREDIT AND FAC.........................................29
6.1 Accuracy of Representations.................................29
6.2 Performance of Covenants....................................29
6.3 Consents....................................................29
6.4 Agreements and Documents....................................30
6.5 No Material Adverse Change..................................30
6.6 Termination of Employee Plans...............................30
6.7 Pooling Letter..............................................30
6.8 Rule 506....................................................30
6.9 No Restraints...............................................31
6.10 No Legal Proceedings........................................31
6.11 Completion of Due Diligence.................................31
6.12 Certificates of Merger......................................31
Section 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
FCB AND THE SHAREHOLDERS....................................31
7.1 Accuracy of Representations.................................31
7.2 Performance of Covenants....................................31
7.3 Consents....................................................31
7.4 Release of Guaranty.........................................31
7.5 Agreements and Documents....................................32
7.6 Cash Consideration..........................................32
7.9 No Restraints...............................................32
7.10 Certificates of Merger......................................32
Section 8. TERMINATION.................................................33
8.1 Termination Events..........................................33
8.2 Termination Procedures......................................33
8.3 Effect of Termination.......................................34
Section 9. INDEMNIFICATION, ETC........................................34
9.1 Survival of Representations and Warranties..................34
9.2 Shareholders' Indemnity Agreement...........................34
9.3 Indemnity Agreement of QuickCREDIT and the
Surviving Corporation.......................................35
9.4 Indemnification Procedure...................................36
9.5 Pledge of Stock as Security.................................36
9.6 Set-off.....................................................37
Section 10. MISCELLANEOUS PROVISIONS....................................37
10.1 Further Assurances..........................................37
10.2 Fees and Expenses...........................................37
10.3 Arbitration.................................................37
10.4 Broker's and Finder's Fees..................................37
10.5 Notices.....................................................38
10.6 Time of the Essence.........................................39
10.7 Headings....................................................39
10.8 Counterparts................................................39
10.9 Governing Law...............................................39
10.10 Successors and Assigns......................................39
10.11 Remedies Cumulative; Specific Performance...................39
10.12 Waiver......................................................40
10.13 Amendments..................................................40
10.14 Severability................................................40
10.15 Parties in Interest.........................................40
10.16 Entire Agreement............................................40
10.17 Construction................................................41
LIST OF EXHIBITS
Exhibit A -- Shareholders of FCB
Exhibit B -- Certain Definitions Used in this Agreement
Exhibit C -- Directors and Officers of the Surviving Corporation
Exhibit D -- Form of Assignment of Promissory Note
Exhibit E -- Form of Assignment of Bank Accounts
Exhibit F -- Form of Employment Agreement
Exhibit G -- Form of Restrictive Covenants Agreement
Exhibit H -- Form of Release
Exhibit I -- Form of Share Subscription Agreement
Exhibit J -- Form of Software Assignment and License Agreement
Exhibit K -- Form of Opinion of Counsel to FCB
and the Shareholders
Exhibit L -- Form of Opinion of Counsel to Triangle,
QuickCREDIT and FAC
Exhibit M -- Form of Escrow Agreement
LIST OF SCHEDULES
Schedule 2.1 -- Due Organization and Qualification
Schedule 2.2 -- Capitalization
Schedule 2.3 -- Options or Other Rights
Schedule 2.5 -- Charter and Bylaws
Schedule 2.7 -- Authority; Binding Nature of Agreement
Schedule 2.8 -- Financial Statements
Schedule 2.9 -- Absence of Undisclosed Liabilities
Schedule 2.10 -- Absence of Changes
Schedule 2.11 -- Legal Proceedings; Orders
Schedule 2.12 -- Tax Matters
Schedule 2.13 -- Title to Assets
Schedule 2.14 -- Compliance with Legal Requirements
Schedule 2.15 -- Contracts
Schedule 2.16 -- Leases
Schedule 2.18 -- Fixed Assets
Schedule 2.19 -- Trade Names and Other Intangibles
Schedule 2.20 -- Suppliers and Customers
Schedule 2.22 -- Employee Benefit Plans
Schedule 2.23 -- Insurance
Schedule 2.24 -- Environmental Matters
Schedule 2.25 -- Officers, Directors and Key Employees
Schedule 2.27 -- Licenses
Schedule 2.28 -- Transactions with Affiliated Parties
Schedule 2.29 -- Bank Accounts and Powers of Attorney
Schedule 2.30 -- Warranties
Schedule 3.2 -- Charter and Bylaws
Schedule 3.4 -- Legal Proceedings; Orders
<PAGE>
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and
entered into as of this 22nd day of May, 1998, by and among TRIANGLE IMAGING
GROUP, INC., a Florida corporation ("Triangle"); QUICKCREDIT CORP., a Florida
corporation and a wholly-owned subsidiary of Triangle ("QuickCREDIT"); FCB
Acquisition Corp., a Florida corporation and wholly-owned subsidiary of
QuickCREDIT ("FAC"); FLORIDA CREDIT BUREAU, INC., a Florida corporation ("FCB"),
and the shareholders of FCB, individual residents of the State of Florida (the
"Shareholders"). Each of the Shareholders and their respective ownership
interests in FCB are set forth in Exhibit A. Certain capitalized terms used in
this Agreement are defined in Exhibit B.
RECITALS:
A. The parties intend to effect a merger of FCB with and into FAC (the
"Merger") in accordance with this Agreement and the Florida Business Corporation
Act (the "FBCA"). Upon consummation of the Merger, FCB will cease to exist, and
FAC will continue to exist as the surviving corporation of the Merger.
B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Code.
C. This Agreement has been adopted and approved by the respective
boards of directors of Triangle, QuickCREDIT and FAC and the board of directors
of FCB and the Shareholders.
D. The capitalization of FCB consists of 500 shares of voting common
stock, $1.00 par value per share, of which 100 shares are issued and outstanding
(the "FCB Common Stock").
E. It is intended that the Merger be treated as a "pooling of
interests" under generally accepted accounting principles and SEC rules.
AGREEMENT:
The parties to this Agreement agree as follows:
Section 1. DESCRIPTION OF TRANSACTION
1.1 Merger of FCB with FAC. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time, FCB shall be merged with and
into FAC, and the separate existence of FAC shall cease. FAC will continue as
the surviving corporation in the Merger (the "Surviving Corporation").
1.2 Effect of Merger. The Merger shall have the effects set forth in this
Agreement and in the applicable provisions of the FBCA.
1.3 Closing; Effective Time. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of
QuickCREDIT, 4400 West Sample Road, Suite 228, Coconut Creek, Florida 33073, at
1:00 p.m. local time on May 22, 1998, or at such other time and date on or
before May 31, 1998 as the parties shall designate (the "Scheduled Closing
Time"; the date on which the Closing actually takes place is referred to in this
Agreement as the "Closing Date"). Contemporaneously with or as promptly as
practicable after the Closing, a properly executed certificate of merger (the
"Certificate of Merger") for the merger of FCB with FAC, conforming to the
requirements of the FBCA, shall be filed with the Secretary of State of the
State of Florida (the "Secretary of State"). The Merger shall take effect at the
time such Certificate of Merger is filed with the Secretary of State (the
"Effective Time").
1.4 Articles of Incorporation and Bylaws; Directors and Officers. Unless the
parties agree otherwise prior to the Effective Time:
(a) the Articles of Incorporation of FAC shall continue as the Articles of
Incorporation of the Surviving Corporation;
(b) the Bylaws of FAC shall continue as the Bylaws of the Surviving
Corporation;
(c) the directors and officers of the Surviving Corporation immediately after
the Effective Time shall be the individuals identified on Exhibit C; and
(d) the Surviving Corporation shall change its name to Florida Credit Bureau,
Inc. promptly after the Closing.
1.5 Conversion of Shares.
Subject to Section 1.7 of this Agreement, on the Closing Date, by
virtue of the Merger and without any further action on the part of Triangle,
QuickCREDIT, FCB or any Shareholder, each share of FCB Common Stock outstanding
immediately prior to the Closing Date shall be canceled and retired and
converted into the right to receive a pro rata share of the aggregate Merger
Consideration described in Section 1.8 of this Agreement.
1.6 Closing of Transfer Books of FCB. On the Closing Date, the holders of
certificates representing shares of FCB Common Stock that were outstanding
immediately prior to the Closing shall cease to have any rights as shareholders
of FCB, and the stock transfer books of FCB shall be closed with respect to all
shares of such FCB Common Stock outstanding immediately prior to the Closing. No
further transfer of any such shares of capital stock of FCB shall be made on
such stock transfer books after the Closing. If, after the Closing, a valid
certificate previously representing any of such shares of FCB Common Stock (a
"FCB Stock Certificate") is presented to QuickCREDIT, such FCB Stock Certificate
shall be canceled and shall be exchanged as provided in Section 1.7 of this
Agreement.
1.7 Exchange of Certificates.
(a) Each Shareholder, at the Closing or as soon thereafter as is practicable,
shall surrender his or her respective FCB Stock Certificate(s) to QuickCREDIT,
together with such transmittal documents as QuickCREDIT may reasonably require,
and QuickCREDIT shall deliver or cause Triangle to deliver to such Shareholder
such Shareholder's pro rata share of the aggregate Merger Consideration, to be
paid at Closing pursuant to, and as provided in, Section 1.8 of this Agreement.
(b) No fractional shares of common stock of Triangle, $.0001 par value
("Triangle Common Stock") shall be issued in connection with the Merger, and no
certificates for any such fractional shares shall be issued. In lieu of such
fractional shares, any Shareholder who would otherwise be entitled to receive a
fraction of a share of Triangle Common Stock (after aggregating all fractional
shares of Triangle Common Stock issuable to such holder) shall receive shares of
Triangle Common Stock rounded upward or downward to the nearest whole number of
shares.
(c) Until surrendered as contemplated by this Section 1.7, each FCB Stock
Certificate shall be deemed, from and after the Closing, to represent only the
right to receive a pro rata share of the Merger Consideration. If any FCB Stock
Certificate shall have been lost, stolen or destroyed, Triangle may, in its
discretion and as a condition precedent to the issuance of any certificate
representing Triangle Common Stock, require the owner of such lost, stolen or
destroyed FCB Stock Certificate, to provide an appropriate affidavit and to
deliver a bond (in such sum as Triangle may reasonably direct) as indemnity
against any claim that may be made against Triangle with respect to such FCB
Stock Certificate.
(d) The shares of Triangle Common Stock to be issued in the Merger shall be
characterized as "restricted securities" for purposes of Rule 144 under the
Securities Act, and each certificate representing any of such shares shall bear
a legend identical or similar in effect to the following legend (together with
any other legend or legends required by applicable state securities laws or
otherwise):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL SECURITIES ACT OF 1933, (THE "FEDERAL ACT") OR THE SECURITIES
LAWS OF ANY STATE (THE "STATE LAWS") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IF, IN THE OPINION OF
COUNSEL TO TRIANGLE, SUCH SALE OR TRANSFER WOULD BE (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR PURSUANT TO AN EXEMPTION FROM
SUCH REGISTRATION; AND (2) IN A TRANSACTION WHICH IS EXEMPT UNDER APPLICABLE
STATE LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE
STATE LAWS OR IN A TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH APPLICABLE
STATE LAWS.
(e) QuickCREDIT shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable to any holder or former holder of FCB Common
Stock pursuant to this Agreement such amounts as QuickCREDIT is required to
deduct or withhold therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
(f) Neither QuickCREDIT nor Triangle shall be liable to any holder or former
holder of FCB Common Stock for any shares of Triangle Common Stock (or dividends
or distributions with respect thereto), or for any cash amounts, delivered to
any public official pursuant to any applicable abandoned property, escheat or
similar law.
1.8 Merger Consideration. The aggregate consideration to be delivered by
QuickCREDIT to the Shareholders in full consideration for the Merger (the
"Merger Consideration") shall be:
(i) a cash payment of One Hundred Fifty Thousand and no/100s Dollars ($150,000)
to be delivered at Closing or, if later, upon the surrender of all of the
outstanding shares of FCB Common Stock;
(ii) Fifty Thousand (50,000) shares of Triangle Common Stock (the "Merger
Shares"), represented by share certificates each evidencing 5,000 shares of
Triangle Common Stock, to be delivered by Triangle (or its transfer agent) as
soon as is practicable following the date of the surrender of all of the
outstanding shares of FCB Common Stock, 20,000 shares of which shall be
delivered by Triangle (or its transfer agent) to Lawrence H. Katz, Attorney at
Law, P.A., a Florida Professional Association, as escrow agent, to be held in
escrow pursuant to Section 9.5 of this Agreement (the "Escrow Shares");
(iii) the assignment by FAC to the Shareholders of that certain promissory note
(the "Promissory Note") dated April 4, 1998, by and between FCB and Financial
Resource Systems, Inc., a Florida corporation, in the original principal amount
of $32,000, such assignment to be in the form of Exhibit D attached hereto and
to be made at Closing or, if later, upon the surrender of all of the outstanding
shares of FCB Common Stock;
(iv) a cash payment to be made as soon as practicable following the date which
is the 90th day immediately following the Closing Date (the "Payment Date"), in
an amount which is equal to (1) the aggregate of the accounts receivable of FCB
("FCB Receivables") that are (x) in existence at 5:00 p.m. on the day before the
Closing Date and (y) actually collected by FAC ("FAC Receipts") during the
period beginning on the Closing Date and ending on the Payment Date less (2) all
accounts payable and other overhead expenses of FCB existing at 5:00 p.m. on the
day before the Closing Date ("FCB Expenses"); provided that all FCB Receivables
remaining on the Payment Date shall be written off by FAC and assigned to
Shareholders and all FCB Expenses which have not been charged, invoiced or
otherwise presented to FAC prior to the Payment Date shall become the obligation
of FAC on the Payment Date. The parties hereto agree that on or about June 30,
1998, the parties shall determine the dollar amount of the FCB Expenses and FCB
Receipts which existed, as of 5:00 p.m. on the day before the Closing Date (for
the purpose of estimating the amount by which the FCB Receipts expected to be
collected by the Payment Date will exceed, or fall short of, the FCB Expenses
expected to be billed or otherwise invoiced to FCB prior to the Payment Date).
The Surviving Corporation further agrees that on the Payment Date it shall
provide to the Shareholders an accounting of the dollar amount of the FCB
Expenses paid and FCB Receipts collected, during the period beginning on the
Closing Date and ending on the Payment Date, to be used to determine the amount
of the cash payment, if any, to be delivered to the Shareholders pursuant to
this Section 1.8(iv); and
(v) the assignment by FAC to the Shareholders of FCB's Operating Account,
account number 016604003538, and FCB's Money Market Account, account number
01606018916 (which accounts are maintained at Huntington Bank, 253 North Orlando
Avenue, Maitland, Florida 32751), such assignment to be in the form of Exhibit E
attached hereto and to be made at Closing or, if later, upon the surrender of
all of the outstanding shares of FCB Common Stock.
1.9 Right to Obligate Triangle to Repurchase Merger Shares. From the period
beginning on the date which is the 366th day immediately following the Closing
Date and ending on the day which is the 730th day immediately following the
Closing Date (the "Put Option Period"), the Shareholders shall have the right to
require Triangle to purchase all or any portion of the Merger Shares (the "Put
Option") at a purchase price of $3.00 per share (the "Repurchase Price") if, at
any time during the Put Option Period, the bid price of Triangle Common Stock is
less than $3.00 per share for five (5) or more consecutive trading days (the
"Triggering Event"); provided, however, that the Repurchase Price shall be
reduced by the amount of any cash dividends paid to the Shareholders during the
Put Option Period and shall be proportionately adjusted in the event of a change
in the number of shares of Triangle Common Stock issued and outstanding during
the Put Option Period as a result of a stock split, stock dividend,
recapitalization, reclassification or similar transaction with respect to such
Triangle Common Stock. The Shareholders may exercise the Put Option by giving
written notice of such intention of exercise to Triangle indicating the number
of shares to be repurchased by Triangle (the "Exercise Notice"), at any time
following the occurrence of the Triggering Event up to and including the fifth
business day following the last day of the Put Option Period. Within fifteen
(15) business days following receipt by Triangle of the Exercise Notice, subject
to confirmation by Triangle of the occurrence of a Triggering Event, (i) the
Shareholders exercising their Put Option shall deliver to Triangle certificates
representing the number of shares of Triangle Common Stock to be repurchased by
Triangle, as indicated in the Exercise Notice, duly endorsed in blank, or
accompanied by stock powers duly endorsed in blank, with all necessary transfer
tax and other revenue stamps acquired at the Shareholders' expense, affixed and
canceled, and (ii) Triangle shall deliver to each exercising Shareholder a cash
payment in the amount determined by multiplying the number of shares of Triangle
Common Stock to be repurchased by Triangle from such Shareholder by the
Repurchase Price, as reduced or adjusted pursuant to this Section 1.9 (the
"Repurchase Payment"); provided, however, that Triangle shall not be required to
deliver that portion of any Repurchase Payment attributable to the exercise of
the Put Option with respect to any Escrow Shares, unless and until the release
of such Escrow Shares from escrow in accordance with the terms of the Escrow
Agreement referenced in Section 9.5 of this Agreement, at which time, upon the
tender of share certificates duly endorsed in blank, or accompanied by a stock
power duly endorsed in blank, with all necessary revenue stamps acquired at the
exercising shareholders' expense, affixed and canceled, evidencing the Escrowed
Shares to be repurchased, Triangle shall be required to deliver to each
exercising Shareholder a cash payment determined by multiplying the Repurchase
Price, as reduced or adjusted pursuant to this Section 1.9 at the time of such
payment, by the lesser of (x) the number of shares of Triangle Common Stock
requested by each such Shareholder to be repurchased pursuant to the applicable
Exercise Notice or (y) the number of Escrow Shares to be released to such
Shareholder from escrow, as determined in accordance to the terms of the Escrow
Agreement referenced in Section 9.5 of this Agreement. The Put Option rights
granted to each Shareholder pursuant to this Section 1.9 shall be exercisable by
each respective Shareholder during his or her lifetime and shall not be
transferrable or assignable except by will, or the laws of descent and
distribution.
1.10 Tax Consequences. For federal income tax purposes, the Merger is intended
to constitute a reorganization within the meaning of Section 368 of the Code.
The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.11 Further Action. If, at any time after the Effective Time, any further
action is determined by Triangle, QuickCREDIT or FAC to be reasonably necessary
or desirable to carry out the purposes of this Agreement or to vest FAC with
full right, title and possession of and to all rights and property of FCB, the
officers and directors of Triangle, QuickCREDIT and FAC shall be fully
authorized (in the name of FCB and otherwise) to take such action.
Section 2. REPRESENTATIONS AND WARRANTIES OF FCB AND THE SHAREHOLDERS
As an inducement to Triangle, QuickCREDIT and FAC to enter into this
Agreement and to consummate the transactions contemplated hereby, and with the
knowledge that Triangle, QuickCREDIT and FAC shall rely thereon, FCB and each of
the Shareholders, jointly and severally, represents and warrants to Triangle,
QuickCREDIT And FAC the following (both as of the Closing Date and as of the
date hereof):
2.1 Due Organization and Qualification. FCB is a corporation duly organized and
validly existing under the laws of the State of Florida, has made all filings as
required under applicable filing and annual registration provisions of the FBCA
and has paid all filing fees due and payable thereunder. FCB has all necessary
corporate power and lawful authority to conduct its business in the manner in
which its business is currently being conducted and to own or lease and use its
assets in the manner in which it now owns, leases or uses its assets. FCB is not
qualified or otherwise authorized to do business as a foreign corporation in any
jurisdiction other than the jurisdictions identified in Schedule 2.1 annexed
hereto, which jurisdictions are the only jurisdictions in which such
qualification or authorization is required by law. Except as set forth on
Schedule 2.1 annexed hereto, FCB does not file and is not required to file
franchise, income or other tax returns in any other jurisdiction based upon the
ownership or use of property therein or the conduct of business or derivation of
income therefrom. FCB does not own or lease property or maintain any resident
employee in any jurisdiction other than the jurisdictions set forth on Schedule
2.1 annexed hereto.
2.2 Capitalization. The title, par value, number of authorized shares and number
of issued and outstanding shares of capital stock of FCB are described on
Schedule 2.2 annexed hereto. No other class of capital stock of FCB is issued
and outstanding and there are no shares of capital stock held in FCB's treasury.
All of the issued and outstanding shares of FCB Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable. The Shares
of capital stock of FCB owned of record and beneficially by each FCB shareholder
and the residence address of each such shareholder is set forth on Schedule 2.2
annexed hereto. Except as set forth on Schedule 2.2 no person or entity has, or
ever has had, any ownership interest in the property, capital stock, assets or
business of FCB.
2.3 Options or Other Rights. Except as described on Schedule 2.3 annexed hereto,
there is no (i) outstanding subscription, option, call, warrant, unsatisfied
preemptive right, commitment, conversion right or other agreement or right of
any kind pursuant to which any Person has the right or option (whether or not
currently exercisable) to acquire, or otherwise relating to, any shares of the
capital stock or any other security of FCB; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or any other security of FCB; (iii) contract
under which FCB is or may become obligated to sell or otherwise issue any shares
of its capital stock or any other securities; or (iv) condition or circumstance
that may give rise to or provide a basis for the assertion of a claim by any
Person to the effect that such Person is entitled to acquire or receive any
shares of capital stock or other securities of FCB. Except as set forth in
Schedule 2.3 annexed hereto, FCB has never issued or granted any option, call,
warrant or right to acquire, or otherwise relating to, any shares of its capital
stock or other securities.
2.4 Subsidiaries and Investments. FCB has no subsidiaries, and has never owned,
beneficially or otherwise, any shares or other securities of, or any direct or
indirect interest of any nature in, any Entity.
2.5 Charter and Bylaws. Schedule 2.5 annexed hereto contains true, correct and
complete copies of (a) the articles of incorporation of FCB, including all
amendments thereto (certified by the Secretary of State of the State of
Florida), and (b) the bylaws of FCB, including all amendments thereto (certified
by the secretary or other executive officer of FCB).
2.6 Books and Records. The corporate minute books, stock certificate books,
stock registers and other corporate records of FCB are true, correct and
complete in all material respects, and the signatures appearing on all documents
contained therein are the true signatures of the persons purporting to have
signed the same. The corporate minute books of FCB contain true and complete
records of all of the meetings and other proceedings (including any actions
taken by written consent or otherwise without a meeting) of the board of
directors of FCB, any committee of the board of directors of FCB and the
shareholders of FCB since the date of incorporation of FCB. All actions
reflected in said books and records were duly and validly taken in compliance
with all Legal Requirements applicable to such matters and the provisions of
FCB's articles of incorporation or bylaws or of any resolution adopted by FCB's
shareholders, FCB's board of directors or any committee of FCB's board of
directors. None of FCB's records, systems, controls, data or information are
recorded, stored, maintained or operated by, or otherwise are wholly or partly
dependent upon or held by, any person, entity or media (including any
electronic, mechanical or photographic process) which are not under the
exclusive ownership and direct control (including all means of access) of FCB.
2.7 Authority; Binding Nature of Agreement.
(a) Each of the Shareholders has the full power and legal capacity to execute
and deliver the Shareholder Documents and to perform their respective
obligations under this Agreement. Each of the Shareholder Documents, when
executed, will constitute a valid and binding agreement of the Shareholder which
is a party thereto, enforceable against such Shareholder in accordance with its
terms.
(b) The execution, delivery and performance by FCB of the FCB Documents has been
duly authorized by all necessary action on the part of FCB and its board of
directors and shareholders. Each of the FCB Documents, when executed, will
constitute the legal, valid and binding obligation of FCB, enforceable against
FCB in accordance with its terms.
(c) Except as described in Schedule 2.7 annexed hereto, no consent,
authorization or approval of, or declaration, filing or registration with, any
Governmental Body, or any Consent of any other Person, is necessary in order to
enable the Shareholders or FCB to enter into and perform their respective
obligations under the Shareholder Documents or FCB Documents, and neither the
execution and delivery of the Shareholder Documents or FCB Documents nor the
consummation of the transactions contemplated thereby will:
(i) conflict with, require any consent under, result in the violation of, or
constitute a breach of any provision of the articles of incorporation or bylaws
of FCB;
(ii) conflict with, require any Consent under, result in the violation of,
constitute a breach of or a default under, or accelerate the performance
required on the part of the Shareholders or FCB by the terms of, any evidence of
indebtedness or Contract to which the Shareholders or FCB is a party, in each
case with or without notice or lapse of time or both, including any evidence of
Encumbrance to which any property either of FCB or FCB Common Stock is subject,
or permit the termination of any such Contract by another Person;
(iii) result in the creation or imposition of any Encumbrance upon, or
restriction on the use of, any property or assets of FCB or FCB Common Stock
under any Contract to which either FCB or the Shareholders are bound;
(iv) accelerate, or constitute an event entitling, or which would, on notice or
lapse of time or both, entitle the holder of any indebtedness of FCB or the
Shareholders to accelerate the maturity of any such indebtedness;
(v) conflict with or result in the breach or violation of any Legal Requirement
that is binding on either FCB or the Shareholders; or
(vi) violate or cause any revocation of or limitation on any Permit of FCB.
2.8 Financial Statements.
(a) FCB has delivered to QuickCREDIT copies of the following financial
statements (collectively, the "FCB Financial Statements"):
(i) the income statements of FCB for the fiscal years ended on December 31,
1996 and 1997 and for the quarter ended March 31, 1998; and
(ii) the unaudited balance sheet of FCB (the "Unaudited Balance Sheet") as of
March 31, 1998 (the "Balance Sheet Date").
(b) Copies of the FCB Financial Statements are annexed hereto as Schedule 2.8.
The FCB Financial Statements have been prepared from the books and records of
FCB in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods covered. The FCB Financial Statements
present fairly the financial condition of FCB as of the respective dates thereof
and the results of operations of FCB for the periods covered thereby, and,
except as indicated therein, reflect all claims against and all debts and
liabilities of FCB, whether fixed or contingent, as of the dates thereof.
2.9 Absence of Undisclosed Liabilities. All liabilities, commitments or
obligations of FCB with respect to FCB's business (whether secured or unsecured
and whether accrued, absolute, contingent, direct or indirect or otherwise and
whether due or to become due) are set forth or adequately reserved against in
the FCB Financial Statements, except for commercial liabilities and obligations
incurred since the Balance Sheet Date in the ordinary course of business and
consistent with past practice and none of which has or will have a material
adverse effect on the business, financial condition or results of operations of
FCB's business. The total of all liabilities in respect of accounts payable
incurred in the ordinary course of business (i.e., invoices received, approved
and authorized for payment) of FCB as set forth on Schedule 2.9. Except as and
to the extent described in the FCB Financial Statements, FCB has no knowledge of
any basis for the assertion against FCB's business or the business of any
predecessor to FCB of any liability, and there are no circumstances, conditions,
happenings, events or arrangements, contractual or otherwise, which may likely
give rise to liabilities, except commercial liabilities and obligations incurred
in the ordinary course of business and consistent with past practice.
2.10 Absence of Changes. Except as set forth in Schedule 2.10 annexed hereto and
since the Balance Sheet Date:
(a) there has not been any material adverse change in FCB's business, condition,
assets, liabilities, operations, financial performance or prospects, and no
event has occurred that will, or could reasonably be expected to, have a
Material Adverse Effect on FCB;
(b) there has not been any material loss, damage or destruction to, or any
material interruption in the use of, any of FCB's assets (whether or not covered
by insurance);
(c) FCB has not declared, accrued, set aside or paid any dividend or made any
other distribution in respect of any shares of capital stock, and has not
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities;
(d) FCB has not sold, issued or authorized the issuance of (i) any capital stock
or other security, (ii) any option, call, warrant or right to acquire, or
otherwise relating to, any capital stock or any other security, or (iii) any
instrument convertible into or exchangeable for any capital stock or other
security;
(e) there has been no amendment to FCB's articles of incorporation or bylaws,
and FCB has not effected or been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(f) FCB has not formed any subsidiary or acquired any equity interest or other
interest in any other Entity;
(g) FCB has not made any capital expenditure which, when added to all other
capital expenditures made by FCB, exceeds $5,000 in the aggregate;
(h) FCB has not (i) entered into or permitted any of the assets owned or used by
it to become bound by any Contract, or (ii) amended or prematurely terminated,
or waived any material right or remedy under, any Contract to which it is or was
party or under which it has or has had any rights or obligations;
(i) FCB has not (i) acquired, leased or licensed any right or other asset from
any other Person, (ii) sold or otherwise disposed of, or leased or licensed, any
right or other asset to any other Person, or (iii) waived or relinquished any
right, except for immaterial rights or other immaterial assets acquired, leased,
licensed or disposed of in the ordinary course of business and consistent with
FCB's past practices;
(j) FCB has not made any pledge of any of its assets or otherwise permitted any
of its assets to become subject to any Encumbrance, except for pledges of
immaterial assets made in the ordinary course of business and consistent with
FCB's past practices;
(k) FCB has not (i) lent money to any Person, or (ii) incurred or guaranteed any
indebtedness for borrowed money;
(l) FCB has not (i) established, adopted or amended any Plan, (ii) paid any
bonus or made any profit-sharing or similar payment to, or increased the amount
of the wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees, or (iii)
hired any new employee;
(m) FCB has not changed any of its methods of accounting or accounting
practices in any respect;
(n) FCB has not made any Tax election;
(o) FCB has not commenced or settled, whether or not commenced by it, any
Legal Proceeding;
(p) FCB has not entered into any material transaction or taken any other
material action outside the ordinary course of business or inconsistent with its
past practices; and
(q) FCB has not agreed or committed to take any of the actions referred to in
clauses "(c)" through "(p)" above.
2.11 Legal Proceedings; Orders.
(a) Except as set forth in Schedule 2.11 annexed hereto, there is no pending
Legal Proceeding, and, to the knowledge of FCB and the Shareholders, no Person
has threatened to commence any Legal Proceeding, (i) that involves FCB or any of
the assets owned or used by FCB; or (ii) that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the Merger or any of the other transactions contemplated by this Agreement. To
the knowledge of FCB and the Shareholders, except as set forth in Schedule 2.11
annexed hereto, no event has occurred, and no claim, dispute or other condition
or circumstance exists, that will, or that could reasonably be expected to, give
rise to or serve as a basis for the commencement of any such Legal Proceeding.
(b) There is no order, writ, injunction, judgment or decree to which FCB, or any
of the assets owned or used by FCB, are subject. Neither the Shareholders nor
FCB is subject to any order, writ, injunction, judgment or decree that relates
to FCB's business or to any of the assets owned or used by FCB. To the knowledge
of FCB and the Shareholders, no officer or other employee of FCB is subject to
any order, writ, injunction, judgment or decree that prohibits such officer or
other employee from engaging in or continuing any conduct, activity or practice
relating to FCB's business.
2.12 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of FCB with any
Governmental Body with respect to any transaction occurring or any taxable
period ending on or before the Closing Date (i) have been or will be filed when
due and (ii) have been, or will be when filed, accurately and completely
prepared in compliance with all applicable Legal Requirements. All Taxes owed by
FCB (whether or not shown on any Tax Return) have been paid. Except as set forth
on Schedule 2.12 annexed hereto, FCB is not currently the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever been
made by a Governmental Body in a jurisdiction where FCB does not file Tax
Returns that FCB is or may be subject to taxation by that jurisdiction. There
are no Encumbrances on any of the assets of FCB that arose in connection with
any failure (or alleged failure) to pay any Tax.
(b) FCB has withheld and paid all Taxes required to have been withheld and paid
by it in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other Person.
(c) None of the Shareholders or any Representative of FCB (or any employee of
FCB responsible for Tax matters) has any reason to believe that any authority
may assess any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax liability of FCB either
(i) claimed or raised by any authority in writing or (ii) as to which any
Shareholder (or any employee of FCB responsible for Tax matters) has knowledge.
Schedule 2.12 annexed hereto lists all federal, state, local, and foreign income
Tax Returns filed with respect to FCB for taxable periods ended on or after
December 31, 1994 and indicates those Tax Returns that have been audited and
those Tax Returns that currently are the subject of an audit. FCB has delivered
to QuickCREDIT correct and complete copies of all federal income Tax Returns,
examination reports, and statements of deficiencies assessed against or agreed
to by FCB since December 31, 1994.
(d) FCB has not waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency.
(e) FCB has not (i) applied for any tax ruling, (ii) entered into a closing
agreement with any taxing authority, (iii) made any payments, or been a party to
an agreement (including this Agreement) that under any circumstances could
obligate it to make payments that will not be deductible because of Section 280G
of the Code, or (iv) been a party to any tax allocation or tax sharing
agreement. FCB has no liability for the Taxes of any Person or Entity (other
than FCB) under Reg. ss.1.1502-6 (or any similar Legal Requirement), as a
transferee or successor, by contract, or otherwise.
(f) The unpaid Taxes of FCB (i) did not, as of the Balance Sheet Date, exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) set forth
on the face of the Unaudited Balance Sheet (rather than in any notes thereto)
and (ii) do not exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of FCB in
filing its Tax Returns.
2.13 Title to Assets. FCB has good and valid title to all of its material
properties and assets (both tangible and intangible), including without
limitation, all properties and assets shown on the Unaudited Balance Sheet and
all properties and assets purchased or acquired by FCB since the Balance Sheet
Date; in each case subject to no Encumbrances, except for (i) Encumbrances
reflected on the Unaudited Balance Sheet, (ii) liens for current taxes,
assessments or governmental charges or levies on property not yet due or
delinquent and (iii) Encumbrances described on Schedule 2.13 annexed hereto
("Permitted Liens"). Except for software licenses described in Schedule 2.15
annexed hereto, or leases of real and personal property described in Schedule
2.16, FCB owns outright and is in exclusive possession of all assets, properties
or rights currently used in its business.
2.14 Compliance with Legal Requirements. Except as described on Schedule 2.14
annexed hereto, FCB is not in violation of any Legal Requirement applicable to
the business of FCB. Without limiting the generality of the foregoing, except as
described on Schedule 2.14 annexed hereto, (i) there is not pending, or to the
knowledge of FCB or the Shareholders threatened, any notification of any
Governmental Body that FCB is not in compliance with applicable Legal
Requirements respecting employment and employment practices, occupational safety
and health laws and regulations, and laws or regulations relating to the quality
of the environment, and neither FCB nor the Shareholders know of any basis
therefor, and (ii) FCB has not received any such notification of past violations
of such Legal Requirements as can reasonably be expected to result in future
claims against FCB, and neither FCB nor the Shareholders know of any basis
therefor.
2.15 Contracts.
(a) Schedule 2.15 annexed hereto contains a complete and accurate list of all of
the following Contracts to which FCB is a party or by or to which it or its
assets or properties are bound or subject or which are necessary for FCB to
conduct its business as presently conducted:
(i) Contracts with any current or former officer, director, employee,
consultant, agent or other representative or with any Person in which any of the
foregoing has an interest, including any "Affiliate" or "Associate" of such
Person, as such terms are defined in the Securities Act of 1933 and the rules
and regulations published thereunder;
(ii) Contracts with any labor union or association representing any
employee;
(iii) Contracts for the sale of any of FCB's assets or properties other than in
the ordinary course of business or for the grant to any person of any
preferential rights to purchase any of its assets or properties;
(iv) Contracts under which FCB agrees to indemnify any party or to share
the tax liability of any Person;
(v) Contracts of guaranty or relating to matters of suretyship;
(vi) Contracts that cannot be canceled without liability, premium or
penalty upon thirty (30) days' notice or less;
(vii) Contracts containing obligations or liabilities of any kind to holders of
FCB's securities as such (including, without limitation, an obligation to
register any of such securities under any Legal Requirement);
(viii) Contracts containing covenants of FCB not to compete in any line of
business or with any person in any geographical area or covenants of any other
Person not to compete with FCB in any line of business or in any geographical
area;
(ix) Contracts relating to the acquisition by FCB of any operating business or
the capital stock of any other Person;
(x) Contracts relating to Intellectual Property owned, licensed or used by FCB
in the course of its business;
(xi) Contracts requiring the payment to any Person of a royalty, override
or similar commission or fee;
(xii) Contracts relating to the borrowing of money by FCB or subjecting any
assets or properties of FCB to any Encumbrance;
(xiii) any Contract which might reasonably be expected to have a potential
adverse impact on the business or operations of FCB;
(xiv) any Contract not made in the ordinary course of business; or
(xv) any other material Contract whether or not made in the ordinary course
of business.
