EXHIBIT 2.3
STOCK PURCHASE AGREEMENT
BY AND AMONG
DATA PROCESSING RESOURCES CORPORATION,
LEARDATA INFO-SERVICES, INC.
AND
THE SHAREHOLDERS OF LEARDATA INFO-SERVICES, INC.
TABLE OF CONTENTS
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PAGE
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ARTICLE 1 DEFINITIONS.............................................. 1
1.1 Defined Terms............................................ 1
1.2 Other Defined Terms...................................... 4
ARTICLE 2 PURCHASE AND SALE OF LEARDATA STOCK...................... 6
2.1 Sale of Leardata Stock................................... 6
2.2 Purchase Price........................................... 6
2.3 Escrowed Shares.......................................... 7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF LEARDATA............... 7
3.1 Organization and Qualification of Leardata............... 7
3.2 Authorization............................................ 8
3.3 Due Execution and Delivery; Binding Obligations.......... 8
3.4 No Conflict or Violation................................. 8
3.5 Consents and Approvals................................... 8
3.6 Pending Litigation....................................... 9
3.7 Capitalization of Leardata............................... 9
3.8 Financial Statements..................................... 9
3.9 Undisclosed Liabilities.................................. 9
3.10 Absence of Certain Changes or Events..................... 10
3.11 Properties............................................... 11
3.12 Books and Records........................................ 11
3.13 Intellectual Property.................................... 12
3.14 Leases................................................... 12
3.15 Receivables.............................................. 12
3.16 Contracts................................................ 13
3.17 Employment Matters; Employee Benefits.................... 14
3.18 Transactions with Affiliated Parties..................... 15
3.19 Certain Payments......................................... 15
3.20 Taxes.................................................... 15
3.21 Compliance with Laws..................................... 16
3.22 Permits.................................................. 16
3.23 Insurance................................................ 16
3.24 Brokers, Finders, etc.................................... 16
3.25 No Subsidiaries.......................................... 16
3.26 Full Disclosure.......................................... 16
i
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDERS............................................. 17
4.1 Authorization............................................ 17
4.2 Due Execution and Delivery; Binding Obligations.......... 17
4.3 No Conflict or Violation................................. 17
4.4 Consents and Approvals................................... 18
4.5 Title to Leardata Stock.................................. 18
4.6 Leardata's Representations and Warranties................ 18
4.7 Securities Law Matters................................... 18
4.8 Full Disclosure.......................................... 19
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER.............. 19
5.1 Organization............................................. 19
5.2 Authorization............................................ 19
5.3 Due Execution and Delivery; Binding Obligations.......... 19
5.4 No Conflict or Violation................................. 20
5.5 Consents and Approvals................................... 20
5.6 Valid Issuance of Shareholders' Shares................... 20
5.7 Pending Litigation....................................... 20
5.8 Capital Structure........................................ 20
5.9 No Materially Adverse Change............................. 21
5.10 Compliance with Law...................................... 21
5.11 SEC Compliance........................................... 21
5.12 Full Disclosure.......................................... 21
ARTICLE 6 THE SHAREHOLDERS' AND LEARDATA'S OBLIGATIONS
BEFORE CLOSING........................................... 21
6.1 Access to Information.................................... 21
6.2 Conduct of Business...................................... 22
6.3 Confidentiality.......................................... 22
6.4 Additional Financial Statements.......................... 22
6.5 Consents; Regulatory Approvals; Reasonable Efforts....... 22
6.6 No Solicitation.......................................... 23
6.7 No Press Release......................................... 23
6.8 Fulfillment of Conditions and Covenants.................. 23
ARTICLE 7 PURCHASER'S OBLIGATIONS BEFORE CLOSING................... 23
7.1 Confidentiality.......................................... 23
7.2 Third Party Consents..................................... 23
7.3 Fulfillment of Conditions and Covenants.................. 24
ARTICLE 8 CONDITIONS TO OBLIGATIONS OF PURCHASER................... 24
8.1 Accuracy of Representations and Warranties............... 24
ii
8.2 Shareholders' and Leardata's Performance of Covenants.... 24
8.3 Shareholders' and Leardata's Officer's Certificate....... 24
8.4 Consents and Regulatory Approvals........................ 24
8.5 Escrow Agreement......................................... 24
8.6 Employment Agreements.................................... 24
8.7 Registration Rights Agreement............................ 25
8.8 Termination of Certain Agreements........................ 25
8.9 Letters of Resignation................................... 25
8.10 Opinion of Counsel....................................... 25
8.11 Payments by Shareholders................................. 25
ARTICLE 9 CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS
AND LEARDATA............................................. 25
9.1 Accuracy of Representations and Warranties............... 25
9.2 Purchaser's Performance of its Covenants................. 25
9.3 Purchaser's Officer's Certificate........................ 25
9.4 Consents................................................. 26
9.5 Employment Agreements.................................... 26
9.7 Registration Rights Agreement............................ 26
9.8 Opinion of Counsel....................................... 26
ARTICLE 10 TERMINATION.............................................. 26
10.1 Termination.............................................. 26
10.2 Effect on Obligations.................................... 26
ARTICLE 11 THE CLOSING.............................................. 27
11.1 Closing.................................................. 27
11.2 Deliveries by the Shareholders and Leardata.............. 27
11.3 Deliveries by Purchaser.................................. 28
ARTICLE 12 POST CLOSING............................................. 28
12.1 Survival of Representations and Warranties............... 28
12.2 Special Bonus Payments................................... 29
12.3 Indemnification Obligations.............................. 29
12.4 Restriction on Transfer.................................. 32
12.5 Post-Closing Adjustment.................................. 32
12.6 Further Assurances....................................... 33
12.7 Expenses................................................. 33
iii
ARTICLE 13 COVENANT NOT TO COMPETE................................. 33
13.1 Non-Compete Covenant.................................... 33
13.2 Definition of Compete................................... 33
13.3 Direct or Indirect Competition.......................... 34
13.4 Confidential Data....................................... 34
13.5 Reasonableness of Restrictions.......................... 34
13.6 Injunctive Relief....................................... 34
ARTICLE 14 MISCELLANEOUS PROVISIONS................................ 35
14.1 Entire Agreement........................................ 35
14.2 Governing Law........................................... 35
14.3 Interpretation.......................................... 35
14.4 Waiver and Amendment.................................... 35
14.5 Assignment.............................................. 36
14.6 Successors and Assigns.................................. 36
14.7 Notices................................................. 36
14.8 Severability............................................ 36
14.9 Specific Performance.................................... 36
14.10 Cumulative Remedies..................................... 37
14.11 Warranty of Authority................................... 37
14.12 Counterparts............................................ 37
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LIST OF EXHIBITS
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A Leardata Adjusted Net Worth at the Balance Sheet Date
B Leardata Adjusted Working Capital at the Balance Sheet Date
C Form of Escrow Agreement
D Form of ▇▇▇▇▇ Employment Agreement
E Form of Other Employment Agreement
F Form of Registration Rights Agreement
LIST OF SCHEDULES
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1.1 Long-Term/Shareholder Liabilities
2.2(a) Allocation of Cash Consideration
2.2(b) Third Party Payments
2.2(c) Allocation of the Shareholders' Shares
3.1 Articles and Bylaws of Leardata
3.5 Leardata's Consents and Approvals
3.6 Leardata's Litigation
3.7 Capitalization of Leardata
3.8 Financial Statements
3.9 Undisclosed Liabilities
3.10 Absence of Certain Changes or Events
3.11 Properties
3.13 Intellectual Property
3.14 Leases
3.15 Receivables
3.16 Contracts and Major Customers
3.17 Employment Matters
3.18 Transactions With Affiliated Parties
3.20 Tax Matters
3.22 Permits
3.23 Insurance
5.5 Purchaser's Consents and Approvals
5.7 Purchaser's Litigation
12.2 Special Bonus Payments Amount
v
STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into
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as of this 17th day of December 1996 (the "Execution Date"), by and among Data
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Processing Resources Corporation, a California corporation ("Purchaser"),
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Leardata Info-Services, Inc., a Texas corporation ("Leardata"), General
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Atlantic Leardata Partners, L.P., a Delaware limited partnership ("GALP"), ▇▇▇▇▇
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▇. ▇▇▇▇▇, an individual ("▇. ▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual ("C.
-------- --
▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇, an
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individual ("▇▇▇▇"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual ("Kuhler"). GALP, B.
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▇▇▇▇▇, C. Smith, Donaldson, ▇▇▇▇ and Kuhler are collectively referred to herein
as the "Shareholders" and sometimes individually referred to as a "Shareholder."
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R E C I T A L S
- - - - - - - -
A. Leardata provides temporary technical personnel to third parties (the
"Business"), with offices situated at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
--------
▇▇▇▇▇▇, ▇▇▇▇▇, and portions of ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇.
B. The Shareholders collectively own all of the issued and outstanding
shares of the capital stock of Leardata (the "Leardata Stock").
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C. Purchaser desires to purchase, and the Shareholders desire to sell,
for the purchase price and upon the terms and subject to the conditions of this
Agreement, all of the Leardata Stock, and by virtue thereof, all of the
Shareholders' interest in Leardata.
A G R E E M E N T
- - - - - - - - -
In consideration of the foregoing recitals and the respective covenants,
agreements, representations and warranties contained herein, the parties,
intending to be legally bound, agree as follows:
ARTICLE 1
DEFINITIONS
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1.1 Defined Terms. For purposes of this Agreement, the following terms
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shall have the following meanings:
"Action" shall mean any action, claim, suit, litigation, proceeding,
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arbitration, mediation or other dispute.