(b) FCB has delivered or made available to QuickCREDIT true and complete copies
of all of the Contracts described on Schedule 2.15. All of such Contracts are
valid and binding upon FCB in accordance with their terms, and FCB has performed
all contractual obligations required to be performed by it to date and is not in
default under any such contracts and has not taken any action which constitutes
or with notice or lapse of time or both would constitute a default under such
Contracts. To the knowledge of FCB and the Shareholders, no other party to any
such contract is in default in the performance of its obligations thereunder or
has taken any action which constitutes, or with notice or lapse of time or both
would constitute, a breach or anticipatory breach thereof. Except as separately
identified on Schedule 2.15 annexed hereto, no approval or consent of any Person
is needed in order that the contracts and other agreements set forth on Schedule
2.15 annexed hereto or on any other Schedule continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
(c) The Contracts identified on Schedule 2.15 annexed hereto collectively
constitute all of the Contracts necessary to enable FCB to conduct its business
in the manner in which its business is currently being conducted and in the
manner in which its business is proposed to be conducted.
(d) Schedule 2.15 annexed hereto identifies and provides a brief description of
each proposed Contract as to which any pending bid, offer or proposal has been
submitted or received by FCB.
2.16 Leases. Schedule 2.16 annexed hereto contains a complete and accurate list
of any real property lease binding FCB or to which FCB is a party ("Leases").
Each such Lease is in full force and effect, and FCB has fully performed all of
its obligations to be performed to date under said Leases. FCB is current with
respect to the payment of all rents and other charges due thereunder, and their
use and occupancy of the premises which are the subject matter of such leases
does not violate any of the terms of such Leases, is in conformity with all
applicable Legal Requirements and is not violative of the conditions of FCB's
respective policies of insurance. All of the buildings, structures and
appurtenances situated on such leased premises are, and as of the Closing Date,
will be, in good operating condition and state of maintenance and repair and
will be adequate and suitable for the purposes for which they are presently
being or are intended to be used, and FCB has adequate rights of ingress and
egress and utility services for the operation of their respective businesses in
the ordinary course. No lessor or landlord under any Lease is in default in the
performance of its obligations thereunder, and FCB has not received notice from
any such lessor or landlord of its intention to exercise any option thereunder
which would adversely affect or terminate FCB's use or occupancy of the demised
premises under such Lease. Except as specifically disclosed in Schedule 2.16,
all of the Leases permit the consummation of the transactions contemplated
hereby without modification of the terms thereof and without the consent of the
applicable lessor or landlord. FCB does not own, and has never owned, any real
property.
2.17 Intentionally Left Blank.
2.18 Fixed Assets. Schedule 2.18 annexed hereto contains a complete and accurate
list of all machinery, equipment, tools, furniture, leasehold improvements,
trade fixtures, vehicles, structures or any related capitalized items and other
tangible property material to the operation of the business of FCB (the "Fixed
Assets") all of which Fixed Assets are reflected in the Unaudited Balance Sheet
(except any such tangible property acquired since the Balance Sheet Date by
FCB). Since the Balance Sheet Date, FCB has not disposed of any Fixed Asset
except in the ordinary course of FCB's business. The Fixed Assets are in good
operating condition and repair, subject to normal wear and tear from normal use
thereof, and FCB has not received notice that any of the Fixed Assets or FCB's
use thereof is in violation of any existing law or any applicable Legal
Requirement.
2.19 Trade Names and Other Intangibles. Schedule 2.19 annexed hereto contains a
complete and accurate list of all patents, patent rights, licenses,
methodologies, know-how, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights or similar rights
("Intellectual Property") which are either (a) wholly or partly owned or
licensed by FCB or (b) used in the conduct of the business of FCB. Except as
described on Schedule 2.19 annexed hereto, no Person or Entity, other than FCB,
has any rights under or in respect of, and to the knowledge of FCB and the
Shareholders, no Person is infringing or otherwise acting adversely with respect
to, FCB's respective rights under or in respect of the Intellectual Property,
and FCB is the exclusive owner of such rights and there is no claim for damages
or any proceeding pending or, to the knowledge of FCB or the Shareholders,
threatened with respect thereto. FCB is not infringing or otherwise acting
adversely to the right of any Person or Entity under or in respect to
Intellectual Property, and there is no claim for damages or any proceeding
pending, or to the knowledge of FCB or the Shareholders threatened, with respect
thereto.
2.20 Suppliers and Customers. Schedule 2.20 annexed hereto contains a complete
and accurate list with respect to FCB of (a) any supplier from whom FCB
purchased or to which FCB paid $15,000 or more during the last fiscal year of
FCB and the amount paid by FCB to each such supplier and (b) any customer or
client of FCB which purchased during the last fiscal year of FCB $25,000 or more
in services from FCB. No customer required to be listed on Schedule 2.20 has
notified FCB of such customer's intention to terminate or materially reduce the
use of FCB's services, and neither FCB nor the Shareholders have any reason to
believe any such customer is likely to terminate the services of FCB on account
of the transactions contemplated hereunder.
2.21 Payment of Wages and Salary. Other than amounts which have not yet become
payable in accordance with FCB's customary practices, which will be paid in a
timely manner, (i) FCB has paid to Paychex, Inc. (f/k/a National Business
Solutions) all payments due to Paychex, Inc. pursuant to that certain Client
Service Agreement (the "Paychex Agreement") dated August 1, 1994, by and between
Paychex, Inc. and FCB, in respect of (i) the wages, salaries, commissions,
bonuses, and other direct compensation of all of the employees of FCB for the
pay period ended immediately prior to the Closing Date, (ii) charges for
employee benefit programs maintained by Paychex, Inc. for the benefit of all FCB
employees entitled to participate therein, (iii) all fees due and payable to
Paychex, Inc. pursuant to Section 3 of the Paychex Agreement, and (iv) all other
amounts due and payable to Paychex, Inc. pursuant to the Paychex Agreement. FCB
is in compliance with all federal, state and local laws and regulations
respecting employment and employment practices, terms and conditions of
employment and wages and hours. FCB has not improperly characterized as an
independent contractor or consultant, any individual who should have been
treated as an employee of FCB for tax withholding or any other purpose. FCB does
not have any employees who are not "Covered Employees" as such term is defined
in the Paychex Agreement.
2.22 Employee Benefit Plans.
(a) Except as described on Schedule 2.22 annexed hereto, FCB is not a party to,
nor makes or is required to make employer contributions to, nor has any current
or future obligation or liability with respect to, any pension, profit sharing,
retirement, deferred compensation, bonus, stock purchase, severance,
hospitalization, medical insurance, life insurance, vacation policy or other
employee benefit plan or program providing benefits for its current or former
employees, other than salaries or cash wages for straight time, overtime or
shift differential (a "Plan"). Except as described on Schedule 2.22 annexed
hereto, FCB has complied with all of its obligations under each Plan and, to the
knowledge of FCB and the Shareholders, all other parties have complied with all
of their respective obligations under each Plan. FCB has made or provided for
all payments due under or with respect to each Plan up to and including the
Closing Date, and all amounts properly accrued up to and including the Closing
Date as liabilities of FCB under each Plan have been recorded on the books of
FCB. Except as described on Schedule 2.22 annexed hereto, no Plan is a
"multiemployer plan" (within the meaning of Section 3(37) of ERISA), and, except
as so set forth, FCB has not made, or has been required to make, any
contributions to any "multiemployer plan" within the last five (5) years. Except
as described on Schedule 2.22 annexed hereto, no Plan listed on Schedule 2.22
(other than any "multiemployer plan") is subject to Title IV of ERISA.
(b) Each Plan listed on Schedule 2.22 has received a determination letter from
the Internal Revenue Service to the effect that it qualified under Section
401(a) of the Code, and that each trust established under such Plan is exempt
from taxation under Section 501(a) of the Code, and nothing has occurred which
would cause the loss of such qualifications or exemptions. No "reportable event"
(within the meaning of Section 4043(b) of ERISA) has occurred with respect to
any pension plan that is subject to Title IV of ERISA maintained by any trade or
business (whether or not incorporated) that is under common control with FCB,
within the meaning of Section 414(c) of the Code and the regulations thereunder
(hereinafter any such plan shall be referred to as an "Affiliate Plan" and any
such trade or business shall be referred to as an "ERISA Affiliate"), and no
"reportable event" will occur with respect to any Plan or Affiliate Plan as a
result of any transaction contemplated by this Agreement.
(c) FCB would not be subject to any withdrawal liability with respect to any
"multiemployer plan" listed on Schedule 2.22 if FCB were to withdraw from any
such plan as of the date hereof. Except as described on Schedule 2.22, FCB has
satisfied all material reporting and disclosure requirements and all other
requirements applicable to it under the Code or ERISA, and the Department of
Labor and the Internal Revenue Service regulations promulgated thereunder, with
respect to the Plans. Neither FCB nor, to the knowledge of FCB or the
Shareholders, any other "party in interest" or "disqualified person" (within the
meaning of Section 3(14) of ERISA or Section 4975(e)(2) of the Code,
respectively) with respect to any Plan has engaged in any "prohibited
transaction" (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) which could subject any Plan, FCB or any trustee, administrator or other
fiduciary of any Plan, to any penalty or excise tax imposed on prohibited
transactions by Section 502(i) of ERISA or Section 4975 of the Code. There are
no material actions, suits or claims pending (other than routine claims for
benefits) or, except as described on Schedule 2.22, to the knowledge of FCB or
the Shareholders, threatened, against any Plan or against the assets of any
Plan. No Plan which is subject to Part III of Subtitle B of Title I of ERISA or
Section 412 of the Code has incurred any "accumulated funding deficiency" (as
defined in ERISA), whether or not waived. Except as described on Schedule 2.22,
no Plan or Affiliate Plan that is or was subject to Title IV of ERISA has been
terminated and, to the knowledge of the Seller, no proceeding has been initiated
to terminate any such Plan or Affiliate Plan. Neither FCB, any ERISA Affiliates,
nor any Shareholder have incurred, nor reasonably expects to incur as a result
of any event occurring on or prior to the Closing Date, any liability to the
Pension Benefit Guaranty Corporation (except for required premium payments, none
of which payments are overdue) or any withdrawal liability under Title IV of
ERISA.
(d) With respect to each Plan that is an "employee benefit plan," within the
meaning of Section 3(3) of ERISA, true and complete copies of (i) the documents
embodying the Plan, any related trust and all amendments thereto, (ii) the
summary plan description and all modifications thereto, (iii) the last filed
Annual Report (Form 5500 Series) and Schedules A and B thereto, (iv) the most
recent Internal Revenue Service determination letter, if applicable, (v) the
most recent actuarial valuation report, if any, and (vi) the most recent annual
and periodic financial statements, have been delivered or made available to
QuickCREDIT and are correct in all material respects.
2.23 Insurance. Schedule 2.23 annexed hereto contains a list and brief
description (specifying the insurer, the policy number or covering note number
with respect to binders and the amount of any deductible, describing each
pending claim thereunder of more than $5,000, setting forth the aggregate
amounts paid out under each such policy through the date hereof and the
aggregate limit, if any, of the insurer's liability thereunder) of all policies
or binders of fire, liability, product liability, workmen's compensation,
vehicular, unemployment and other insurance held by or on behalf of FCB. Such
policies and binders are valid and enforceable in accordance with their terms,
are in full force and effect, and insure against risks and liabilities to the
extent and in the manner reasonably determined by FCB to be appropriate and
sufficient and are adequate to protect FCB and its assets and properties. FCB
has paid all premiums due thereon and is not in default with respect to any
provision contained in any such policy or binder and has not failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. Except for claims described on Schedule 2.23, there are no outstanding
unpaid claims under any such policy or binder. FCB has not received notice of
cancellation or non-renewal of any such policy or binder. None of the policies
listed on Schedule 2.23 provides that premiums paid in respect of the periods
prior to the Closing Date may be adjusted or recomputed based on claims-paying
experience of such policies or otherwise. FCB has no notice from any of its
insurance carriers that any insurance premiums will be increased in the future
or that any insurance coverage listed on Schedule 2.23 will not be available in
the future on the same terms as now in effect.
2.24 Environmental Matters.
(a) Except as described in Schedule 2.24, (i) FCB has never generated,
transported, used, stored, treated, disposed of, or managed any Hazardous Waste;
(ii) no Hazardous Material has ever been or is threatened to be spilled,
released, or disposed of at any site presently or formerly owned, operated,
leased or used by FCB, or has ever come to be located in the soil or groundwater
at any such site; (iii) no Hazardous Material has ever been transported by or at
the direction of FCB from any site presently or formerly owned, operated,
leased, or used by FCB for treatment, storage, or disposal at any other place;
and (iv) no Encumbrance has ever been imposed by any Governmental Body on any
property, facility, machinery, or equipment owned, operated, leased, or used by
FCB in connection with the presence of any Hazardous Material.
(b) (i) FCB has no liability under, nor has it ever violated, any Environmental
Law; (ii) FCB, any property owned, operated, leased, or used by FCB, and any
facilities and operations thereon, are presently in compliance with all
applicable Environmental Laws; (iii) FCB has never entered into or been subject
to any judgment, consent decree, compliance order, or administrative order with
respect to any environmental or health and safety matter or received any request
for information, notice, demand letter, administrative inquiry, or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law; and (iv) neither FCB
nor the Shareholders have any knowledge or reason to know that any of the items
enumerated in the immediately preceding clause of this paragraph will be
forthcoming.
(c) FCB has provided to QuickCREDIT copies of all documents, records, and
information available to FCB or the Shareholders concerning any environmental or
health and safety matter relevant to FCB, whether generated by FCB or others,
including, without limitation, environmental audits, environmental risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials, spill control plans, and reports, correspondence, permits,
licenses, approvals, consents, and other authorizations related to environmental
or health and safety matters issued by any governmental agency.
(d) For purposes of this Agreement, "Hazardous Material" shall mean and include
any hazardous waste, hazardous material, hazardous substance, petroleum product,
oil, toxic substance, pollutant, contaminant, or other substance which may pose
a threat to the environment or to human health or safety, as defined or
regulated under any Environmental Law; "Hazardous Waste" shall mean and include
any hazardous waste as defined or regulated under any Environmental Law;
"Environmental Law" shall mean any environmental or health and safety-related
Legal Requirement existing at any time prior to the Closing Date.
2.25 Officers, Directors and Key Employees. Schedule 2.25 annexed hereto
describes with respect to FCB the name and total annual compensation (and
benefit costs) of each officer and director of FCB and of each other employee,
consultant, agent or other representative of FCB whose current annual rate of
compensation exceeds $15,000. FCB has not made a commitment or agreement to
increase the compensation or to modify the conditions or terms of employment of
any such person. None of such persons has communicated to FCB or to the
Shareholders that such person intends to resign or otherwise terminate such
person's relationship with FCB.
2.26 Restrictive Documents. Neither FCB nor any of the Shareholders is subject
to, or a party to, any charter, bylaw, Permit, Contract, Legal Requirement or
any other restriction of any kind, which adversely affects the business
practices, operations or condition of FCB or any of its assets or property, or
which would prevent consummation of the transactions contemplated by this
Agreement, compliance by FCB or the Shareholders with the terms, conditions and
provisions hereof, or the continued operation of FCB's business after the date
hereof or the Closing Date on substantially the same basis as heretofore
operated or which would restrict the ability of FCB to acquire any property or
conduct business in any area.
2.27 Licenses. FCB possesses all concessions, permits, licenses, orders, and
other governmental authorizations and approvals ("Permits") required to permit
FCB to carry on its business as it is presently being conducted. All such
Permits are described on Schedule 2.27 annexed hereto, are in the name of FCB
and are in full force and effect, and no modification, termination, suspension
or cancellation of any of them is threatened. Except as described in Schedule
2.27 annexed hereto, all such Permits permit the consummation of the
transactions contemplated hereby without modification thereof and without the
consent of the issuing authority.
2.28 Transactions with Affiliated Parties. Except as described on Schedule 2.28
annexed hereto, no Associate or Affiliate of FCB or any of the Shareholders (a)
has any ownership interest, directly or indirectly, in any competitor, supplier
or customer of FCB, (b) has any outstanding loan to or receivable in either
event to or from FCB or (c) is a party to or has any interest in any contract or
agreement with FCB.
2.29 Bank Accounts and Powers of Attorney. Schedule 2.29 annexed hereto contains
an accurate and complete list showing (a) the name and address of each bank in
which FCB has an account or safe deposit box, the number of any such account or
any such box and the names of all persons authorized to draw thereon or to have
access thereto and (b) the names of all persons, if any, holding powers of
attorney from FCB and a summary statement of the terms thereof.
2.30 Warranties. Schedule 2.30 annexed hereto contains (a) a true and complete
description of all warranties granted or made with respect to services sold by
FCB during the three years prior to the date hereof; and (b) a true and complete
description of FCB's warranty experience for the same period. Neither FCB nor
the Shareholders have any reason to believe that warranty claims for FCB will,
in the foreseeable future, exceed historical levels to any material extent.
2.31 Assets Complete. Upon the Effective Time of the Merger, the Surviving
Corporation will own all of the assets and possess all of the rights necessary
for it to conduct the business of FCB in a manner consistent with the manner in
which FCB has conducted its business on and immediately prior to the Effective
Date.
2.32 No Changes Prior to Closing Date. During the period from the Balance Sheet
Date to and including the Closing Date, except as expressly contemplated hereby
or consented to in writing by QuickCREDIT in accordance with Section 4.2 hereof,
FCB will not have (a) incurred any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except in the ordinary
course of business, (b) permitted any of its assets to be subjected to any
Encumbrance, (c) sold, transferred or otherwise disposed of any of its assets,
(d) made any capital expenditure or commitment therefor, (e) declared or paid
any dividend or made any distribution on any shares of its capital stock, or
redeemed, purchased or otherwise acquired any shares of its capital stock or
granted or canceled any option, warrant or other right to purchase or acquire
any such shares, (f) made any bonus or profit sharing distribution or similar
payment of any kind, (g) increased its indebtedness for borrowed money, or made
any loan to any Person, (h) except in the ordinary course of business,
consistent with past practices of FCB, made or permitted any amendment or
termination of any contract, agreement or license to which FCB is a party or by
which it or any of its assets and properties are subject or bound, (i) entered
into any agreement or arrangement granting any preferential rights to purchase
any of FCB's assets or properties or requiring the consent of any party to the
transfer and assignment of any of FCB's assets or properties, (j) written off as
uncollectible any notes or accounts receivable, except write-offs in the
ordinary course of business charged to applicable reserves, none of which
individually or in the aggregate is material to FCB, (k) granted any increase in
the rate of wages, salaries, bonuses or other remuneration of any executive
employee or other employees, except in the ordinary course of business, (l)
canceled or waived any claims or rights of substantial value, (m) made any
change in any method of accounting or auditing practice, (n) otherwise conducted
its business or entered into any transaction, except in the usual and ordinary
manner and in the ordinary course of its business, or (o) agreed, whether or not
in writing, to do any of the foregoing.
2.33 Disclosure. Neither this Agreement, nor any Schedule, Exhibit or
certificate delivered in accordance with the terms hereof by or on behalf of FCB
or the Shareholders, or by any of FCB's Representatives, in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact, or omits or will omit any statement of a material fact
necessary in order to make the statements contained herein or therein not
misleading. There is no fact known to FCB or the Shareholders which materially
and adversely affects the business, prospects (financial or otherwise) or
financial condition of FCB or its properties or assets, which has not been set
forth in this Agreement or in the Schedules, Exhibits, certificates or other
documents furnished by or on behalf of FCB or the Shareholders, or by any of
FCB's Representatives, in connection with the transactions contemplated by this
Agreement.
2.34 Broker's or Finder's Fees. Except for George Gobel of Access Data Systems,
Inc., who is entitled to payment of a finder's fee upon consummation of the
Merger, which finder's fee Shareholders are obligated to pay pursuant to Section
10.4 of this Agreement, no agent, broker, person or firm acting on behalf of the
Shareholders or FCB is, or will be, entitled to any commission or broker's or
finder's fees from any of the parties hereto, or from any person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the transactions contemplated herein.
2.35 Copies of Documents. FCB has caused to be made available for inspection and
copying by QuickCREDIT and its Representatives, true, complete and correct
copies of all documents referred to in this Section 2 or in any Schedule
furnished by FCB or the Shareholders to Triangle or QuickCREDIT.
Section 3. REPRESENTATIONS AND WARRANTIES OF TRIANGLE,
QUICKCREDIT AND FAC
As an inducement to FCB and the Shareholders to enter into this
Agreement and to consummate the transactions contemplated hereby, and with the
knowledge that FCB and the Shareholders shall rely thereon, Triangle,
QuickCREDIT and FAC, jointly and severally, represent and warrant to FCB and the
Shareholders the following (both as of the Closing Date and as of the date
hereof):
3.1 Due Organization and Qualification. Each of Triangle, QuickCREDIT and FAC is
a corporation duly organized and validly existing under the laws of the State of
Florida, has made all filings as required under the FBCA and has paid all filing
fees due and payable thereunder. Each of Triangle, QuickCREDIT and FAC has all
necessary corporate power and lawful authority to conduct its respective
business in the manner in which such business is currently being conducted and
to own or lease and use its respective assets in the manner in which it now
owns, leases or uses its assets.
3.2 Charter and By-Laws. Schedule 3.2 annexed hereto contains true, correct and
complete copies of (a) the articles of incorporation of each of Triangle,
QuickCREDIT and FAC, including all amendments thereto (certified by the
Secretary of State of the State of Florida), and (b) the bylaws of each of
Triangle, QuickCREDIT and FAC, including all amendments thereto (certified by
the respective secretary or other executive officer of Triangle, QuickCREDIT and
FAC).
3.3 Authority; Binding Nature of Agreement.
(a) The execution, delivery and performance by Triangle, QuickCREDIT and FAC of
the Acquiror's Documents has been duly authorized by all necessary action on the
part of Triangle, QuickCREDIT and FAC and their respective boards of directors.
Each of the Acquiror's Documents constitutes the legal, valid and binding
obligation of Triangle, QuickCREDIT and FAC respectively, enforceable against
such entity in accordance with its respective terms.
(b) No consent, authorization or approval of, or declaration, filing or
registration with, any Governmental Body, or any consent, authorization or
approval of any other Person, is necessary in order to enable Triangle,
QuickCREDIT or FAC to enter into and perform their respective obligations under
the Acquiror's Documents, and neither the execution and delivery of the
Acquiror's Documents nor the consummation of the transactions contemplated
thereby will:
(i) conflict with, require any consent under, result in the violation of, or
constitute a breach of any provision of the articles or certificate of
incorporation or bylaws of Triangle, QuickCREDIT or FAC;
(ii) conflict with, require any Consent under, result in the violation of,
constitute a breach of, or accelerate the performance required on the part of
Triangle, QuickCREDIT or FAC by the terms of, any evidence of indebtedness or
Contract to which Triangle, QuickCREDIT or FAC is a party, in each case with or
without notice or lapse of time or both, including any evidence of Encumbrance
to which any property either of Triangle, QuickCREDIT or FAC is subject, or
permit the termination of any such Contract by another Person;
(iii) result in the creation or imposition of any Encumbrance upon, or
restriction on the use of, any property or assets of Triangle, QuickCREDIT or
FAC under any Contract to which either Triangle, QuickCREDIT or FAC is bound;
(iv) accelerate, or constitute an event entitling, or which would, on notice or
lapse of time or both, entitle the holder of any indebtedness of Triangle,
QuickCREDIT or FAC to accelerate the maturity of any such indebtedness;
(v) conflict with or result in the breach or violation of any Legal Requirement
that is binding on Triangle, QuickCREDIT or FAC; or
(vi) violate or cause any revocation of or limitation on any Permit of
Triangle, QuickCREDIT or FAC.
3.4 Legal Proceedings; Orders. Except as set forth in Schedule 3.4 annexed
hereto, there is no pending Legal Proceeding, and, to the knowledge of Triangle
or QuickCREDIT, no Person has threatened to commence any Legal Proceeding that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Merger or any of the other transactions
contemplated by this Agreement. To the knowledge of Triangle, QuickCREDIT or
FAC, except as set forth in Schedule 3.4 annexed hereto, no event has occurred,
and no claim, dispute or other condition or circumstance exists, that will, or
that could reasonably be expected to, give rise to or serve as a basis for the
commencement of any such Legal Proceeding.
3.5 SEC Filings; Financial Statements.
(a) QuickCREDIT has delivered to FCB and the Shareholders accurate and complete
copies (excluding copies of exhibits) of each report, registration statement (on
a form other than Form S-8) and definitive proxy statement filed by Triangle
with the SEC between January 1, 1997 and the date of this Agreement (the
"Triangle SEC Documents"). As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing), (i) each of the Triangle SEC Documents complied in all
material respects with the applicable requirements of the Securities Act of 1933
or the Exchange Act of 1934 (as the case may be) and (ii) none of the Triangle
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The consolidated financial statements contained in the Triangle SEC
Documents (i) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered, except
as may be indicated in the notes to such financial statements and (in the case
of unaudited statements) as permitted by Form 10-Q of the SEC, and except that
unaudited financial statements may not contain footnotes and are subject to
normal and recurring year-end audit adjustments (which will not, individually or
in the aggregate, be material in magnitude); and (ii) fairly present the
consolidated financial position of Triangle as of the respective dates thereof
and the consolidated results of operations of Triangle for the periods covered
thereby.
3.6 Valid Issuance. The Triangle Common Stock to be issued as Merger
Consideration will, when issued in accordance with the provisions of this
Agreement, be validly issued, fully paid and non-assessable.
3.7 Broker's or Finder's Fees. No agent, broker, person or firm acting on behalf
of Triangle, QuickCREDIT or FAC is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
3.8 Disclosure. No representation by Triangle, QuickCREDIT or FAC in this
Section 3 contains any untrue statement of a material fact necessary to make the
statements herein not misleading on the date hereof.
Section 4. CERTAIN COVENANTS OF FCB AND THE SHAREHOLDERS
4.1 Access and Investigation. During the period from the date of this Agreement
through the Effective Time (the "Pre-Closing Period"), FCB shall, and shall
cause its Representatives to (a) provide QuickCREDIT and its Representatives
with reasonable access to FCB's Representatives, personnel and assets and to all
existing books, records, Tax Returns, work papers and other documents and
information relating to FCB; and (b) provide QuickCREDIT and its Representatives
with such copies of the existing books, records, Tax Returns, work papers and
other documents and information relating to FCB, and with such additional
financial, operating and other data and information regarding FCB, as
QuickCREDIT may reasonably request. In the event that this Agreement shall be
terminated in accordance with Section 8 of this Agreement, QuickCREDIT shall
keep confidential, and not use in any manner, any information on documents
obtained from FCB pursuant to this Section 4.1. QuickCREDIT's investigation of,
or failure to investigate, the business and affairs of FCB at any time prior to
the Effective Date shall not for any purpose (i) diminish, obviate or otherwise
affect the representations and warranties of FCB and the Shareholders provided
in Section 2 of this Agreement or Triangle's or QuickCREDIT's right to rely upon
such representations and warranties or (ii) be deemed a waiver of or otherwise
affect in any way the rights of Triangle or QuickCREDIT set forth in Section 9
of this Agreement.
4.2 Operation of the Business of FCB. During the Pre-Closing Period, unless
Triangle and QuickCREDIT otherwise consent in writing:
(a) FCB shall conduct its business and operations in the ordinary course and in
substantially the same manner as such business and operations have been
conducted prior to the date of this Agreement;
(b) FCB shall use reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers and employees
and maintain its relations and goodwill with all suppliers, customers,
landlords, creditors, employees and other Persons having business relationships
with FCB;
(c) FCB shall keep in full force and effect all insurance policies
identified in Schedule 2.23 annexed hereto;
(d) FCB shall not declare, accrue, set aside or pay any dividend or make any
other distribution in respect of any shares of capital stock, and shall not
repurchase, redeem or otherwise reacquire any shares of capital stock or other
securities;
(e) FCB shall not sell, issue or authorize the issuance of (i) any capital stock
or other security, (ii) any option, call, warrant or right to acquire, or
relating to, any capital stock or other security, or (iii) any instrument
convertible into or exchangeable for any capital stock or other security;
(f) neither FCB nor any of the Shareholders shall amend or permit the adoption
of any amendment to FCB articles of incorporation or bylaws, or effect or permit
FCB to become a party to any Acquisition Transaction, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
(g) FCB shall not form any subsidiary or acquire any equity interest or
other interest in any other Entity;
(h) FCB shall not make any capital expenditure, except for capital expenditures
that, when added to all other capital expenditures made on behalf of FCB during
the Pre-Closing Period, do not exceed $5,000 in the aggregate;
(i) FCB shall not (i) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any material Contract, or (ii) amend or
prematurely terminate, or waive any material right or remedy under, any material
Contract except as contemplated in Section 5.9 of this Agreement;
(j) FCB shall not, other than in the ordinary course of business consistent with
past practice (i) acquire, lease or license any right or other asset from any
other Person, (ii) sell or otherwise dispose of, or lease or license, any right
or other asset to any other Person, or (iii) waive or relinquish any right,
except for immaterial assets acquired, leased, licensed or disposed of by FCB;
(k) FCB shall not (i) lend money to any Person, or (ii) incur or guarantee any
indebtedness, except that FCB may make routine borrowings in the ordinary course
of business under its respective existing lines of credit;
(l) FCB shall not (i) establish, adopt or amend any Plan, (ii) pay any bonus or
make any profit-sharing or similar payment to, or increase the amount of the
wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees, or (iii)
hire any new employee whose aggregate annual compensation is expected to exceed
$15,000;
(m) FCB shall not change any of its methods of accounting or accounting
practices in any respect;
(n) FCB shall not make any Tax election;
(o) FCB shall not commence or settle, whether or not commenced by FCB, any
Legal Proceeding;
(p) FCB shall not enter into any material transaction or take any other material
action outside the ordinary course of business or inconsistent with its past
practices; and
(q) FCB shall not agree or commit to take any of the actions described in
clauses "(d)" through "(p)" of this Section 4.2.
4.3 Notification; Updates to Schedules.
(a) During the Pre-Closing Period, FCB and the Shareholders shall promptly
notify QuickCREDIT in writing of:
(i) the discovery by FCB or the Shareholders of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes an inaccuracy in or breach of any representation
or warranty made by FCB or any of the Shareholders in this Agreement;
(ii) any event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement and that would cause or constitute an
inaccuracy in or breach of any representation or warranty made by FCB or any of
the Shareholders in this Agreement if (A) such representation or warranty had
been made as of the time of the occurrence, existence or discovery of such
event, condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement;
(iii) any breach of any covenant or obligation of FCB or any of the
Shareholders; and
(iv) any event, condition, fact or circumstance that would make the timely
satisfaction of any of the conditions set forth in Section 6 or Section 7 of
this Agreement impossible or unlikely.
(b) If any event, condition, fact or circumstance that is required to be
disclosed pursuant to Section 4.3(a) of this Agreement requires any change in
any Schedule to this Agreement, or if any such event, condition, fact or
circumstance would require such a change assuming such Schedule were dated as of
the date of the occurrence, existence or discovery of such event, condition,
fact or circumstance, then FCB or the Shareholders shall promptly deliver to
QuickCREDIT an update to such Schedule specifying such change. No such update
shall be deemed to supplement or amend any Schedule for the purpose of (i)
determining the accuracy of any of the representations and warranties made by
FCB or any of the Shareholders in this Agreement, or (ii) determining whether
any of the conditions set forth in Section 6 of this Agreement has been
satisfied.
4.4 Pooling of Interests. Prior to the Closing, neither FCB nor any Shareholder
shall take any action which would have an adverse effect on the ability of
Triangle to account for the Merger as a "pooling of interests".
4.5 No Negotiation. During the Pre-Closing Period, neither FCB nor
any of the Shareholders shall, directly or indirectly:
(a) solicit or encourage the initiation of any inquiry, proposal or offer from
any Person (other than QuickCREDIT) relating to a possible Acquisition
Transaction;
(b) participate in any discussions or negotiations or enter into any agreement
with, or provide any non-public information to, any Person (other than
QuickCREDIT) relating to or in connection with a possible Acquisition
Transaction; or
(c) consider, entertain or accept any proposal or offer from any Person (other
than QuickCREDIT) relating to a possible Acquisition Transaction.
FCB shall promptly notify QuickCREDIT in writing of any inquiry, proposal or
offer relating to a possible Acquisition Transaction that is received by FCB or
any of the Shareholders during the Pre-Closing Period.
Section 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 Filings and Consents. As promptly as practicable after the execution of this
Agreement, each party to this Agreement (a) shall make all filings (if any) and
give all notices (if any) required to be made and given by such party in
connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use his, its or their best efforts to obtain each
Consent (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Merger or any of the other transactions contemplated by this Agreement. FCB
shall promptly deliver to QuickCREDIT a copy of each such filing made, each such
notice given and each such Consent obtained by FCB during the Pre-Closing
Period. QuickCREDIT shall promptly deliver to FCB a copy of each such filing
made, each such notice given and each such consent obtained by QuickCREDIT
during the Pre-Closing Period.
5.2 Public Announcements. During the Pre-Closing Period, (a) neither FCB nor any
of the Shareholders shall (and FCB shall not permit any of its Representatives
to) make any public statement regarding this Agreement or the Merger, or
regarding any of the other transactions contemplated by this Agreement, without
QuickCREDIT's prior written consent, and (b) QuickCREDIT will use reasonable
efforts to consult with FCB prior to issuing any press release or making any
public statement regarding the Merger.
5.3 Best Efforts. During the Pre-Closing Period, (a) FCB and the Shareholders
shall use their reasonable best efforts to cause the conditions set forth in
Section 6 of this Agreement to be satisfied on a timely basis, and (b)
QuickCREDIT shall use its reasonable best efforts to cause the conditions set
forth in Section 7 of this Agreement to be satisfied on a timely basis.
5.4 Employment Agreements. At the Closing, Howard M. Watch shall enter into an
employment agreement with the Surviving Corporation having substantially the
form as set forth in Exhibit F, attached hereto (the "Employment Agreements").
5.5 Restrictive Covenants Agreements. At the Closing, Howard M. Watch shall
enter into a restrictive covenants agreement with the Surviving Corporation
having substantially the form as set forth in Exhibit G, attached hereto (the
"Restrictive Covenants Agreements").
5.6 Release. At the Closing, Howard M. Watch shall execute and deliver to
Triangle a Release in the form of Exhibit H, attached hereto (the "Release").
5.7 Share Subscription Agreement. At the Closing, Howard M. Watch shall execute
and deliver to Triangle a Share Subscription Agreement in the form of Exhibit I,
attached hereto (the "Subscription Agreement").
5.8 Termination of Employee Plans. At the Closing, FCB shall terminate all Plans
set forth on Schedule 2.22 under which any of its employees or former employees
may have any rights, and shall ensure that no employee or former employee of FCB
has any rights thereunder and that any liabilities of FCB thereunder (including
any such liabilities relating to services performed prior to the Closing) are
fully extinguished at no cost to FCB.
5.9 Software Assignment and License Agreement. At the Closing, FAC and the
Shareholders shall enter into a Software Assignment and License Agreement in the
form of Exhibit J, attached hereto (the "Software Assignment and License
Agreement").
5.10 National Telecommunications, Inc. Collection Indemnity. Shareholders
covenant and agree to indemnify, upon the terms and conditions of and to the
fullest extent permitted by Section 9 of this Agreement, Triangle, QuickCREDIT
and the Surviving Corporation against any Loss of Triangle, as defined in
Section 9 of this Agreement, by reason of, resulting from, arising out of, based
upon, awarded or asserted against or otherwise in respect of any and all
disputes by and between FCB and National Telecommunications, Inc. regarding
claims for past due accounts existing on, and as of, the Closing Date.
Section 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF TRIANGLE,
QUICKCREDIT AND FAC
The obligations of Triangle, QuickCREDIT and FAC to effect the Merger
and otherwise consummate the transactions contemplated by this Agreement are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions:
6.1 Accuracy of Representations. Each of the representations and warranties made
by FCB and the Shareholders in this Agreement and in each of the other
agreements and instruments delivered to QuickCREDIT in connection with the
transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement, and shall be accurate in all
material respects as of the Closing Date as if made at the Closing Date (without
giving effect to any update to any Schedule to this Agreement).
6.2 Performance of Covenants. Each covenant or obligation that FCB or any of the
Shareholders is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects.
6.3 Consents. All Consents required to be obtained by FCB or the Shareholders in
connection with the Merger and the other transactions contemplated by this
Agreement shall have been obtained and shall be in full force and effect.
6.4 Agreements and Documents. QuickCREDIT shall have received the following
agreements and documents, each of which shall be in full force and effect:
(a) the Employment Agreement between Howard M. Watch and the Surviving
Corporation;
(b) the Restrictive Covenants Agreement between Howard M. Watch and the
Surviving Corporation;
(c) a Release, executed by Howard M. Watch;
(d) a Share Subscription Agreement, executed by Howard M. Watch;
(e) the Escrow Agreement executed by Howard M. Watch and Lawrence Katz,
Esquire;
(f) a legal opinion of Lawrence H. Katz, Attorney at Law, P.A. dated as of
the Closing Date, in the form of Exhibit J;
(g) a certificate executed by FCB and the Shareholders stating that each of
the representations and warranties set forth in Section 2 of this Agreement is
accurate in all material respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 6.1, 6.2, 6.3, 6.4
and 6.5 of this Agreement have been duly satisfied (the "FCB and Shareholders'
Closing Certificate"); and
(h) such other certified resolutions, documents or certificates as may be
reasonably requested by QuickCREDIT prior to the Closing Date.
6.5 No Material Adverse Change. There shall have been no material adverse change
in FCB's business, condition, assets, liabilities, operations, financial
performance or prospects since the date of this Agreement.
6.6 Termination of Employee Plans. FCB shall have provided QuickCREDIT with
evidence, satisfactory to QuickCREDIT, as to the termination of the Plans
referred to in Section 2.22 of this Agreement.
6.7 Pooling Letter. Triangle shall have received evidence satisfactory to
Triangle or a letter from Mazars & Guerard, certified public accountants to
Triangle, dated the Closing Date, confirming that Triangle may account for the
Merger as a "pooling of interests" in accordance with generally accepted
accounting principles, Accounting Principles Board Opinion No. 16 and all
published rules, regulations and policies of the SEC.
6.8 Rule 506. All applicable requirements of Rule 506 under the Securities Act
shall have been satisfied.
6.9 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger shall have
been issued by any court of competent jurisdiction and remain in effect, and
there shall not be any Legal Requirement enacted or deemed applicable to the
Merger that makes consummation of the Merger illegal.
6.10 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by FCB of any material right pertaining to its ownership of stock
of the Surviving Corporation.
6.11 Completion of Due Diligence. QuickCREDIT shall have completed its due
diligence investigation of FCB and shall have been satisfied with the results
thereof.
6.12 Certificates of Merger. The parties shall have executed a Certificate of
Merger to be filed with the Secretary of State as contemplated in Section 1.3 of
this Agreement.
Section 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
FCB AND THE SHAREHOLDERS
The obligations of FCB and the Shareholders to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of the following conditions:
7.1 Accuracy of Representations. Each of the representations and warranties made
by Triangle, QuickCREDIT and FAC in this Agreement and in each of the other
agreements and instruments delivered to FCB in connection with the transactions
contemplated by this Agreement shall have been accurate in all material respects
as of the date of this Agreement, and shall be accurate in all material respects
as of the Closing Date as if made at the Closing Date.
7.2 Performance of Covenants. All of the covenants and obligations that
Triangle, QuickCREDIT and FAC are required to comply with or to perform at or
prior to the Closing shall have been complied with and performed in all material
respects.
7.3 Consents. All Consents required to be obtained by Triangle, QuickCREDIT or
FAC in connection with the Merger and the other transactions contemplated by
this Agreement shall have been obtained and shall be in full force and effect.
7.4 Release of Guaranty. Howard M. Watch shall have received a release of his
obligations under that certain guaranty agreement by and between Howard M. Watch
and The Maitland Building, dated February 20, 1998, guaranteeing the obligations
of FCB under that certain lease agreement dated February 20, 1998 relating to
the letting of commercial office space located at 235 S. Maitland Avenue, Suite
202, Maitland, Florida 32751.
7.5 Agreements and Documents. FCB and the Shareholders shall have received the
following agreements and documents, each of which shall be in full force and
effect:
(a) a legal opinion of Smith, Gambrell & Russell, LLP in the form of
Exhibit L;
(b) a certificate executed by Triangle, QuickCREDIT and FAC stating that
each of the representations and warranties set forth in Section 3 of this
Agreement are accurate in all material respects as of the Closing Date as if
made on the Closing Date and that the conditions set forth in Sections 7.1, 7.2,
7.3 and 7.4 of this Agreement have been duly satisfied (the "Triangle Closing
Certificate");
(c) FAC and Shareholders shall have entered into the Software Assignment
and License Agreement;
(d) such other certified resolutions, documents, or certificates as may be
reasonably requested by FCB prior to the Closing Date; and
(e) a letter shall have been delivered to Securities Transfer Corp., the
transfer agent for Triangle (the "Transfer Agent") requesting that stock
certificates evidencing the shares of Triangle common stock to be delivered by
Triangle pursuant to Section 1.8 of this Agreement be issued in the name of each
of the Shareholders in the amount set forth in Section 1.8 of this Agreement,
20,000 shares of which shall be issued in a separate certificate to be delivered
to the Escrow Agent.
7.6 Cash Consideration. The cash consideration to be paid to Shareholders at
Closing shall have been delivered to Shareholders.
7.7 Assignment of Note. The assignment of the Promissory Note to Shareholders
shall have been executed and delivered to Shareholders in accordance with
Section 1.8 of this Agreement.
7.8 Assignment of Bank Accounts. The assignment of the Bank Accounts to
Shareholders shall have been executed and delivered to the Shareholders in
accordance with Section 1.8 of this Agreement.
7.9 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger by FCB shall
have been issued by any court of competent jurisdiction and remain in effect,
and there shall not be any Legal Requirement enacted or deemed applicable to the
Merger that makes consummation of the Merger by FCB illegal.
7.10 Certificates of Merger. The parties shall have executed a Certificate of
Merger to be filed with the Secretary of State as contemplated in Section 1.3 of
this Agreement.
Section 8. TERMINATION
8.1 Termination Events. This Agreement may be terminated prior to the Closing:
(a) by QuickCREDIT if QuickCREDIT reasonably determines that the timely
satisfaction of any condition set forth in Section 6 of this Agreement has
become impossible (other than as a result of any failure on the part of
Triangle, QuickCREDIT or FAC to comply with or perform any covenant or
obligation of Triangle, QuickCREDIT or FAC set forth in this Agreement), and
such condition has not been cured within ten (10) business days after receipt by
FCB of notice from QuickCREDIT of QuickCREDIT's intent to terminate this
Agreement;
(b) by FCB if FCB reasonably determines that the timely satisfaction of any
condition set forth in Section 7 of this Agreement has become impossible (other
than as a result of any failure on the part of FCB or any of the Shareholders to
comply with or perform any covenant or obligation set forth in this Agreement or
in any other agreement or instrument delivered to QuickCREDIT), and such
condition has not been cured within ten (10) business days after receipt by
QuickCREDIT of notice from FCB of FCB's intent to terminate this Agreement;
(c) by Triangle, QuickCREDIT or FAC at or after the Scheduled Closing Time if
any condition set forth in Section 6 of this Agreement has not been satisfied by
the Scheduled Closing Time;
(d) by FCB at or after the Scheduled Closing Time if any condition set forth in
Section 7 of this Agreement has not been satisfied by the Scheduled Closing
Time;
(e) by Triangle, QuickCREDIT or FAC if the Closing has not taken place on or
before May 31, 1998 (other than as a result of any failure on the part of
Triangle, QuickCREDIT or FAC to comply with or perform any covenant or
obligation of Triangle, QuickCREDIT or FAC set forth in this Agreement);
(f) by FCB if the Closing has not taken place on or before May 31, 1998 (other
than as a result of the failure on the part of FCB or any of the Shareholders to
comply with or perform any of their respective covenants or obligations set
forth in this Agreement or in any other agreement or instrument delivered to
Triangle, QuickCREDIT or FAC); or
(g) by the mutual consent of Triangle, QuickCREDIT, FAC and FCB.
8.2 Termination Procedures. If Triangle, QuickCREDIT or FAC wishes to terminate
this Agreement pursuant to Section 8.1(a), Section 8.1(c) or Section 8.1(e) of
this Agreement, Triangle, QuickCREDIT or FAC shall deliver to FCB a written
notice stating that Triangle, QuickCREDIT or FAC is terminating this Agreement
and setting forth a brief description of the basis on which Triangle,
QuickCREDIT or FAC is terminating this Agreement. If FCB wishes to terminate
this Agreement pursuant to Section 8.1(b), Section 8.1(d) or Section 8.1(f) of
this Agreement, FCB shall deliver to Triangle or QuickCREDIT a written notice
stating that FCB is terminating this Agreement and setting forth a brief
description of the basis on which FCB is terminating this Agreement.
8.3 Effect of Termination. If this Agreement is terminated pursuant to Section
8.1 of this Agreement, all further obligations of the parties under this
Agreement shall terminate; provided, however, that no party shall be relieved of
any obligation or liability arising from any prior breach by such party of any
provision of this Agreement.
Section 9. INDEMNIFICATION, ETC.
9.1 Survival of Representations and Warranties. All of the representations and
warranties of FCB, the Shareholders, Triangle, QuickCREDIT and FAC contained in
this Agreement shall survive the Closing for a period of 18 months from the
Closing Date.
9.2 Shareholders' Indemnity Agreement. Subject to Section 9.6 of this Agreement,
the Shareholders, jointly and severally, shall defend, indemnify and hold
harmless Triangle, QuickCREDIT and the Surviving Corporation (and their
respective directors, officers, employees, agents, affiliates, successors and
assigns) from and against any and all direct or indirect requests, demands,
claims, payments, defenses, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, liens, causes of action, suits,
proceedings, judgments, losses, Damages (including without limitation punitive,
exemplary or consequential damages, lost income and profits and interruptions of
business of the Surviving Corporation), liabilities, costs, and expenses of any
kind (including without limitation (i) interest, penalties and reasonable
attorneys' fees and expenses, (ii) attorneys' fees and expenses necessary to
enforce their rights to indemnification hereunder, and (iii) consultants' fees
and other costs of defending or investigating any claim hereunder), and interest
on any amount payable as a result of the foregoing, whether accrued, absolute,
contingent, known, unknown, or otherwise as of the Closing Date or thereafter
asserted against, imposed upon or incurred by Triangle, QuickCREDIT, the
Surviving Corporation or any of their respective directors, officers, employees,
agents, affiliates, successors or assigns (collectively, a "Loss of Triangle")
by reason of, resulting from, arising out of, based upon, awarded or asserted
against or otherwise in respect of:
(a) any period or periods of operation of FCB ending prior to the Closing and
which involve any claims against Triangle, QuickCREDIT, FAC, FCB, the Surviving
Corporation or their respective properties or assets, relating to actions or
inactions of FCB or its respective officers, directors, shareholders, employees
or agents prior to Closing, or the operation of the business of FCB prior to the
Closing unless such liability was disclosed on the FCB Financial Statements and
adequate reserves were established therefor;
(b) any breach of any representation and warranty contained in this Agreement or
any misrepresentation in or omission on the part of FCB or the Shareholders
contained in any certificate or other document furnished or to be furnished to
Triangle or QuickCREDIT by FCB or any of the Shareholders pursuant to this
Agreement;
(c) any breach or nonfulfillment on the part of FCB or any of the Shareholders
of any covenant contained in this Agreement;
(d) the failure of FCB or any of the Shareholders to obtain, prior to the
Closing Date, any consents of Governmental Bodies and other Persons as may be
necessary to permit the consummation of the Merger and to permit the Surviving
Corporation to continue to operate the business of FCB in the manner presently
conducted after the Closing Date;
(e) any federal, state, local or foreign taxes, including any interest and
penalties thereon, due from FCB or the Shareholders with respect to any period
prior to the Closing Date, other than amounts accrued therefor on FCB Financial
Statements.
9.3 Indemnity Agreement of QuickCREDIT and the Surviving Corporation.
QuickCREDIT and the Surviving Corporation shall, jointly and severally,
indemnify and hold harmless the Shareholders (and their respective successors
and assigns) from and against any and all direct or indirect requests, demands,
claims, payments, defenses, obligations, recoveries, deficiencies, fines,
penalties, interest, assessments, actions, liens, causes of action, suits,
proceedings, judgments, losses, Damages (including without limitation punitive,
exemplary or consequential damages and lost income and profits and interruptions
of business), liabilities, costs, and expenses of any kind (including without
limitation (i) interest, penalties and reasonable attorneys' fees and expenses,
(ii) attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim hereunder, and interest on any amount
payable as a result of the foregoing) whether accrued, absolute, contingent,
known, unknown or otherwise as of the Closing Date or thereafter asserted
against, imposed upon or incurred by the Shareholders or their respective
representatives or assigns, (a "Loss of the Shareholders") by reason of,
resulting from, arising out of, based upon, awarded or asserted against in
respect of or otherwise in respect of:
(a) any period or periods of operation of the Surviving Corporation beginning
after the Closing and which involve any claims against the Shareholders or their
respective assets relating to actions or inactions of QuickCREDIT or the
Surviving Corporation or their respective officers, directors, shareholders,
employees or agents after the Closing, or the operation of the Surviving
Corporation after the Closing (except to the extent any of the foregoing arise
from the acts or omissions of the Shareholders); and
(b) any breach of any representation and warranty or nonfulfillment of any
covenant or agreement on the part of Triangle, QuickCREDIT or FAC contained in
this Agreement, or any misrepresentation in or omission from or nonfulfillment
of any covenant on the part of the Triangle, QuickCREDIT or FAC contained in any
certificate furnished or to be furnished to the Shareholders by Triangle,
QuickCREDIT or FAC pursuant to this Agreement.
(c) the guaranty by and between Howard M. Watch and The Maitland Building, dated
February 20, 1998, guaranteeing the obligations of FCB under that certain lease
agreement dated February 20, 1998 relating to the letting of commercial office
space located at 235 S. Maitland Avenue, Suite 202, Maitland, Florida 32751.
9.4 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, the party to be indemnified hereunder (the
"Indemnitee") shall promptly notify the indemnifying party hereunder (the
"Indemnitor") in writing of any damage, claim, loss, liability or expense or
other matter which the Indemnitee has determined has given or could give rise to
a claim for which indemnification rights are granted hereunder (such written
notice referred to as the "Notice of Claim"). The Notice of Claim shall specify,
in all reasonable detail, the nature and estimated amount of any such claim
giving rise to a right of indemnification, to the extent the same can reasonably
be estimated. Any failure on the part of an Indemnitee to give timely notice to
the Indemnitor of a claim shall not affect the right of the Indemnitee to obtain
indemnification from the Indemnitor with respect to such claim unless the
Indemnitor is actually harmed by such failure to notify, and only to the extent
of such actual harm.
(b) With respect to any matter set forth in a Notice of Claim relating to a
third party claim the Indemnitor shall defend, in good faith and at its expense,
any such claim or demand, and the Indemnitee, at its expense, shall have the
right to participate in the defense of any such third party claim. So long as
Indemnitor is defending, in good faith, any such third party claim, the
Indemnitee shall not settle or compromise such third party claim. The Indemnitee
shall make available to the Indemnitor or its representatives all records and
other materials reasonably required by them for use in contesting any third
party claim and shall cooperate fully with the Indemnitor in the defense of all
such claims. If the Indemnitor does not defend any such third party claim or if
the Indemnitor does not provide the Indemnitee with prompt and reasonable
assurances that the Indemnitor will satisfy the third party claim, the
Indemnitee may, at its option, elect to defend any such third party claim, at
the Indemnitor's expense, but subject to the Indemnitor's right to assume such
defense from the Indemnitee at any time. An Indemnitor may not settle or
compromise any claim without obtaining a full and unconditional release of the
Indemnitee, unless the Indemnitee consents in writing to such settlement or
compromise. Notwithstanding the foregoing, if there is a reasonable probability
that a third party claim for which Triangle, QuickCREDIT or the Surviving
Corporation has indemnification rights against the Shareholders hereunder which
will materially and adversely affect Triangle, QuickCREDIT or the Surviving
Corporation other than as a result of money damages or other payments, Triangle,
QuickCREDIT or the Surviving Corporation shall be entitled to participate in the
defense of such claim at the Shareholders' expense.
9.5 Pledge of Stock as Security. As security for the payment of any and all sums
in respect of which the Shareholders may be liable pursuant to Section 9.2 of
this Agreement, the Shareholders agree to pledge 20,000 shares of Triangle
Common Stock to be held in escrow by the law firm of Lawrence H. Katz, Attorney
at Law, P.A., a Florida professional association, 341 North Maitland Avenue,
Suite 120, Maitland, Florida 32751-4761, with Lawrence H. Katz, Esquire to act
as the escrow agent therefor in accordance with the terms of that certain Escrow
Agreement attached hereto as Exhibit M.
9.6 Set-off. Triangle, QuickCREDIT and the Surviving Corporation shall have the
right to set-off and apply against the shares of Triangle Common Stock pledged
by the Shareholders pursuant to Section 9.5 of this Agreement and any other
amounts owing from Triangle, QuickCREDIT or the Surviving Corporation to the
Shareholders under any other agreement between Triangle, QuickCREDIT or the
Surviving Corporation and the Shareholders, all sums in respect of which the
Shareholders may be liable pursuant to Section 9.2 of this Agreement, such right
of set-off to be in addition to and not in lieu of or an election against any
and all other remedies available to Triangle, QuickCREDIT and the Surviving
Corporation under this Agreement or at law or in equity.
Section 10. MISCELLANEOUS PROVISIONS
10.1 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
10.2 Fees and Expenses. Subject to Section 9 of this Agreement, all fees, costs
and expenses (including legal fees and accounting fees) that have been incurred
or that are incurred in the future by each party in connection with the
transactions contemplated by this Agreement, including all fees, costs and
expenses incurred by such party in connection with or by virtue of (a) any
investigation and review conducted by such party of the other parties' business
(and the furnishing of information in connection with such investigation and
review), (b) the negotiation, preparation and review of this Agreement and all
agreements, certificates, opinions and other instruments and documents delivered
or to be delivered in connection with the transactions contemplated by this
Agreement, (c) the preparation and submission of any filing or notice required
to be made or given in connection with any of the transactions contemplated by
this Agreement, and the obtaining of any Consent required to be obtained in
connection with any of such transactions, and (d) the consummation of the Merger
shall be paid by Triangle, QuickCREDIT or FAC, if incurred by Triangle,
QuickCREDIT or FAC, and by the Shareholders, if incurred by FCB or the
Shareholders.
10.3 Arbitration. Except as provided in Section 10.11 of this Agreement, any
controversy, dispute or claim arising out of or relating to this Agreement or
the breach thereof shall be settled by arbitration. Arbitration proceedings
shall be conducted in accordance with the rules then prevailing of the American
Arbitration Association or any successor. The award of the Arbitration shall be
binding on the Parties. Judgment shall be entered upon an award of a majority of
the arbitrators filed in a court of competent jurisdiction and confirmed by such
court. Venue for Arbitration proceedings shall be Broward County, Florida. The
Parties consent that the costs of arbitration, attorneys' fees of the Parties,
together with all other expenses shall be paid as provided in the Arbitration
award.
10.4 Broker's and Finder's Fees. Any agent, broker, finder, person or firm
acting on behalf of the Shareholders or FCB, including without limitation George
Gobel of Access Data Systems, Inc., which is or will be entitled to any
commission or broker's or finder's fee from the Shareholders or FCB, or from any
person controlling, controlled by or under common control with the Shareholders
or FCB, in connection with any of the transactions contemplated herein shall be
paid by the Shareholders.
10.5 Notices. All notices and other communications required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed to have been given only if and when (a) personally delivered, or (b)
three (3) business days after mailing, postage prepaid, by certified mail, or
(c) when delivered (and receipted for) by an overnight delivery service, or (d)
when first sent by e-mail, telecopier or other means of instantaneous
communication provided such communication is promptly confirmed by personal
delivery, mail or an overnight delivery service as provided above, addressed in
each case as follows:
if to Triangle, QuickCREDIT, FAC or the Surviving Corporation:
QuickCREDIT Corp.
4400 West Sample Road
Suite 228
Coconut Creek, Florida 33073
Attention: Van Saliba
Facsimile: (954) 975-7559
with a copy to:
Smith, Gambrell & Russell, LLP
Promenade II, Suite 3100
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309-3592
Attention: Peter B. Barlow, Esq.
Facsimile: (404) 685-6972
if to FCB :
Florida Credit Bureau, Inc.
235 South Maitland Avenue, Suite 202
Maitland, Florida 32751
Attention: Howard M. Watch
Facsimile: (407) 539-0438
with a copy to:
Lawrence H. Katz, Esquire
Lawrence H. Katz, Attorney at Law, P.A.
341 North Maitland Avenue, Suite 120
Maitland, Florida 32751-4761
Facsimile: (407) 539-1466
if to the Shareholders:
Howard M. Watch
4922 Samoa Circle
Orlando, Florida 32808
Section 10.6 Time of the Essence. Time is of the essence of this Agreement.
10.7 Headings. The bold-faced Section headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
10.8 Counterparts. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
10.9 Governing Law. This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of Florida.
10.10 Successors and Assigns. This Agreement shall be binding upon: FCB and its
successors and assigns (if any); the Shareholders and their respective personal
representatives, executors, administrators, estates, heirs, successors and
assigns (if any); Triangle and its successors and assigns (if any); QuickCREDIT
and its successors and assigns (if any); and FAC and its successors and assigns
(if any). This Agreement shall inure to the benefit of: FCB, the Shareholders,
Triangle, QuickCREDIT, FAC and the respective successors, heirs personal
representatives and assigns (if any) of the foregoing. Following the Merger,
Triangle, QuickCREDIT and FAC may freely assign any or all of their respective
rights under this Agreement (including their indemnification rights under
Section 9 of this Agreement), in whole or in part, to any other Person without
obtaining the consent or approval of any other party hereto or of any other
Person; provided, however, that no assignment by Triangle, QuickCREDIT or FAC of
any or all of their respective rights under this Agreement shall relieve
Triangle, QuickCREDIT or FAC of any of their respective obligations under this
Agreement (including any indemnification obligation under Section 9 of this
Agreement).
10.11 Remedies Cumulative; Specific Performance. The rights and remedies of the
parties hereto shall be cumulative (and not alternative). The parties to this
Agreement agree that, in the event of any breach or threatened breach by any
party to this Agreement of any covenant, obligation or other provision set forth
in this Agreement for the benefit of any other party to this Agreement, such
other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
10.12 Waiver.
(a) No failure on the part of any party to exercise any power, right, privilege
or remedy under this Agreement, and no delay on the part of any party in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.
(b) No party shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
10.13 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
10.14 Severability. In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of circumstances, shall
be determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent permitted by
law.
10.15 Parties in Interest. Except for the provisions of Section 9 of this
Agreement, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective successors, heirs, personal representatives and assigns (if any).
10.16 Entire Agreement. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties hereto relating to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, written or oral, among or between any of the parties relating to
the subject matter hereof and thereof.
10.17 Construction.
(a) For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include the masculine
and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to
"Sections," "Exhibits" and "Schedules" are intended to refer to Sections,
Exhibits and Schedules to this Agreement. All Schedules and Exhibits are
integral parts of this Agreement and are incorporated into this Agreement by
reference.
The parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.
"TRIANGLE"
TRIANGLE IMAGING GROUP, INC.
_________________________________________________________
By: Vito A. Bellezza
Title: Chairman of the Board and Chief Executive Officer
"QUICKCREDIT"
QUICKCREDIT CORP.
_________________________________________________________
By: Van Saliba
Title: President
"FAC"
FCB ACQUISITION CORP.
_________________________________________________________
By: Van Saliba
Title: President
"FCB"
FLORIDA CREDIT BUREAU, INC.
_________________________________________________________
By: Howard M. Watch
Title: President
THE "SHAREHOLDER"
_________________________________________________________
(SEAL)
Howard M. Watch
<PAGE>
EXHIBIT A
SHAREHOLDERS OF FLORIDA CREDIT BUREAU, INC.
Shareholder Number and Class of Shares Owned
Howard M. Watch 100 shares of FCB Common Stock
<PAGE>
EXHIBIT B
CERTAIN DEFINITIONS USED IN THIS AGREEMENT
For purposes of the Agreement (including this Exhibit B):
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale, license, disposition or acquisition of all or a material
portion of FCB's business or assets;
(b) the issuance, disposition or acquisition of (i) any capital stock or
other equity security of FCB; (ii) any option, call, warrant or right (whether
or not immediately exercisable) to acquire, or otherwise relating to, any
capital stock or other equity security of FCB; or (iii) any security, instrument
or obligation that is or may become convertible into or exchangeable for any
capital stock or other equity security of FCB; or
(c) any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving FCB.
Affiliate. "Affiliate" shall have the meaning specified in Section
2.15(a)(i) of this Agreement.
Affiliate Plan. "Affiliate Plan" shall have the meaning specified in
Section 2.22(b) of this Agreement.
Agreement. "Agreement" shall mean the Agreement and Plan of Merger to which
this Exhibit B is attached (including all Exhibits and Schedules), as it may be
amended from time to time.
Associate. "Associate" shall have the meaning specified in Section
2.15(a)(i) of this Agreement.
Balance Sheet Date. "Balance Sheet Date" shall have the meaning specified
in Section 2.8(a)(ii) of this Agreement.
Certificate of Merger. "Certificate of Merger" shall have the meaning
specified in Section 1.3 of this Agreement.
Closing. "Closing" shall have the meaning specified in Section 1.3 of this
Agreement.
Closing Date. "Closing Date" shall have the meaning specified in Section
1.3 of this Agreement.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
FCB Common Stock. "FCB Common Stock" shall have the meaning specified in
the Recitals to this Agreement.
FCB Documents. "FCB Documents" shall mean this Agreement and the other
documents and agreements required to be executed and delivered by FCB hereunder.
FCB Financial Statements. "FCB Financial Statements" shall have the meaning
specified in Section 2.8(a) of this Agreement.
FCB and Shareholders' Closing Certificate. "FCB and Shareholders' Closing
Certificate" shall have the meaning specified in Section 6.4(i) of this
Agreement.
FCB Stock Certificate. "FCB Stock Certificate" shall have the meaning
specified in Section 1.6 of this Agreement.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking of
any nature.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
Effective Time. "Effective Time" shall have the meaning specified in
Section 1.3 of this Agreement.
Employment Agreements. "Employment Agreements" shall have the meaning
specified in Section 5.4 of this Agreement.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security), any restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Environmental Law. "Environmental Law" shall have the meaning specified in
Section 2.24(d) of this Agreement.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
ERISA Affiliate. "ERISA Affiliate" shall have the meaning specified in
Section 2.22(b) of this Agreement.
FBCA. "FBCA" shall mean the Florida Business Corporation Act.
Fixed Assets. "Fixed Assets" shall have the meaning specified in Section
2.18 of this Agreement.
Governmental Body. "Governmental Body" shall mean any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city, local or other political subdivision.
Hazardous Material. "Hazardous Material" shall have the meaning specified
in Section 2.24(d) of this Agreement.
Hazardous Waste. "Hazardous Waste" shall have the meaning specified in
Section 2.24(d) of this Agreement.
Indemnitor. "Indemnitor" shall have the meaning specified in Section 9.4(a)
of this Agreement.
Indemnitee. "Indemnitee" shall have the meaning specified in Section 9.4(a)
of this Agreement.
Intellectual Property. "Intellectual Property" shall have the meaning
specified in Section 2.19 of this Agreement.
Investment Letter. "Investment Letter" shall have the meaning specified in
Section 5.7 of this Agreement.
Leases. "Leases" shall have the meaning specified in Section 2.16 of this
Agreement.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitute, principle of common
law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Body.
Loss of the Shareholders. "Loss of the Shareholders" shall have the meaning
specified in Section 9.3 of this Agreement.
Loss of Triangle. "Loss of Triangle" shall have the meaning specified in
Section 9.2 of this Agreement.
Material Adverse Effect. A violation or other matter will be deemed to have
a "Material Adverse Effect" on FCB if such violation or other matter (considered
together with all other matters that would constitute exceptions to the
representations and warranties set forth in the Agreement or in FCB's and
Shareholders' Closing Certificate but for the presence of "Material Adverse
Effect" or other materiality qualifications, or any similar qualifications, in
such representations and warranties) would have a material adverse effect on
FCB's business, condition, assets, liabilities, operations, financial
performance or prospects.
Merger. "Merger" shall have the meaning specified in the Recitals to this
Agreement.
Merger Consideration. "Merger Consideration" shall have the meaning
specified in Section 1.8 of this Agreement.
Notice of Claim. "Notice of Claim" shall have the meaning specified in
Section 9.4(a) of this Agreement.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Permit. "Permit" shall have the meaning specified in Section 2.27 of this
Agreement.
Permitted Liens. "Permitted Liens" shall have the meaning specified in
Section 2.13 of this Agreement.
Plan. "Plan" shall have the meaning specified in Section 2.22(a) of this
Agreement.
Pre-Closing Period. "Pre-Closing Period" shall have the meaning specified
in Section 4.1 of this Agreement.
Release. "Release" shall have the meaning specified in Section 5.6 of this
Agreement.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accounts, advisors and representatives.
Restrictive Covenants Agreement. "Restrictive Covenants Agreement" shall
have the meaning specified in Section 5.5 of this Agreement.
Scheduled Closing Time. "Scheduled Closing Time" shall have the meaning
specified in Section 1.3 of this Agreement.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
Secretary of State. "Secretary of State" shall have the meaning specified
in Section 1.3 of this Agreement.
Securities Act. "Securities Act" shall mean the Securities Act of 1933.
Share Subscription Agreement. "Share Subscription Agreement" shall have the
meaning specified in Section 5.7 of this Agreement.
Shareholder Documents. "Shareholder Documents" shall mean this Agreement
and the other documents and agreements required to be executed and delivered by
the Shareholders hereunder.
Escrow Agreement. "Escrow Agreement" shall have the meaning specified in
Section 9.5 of this Agreement.
Surviving Corporation. "Surviving Corporation" shall have the meaning
specified in Section 1.1 of the Agreement.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
Triangle Common Stock. "Triangle Common Stock" shall have the meaning
specified in Section 1.7(b) of this Agreement.
Triangle Closing Certificate. "Triangle Closing Certificate" shall have the
meaning specified in Section 7.4(b) of this Agreement.
Triangle Documents. "Triangle Documents" shall mean this Agreement and the
other documents and agreements required to be executed and delivered by Triangle
or FAC hereunder.
Triangle SEC Documents. "Triangle SEC Documents" shall have the meaning
specified in Section 3.5(a) of this Agreement.
Unaudited Balance Sheet. Unaudited Balance Sheet shall have the meaning
specified in Section 2.8(a)(ii) of this Agreement.
<PAGE>
EXHIBIT C
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
1. Directors:
Vito A. Bellezza
2. Officers:
President: Van Saliba
Secretary: Harold S. Fischer
<PAGE>
EXHIBIT D
ASSIGNMENT OF PROMISSORY NOTE
THIS ASSIGNMENT AGREEMENT is made and entered into this 22nd day of
May, 1998, by and between FCB Acquisition Corp., a Florida corporation
(hereinafter referred to as "Assignor") and Howard M. Watch, an individual
resident of the State of Florida (hereinafter referred to as "Assignee");
W I T N E S S E T H:
WHEREAS, Financial Resource Systems, Inc., a Florida corporation
executed and delivered a promissory note payable to Assignor on or about April
6, 1998, in the original principal amount of $32,000.00 (the "Promissory Note"),
a copy of which is attached hereto as Exhibit A and is incorporated herein by
this reference, in consideration for the investment by Assignor in FRS; and
WHEREAS, in consideration for the entry into and performance by
Assignee of his obligations under that certain Agreement and Plan of Merger and
Reorganization (the "Merger Agreement") by and among Assignor, Assignee,
Triangle Imaging Group, Inc., a Florida corporation, QuickCREDIT Corp., Inc., a
Florida corporation, and Florida Credit Bureau, Inc., Assignor covenanted and
agreed in the Merger Agreement to convey, transfer and assign all interest,
right and title of Assignor in and to the Promissory Note to Assignee;
NOW, THEREFORE, in consideration of the mutual terms, covenants,
conditions and agreements in the Merger Agreement and hereinafter contained and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged by each of the parties, it is hereby agreed by and among the
parties as follows:
1. Assignor hereby transfers, assigns, conveys and sets over to Assignee all of
Assignor's right, title and interest in and to the Promissory Note together with
all proceeds derived therefrom and any and all security instruments securing the
payment of the indebtedness evidenced thereby.
2. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement under seal as of the date first above written.
ASSIGNOR
FCB Acquisition Corp.
A Florida corporation
____________________________________________
Van Saliba, President
[CORPORATE SEAL]
ASSIGNEE
Howard M. Watch
A Florida resident
____________________________________________
Howard M. Watch
<PAGE>
EXHIBIT E
ASSIGNMENT OF BANK ACCOUNTS
THIS ASSIGNMENT AGREEMENT is made and entered into this 22nd day of
May, 1998, by and between FCB Acquisition Corp., a Florida corporation
(hereinafter referred to as "Assignor") and Howard M. Watch, an individual
resident of the State of Florida (hereinafter referred to as "Assignee");
W I T N E S S E T H:
WHEREAS, in consideration for the entry into and performance by
Assignee of his obligations under that certain Agreement and Plan of Merger and
Reorganization (the "Merger Agreement") by and among Assignor, Assignee,
Triangle Imaging Group, Inc., a Florida corporation, QuickCREDIT Corp., Inc., a
Florida corporation, and Florida Credit Bureau, Inc., Assignor covenanted and
agreed in the Merger Agreement to convey, transfer and assign all interest,
right and title of Assignor in and to FCB's Operating Account, account number
016604003538, and FCB'S Money Market Account, account number 01606018916(the
"Bank Accounts"), to Assignee;
NOW, THEREFORE, in consideration of the mutual terms, covenants,
conditions and agreements in the Merger Agreement and hereinafter contained and
for other good and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged by each of the parties, it is hereby agreed by
and among the parties as follows:
1. Assignor hereby transfers, assigns, conveys and sets over to Assignee all of
Assignor's right, title and interest in and to the Bank Accounts.
2. Assignee hereby agrees to indemnify and hold harmless Assignor, and
its successors and assigns, from and against any and all direct or indirect
demands, claims, obligations, recoveries, deficiencies, fines, penalties,
interest, assessments, actions, liens, suits, proceedings, judgments, losses,
damages, and costs and expenses of any kind, by reason of, resulting from or
arising out of any overdraft, assertion of nonsufficient funds, or other claim
that the cash balance in either or both of the Bank Accounts is at any time
insufficient to cover, pay, or otherwise satisfy any claim for payment or any
withdrawal, transfer, draft or other instrument drawn against or otherwise
giving a claim of right to the cash balance in either of the Bank Accounts.
3. Assignee hereby agrees to close the Bank Accounts within ten (10)
business days of the date hereof.
4. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement under seal as of the date first above written.
ASSIGNOR
FCB Acquisition Corp.
A Florida corporation
____________________________________________
Van Saliba, President
[CORPORATE SEAL]
ASSIGNEE
Howard M. Watch
A Florida resident
____________________________________________
Howard M. Watch
<PAGE>
EXHIBIT F
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 22nd day of May, 1998, by and between FCB ACQUISITION CORP., a Florida
corporation (the "Company"), and HOWARD M. WATCH, an individual resident of the
State of Florida ("Employee").
W I T N E S S E T H:
WHEREAS, the Company and Employee are parties to that certain Agreement
and Plan of Merger and Reorganization, dated as of May 22, 1998 (the "Merger
Agreement"), which contemplates the execution of this Agreement; and
WHEREAS, the Company desires to retain Employee, and Employee desires
to be retained by the Company, all in accordance with the terms and conditions
of the Merger Agreement and as hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual premises,
covenants and agreements set forth herein and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions set forth in this Agreement, the Company
shall employ Employee, and Employee shall serve the Company as office manager.
Employee shall report to, and be subject to the supervisory authority of the
chief executive officer (the "CEO") of the Company or such other person as the
CEO may designate.