"Affiliate" shall mean an "affiliate" under the meaning of Rule 405 of
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Regulation C promulgated under the Securities Act of 1933, as amended.
"Books and Records" shall mean all books, ledgers, files, records,
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manuals and other materials (in any form or medium) related to the Business,
including, but not limited to, all correspondence, personnel records, data base
of current, former and prospective technical contractors, purchasing materials
and records, vendor lists, operation and quality control records and procedures,
research and development files, Intellectual Property disclosures and
documentation, accounting records and systems, litigation files, sales order
files, purchase order files, advertising materials, catalogs, product brochures,
mailing lists, customer lists, distribution lists, sales and promotional
materials and all other records utilized by Leardata in connection with the
Business and all computer hardware, software and data files necessary to access
or review or continue to compile or utilize any of the foregoing.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Contracts" shall mean all of the contracts, licenses, Leases,
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arrangements, understandings and other agreements related in any way to the
Business, including, without limitation, all of the Contracts described on
Schedules 3.13, 3.14 and 3.16 hereto.
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"DPRC Average Closing Price" shall mean, with respect to the DPRC
--------------------------
Common Shares, the average closing price as publicly reported by the Nasdaq
Stock Market as of 4:00 p.m. Eastern Time of DPRC Common Shares over the last 20
trading days ending on (and including) the trading day immediately prior to the
Execution Date.
"Employee Benefit Plan(s)" shall mean: (a) Any "employee welfare
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benefit plan," as defined in Section 3(1) of ERISA, (i) which Leardata sponsors
or to which Leardata contributes or is required to contribute, or under which
Leardata may incur any liability, and (ii) which covers an employee or former
employee of Leardata including each multi-employer welfare benefit plan; (b) any
"multi-employer plan," as defined in Section 4001(a)(3) of ERISA, (i) to which
Leardata (or any person which is a member of a "controlled group of
corporations" with or under "common control" with Leardata as defined in Section
414(b) or (c) of the Code ("Common Control Entity")) has contributed or been
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obligated to contribute at any time or under which Leardata may incur any
liability, and (ii) which covers an employee or former employee of Leardata; (c)
any "employee pension benefit plan," as defined in Section 3(2) of ERISA, (i)
which Leardata sponsors or to which Leardata or any Common Control Entity
contributes or is required to contribute or under which Leardata may incur any
liability, and (ii) which covers an employee or former employee of Leardata; and
(d) any deferred compensation plan, bonus plan, profit sharing plan, stock
option plan, employee stock purchase plan and any other employee benefit plan,
agreement, arrangement or commitment maintained by Leardata which covers an
employee or former employee of Leardata.
"Encumbrances" shall mean any claim, lien, pledge, option, charge,
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easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, restriction, encumbrance or other right of third parties, of any
kind or nature.
2
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time, and any successor statute, including the
rules and regulations promulgated thereunder.
"Intellectual Property" shall mean all of Leardata's intellectual
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property rights including, without limitation, all of Leardata's (a) common law,
state, federal and statutory rights in any trademarks, trademark registrations
and applications, service marks and trade names, copyrights, copyright
registrations; patents, patent applications, design rights, inventions, trade
secrets, technical and business confidential information (including, but not
limited to designs, plans, specifications, formulas, processes, methods, shop
rights, know-how and other business or technical confidential information in
each case whether or not such rights are patentable, copyrightable or
registerable); (b) computer software programs and systems, know-how, formulae
and designs and documentation relating to the foregoing or used or useable in
the Business; and (c) other proprietary information owned, controlled, created
or used or useable by or on behalf of Leardata in connection with the conduct of
the Business in which Leardata has any interest whatsoever, whether or not
registered, including rights or obligations under any license agreement with any
other person.
"Laws" shall mean all federal, state or local statutes, regulations,
----
ordinances, orders, decrees, or any other laws, common law theories or reported
decisions of any state or federal court now or at any time hereafter in effect.
"Leardata Adjusted Net Worth" shall mean the difference between (a)
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all of the assets of Leardata, and (b) all of the liabilities of Leardata other
than the Special Bonus Payments Amount and the Long-Term/Shareholder
Liabilities, as determined in accordance with generally accepted accounting
principles, consistently applied with prior practice. The Leardata Adjusted Net
Worth at the Balance Sheet Date is shown on Exhibit A hereto. The Leardata
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Adjusted Net Worth at the Closing Date shall be determined in the same manner
used by the parties to determine the Leardata Adjusted Net Worth at the Balance
Sheet Date.
"Leardata Adjusted Working Capital" shall mean the difference between
---------------------------------
(a) all of the current assets of Leardata, and (b) all of the current
liabilities of Leardata other than the Special Bonus Payments Amount and the
current portion of the Long-Term/Shareholder Liabilities, as determined in
accordance with generally accepted accounting principles, consistently applied
with prior practice. The Leardata Adjusted Working Capital at the Balance Sheet
Date is shown on Exhibit B hereto. The Leardata Adjusted Working Capital at the
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Closing Date shall be determined in the same manner used by the parties to
determine the Leardata Adjusted Working Capital at the Balance Sheet Date.
"Long-Term/Shareholder Liabilities" shall mean all long and short term
---------------------------------
bank, working capital line, institutional, shareholder-related and other
interest bearing debt, accrued interest and income tax liabilities of Leardata,
whether current or deferred, including, without limitation, those set forth on
Schedule 1.1 hereto.
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3
"Permits" shall mean all franchises, permits, licenses,
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qualifications, rights-of-way, easements, municipal and other approvals,
authorizations, orders, consents and other rights from, and filings with, any
governmental authority of any jurisdiction worldwide relating to the conduct of
the Business.
"Permitted Transfer" shall mean (a) any Transfer by GALP to any of its
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Affiliates, (b) any Transfer on the terms and subject to the conditions of the
Registration Rights Agreement, or (c) any Transfer by a Shareholder during his
or her lifetime to (i) a revocable trust established by such Shareholder (or
jointly established by such Shareholder and his or her spouse), and in which
such Shareholder (or such Shareholder and his or her spouse) retains during his
or her (or their) life the entire beneficial interest and such Shareholder (or
such Shareholder and his or her spouse or any professional trustee or trustees)
serves (or serve), until his or her (or their) death or incapacity as the sole
trustee(s), or (ii) an irrevocable trust established by such Shareholder (or
jointly established by such Shareholder and his or her spouse) in which the
entire beneficial interest is granted to such Shareholder's (or such
Shareholder's and his or her spouse's) siblings, parents or issue (except that
residual grants to other persons shall be permissible in the event that any of
the foregoing persons do not survive the trustor(s)).
"Representatives" shall mean any officer, director, manager,
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principal, shareholder, member, partner, attorney, accountant, advisor, agent,
trustee, employee or other representative of a party.
"Tax(es)" shall mean all taxes, charges, fees, levies or other
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assessments imposed by and required to be paid to any federal, state, local or
foreign taxing authority, including, without limitation, income, excise,
property, sales, transfer, ad valorem, payroll and franchise taxes (including
any interest, penalties or additions attributable to or imposed on or with
respect to any such assessment) and any estimated payments or estimated taxes.
"Tax Return" shall mean any return, report, information return or
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other document (including any related or supporting information) filed or
required to be filed with any federal, state, local or foreign governmental
entity or other authority in connection with the determination, assessment or
collection of any Tax (whether or not such Tax is imposed on Leardata) or the
administration of any Laws, regulations or administrative requirements relating
to any Tax.
1.2 Other Defined Terms. The following capitalized terms shall have the
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meanings given to them in the Sections set forth below:
4
Term Section
---- -------
Accountants 12.5(a)
Affiliated Party(ies) 3.18
Agreement Introduction
Ancillary Agreements 3.2
▇. ▇▇▇▇▇ Introduction
Balance Sheet 3.8
Balance Sheet Date 3.8
Business Recital A
▇. ▇▇▇▇▇ Introduction
Cash Consideration 2.2(a)
Closing 11.1
Closing Date 11.1
Damages 12.3(a)
▇▇▇▇▇▇▇▇▇ Introduction
DPRC Common Shares 2.2(c)
DPRC Preferred Shares 5.8
Escrow Agent 2.3
Escrow Agreement 2.3
Execution Date Introduction
Financial Statements 3.8
GALP Introduction
Indemnitee 12.3(c)
Indemnitor 12.3(c)
▇▇▇▇ Introduction
Kuhler Introduction
Leardata Introduction
Leardata Stock Recital B
Leases 3.14
Major Customers 3.16(b)
Non-Compete Period 13.1
Obligated Shareholders 13.1
Other Employment Agreements 8.6
Pledging Shareholder(s) 2.3
Purchase Price 2.2
Purchaser Introduction
Purchaser Representatives 12.3(a)
Registration Rights Agreement 8.7
Shareholder(s) Introduction
Shareholder Representatives 12.3(b)
Shareholders' Shares 2.2(c)
5
▇▇▇▇▇ Employment Agreement 8.6
Special Bonus Payments Amount 2.2(a)(iv)
Survival Date 12.1
Territory 13.1
Third Party Payments 2.2(b)
Transfer 12.4
Warranty Claims 12.3(e)
ARTICLE 2
PURCHASE AND SALE OF LEARDATA STOCK
-----------------------------------
2.1 Sale of Leardata Stock. On the terms and subject to the conditions of
----------------------
this Agreement, at the Closing, the Shareholders shall sell, assign, transfer
and deliver to Purchaser, and Purchaser shall purchase and acquire from the
Shareholders, all of the Leardata Stock, free and clear of all Encumbrances.
Schedule 3.7 hereto sets forth the number and type of shares of Leardata Stock
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that each of the Shareholders will sell, assign, transfer and deliver to
Purchaser hereunder.
2.2 Purchase Price. In consideration of the sale, assignment, transfer
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and delivery of all of the Leardata Stock to Purchaser and the Shareholders'
respective obligations under Article 13, below, on the terms and subject to the
conditions of this Agreement, Purchaser will pay or cause to be paid the
following amounts to the following persons (collectively, the "Purchase Price"):
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(a) Cash by wire transfer to each of the Shareholders' accounts (the
"Cash Consideration"), in the amounts set forth opposite each of such
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Shareholders' names on Schedule 2.2(a) hereto, which amounts, in the aggregate,
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shall be equal to the following:
(i) Fourteen Million Eight Hundred Fifty Thousand and No/100
Dollars ($14,850,000.00); plus
(ii) Seventy-Five Percent (75%) of the verifiable amount of cash
held by Leardata at the Closing Date; minus
(iii) The amount of the Long-Term/Shareholder Liabilities at the
Closing Date; minus
(iv) The amount of the Third Party Payments which are not Long-
Term Shareholder Liabilities; minus
(v) Four Hundred Forty Thousand and No/100 Dollars ($440,000.00)
(the "Special Bonus Payments Amount").
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6
(b) Cash by wire transfer to the accounts of each of the persons set
forth on Schedule 2.2(b) hereto (the "Third Party Payments"), in the amounts set
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forth opposite each of such persons' names on Schedule 2.2(b) hereto; and
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(c) Stock certificates of Purchaser, certifying that each of the
Shareholders is the record holder of that number of shares of the common stock
of Purchaser (the "DPRC Common Shares") set forth opposite each of such
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Shareholders' names on Schedule 2.2(c) hereto (collectively, the "Shareholders'
--------------- -------------
Shares"), which number of shares, in the aggregate, shall be equal to the number
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of shares which when multiplied by the DPRC Average Closing Price, equals the
following:
(i) Four Million Nine Hundred Fifty Thousand and No/100 Dollars
($4,950,000.00); plus
(ii) Twenty-Five Percent (25%) of the verifiable amount of cash
held by Leardata at the Closing Date.
2.3 Escrowed Shares. All of the Shareholders' Shares to be issued in the
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name of GALP, ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇ (collectively referred to herein as the
"Pledging Shareholders" and sometimes individually as a "Pledging Shareholder")
---------------------- --------------------
shall be held by an escrow agent (the "Escrow Agent") pursuant to an escrow
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agreement in substantially the form attached hereto as Exhibit C (the "Escrow
--------- ------
Agreement"), to secure claims by Purchaser for the indemnification obligations
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of the Pledging Shareholders pursuant to Section 12.3, below. All costs and
expenses of the Escrow Agent in connection with the Escrow Agreement shall be
paid by Purchaser.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF LEARDATA
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Leardata hereby represents and warrants to Purchaser that the following
statements are true and complete and not misleading as of the date of this
Agreement:
3.1 Organization and Qualification of Leardata. Leardata is a corporation
------------------------------------------
duly organized, validly existing and in good standing under the Laws of the
State of Texas. Leardata has the requisite corporate power and authority to own
and operate the Business, to carry on the Business as presently conducted and to
consummate the transactions contemplated hereby. Leardata is qualified to do
business as a foreign corporation in each jurisdiction in which its conduct of
the Business or the ownership or leasing of properties makes such qualification
necessary except to the extent that failure to so qualify would not have a
material adverse effect on Leardata or the Business. Leardata has complete
corporate power and authority to consummate the transaction contemplated hereby.
Copies of Leardata's Articles of Incorporation, certified by the Secretary of
State of the State of Texas, and Bylaws, certified by Leardata's Secretary, each
of which is attached hereto as Schedule 3.1, are complete and correct and, since
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the respective
7
dates of certification thereof, there have not been any amendments to such
Articles of Incorporation or Bylaws.
3.2 Authorization. Leardata has the requisite power, authority and legal
-------------
right and capacity to enter into this Agreement and the agreements contemplated
hereby (the "Ancillary Agreements"), to perform its obligations hereunder and
--------------------
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by Leardata of this Agreement and the
Ancillary Agreements have been duly authorized by all necessary corporate action
on the part of Leardata to make this Agreement and the Ancillary Agreements
valid and binding upon Leardata in accordance with their respective terms.
3.3 Due Execution and Delivery; Binding Obligations. This Agreement has
-----------------------------------------------
been, and each of the Ancillary Agreements will be, duly executed and delivered
by Leardata. This Agreement constitutes, and each of the Ancillary Agreements
will constitute, the legal, valid and binding agreement and obligation of
Leardata, enforceable against Leardata in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar Laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability and except as rights of indemnity or contribution may
be limited by federal or state securities or other Laws or the public policy
underlying such Laws.
3.4 No Conflict or Violation. Neither the execution and delivery of this
------------------------
Agreement and the Ancillary Agreements by Leardata, nor the consummation of the
transactions contemplated hereby and thereby, will result in (a) a violation of,
or a conflict with, Leardata's charter documents or any subscription,
shareholders' or similar types of agreements or understandings to which Leardata
is a party; (b) a breach of, or a default (or an event which, with notice or
lapse of time or both would constitute a default) under or result in the
termination of, or accelerate the performance required by, or create a right of
termination or acceleration under, any Contract or Encumbrance or, to Leardata's
knowledge, any Permit to which Leardata is a party or by which the Business is
bound or affected; (c) the payment by, or the creation of any obligation
(absolute or contingent) to pay on behalf of, any party of any severance,
termination, "golden parachute" or other similar payments pursuant to any
employment or other Contracts of Leardata, or Leardata's current or former
officers, directors or employees; (d) to Leardata's knowledge, a violation by
Leardata of any applicable Law; (e) a violation by Leardata of any order,
judgment, writ, injunction decree or award to which Leardata is a party or by
which the Business is affected; or (f) an imposition of any Encumbrance.
3.5 Consents and Approvals. Except as set forth on Schedule 3.5 hereto,
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no consent, Permit, approval or authorization of, or declaration, filing,
application, transfer, registration with, any governmental or regulatory
authority, or any other person or entity is required to be made or obtained by
Leardata by virtue of its execution, delivery and performance of this Agreement
or any of the Ancillary Agreements or to avoid the loss of any Permit, or the
violation, breach or termination of, or any default under, or the creation of
Encumbrances on any of the assets or
8
properties of Leardata pursuant to the terms of any Law, or to enable Purchaser
to own the Leardata Stock and continue the lawful operation of the Business
following the Closing Date as presently conducted.
3.6 Pending Litigation. Except as disclosed on Schedule 3.6 hereto, there
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is no pending or, to Leardata's knowledge, threatened Action, whether private or
public, affecting Leardata or the Business which could reasonably be expected to
affect the enforceability of this Agreement or any of the Ancillary Agreements
or which could reasonably be expected to materially and adversely affect the
Business, Leardata's assets or properties, or Leardata's ability to consummate
the transactions contemplated by or perform its obligations under this Agreement
or any of the Ancillary Agreements.
3.7 Capitalization of Leardata. The authorized capital stock of Leardata
--------------------------
consists of 5,000,000 shares of preferred stock, $0.10 par value, of which
3,864,480 shares are issued and outstanding, and 1,000,000 shares of common
stock, $0.01 par value, of which 386,452 shares are issued and outstanding. The
issued and outstanding shares of capital stock of Leardata consist solely of the
Leardata Stock, which is more specifically described on Schedule 3.7 hereto, and
------------
held entirely by the Shareholders. Other than this Agreement, there is not
outstanding any subscription, option, warrant, call, right or other agreement or
commitment obligating Leardata to issue, sell, deliver or transfer (including
any right of conversion or exchange under any outstanding security or other
instrument) any shares of the Leardata Stock or any other shares of the capital
stock of Leardata. All of the shares of the Leardata Stock are duly and validly
authorized, issued and outstanding, fully paid and non-assessable.
3.8 Financial Statements. Leardata has furnished to Purchaser copies of:
--------------------
(a) the audited balance sheets of Leardata at December 31, 1995, 1994 and 1993,
and the related statements of income, shareholders' equity and cash flows for
the periods then ended, together with the related notes thereto and the
auditors' report thereon, and (b) Leardata's internally prepared balance sheet
(the "Balance Sheet") at October 31, 1996 (the "Balance Sheet Date"), and the
------------- ------------------
related statements of income and cash flows for the period then ended. All
financial statements referred to in this Section 3.8 (the "Financial
---------
Statements") are complete and correct, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the respective periods (except that the Balance Sheet does not include certain
year-end adjustments and footnotes required under generally accepted accounting
principles), and fairly present the financial condition of Leardata as at the
respective dates thereof and the results of operations of Leardata for the
respective periods covered by the statements of income contained therein. The
Financial Statements are attached hereto as Schedule 3.8. All reserves made by
------------
Leardata in the Financial Statements are appropriate and adequate for all known
or anticipated liabilities. Leardata has provided and disclosed to Purchaser,
its accountants and other Representatives all material facts and information
relating to the preparation of the Financial Statements.