(b) At all times during the term hereof, Employee shall, for the benefit of the
Company, use his skills, knowledge and specialized training to perform the
duties and exercise the powers, functions and discretions incident to his
position as office manager (including preserving the Company's current base of
clients) or which from time to time, consistent with such position may be
assigned to or vested in him by the CEO or board of directors of the Company
(the "Board"), in an efficient and competent manner and on such terms and
subject to such restrictions as the CEO or the Board may from time to time
reasonably impose.
(c) At all times during the term hereof, Employee shall during normal working
hours, devote such time and attention as are reasonably necessary to his duties
hereunder (reasonable vacation time and absence for sickness or similar
disability excepted).
2. Term. The term of this Agreement shall begin as of the date hereof (the
"Effective Date") and shall end on the first anniversary date following the
Effective Date unless terminated earlier as provided in this Agreement.
Following expiration of the initial term, this Agreement shall continue on a
month-to-month basis, terminable by either party with or without cause upon
thirty (30) days written notice to the other party.
3. Compensation.
(a) Subject to the terms of this Agreement, as compensation for Employee's
services, the Company shall pay Employee an annual salary of $60,000 per year.
Employee's salary shall be payable to Employee on the regularly reoccurring pay
period established by the Company, but not less than monthly.
(b) In addition to the salary described in subsection 3(a) above, Employee shall
be entitled to reimbursement by the Company for all actual, reasonable and
direct expenses incurred by him in the performance of his duties hereunder,
provided such expenses (i) are business expenses that are properly tax
deductible for the Company (ii) were pre-approved by an appropriate officer of
the Company and (iii) were otherwise incurred in accordance with the policies
and procedures established by the Company from time to time. Employee shall
provide the Company with written documentation of any expenses submitted for
reimbursement as required by Company policy, and reimbursement for each item of
approved expense shall be made within a reasonable time.
4. Employment Benefits.
(a) Employee shall be entitled to the company benefits and vacation days set
forth on Exhibit "A" attached hereto and made a part hereof. The Company
reserves the right, in its sole discretion, to alter, amend or discontinue any
of such employee benefit programs at any time.
(b) Employee acknowledges that the Company may adopt employee handbooks,
policies and procedures from time to time and Employee agrees to adhere to the
terms of any handbook, policy or procedures which the Company may adopt. The
Company reserves the right, in its sole discretion, to alter, amend or terminate
any handbook, policy or procedure.
5. Termination of Employment.
(a) If the Company terminates Employee's employment With Cause (as hereinafter
defined), all obligations of Company to provide compensation and benefits under
this Agreement shall cease as of the effective date of, and Employee shall have
no claim against the Company for damages or otherwise by reason of, such
termination.
(b) If during the term of this Agreement, the Company terminates Employee's
employment Without Cause (as hereinafter defined), then Employee will be
entitled to continue to receive Employee's salary on the regularly reoccurring
pay period of the Company until the end of the first anniversary of the
Effective Date ("Post-termination Compensation") as liquidated damages and in
lieu of any other compensation or claims in connection with such termination or
Employee's employment with the Company; provided, however, that the Company may,
in its sole discretion, elect to pay Employee's post-termination Compensation in
one payment. Provided, further, that Employee's Post-termination Compensation
shall cease to accrue and Employee shall have no further entitlement to the same
from and after the earlier of the Employee's death, or the date of a material
breach by Employee of any of the post-employment covenants set forth in this
Agreement or of any of the representations, warranties and covenants of Employee
contained in the Merger Agreement which breach results in any harm, cost or
expense, whether direct or indirect, to the Company. The Company may condition
payment of Post-termination Compensation, whether such payments are made in
accordance with the Company's regularly reoccurring pay schedule or are paid in
a single payment, upon Employee's execution of an unconditional release in favor
of the Company of all obligations of the Company under this Agreement.
(c) "With Cause" means the termination of employment resulting from:
(i) any act or omission which constitutes a material breach by Employee of his
obligations under this Agreement or of the representations, warranties and
covenants under the Merger Agreement which results in any harm, cost or expense,
whether direct or indirect, to the Company;
(ii) the conviction of Employee in a court of competent jurisdiction of a felony
or any crime involving moral turpitude, fraud or dishonesty;
(iii) the perpetration by Employee of any act of material misconduct or
dishonesty whether relating to the Company, the Company's employees or
otherwise, including, without limitation, entering into any secret agreement,
orally or in writing, with a competitor of the Company or with a client of the
Company;
(iv) the use of illegal drugs by the Employee, or drunkenness or substance abuse
by the Employee which interferes with the performance of his duties hereunder;
(v) gross incompetence on the part of Employee in the performance of his
duties hereunder;
(vi) Employee's failure, refusal or inability to follow any lawful directives of
the Board, the CEO or any person designated by the CEO to serve as Employee's
supervisor;
(vii) taking secret charges on transactions between the Company and third
parties; or
(viii) any other act or omission (other than an act or omission resulting from
the exercise by Employee of good faith business judgment) which materially
impairs the financial condition or business reputation of the Company.
(d) "Without Cause" means the termination of employment resulting from any
reason other than those enumerated in subsection (c) above.
6. Final Settlement and Effect of Termination.
(a) Upon termination of this Agreement and payment to Employee of all amounts
due Employee hereunder, Employee or his representative shall execute and deliver
to the Company, on a form prepared by the Company, a receipt for such sums and a
release of all claims for payment due pursuant to this Agreement, except such
claims as may have been submitted pursuant to the terms of this Agreement and
which remain unpaid.
(b) The provisions of this Agreement shall survive the termination of this
Agreement and the termination of Employee's employment with the Company to the
extent required to give full effect to the covenants and agreements contained
herein.
7. Confidentiality.
(a) Employee agrees that, both during the term of his employment and after the
termination of his employment for any reason, Employee shall not directly or
indirectly use or disclose, except as authorized by the Company in connection
with the performance of Employee's duties, any Confidential Information, as
defined hereinafter, that Employee may have or acquire (whether or not developed
or compiled by Employee and whether or not Employee has been authorized to have
access to such Confidential Information) during the term of this Agreement. The
term "Confidential Information" as used in this Agreement shall mean and include
any information, data and know-how relating to the business of the Company that
is disclosed to Employee by the Company or known by him as a result of his
relationship with the Company and not within the public domain (whether
constituting a trade secret or not), including without limitation, the following
information:
(i) financial information, such as Company's earnings, assets, debts, prices,
fee structure, volumes of purchases or sales or other financial data, whether
relating to Company generally, or to particular products, services, geographic
areas, or time periods;
(ii) marketing information, such as details about ongoing or proposed marketing
programs or agreements by or on behalf of Company, marketing forecasts or
results of marketing efforts or information about impending transactions;
(iii) intellectual property information, such as formulas, design details or
parameters, software source code, proprietary programs, devises, techniques and
processes, ongoing or planned activities in intellectual property development,
ongoing or planned joint venture activities, and licensing terms or conditions;
(iv) personnel information, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed promotions,
hiring, resignations, disciplinary actions, terminations or reasons therefor,
training methods, performance, or other employee information;
(v) customer information, such as any compilation of past, existing or
prospective customers, customer proposals or agreements between customers and
Company, status of customer accounts or credit, or related information about
actual or prospective customers; or
(vi) information with respect to any customer affairs that the Company
agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
client to which such information pertains.
(b) The covenant contained in this Section 7 shall survive the termination of
Employee's employment with the Company for any reason for a period of two (2)
years; provided, however, that with respect to those items of Confidential
Information which constitute trade secrets under applicable law, Employee's
obligations of confidentiality and non-disclosure as set forth in this Section 7
shall continue to survive after such two (2) year period for as long as such
items remain trade secrets under applicable law. These rights of the Company are
in addition to those rights the Company has under the common law, applicable
statutes for the protection of trade secrets or any other agreement between the
Company and Employee respecting the subject matter hereof.
8. Rights to Materials. All records, files, memoranda, reports, price lists,
customer lists, drawings, plans, sketches, documents and the like (together with
all copies thereof) relating to the business of the Company, which Employee
shall use or prepare or come in contact with in the course of, or as a result
of, his employment shall, as between the parties hereto, remain the sole
property of the Company. Upon the termination of his employment or upon the
prior demand of the Company, he shall immediately return all such materials and
shall not thereafter cause removal thereof from the premises of the Company.
9. Works Made for Hire. The Company and Employee acknowledge that in the course
of Employee's employment by the Company, Employee may from time to time create
for the Company copyrightable works. Such works may consist of manuals,
pamphlets, instructional materials, computer programs, films, tapes or other
copyrightable material, or portions thereof, and may be created within or
without the Company's facilities and before, during or after normal business
hours. All such works related to or useful in the business of the Company are
specifically intended to be works made for hire and shall be the property of the
Company, and Employee shall cooperate with the Company in the protection of the
Company's copyrights therein and, to the extent deemed desirable by the Company,
the registration of such copyrights.
10. Discoveries. Employee agrees that any inventions, discoveries or
improvements that Employee may develop or conceive during the course of
Employee's employment shall be the sole property of the Company. Employee agrees
to promptly disclose to the Company in writing all such inventions, discoveries
and improvements, whether directly or indirectly related to the business of the
Company or whether made solely by the Employee or in conjunction with others. At
the Company's request and expense, both during and after Employee's employment,
Employee will promptly execute a specific assignment of title to the Company (or
any specified member thereof) of each invention, discovery or improvement
described in the preceding paragraph, and perform all other acts reasonably
necessary to enable the Company to secure a patent therefor in the United States
and in foreign countries and to maintain, defend and assert such patents. This
obligation shall survive the termination or expiration of this Agreement.
11. Severability. Except as noted below, should any provision of this Agreement
be declared or determined by any court of competent jurisdiction to be
unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the
invalid or unenforceable part, term or provision shall be deemed not to be a
part of this Agreement. The covenants set forth in this Agreement are to be
reformed pursuant to Section 12 if held to be unreasonable or enforceable, in
whole or in part, and, as written and as reformed, shall be deemed to be part of
this Agreement.
12. Reformation. If any of the covenants or promises of this Agreement are
determined by any court of law or equity, with jurisdiction over this matter, to
be overly broad and therefore unenforceable, in whole or in part, as written,
Employee hereby consents to and affirmatively requests that said court narrow
the scope of the covenant or promise so as to be reasonable and enforceable and
that said court enforce the covenant or promise as so reformed.
13. Injunctive Relief. Employee understands, acknowledges and agrees that in the
event of a breach or threatened breach of any of the covenants and promises
contained in Sections 7, 8, 9 and 10, the Company will suffer irreparable injury
for which there is no adequate remedy at law and the Company will therefore be
entitled to injunctive relief enjoining said breach or threatened breach.
Employee further acknowledges, however, that the Company shall have the right to
seek a remedy at law as well as or in lieu of equitable relief in the event of
any such breach.
14. Assignment. This Agreement is a contract for personal services and shall not
be assigned by the Company or Employee in any manner or by operation of law
except by mutual written consent of the parties hereto; provided, however, that
this restriction against assignment shall not preclude assignment by the Company
without the consent of Employee as a result of a merger into, consolidation
with, or sale of substantially all of the assets of the Company to another
entity. The terms and provisions of this Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns, and upon
Employee and his heirs and personal representatives. The term "Company" as used
in this Agreement shall be deemed to include the successors and assigns of the
original or any subsequent entity constituting the Company as well as any and
all divisions, subsidiaries, or affiliates thereof.
15. Waiver. The waiver by any party to this Agreement of a breach of any of the
provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent or simultaneous breach.
16. Applicable Law. This Agreement shall be governed by, interpreted and
construed under the internal laws of the State of Florida without reference to
its conflict of laws principles.
17. Headings and Captions. The headings and captions used in this Agreement are
for convenience of reference only, and shall in no way define, limit, expand or
otherwise affect the meaning or construction of any provision of this Agreement.
18. Notice. Any notice required or permitted to be given pursuant to this
Agreement shall be deemed sufficiently given when delivered in person or when
deposited, properly addressed, in the United States mail, first class postage
prepaid, return receipt requested.
19. Gender. All pronouns or any variations thereof contained in this Agreement
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person or persons may require.
20. Entire Agreement. This Agreement constitutes the entire agreement between
the Company and Employee with respect to the subject matter of this Agreement
and supersedes any prior agreements or understandings between the Company and
Employee with respect to such subject matter. No amendment or waiver of this
Agreement or any provision hereof shall be effective unless in writing signed by
both of the parties. Notwithstanding the foregoing, Employee acknowledges that
he is entering into this Agreement in connection with the acquisition of Florida
Credit Bureau, Inc. ("FCB"), by the Company pursuant to the Merger Agreement, to
which Employee is a party. In the event of any direct or irreconcilable conflict
between this Agreement and the Merger Agreement, the Merger Agreement shall
control.
21. Termination of Merger Agreement. In the event the Merger Agreement is
terminated in accordance with its terms prior to consummation of the Merger,
this Agreement shall be null and void.
IN WITNESS WHEREOF, the Company and Employee have caused this Agreement
to be executed, under seal, as of the date and year first above written.
"COMPANY"
FCB ACQUISITION CORP.
a Florida corporation
By:_______________________________________
Name: Van Saliba
Title: President
[CORPORATE SEAL]
"EMPLOYEE"
____________________________________(L.S.)
HOWARD M. WATCH
<PAGE>
EXHIBIT "A"
COMPANY BENEFITS
The normal benefits enjoyed by all Triangle employees, including life,
medical, dental, disability insurance and participation in the Triangle 401(k)
Plan.
<PAGE>
EXHIBIT G
RESTRICTIVE COVENANTS AGREEMENT
THIS RESTRICTIVE COVENANTS AGREEMENT (this "Agreement") is dated as of
May 22, 1998, by and among Triangle Imaging Group, Inc., a Florida corporation
("Triangle"), QuickCREDIT Corp., a Florida corporation ("QuickCREDIT"), FCB
Acquisition Corp., a Florida corporation ("FAC") (Triangle, QuickCREDIT and FAC
collectively referred to as "Acquirors") and Howard M. Watch, an individual
resident of the State of Florida ("Shareholder").
W I T N E S S E T H:
WHEREAS, Triangle, QuickCREDIT, FAC and Shareholder have entered into an
Agreement and Plan of Merger and Reorganization (the "Merger Agreement")
providing for the merger of Florida Credit Bureau, Inc. ("FCB") with and into
FAC, with FAC being the surviving corporation of such merger (the "Surviving
Corporation"); and
WHEREAS, Shareholder is a shareholder and executive officer of FCB, and
such position has placed Shareholder in a position of confidence and trust with
respect to FCB; and
WHEREAS, the Merger Agreement requires that Shareholder enter into this
Agreement as a condition precedent to the merger of FCB and FAC; and
WHEREAS, in consideration of Acquiror's covenants in the Merger
Agreement and to induce Buyer to acquire FCB, the Shareholder is willing to
enter into this Agreement and to comply with the restrictive covenants contained
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements of the parties hereto, and for other good and valuable consideration,
including, without limitation, the Merger Consideration, as defined in the
Merger Agreement, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Definitions. The following terms shall have the meanings set forth below for
purposes of this Agreement:
(a) The term "Area" shall mean the state of Florida.
(b) The term "Confidential Information" shall mean and include any information,
data and know-how relating to the business of Triangle, QuickCREDIT, FCB or the
Surviving Corporation and not generally within the public domain (whether
constituting a trade secret or not) including without limitation the following
information:
(i) financial information, such as the earnings, assets, debts, prices, fee
structures, projections, budgets, margins, tax information or other financial
data of the business of Triangle, QuickCREDIT, FCB or the Surviving Corporation,
whether relating to the business of Triangle, QuickCREDIT, FCB or the Surviving
Corporation generally, or to particular, services, geographic areas or time
periods;
(ii) product and service information, such as information concerning the goods
and services used or purchased by Triangle, QuickCREDIT, FCB or the Surviving
Corporation, know-how, techniques, codes, development plans, manuals, the
identities of suppliers and consultants, terms of supply and consulting
contracts, or of particular transactions, or related information about potential
suppliers and consultants, to the extent that such information is not generally
known to the public, and to the extent that the combination of suppliers or use
of a particular supplier or consultant, though generally known or available,
yields advantages to Triangle, QuickCREDIT, FCB or the Surviving Corporation the
details of which are not generally known;
(iii) marketing information, such as details about ongoing or proposed marketing
programs, strategies or agreements by or on behalf of Triangle, QuickCREDIT, FCB
or the Surviving Corporation, marketing forecasts or strategies or results of
marketing efforts or information about impending transactions;
(iv) personnel information, such as employees' personal or medical histories,
compensation or other terms of employment, actual or proposed promotions,
hirings, resignations, disciplinary actions, terminations or reasons therefor,
training methods, performance, or other employee information;
(v) customer information, such as any compilations or lists of past, existing or
prospective customers, proposals, bids or agreements between customers and
Triangle, QuickCREDIT, FCB or the Surviving Corporation, status of customer
accounts or credit, or related information about actual or prospective
customers; and
(vi) operations information, such as software, systems, techniques used and
developed by Triangle, QuickCREDIT, FCB or the Surviving Corporation, operations
manuals and personnel manuals.
The term "Confidential Information" does not include information that
has become generally available to the public by the act of one who has the right
to disclose such information without violating any right of Triangle,
QuickCREDIT, FCB or the Surviving Corporation, as the case may be.
(c) The term "Competing Business" shall mean and include any proprietorship,
partnership, joint venture, business trust, corporation, association or other
entity or person (other than Triangle, QuickCREDIT or the Surviving Corporation
and any successor of Triangle, QuickCREDIT or the Surviving Corporation) engaged
at the time of such determination in the business of credit reporting.
(d) The term "Customer" or "Customers" shall mean any person, partnership,
association, firm, corporation or other entities which at the time of
determination has purchased, during the previous two year period, any services
or products from Triangle, QuickCREDIT, FCB or the Surviving Corporation or
which has been actively sought as a prospective customer of Triangle,
QuickCREDIT, FCB or the Surviving Corporation during such period.
2. Acknowledgments. The Shareholder acknowledges that this Agreement is being
executed and delivered ancillary to the acquisition of FCB for separately
bargained-for consideration. The Shareholder further acknowledges that FCB is a
highly competitive business, strongly dependent upon personal contacts with
Customers and potential Customers and the establishment of trust and confidence
in relationships between the owners and executive officers of FCB and its
Customers. The Shareholder agrees that Triangle, QuickCREDIT and the Surviving
Corporation would suffer great loss and damage if the Shareholder, on
Shareholder's own behalf or on behalf of any Competing Business, were to engage
in a business competitive with Triangle, QuickCREDIT or the Surviving
Corporation.
3. Covenants. Recognizing the need of Triangle, QuickCREDIT and the Surviving
Corporation to protect their legitimate business interests, including the
goodwill of FCB acquired in the merger, and to induce Triangle, QuickCREDIT and
the Surviving Corporation to enter into and perform their respective obligations
under the Merger Agreement, Shareholder covenants and agrees with Triangle,
QuickCREDIT and the Surviving Corporation as follows:
(a) that Shareholder will not from the date of this Agreement until two (2)
years following the date hereof, for whatever reason, either directly or
indirectly:
(i) within the Area, solicit the sale or lease on Shareholder's own behalf or in
the service of or on behalf of any Competing Business, any product or service
similar to or in competition with the existing products or services of Triangle,
QuickCREDIT or the Surviving Corporation or any successor to the business of
Triangle, QuickCREDIT or the Surviving Corporation;
(ii) within the Area, either directly or indirectly, engage, participate, invest
in (other than to hold 1% or less of any class of securities of a public
company) or assist, as owner, part-owner, stockholder, partner, director,
officer, trustee, employee, agent, consultant or any other capacity, any
Competing Business;
(iii) solicit or attempt to solicit, directly or by assisting others, any
business from a Customer of Triangle, QuickCREDIT or the Surviving Corporation
for purposes of providing products or services in competition with Triangle,
QuickCREDIT or the Surviving Corporation.
(iv) employ or attempt to employ or assist anyone else in employing in any
Competing Business any employee of the Triangle, QuickCREDIT or the Surviving
Corporation (whether or not such employment is full or part time or pursuant to
a written or oral contract).
(b) that Shareholder will not for a period of five (5) years from the date
hereof, for whatever reason, disclose or use or otherwise exploit for
Shareholder's own benefit, for the benefit of any other person, or for the
benefit of any Competing Business, any Confidential Information; provided,
however, that to the extent any Confidential Information constitutes a trade
secret under applicable law, the restrictions contained in this Section 3(b)
shall continue to apply for so long as such information remains a trade secret.
4. Remedies. Shareholder acknowledges that irreparable loss and injury would
result to Triangle, QuickCREDIT and the Surviving Corporation upon any breach by
Shareholder of any of the covenants contained in this Agreement and that damages
arising out of such breach would be difficult to ascertain. Shareholder agrees
that, in addition to all other remedies provided at law or in equity, Triangle,
QuickCREDIT and the Surviving Corporation , or each of them, may petition and
obtain from a court of law or equity, without bond, both temporary and permanent
injunctive relief to prevent a breach by Shareholder of any such covenant.
5. Miscellaneous.
(a) The terms and provisions of this Agreement shall inure to the benefit of and
be binding upon Acquirors, the Surviving Corporation and their successors and
assigns, and upon the Shareholder and Shareholder's heirs and personal
representatives. The rights of Triangle, QuickCREDIT and the Surviving
Corporation hereunder may be assigned, without the consent of Shareholder, by
Triangle, QuickCREDIT and the Surviving Corporation to any successor to the
business of Triangle, QuickCREDIT, or the surviving Corporation, whether by
merger, sale of stock, sale of assets or other transaction.
(b) This Agreement constitutes the entire Agreement between the parties hereto
concerning the subject matter hereof. This Agreement shall not be altered,
modified, amended or terminated except by written instrument executed by the
parties hereto.
(c) This Agreement, and the rights and liabilities of the parties hereto, shall
be construed in all respects in accordance with the laws of the State of
Florida.
(d) The covenants contained in this Agreement are separate and severable and the
invalidity or unenforceability of any one or more covenants, shall not affect
the validity or enforceability of any other covenant contained herein. It is the
intention of the parties hereto that the provisions of this Agreement shall be
enforced to the fullest extent permissible under the laws and public policies of
each jurisdiction in which such enforcement is sought, but that the
enforceability (or judicial modification to conform with such laws and public
policies, which the parties hereby expressly authorize), of any provision hereof
shall not render unenforceable or impair the remainder of this agreement, which
shall be deemed amended to delete or modify, as necessary, the invalid or
unenforceable portions. The parties hereto acknowledge and agree that for
purposes of judicial interpretation or enforcement of this Agreement, this
Agreement shall be deemed to have been executed and delivered ancillary to the
sale of a business.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TRIANGLE IMAGING GROUP, INC.
___________________________________________
By: Vito A. Bellezza
Title: Chairman and Chief Executive Officer
QUICKCREDIT CORP.
___________________________________________
By: Van Saliba
Title: President
FCB ACQUISITION CORP.
___________________________________________
By: Van Saliba
Title: President
SHAREHOLDER
___________________________________________
By: Howard M. Watch
<PAGE>
EXHIBIT H
RELEASE
THIS RELEASE (the "Agreement") is executed and delivered as of May 22, 1998
by Howard M. Watch, an individual resident of the State of Florida (the
"Shareholder") in favor of, and for the benefit of, Triangle Imaging Group,
Inc., a Florida corporation ("Triangle"), QuickCREDIT Corp., a Florida
corporation ("QuickCREDIT"), FCB Acquisition Corp., a Florida corporation
("FAC") and the Representatives of the foregoing corporations (as defined
below).
WHEREAS, the Shareholder has entered into an Agreement and Plan of Merger
and Reorganization, dated as of May 22, 1998 (the "Merger Agreement"), by and
among Triangle, QuickCREDIT, FAC, Florida Credit Bureau, Inc., a Florida
corporation ("FCB"), and the Shareholder, whereby FCB shall merge with and into
FAC at which time FCB shall cease to exist (the "Merger") and FAC shall continue
as the surviving corporation in the Merger (the "Surviving Corporation"); and
WHEREAS, pursuant to the requirements of Section 5.6 of the Merger
Agreement, and as a condition to closing and effecting the Merger, the
Shareholder is required to release and forever discharge Triangle, QuickCREDIT,
FAC and the Surviving Corporation and each of their respective directors,
officers, agents and employees, attorneys and stockholders (collectively,
"Representatives"), and the Shareholder is willing to so release and discharge
Triangle, QuickCREDIT, FAC and the Surviving Corporation and each of their
respective past, present and future Representatives in consideration of the
direct personal benefit to be derived by the Shareholder from the Merger;
NOW, THEREFORE, for and in consideration of the premises and the promises,
undertakings and covenants set forth herein, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
1. Release by the Shareholder. The Shareholder, for himself and his
respective heirs, personal representatives, successors and assigns, hereby
releases and forever discharges Triangle, QuickCREDIT, FAC and the Surviving
Corporation, their respective affiliates, successors and assigns, and each of
their respective past, present or future Representatives, of and from any and
all causes of action and claims for relief of any kind and nature whatsoever,
known and unknown, anticipated and unanticipated, absolute or contingent, past,
present and future, for or on account of any and all losses, injuries, or
damages, including all consequential, incidental, and derivative damages of any
kind and nature, arising on or before the Closing Date (as defined in the Merger
Agreement), resulting or to result from or in any way growing out of the
previous employment relationship between the Shareholder and FCB prior to the
Closing Date, and all other matters of every type or nature which, directly or
indirectly, relate to or concern any relationship between the Shareholder and
FCB and their respective affiliates, successors and assigns, and each of their
respective past, present or future Representatives, prior to the Closing Date,
except (i) claims for regular compensation and benefits accrued and payable to
the Shareholder with respect to periods beginning prior to the Closing Date, as
applicable, in each case consistent with FCB's normal policies for such payments
as disclosed to Triangle, QuickCREDIT and FAC, (ii) claims against Triangle,
QuickCREDIT and FAC for breach of the Merger Agreement, and (iii) claims for
indemnification for actions taken by the Shareholder in his capacity as an
officer or director of FCB to the extent FCB is otherwise legally obligated to
so indemnify the Shareholder (collectively, the "Unreleased Claims").
2. Representations of the Shareholder. The Shareholder hereby represents
and warrants to Triangle, QuickCREDIT, FAC and the Surviving Corporation that
the Shareholder has not at any time assigned any claim that the Shareholder may
have had, now has, or may hereafter have against Triangle, QuickCREDIT, FAC,
FCB, the Surviving Corporation or their respective affiliates, successors or
assigns, or each of their past, present or future Representatives, and for
themselves and their respective heirs, personal representatives, successors and
assigns, hereby covenant and agree with Triangle, QuickCREDIT, FAC and the
Surviving Corporation, that they shall not hereafter take any action to assign
or assist in the assignment of any such claim, other than an Unreleased Claim.
3. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida.
4. Severability of Provisions. Wherever possible, each provision of this
Agreement shall be interpreted to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, said provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed and delivered under seal as of the day and year first written above.
_____________________________________(SEAL)
Name: Howard M. Watch
<PAGE>
EXHIBIT I
IMPORTANT INFORMATION FOR SUBSCRIBER
THE SECURITIES PURCHASED PURSUANT TO THE SUBSCRIPTION AGREEMENT SET FORTH BELOW
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, AS AMENDED (COLLECTIVELY, THE
"ACTS"), OR ANY OTHER APPLICABLE BLUE SKY LAW, AND CANNOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS SUCH SECURITIES (i) ARE REGISTERED UNDER SUCH ACTS, (ii) IN
THE OPINION OF LEGAL COUNSEL AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE OR
(iii) THE REQUEST FOR TRANSFER IS ACCOMPANIED BY NO-ACTION LETTERS FROM THE
SECURITIES AND EXCHANGE COMMISSION AND THE APPLICABLE STATE SECURITIES
COMMISSION. BECAUSE THE SECURITIES ARE NOT REGISTERED UNDER THE ACTS,
SUBSCRIBERS MUST BEAR THE ECONOMIC RISK OF INVESTMENT IN SUCH SECURITIES FOR AN
INDEFINITE PERIOD OF TIME. CERTIFICATES REPRESENTING SUCH SECURITIES WILL BEAR A
LEGEND BRIEFLY DESCRIBING RESTRICTIONS WITH RESPECT TO THE TRANSFER THEREOF AND
A STOP-TRANSFER ORDER WITH RESPECT TO SUCH SECURITIES WILL BE PLACED WITH THE
CORPORATION'S TRANSFER AGENT (OR NOTED IN THE CORPORATION'S RECORDS) BEFORE
CERTIFICATES REPRESENTING ANY SECURITIES SUBSCRIBED WILL BE ISSUED.
SHARE SUBSCRIPTION AGREEMENT
TO THE BOARD OF DIRECTORS OF Triangle Imaging Group, Inc., a
corporation organized and incorporated under the laws of the State of Florida
(the "Corporation"):
1. Subscription. The undersigned, HOWARD M. WATCH ("Subscriber"),
hereby subscribes for 50,000 shares of common stock of the Corporation, $.0001
par value (the "Shares"), for the aggregate consideration described in that
certain Agreement and Plan of Merger and Reorganization (the "Merger Agreement")
dated as of May 22, 1998, by and among the Corporation, QuickCREDIT Corp., a
Florida corporation and wholly-owned subsidiary of the Corporation
("QuickCREDIT"), FCB Acquisition Corp., a Florida corporation and wholly-owned
subsidiary of QuickCREDIT, Florida Credit Bureau, Inc., a Florida corporation
("FCB") and Subscriber, an individual resident of the State of Florida and the
sole shareholder of FCB.
2. Restrictions. Subscriber understands that the Shares have not been
registered under the Acts, or any other applicable "blue sky" law, and will be
issued in reliance upon certain exemptions from registration thereunder.
Subscriber understands that the statutory basis for such exemptions is dependent
upon Subscriber's undertaking to acquire the Shares for purposes of investment
for its own account, not as a nominee or agent, and without the intent of
reselling or disposing of the Shares, or otherwise participating directly or
indirectly in a distribution thereof. Subscriber further understands that by
reason of the exemptions to be relied upon in connection with their issuance,
the Shares issued to Subscriber will not be freely transferable and that any
proposed sale or other transfer of the Shares may be prohibited and will in any
event be subject to significant restrictions. Any certificates representing the
Shares will bear a legend to such effect, and a stop-transfer order with respect
to the Shares will be placed with the Corporation's transfer agent (or noted in
the Corporation's records if the Corporation acts as its own transfer agent in
respect of the Shares).
3. Representations and Warranties of Subscriber. Subscriber hereby
represents and warrants to, and agrees with, the Corporation as follows:
(a) The Shares are being acquired by Subscriber for Subscriber's own
account, not as a nominee or agent, and not with a view to, or for, resale,
transfer or distribution;
(b) Subscriber has no intention of participating directly or indirectly in
a distribution of the Shares;
(c) Subscriber has such knowledge and experience in financial and business
matters that Subscriber is capable of evaluating the merits and risks of this
investment;
(d) Subscriber has received and reviewed copies of the Corporation's filings
with the United States Securities and Exchange Commission listed on Exhibit A
hereto.
(e) Subscriber has had access during the course of the transactions as
contemplated in the Merger Agreement and prior to its acquisition of the Shares
to such additional information relating to the Corporation as Subscriber has
desired and has been given the opportunity to (i) ask questions of, and receive
answers from, the Corporation and its representatives concerning the Corporation
and the terms and conditions of the issuance of the Shares, and (ii) obtain any
additional information that the Corporation possesses or can reasonably obtain
that is necessary to verify the accuracy of information furnished by the
Corporation in connection herewith;
(f) Subscriber is an accredited investor as that term is defined in Section
501(a) under Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act of 1933. Subscriber is capable of bearing the economic
risks of the investment in the Shares, including loss of the entire investment,
and if Subscriber deems it necessary to do so, has reviewed the merits of the
investment with his tax and legal counsel and with investment adviser(s), and
Subscriber understands the merits and risks of this investment; and
(g) Subscriber has accurately completed the accredited Investor Questionnaire
attached hereto as Exhibit B and has executed such Questionnaire, and any
applicable exhibits thereto, where required.
(h) Subscriber has evaluated the risks of this investment and has determined the
Corporation is a suitable investment.
4. Representations of the Corporation. The Corporation hereby
represents and warrants to Subscriber as follows:
(a) The Corporation is a corporation organized and in good standing under
the laws of the State of Florida;
(b) All corporate action on the part of the Corporation necessary for
authorization in respect of the Corporation's issuance of the Shares as
contemplated hereunder has been (or shall be) taken prior to the date of the
Corporation's execution of this Share Subscription Agreement;
(c) The Corporation's execution of this Share Subscription Agreement and
issuance of the Shares as contemplated hereunder will not conflict with or
violate any provision of the Certificate of Incorporation or Bylaws of the
Corporation or any material agreement to which the Corporation is bound; and
(d) Upon execution of this Share Subscription Agreement and receipt by the
Corporation of the consideration for the Shares as described herein, the Shares
shall be deemed to be validly issued and outstanding, fully paid and
nonassessable.
5. Consideration. Subscriber hereby agrees and understands that the
consideration for the Shares shall not be delivered by Subscriber to the
Corporation until the share subscription contained herein shall have been
accepted; provided, however, that such consideration shall be delivered promptly
thereafter in accordance with the terms and conditions of the Merger Agreement
and prior to the issuance by the Corporation of the Shares. Subscriber
understands and agrees that the undersigned shall not be entitled to
certificates for, nor shall the undersigned be entitled to vote the Shares until
the consideration set forth herein has been delivered to the Corporation as
contemplated in the Merger Agreement.
Executed as of the 22nd day of May, 1998.
Very truly yours,
________________________________________(L.S.)
Howard M. Watch
ACCEPTED AND AGREED TO:
TRIANGLE IMAGING GROUP, INC.
By:___________________________________________
Name: Vito A. Bellezza
Title: Chairman of the Board of Directors
and Chief Executive Officer
Date: May 22, 1998
<PAGE>
EXHIBIT A
INDEX TO SEC FILINGS
I. The Corporation's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997;
II. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997;
III. The Corporation's Registration Statement on Form S-8 filed on August
15, 1997;
IV. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997;
V. The Corporation's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1997;
VI. The Corporation's Quarterly Report on Form 10-KSB for the year ended
December 31, 1996;
VII. The Corporation's Amendment to its Current Report on Form 8-K/A filed
March 4, 1997;
VIII. The Corporation's Current Report on Form 8-K filed January 3, 1997;
IX. The Corporation's Registration Statement on Form S-8 filed December 24,
1996;
X. The Corporation's Current Report on Form 8-K filed December 20, 1996;
XI. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996;
XII. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996;
XIII. The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
XIV. The Corporation's Annual Report on Form 10-KSB for the year ended
December 31, 1995.
<PAGE>
EXHIBIT B
TRIANGLE IMAGING GROUP, INC.
ACCREDITED INVESTOR QUESTIONNAIRE
Purpose of This Questionnaire
The undersigned has met with certain principals of Triangle Imaging
Group, Inc. (the "Company"), and has been provided certain information with
regard to a proposed investment in the Company. Certain of the Company's
securities will be offered to the undersigned as an "accredited investor"
without registration under the Securities Act of 1933, as amended (the "1933
Act"), or the securities laws of any state, in reliance on the exemption
contained in Section 3(b) and/or 4(2) and/or 4(6) of the 1933 Act in reliance on
Regulation D of the Securities and Exchange Commission thereunder and on similar
exemptions under applicable state laws. Under Section 4(2) and/or certain state
laws, the Company may be required to determine that an individual, or an
individual together with a "purchaser representative" or each individual equity
owner of an "investing entity" meets certain suitability requirements before
selling securities to such individual or entity. This Questionnaire will enable
the Company to make investor qualification determinations and discharge its
responsibilities under federal and state securities laws and the Company will
rely upon the information contained herein. SECURITIES WILL NOT BE SOLD OR
ISSUED TO THE UNDERSIGNED UNTIL A QUESTIONNAIRE HAS BEEN FILLED OUT AS
THOROUGHLY AS POSSIBLE. IN THE CASE OF AN INVESTOR THAT IS A PARTNERSHIP, TRUST
OR CORPORATION WHICH DOES NOT QUALIFY AS AN ACCREDITED INVESTOR, EACH EQUITY
OWNER MUST COMPLETE A QUESTIONNAIRE TO DETERMINE ACCREDITED STATUS. This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security.