3.9 Undisclosed Liabilities. Except as set forth on Schedule 3.9 hereto,
----------------------- ------------
Leardata does not have any liabilities or obligations (absolute, accrued,
contingent or otherwise) related to the
9
Business or its assets or properties except (a) liabilities reflected on the
Financial Statements, (b) liabilities incurred since the Balance Sheet Date in
the ordinary course of business, and (c) liabilities arising under any Contract
in the ordinary course of conducting the Business.
3.10 Absence of Certain Changes or Events. Since the Balance Sheet Date,
------------------------------------
except as set forth on Schedule 3.10 hereto, there has not been any:
-------------
(a) Amendment to Leardata's Articles of Incorporation or Bylaws;
issuance of any shares of the capital stock of Leardata; or issuance or creation
of any warrants, obligations, subscriptions, options, convertible securities or
other commitments under which any additional shares of the capital stock of
Leardata of any class have been or might be, directly or indirectly, authorized,
issued or transferred;
(b) Declaration, setting aside or payment of any dividend by Leardata;
distribution in respect of the capital stock of Leardata; or purchase or
redemption, directly or indirectly, of any shares of the capital stock of
Leardata;
(c) Except for any payments contemplated by the Special Bonus Payments
Amount, increase in the salary or other compensation payable or to become
payable by Leardata to any of its officers, directors, partners or employees;
the declaration, payment, commitment or obligation of any kind for the payment
by Leardata, of a bonus or other additional salary or compensation to any such
person; the repayment by Leardata of any loan from such person; or the payment
by Leardata of any accrued but unpaid salaries, distributions or any other
payments, whether in cash or property, to any such person;
(d) Change in accounting methods or practices by Leardata (including,
without limitation, any change in depreciation, amortization or valuation
policies or rates or any change in billing and revenue recognition policies) or
revaluation of any of its assets, liabilities or reserves reflected on the
Financial Statements, or any change in any assumption underlying or methods of
calculating any bad debt, contingency or other reserves related to the Business;
(e) Agreement entered into not in the usual and ordinary course of the
Business; agreement entered into in the usual and ordinary course of the
Business having a term of at least 12 months or involving an amount exceeding
$10,000; or capital expenditure, or the incurring of any obligation to make any
capital expenditure, by Leardata in excess of $10,000;
(f) Agreement entered into to provide technical contractors at other
than an hourly rate or at a margin or rate-of-return that is less than the
historical average;
(g) Payment by or on behalf of Leardata of any obligation or
liability, whether fixed or contingent, other than current liabilities; waiver
or compromise by Leardata of any right or claim; or cancellation by Leardata,
without full payment, of any note, loan or other obligation owed to Leardata;
10
(h) Failure to pay or satisfy when due any obligation of Leardata
except where such failure would not adversely affect Leardata, the Business, its
assets or its liabilities;
(i) Amendment, rescission, expiration or termination of any of
Leardata's existing Contracts or agreements, including, without limitation, the
lapse, expiration or termination of any insurance coverage;
(j) Sale, transfer or disposal of, or agreement to sell, transfer or
otherwise dispose of, any of the assets, properties or rights of Leardata other
than in the ordinary course of business; destruction, damage to, or loss of any
of Leardata's material assets or properties (whether or not covered by
insurance) used or useable in the Business; or disposition or lapsing of any
Intellectual Property or any disclosure to any person (other than persons
subject to confidentiality agreements) of any Intellectual Property;
(k) Labor dispute or other event or condition of any character
adversely affecting the prospects, earnings, properties or condition, financial
or otherwise, of the Business;
(l) Other event or condition of any character which it is reasonable
to expect will, individually or in the aggregate, materially and adversely
affect Leardata, its assets or the Business or Leardata's ability to perform its
obligations hereunder; or
(m) Agreement by Leardata or the Shareholders to do or cause any of
the things described in clauses (a) through (l), above.
3.11 Properties. Schedule 3.11 hereto sets forth a complete and correct
---------- -------------
list of all assets owned by Leardata as of the Balance Sheet Date which have
been treated as capital assets. Leardata does not own any real property.
Except as set forth on Schedule 3.11 hereto, Leardata has good, indefeasible and
-------------
marketable title to, or a valid leasehold interest in, or a valid license to
use, all of the personal property used in and material to the Business, in each
case free and clear of all Encumbrances. All personal property owned or leased
by Leardata is in good order and operating condition, ordinary wear and tear
excepted, and free from any defects, except for such minor defects which do not
substantially interfere with the continued use thereof in the conduct of normal
operations in the manner and to the extent such assets are presently being used.
3.12 Books and Records. Leardata has made and kept (and given Purchaser's
-----------------
Representatives access to) the Books and Records, which, in reasonable detail,
accurately and fairly reflect the activities and transactions of Leardata
related to the Business, the dispositions of assets related to the Business, and
the financial condition of Leardata and the Business, including, without
limitation, the existence of any and all liabilities, whether actual or
contingent, including, without limitation, the Long-Term/Shareholder
Liabilities.
11
3.13 Intellectual Property.
---------------------
(a) Schedule 3.13 hereto is a complete and correct list of all of the
-------------
material Intellectual Property. Except as set forth on Schedule 3.13 hereto,
-------------
(a) the Intellectual Property is owned by Leardata or Leardata has a valid
license to use the same, (b) neither the Shareholders nor Leardata has received
any notice or claim disputing Leardata's right to own or use any such
Intellectual Property, and (c) to Leardata's knowledge, Leardata's right to own
or use the Intellectual Property is not disputed by any third party. Except as
set forth on Schedule 3.13 hereto, the Intellectual Property is owned by
-------------
Leardata free and clear of all Encumbrances. The Intellectual Property
constitutes all of the proprietary rights necessary and sufficient for the
lawful operation of the Business as presently conducted. To Leardata's
knowledge, Leardata is not infringing upon or otherwise acting adversely to any
property owned by any other person with respect to the Intellectual Property
which has been received and used by Leardata, nor is there any Action by any
person pending or, to Leardata's knowledge, threatened with respect thereto.
(b) Schedule 3.13 hereto accurately discloses all licenses,
-------------
sublicenses or agreements by which Leardata holds or has given to others the
right to use the Intellectual Property. Leardata is not in default and, to
Leardata's knowledge, no third party is in default, under any such license,
sublicense or agreement.
3.14 Leases. Schedule 3.14 hereto sets forth a true, correct and complete
------ -------------
list and description of all leases, subleases, licenses and other occupancy or
lease agreements, together with all amendments, supplements and nondisturbance
agreements pertaining thereto, under which Leardata leases, subleases, licenses,
occupies or uses any real or personal property (the "Leases"). All of the
------
Leases are in good standing, legal, valid, binding and in full force and effect,
all rents and additional rents due to date under each such Lease have been paid
in full, and there is not under any of such Leases any existing default,
violation or breach by Leardata or event or condition which after notice or
lapse of time or both would constitute a default, violation or breach. Leardata
has provided Purchaser with true and correct copies of all such Leases.
3.15 Receivables. Attached hereto as Schedules 3.15 are true and complete
----------- --------------
lists of the Receivables at November 30, 1996 and Unbilled Receivables as of
November 30, 1996, including, without limitation, all Receivables from and
Unbilled Receivables with respect to Affiliated Parties. Except to the extent
collected since such date, all Receivables are reflected on Schedule 3.15, and
-------------
all Receivables and Unbilled Receivables accruing or created between such dates
and the Effective Date are and will be (a) valid bona fide claims against
debtors for sales or other charges, and (b) subject to no known or asserted
defenses, set-offs or counterclaims. No additional loss reserves are required
with respect to the Receivables and Unbilled Receivables other than that which
is currently provided for in the Financial Statements. Leardata has no reason
to believe that the Receivables and Unbilled Receivables are not collectible in
accordance with their terms. Leardata will update Schedule 3.15 at Closing to
-------------
list all Receivables and Unbilled Receivables as of December 31, 1996.
12
3.16 Contracts.
---------
(a) Schedule 3.16 hereto contains a complete and correct list of all
-------------
Contracts, whether written or oral, (i) to which Leardata is a party or by which
it is bound, or (ii) by which any of the assets, properties or the Business is
bound or subject, and, in either case, which constitute:
(i) Mortgages, indentures, security agreements and other
agreements and instruments relating to the borrowing of money by, or any
extension or credit to, Leardata;
(ii) Sales agency or marketing agreement;
(iii) Agreements or commitments for capital expenditures;
(iv) Brokerage or finder's agreements;
(v) Partnership, joint venture or other arrangements or
agreements involving a sharing of profits or expenses;
(vi) Contracts or commitments to sell, lease or otherwise dispose
of any assets, properties or business other than in the ordinary course of
business;
(vii) Contracts or commitments limiting the freedom of Leardata to
compete in any line of business or in any geographic area or with any person;
(viii) Other agreements, contracts or commitments which in any case
are not terminable on at least 30 days' prior written notice or involve payments
or receipts of more than $10,000 per annum; and
(ix) Any other agreements, contracts or commitments material
to the Business, operations or financial condition of Leardata.
(b) Schedule 3.16 hereto sets forth a correct and complete list of the
-------------
10 largest customers (by sales volume) (the "Major Customers") of the Business
---------------
during the 12-month period ended at the Balance Sheet Date indicating the sales
to such Major Customers within such period and the existing contractual
arrangements with each such Major Customer. As of the Balance Sheet Date,
Leardata had no outstanding Contracts with customers requiring payments or
credits in excess of $5,000, except for those listed on Schedule 3.16 hereto.