Instructions:
The Company will not issue securities to the undersigned until one (1)
copy of this Questionnaire has been completed, signed, dated and delivered to
the Company.
Your answers will be kept strictly confidential at all times. The
Company may, however, present this Questionnaire to such parties as it deems
appropriate in order to assure itself that the offer and sale of the securities
will not result in a violation of the registration provisions of the 1933 Act or
a violation of the securities laws of any state.
All questions must be answered. If the appropriate answer is "None" or
"Not applicable," please so state. Please print or type your answers to all
questions and attach additional sheets if necessary to complete your answer to
any item.
Name(s):________________________________________________________________________
Social Security Number or Taxpayer Identification Number:_______________________
Home Address:___________________________________________________________________
________________________________________________________________________________
Business Address:_______________________________________________________________
________________________________________________________________________________
Home Telephone:_________________________________________________________________
Business Telephone:_____________________________________________________________
Occupation/Business:____________________________________________________________
Place and date of formation (if an entity):_____________________________________
If the undersigned is an individual, please CHECK whichever of the following
statements, (a)-(e) below, is applicable to you:
___ (a) The undersigned has had an individual income in excess of $200,000
in each of the two most recent calendar years and reasonably expects to have an
individual income in excess of $200,000 in the current calendar year;
___ (b) The undersigned has had joint income with his or her spouse in
excess of $300,000 in each of the two most recent calendar years and reasonably
expects to have joint income with his or her spouse in excess of $300,000 in the
current calendar year;
___ (c) The undersigned has an individual net worth, or joint net worth
with his or her spouse, in excess of $1,000,000;
___ (d) The undersigned is a director or executive officer of the Company;
___ (e) None of the above.
For purposes of this Accredited Investor Questionnaire, the following
definitions apply:
"Individual income" means "adjusted gross income" as reported for
federal income tax purposes, less any income attributable to a spouse or to
property owned by a spouse, increased by the following amounts (but not
including any amounts attributable to a spouse or to property owned by a
spouse): (i) the amount of any interest income received which is tax-exempt
under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) the amount of any losses claimed as a limited partner in a limited
partnership (as reported on Schedule E of Form 1040) and (iii) any deduction
claimed for depletion under Section 611 et seq. of the Code.
"Joint income" means "adjusted gross income" of you and your spouse as
reported for federal income tax purposes, increased by the following amounts:
(i) the amount of any interest income received which is tax-exempt under Section
103 of the Code, (ii) the amount of losses claimed as a limited partner in a
limited partnership (as reported on Schedule E of Form 1040) and (iii) any
deduction claimed for depletion under Section 611 et seq.
of the Code.
"Net worth" means the excess of total assets at fair market value,
including home and personal property, over total liabilities, including
mortgages and income taxes on unrealized appreciation of assets.
If the undersigned is a corporation, partnership, employee benefit plan,
individual retirement account or trust, please CHECK whichever of the following
statements (a)-(n) is applicable:
___ (a) The undersigned is a self-directed individual retirement account or
401(k) Plan (if this statement is checked, the participant must also check
whichever of statements 9(a)-(e), above are applicable);
___ (b) The undersigned is a bank as defined in section 3(a)(2) of the 1933
Act, or a savings and loan association or other institution as defined in
section 3(a)(5)(A) of the 1933 Act, whether acting in an individual or fiduciary
capacity;
___ (c) The undersigned is a broker or dealer registered pursuant to
section 15 of the Securities Exchange Act of 1934;
___ (d) The undersigned is an insurance company as defined in section 2(13)
of the 1933 Act;
___ (e) The undersigned is an investment company registered under the
Investment Company Act of 1940;
___ (f) The undersigned is a business development company as defined in
section 2(a)(48) of the Investment Company Act of 1940;
___ (g) The undersigned is a Small Business Investment Company licensed by
the U.S. Small Business Administration under section 301(c) or (d) of the Small
Business Investment Act of 1958;
___ (h) The undersigned is a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees if such plan has total
assets in excess of $5,000,000;
___ (i) The undersigned is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, provided that
the investment decision is made by a plan fiduciary, as defined in section 3(21)
of such Act, and the plan fiduciary is either a bank, savings and loan
association, insurance company or registered investment adviser or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, the investment decisions are made solely by persons that are
accredited investors.
___ (j) The undersigned is a private business development company as
defined in section 202(a)(22) of the Investment Advisers Act of 1940;
___ (k) The undersigned is an organization described in section 501(c)(3)
of the Code, a corporation, a Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities,
with total assets in excess of $5,000,000;
___ (l) The undersigned is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the securities,
whose purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Securities Act;
___ (m) The undersigned is an entity, each of whose stockholders, partners
or beneficiaries meets at least one of the conditions set forth under 9(a)-(d),
above with respect to individuals or 10(b)-(l), above with respect to
corporations, partnerships, trusts or other entities; or
___ (n) None of the above.
IF YOU CHECK THE STATEMENT NOTED AS 10(m) ABOVE AND DO NOT CHECK ANY OTHER
STATEMENT, A COMPLETED QUESTIONNAIRE FOR EACH STOCKHOLDER OF THE SUBSCRIBING
CORPORATION, EACH PARTNER OF THE SUBSCRIBING PARTNERSHIP OR EACH BENEFICIARY OF
THE SUBSCRIBING EMPLOYEE BENEFIT PLAN MUST ACCOMPANY THIS QUESTIONNAIRE.
To the best of my knowledge and belief, the above information supplied
by me is true and correct in all respects.
Dated: _______________________ __________________________________________
Signature
__________________________________________
Title (if an entity)
<PAGE>
ALL PURCHASERS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the undersigned has executed this Accredited Investor
Questionnaire on this _______ day of __________________, 1998.
__________________________ x $______________ per share = $______________________
Shares to be Purchased Purchase Price
Manner in which Title is to be held (Please Check One):
1. ___ Individual 7. ___ Trust/Estate/Pension or
Profit Sharing Plan
Date Opened:___________
2. ___ Joint Tenants With
Right of Survivorship
8. ___ As a Custodian for
3. ___ Community Property
_______________________________
Under the Uniform Gift to
4. ___ Tenants in Common Act of the State of ___________
5. ___ Corporation/Partnership 9. ___ Married with Separate
Property
6. ___ IRA 10. ___ Keogh
INDIVIDUAL PURCHASERS MUST COMPLETE PAGE 6; PURCHASERS WHICH
ARE ENTITIES MUST COMPLETE PAGE 7.
<PAGE>
FOR EXECUTION BY A PURCHASER WHO IS A NATURAL PERSON
________________________________________________________________________________
Exact Name in Which Title is to be Held
________________________________________________________________________________
(Signature)
________________________________________________________________________________
Name (Please Print)
________________________________________________________________________________
Residence Address: Number and Street
________________________________________________________________________________
City State Zip Code
________________________________________________________________________________
Social Security Number
Accepted this _______ day of __________________, 1998, on behalf of the Company.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
FOR EXECUTION BY A PURCHASER WHICH IS AN ENTITY
(Corporation, Partnership, Trust, Etc.)
________________________________________________________________________________
Name of Entity (Please Print)
By:_______________________________________
Title:____________________________________
Attest:___________________________________
Title:____________________________________
[SEAL]
__________________________________________
__________________________________________
__________________________________________
Address
__________________________________________
Taxpayer Identification Number
ACCEPTED, this _____ day of ___________________, 1998, on behalf of the Company.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
<PAGE>
EXHIBIT J
SOFTWARE ASSIGNMENT AND LICENSE AGREEMENT
THIS SOFTWARE LICENSE AGREEMENT ("Agreement"), dated as of May 22, 1998,
is between Howard M. Watch, a Florida resident ("Watch") and FCB Acquisition
Corp., a Florida corporation ("FAC").
Section 1. DEFINITIONS. These capitalized words shall have the following
meaning:
a. "Commencement Date" means the date first above written.
b. "Documentation" means the various written materials, training
modules, and audio and videotapes, if any, which are provided by Watch to help
FAC use the Software.
c. "Intellectual Property" means any copyrights, patents, trade secrets or
similar property rights owned by any person or entity in the Software.
d. "Merger" means the merger of Florida Credit Bureau, Inc. ("FCB") with
and into FAC pursuant to that certain agreement and plan of merger and
reorganization (the "Merger Agreement") by and among FCB, FAC, Watch, Triangle
Imaging Group, Inc. and QuickCREDIT Corp. FAC will be the surviving entity in
the Merger.
e. "Software" means the computer programs which became the property FAC
incident to the Merger, and any modified, updated and enhanced versions and
additions thereto that are proprietary to, have been developed by, or are
licensed to Watch or FCB and were used in the operation of the business of FCB
prior to the Merger.
Section 2. ASSIGNMENT. In consideration of $1.00 and the mutual
promises, agreements and premises contained herein, FAC hereby sells, transfers,
assigns, conveys, sets over and delivers to Watch, and Watch hereby purchases,
accepts and acquirors from FAC, all right, title and interest of FAC in and to
the Software. FAC agrees to do, execute and deliver, or cause to be done,
executed and delivered, all such further acts, transfers, assignments or
conveyances necessary to convey to Watch, his successors and assigns the entire
right, title and interest in the Software.
Section 3. LICENSE. In consideration of the assignment to Licensor set
forth in Section 2 of this Agreement and the mutual promises, agreements and
premises contained herein, subject to the terms, conditions and limitations set
forth herein, Watch hereby grants to FAC a non-exclusive license to use the
Software and Documentation in the operation of the business of FAC following the
Merger.
Section 4. OWNERSHIP. Title to and ownership of the Software and
Documentation shall remain with Watch or those entities that have authorized
Watch to sublicense and use them, free from any claim or right of FAC or the
holder of any security interest, lien or encumbrance on any of FAC's property.
FAC agrees to take such steps required by Watch as may be reasonably necessary
to prevent any person from acquiring any rights in the Software or
Documentation.
Section 5. PROPRIETARY PROTECTION, RESTRICTIONS AND ASSIGNMENT. The
Software and Documentation are proprietary to Watch and/or those entities that
have authorized Watch to sublicense and use them. FAC agrees not to use, copy,
modify or distribute the Software (electronically or otherwise), or any copy,
adaptation, transcription, or merged portion thereof, except as expressly
authorized in writing by Watch. FAC may not reverse assemble, reverse compile,
or otherwise translate the Software. FAC's rights hereunder may be transferred,
leased, assigned, or sublicensed, pursuant to any agreement to do the same or as
a result of any merger, consolidation, sale of assets, or other business
combination or restructuring, to a successor in interest of FAC's business,
stock or assets, or to any parent corporation, grandparent corporation,
subsidiary or affiliate of FAC who assumes FAC's obligations under this
Agreement.
Section 6. TERM. This Agreement will be effective from the date of
execution by FAC and Watch (the "Effective Date") and shall continue in full
force and effect for a period of 180 days from the Effective Date. Upon
expiration or sooner termination of this Agreement, FAC agrees to return
immediately the originals and all copies of the Software and Documentation
unencumbered to Watch. At Watch's request, FAC will certify to Watch in writing
that the original and all copies of the Software Documentation have been
returned or destroyed.
Section 7. TERMINATION. Watch shall be entitled to terminate this Agreement
immediately if FAC violates or attempts to violate any of the restrictions in
Section 4 of this Agreement.
Section 8. AMENDMENTS. This Agreement may not be amended, modified or
rescinded except in writing, signed by both parties, and any attempt to do so
shall be void and of no effect.
Section 9. GOVERNING LAW. this Agreement is to be governed by and construed
in accordance with the laws of the State of Florida.
Section 10. SEVERABILITY. If any provision of this Agreement is determined
to be void or unenforceable, the provision shall be deemed severed from the
Agreement and the remainder of this Agreement shall continue in full force and
effect.
Section 11. WAIVER. If either party fails to exercise any right or
option at any time under this Agreement, such failure will not be deemed a
waiver of the exercise of such right or option at any other time or the waiver
of a different right or option.
Section 12. ENTIRE AGREEMENT. This Agreement supersedes all prior oral and
written agreements and understandings and constitutes the entire Agreement
between the parties with respect to the subject matter hereof.
Section 13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties, their successors and permitted
assigns.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date set forth in the preamble to this Agreement,
"LICENSOR"
__________________________________________
Howard M. Watch
"LICENSEE"
QUICKCREDIT CORP.
__________________________________________
By: Van Saliba
Title: President
<PAGE>
EXHIBIT K
FORM OF OPINION OF COUNSEL TO FCB AND THE SHAREHOLDERS
May _____, 1998
Florida Credit Bureau, Inc.
235 S. Maitland Avenue, Suite 202
Maitland, Florida 32751
Ladies and Gentlemen:
This opinion is rendered to you pursuant to the requirements of Section
7.4 of the Agreement and Plan of Merger and Reorganization, dated as of May
_____, 1998 (the "Merger Agreement"), by and among Florida Credit Bureau, Inc.,
a Florida corporation ("FCB"), Howard M. Watch, an individual resident of the
State of Florida (the "Shareholder"), Triangle Imaging Group, Inc., a Florida
corporation ("Triangle"), QuickCREDIT Corp., a Florida corporation
("QuickCREDIT"), and FCB Acquisition Corp., a Florida corporation ("FAC").
We have acted as special counsel to Triangle, QuickCREDIT and FAC
(collectively, the "Parties") in connection with the negotiation of the Merger
Agreement and the consummation by the Parties of the transactions contemplated
in the Merger Agreement. In the capacity described above, we are familiar with
the records of the corporate proceedings of the Parties relating to the Merger
Agreement and the transactions contemplated therein. We have also examined
originals or copies, certified, or otherwise identified, to our satisfaction, of
the following documents:
1. the Merger Agreement;
2. the Share Subscription Agreement, dated May _____, 1998, executed by the
Shareholder in favor of Triangle;
3. the Release, dated May _____, 1998, executed by the Shareholder;
4. the Restrictive Covenants Agreement, dated May _____, 1998, executed by
the Shareholder;
5. the Employment Agreement, dated May _____, 1998, executed by the
Shareholder;
6. the Escrow Agreement by and among the Parties, FCB and the Shareholder,
dated as of May _____, 1998;
7. the Assignment of Promissory Note, dated May ___, 1998, by and between
FAC and the Shareholder;
8. the Assignment of Bank Accounts, dated May ___, 1998, by and between FAC
and the Shareholder;
9. certificates of recent date, issued by the Secretary of State of the
State of Florida with respect to the corporate existence of each of the Parties
(the "Certificates of Existence"); and
10. the Articles of Merger of FCB with and into FAC, dated May _____, 1998,
to be filed with the Secretary of State of the State of Florida (the
"Certificate of Merger").
The documents referenced in items 1 through 10 above are hereinafter
collectively referred to as the "Merger Documents".
This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord of the ABA Section of Business Law
(1991) (the "Accord"). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. Capitalized terms used in this
opinion letter and not otherwise defined shall have the meanings assigned to
such terms in the Accord and the Merger Agreement. If there should be any
conflict between the definition contained in the Accord and the Merger
Agreement, the definition contained in the Accord shall control.
The opinions expressed herein are limited to the federal laws of the
United States of America, the laws of the State of Georgia, as currently in
effect, and the provisions of the Florida Business Corporation Act, as reported
in standard compilations of corporation statutes (excluding any case law
annotations contained therein). We are admitted to the Bar of the State of
Georgia and do not purport to be experts in the laws of any other state.
In connection with the opinions set forth below, we have, with your
permission, assumed the genuineness of all signatures and the authenticity,
completeness and accuracy of all materials examined. As to questions of fact
material to our opinions, we have relied, with your permission and without
independent verification of the accuracy or completeness thereof, solely on the
following: (i) the records of the corporate proceedings of the Parties relating
to the Merger Agreement and the transactions contemplated therein; (ii) the
statements and representations contained in the Certificates of Existence; (iii)
the respective statements, representations and warranties of the Parties
contained in the Merger Documents; and (iv) an officer's certificate of each of
the Parties, each dated May _____, 1998, with respect to certain factual
matters. We have made no other factual investigation, including any independent
search of any public records, for the purpose of rendering this opinion letter.
Based upon and subject to the foregoing, we are of the opinion that:
1. Each of the Parties has duly authorized the execution and delivery of
the Merger Documents to which it is a party and the performance of all of its
obligations thereunder.
2. Each of the Parties has the requisite corporate power to execute and
deliver the Merger Documents to which it is a party.
3. The shares of Triangle Common Stock to be delivered under the Merger
Agreement (the "Merger Shares") have been duly authorized and, when delivered
against surrender of the issued and outstanding shares of FCB Common Stock, in
accordance with the provisions of the Merger Agreement, will be validly issued,
fully paid and nonassessable.
This letter is given solely for the benefit of the addressees hereof and
may only be relied upon for matters arising out of the transactions described
herein. Without our prior written consent, this letter may not be used or relied
upon by any other person or entity for any purpose whatsoever.
Very truly yours,
SMITH, GAMBRELL & RUSSELL, LLP
By:_________________________________________
W. Thomas King
<PAGE>
EXHIBIT L
FORM OF OPINION OF COUNSEL TO TRIANGLE, QUICKCREDIT AND FAC
May ___, 1998
Triangle Imaging Group, Inc.
4400 West Sample Road, Suite 228
Coconut Creek, Florida 33073
Ladies and Gentlemen:
This opinion is rendered to you pursuant to the requirements of the
Agreement and Plan of Merger and Reorganization, dated as of May ___, 1998 (the
"Merger Agreement"), by and among Florida Credit Bureau, Inc., a Florida
corporation (the "Company"), Howard M. Watch, an individual resident of the
State of Florida (the "Shareholder"), Triangle Imaging Group, Inc., a Florida
corporation ("Triangle"), QuickCREDIT Corp., a Florida corporation
("QuickCREDIT"), and FCB Acquisition Corp., a Florida corporation (the
"Subsidiary").
We have acted as counsel to the Company and Shareholder in connection
with the entry into and performance by the Company and Shareholder of the
transactions contemplated in the Merger Agreement. In the capacity described
above, we are familiar with the corporate minute book of the Company, including
the articles of incorporation, bylaws and stock transfer records of the Company,
and we are further familiar with the corporate proceedings of the Company
relating to the Merger Agreement and the transactions contemplated therein. We
have also examined originals or copies certified, or otherwise identified to our
satisfaction, of the following documents:
1. the Merger Agreement;
2. the Share Subscription Agreement, dated May ___, 1998, executed by
Shareholder in favor of Triangle;
3. the Release, dated May ___, 1998, executed by Shareholder;
4. the Restrictive Covenants Agreement, dated May ___, 1998, executed by
Shareholder;
5. a certificate, dated May ___, 1998, issued by the Secretary of State of
the State of Florida with respect to the corporate existence of the Company (the
"Certificate of Existence");
6. the Employment Agreement, dated May ___, 1998, executed by Shareholder;
7. the Escrow Agreement, dated May ___, 1998; and
8. the Certificate of Merger of the Company into the Subsidiary dated May
___, 1998, to be filed with the Secretary of State of the State of Florida (the
"Certificate of Merger").
The documents referenced in items 1 through 8 above are hereinafter
collectively referred to as the "Merger Documents".
This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord of the ABA Section of Business Law
(1991) (the "Accord"). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. Capitalized terms used in this
opinion letter and not otherwise defined shall have the meanings assigned to
such terms in the Accord and the Merger Agreement. If there should be any
conflict between the definition contained in the Accord and the Merger
Agreement, the definition contained in the Accord shall control.
The opinions expressed herein are limited to the laws of the State of
Florida and the federal laws of the United States of America.
In connection with the opinions set forth below, we have assumed the
genuineness of all signatures, other than those on behalf of the Company and
that of Shareholder, and the authenticity, completeness and accuracy of all
materials examined. As to questions of fact material to our opinions, we have
relied, without independent verification of the accuracy or completeness
thereof, solely on the following: (i) the contents of the corporate minute book
and stock transfer records of the Company; (ii) the statements and
representations contained in the Certificate of Existence; and (iii) the
respective statements, representations and warranties of the Company and
Shareholder contained in the Merger Agreement. We have made no other factual
investigation for the purpose of rendering this opinion letter.
The use of the term "Actual Knowledge" shall have the meaning given to
such term in the Accord, but shall not be taken to mean that we have made, and
in fact we have not made, any independent investigation concerning the accuracy
or veracity of any representation, warranty or statement of fact other than as
described in the preceding paragraphs. We have made no independent search of any
public records in connection with our rendering of the opinions contained
herein.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida and has all necessary
corporate power and lawful authority to own, operate and lease its properties
and carry on its business as and where such business is now being conducted. As
used herein, the term "in good standing" shall mean that all filings have been
made as required under applicable filing and annual registration provisions of
the Florida Business Corporation Act and all filing fees due and payable
thereunder have been paid.
2. The issued and outstanding shares of the Company are as set forth on
Schedule 2.2 to the Merger Agreement. All the shares of the Company identified
on such Schedule are duly authorized, validly issued, fully paid and
nonassessable. Except as set forth on Schedule 2.2 to the Merger Agreement,
there is no outstanding capital stock of the Company, and, to our Actual
Knowledge, except as set forth on Schedule 2.3 to the Merger Agreement, there
are no outstanding options, warrants or other rights to acquire common stock or
other securities of the Company.
3. Shareholder is the sole record and beneficial owner of the shares set
forth beside his name on Exhibit A to the Merger Agreement, and, to our Actual
Knowledge, has good and valid title to such shares, free and clear of all liens,
claims, encumbrances, equities or claims.
4. The Company has duly and validly executed each Merger Document to
which it is a party, and each such Merger Document is the valid, binding and
enforceable obligation of the Company. Shareholder has duly and validly executed
each Merger Document to which he is a party, and each such Merger Document is
the valid, binding and enforceable obligation of Shareholder.
5. The execution, delivery and performance of the Merger Documents to
which the Company is a party by the Company are within the Company's corporate
powers and have been duly authorized by all necessary corporate action on the
part of the Company. The execution, delivery and performance of the Merger
Documents to which Shareholder is a party are within Shareholder's full power
and legal capacity. Except as disclosed in the Merger Documents, the execution,
delivery and performance of the Merger Documents by the Company or Shareholder,
do not: (i) conflict with, require any consent under, result in the violation
of, or constitute a breach of any provision of the articles or certificate of
incorporation or bylaws of the Company; (ii) to our Actual Knowledge, conflict
with, require any Consent under, result in the violation of, constitute a breach
of, or accelerate the performance required on the part of Shareholder or the
Company by the terms of, any evidence of indebtedness or Contract to which
Shareholder or the Company is a party, in each case with or without notice or
lapse of time or both, or permit the termination of any such Contract by another
Person; (iii) to our Actual Knowledge, result in the creation or imposition of
any Encumbrance upon, or restriction on the use of, any property or assets of
the Company or the Company Common Stock under any Contract to which either the
Company or Shareholder is bound; (iv) to our Actual Knowledge, accelerate, or
constitute an event entitling, or which would, on notice or lapse of time or
both, entitle the holder of any indebtedness of the Company or Shareholder to
accelerate the maturity of any such indebtedness; (v) conflict with or result in
the breach or violation of any Legal Requirement that is binding on either the
Company or Shareholder; or (vi) violate or cause any revocation of or limitation
on any Permit of the Company.
6. Except as disclosed in Schedule 2.7 to the Merger Agreement, no
authorization, consent or approval or other action by, and no notice to or
filing with, any Governmental Body or any other Person is required to be
obtained or made by the Company or Shareholder for the due execution, delivery
and performance by them of the Merger Documents.
7. Under the laws of the State of Florida, the Merger will be effective
upon the filing of the Certificate of Merger with the Secretary of State of
Florida.
8. This letter is given solely for the benefit of the addressees hereof
and may only be relied upon for matters arising out of the transactions
described herein. Without our prior written consent, this letter may not be used
or relied upon by any other person or entity for any purpose whatsoever.
By:_________________________________________
<PAGE>
EXHIBIT M
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of May 22, 1998, by and among TRIANGLE IMAGING
GROUP, INC., a Florida corporation ("Triangle"), QUICKCREDIT CORP., a Florida
corporation ("QuickCREDIT"), FCB ACQUISITION CORP., ("FAC") (Triangle,
QuickCREDIT and FAC each an "Acquiror" and collectively "Acquirors"), Howard M.
Watch, an individual resident of Florida ("Seller") and Lawrence H. Katz,
Attorney at Law, P.A., a Florida professional association ("Escrow Agent").
W I T N E S S E T H:
WHEREAS, Acquirors, Seller and Florida Credit Bureau, Inc. ("FCB"), a
Florida corporation, have entered into an Agreement (the "Merger Agreement")
pursuant to which, among other things, (i) FCB will be merged with and into FAC,
with FAC as the surviving entity (the "Merger") and (ii) each issued and
outstanding share of the common stock of FCB, $1.00 par value per share (the
"FCB Common Stock"), will be converted into the right to receive the merger
consideration set forth in Section 1.8 of the Merger Agreement (the "Merger
Consideration"), which Merger Consideration includes 50,000 shares (the "Merger
Shares") of common stock of Triangle, $.0001 par value per share;
WHEREAS, the Merger Agreement requires as a condition to consummation of
the transactions described therein that Acquirors, Seller and Escrow Agent enter
into this Agreement, and that Acquiror deposit 20,000 shares of the Merger
Shares with Escrow Agent (the "Escrow Shares"), in order to provide a fund for
indemnity payments which Seller may become obligated to make to Acquirors as and
to the extent provided in Section 9 of the Merger Agreement ("Indemnity
Claims");
WHEREAS, the parties hereto desire that Escrow Agent be appointed as
escrow agent to act in accordance with the terms and conditions hereof;
WHEREAS, Escrow Agent is willing to serve as the escrow agent and hold
the Escrow Shares in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration for the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt, adequacy and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Appointment of Escrow Agent.
Seller hereby irrevocably appoints Escrow Agent as escrow
agent, to receive, hold, administer and deliver the Escrow Funds (as defined
below) at any time held by Escrow Agent pursuant to this Escrow Agreement in
accordance with this Escrow Agreement, and Escrow Agent hereby accepts such
appointment, all subject to and upon the terms and conditions hereinafter set
forth.
2. Deposit of Escrow Shares.
Seller hereby agrees that the Escrow Shares shall be deposited
by the Acquirors with Escrow Agent immediately upon the later to occur of (i)
the Closing described in the Merger Agreement or (ii) receipt by Acquirors from
the Acquirors' stock transfer agent, of a share certificate evidencing the
Escrow Shares. Escrow Agent hereby agrees to hold the Escrow Shares upon receipt
in accordance with this Escrow Agreement. Escrow Agent has no obligation to
collect all or any portion of the Escrow Shares and shall incur no obligations
under this Escrow Agreement until the Escrow Shares are received by Escrow
Agent.
3. Investment.
(i) The Escrow Agent shall invest and reinvest all available cash dividends and
other amounts distributed or paid from time to time by Triangle and delivered to
Escrow Agent in respect of the Escrow Shares, as directed in writing by Seller
and Acquirors jointly, in any of the following kinds of investments, or in any
combination thereof: (i) bonds or other obligations of, or guaranteed by, the
government of the United States of America, or agencies of any of the foregoing,
having maturities of not greater than ninety (90) days (or, if earlier, the
Release Date, as hereinafter defined); (ii) commercial paper rated, at the time
of the Escrow Agent's investment therein, at least P-1 by Moody's Investors
Service, Inc. and A-1 by Standard & Poor's Corporation and having maturities of
not greater than ninety (90) days (or, if earlier, the Release Date); (iii)
demand or time deposits in, certificates of deposit of or bankers' acceptances
issued by (A) a depository institution or trust company incorporated under the
laws of the United States of America, any State thereof or the District of
Columbia or (B) a United States branch office or agency of a foreign depository
institution or trust company if, in any such case, the depository institution,
trust company or office or agency has combined capital and surplus of not less
than one hundred million dollars ($100,000,000) (any such institution being
herein called a "Permitted Bank") having maturities of not greater than ninety
(90) days (or, if earlier, the Release Date); (iv) repurchase obligations of a
Permitted Bank or securities dealer (acting as principal) meeting the capital
and surplus requirements specified for a Permitted Bank with respect to any bond
or other obligation referred to in clause (i) above; (v) any money market fund
substantially all of which is invested in the foregoing investment categories;
or (vi) such other investments as Acquirors and Seller shall jointly approve in
writing. The Escrow Shares and any amounts paid thereon while on deposit with
Escrow Agent shall be referred to hereinafter collectively as the "Escrow
Funds."
(ii) All taxes in respect of earnings on the Escrow Amount shall be the
obligation of and shall be paid when due by Seller, who shall jointly and
severally indemnify and hold Acquirors and the Escrow Agent harmless from and
against all such taxes.
4. Custody and Release of Escrow Funds.
Escrow Agent shall hold and disburse the Escrow Funds in
accordance with the following:
(i) In the event Acquirors believe Acquirors are entitled to receive all or a
portion of the Escrow Funds on account of an Indemnity Claim, Acquirors shall
deliver to Escrow Agent a written certificate stating that Acquirors are
entitled to payment from the Escrow Funds on account of a valid Indemnity Claim
(the "Claim Certificate"). The Claim Certificate shall state the amount of the
payment from the Escrow Funds to which Acquirors believe Acquirors are entitled.
Within 5 business days following Escrow Agent's receipt of any Claim
Certificate, Escrow Agent shall send notice to Seller of Escrow Agent's receipt
of such Claim Certificate ("Claim Notice"). The Claim Notice shall include a
copy of the Claim Certificate.
(ii) If Escrow Agent does not, within 15 business days following receipt of the
Claim Notice by Seller, receive from Seller a written notice objecting to
payment of all or any portion of the claim(s) specified in the Claim Certificate
("Objection Notice"), Escrow Agent shall deliver to Acquirors an amount from the
Escrow Funds equal to the lesser of (i) the amount specified in the Claim
Certificate or (ii) the full remaining balance of the Escrow Funds.
(iii) If Seller elects to deliver an Objection Notice within the 15 day period
specified in subparagraph 4(b) above, Seller shall specify in such Objection
Notice whether Seller disputes all or a portion of the amount claimed in the
Claim Certificate. If Seller does not dispute the entire amount claimed in the
Claim Certificate, Seller shall specify the amount which Seller disputes, and
upon receipt of the Objection Notice, Escrow Agent shall pay any undisputed
portion claimed in the Claim Certificate to Acquirors in accordance with
subparagraph 4(b). Within 5 business days following Escrow Agent's receipt of
any Objection Notice, Escrow Agent shall notify Acquirors of Escrow Agent's
receipt of such Objection Notice and shall provide to Acquirors a copy of the
Objection Notice with such notification. (iv) Any portion of the Escrow Funds
claimed by Acquirors pursuant to a Claim Notice delivered to Escrow Agent in
accordance with subparagraph 4(a) and disputed by Seller pursuant to an
Objection Notice delivered to Escrow Agent in accordance with subparagraph 4(b)
("Disputed Amounts") shall be retained by Escrow Agent until Escrow Agent shall
have received either of the following:
(2) a written directive executed jointly by Acquirors and Seller directing
Escrow Agent to pay all or a portion of the Disputed Amounts to Acquirors or to
Seller and specifying the amounts to be paid, in which case Escrow Agent shall
promptly pay such amounts to Acquirors from the Escrow Funds in accordance with
such directive; or
(3) a certified copy of a final, non-appealable order of a court of competent
jurisdiction ordering Escrow Agent to deliver all or a portion of the Disputed
Amounts, in which case Escrow Agent shall promptly comply with the terms of such
court order.
(v) If, on the date which is the 365th day immediately
following the Closing Date (the "Release Date"), the amount of Escrow Funds
remaining in control of Escrow Agent exceeds the aggregate amount of Disputed
Claims and Pending Claims, as hereafter defined, as of such date, Escrow Agent
shall release to Seller all Escrow Funds remaining in excess of such aggregate
sum.
A "Pending Claim" for purposes of this Subsection (e)
shall be any amount of the Escrow
Funds which is the subject of a Notice of Claim delivered within 15 days prior
to the Release Date with respect to which the Escrow Agent has not received an
Objection Notice as of the Release Date.
(vi) No Claim Certificate may be delivered by Acquirors to
Escrow Agent after the date which is two business days prior to the Release Date
(the "Bar Date"). Any Claim Certificate delivered to Escrow Agent after the Bar
Date shall be void and shall be disregarded by Escrow Agent. Subject to the
other terms and conditions of this Agreement, following the Release Date, Escrow
Agent shall continue to hold any Disputed Amounts or Pending Amounts beyond the
Release Date until disbursement in accordance with subparagraphs 4(b) or (d), as
the case may be.
(vii) Anything in this Escrow Agreement to the contrary
notwithstanding:
(a) Escrow Agent may deposit all or any portion of the Escrow Funds with
the clerk of any court of competent jurisdiction upon commencement of an action
in the nature of interpleader or in the course of any court proceedings.
(b) If at any time Escrow Agent receives an order of a court of competent
jurisdiction, or (subject to subparagraph 5(b) below) written instructions
signed by both Acquirors and Seller directing delivery of all or a portion of
the Escrow Funds, Escrow Agent shall comply with such order or instructions.
(viii) The Escrow Funds shall not be subject to lien or attachment by any
creditor of any party hereto and shall be used solely for the purposes set forth
in this Escrow Agreement. The Escrow Funds shall not be available to, and shall
not be used by, Escrow Agent to set off any obligation of Acquirors or Seller to
Escrow Agent.
(ix) Upon any delivery or deposit of all of the Escrow Funds pursuant to
this Section 4, Escrow Agent shall thereupon be released and discharged from any
and all further obligations arising in connection with this Escrow Agreement.
5. Concerning Escrow Agent.
Escrow Agent has been induced to accept its obligations under this
Escrow Agreement by the following terms, conditions, representations and
warranties:
(i) Escrow Agent shall not be liable, except for his own gross negligence or
willful misconduct and, except with respect to claims based upon such gross
negligence or willful misconduct that are successfully asserted against Escrow
Agent. Acquirors and Seller jointly and severally shall indemnify and hold
harmless Escrow Agent (and any successor escrow agent) from and against any and
all claims, liabilities, losses, damages, costs, reasonable attorneys' fees and
other expenses whatsoever arising out of or in connection with Escrow Agent's
service as Escrow Agent under this Escrow Agreement. Without limiting the
foregoing, in no event shall Escrow Agent be liable except for his own gross
negligence or willful misconduct for any matter or thing relating to his
investment or reinvestment of the Escrow Funds, including, without limitation,
any failure to earn interest, any claim that a higher rate of return could have
been obtained, any delays in the investment or reinvestment of any amounts paid
by Triangle with respect to the Escrow Shares, including without limitation, any
failure to earn interest, any claim that a higher rate of return could have been
obtained, any delays in the investment or reinvestment of such dividends or any
loss of interest incident to any such delays.
(ii) In the event of any disagreement among the parties to this Escrow
Agreement, or among them or any one of them and any other person, resulting in
adverse claims or demands being made in connection with all or any part of the
Escrow Funds, or in the event that Escrow Agent in good faith is in doubt as to
what action it should take hereunder, Escrow Agent may, at its option, refuse to
comply with any claims or demands on it (but nothing herein shall obligate
Escrow Agent so to do) until (i) Escrow Agent shall have received an order of a
court of competent jurisdiction directing delivery of all or any part of the
Escrow Funds or (ii) all differences shall have been adjusted and all doubt
resolved by written agreement executed by the parties to such disagreement and
delivered to Escrow Agent.
(iii) Escrow Agent shall be entitled to rely upon any judgment, certification,
demand, notice, instrument or other writing delivered to it hereunder without
being required to determine the authenticity or correctness of any fact stated
therein or the propriety or validity of the service thereof and may act in
reliance upon any instrument or signature believed by it to be genuine and may
assume that any person purporting to give any notice or receipt or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
(iv) Each of the Acquirors represents and warrants to Escrow Agent that
Acquirors have full power and authority to act as representative of any and all
of the other Acquirors for all purposes with respect to this Escrow Agreement
and the Escrow Funds. Escrow Agent shall be entitled to rely conclusively on the
authority of any Acquiror to make Indemnity Claims on behalf of any of the
Acquirors and Escrow Agent shall make payment with respect to any such claim
directly to any Acquiror as agent and trustee of such other Acquiror(s). Escrow
Agent shall have no obligation to communicate directly with any Acquiror or to
honor or acknowledge any directives or communications given or purportedly given
by any Acquiror, other than those provided by an Acquiror in accordance with the
terms of this Escrow Agreement.