-------------
There are no outstanding disputes with any Major Customer, and no Major Customer
has refused to do business with Leardata or has stated its intention not to
continue to do business with or increase or reduce its purchases from Leardata
or Purchaser upon consummation of the transactions contemplated hereby.
Leardata has no reason to believe that any customer account is not collectible
in
13
accordance with its terms. No existing contractual arrangement with a customer
contains any fixed price arrangement.
(c) As of the Balance Sheet Date, Leardata had no outstanding
Contracts with suppliers or vendors requiring payments in excess of $10,000 on
an annualized basis except those listed on Schedule 3.16 hereto.
-------------
(d) Leardata has delivered to Purchaser or its Representatives
complete and correct copies of all written Contracts, together with all
amendments thereto, and accurate descriptions of all oral Contracts, listed on
Schedules 3.13, 3.14 and 3.16 hereto or required to be listed thereon. All of
-------------- ---- ----
the Contracts are valid and in full force and effect and Leardata has duly
performed all of its obligations under each Contract to the extent those
obligations have accrued, and no default, violation or breach by Leardata under
any Contract has occurred which affects the enforceability of such Contract or
any parties' rights thereunder.
3.17 Employment Matters; Employee Benefits.
-------------------------------------
(a) Schedule 3.17 hereto sets forth a complete and correct list of all
-------------
the names, current annual rates of salary, bonuses, employee benefits, accrued
vacation times, sick pay and other compensation, date of hire and location of
all the current employees, consultants, contractors and agents of Leardata who
provide services in connection with the Business. Except for the Special Bonus
Payments Amount, none of such persons has received or will receive an increase
in salary or other compensation from Leardata prior to the Closing Date. Except
as set forth on Schedule 3.17 hereto, there are no employment or consulting
-------------
contracts or arrangements, including pensions, bonus or profit sharing plans, or
other severance or termination contracts or arrangements which constitute
contractual obligations of Leardata not terminable on 10 days' notice. There
are no collective bargaining agreements with any union or other bargaining group
for any of Leardata's employees, nor is Leardata aware of any efforts by its
employees or contractors to organize or participate in any of the foregoing. To
Leardata's knowledge, no employee or contractor is in violation of any of its
obligations to, or any employment agreement with, a prior employer. No key
employee, consultant or contractor of Leardata has left Leardata since the
Balance Sheet Date and no current key employee or contractor has indicated any
present or future intention to terminate its, his or her employment with
Leardata. Leardata has made available to Purchaser true and correct copies of
all performance reviews conducted of the persons set forth on Schedule 3.17.
-------------
(b) Leardata has complied with all provision of Law pertaining to the
employment and terminating of employees and the hiring and terminating of
consultants and contractors, including, without limitation all such Laws
relating to labor relations, equal employment practices, fair employment
practices, entitlements, prohibited discrimination, terms and conditions of
employment, wages and hours, independent contractor classification, withholding
requirements or other similar employment or hiring practices or acts, and
Leardata is not engaged in any unfair labor practices and is not a party to any
Action involving a violation
14
or alleged violation of any of any of the foregoing Laws. Without limiting the
generality of the foregoing, Leardata has complied in all respects with the WARN
Act, COBRA, the Immigration and Nationality Act, as amended, and the Immigration
Reform and Control Act of 1986, including, without limitation, completing a Form
I-9 for every employee of Leardata, and maintaining all such Form I-9(s) and
related information in accordance with such acts. Except as set forth on
Schedule 3.6 hereto, no employee, consultant, contractor or governmental agency
------------
or authority has brought or threatened an Action against Leardata with respect
to any matter arising out of, relating to or in connection with such employee's,
consultants' or contractor's employment by Leardata.
(c) Except as set forth on Schedule 3.17 hereto, there are no pension,
-------------
bonus, profit sharing, stock option or employee benefit plans maintained by
Leardata or to which Leardata contributes or is required to contribute. All
such plans set forth on Schedule 3.17 hereto, and their related trusts, if any,
-------------
comply with the provisions of and have been administered in compliance with the
provisions of ERISA, and all other applicable Laws.
3.18 Transactions with Affiliated Parties. Attached hereto as Schedule
------------------------------------ --------
3.18 is a true and complete list and description of all transactions requiring
----
payments in excess of $10,000 engaged in between Leardata and any director,
officer, employee, shareholder (including the Shareholders) or agent of Leardata
or any of their spouses or children, any trust of which any such person is the
grantor, trustee or beneficiary, any corporation of which any such person or
party is a shareholder, employee, officer or director, or any partnership or
other entity in which any such person or party owns an interest (all such
persons, trusts, corporations and entities being herein referred to collectively
as "Affiliated Parties" and individually as an "Affiliated Party"). No
------------------ ----------------
Affiliated Party has any ownership interest, directly, indirectly or
beneficially, in any competitor or potential competitor, supplier or customer of
Leardata.
3.19 Certain Payments. Neither the Shareholders nor Leardata, nor to
----------------
Leardata's knowledge, any other entity has, directly or indirectly, on behalf of
or with respect to Leardata: (a) made an unreported political contribution; (b)
made or received any payment which was not legal to make or receive; (c) engaged
in any transaction or made or received any payment which was not properly
recorded in the Books and Records; (d) created or used any "off-book" bank or
cash account or "slush fund"; or (e) engaged in any conduct constituting a
violation of the Foreign Corrupt Practices Act of 1977.
3.20 Taxes.
-----
(a) All federal, state and other Tax Returns of Leardata required by
Law to be filed have been duly filed on a timely basis. All Tax Returns filed
or to be filed with respect to all fiscal periods through and including the
fiscal year ended December 31, 1995 by Leardata are true, correct and complete
in all material respects and no Taxes (other than those already paid or reserved
for with respect to such Tax returns) are or will be required to be paid. True
and correct copies of all Tax Returns for the past three years have been
provided to Purchaser. All Taxes
15
which are due and payable by Leardata have been paid in full and all deposits
required by Law to be made by Leardata with respect to any such Taxes have been
duly made.
(b) Schedule 3.20 hereto lists each jurisdiction in which Leardata is
-------------
required to file Tax Returns in connection with the conduct of the Business.
Except as set forth on Schedule 3.20 hereto, Leardata is not delinquent in the
-------------
payment of any Taxes nor does Leardata have any Tax deficiency or claim
outstanding, proposed or assessed against it, and there is no basis for any such
deficiency of claim. There is not now in force any extension of time with
respect to the date on which any Tax Return was or is due to be filed by or with
respect to Leardata, or any waiver or agreement by Leardata for the extension or
the assessment of any Tax.
(c) The charges, accruals and reserves on the books of Leardata in
respect of federal, state and local Taxes for all periods since the fiscal year
ended December 31, 1995, and in respect of other Taxes for all outstanding
periods, are adequate and Leardata is not aware of any additional assessments
for such years or any basis therefor.
3.21 Compliance with Laws. Leardata's operation of the Business is in
--------------------
compliance in all material respects with all applicable Laws (including, but not
limited to, environmental Laws). Leardata has not received any notice from or
otherwise been advised that any governmental authority or other person is
claiming any violation or potential violation of any Law.
3.22 Permits. Leardata holds, free from all Encumbrances and burdensome
-------
restrictions, all Permits. Each of the Permits is sufficient for the lawful
operation of the Business as presently conducted. Attached hereto as Schedule
--------
3.22 is a list of all such Permits, true and complete copies of which have been
----
furnished to Purchaser. All Permits required for the lawful operation of the
Business as presently conducted will be in full force and effect on the Closing
Date.
3.23 Insurance. Attached as Schedule 3.23 hereto is a true and complete
--------- -------------
list of all insurance maintained by Leardata with respect to the Business during
the past three years. Leardata has provided Purchaser with true and correct
copies of all such insurance policies. Leardata has not agreed to modify or
cancel any of such insurance, nor has Leardata received notice of any actual or
threatened modification or cancellation of such insurance.
3.24 Brokers, Finders, etc. All negotiations relating to this Agreement
---------------------
and the transaction contemplated hereby have been carried on without the
intervention of any person acting on behalf of the Shareholders or Leardata in
such manner as to give rise to any claim against Purchaser, Leardata or any of
their respective Representatives for any brokerage or finders' commission, fee
or similar compensation.
3.25 No Subsidiaries. Leardata does not own, directly or indirectly, any
---------------
interest or investment (whether equity or debt) in any corporation, partnership,
business, trust or other entity.
16
3.26 Full Disclosure. No representation, warranty or other statement of
---------------
Leardata contained in this Agreement, or any other document, certificate or
written statement furnished to Purchaser in connection with the transactions
contemplated by this Agreement, contains any untrue statement of a fact or omits
to state a fact necessary in order to make the statements contained herein or
therein not misleading. There is no fact known to Leardata which adversely
affects the prospects, earnings, properties or condition, financial or
otherwise, of the Business that has not been disclosed herein or in such other
documents, certificates and statements furnished to Purchaser for use in
connection with the transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
--------------------------------------------------
Each of the Shareholders, jointly and not severally, represents and
warrants to Purchaser that the following statements are true and correct and not
misleading as of the Execution Date; provided, however, that each of the
-------- -------
Shareholders other than the Pledging Shareholders is only representing and
warranting to Purchaser pursuant to Section 4.7, below:
4.1 Authorization. Such Pledging Shareholder has the requisite power,
-------------
authority and legal right and capacity to enter into this Agreement and the
Ancillary Agreements, to perform such Pledging Shareholder's obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.