(v) Neither Acquirors nor Seller shall have any right or standing to make a
claim, provide any notice or receive any payment by, through or under this
Agreement except in accordance with the procedures described herein. Escrow
Agent shall have no obligation to communicate directly with Acquirors or Seller
or to honor or acknowledge any directives or communications given or purportedly
given by Acquirors or Seller, except those provided by Acquirors or Seller in
accordance with this Agreement.
(vi) Escrow Agent may seek the advice of legal counsel selected with reasonable
care in the event of any dispute or question as to the construction of any of
the provisions of this Escrow Agreement or its duties hereunder, and it shall
incur no liability and shall be fully protected in respect of any action taken,
omitted or suffered by it in good faith in accordance with the opinion of such
counsel;
(vii) This Escrow Agreement expressly sets forth all the duties of Escrow Agent
with respect to any and all matters pertinent hereto.
6. Successor Escrow Agent.
Escrow Agent (and any successor escrow agent) may at any time resign as
such by delivering the Escrow Funds to any successor escrow agent mutually
designated by Acquirors and Seller in writing, or to any court of competent
jurisdiction. Escrow Agent may be removed by Acquirors and Seller by signing and
delivering to Escrow Agent a joint directive stating that Escrow Agent has been
removed and designating a successor Escrow Agent, in which case Escrow Agent
shall promptly deliver the Escrow Funds to the successor escrow agent. Escrow
Agent shall be discharged of and from any and all further obligations arising in
connection with this Escrow Agreement following any resignation or removal
immediately upon delivery of the Escrow Funds to such court or such successor
escrow agent.
7. Notices.
Any notices, certificates or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given only
if and when (i) delivered by messenger and receipted for, or (ii) when delivered
and receipted for by an overnight mail service, or (iii) when delivered and
receipted for by U.S. certified mail, addressed in each case as follows:
If to Acquirors, to:
QuickCREDIT Corp.
4400 West Sample Road, Suite 228
Coconut Creek, Florida 33073
Attention: Van Saliba
with a copy to:
Smith, Gambrell & Russell, LLP
1230 Peachtree Street, N.E.
Suite 3100
Atlanta, Georgia 30309
Attention: Peter B. Barlow, Esquire
If to Seller to:
Howard M. Watch
4922 Samoa Circle
Orlando, Florida 32808
with a copy to:
Lawrence H. Katz, Attorney at Law, P.A.
341 North Maitland Avenue, Suite 120
Maitland, Florida 32751-4761
If to Escrow Agent to:
Lawrence H. Katz, Attorney at Law, P.A.
341 North Maitland Avenue, Suite 120
Maitland, Florida 32751-4761
Any address set forth above may be changed by notice given pursuant to this
Section 7.
Miscellaneous.
(i) Any provision of this Escrow Agreement which may be determined by any court
of competent authority to be prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. It
is expressly understood, however, that the parties hereto intend each and every
provision of this Escrow Agreement to be valid and enforceable and hereby
knowingly waive all rights to object to any provision of this Escrow Agreement.
(ii) This Escrow Agreement shall be binding upon and inure solely to the benefit
of the parties hereto and their respective successors and permitted assigns, and
shall not be enforceable by or inure to the benefit of any third party. No party
may assign its rights or obligations under this Escrow Agreement without the
written consent of the other parties. In no event shall Escrow Agent be required
to act upon, or be bound by, any notice, instruction, confirmation or other
communication given by a person other than Acquirors or Seller nor shall Escrow
Agent be required to deliver the Escrow Funds to any person other than Acquirors
or Seller or a successor escrow agent designated by Acquirors and Seller in
accordance with Paragraph 6.
(iii) This Escrow Agreement shall be construed in accordance with and governed
by the internal laws of the State of Florida.
(iv) This Escrow Agreement constitutes the entire understanding among the
parties with respect to the subject matter hereof. This Escrow Agreement may
only be modified or terminated by a writing signed by all of the parties hereto,
and no waiver hereunder shall be effective unless in writing signed by the party
to be charged.
(v) The fees of Escrow Agent shall be paid 50% by Acquirors and 50% by Seller,
as and when billed by Escrow Agent in accordance with the schedule of fees
described on Exhibit "A" hereto.
(vi) This Escrow Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which counterparts of this Escrow Agreement taken together shall
constitute but one and the same instrument.
(vii) A "business day" for purposes of this Agreement shall mean any day on
which commercial banks in Ft. Lauderdale, Florida are open for regular business.
(viii) The section headings used herein are for convenience of reference only
and shall not define or limit the provisions of this Escrow Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement on the date first above written.
ACQUIRORS SELLER
TRIANGLE IMAGING GROUP, INC.
____________________________________ ________________________________________
By: Vito A. Bellezza By: Howard M. Watch
Title: Chairman of the Board
of Directors and Chief
Financial Officer Federal Tax I.D.# ______________________
ESCROW AGENT
____________________________________
By: Harold S. Fischer
Title: President
________________________________________
Lawrence H. Katz, Attorney at Law,
P.A., a Florida Professional Corporation
QUICKCREDIT CORP.
________________________________________
By: Lawrence H. Katz, Esquire, President
____________________________________
By: Van Saliba
Title: President
FCB ACQUISITION CORP.
____________________________________
By: Van Saliba
Title: President
<PAGE>
EXHIBIT A
SCHEDULE OF ESCROW AGENT FEES
Hourly Rate $250.00
Any out-of-pocket expenses, or extraordinary fees or expenses such as
attorneys fees or messenger costs, are additional and are not included in the
above schedule.
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of May 29, 1998, by and
between Thomas Secreto, an individual residing at 6 North Drive, Westbury, NY
11590 ("Secreto") and Arthur Marino, an individual residing at 216 Little Plains
Road, Huntington, NY 11743 ("Marino" and together with Secreto, the Sellers")
and Triangle Imaging Group, Inc., a Florida corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, the Sellers are the record owners of 40 shares of
common stock, no par value, of Tri-Max Systems, Inc., a New York corporation
("Tri-Max" or the "Company") representing all of the issued and outstanding
shares of the capital stock (the "Shares") of the Company; and
WHEREAS, the Sellers desire to sell the Shares to the
Purchaser, and the Purchaser desires to purchase the Shares from the Sellers,
all upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties and agreements set forth herein, the parties
agree as follows:
ARTICLE I
SALE OF SHARES; PURCHASE PRICE
1.1 Sale of Shares. On the Closing Date (as defined in Section
5.1 hereof), the Seller shall sell, assign, transfer and deliver the Shares to
the Purchaser, and the Purchaser shall purchase the Shares from the Sellers, all
upon the terms and conditions, and for the purchase price, set forth herein.
1.2 Purchase Price. The aggregate purchase price (the
"Purchase Price") for the Shares shall be the issuance to each Seller on the
Closing Date of 130,000 shares of Common Stock, $.001 par value per share, of
Purchaser for a total of 260,000 of such shares (the "Triangle Shares").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, jointly and severally, represents and warrants to
the Purchaser that:
2.1 Due Organization and Qualification: Subsidiaries: Due Authorization.
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of New York, with full corporate
power and authority to own, lease and operate its business and properties and to
carry on its business in the places and in the manner as presently conducted or
proposed to be conducted. The Company is in good standing as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it requires such qualification except
for any such failure, which when taken together with all other failures, is not
likely to have a material adverse effect on the business of the Company.
(b) The Company has no subsidiaries. The Company does not own,
directly or indirectly, any capital stock, equity or interest in any
corporation, firm, partnership, joint venture or other entity, other than those
set forth in Schedule 2.1. Except as set forth in Schedule 2.1, there is no
contract, agreement, arrangement, option, warrant, call, commitment or other
right of any character obligating or entitling the Company to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exchangeable for securities of the Company.
(c) Such Seller has all requisite power and authority to
execute and deliver this Agreement and all other agreements contemplated hereby
(the "Additional Agreements") and to consummate the transactions contemplated
hereby and thereby. Such Seller has taken all action necessary for the execution
and delivery of this Agreement and the Additional Agreements and the
consummation of the transactions contemplated hereby and thereby, and each of
this Agreement and the Additional Agreements each constitute the valid and
binding obligation of such Seller, enforceable against such Seller in accordance
with its respective terms, except as may be affected by bankruptcy, insolvency,
moratoria or other similar laws affecting the enforcement of creditors' rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.
2.2 Capitalization: Title to the Shares. The authorized
capital stock of Tri-Max consists of 200 shares of common stock, no par value,
of which 40 shares are issued and outstanding. No shares of preferred stock are
authorized. The Shares have been duly authorized and validly issued and are
fully paid and non-assessable and are free of preemptive rights. The Sellers
are, and on the Closing Date will be, the owners of record of all of the Shares,
and upon the sale of the Shares to the Purchaser pursuant to this Agreement, the
Purchaser will have good and marketable title to the Shares, free and clear of
all liens, claims, encumbrances or other contractual restrictions of any kind
("Liens"). There are no existing warrants, options, subscriptions, calls,
rights, commitments or any other agreements of any character obligating Tri-Max
to issue, sell or transfer any shares of its capital stock.
2.3 Agreements With Former Shareholder. Except for that
certain Agreement dated May 29, 1998 by and between Sellers and Steve Rigisich,
neither Sellers nor Tri-Max is currently a party to any agreement with any
former shareholder of Tri-Max.
2.4 Employment and Consulting Agreements. Except as set forth
on Schedule 2.4 neither Sellers nor Tri-Max is a party to any consulting or
employment agreements.
2.5 Financial Statements; Absence of Certain Changes. Tri-Max
has previously furnished to the Purchaser true and complete copies of the
following financial statements:
(i) Consolidated unaudited statements of financial condition
of Tri-Max as of December 31, 1997.
All such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis and
fairly present the financial condition of Tri-Max as of the dates thereof.
Specifically, without limitation, such financial statements reflect all material
accrued liabilities and adequate reserves for all material unaccrued liabilities
and for all reasonably anticipated material losses of Tri-Max.
2.6 No Conflicts or Defaults. Except as set forth in Schedule
2.6 the execution and delivery of this Agreement and the Additional Agreements
by each Seller and the consummation of the transactions contemplated hereby and
thereby do not and shall not (a) contravene the Certificate of Incorporation or
By-Laws of the Company or (b) with or without the giving of notice or the
passage of time and subject to obtaining such consents prior to the Closing as
are set forth in Schedule 2.6, (i) violate, conflict with, or result in a breach
of, or a default or loss of rights under, any material covenant, agreement,
mortgage, indenture, lease, instrument, permit or license to which the Company
or any of the Subsidiaries is a party or by which the Company or Sellers or any
of their respective assets are bound, or any judgment, order or decree, or any
law, rule or regulation to which the Company or Sellers or any of their
respective assets are subject, (ii) result in the creation of, or give any party
the right to create any Liens upon any of the assets of the Company or Sellers,
(iii) terminate or give any party the right to terminate, amend, abandon or
refuse to perform, any material agreement, arrangement or commitment to which
the Company or Sellers is a party or by which the Company or Sellers or any of
their respective assets are bound, or (iv) accelerate or modify, or give any
party the right to accelerate or modify, the time within which, or the terms
under which, the Company or Sellers is to perform any duties or obligations or
receive any rights or benefits under any material agreement, arrangement or
commitment to which it is a party.
2.7 Further Financial Matters. (a) Except as set forth in
Schedule 2.7, the Company has no liabilities or obligations, whether secured or
unsecured, accrued, determined, absolute or contingent, asserted or unasserted
or otherwise, which are required to be reflected or reserved in a balance sheet
or the notes thereto under generally accepted accounting principles, but which
are not reflected in the Financial Statements.
(b) Except as set forth in Schedule 2.7, the Company does not
have any, direct or indirect, indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise.
(c) The forecasted operations statements and cash flow
statements of the Company, true and complete copies of which have been delivered
to the Purchaser, were prepared in good faith on the assumptions stated therein,
which assumptions were believed to be reasonable in light of conditions existing
at the time of delivery of such forecasts, and represented, at the time of
delivery, such Seller's best estimate of its future financial performance, it
being recognized that such forecasts do not constitute a warranty as to the
future performance of the Company and that actual results may vary from
forecasted results.
2.8 Taxes. Except as indicated in Schedule 2.8, the Company
has filed all United States federal, state, county, local and foreign national,
provincial and local returns and reports which were required to be filed on or
prior to the date hereof in respect of all income, withholding, franchise,
payroll, excise, property, sales, use, value-added or other taxes or levies,
imposts, duties, license and registration fees, charges, assessments or
withholdings of any nature whatsoever (together, "Taxes"), and has paid all
Taxes (and any related penalties, fines and interest) which have become due
pursuant to such returns or reports or pursuant to any assessment which has
become payable, or, to the extent its liability for any Taxes (and any related
penalties, fines and interest) has not been fully discharged, the same have been
properly reflected as a liability on the books and records of the Company and
adequate reserves therefor have been established. All such returns and reports
filed on or prior to the date hereof have been properly prepared and are true,
correct (and to the extent such returns reflect judgments made by the Company,
such judgments were reasonable under the circumstances) and complete in all
material respects. Except as indicated in Schedule 2.8, no extension for the
filing of any such return or report is currently in effect. Except as indicated
in Schedule 2.8, no tax return or tax return liability of the Company has been
audited or, presently under audit. All taxes and any penalties, fines and
interest which have been asserted to be payable as a result of any audits have
been paid. Except as indicated in Schedule 2.8, the Company has not given or
been requested to give waivers of any statute of limitations relating to the
payment of any Taxes (or any related penalties, fines and interest). There are
no claims pending or, to the knowledge of such Seller, threatened, against the
Company for past due Taxes. Except as indicated in Schedule 2.8, all payments
for withholding taxes, unemployment insurance and other amounts required to be
paid for periods prior to the date hereof to any governmental authority in
respect of employment obligations of the Company, have been paid or shall be
paid prior to the Closing and have been duly provided for on the books and
records of the Company and in the Financial Statements.
2.9 Indebtedness: Contracts: No Defaults.
(a) Schedule 2.9 sets forth a true, complete and correct list
of all instruments, agreements, contracts, indentures, mortgages, guarantees,
notes, commitments, accommodations, letters of credit or other arrangements or
understandings, whether written or oral, to which the Company is a party
(collectively, the "Operating Agreements"). The Operating Agreements constitute
all of the contracts, agreements, understandings and arrangements required for
the operation of the business of the Company or which have a material effect
thereon. Copies of all such written Operating Agreements have previously been
delivered or otherwise made available to the Purchaser and such copies are true,
complete and correct as of the date hereof.
(b) Except as disclosed in Schedule 2.9, neither the Company,
nor any other person or entity is in breach in any material respect of, or in
default in any material respect under, any contract, agreement, arrangement,
commitment or plan to which the Company is a party, including the Operating
Agreements, and no event or action has occurred, is pending or is threatened,
which, after the giving of notice, passage of time or otherwise, would
constitute or result in such a material breach or material default by the
Company or, to the knowledge of such Seller, any other person or entity. The
Company has not received any notice of default under any contract, agreement,
arrangement, commitment or plan to which it is a party, including the Operating
Agreements, which default has not been cured to the satisfaction of, or duly
waived by, the party claiming such default on or before the date hereof.
2.10 Personal Property. Except as set forth in Schedule 2.10,
the Company has good and marketable title to all of its tangible personal
property and assets, including, without limitation, all of the assets reflected
in the Financial Statements that have not been disposed of in the ordinary
course of business since December 31, 1997, free and clear of all Liens or
mortgages, except for any Lien for current taxes not yet due and payable and
such restrictions, if any, on the disposition of securities as may be imposed by
federal or applicable state securities laws.
2.11 Real Property. (a) Schedule 2.11 sets forth a true and
complete list of all real property owned by the Company (the "Owned Real
Property"). The Company is the owner of insurable title to such Owned Real
Property and to all of the structures located thereon, free and clear of all
Liens, mortgages and restrictions on the use thereof, except matters of record
which do not interfere in any material way with use or occupancy of the Owned
Real Property.
(b) Schedule 2.11 sets forth a true, correct and complete list
of all leases, subleases, licenses and other agreements (collectively, the "Real
Property Leases") under which the Company uses or occupies, has the right to use
or occupy, or leases the right to use or occupy, now or in the future, any real
property where the annual rental obligation exceeds $10,000 (the land,
buildings, and other improvements covered by the Real Property Leases being
herein called the "Leased Real Property"). Except as set forth in Schedule 2.11
each Real Property Lease is valid, binding and in full force and effect with
respect to the Company, and, to the knowledge of such Seller, all other parties
thereto; no notice of default or termination under any Real Property Lease is
outstanding; no termination event or condition or uncured default on the part of
the Company, exists under any Real Property Lease, and no event has occurred and
no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a default or termination event or condition with
respect to the Company, or, to the knowledge of such Seller, any other party
thereto. The Company holds any leasehold estate under, and any other interest in
each Real Property Lease, free and clear of all Liens and mortgages except as
set forth in Schedule 2.11.
2.12 Compliance with Law. (a) Except as set forth in Schedule
2.12, the Company is not conducting its business or affairs in material
violation of any applicable federal, state or local law, ordinance, rule,
regulation, court or administrative order, decree or process, or any requirement
of insurance carriers. The Company has not received any notice of violation or
claimed violation of any such law, ordinance, rule, regulation, order, decree,
process or requirement.
(b) The Company is in compliance in all material respects with
all applicable federal, state, local and foreign laws and regulations relating
to the protection of the environment and human health. There are no claims,
notices, actions, suits, hearings, investigations, inquiries or proceedings
pending or, to the knowledge of such Seller, threatened against the Company that
are based on or related to any environmental matters or the failure to have any
required environmental permits, and there are no past or present conditions that
such Seller has reason to believe are likely to give rise to any material
liability or other obligations of the Company under any environmental laws.
2.13 Permits and Licenses. Except as set forth in Schedule
2.13, the Company has all certificates of occupancy, rights, permits,
certificates, licenses, franchises, approvals and other authorizations as are
reasonably necessary to conduct its business and to own, lease, use, operate and
occupy its assets, at the places and in the manner now conducted and operated,
except those the absence of which would not materially adversely affect its
business. Except as set forth in Schedule 2.13, as of the date hereof, the
Company has not received any written or oral notice or claim pertaining to the
failure to obtain any material permit, certificate, license, approval or other
authorization required by any federal, state or local agency or other regulatory
body, the failure of which to obtain would materially and adversely affect its
business.
2.14 Ordinary Course. Except as set forth in Schedule 2.14,
since September 14, 1992, the Company has conducted its business, maintained its
real property and equipment and kept its books of account, records and files,
substantially in the same manner as previously conducted, maintained or kept and
solely in the ordinary course.
2.15 No Adverse Changes. Except as set forth in Schedule 2.15,
since January 1, 1998, there has not been (a) any material adverse change in the
business, prospects, the financial or other condition, or the assets or
liabilities of the Company as reflected in the Financial Statements, (b) any
material loss sustained by the Company, including, but not limited to any loss
on account of theft, fire, flood, explosion, accident or other calamity, whether
or not insured, which has materially and adversely interfered, or may materially
and adversely interfere, with the operation of the Company's business, or (c) to
the best knowledge of such Seller, any event, condition or state of facts,
including, without limitation, the enactment, adoption or promulgation of any
law, rule or regulation, the occurrence of which materially and adversely does
or would affect the results of operations or the business or financial condition
of the Company.
2.16 Litigation. (a) Except as set forth in Schedule 2.16
there is no claim, dispute, action, suit, proceeding or investigation pending
or, to the knowledge of such Seller, threatened, against or affecting the
business of the Company, or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Additional Agreements, at law
or in equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to the
knowledge of such Seller, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the 12-month period
preceding the date hereof; (b) there is no outstanding judgment, order, writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality, against or materially affecting the business of the Company;
and (c) the Company has not received any written or verbal inquiry from any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality concerning the possible violation of any law, rule
or regulation or any matter disclosed in respect of its business.
2.17 Insurance. The Company maintains insurance against all
risks customarily insured against by companies in the computer and consulting
and servicing industry. All such policies are in full force and effect, and the
Company has not received any notice from any insurance company suspending,
revoking, modifying or canceling (or threatening such action) any insurance
policy issued to the Company. Copies of such insurance policies have been
provided to Purchaser and are listed in Schedule 2.17.
2.18 Authorizations. Any authorization, approval, order,
license, permit, franchise or consent of, declaration to, or filing or
registration with, any court, governmental authority or any other person or
entity which is not a party to this Agreement or the Additional Agreements which
is required in connection with the execution, delivery and performance by such
Seller of this Agreement or the Additional Agreements has been obtained or shall
be obtained as of the Closing Date. There is no pending or threatened claim,
action, suit, investigation or proceeding against the Company or such Seller
before any court, arbitrator or governmental authority which, if determined
adversely to the Company or such Seller, would have a material adverse effect on
the ability of such Seller to perform its obligations under this Agreement or
the Additional Agreements.
2.19 Certificate of Incorporation and By-Laws: Minute Books.
The copies of the Certificate of Incorporation and By-Laws (or similar governing
documents) of the Company, and all amendments to each are true, correct and
complete. The minute books of the Company contain true and complete records of
all meetings and consents in lieu of meetings of their respective Board of
Directors (and any committees thereof), or similar governing bodies, since the
time of their respective organization. The stock books of the Company are true,
correct and complete.
2.20 Employee Benefit Plans. Except as set forth in Schedule
2.20, the Company does not maintain, nor has the Company maintained in the past,
any employee benefit plans ("as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), or any plans,
programs, policies, practices, arrangements or contracts (whether group or
individual) providing for payments, benefits or reimbursements to employees of
the Company, former employees, their beneficiaries and dependents under which
such employees, former employees, their beneficiaries and dependents are covered
through an employment relationship with the Company, or any entity required to
be aggregated in a controlled group or affiliated service group with the Company
for purposes of ERISA or the Internal Revenue Code of 1986 (the "Code")
(including, without limitation, under Section 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA, at any relevant time ("Benefit Plans").
2.21 Patents and Trademarks. The Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes necessary for its business as now conducted without any conflict with
or infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, and neither the
Company is not bound by, or a party to, any options, licenses or agreements of
any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes of any other person or entity.
2.22 Transactions with Affiliates. Except as set forth in
Schedule 2.22, (a) the Company has no indebtedness due from its respective
officers, directors or stockholders or any of their respective relatives or
affiliates, or (b) none of the officers, directors or stockholders of the
Company or their respective relatives or affiliates has any claim against the
Company.
2.23 Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the Sellers
directly with the Purchaser without the intervention of any person on behalf of
the Company or Sellers in such a manner as to give rise to any valid claim by
any person against Purchaser for a finder's fee, brokerage commission or similar
payment.
2.24 Investment Representation.
(a) The Triangle Shares to be received by such Seller will be
acquired for investment for an indefinite period for such Seller's own account
and not with a view to the sale or distribution of any part thereof, and it has
no present intention of selling or otherwise distributing the same.
(b) Such Seller agrees not to make a disposition of any of the
Triangle Shares, unless the Triangle Shares shall have been registered under the
Act and any applicable state securities or Blue Sky laws, or pursuant to
exemptions therefrom.
(c) Such Seller is able to manage for itself in the
transactions contemplated by this Agreement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, has the ability to bear the economic risks of its
investments, and has received all the information it has requested from
Purchaser that it considers necessary or appropriate for deciding whether to
sell the Shares and receive the Triangle Shares.
(d) Such Seller understands that the Triangle Shares will not
be registered under the Act and applicable state securities or Blue Sky laws on
the grounds that the issuance of the Triangle Shares are exempt from
registration under the Act and applicable state securities or Blue Sky laws.
2.25 Restricted Securities. Such Seller understands that the
Triangle Shares may not be sold, transferred, or otherwise disposed of without
registration under the Act or an exemption therefrom, and that in the absence of
an effective registration statement covering the Triangle Shares or any
available exemption from registration under the Act, the Triangle Shares must be
held indefinitely. Such Seller is aware that the Triangle Shares may not be sold
pursuant to Rule 144 promulgated under the Act unless all of the conditions of
that Rule are met. Among the conditions for use of Rule 144 may be the
availability of current information to the public about Purchaser.
2.26 Miscellaneous. The representations and warranties made by
such Seller in this Agreement and the Additional Agreements and the statements
made by or on behalf of such Seller in any certificate, document or exhibit
furnished in connection with the transactions contemplated hereby or thereby,
when taken together, do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make such representations
or warranties or other such statements, in light of the circumstances under, and
at the time at, which they were made, not false or misleading.
2.27 Survival of Representations and Warranties. The
representation and warranties of such Seller shall survive the Closing Date
until the date upon which the liability to which any claim relating to any such
representation or warranty is barred by all applicable statutes of limitation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers that:
3.1 Due Authorization: Valid Obligation. Purchaser has or
prior to the Closing Date will have taken all corporate or other action
necessary to authorize it to execute and deliver this Agreement and the
Additional Agreements, and to consummate the transactions contemplated hereby
and thereby, and this Agreement and the Additional Agreements constitute the
valid and binding obligations of Purchaser, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
3.2 No Conflicts. The execution and delivery by Purchaser of
this Agreement and the Additional Agreements and the consummation of the
transactions contemplated hereby and thereby do not and shall not (a) contravene
its Certificate of Incorporation or By-Laws (or similar governing instruments),
or (b) with or without the giving of notice or the passage of time, violate,
conflict with, or result in a breach of, or a default or loss of rights under,
any covenant, agreement, mortgage, indenture, lease or instrument to which
Purchaser is a party or by which Purchaser or any of its assets is bound or any
judgment, order, decree, law, rule or regulation to which Purchaser or any of
its assets are subject.
3.3 Authorizations. Any authorization, approval, order,
license, permit, franchise or consent of, declaration to, or filing or
registration with, any court, governmental authority or any other person or
entity which is not a party to this Agreement and the Additional Agreements
which is required in connection with the execution, delivery and performance of
this Agreement and the Additional Agreements by Purchaser has been obtained or
shall be obtained as of the Closing Date. There is no pending or threatened
claim, action, suit, investigation or proceeding against Purchaser before any
court, arbitrator or governmental authority which, if determined adversely to
Purchaser, would have a material adverse effect on the ability of Purchaser to
perform its obligations under this Agreement.
3.4 Miscellaneous. The representations and warranties made by
Purchaser in this Agreement and the statements made by or on behalf of Purchaser
or in any certificate, document or exhibit furnished in connection with the
transactions contemplated hereby do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make such
representations or warranties or other such statement, in light of the
circumstances under which they were made, not false or misleading.
3.5 Survival of Representations and Warranties. The
representation and warranties of Purchaser shall survive the Closing Date until
the date upon which the liability to which any claim relating to any such
representation or warranty is barred by all applicable statutes of limitation.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnity of Purchaser. Sellers, jointly and severally,
agree to defend, indemnify and hold harmless Purchaser from and against, and to
reimburse Purchaser with respect to, all liabilities, losses, costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, asserted against or incurred by Purchaser by reason of, arising
out of, or in connection with:
(a) any material breach of any representation or warranty
contained in this Agreement and made by the Sellers or in any document
or certificate delivered by the Sellers pursuant to the provisions of
this Agreement or in connection with the transactions contemplated
thereby;
(b) any material failure by the Sellers to perform any
agreement required by this Agreement to be performed thereby; or
(c) any claim, demand, action, suit, proceeding or
investigation involving the Company arising out of the operation of the
Company on or prior to the Closing Date or the allegation by any third
party of the existence of any state of facts which, if existing, would
constitute a material breach of any representation or warranty referred
to in clause (a) of this Section 4.1.
4.2 Indemnification Procedure.
(a) Purchaser shall give prompt notice to the Sellers of any
claim for indemnification arising under Section 4.1. The Sellers shall have the
right to assume and to control the defense of any such claim with counsel
reasonably acceptable to Purchaser, at the Sellers' own cost and expense,
including the cost and expense of reasonable attorneys' fees and disbursements
in connection with such defense, in which event the Sellers shall not be
obligated to pay the fees and disbursements of separate counsel for Purchaser in
such action. In the event, however, that Purchaser's legal counsel shall
determine that defenses may be available to Purchaser that are different from or
in addition to those available to the Sellers, in that there could reasonably be
expected to be a conflict of interest if Purchaser and the Sellers have common
counsel in any such proceeding, or if the Sellers have not assumed the defense
of the action or proceedings, then Purchaser may employ separate counsel to
represent or defend Purchaser, and the Sellers shall pay the reasonable fees and
disbursements of counsel for Purchaser. No settlement of any such claim or
payment in connection with any such settlement shall be made without the prior
consent of the Sellers which consent shall not be unreasonably withheld.
4.3 Escrow of Triangle Shares. The parties acknowledge that
Sellers shall deposit 50,000 (25,000 each Seller) of the Triangle Shares with
Buyer (accompanied with stock powers duly endorsed in blank) which Buyer shall
retain for six months from the date of this Agreement as additional security for
the indemnification provisions provided in this Section 4. If no outstanding
claims have been made by Buyer on such date, Buyer shall deliver such shares to
Sellers. If, however, there are outstanding claims pursuant to this Section 4,
Buyer shall retain such shares pending the resolution of such claims. If any of
such claims are in favor of Buyer, Seller shall have the right to reimburse
Buyer in immediately available funds or direct the sale of a sufficient number
of escrowed shares and direct the proceeds of such sale to Buyer.
ARTICLE V
CLOSING DATE; CLOSING
5.1 Closing. The closing hereunder (the "Closing") shall take
place at the offices of Berlack, Israels & Liberman LLP, 120 West 45th Street,
New York, New York 10036, at 9:00 A.M. (local time) on May 29,1998 (the "Closing
Date") or at such other time and location as Purchaser and Sellers may agree
upon.
5.2 Delivery by Sellers. At the Closing, Sellers shall
deliver, or shall cause to be delivered, to Purchaser the following:
(i) Certificates representing the Shares, which certificates
shall be duly endorsed in blank or, in lieu thereof shall have affixed
thereto stock powers executed in blank and in proper form for transfer;
(ii) The resignations of all directors and officers of the
Company, except for Thomas Secreto and Arthur Marino whom shall remain
as the President and Vice President of the Company;
(iii) The Company's minute books, stock books, stock transfer
ledger and corporate seal and all other items and documents of or
relating to the Company as the Purchaser may reasonably request as are
contained within the purposes of this Agreement;
(iv) the Employment Agreements referred to in Section 6.2; and
(v) the legal opinion of Sellers' counsel in form and substance
satisfactory to Purchaser and its legal counsel;
5.3 Delivery by Purchaser. At the closing, Purchaser shall deliver, or
cause to be delivered, to Sellers the following:
(i) the Triangle Shares (subject to the provisions of Sections 4.3 and
6.7); and
(ii) the Employment Agreements referred to in Section 6.2.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Working Capital. Purchaser agrees to provide working capital for
Tri-Max in the amount of $200,000 to be funded at the discretion of Purchaser.
6.2 Employment Agreement. On the Closing Date, the Sellers will enter into
the Employment Agreements with the Company, forms of which are attached hereto
as Exhibit 1 and 2.
6.3 Confidentiality. From and after the Closing Date, the Sellers shall not
disclose or furnish to any other person, except to the extent required by law or
by order of any court or governmental agency, (a) any information which is not
generally known in the industry relating to Purchaser or the Company, (b) any
information which is not generally known in the industry relating to the
operations or financial status of the Purchaser or the Company which is not
specifically a matter of public record, (c) any trade secrets or other
confidential information of the Purchaser or the Company, including without
limitation, any marketing or business plans or research or development on new
products and services or (d) the name, address or other information relating to
any supplier or customer of the Purchaser or the Company.
6.4 Non-Competition. (a) Sellers acknowledge that (i) the
business of the Company is in the computer and consulting and servicing industry
(the "Restricted Activities"), (ii) the business is national in scope, (iii)
Sellers' ownership of the Company has brought them in close contact with certain
confidential affairs of the Company not readily available to the public and (iv)
Purchaser would not purchase the Company but for the agreements and covenants
contained in this Section 6.4.
(b) Sellers shall not in the United States of America,
directly or indirectly, for a period consisting of three years following the
Closing Date (the "Restricted Period"), (i) engage in the Restricted Activities
or (ii) become interested in any person engaged in the Restricted Activities
(other than Purchaser) as a partner, shareholder, principal, agent, trustee,
consultant., lender or in any other relationship or capacity, provided, however,
that this Section 6.4 shall not be construed to prohibit the ownership of not
more than 2% of the capital stock of any corporation which is engaged in any of
the Restricted Activities having a class of securities registered pursuant to
the Securities Exchange Act of 1934.
(c) If Sellers breach, or threaten to commit a breach of, any
of the provisions of this Section 6.4 (the "Restrictive Covenants"), Purchaser
shall have the right and remedy (which shall not be affected by the provisions
of any other Section of this Agreement and shall be in addition to, and not in
lieu of, any other rights and remedies available to Purchaser under law or in
equity) to have the Restrictive Covenants specifically enforced by any court
having equity jurisdiction, including, without limitation, the right to an entry
against Sellers or restraining orders and injunctions (preliminary, mandatory,
temporary and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable injury to Purchaser
and that money damages will not provide adequate remedy to Purchaser.
(d) If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions. If any court determines that any
of the Restrictive Covenants, or any part thereof, is unenforceable because of
the duration of such provision or the area covered thereby, such court shall
have the power to reduce the duration or area of such provisions and, in its
reduced form, such provision shall then be enforceable and shall be enforced.
(e) Purchaser and Sellers intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Covenants. If the courts of
any one or more of such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the Purchaser and Sellers that such determination not bar or in any
way affect Purchaser's right to the relief provided above in the courts of any
other jurisdiction being, for this purpose, several into diverse and independent
covenants, subject, where appropriate, to the doctrine of res judicata.
6.5 Post-Closing Further Assurances. At any time and from time
to time after the Closing Date at the request of either party, and without
further consideration, the other party will execute and deliver, or cause the
execution and delivery of, such other instruments of sale, transfer, conveyance,
assignment and confirmation and take or cause to be taken such other action as
the party requesting the same may reasonably deem necessary or desirable in
order to transfer, convey and assign more effectively to the requesting party
all of the property and rights intended to be conveyed to such party pursuant to
the provisions of this Agreement.
6.6 Publicity. No publicity release or announcement concerning
this Agreement or the transactions contemplated hereby shall be made without
advance approval thereof by the Purchaser. No approval from the Sellers is
necessary.
6.7 Additional Shares. Each Seller shall receive an additional
5,000 shares of common stock of Triangle on the date hereof. However, if Tri-Max
does not achieve pre-tax income of $200,000 for the period of June 1, 1998
through June 30, 1999, such shares will be canceled. Seller shall deposit such
shares with Buyer (accompanied with stock power duly endorsed in blank) pending
the determination of whether or not such earning threshold shall be achieved.
ARTICLE VII
MISCELLANEOUS
7.1 Expenses. Each of the parties hereto shall be responsible
for their respective fees, costs and expenses incurred in connection with the
Agreement.
7.2 Notice. All communications, notices, requests, consents or
demands given or required under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered to, or received by prepaid
registered or certified mail or recognized overnight courier addressed to, or
upon receipt of a facsimile sent to, the party for whom intended, as follows, or
to such other address or facsimile number as may be furnished by such party by
notice in the manner provided herein:
If to the Purchaser:
Triangle Imaging Group, Inc.
4400 West Sample Road
Suite 228
Coconut Creek, FL 33073
in each case with a copy to:
Berlack, Israels & Liberman LLP
120 West 45th Street
New York, New York 10036
Attention: Alan N. Forman, Esq.
Tel.: (212) 704-0100
Fax: (212) 704-0196
If to the Seller:
To the addresses of Sellers set forth on page 1 of this Agreement in each
case with a copy to:
Allen Kramer, Esq.
30 Vessey Street
New York, NY 10007
Tel.: (212) 233-0580
Fax: (212) 732-8795
7.3 Entire Agreement. This Agreement, the Schedules and the
Exhibits hereto, the Additional Agreements and the instruments and agreements to
be executed pursuant to this Agreement, sets forth the entire understanding of
the parties hereto with respect to its subject matter, merges and supersedes all
prior and contemporaneous understandings with respect to its subject matter and
may not be waived or modified, in whole or in part, except by a writing signed
by each of the parties hereto. No waiver of any provision of this Agreement in
any instance shall be deemed to be a waiver of the same or any other provision
in any other instance. Failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such provision.