4.2 Due Execution and Delivery; Binding Obligations. This Agreement has
-----------------------------------------------
been, and each of the Ancillary Agreements will be, duly executed and delivered
by such Pledging Shareholder. This Agreement constitutes, and each of the
Ancillary Agreements will constitute, the legal, valid and binding agreement and
obligation of such Pledging Shareholder, enforceable against such Pledging
Shareholder in accordance with their respective terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or conveyance or similar Laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability and except as
rights of indemnity or contribution may be limited by federal or state
securities or other Laws or the public policy underlying such Laws.
4.3 No Conflict or Violation. Neither the execution and delivery of this
------------------------
Agreement and the Ancillary Agreements by such Pledging Shareholder nor the
consummation of the transactions contemplated hereby and thereby, will result in
(a) a violation of, or a conflict with, any subscription, shareholders' or
similar types of agreements or understandings to which such Pledging Shareholder
is a party; (b) a breach of, or a default (or an event which, with notice or
lapse of time or both would constitute a default) under or result in the
termination of, or accelerate the performance required by, or create a right of
termination or acceleration under, any Contract or Encumbrance or, to such
Pledging Shareholder's knowledge, any Permit to which such Pledging Shareholder
is a party; (c) to such Pledging Shareholder's knowledge, a violation by
17
such Pledging Shareholder of any applicable Law; or (d) a violation by such
Pledging Shareholder of any order, judgment, writ, injunction decree or award to
which such Pledging Shareholder is a party.
4.4 Consents and Approvals. No consent, Permit, approval or authorization
----------------------
of, or declaration, filing, application, transfer, registration with, any
governmental or regulatory authority, or any other person or entity is required
to be made or obtained by such Pledging Shareholder by virtue of such Pledging
Shareholders' execution, delivery and performance of this Agreement or any of
the Ancillary Agreements, or to enable Purchaser to own the Leardata Stock.
4.5 Title to Leardata Stock. Such Pledging Shareholder owns beneficially
-----------------------
and of record the number of shares of the Leardata Stock opposite such Pledging
Shareholder's name as set forth on Schedule 3.7 hereto, free and clear of all
------------
Encumbrances affecting his or her ability to transfer such shares to Purchaser.
Except as set forth on Schedule 3.7 hereto, there is not outstanding any
------------
subscription, option, warrant, call, right or other agreement or commitment
obligating such Pledging Shareholder or Leardata to issue, sell, deliver or
transfer (including any right of conversion or exchange under any outstanding
security or other instrument) any shares of the Leardata Stock or any other
shares of the capital stock of Leardata.
4.6 Leardata's Representations and Warranties. All of the representations
-----------------------------------------
and warranties of Leardata contained herein are true and correct and not
materially misleading as of the Execution Date.
4.7 Securities Law Matters. Such Shareholder represents and warrants to
----------------------
Purchaser that: (a) Such Shareholder is acquiring its, his or her Shareholders'
Shares for its, his or her account, and not with a view to any sale,
distribution or disposition in violation of any federal or state securities
Laws; (b) such Shareholder has been given the opportunity to obtain any
information or documents, and to ask questions and receive answers about such
documents, about Purchaser which such Shareholder deems necessary to evaluate
the merits and risks related to its, his or her investment in its, his or her
Shareholders' Shares and such Shareholder understands and has taken cognizance
of all risk factors related to such transactions; and (c) such Shareholder can
afford to bear the economic risk of holding the unregistered Shareholders'
Shares for an indefinite period of time, can afford to suffer a complete loss of
its, his or her investment in its, his or her Shareholders' Shares, and such
Shareholder has adequate means for providing for such Shareholder's needs and
contingencies. Such Shareholder acknowledges that the Shareholders' Shares will
be characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired directly from Purchaser in a transaction not
involving a public offering and that all certificates and instruments evidencing
its, his or her Shareholders' Shares will bear the following legends in addition
to any other legend that may be required under the Escrow Agreement:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES
AND MAY NOT BE SOLD OR
18
OFFERED FOR SALE EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933,
AS AMENDED.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, AS MORE SPECIFICALLY SET FORTH IN A STOCK
PURCHASE AGREEMENT DATED DECEMBER 17, 1996, AMONG DATA PROCESSING
RESOURCES CORPORATION, LEARDATA INFO-SERVICES, INC., AND ALL OF THE
SHAREHOLDERS OF LEARDATA INFO-SERVICES, INC.
4.8 Full Disclosure. No representation, warranty or other statement of
---------------
such Pledging Shareholder contained in this Agreement, or any other document,
certificate or written statement furnished to Purchaser in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
fact or omits to state a fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact known to such
Pledging Shareholder which adversely affects the prospects, earnings, properties
or condition, financial or otherwise, of the Business that has not been
disclosed herein or in such other documents, certificates and statements
furnished to Purchaser for use in connection with the transactions contemplated
hereby.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to the Shareholders that the
following statements are true and complete and not misleading as of the date of
this Agreement:
5.1 Organization. Purchaser is a corporation duly organized, validly
------------
existing and in good standing under the Laws of the State of California.
Purchaser has the requisite corporate power and authority to own and operate its
business, to carry on its business as presently conducted and to consummate the
transactions contemplated hereby. Purchaser is qualified to do business as a
foreign corporation in each jurisdiction in which the conduct of its business or
the ownership or leasing of properties makes such qualification necessary except
to the extent that failure to so qualify would not have a material adverse
effect on Purchaser. Purchaser has complete corporate power and authority to
consummate the transaction contemplated hereby.
5.2 Authorization. Purchaser has the requisite corporate power, authority
-------------
and legal right and capacity to enter into this Agreement and the Ancillary
Agreements, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.
19
5.3 Due Execution and Delivery; Binding Obligations. The execution,
-----------------------------------------------
delivery and performance by Purchaser of this Agreement and the Ancillary
Agreements have been duly authorized by the Board of Directors of Purchaser. No
further corporate action is necessary on the part of Purchaser to make this
Agreement and the Ancillary Agreements valid and binding upon Purchaser in
accordance with their respective terms. This Agreement has been, and the
Ancillary Agreements will be, duly executed and delivered by Purchaser. This
Agreement constitutes, and each of the Ancillary Agreements will constitute, the
valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance or similar Laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability and except as rights of
indemnity or contribution may be limited by federal or state securities or other
Laws or the public policy underlying such Laws.
5.4 No Conflict or Violation. Neither the execution and delivery of this
------------------------
Agreement and the Ancillary Agreements, nor the consummation of the transactions
contemplated hereby and thereby, will result in (a) a violation of, or a
conflict with, Purchaser's charter documents or any subscription, shareholders'
or similar types of agreements or understandings to which Purchaser is a party;
(b) to Purchaser's knowledge, a violation by Purchaser of any Law; or (c) to
Purchaser's knowledge, a violation by Purchaser of any order, judgment, writ,
injunction decree or award to which Purchaser is a party.
5.5 Consents and Approvals. Except as set forth on Schedule 5.5 hereto,
---------------------- ------------
no consent, permit, approval or authorization of, or declaration, filing,
application, transfer or registration with, any governmental or regulatory
authority, or to Purchaser's knowledge, any other person or entity is required
to be made or obtained by Purchaser by virtue of its execution, delivery and
performance of this Agreement, any of the Ancillary Agreements or Purchaser's
consummation of the transactions contemplated hereby or thereby other than state
and federal filings that may be required under securities Laws with respect to
the issuance and sale of the Shareholders' Shares.
5.6 Valid Issuance of Shareholders' Shares. Each of the Shareholders'
--------------------------------------
Shares when issued, sold and delivered in accordance with the terms hereof, will
be duly and validly issued, fully-paid and nonassessable, free and clear of all
Encumbrances (other than Encumbrances generally imposed on the transfer of
securities under federal and state securities Laws), and not subject to any
preemptive rights.
5.7 Pending Litigation. Except as disclosed on Schedule 5.7 hereto, there
------------------ ------------
is no pending or, to Purchaser's knowledge, threatened Action, whether private
or public, affecting Purchaser or its business which could reasonably be
expected to affect the enforceability of this Agreement or any of the Ancillary
Agreements or which could reasonably be expected to materially and adversely
affect its business, Purchaser's assets or properties, or Purchaser's ability
20
to consummate the transactions contemplated by or perform its obligations under
this Agreement or any of the Ancillary Agreements.
5.8 Capital Structure. The authorized capital stock of Purchaser consists
-----------------
of 20,000,000 DPRC Common Shares and 2,000,000 shares of Preferred Stock ("DPRC
----
Preferred Shares"). As of July 31, 1996, there were not more than 7,492,321
----------------
DPRC Common Shares outstanding and no shares of DPRC Preferred Shares
outstanding.
5.9 No Materially Adverse Change. Since October 31, 1996, there have been
----------------------------
no changes in the condition, financial or otherwise, of Purchaser's business, or
in its earnings or properties, whether or not arising from transactions in the
ordinary course of business, that, individually or in the aggregate, have been,
or could reasonably be expected to be, materially adverse to the prospects,
earnings, properties or condition, financial or otherwise, of Purchaser or
Purchaser's business.
5.10 Compliance with Law. To Purchaser's knowledge, Purchaser's conduct of
-------------------
its business is in compliance with all applicable Laws, except where the failure
to comply would not materially and adversely affect Purchaser or its business.
5.11 SEC Compliance. Since Purchaser's initial public offering of common
--------------
stock in March 1996, Purchaser has filed all necessary disclosure documents and
reports in connection with its securities and, to Purchaser's knowledge, all
such documents and reports contain no untrue statement of material fact or omit
to state any material fact necessary to make the information contained therein,
in light of the circumstances under which they were made, not misleading.
5.12 Full Disclosure. No representation, warranty or other statement of
---------------
Purchaser contained in this Agreement, or any other document, certificate or
written statement furnished to Leardata or the Shareholders in connection with
the transactions contemplated by this Agreement, contains any untrue statement
of a fact or omits to state a fact necessary in order to make the statements
contained herein or therein not misleading.
ARTICLE 6
THE SHAREHOLDERS' AND LEARDATA'S OBLIGATIONS BEFORE CLOSING
-----------------------------------------------------------
Each of the Shareholders and Leardata covenants that during the period from
the Execution Date through the Closing Date:
6.1 Access to Information. Purchaser and its counsel, accountants and
---------------------
other Representatives shall have full access during normal business hours to all
properties, Books and Records, Contracts, Permits and other documents of or
relating to Leardata and the Business so that Purchaser may have full
opportunity to make such investigation as it shall desire to make of
21
the affairs of Leardata relating to the Business. Leardata shall furnish or
cause to be furnished to Purchaser and its Representatives all data and
information concerning the Business, finances and properties that may reasonably
be requested. The Pledging Shareholders and Leardata shall remain fully liable
and responsible for all of the Pledging Shareholders' and Leardata's
representations, warranties, covenants, agreements and conditions in this
Agreement, notwithstanding any such investigation performed or information
received by Purchaser after the Execution Date.
6.2 Conduct of Business. Except as specifically contemplated by this
-------------------
Agreement, Leardata will conduct the Business in the ordinary course of business
and consistent with past practice, and will use all reasonable effort to
preserve intact its advantageous business relationships, to keep available the
service of its employees and technical contractors and to maintain satisfactory
relationships with its contractors, distributors, customers and other persons
sharing business relationships with them. Without limiting the generality of
the foregoing, Leardata will not, without the prior written consent of
Purchaser, take or undertake or incur or permit to exist any of the acts,
transactions, events or occurrences specified in Section 3.10, above, unless
such actions are specifically contemplated by this Agreement. Each of the
Pledging Shareholders and Leardata shall give Purchaser prompt written notice of
any change in any of the information contained in the representations and
warranties made in Articles 3 and 4, above, which occur prior to the Closing
Date.
6.3 Confidentiality. Each of the Shareholders and Leardata will hold, and
---------------
Leardata will cause each of its employees, contractors, officers, directors and
other Representatives to hold, in strict confidence, and will not use to the
detriment of Purchaser, any information or data obtained in connection with this
Agreement; and if the transaction contemplated by this Agreement is not
consummated, Leardata and the Shareholders will return to Purchaser all such
information and data as Purchaser may request, including, but not limited to,
worksheets, test reports, manuals, lists, memoranda and other documents prepared
or made available to the Shareholders, Leardata or their respective
Representatives in connection with this transaction.
6.4 Additional Financial Statements. As soon as reasonably practicable
-------------------------------
after they become available, the Shareholders and Leardata will furnish to
Purchaser Leardata's balance sheet for each month after October 31, 1996 ending
prior to the Closing Date, and the related statements of income and cash flow
for such period, together with the related notes thereto. All such financial
statements referred to in this Section 6.4 shall be complete and correct,
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the respective periods (except as otherwise permitted
for the Balance Sheet), fairly present the financial condition of Leardata as at
the respective dates thereof and the results of operations of Leardata for the
respective periods covered by the statements of income contained therein, and
each shall be in a form reasonably satisfactory to Purchaser and its
accountants.
6.5 Consents; Regulatory Approvals; Reasonable Efforts. Each of the
--------------------------------------------------
Shareholders and Leardata agrees to utilize its, his or her best efforts and
cooperate with each other in every
22
way, to take, as promptly as possible, or cause to be taken, all action and do,
or cause to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement and each of the
Shareholders and Leardata, as the case may be, will use its, his or her best
efforts to obtain all waivers, Permits, consents, approvals, authorizations and
clearances and to effect all registrations, filings and notices with or to third
parties or governmental, regulatory or public bodies or authorities which are in
the opinion of Purchaser necessary or desirable in connection with the
transactions contemplated by this Agreement.
6.6 No Solicitation. Neither the Shareholders nor Leardata will directly
---------------
or indirectly, through any officer, director, partner, agent or otherwise,
solicit, initiate or encourage submission of proposals or offers from any person
relating to any acquisition or purchase of any equity interest in, or all or a
substantial portion of the assets of, Leardata or any business combination with
Leardata, or participate in any negotiations regarding or furnish to any other
person any information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person to do or seek any of the foregoing, except as provided for
herein. Neither the Shareholders nor Leardata shall sell or otherwise transfer
or agree to sell or grant an option to buy any of the capital stock of Leardata
or all or a substantial portion of the assets of Leardata except as contemplated
hereby.
6.7 No Press Release. The Shareholders and Leardata expressly agree that
----------------
they will not, whether before, on, or after the Closing Date, issue or authorize
to be issued any press release or similar announcement concerning this Agreement
or any of the transactions contemplated hereby without the prior written
approval of Purchaser. The Shareholders and Leardata acknowledge that Purchaser
may make any press release or similar announcement reasonably required so as to
allow Purchaser or any of its Affiliates to comply with the disclosure
requirements of any applicable securities Laws.
6.8 Fulfillment of Conditions and Covenants. Neither the Shareholders nor
---------------------------------------
Leardata shall take any course of action inconsistent with the satisfaction of
the requirements or conditions applicable to the Shareholders and Leardata set
forth in this Agreement. The Shareholders and Leardata shall each promptly do
all acts and take all measures as may be appropriate to enable them to perform
as early as possible the obligations herein provided to be performed by them.
ARTICLE 7
PURCHASER'S OBLIGATIONS BEFORE CLOSING
--------------------------------------
Purchaser covenants that during the period from the date of this Agreement
to the Closing Date:
7.1 Confidentiality. Purchaser and its employees, officers, directors and
---------------
other Representatives will hold in strict confidence, and will not use to the
detriment of Leardata, any
23
information or data provided to Purchaser by Leardata or its Representatives in
connection with this Agreement; and if the transaction contemplated by this
Agreement is not consummated, Purchaser will return to Leardata all such
information and data as Leardata may reasonably request.
7.2 Third Party Consents. Purchaser shall obtain from third parties all
--------------------
requisite consents, waivers, authorizations and approvals necessary to enable
Purchaser to consummate the transactions contemplated by this Agreement.
7.3 Fulfillment of Conditions and Covenants. Purchaser shall not take any
---------------------------------------
course of action inconsistent with the satisfaction of the requirements or
conditions applicable to it set forth in this Agreement. Purchaser shall
promptly do all acts and take all measures as may be appropriate to enable it to
perform as early as possible the obligations herein provided to be performed by
it.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF PURCHASER
--------------------------------------
The obligations of Purchaser to perform its obligations under this
Agreement are subject to the satisfaction, on or before to the Closing Date, of
each of the following conditions, unless waived in writing by Purchaser:
8.1 Accuracy of Representations and Warranties. All representations and
------------------------------------------
warranties of the Shareholders and Leardata contained in this Agreement or in
any document delivered pursuant hereto shall be true and correct in all material
respects when made and on and as of the Closing Date as though made at that
time.
8.2 Shareholders' and Leardata's Performance of Covenants. All covenants,
-----------------------------------------------------
agreements and obligations required by the terms of this Agreement to be
performed, satisfied or complied with by the Shareholders or Leardata at or
before the Closing Date shall have been duly and properly performed in all
material respects.
8.3 Shareholders' and Leardata's Officer's Certificate. Purchaser shall
--------------------------------------------------
have received a certificate, dated the Closing Date, signed and verified by each
of the Pledging Shareholders and the President of Leardata, certifying that the
conditions specified in Sections 8.1 and 8.2, above, have each been fulfilled.
8.4 Consents and Regulatory Approvals. All licenses, Permits,
---------------------------------
authorizations, consents and approvals of and filings with any governmental or
regulatory agency or any other third party required to be obtained or made in
connection with the consummation of the transactions contemplated by this
Agreement shall have been duly obtained or made by or on behalf of the
Shareholders or Leardata.
24
8.5 Escrow Agreement. Purchaser shall have obtained an executed Escrow
----------------
Agreement from each of the Pledging Shareholders and the Escrow Agent.
8.6 Employment Agreements. Purchaser shall have obtained an executed
---------------------
employment agreement from (a) each of ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇ in the form of
Exhibit D hereto (each, a "▇▇▇▇▇ Employment Agreement"), and (b) each of ▇▇▇
--------- --------------------------
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Casinos, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ in the form of Exhibit E hereto (each, an "Other
--------- -----
Employment Agreement");
--------------------
8.7 Registration Rights Agreement. Purchaser shall have obtained an
-----------------------------
executed registration rights agreement from each of the Shareholders in the form
of Exhibit F hereto (the "Registration Rights Agreement").
--------- -----------------------------
8.8 Termination of Certain Agreements. Purchaser shall have received
---------------------------------
evidence, in form and substance reasonably satisfactory to Purchaser, of the
termination of each of the following: (a) that certain Shareholders' Agreement
dated January 15, 1991, by and among Leardata and each of the Pledging
Shareholders; (b) that certain 1990 Incentive Stock Option Plan for Leardata;
and (c) those certain employment agreements between Leardata and each of ▇.