7.4 Successors and Assigns. This Agreement shall be binding
upon, enforceable against and inure to the benefit of, the parties hereto and
their respective -heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any party hereto except with the prior written consent of the other parties,
which consent shall not be unreasonably withheld.
7.5 Governing Law; Submission to Jurisdiction. This Agreement
shall in all respects be governed by and construed in accordance with the laws
of the State of Florida applicable to agreements made and fully to be performed
in such state, without giving effect to conflicts of law principles. The parties
hereto agree to submit to the jurisdiction of the State and Federal courts in
the State of Florida with respect to any claim or matter arising under this
Agreement, and hereby consent that service of process with respect to all courts
in and of the State of Florida may be made by registered mail to such person at
the address of such person set forth herein.
7.6 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7 Construction. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Articles, Sections and Exhibits are to the articles,
sections and exhibits, respectively, of this Agreement. The Schedules are hereby
incorporated herein by reference and made a part of this Agreement. As used
herein, the singular includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
7.8 Severability. If any provision of this Agreement is held
to be invalid or unenforceable by a court of competent jurisdiction, this
Agreement shall be interpreted and enforceable as if such provision were severed
or limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement as of the date first set forth above.
TRIANGLE IMAGING GROUP, INC.
By:__________________________________________
Name:
Title:
_____________________________________________
Thomas Secreto
_____________________________________________
Arthur Marino
<PAGE>
Schedule 2.4 Employment and Consulting Agreements
N/A
<PAGE>
Schedule 2.6 Conflicts or Defaults
N/A
<PAGE>
Schedule 2.7 Further Financial Matters
Designagraphics is claiming that they are owed about $14,000 for work done on
behalf of Tri-Max as a consultant. Tri-Max is claiming that because of poor work
and errors made, Tri-Max gave credits to the customer and had to redo some of
the work.
Designagraphics has offered through their attorney to settle the matter for
$10,000.00. Tri-Max countered with an offer to pay $7,000.00 No litigation has
been started.
<PAGE>
Schedule 2.8 Taxes
Tri-Max has filed as a "sub chapter S" corporation. After the acquisition, it
will no longer qualify as one and therefore, must end its tax year at time of
sale and file a tax return for the period of January 1, 1998 through closing.
<PAGE>
Schedule 2.9 Indebtedness; Contracts; No Defaults
IBM Business Partner agreement
Lotus Development Corporation business Partner agreement Fleet Business
Revolving line of credit - $25,000 outstanding
<PAGE>
Schedule 2.10 Personal Property
None
<PAGE>
Schedule 2.11 Real Property
Lease dated 28 July, 1995 between LBA Properties, Inc. and GIM Electronics
and Tri-Max Corp. for 4500 sq. ft. at 270 H Duffy Avenue, Hicksville, New York
10801 for a term of 5 years, 1 month.
<PAGE>
Schedule 2.12 Compliance with Law
N/A
<PAGE>
Schedule 2.13 Permits and Licenses
N/A
<PAGE>
Schedule 2.14 Ordinary Course
N/A
<PAGE>
Schedule 2.15 No Adverse Changes
N/A
<PAGE>
Schedule 2.16 Litigation
See Schedule 2.7
<PAGE>
Schedule 2.17 Insurance
State Farm Fire & Casualty Co. - business policy, Special From 3 which
includes business liability of $1,000,000.
<PAGE>
Schedule 2.20 Employee Benefit Plans
Tri-Max Systems Corp. 401(k) Plan
401(k) Profit Sharing Plan
effective date: 1/1/93
<PAGE>
Schedule 2.22 Transaction with Affiliates
N/A
<PAGE>
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 29, 1998, by and between Tri-Max
Systems, Inc., a New York corporation (the "Company"), and Thomas Secreto, an
individual residing at 6 North Drive, Westbury, NY 11590 (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to secure the services of the Executive upon
the terms and conditions
hereinafter set forth; and
WHEREAS, the Executive desires to render services to the Company upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Company hereby employs Executive and the Executive
hereby accepts such employment, as the President, subject to the terms and
conditions set forth in this Agreement.
2. Duties. The Executive shall serve as the President. During
the term of this Agreement, the Executive shall devote all of his business time
to the performance of his duties hereunder unless otherwise authorized by the
Chief Executive Officer of the Company. The Executive shall report directly to
the Chief Executive Officer of the Company and to the Company's Board of
Directors.
3. Term of Employment; Vacation.
(a) The term of the Executive's employment shall be for a
period of twenty four (24) months commencing on May 29, 1998 (the "Start Date"),
subject to earlier termination by the parties pursuant to Section 6 hereof (the
"Term").
(b) The Executive shall be entitled to three (3) weeks vacation during each
year of the Term.
4. Compensation of Executive.
4.1 Salary. The Company shall pay to Executive a base salary (the "Base
Salary") of Ninety-Seven Thousand Dollars ($97,000) per annum, less such
deductions as shall be required to be withheld by applicable law and
regulations. All salaries payable to Executive shall be paid at such regular
weekly, biweekly or semi-monthly time or times as the Company makes payment of
its regular payroll in the regular course of business.
4.2 Bonuses.
(a) During the first year of the Term, the Executive shall be entitled to
receive cash performance bonuses based upon after-tax income achieved by the
Company of $100,000 for each of the first four fiscal quarters. If such earning
threshold will be achieved, within forty-five (45) days following the end of
each fiscal quarter, the Company shall pay to the Executive a cash bonus equal
to $5,000 for the fiscal quarter ending preceding such date, calculated in
accordance with generally accepted accounting principles. Notwithstanding the
forgoing, the parties agree that if officers of Triangle Imaging Group, Inc.
("Triangle") are paid consulting fees or salaries by the Company outside the
ordinary course of business, such amounts shall be added back for the purposes
of calculating the bonus due to the Executive under this Section 4.2(a). For
each ten percent (10%) that the threshold shall be exceeded (ie.; $10,000 in a
quarter), Executive shall receive an additional $500 bonus, up to a maximum of
$2,500 per fiscal quarter.
(b) Upon the execution of this Agreement, the Executive shall be
entitled to receive options (the "Options") to purchase 100,000 shares of the
common stock of Triangle ("Common Stock"), pursuant to Triangle's Executive
Stock Option Plan, exercisable for a period of five (5) years following the date
of grant, at an exercise price equal to the closing bid price of the Common
Stock on May 29, 1998. The Options shall vest one half on May 29, 1999 and the
remainder on May 29, 2000, so long as the Executive continues to be employed by
the Company.
(c) Additional bonuses may be paid to the Executive in cash, stock,
options or other consideration in such amount(s) as determined in the sole
discretion by the Company's Board of Directors.
4.3 Expenses. During the Term, the Company shall promptly reimburse the
Executive for all reasonable and necessary travel expenses and other
disbursements incurred by the Executive on behalf of the Company in the
performance of the Executive's duties hereunder, assuming Executive has received
prior approval for such travel expenses and disbursements by the Company to the
extent possible consistent with corporate practices with respect to the
reimbursement of expenses incurred by the Company's employees. The Executive
shall also be entitled to an automobile allowance equal to $750 per month.
4.4 Benefits. The Executive shall be permitted during the Term to
participate in any hospitalization or disability insurance plans, health
programs (including medical and dental plans), pension plans, life insurance
plans, bonus plans or similar benefits (such as the Company's 401-K Plan and
Employee Stock Option Plan) that may be available to other executives of the
Company (including coverage under any officers and directors liability insurance
policy), subject to such eligibility rules as are applied to senior managers
generally. The Company will only be responsible for the premiums on such
policies or plans for the Executive only and not for any other family members of
Executive.
5. Disability of the Executive. If the Executive is incapacitated or
disabled by accident, sickness or otherwise so as to render the Executive
mentally or physically incapable of performing the services required to be
performed under this Agreement for a period of 60 consecutive days or 90 days in
any period of 360 consecutive days (a "Disability"), the Company may, at the
time or during the period of such Disability, at its option, terminate the
employment of the Executive under this Agreement immediately upon giving the
Executive written notice to that effect.
6. Termination.
The Company may terminate the employment of the Executive and all of the
Company's obligations under this Agreement at any time for Cause (as hereinafter
defined) by giving the Executive notice of such termination, with reasonable
specificity of the details thereof. "Cause" shall mean (i) the Executive's
willful misconduct which could reasonably be expected to have a material adverse
effect on the business and affairs of the Company, (ii) the Executive's
disregard of lawful instructions of the Company's Board of Directors or Chief
Executive Officer consistent with the Executive's responsibilities under this
Agreement relating to the business of the Company, (iii) the Executive's neglect
of duties or failure to act, which, in each case, could reasonably be expected
to have a material adverse effect on the business and affairs of the Company,
(iv) the commission by the Executive of an act constituting common law fraud, or
a felony, or criminal act against the Company or any affiliate thereof or any of
the assets of any of them, (v) the Executive's abuse of alcohol or other drugs
or controlled substances, or conviction of a crime involving moral turpitude,
(vi) the Executive's material breach of any of the agreements contained herein
or (vii) the Executive's death or resignation hereunder; provided however, that
if the Executive resigned as a result of a material breach by the Company of
this Agreement, such resignation shall not be considered "Cause" hereunder. A
termination pursuant to Section 6(a)(i), (ii), (iii), (iv), (v) (other than as a
result of a conviction of a crime involving moral turpitude) or (vi) shall take
effect 30 days after the giving of the notice contemplated hereby unless the
Executive shall, during such 30-day period, remedy to the reasonable
satisfaction of the Board of Directors of the Company the misconduct, disregard,
abuse or breach specified in such notice; provided, however, that such
termination shall take effect immediately upon the giving of such notice if the
Board of Directors of the Company shall, in its reasonable discretion, have
determined that such misconduct, disregard, abuse or breach is not remediable
(which determination shall be stated in such notice). A termination pursuant to
Section 6(a)(v) (as a result of a conviction of a crime involving moral
turpitude) or (vii) shall take effect immediately upon the giving of the notice
contemplated hereby. For convenience of reference, the date upon which any
termination of the employment of the Executive pursuant to Sections 5 or 6 shall
be effective shall be hereinafter referred to as the "Termination Date".
7. Effect of Termination of Employment.
Upon the termination of the Executive's employment for Cause or a
Disability, neither the Executive nor the Executive's beneficiaries or estate
shall have any further rights to compensation under this Agreement or any claims
against the Company arising out of this Agreement, except the right to receive
(i) the unpaid portion of the Base Salary provided for in Section 4.1, earned
through the Termination Date (the "Unpaid Salary Amount"), and (ii)
reimbursement for any expenses for which the Executive shall not have
theretofore been reimbursed, as provided in Section 4.3 (the "Expense
Reimbursement Amount"). If the Termination Date is prior to the first
anniversary date of this Agreement, executive shall not be entitled to any of
the unvested Options. If the Termination Date occurs after the first anniversary
date of this Agreement, Executive shall be entitled to receive a pro rata
portion of such Options equal to the number of months of employment hereunder as
a percentage of the 24 months of the Term of this Agreement.
8. Disclosure of Confidential Information. Executive recognizes that he has
had and will continue to have access to secret and confidential information
regarding the Company, including but not limited to its customer list, products,
know-how, and business plans. Executive acknowledges that such information is of
great value to the Company, is the sole property of the Company, and has been
and will be acquired by him in confidence. In consideration of the obligations
undertaken by the Company herein, Executive will not, at any time, during or
after his employment hereunder, reveal, divulge or make known to any person, any
information acquired by Executive during the course of his employment, which is
treated as confidential by the Company, including but not limited to its
customer list, not otherwise in the public domain, other than in the ordinary of
business during his employment hereunder. The provisions of this Section 8 shall
survive Executive's employment hereunder.
9. Covenant Not To Compete.
(a) Executive recognizes that the services to be performed by him hereunder
are special, unique and extraordinary. The parties confirm that it is reasonably
necessary for the protection of Company that Executive agree, and accordingly,
Executive does hereby agree, that he shall not, directly or indirectly, at any
time during the term of the Agreement and the "Restricted Period" (as defined in
Section 9(e) below):
(i) except as provided in Subsection (d) below, be engaged in the computer
and computer consulting and servicing industries, or provide technical
assistance, advice or counseling regarding such industries in any state in the
United States in which the Company or an affiliate thereof transacts business,
either on his own behalf or as an officer, director, stockholder, partner,
consultant, associate, employee, owner, agent, creditor, independent contractor,
or co-venturer of any third party; or
(ii) employ or engage, or cause or authorize, directly or indirectly, to be
employed or engaged, for or on behalf of himself or any third party, any
employee or agent of Company or any affiliate thereof.
(b) Executive hereby agrees that he will not, directly or indirectly, for
or on behalf of himself or any third party, at any time during the term of the
Agreement and during the Restricted Period solicit any customers of the Company
or any affiliate thereof in a manner which directly or indirectly competes with
the Company.
(c) If any of the restrictions contained in this Section 9 shall be deemed
to be unenforceable by reason of the extent, duration or geographical scope
thereof, or otherwise, then the court making such determination shall have the
right to reduce such extent, duration, geographical scope, or other provisions
hereof, and in its reduced form this Section shall then be enforceable in the
manner contemplated hereby.
(d) This Section 9 shall not be construed to prevent Executive from owning,
directly or indirectly, in the aggregate, an amount not exceeding two percent
(2%) of the issued and outstanding voting securities of any class of any company
whose voting capital stock is traded on a national securities exchange or on the
over-the-counter market other than securities of the Company.
(e) The term "Restricted Period," as used in this Section 9, shall mean (i)
the period of Executive's actual employment hereunder plus (ii) 24 months
thereafter in the event that the Executive is terminated for Cause.
(f) The provisions of this Section 9 shall survive the end of the Term as
provided in Section 9(e) hereof.
10. Miscellaneous.
10.1 Injunctive Relief. Executive acknowledges that the services to be
rendered under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, Executive agrees that any breach or threatened
breach by him of Section 8 or 9 of this Agreement shall entitle Company, in
addition to all other legal remedies available to it, to apply to any court of
competent jurisdiction to seek to enjoin such breach or threatened breach. The
parties understand and intend that each restriction agreed to by Executive
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which Company
seeks enforcement thereof, such restriction shall be limited to the extent
permitted by law.
10.2 Assignments. Neither Executive nor the Company may assign or delegate
any of their rights or duties under this Agreement without the express written
consent of the other.
10.3 Entire Agreement. This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties with respect to Executive's
employment by Company, supersedes all prior understandings and agreements,
whether oral or written, between Executive and Company, and shall not be
amended, modified or changed except by an instrument in writing executed by the
party to be charged. The invalidity or partial invalidity of one or more
provisions of this Agreement shall not invalidate any other provision of this
Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
10.4 Binding Effect. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
10.5 Headings. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
10.6 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, or by private
overnight mail service (e.g. Federal Express) to the party at the address set
forth above or to such other address as either party may hereafter give notice
of in accordance with the provisions hereof. Notices shall be deemed given on
the sooner of the date actually received or the third business day after
sending.
10.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to such
State's conflicts of laws provisions and each of the parties hereto irrevocably
consents to the jurisdiction and venue of the federal and state courts located
in the State of Florida.
10.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 Separability. If any of the restrictions contained in this Agreement
shall be deemed to be unenforceable by reason of the extent, duration or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Agreement shall
then be enforceable in the manner contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
TRI-MAX SYSTEMS, INC.
______________________________________________
By:
______________________________________________
Name:
______________________________________________
Title:
______________________________________________
Thomas Secreto
<PAGE>
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 29, 1998, by and between Tri-Max
Systems, Inc., a New York corporation (the "Company"), and Arthur Marino, an
individual residing at 216 Little Plains Road, Huntington, NY 11743 (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to secure the services of the Executive upon
the terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to render services to the Company upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Company hereby employs Executive and the Executive
hereby accepts such employment, as the Vice President, subject to the terms and
conditions set forth in this Agreement.
2. Duties. The Executive shall serve as the Vice President. During the term
of this Agreement, the Executive shall devote all of his business time to the
performance of his duties hereunder unless otherwise authorized by the Chief
Executive Officer of the Company. The Executive shall report directly to the
Chief Executive Officer of the Company and to the Company's Board of Directors.
3. Term of Employment; Vacation.
(a) The term of the Executive's employment shall be for a period of twenty
four (24) months commencing on May 29, 1998 (the "Start Date"), subject to
earlier termination by the parties pursuant to Section 6 hereof (the "Term").
(b) The Executive shall be entitled to three (3) weeks vacation during each
year of the Term. 4. Compensation of Executive. 4.1 Salary. The Company shall
pay to Executive a base salary (the "Base Salary") of Ninety-Seven Thousand
Dollars ($97,000) per annum, less such deductions as shall be required to be
withheld by applicable law and regulations. All salaries payable to Executive
shall be paid at such regular weekly, biweekly or semi-monthly time or times as
the Company makes payment of its regular payroll in the regular course of
business.
4.2 Bonuses.
(a) During the first year of the Term, the Executive shall be entitled to
receive cash performance bonuses based upon after-tax income achieved by the
Company of $100,000 for each of the first four fiscal quarters. If such earning
threshold will be achieved, within forty-five (45) days following the end of
each fiscal quarter, the Company shall pay to the Executive a cash bonus equal
to $5,000 for the fiscal quarter ending preceding such date, calculated in
accordance with generally accepted accounting principles. Notwithstanding the
forgoing, the parties agree that if officers of Triangle Imaging Group, Inc.
("Triangle") are paid consulting fees or salaries by the Company outside the
ordinary course of business, such amounts shall be added back for the purposes
of calculating the bonus due to the Executive under this Section 4.2(a). For
each ten percent (10%) that the threshold shall be exceeded (ie.; $10,000 in a
quarter), Executive shall receive an additional $500 bonus, up to a maximum of
$2,500 per fiscal quarter.
(b) Upon the execution of this Agreement, the Executive shall be entitled
to receive options (the "Options") to purchase 100,000 shares of the common
stock of Triangle ("Common Stock"), pursuant to Triangle's Employee Stock Option
Plan, exercisable for a period of ten (10) years following the date of grant, at
an exercise price equal to the closing bid price of the Common Stock on May 29,
1998. The Options shall vest one half on May 29, 1999 and the remainder on May
29, 2000, so long as the Executive continues to be employed by the Company.
(c) Additional bonuses may be paid to the Executive in cash, stock, options
or other consideration in such amount(s) as determined in the sole discretion by
the Company's Board of Directors.
4.3 Expenses. During the Term, the Company shall promptly reimburse the
Executive for all reasonable and necessary travel expenses and other
disbursements incurred by the Executive on behalf of the Company in the
performance of the Executive's duties hereunder, assuming Executive has received
prior approval for such travel expenses and disbursements by the Company to the
extent possible consistent with corporate practices with respect to the
reimbursement of expenses incurred by the Company's employees. The Executive
shall also be entitled to an automobile allowance equal to $750 per month.
4.4 Benefits. The Executive shall be permitted during the Term to
participate in any hospitalization or disability insurance plans, health
programs (including medical and dental plans), pension plans, life insurance
plans, bonus plans or similar benefits (such as the Company's 401-K Plan and
Employee Stock Option Plan) that may be available to other executives of the
Company (including coverage under any officers and directors liability insurance
policy), subject to such eligibility rules as are applied to senior managers
generally. The Company will only be responsible for the premiums on such
policies or plans for the Executive only and not for any other family members of
Executive.
5. Disability of the Executive. If the Executive is incapacitated or
disabled by accident, sickness or otherwise so as to render the Executive
mentally or physically incapable of performing the services required to be
performed under this Agreement for a period of 60 consecutive days or 90 days in
any period of 360 consecutive days (a "Disability"), the Company may, at the
time or during the period of such Disability, at its option, terminate the
employment of the Executive under this Agreement immediately upon giving the
Executive written notice to that effect.
6. Termination.
The Company may terminate the employment of the Executive and all of the
Company's obligations under this Agreement at any time for Cause (as hereinafter
defined) by giving the Executive notice of such termination, with reasonable
specificity of the details thereof. "Cause" shall mean (i) the Executive's
willful misconduct which could reasonably be expected to have a material adverse
effect on the business and affairs of the Company, (ii) the Executive's
disregard of lawful instructions of the Company's Board of Directors or Chief
Executive Officer consistent with the Executive's responsibilities under this
Agreement relating to the business of the Company, (iii) the Executive's neglect
of duties or failure to act, which, in each case, could reasonably be expected
to have a material adverse effect on the business and affairs of the Company,
(iv) the commission by the Executive of an act constituting common law fraud, or
a felony, or criminal act against the Company or any affiliate thereof or any of
the assets of any of them, (v) the Executive's abuse of alcohol or other drugs
or controlled substances, or conviction of a crime involving moral turpitude,
(vi) the Executive's material breach of any of the agreements contained herein
or (vii) the Executive's death or resignation hereunder; provided however, that
if the Executive resigned as a result of a material breach by the Company of
this Agreement, such resignation shall not be considered "Cause" hereunder. A
termination pursuant to Section 6(a)(i), (ii), (iii), (iv), (v) (other than as a
result of a conviction of a crime involving moral turpitude) or (vi) shall take
effect 30 days after the giving of the notice contemplated hereby unless the
Executive shall, during such 30-day period, remedy to the reasonable
satisfaction of the Board of Directors of the Company the misconduct, disregard,
abuse or breach specified in such notice; provided, however, that such
termination shall take effect immediately upon the giving of such notice if the
Board of Directors of the Company shall, in its reasonable discretion, have
determined that such misconduct, disregard, abuse or breach is not remediable
(which determination shall be stated in such notice). A termination pursuant to
Section 6(a)(v) (as a result of a conviction of a crime involving moral
turpitude) or (vii) shall take effect immediately upon the giving of the notice
contemplated hereby. For convenience of reference, the date upon which any
termination of the employment of the Executive pursuant to Sections 5 or 6 shall
be effective shall be hereinafter referred to as the "Termination Date".
7. Effect of Termination of Employment.
Upon the termination of the Executive's employment for Cause or a
Disability, neither the Executive nor the Executive's beneficiaries or estate
shall have any further rights to compensation under this Agreement or any claims
against the Company arising out of this Agreement, except the right to receive
(i) the unpaid portion of the Base Salary provided for in Section 4.1, earned
through the Termination Date (the "Unpaid Salary Amount"), and (ii)
reimbursement for any expenses for which the Executive shall not have
theretofore been reimbursed, as provided in Section 4.3 (the "Expense
Reimbursement Amount"). If the Termination Date is prior to the first
anniversary date of this Agreement, executive shall not be entitled to any of
the unvested Options. If the Termination Date occurs after the first anniversary
date of this Agreement, Executive shall be entitled to receive a pro rata
portion of such Options equal to the number of months of employment hereunder as
a percentage of the 24 months of the Term of this Agreement.
8. Disclosure of Confidential Information. Executive recognizes that he has
had and will continue to have access to secret and confidential information
regarding the Company, including but not limited to its customer list, products,
know-how, and business plans. Executive acknowledges that such information is of
great value to the Company, is the sole property of the Company, and has been
and will be acquired by him in confidence. In consideration of the obligations
undertaken by the Company herein, Executive will not, at any time, during or
after his employment hereunder, reveal, divulge or make known to any person, any
information acquired by Executive during the course of his employment, which is
treated as confidential by the Company, including but not limited to its
customer list, not otherwise in the public domain, other than in the ordinary of
business during his employment hereunder. The provisions of this Section 8 shall
survive Executive's employment hereunder.
9. Covenant Not To Compete.
(a) Executive recognizes that the Company operates nationwide and that the
services to be performed by him hereunder are special, unique and extraordinary.
The parties confirm that it is reasonably necessary for the protection of
Company that Executive agree, and accordingly, Executive does hereby agree, that
he shall not, directly or indirectly, at any time during the term of the
Agreement and the "Restricted Period" (as defined in Section 9(e) below):
(i) except as provided in Subsection (d) below, be engaged in the computer
and computer consulting and servicing industries, or provide technical
assistance, advice or counseling regarding such industries in any state in the
United States in which the Company or an affiliate thereof transacts business,
either on his own behalf or as an officer, director, stockholder, partner,
consultant, associate, employee, owner, agent, creditor, independent contractor,
or co-venturer of any third party; or
(ii) employ or engage, or cause or authorize, directly or indirectly, to be
employed or engaged, for or on behalf of himself or any third party, any
employee or agent of Company or any affiliate thereof.
(b) Executive hereby agrees that he will not, directly or indirectly, for
or on behalf of himself or any third party, at any time during the term of the
Agreement and during the Restricted Period solicit any customers of the Company
or any affiliate thereof in a manner which directly or indirectly competes with
the Company.
(c) If any of the restrictions contained in this Section 9 shall be deemed
to be unenforceable by reason of the extent, duration or geographical scope
thereof, or otherwise, then the court making such determination shall have the
right to reduce such extent, duration, geographical scope, or other provisions
hereof, and in its reduced form this Section shall then be enforceable in the
manner contemplated hereby.
(d) This Section 9 shall not be construed to prevent Executive from owning,
directly or indirectly, in the aggregate, an amount not exceeding two percent
(2%) of the issued and outstanding voting securities of any class of any company
whose voting capital stock is traded on a national securities exchange or on the
over-the-counter market other than securities of the Company.
(e) The term "Restricted Period," as used in this Section 9, shall mean (i)
the period of Executive's actual employment hereunder plus (ii) 24 months
thereafter in the event that the Executive is terminated for Cause.
(f) The provisions of this Section 9 shall survive the end of the Term as
provided in Section 9(e) hereof.
10. Miscellaneous.
10.1 Injunctive Relief. Executive acknowledges that the services to be
rendered under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, Executive agrees that any breach or threatened
breach by him of Section 8 or 9 of this Agreement shall entitle Company, in
addition to all other legal remedies available to it, to apply to any court of
competent jurisdiction to seek to enjoin such breach or threatened breach. The
parties understand and intend that each restriction agreed to by Executive
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which Company
seeks enforcement thereof, such restriction shall be limited to the extent
permitted by law.
10.2 Assignments. Neither Executive nor the Company may assign or delegate
any of their rights or duties under this Agreement without the express written
consent of the other.
10.3 Entire Agreement. This Agreement constitutes and embodies the full and
complete understanding and agreement of the parties with respect to Executive's
employment by Company, supersedes all prior understandings and agreements,
whether oral or written, between Executive and Company, and shall not be
amended, modified or changed except by an instrument in writing executed by the
party to be charged. The invalidity or partial invalidity of one or more
provisions of this Agreement shall not invalidate any other provision of this
Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
10.4 Binding Effect. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their respective
successors, heirs, beneficiaries and permitted assigns.
10.5 Headings. The headings contained in this Agreement are for convenience
of reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
10.6 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, or by private
overnight mail service (e.g. Federal Express) to the party at the address set
forth above or to such other address as either party may hereafter give notice
of in accordance with the provisions hereof. Notices shall be deemed given on
the sooner of the date actually received or the third business day after
sending.
10.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to such
State's conflicts of laws provisions and each of the parties hereto irrevocably
consents to the jurisdiction and venue of the federal and state courts located
in the State of Florida.
10.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 Separability. If any of the restrictions contained in this Agreement
shall be deemed to be unenforceable by reason of the extent, duration or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Agreement shall
then be enforceable in the manner contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
TRI-MAX SYSTEMS, INC.
______________________________________________
By:
______________________________________________
Name:
______________________________________________
Title:
______________________________________________
Arthur Marino
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of May 29, 1998, by and between Marios
Roussos, an individual residing at 24 Lucille Lane, Dix Hills, New York 11746
("Seller") and Triangle Imaging Group, Inc., a Florida corporation
("Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller is the record owner of 100 shares of
common stock, no par value, of Multitask Computer Services Inc., a New York
corporation ("Multitask" or the "Company"), representing all of the issued and
outstanding shares of the capital stock (the "Shares") of the Company; and
WHEREAS, the Seller desires to sell the Shares to the
Purchaser, and the Purchaser desires to purchase the Shares from the Seller, all
upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties and agreements set forth herein, the parties
agree as follows:
ARTICLE I
SALE OF SHARES; PURCHASE PRICE
1.1 Sale of Shares. On the Closing Date (as defined in Section 5.1 hereof), the
Seller shall sell, assign, transfer and deliver the Shares to the Purchaser, and
the Purchaser shall purchase the shares from the Seller, all upon the terms and
conditions, and for the purchase price, set forth herein.
1.2 Purchase Price. The aggregate purchase price (the "Purchase Price") for the
Shares shall be the issuance to Seller on the Closing Date of 130,000 shares of
Common Stock, $.001 par value per share of Purchaser (the "Triangle Shares").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser that:
2.1 Due Organization and Qualification: Subsidiaries: Due Authorization.
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of New York, with full corporate
power and authority to own, lease and operate its business and properties and to
carry on its business in the places and in the manner as presently conducted or
proposed to be conducted. The Company is in good standing as a foreign
corporation in each jurisdiction in which the properties owned, leased or
operated, or the business conducted, by it requires such qualification except
for any such failure, which when taken together with all other failures, is not
likely to have a material adverse effect on the business of the Company.
(b) The Company has no subsidiaries. The Company does not own,
directly or indirectly, any capital stock, equity or interest in any
corporation, firm, partnership, joint venture or other entity, other than those
set forth in Schedule 2.1. Except as set forth in Schedule 2.1, there is no
contract, agreement, arrangement, option, warrant, call, commitment or other
right of any character obligating or entitling the Company to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exchangeable for securities of the Company.
(c) The Seller has all requisite power and authority to
execute and deliver this Agreement and all other agreements contemplated hereby
(the "Additional Agreements") and to consummate the transactions contemplated
hereby and thereby. The Seller has taken all action necessary for the execution
and delivery of this Agreement and the Additional Agreements and the
consummation of the transactions contemplated hereby and thereby, and each of
this Agreement and the Additional Agreements each constitute the valid and
binding obligation of the Seller, enforceable against the Seller in accordance
with its respective terms, except as may be affected by bankruptcy, insolvency,
moratoria or other similar laws affecting the enforcement of creditors' rights
generally and subject to the qualification that the availability of equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.
2.2 Capitalization: Title to the Shares. The authorized
capital stock of Multitask consists of 200 shares of common stock, no par value,
of which 100 shares are issued and outstanding. No shares of preferred stock are
authorized. The Shares have been duly authorized and validly issued and are
fully paid and non-assessable and are free of preemptive rights. The Seller is,
and on the Closing Date will be, the owner of record of all of the Shares, and
upon the sale of the Shares to the Purchaser pursuant to this Agreement, the
Purchaser will have good and marketable title to the Shares, free and clear of
all liens, claims, encumbrances or other contractual restrictions of any kind
("Liens"). There are no existing warrants, options, subscriptions, calls,
rights, commitments or any other agreements of any character obligating
Multitask to issue, sell or transfer any shares of its capital stock.
2.3 Agreements With Former Shareholder. Neither Seller nor Multitask is
currently a party to any agreement with any former shareholder of Multitask.
2.4 Employment and Consulting Agreements. Except as set forth
on Schedule 2.4 neither Seller nor Multitask is a party to any consulting or
employment agreements.
2.5 Financial Statements; Absence of Certain Changes.
Multitask has previously furnished to the Purchaser true and complete copies of
the following financial statements:
(ii) Consolidated unaudited statements of financial condition of Multitask
as of December 31,1997
All such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis and
fairly present the financial condition of Multitask as of the dates thereof.
2.6 No Conflicts or Defaults. Except as set forth in Schedule
2.6 the execution and delivery of this Agreement and the Additional Agreements
by the Seller and the consummation of the transactions contemplated hereby and
thereby do not and shall not (a) contravene the Certificate of Incorporation or
By-Laws of the Company or (b) with or without the giving of notice or the
passage of time and subject to obtaining such consents prior to the Closing as
are set forth in Schedule 2.6, (i) violate, conflict with, or result in a breach
of, or a default or loss of rights under, any material covenant, agreement,
mortgage, indenture, lease, instrument, permit or license to which the Company
or any of the Subsidiaries is a party or by which the Company or Seller or any
of their respective assets are bound, or any judgment, order or decree, or any
law, rule or regulation to which the Company or Seller or any of their
respective assets are subject, (ii) result in the creation of, or give any party
the right to create any Liens upon any of the assets of the Company or Seller,
(iii) terminate or give any party the right to terminate, amend, abandon or
refuse to perform, any material agreement, arrangement or commitment to which
the Company or Seller is a party or by which the Company or Seller or any of
their respective assets are bound, or (iv) accelerate or modify, or give any
party the right to accelerate or modify, the time within which, or the terms
under which, the Company or Seller is to perform any duties or obligations or
receive any rights or benefits under any material agreement, arrangement or
commitment to which it is a party.
2.7 Further Financial Matters. (a) Except as set forth in
Schedule 2.7, the Company has no liabilities or obligations, whether secured or
unsecured, accrued, determined, absolute or contingent, asserted or unasserted
or otherwise, which are required to be reflected or reserved in a balance sheet
or the notes thereto under generally accepted accounting principles, but which
are not reflected in the Financial Statements.
(b) Except as set forth in Schedule 2.7, the Company does not
have any, direct or indirect, indebtedness, liability, claim, loss, damage,
deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
or otherwise.
2.8 Taxes. Except as indicated in Schedule 2.8, the Company
has filed all United States federal, state, county, local and foreign national,
provincial and local returns and reports which were required to be filed on or
prior to the date hereof in respect of all income, withholding, franchise,
payroll, excise, property, sales, use, value-added or other taxes or levies,
imposts, duties, license and registration fees, charges, assessments or
withholdings of any nature whatsoever (together, "Taxes"), and has paid all
Taxes (and any related penalties, fines and interest) which have become due
pursuant to such returns or reports or pursuant to any assessment which has
become payable, or, to the extent its liability for any Taxes (and any related
penalties, fines and interest) has not been fully discharged, the same have been
properly reflected as a liability on the books and records of the Company and
adequate reserves therefor have been established. All such returns and reports
filed on or prior to the date hereof have been properly prepared and are true,
correct (and to the extent such returns reflect judgments made by the Company,
such judgments were reasonable under the circumstances) and complete in all
material respects. Except as indicated in Schedule 2.8, no extension for the
filing of any such return or report is currently in effect. Except as indicated
in Schedule 2.8, no tax return or tax return liability of the Company has been
audited or, presently under audit. All taxes and any penalties, fines and
interest which have been asserted to be payable as a result of any audits have
been paid. Except as indicated in Schedule 2.8, the Company has not given or
been requested to give waivers of any statute of limitations relating to the
payment of any Taxes (or any related penalties, fines and interest). There are
no claims pending or, to the knowledge of the Seller, threatened, against the
Company for past due Taxes. Except as indicated in Schedule 2.8, all payments
for withholding taxes, unemployment insurance and other amounts required to be
paid for periods prior to the date hereof to any governmental authority in
respect of employment obligations of the Company, have been paid or shall be
paid prior to the Closing and have been duly provided for on the books and
records of the Company and in the Financial Statements.
2.9 Indebtedness: Contracts: No Defaults.
(a) Schedule 2.9 sets forth a true, complete and correct list
of all instruments, agreements, contracts, indentures, mortgages, guarantees,
notes, commitments, accommodations, letters of credit or other arrangements or
understandings, whether written or oral, to which the Company is a party
(collectively, the "Operating Agreements"). The Operating Agreements constitute
all of the contracts, agreements, understandings and arrangements required for
the operation of the business of the Company or which have a material effect
thereon. Copies of all such written Operating Agreements have previously been
delivered or otherwise made available to the Purchaser and such copies are true,
complete and correct as of the date hereof.
(b) Except as disclosed in Schedule 2.9, neither the Company,
nor any other person or entity is in breach in any material respect of, or in
default in any material respect under, any contract, agreement, arrangement,
commitment or plan to which the Company is a party, including the Operating
Agreements, and no event or action has occurred, is pending or is threatened,
which, after the giving of notice, passage of time or otherwise, would
constitute or result in such a material breach or material default by the
Company or, to the knowledge of the Seller, any other person or entity. The
Company has not received any notice of default under any contract, agreement,
arrangement, commitment or plan to which it is a party, including the Operating
Agreements, which default has not been cured to the satisfaction of, or duly
waived by, the party claiming such default on or before the date hereof.
2.10 Personal Property. Except as set forth in Schedule 2.10,
the Company has good and marketable title to all of its tangible personal
property and assets, including, without limitation, all of the assets reflected
in the Financial Statements that have not been disposed of in the ordinary
course of business since December 31, 1997, free and clear of all Liens or
mortgages, except for any Lien for current taxes not yet due and payable and
such restrictions, if any, on the disposition of securities as may be imposed by
federal or applicable state securities laws.
2.11 Real Property. (a) Schedule 2.11 sets forth a true and
complete list of all real property owned by the Company (the "Owned Real
Property"). The Company is the owner of insurable title to such Owned Real
Property and to all of the structures located thereon, free and clear of all
Liens, mortgages and restrictions on the use thereof, except matters of record
which do not interfere in any material way with use or occupancy of the Owned
Real Property.
(b) Schedule 2.11 sets forth a true, correct and complete list
of all leases, subleases, licenses and other agreements (collectively, the "Real
Property Leases") under which the Company uses or occupies, has the right to use
or occupy, or leases the right to use or occupy, now or in the future, any real
property where the annual rental obligation exceeds $10,000 (the land,
buildings, and other improvements covered by the Real Property Leases being
herein called the "Leased Real Property"). Except as set forth in Schedule 2.11
each Real Property Lease is valid, binding and in full force and effect with
respect to the Company, and, to the knowledge of the Seller, all other parties
thereto; no notice of default or termination under any Real Property Lease is
outstanding; no termination event or condition or uncured default on the part of
the Company, exists under any Real Property Lease, and no event has occurred and
no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a default or termination event or condition with
respect to the Company, or, to the knowledge of the Seller, any other party
thereto. The Company holds any leasehold estate under, and any other interest in
each Real Property Lease, free and clear of all Liens and mortgages except as
set forth in Schedule 2.11.
2.12 Compliance with Law. (a) Except as set forth in Schedule
2.12, the Company is not conducting its business or affairs in material
violation of any applicable federal, state or local law, ordinance, rule,
regulation, court or administrative order, decree or process, or any requirement
of insurance carriers. The Company has not received any notice of violation or
claimed violation of any such law, ordinance, rule, regulation, order, decree,
process or requirement.
(b) The Company is in compliance in all material respects with
all applicable federal, state, local and foreign laws and regulations relating
to the protection of the environment and human health. There are no claims,
notices, actions, suits, hearings, investigations, inquiries or proceedings
pending or, to the knowledge of the Seller, threatened against the Company that
are based on or related to any environmental matters or the failure to have any
required environmental permits, and there are no past or present conditions that
the Seller has reason to believe are likely to give rise to any material
liability or other obligations of the Company under any environmental laws.
2.13 Permits and Licenses. Except as set forth in Schedule
2.13, the Company has all certificates of occupancy, rights, permits,
certificates, licenses, franchises, approvals and other authorizations as are
reasonably necessary to conduct its business and to own, lease, use, operate and
occupy its assets, at the places and in the manner now conducted and operated,
except those the absence of which would not materially adversely affect its
business. Except as set forth in Schedule 2.13, as of the date hereof, the
Company has not received any written or oral notice or claim pertaining to the
failure to obtain any material permit, certificate, license, approval or other
authorization required by any federal, state or local agency or other regulatory
body, the failure of which to obtain would materially and adversely affect its
business.
2.14 Ordinary Course. Except as set forth in Schedule 2.14,
since June 4, 1993, the Company has conducted its business, maintained its real
property and equipment and kept its books of account, records and files,
substantially in the same manner as previously conducted, maintained or kept and
solely in the ordinary course.
2.15 No Adverse Changes. Except as set forth in Schedule 2.15,
since December 31, 1997, there has not been (a) any material adverse change in
the business, prospects, the financial or other condition, or the assets or
liabilities of the Company as reflected in the Financial Statements, (b) any
material loss sustained by the Company, including, but not limited to any loss
on account of theft, fire, flood, explosion, accident or other calamity, whether
or not insured, which has materially and adversely interfered, or may materially
and adversely interfere, with the operation of the Company's business, or (c) to
the best knowledge of the Seller, any event, condition or state of facts,
including, without limitation, the enactment, adoption or promulgation of any
law, rule or regulation, the occurrence of which materially and adversely does
or would affect the results of operations or the business or financial condition
of the Company.
2.16 Litigation. (a) Except as set forth in Schedule 2.16
there is no claim, dispute, action, suit, proceeding or investigation pending
or, to the knowledge of the Seller, threatened, against or affecting the
business of the Company, or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Additional Agreements, at law
or in equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to the
knowledge of the Seller, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the 12-month period
preceding the date hereof; (b) there is no outstanding judgment, order, writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality, against or materially affecting the business of the Company;
and (c) the Company has not received any written or verbal inquiry from any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality concerning the possible violation of any law, rule
or regulation or any matter disclosed in respect of its business.
2.17 Insurance. The Company maintains insurance against all
risks customarily insured against by companies in the computer and consulting
and servicing industry. All such policies are in full force and effect, and the
Company has not received any notice from any insurance company suspending,
revoking, modifying or canceling (or threatening such action) any insurance
policy issued to the Company. Copies of such insurance policies have been
provided to Purchaser and are listed in Schedule 2.17.
2.18 Authorizations. Any authorization, approval, order,
license, permit, franchise or consent of, declaration to, or filing or
registration with, any court, governmental authority or any other person or
entity which is not a party to this Agreement or the Additional Agreements which
is required in connection with the execution, delivery and performance by the
Seller of this Agreement or the Additional Agreements has been obtained or shall
be obtained as of the Closing Date. There is no pending or threatened claim,
action, suit, investigation or proceeding against the Company or Seller before
any court, arbitrator or governmental authority which, if determined adversely
to the Company or Seller, would have a material adverse effect on the ability of
the Seller to perform its obligations under this Agreement or the Additional
Agreements.
2.19 Certificate of Incorporation and By-Laws: Minute Books.
The copies of the Certificate of Incorporation and By-Laws (or similar governing
documents) of the Company, and all amendments to each are true, correct and
complete. The minute books of the Company contain true and complete records of
all meetings and consents in lieu of meetings of their respective Board of
Directors (and any committees thereof), or similar governing bodies, since the
time of their respective organization. The stock books of the Company are true,
correct and complete.
2.20 Employee Benefit Plans. Except as set forth in Schedule
2.20, the Company does not maintain, nor has the Company maintained in the past,
any employee benefit plans ("as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), or any plans,
programs, policies, practices, arrangements or contracts (whether group or
individual) providing for payments, benefits or reimbursements to employees of
the Company, former employees, their beneficiaries and dependents under which
such employees, former employees, their beneficiaries and dependents are covered
through an employment relationship with the Company, or any entity required to
be aggregated in a controlled group or affiliated service group with the Company
for purposes of ERISA or the Internal Revenue Code of 1986 (the "Code")
(including, without limitation, under Section 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA, at any relevant time ("Benefit Plans").
2.21 Patents and Trademarks. The Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes necessary for its business as now conducted without any conflict with
or infringement of the rights of others. There are no outstanding options,
licenses or agreements of any kind relating to the foregoing, and neither the
Company is not bound by, or a party to, any options, licenses or agreements of
any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes of any other person or entity.
2.22 Transactions with Affiliates. Except as set forth in
Schedule 2.22, (a) the Company has no indebtedness due from its respective
officers, directors or stockholders or any of their respective relatives or
affiliates, or (b) none of the officers, directors or stockholders of the
Company or their respective relatives or affiliates has any claim against the
Company.
2.23 Brokers. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the Seller
directly with the Purchaser without the intervention of any person on behalf of
the Company or Seller in such a manner as to give rise to any valid claim by any
person against Purchaser for a finder's fee, brokerage commission or similar
payment.
2.24 Investment Representation.
(a) The Triangle Shares to be received by Seller will be
acquired for investment for an indefinite period for the Seller's own account
and not with a view to the sale or distribution of any part thereof, and it has
no present intention of selling or otherwise distributing the same.
(b) The Seller agrees not to make a disposition of any of the
Triangle Shares, unless the Triangle Shares shall have been registered under the
Act and any applicable state securities or Blue Sky laws, or pursuant to
exemptions therefrom.
(c) The Seller is able to manage for itself in the
transactions contemplated by this Agreement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investment, has the ability to bear the economic risks of its
investments, and has received all the information it has requested from
Purchaser that it considers necessary or appropriate for deciding whether to
sell the Shares and receive the Triangle Shares.
(d) The Seller understands that the Triangle Shares will not
be registered under the Act and applicable state securities or Blue Sky laws on
the grounds that the issuance of the Triangle Shares are exempt from
registration under the Act and applicable state securities or Blue Sky laws.
2.25 Restricted Securities. Seller understands that the
Triangle Shares may not be sold, transferred, or otherwise disposed of without
registration under the Act or an exemption therefrom, and that in the absence of
an effective registration statement covering the Triangle Shares or any
available exemption from registration under the Act, the Triangle Shares must be
held indefinitely. Seller is aware that the Triangle Shares may not be sold
pursuant to Rule 144 promulgated under the Act unless all of the conditions of
that Rule are met. Among the conditions for use of Rule 144 may be the
availability of current information to the public about Purchaser.
2.26 Miscellaneous. The representations and warranties made by
the Seller in this Agreement and the Additional Agreements and the statements
made by or on behalf of the Seller in any certificate, document or exhibit
furnished in connection with the transactions contemplated hereby or thereby,
when taken together, do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make such representations
or warranties or other such statements, in light of the circumstances under, and
at the time at, which they were made, not false or misleading.
2.27 Survival of Representations and Warranties. The
representation and warranties of Seller shall survive the Closing Date until the
date upon which the liability to which any claim relating to any such
representation or warranty is barred by all applicable statutes of limitation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller that:
3.1 Due Authorization: Valid Obligation. Purchaser has or
prior to the Closing Date will have taken all corporate or other action
necessary to authorize it to execute and deliver this Agreement and the
Additional Agreements, and to consummate the transactions contemplated hereby
and thereby, and this Agreement and the Additional Agreements constitute the
valid and binding obligations of Purchaser, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefor may
be brought.
3.2 No Conflicts. The execution and delivery by Purchaser of
this Agreement and the Additional Agreements and the consummation of the
transactions contemplated hereby and thereby do not and shall not (a) contravene
its Certificate of Incorporation or By-Laws (or similar governing instruments),
or (b) with or without the giving of notice or the passage of time, violate,
conflict with, or result in a breach of, or a default or loss of rights under,
any covenant, agreement, mortgage, indenture, lease or instrument to which
Purchaser is a party or by which Purchaser or any of its assets is bound or any
judgment, order, decree, law, rule or regulation to which Purchaser or any of
its assets are subject.
3.3 Authorizations. Any authorization, approval, order,
license, permit, franchise or consent of, declaration to, or filing or
registration with, any court, governmental authority or any other person or
entity which is not a party to this Agreement and the Additional Agreements
which is required in connection with the execution, delivery and performance of
this Agreement and the Additional Agreements by Purchaser has been obtained or
shall be obtained as of the Closing Date. There is no pending or threatened
claim, action, suit, investigation or proceeding against Purchaser before any
court, arbitrator or governmental authority which, if determined adversely to
Purchaser, would have a material adverse effect on the ability of Purchaser to
perform its obligations under this Agreement.
3.4 Miscellaneous. The representations and warranties made by
Purchaser in this Agreement and the statements made by or on behalf of Purchaser
or in any certificate, document or exhibit furnished in connection with the
transactions contemplated hereby do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make such
representations or warranties or other such statement, in light of the
circumstances under which they were made, not false or misleading.
3.5 Survival of Representations and Warranties. The
representation and warranties of Purchaser shall survive the Closing Date until
the date upon which the liability to which any claim relating to any such
representation or warranty is barred by all applicable statutes of limitation.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnity of Purchaser. Seller agrees to defend, indemnify
and hold harmless Purchaser from and against, and to reimburse Purchaser with
respect to, all liabilities, losses, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, asserted against or
incurred by Purchaser by reason of, arising out of, or in connection with:
(a) any material breach of any representation or warranty
contained in this Agreement and made by the Seller or in any document
or certificate delivered by the Seller pursuant to the provisions of
this Agreement or in connection with the transactions contemplated
thereby;
(b) any material failure by the Seller to perform any
agreement required by this Agreement to be performed thereby; or
(c) any claim, demand, action, suit, proceeding or
investigation involving the Company arising out of the operation of the
Company on or prior to the Closing Date or the allegation by any third
party of the existence of any state of facts which, if existing, would
constitute a material breach of any representation or warranty referred
to in clause (a) of this Section 4.1.
4.2 Indemnification Procedure.
(a) Purchaser shall give prompt notice to the Seller of any
claim for indemnification arising under Section 4.1. The Seller shall have the
right to assume and to control the defense of any such claim with counsel
reasonably acceptable to Purchaser, at the Seller's own cost and expense,
including the cost and expense of reasonable attorneys' fees and disbursements
in connection with such defense, in which event the Seller shall not be
obligated to pay the fees and disbursements of separate counsel for Purchaser in
such action. In the event, however, that Purchaser's legal counsel shall
determine that defenses may be available to Purchaser that are different from or
in addition to those available to the Seller, in that there could reasonably be
expected to be a conflict of interest if Purchaser and the Seller have common
counsel in any such proceeding, or if the Seller has not assumed the defense of
the action or proceedings, then Purchaser may employ separate counsel to
represent or defend Purchaser, and the Seller shall pay the reasonable fees and
disbursements of counsel for Purchaser. No settlement of any such claim or
payment in connection with any such settlement shall be made without the prior
consent of the Seller which consent shall not be unreasonably withheld.
4.3 Escrow of Triangle Shares. The parties acknowledge that
Seller shall deposit 25,000 of the Triangle Shares with Buyer (accompanied with
stock powers duly endorsed in blank) which Buyer shall retain for six months
from the date of this Agreement as additional security for the indemnification
provisions provided in this Section 4. If no outstanding claims against Seller
for indemnification have been made by Buyer on such date, Buyer shall deliver
such shares to Seller. If, however, there are outstanding claims pursuant to
this Section 4, Buyer shall retain such shares pending the resolution of such
claims. If any of such claims are in favor of Buyer, Seller shall have the right
to reimburse Buyer in immediately available funds or direct the sale of a
sufficient number of escrowed shares and direct the proceeds of such sale to
Buyer.
ARTICLE V
CLOSING DATE; CLOSING
5.1 Closing. The closing hereunder (the "Closing") shall take
place at the offices of Berlack, Israels & Liberman LLP, 120 West 45th Street,
New York, New York 10036, at 9:00 A.M. (local time) on May 29,1998 (the "Closing
Date") or at such other time and location as Purchaser and Seller may agree
upon.
5.2 Delivery by Seller. At the Closing, Seller shall deliver,
or shall cause to be delivered, to Purchaser the following:
(i) Certificates representing the Shares, which certificates
shall be duly endorsed in blank or, in lieu thereof shall have affixed
thereto stock powers executed in blank and in proper form for transfer;
(ii) The resignations of all directors and officers of the Company;
(iii) The Company's minute books, stock books, stock transfer
ledger and corporate seal and all other items and documents of or
relating to the Company as the Purchaser may reasonably request as are
contained within the purposes of this Agreement;
(iv) the Employment Agreement referred to in Section 6.2; and
(v) the legal opinion of Seller's counsel in form and substance
satisfactory to Purchaser and its legal counsel;
5.3 Delivery by Purchaser. At the closing, Purchaser shall
deliver, or cause to be delivered, to Seller the following:
(i) the Triangle Shares (subject to the provisions of Sections 4.3 and
6.7); and
(ii) the Employment Agreement referred to in Section 6.2.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Buyer shall assume the liabilities of the existing EAB
line of credit referred to in Schedule 2.7 and use its best efforts to obtain
the release of the personal guarantees of Marios Roussos and Athena Roussos.
6.2 Employment Agreement. On the Closing Date, Marios Roussos
will enter into an Employment Agreement, a form of which is attached hereto as
Exhibit 1.
6.3 Confidentiality. From and after the Closing Date, the
Seller shall not disclose or furnish to any other person, except to the extent
required by law or by order of any court or governmental agency or to Seller's
advisors, (a) any information which is not generally known in the industry
relating to Purchaser or the Company, (b) any information which is not generally
known in the industry relating to the operations or financial status of the
Purchaser or the Company which is not specifically a matter of public record,
(c) any trade secrets or other confidential information of the Purchaser or the
Company, including without limitation, any marketing or business plans or
research or development on new products and services or (d) the name, address or
other information relating to any supplier or customer of the Purchaser or the
Company.
6.4 Non-Competition. (a) Seller acknowledges that (i) the
business of the Company is in the computer and consulting and servicing industry
(the "Restricted Activities"), (ii) the business is national in scope, (iii)
Seller's ownership of the Company has brought him in close contact with certain
confidential affairs of the Company not readily available to the public and (iv)
Purchaser would not purchase the Company but for the agreements and covenants
contained in this Section 6.4.
(b) Seller shall not in the United States of America, directly
or indirectly, for a period consisting of three years following the Closing Date
or such later date as provided in the Employment Agreement with Seller (the
"Restricted Period"), (i) engage in the Restricted Activities that compete with
Tri-Max or Triangle or (ii) become interested in any person engaged in the
Restricted Activities that compete with Tri-Max or Triangle (other than
Purchaser) as a partner, shareholder, principal, agent, trustee, consultant.,
lender or in any other relationship or capacity, provided, however, that this
Section 6.4 shall not be construed to prohibit the ownership of not more than 2%
of the capital stock of any corporation which is engaged in any of the
Restricted Activities having a class of securities registered pursuant to the
Securities Exchange Act of 1934.
(c) If Seller breaches, or threatens to commit a breach of,
any of the provisions of this Section 6.4 (the "Restrictive Covenants"),
Purchaser shall have the right and remedy (which shall not be affected by the
provisions of any other Section of this Agreement and shall be in addition to,
and not in lieu of, any other rights and remedies available to Purchaser under
law or in equity) to have the Restrictive Covenants specifically enforced by any
court having equity jurisdiction, including, without limitation, the right to an
entry against Seller or restraining orders and injunctions (preliminary,
mandatory, temporary and permanent) against violations, threatened or actual,
and whether or not then continuing, of such covenants, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to Purchaser and that money damages will not provide adequate remedy to
Purchaser.
(d) If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions. If any court determines that any
of the Restrictive Covenants, or any part thereof, is unenforceable because of
the duration of such provision or the area covered thereby, such court shall
have the power to reduce the duration or area of such provisions and, in its
reduced form, such provision shall then be enforceable and shall be enforced.
(e) Purchaser and Seller intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Covenants. If the courts of
any one or more of such jurisdictions hold the Restrictive Covenants wholly
unenforceable by reason of the breadth of such scope or otherwise, it is the
intention of the Purchaser and Seller that such determination not bar or in any
way affect Purchaser's right to the relief provided above in the courts of any
other jurisdiction being, for this purpose, severable into diverse and
independent covenants, subject, where appropriate, to the doctrine of res
judicata.
6.5 Post-Closing Further Assurances. At any time and from time
to time after the Closing Date at the request of either party, and without
further consideration, the other party will execute and deliver, or cause the
execution and delivery of, such other instruments of sale, transfer, conveyance,
assignment and confirmation and take or cause to be taken such other action as
the party requesting the same may reasonably deem necessary or desirable in
order to transfer, convey and assign more effectively to the requesting party
all of the property and rights intended to be conveyed to such party pursuant to
the provisions of this Agreement.
6.6 Publicity. No publicity release or announcement concerning
this Agreement or the transactions contemplated hereby shall be made without
advance approval thereof by the Purchaser. No approval from the Seller is
necessary.
6.7 Additional Shares. Seller shall receive an additional
5,000 shares of common stock of Triangle on the date hereof. However, if Tri-Max
does not achieve pre-tax income of $200,000 for the period of June 1, 1998
through June 30, 1999 such shares will be canceled. Seller shall deposit such
shares with Buyer (accompanied with stock powers duly endorsed in blank) pending
the determination of whether or not such earning threshold shall be achieved.
ARTICLE VII
MISCELLANEOUS
7.1 Expenses. Each of the parties hereto shall be responsible
for their respective fees, costs and expenses incurred in connection with the
Agreement.
7.2 Notice. All communications, notices, requests, consents or
demands given or required under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered to, or received by prepaid
registered or certified mail or recognized overnight courier addressed to, or
upon receipt of a facsimile sent to, the party for whom intended, as follows, or
to such other address or facsimile number as may be furnished by such party by
notice in the manner provided herein:
If to the Purchaser:
Triangle Imaging Group, Inc.
4400 West Sample Road
Suite 228
Coconut Creek, FL 33073
in each case with a copy to:
Berlack, Israels & Liberman LLP
120 West 45th Street
New York, New York 10036
Attention: Alan N. Forman, Esq.
Tel.: (212) 704-0100
Fax: (212) 704-0196
If to the Seller:
24 Lucille Lane
Dix Hills, NY 11746
in each case with a copy to:
Stuart R. Moshell, Esq.
Moshell & Moshell
100 Garden City Plaza
Suite 202
Garden City, NY 11530
7.3 Entire Agreement. This Agreement, the Schedules and the
Exhibits hereto, the Additional Agreements and the instruments and agreements to
be executed pursuant to this Agreement, sets forth the entire understanding of
the parties hereto with respect to its subject matter, merges and supersedes all
prior and contemporaneous understandings with respect to its subject matter and
may not be waived or modified, in whole or in part, except by a writing signed
by each of the parties hereto. No waiver of any provision of this Agreement in
any instance shall be deemed to be a waiver of the same or any other provision
in any other instance. Failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such provision.
7.4 Successors and Assigns. This Agreement shall be binding
upon, enforceable against and inure to the benefit of, the parties hereto and
their respective -heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any party hereto except with the prior written consent of the other parties,
which consent shall not be unreasonably withheld.
7.5 Governing Law; Submission to Jurisdiction. This Agreement
shall in all respects be governed by and construed in accordance with the laws
of the State of Florida applicable to agreements made and fully to be performed
in such state, without giving effect to conflicts of law principles. The parties
hereto agree to submit to the jurisdiction of the State and Federal courts in
the State of Florida with respect to any claim or matter arising under this
Agreement, and hereby consent that service of process with respect to all courts
in and of the State of Florida may be made by registered mail to such person at
the address of such person set forth herein.
7.6 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.7 Construction. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Articles, Sections and Exhibits are to the articles,
sections and exhibits, respectively, of this Agreement. The Schedules are hereby
incorporated herein by reference and made a part of this Agreement. As used
herein, the singular includes the plural, and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
7.8 Severability. If any provision of this Agreement is held
to be invalid or unenforceable by a court of competent jurisdiction, this
Agreement shall be interpreted and enforceable as if such provision were severed
or limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement as of the date first set forth above.
TRIANGLE IMAGING GROUP, INC.
______________________________________________
By:
______________________________________________
Name:
______________________________________________
Title:
______________________________________________
Marios Roussos
<PAGE>
Exhibit 1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 29, 1998, by and between Tri-Max
Systems, Inc., a New York corporation (the "Company"), and Marios Roussos, an
individual residing at 24 Lucille Lane, Dix Hills, New York 11746 (the
"Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to secure the services of the Executive upon
the terms and conditions hereinafter set forth; and
WHEREAS, the Executive desires to render services to the Company upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties mutually agree as follows:
1. Employment. The Company hereby employs Executive and the
Executive hereby accepts such employment, as the Vice President of PC and
Networking Systems, subject to the terms and conditions set forth in this
Agreement.
2. Duties. The Executive shall serve as the Vice President of
PC and Networking Systems. During the term of this Agreement, the Executive
shall devote all of his business time to the performance of his duties hereunder
unless otherwise authorized by the Chief Executive Officer of the Company. The
Executive shall report directly to the Chief Executive Officer of the Company
and to the Company's Board of Directors.
3. Term of Employment; Vacation.
(a) The term of the Executive's employment shall be for a
period of twenty four (24) months commencing on May 29, 1998 (the "Start Date"),
subject to earlier termination by the parties pursuant to Section 6 hereof (the
"Term").
(b) The Executive shall be entitled to three (3) weeks
vacation during each year of the Term. 4. Compensation of
Executive. 4.1 Salary. The Company shall pay to Executive a
base salary (the "Base Salary") of
Ninety-Seven Thousand Dollars ($97,000) per annum, less such deductions as shall
be required to be withheld by applicable law and regulations. All salaries
payable to Executive shall be paid at such regular weekly, biweekly or
semi-monthly time or times as the Company makes payment of its regular payroll
in the regular course of business.
4.2 Bonuses.
(a) During the first year of the Term, the Executive shall be
entitled to receive cash performance bonuses, payable on a bi-monthly basis, of
an aggregate of $7,500 per quarter (for an aggregate of $30,000). Executive
acknowledges that such bonuses are being advanced to him based upon expected
after-tax income achieved by the Company of $100,000 per quarter (during the
first four quarters of the Term, it being acknowledged that the first quarter
shall consist of four months (June 1 to September 30) with the remainder of the
three quarters to be 3 successive three month periods). If the after-tax income
has not been achieved for a specific quarter, Executive will surrender (at the
end of the fourth quarter), for cancellation, such number of his shares of
common stock of Triangle Imaging Group, Inc. ("Triangle") that has a fair market
value equal to $7,500 (for each quarter that such threshold is not achieved).
The date ending on the last day of the fourth fiscal quarter shall be the date
on which the fair market value of the stock so surrendered (for all previous
quarters) shall be computed. In order to accomplish the potential forfeiture of
such stock, Executive shall deliver to Triangle, on the date hereof, 15,000
shares of common stock of Triangle (in addition to the stock to be held by
Triangle pursuant to Section 4.3 of the Stock Purchase Agreement, dated the date
hereof, between Triangle and Executive). Any shares not so forfeited at the end
of the four-quarter period shall be returned to Executive. Executive shall
deliver additional shares to Triangle if there is an insufficient number of
shares held by Triangle for cancellation. In the alternative, Executive shall
reimburse the Company for all bonus payments received by Executive during each
quarter where Company did not meet its earning threshold. The after-tax income
shall be calculated in accordance with generally accepted accounting principles.
Notwithstanding the forgoing, the parties agree that if officers of Triangle are
paid consulting fees or salaries by the Company, such amounts shall be added
back for the purposes of calculating after-tax income under this Section 4.2(a).
(b) Upon the execution of this Agreement, the Executive shall be
entitled to receive options (the "Options") to purchase 100,000 shares of the
common stock of Triangle ("Common Stock"), pursuant to Triangle's Employee Stock
Option Plan, exercisable for a period of ten (10) years following the date of
grant, at an exercise price as determined by the compensation committee of the
board of directors of Triangle. The Options shall vest one half on May 29, 1999
and the remainder on May 29, 2000, so long as the Executive continues to be
employed by the Company.
(c) Additional bonuses may be paid to the Executive in cash, stock,
options or other consideration in such amount(s) as determined in the sole
discretion by the Company's Board of Directors.
4.3 Expenses. During the Term, the Company shall promptly
reimburse the Executive for all reasonable and necessary travel expenses and
other disbursements incurred by the Executive on behalf of the Company in the
performance of the Executive's duties hereunder, assuming Executive has received
prior approval for such travel expenses and disbursements by the Company to the
extent possible consistent with corporate practices with respect to the
reimbursement of expenses incurred by the Company's employees. The Executive
shall also be entitled to an automobile allowance equal to $750 per month.
4.4 Benefits. The Executive shall be permitted during the Term
to participate in any hospitalization or disability insurance plans, health
programs (including medical and dental plans), pension plans, life insurance
plans, bonus plans or similar benefits (such as the Company's 401-K Plan and
Employee Stock Option Plan) that may be available to other executives of the
Company (including coverage under any officers and directors liability insurance
policy), subject to such eligibility rules as are applied to senior managers
generally. The Company will only be responsible for the premiums on such
policies or plans for the Executive only and not for any other family members of
Executive.
5. Disability of the Executive. If the Executive is
incapacitated or disabled by accident, sickness or otherwise so as to render the
Executive mentally or physically incapable of performing the services required
to be performed under this Agreement for a period of 60 consecutive days or 90
days in any period of 360 consecutive days (a "Disability"), the Company may, at
the time or during the period of such Disability, at its option, terminate the
employment of the Executive under this Agreement immediately upon giving the
Executive written notice to that effect.
6. Termination.
The Company may terminate the employment of the Executive and
all of the Company's obligations under this Agreement at any time for Cause (as
hereinafter defined) by giving the Executive notice of such termination, with
reasonable specificity of the details thereof. "Cause" shall mean (i) the
Executive's willful misconduct which could reasonably be expected to have a
material adverse effect on the business and affairs of the Company, (ii) the
Executive's disregard of lawful instructions of the Company's Board of Directors
or Chief Executive Officer consistent with the Executive's responsibilities
under this Agreement relating to the business of the Company, (iii) the
Executive's neglect of duties or willful failure to act, which, in each case,
could reasonably be expected to have a material adverse effect on the business
and affairs of the Company, (iv) the commission by the Executive of an act
constituting common law fraud, or a felony, or criminal act against the Company
or any affiliate thereof or any of the assets of any of them, (v) the
Executive's abuse of alcohol or other drugs or controlled substances, or
conviction of a crime involving moral turpitude, (vi) the Executive's material
breach of any of the agreements contained herein or (vii) the Executive's death
or resignation hereunder; provided however, that if the Executive resigned as a
result of a material breach by the Company of this Agreement, such resignation
shall not be considered "Cause" hereunder. A termination pursuant to Section
6(a)(i), (ii), (iii), (iv), (v) (other than as a result of a conviction of a
crime involving moral turpitude) or (vi) shall take effect 30 days after the
giving of the notice contemplated hereby unless the Executive shall, during such
30-day period, remedy to the reasonable satisfaction of the Board of Directors
of the Company the misconduct, disregard, abuse or breach specified in such
notice; provided, however, that such termination shall take effect immediately
upon the giving of such notice if the Board of Directors of the Company shall,
in its reasonable discretion, have determined that such misconduct, disregard,
abuse or breach is not remediable (which determination shall be stated in such
notice). A termination pursuant to Section 6(a)(v) (as a result of a conviction
of a crime involving moral turpitude) or (vii) shall take effect immediately
upon the giving of the notice contemplated hereby. For convenience of reference,
the date upon which any termination of the employment of the Executive pursuant
to Sections 5 or 6 shall be effective shall be hereinafter referred to as the
"Termination Date".
7. Effect of Termination of Employment.
Upon the termination of the Executive's employment for Cause
or a Disability, neither the Executive nor the Executive's beneficiaries or
estate shall have any further rights to compensation under this Agreement or any
claims against the Company arising out of this Agreement, except the right to
receive (i) the unpaid portion of the Base Salary provided for in Section 4.1,
earned through the Termination Date (the "Unpaid Salary Amount"), and (ii)
reimbursement for any expenses for which the Executive shall not have
theretofore been reimbursed, as provided in Section 4.3 (the "Expense
Reimbursement Amount"). If the Termination Date is prior to the first
anniversary date of this Agreement, executive shall not be entitled to any of
the unvested Options. If the Termination Date occurs after the first anniversary
date of this Agreement, Executive shall be entitled to receive a pro rata
portion of such Options equal to the number of months of employment hereunder as
a percentage of the 24 months of the Term of this Agreement.
8. Disclosure of Confidential Information. Executive
recognizes that he has had and will continue to have access to secret and
confidential information regarding the Company, including but not limited to its
customer list, products, know-how, and business plans. Executive acknowledges
that such information is of great value to the Company, is the sole property of
the Company, and has been and will be acquired by him in confidence. In
consideration of the obligations undertaken by the Company herein, Executive
will not, at any time, during or after his employment hereunder, reveal, divulge
or make known to any person, any information acquired by Executive during the
course of his employment, which is treated as confidential by the Company,
including but not limited to its customer list, not otherwise in the public
domain, other than in the ordinary of business during his employment hereunder.
The provisions of this Section 8 shall survive Executive's employment hereunder.
9. Covenant Not To Compete.
(a) Executive recognizes that the Company operates nationwide
and that the services to be performed by him hereunder are special, unique and
extraordinary. The parties confirm that it is reasonably necessary for the
protection of Company that Executive agree, and accordingly, Executive does
hereby agree, that he shall not, directly or indirectly, at any time during the
term of the Agreement and the "Restricted Period" (as defined in Section 9(e)
below):
(i) except as provided in Subsection (d) below, be engaged in the computer
and computer consulting and servicing industries that compete with Triangle or
the Company, or provide technical assistance, advice or counseling regarding
such industries in any state in the United States in which the Company or an
affiliate thereof transacts business, either on his own behalf or as an officer,
director, stockholder, partner, consultant, associate, employee, owner, agent,
creditor, independent contractor, or co-venturer of any third party; or
(ii) solicit the employment or engagement, or cause or authorize, directly
or indirectly, to be employed or engaged, for or on behalf of himself or any
third party, any employee or agent of Company or any affiliate thereof.
(b) Executive hereby agrees that he will not, directly or
indirectly, for or on behalf of himself or any third party, at any time during
the term of the Agreement and during the Restricted Period solicit any customers
of the Company or any affiliate thereof in a manner which directly or indirectly
competes with the Company.
(c) If any of the restrictions contained in this Section 9
shall be deemed to be unenforceable by reason of the extent, duration or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Section shall
then be enforceable in the manner contemplated hereby.
(d) This Section 9 shall not be construed to prevent Executive
from owning, directly or indirectly, in the aggregate, an amount not exceeding
two percent (2%) of the issued and outstanding voting securities of any class of
any company whose voting capital stock is traded on a national securities
exchange or on the over-the-counter market other than securities of the Company.
(e) The term "Restricted Period," as used in this Section 9,
shall mean (i) the period of Executive's actual employment hereunder plus (ii)
24 months thereafter in the event that the Executive is terminated for Cause.
(f) The provisions of this Section 9 shall survive the end of the Term as
provided in Section 9(e) hereof.
10. Miscellaneous.
10.1 Injunctive Relief. Executive acknowledges that the
services to be rendered under the provisions of this Agreement are of a special,
unique and extraordinary character and that it would be difficult or impossible
to replace such services. Accordingly, Executive agrees that any breach or
threatened breach by him of Section 8 or 9 of this Agreement shall entitle
Company, in addition to all other legal remedies available to it, to apply to
any court of competent jurisdiction to seek to enjoin such breach or threatened
breach. The parties understand and intend that each restriction agreed to by
Executive hereinabove shall be construed as separable and divisible from every
other restriction, that the unenforceability of any restriction shall not limit
the enforceability, in whole or in part, of any other restriction, and that one
or more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which Company
seeks enforcement thereof, such restriction shall be limited to the extent
permitted by law.
10.2 Assignments. Neither Executive nor the Company may assign
or delegate any of their rights or duties under this Agreement without the
express written consent of the other.
10.3 Entire Agreement. This Agreement constitutes and embodies
the full and complete understanding and agreement of the parties with respect to
Executive's employment by Company, supersedes all prior understandings and
agreements, whether oral or written, between Executive and Company, and shall
not be amended, modified or changed except by an instrument in writing executed
by the party to be charged. The invalidity or partial invalidity of one or more
provisions of this Agreement shall not invalidate any other provision of this
Agreement. No waiver by either party of any provision or condition to be
performed shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same time or any prior or subsequent time.
10.4 Binding Effect. This Agreement shall inure to the benefit
of, be binding upon and enforceable against, the parties hereto and their
respective successors, heirs, beneficiaries and permitted assigns.
10.5 Headings. The headings contained in this Agreement are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.6 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered, sent by
registered or certified mail, return receipt requested, postage prepaid, or by
private overnight mail service (e.g. Federal Express) to the party at the
address set forth above or to such other address as either party may hereafter
give notice of in accordance with the provisions hereof. Notices shall be deemed
given on the sooner of the date actually received or the third business day
after sending.
10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida without giving
effect to such State's conflicts of laws provisions and each of the parties
hereto irrevocably consents to the jurisdiction and venue of the federal and
state courts located in the State of Florida.
10.8 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
10.9 Separability. If any of the restrictions contained in
this Agreement shall be deemed to be unenforceable by reason of the extent,
duration or geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form this Agreement shall
then be enforceable in the manner contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
TRI-MAX SYSTEMS, INC.
______________________________________________
By:
______________________________________________
Name:
______________________________________________
Title:
______________________________________________
Marios Roussos