▇▇▇▇▇ and ▇. ▇▇▇▇▇, together with ▇. ▇▇▇▇▇'▇ and ▇. ▇▇▇▇▇'▇ agreement to waive
any and all rights, benefits and privileges thereunder without any additional
cost or expense to Leardata.
8.9 Letters of Resignation. Purchaser shall have received the written
----------------------
resignations of all the officers and directors of Leardata.
8.10 Opinion of Counsel. Purchaser shall have received from Glast, Philips
------------------
& ▇▇▇▇▇▇, legal counsel for the Shareholders and Leardata, an opinion, dated the
Closing Date, as to such matters as Purchaser may reasonably request.
8.11 Payments by Shareholders. Each of the Shareholders shall have paid to
------------------------
Leardata all amounts outstanding under all loans made by Leardata to such
Shareholder.
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS AND LEARDATA
----------------------------------------------------------
The obligations of the Shareholders and Leardata to perform their
respective obligations under this Agreement are subject to the satisfaction, on
or before the Closing Date, of each of the following conditions, unless waived
in writing by the Shareholders or Leardata:
9.1 Accuracy of Representations and Warranties. All representations and
------------------------------------------
warranties of Purchaser contained in this Agreement or in any document delivered
pursuant hereto shall be
25
true and correct in all material respects when made and on and as of the Closing
Date as though made at that time.
9.2 Purchaser's Performance of its Covenants. All covenants, agreements
----------------------------------------
and obligations required by the terms of this Agreement to be performed,
satisfied or complied with by Purchaser at or before the Closing Date shall have
been duly and properly performed in all material respects.
9.3 Purchaser's Officer's Certificate. The Shareholders and Leardata
---------------------------------
shall have received a certificate, dated the Closing Date, signed and verified
by the President or Chief Financial Officer of Purchaser, and certifying that
the conditions specified in Sections 9.1 and 9.2, above, have each been
fulfilled.
9.4 Consents. All necessary agreements, waivers, approvals,
--------
authorizations, assurances and consents of third parties to the consummation of
the transactions contemplated by this Agreement shall have been obtained by
Purchaser and delivered to Leardata.
9.5 Employment Agreements. Leardata shall have obtained executed copies
---------------------
of (a) the ▇▇▇▇▇ Employment Agreements from each of ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇, and
(b) the Other Employment Agreements from each of ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Casinos, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇.
9.6 Escrow Agreement. Each of the Pledging Shareholders shall have
----------------
obtained an executed Escrow Agreement from Purchaser and the Escrow Agent.
9.7 Registration Rights Agreement. Each of the Shareholders shall have
-----------------------------
obtained an executed counterpart of the Registration Rights Agreement.
9.8 Opinion of Counsel. Each of the Shareholders shall have received from
------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Purchaser, an opinion, dated the Closing Date,
as to such matters as the Shareholders may reasonably request.
ARTICLE 10
TERMINATION
-----------
10.1 Termination. This Agreement and the transactions contemplated herein
-----------
may be terminated at any time prior to Closing:
(a) By the mutual written consent of Purchaser and the Pledging
Shareholders;
26
(b) By either Purchaser or the Pledging Shareholders in writing,
without liability to the party terminating this Agreement on account of such
termination, if the Closing shall not have occurred on or before January 15,
1997; or
(c) By either Purchaser or the Pledging Shareholders in writing,
without liability to the party terminating this Agreement on account of such
termination, if Purchaser or the Pledging Shareholders, as the case may be,
shall (i) fail to perform in any material respect its agreements contained
herein required to be performed prior to the Closing Date, or (ii) materially
breaches any of its representations, warranties or covenants contained herein.
10.2 Effect on Obligations. Termination of this Agreement pursuant to this
---------------------
Article 10 shall terminate all obligations of the parties hereunder and this
Agreement shall become void and have no effect without any liability on the part
of any party or the shareholders, directors, officers or partners in respect
thereof, except for the obligations under Sections 6.3, 7.1 and 12.3, below;
provided, however, that termination pursuant to clause (c) of Section 10.1,
-------- -------
above, shall not relieve the defaulting or breaching party from any liability to
the other party.
ARTICLE 11
THE CLOSING
-----------
11.1 Closing. The closing of the sale and purchase of the Leardata Stock
-------
(the "Closing" or "Closing Date") shall take place at the offices of Glast,
------- ------------
Philips & ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, at 10:00 a.m.
local time on January 6, 1997, or at such other place, time and date as may be
mutually agreed to by the parties. Notwithstanding anything in this Agreement
to the contrary, the Closing shall be deemed effective as of the close of
business on the Closing Date.
11.2 Deliveries by the Shareholders and Leardata. At the Closing, the
-------------------------------------------
Shareholders and Leardata shall deliver the following:
(a) Certificates representing all of the Leardata Stock, registered in
the names of the Shareholders, duly endorsed by the Shareholders for transfer to
Purchaser or accompanied by an assignment of the shares of the Leardata Stock
duly executed by the Shareholders, and any other documents that are necessary to
transfer to Purchaser good and marketable title to all shares of Leardata Stock;
(b) The certificates contemplated by Section 8.3, above;
(c) Evidence of having obtained the consents required to be obtained
by Leardata and the Shareholders pursuant to Section 8.4, above;
(d) The Escrow Agreement referred to in Section 8.5, above;
27
(e) The ▇▇▇▇▇ Employment Agreements and the Other Employment
Agreements referred to in Section 8.6, above;
(f) The Registration Rights Agreement referred to in Section 8.7,
above;
(g) Evidence of the termination of each of the agreements required by
Section 8.8, above;
(h) The letters of resignation required by Section 8.9, above;
(i) The legal opinion contemplated by Section 8.10, above;
(j) Evidence that each of the Shareholders shall have paid to Leardata
all amounts outstanding under all loans made by Leardata to such Shareholder, as
required by Section 8.11, above;
(k) The stock books, stock ledgers, minute books and corporate seal of
Leardata; and
(l) All other agreements, documents, instruments and writings required
to be delivered by the Shareholders at the Closing Date pursuant to this
Agreement.
11.3 Deliveries by Purchaser. At the Closing, Purchaser shall deliver the
-----------------------
following:
(a) Cash by wire transfer to the Shareholders' accounts, in the amount
set forth opposite each of such Shareholders' names on Schedule 2.2(a) hereto,
---------------
as contemplated under Section 2.2(a), above;
(b) Cash by wire transfer to each of the persons set forth on Schedule
--------
2.2 hereto, in the amount set forth opposite each of such persons' names on
---
Schedule 2.2 hereto, as contemplated under Section 2.2(b), above;
------------
(c) Stock certificates deliverable to each of the Shareholders,
certifying that such Shareholder is the record holder of the Shareholders'
Shares set forth opposite such Shareholders' name on Schedule 2.2(c) hereto, as
---------------
contemplated under Section 2.2(c), above;
(d) The officer's certificate contemplated by Section 9.3, above;
(e) Evidence of having obtained the consents required to be obtained
by Purchaser pursuant to Section 9.4, above;
(f) The ▇▇▇▇▇ Employment Agreements and the Other Employment
Agreements contemplated by Section 9.5, above;
28
(g) The Escrow Agreement contemplated by Section 9.6, above;
(h) The Registration Rights Agreement referred to in Section 9.7,
above;
(i) The legal opinion contemplated by Section 9.8, above; and
(i) All other agreements, documents, instruments and writings required
to be delivered by Purchaser at the Closing pursuant to this Agreement.
ARTICLE 12
POST CLOSING
------------
12.1 Survival of Representations and Warranties. Regardless of any
------------------------------------------
investigation at any time made by or on behalf of any party, or of any
information any party may have in respect thereof, all representations and
warranties made hereunder or pursuant hereto or in connection with the
transactions contemplated hereby shall survive the Execution Date for a period
of 14 months after the Closing Date, except all representations and warranties
under Section 3.7, above, and with respect to Tax matters shall survive through
the applicable statute of limitations (each, a "Survival Date").
-------------
12.2 Special Bonus Payments. As soon as practicable after the Closing,
----------------------
Leardata shall pay bonuses to the employees and in the amounts set forth on
Schedule 12.2 hereto, which bonuses shall be in the aggregate amount of the
-------------
Special Bonus Payments Amount. Purchaser hereby authorizes and directs ▇. ▇▇▇▇▇
and ▇. ▇▇▇▇▇ to execute and deliver all checks to the employees and in the
amounts set forth on Schedule 12.2 hereto.
-------------
12.3 Indemnification Obligations.
---------------------------
(a) Indemnification by the Pledging Shareholders. The Pledging
--------------------------------------------
Shareholders shall indemnify, defend and hold harmless Purchaser and any of its
Affiliates and their respective officers, directors, partners, agents,
employees, attorneys and Representatives, and their respective heirs, executors,
administrators, successors and assigns (collectively, the "Purchaser
---------
Representatives"), and shall reimburse Purchaser and any of its Affiliates and
---------------
the Purchaser Representatives, on demand, for any claim, demand, loss,
liability, damage or expense, including without limitation interest, penalties
and reasonable attorneys', accountants' and experts' fees and costs of
investigation incurred as a result thereof ("Damages"), resulting from any of
-------
the following:
(i) Any breach or default in the performance by the Shareholders or
Leardata of any covenant or agreement of the Shareholders or Leardata contained
herein, in any agreement contemplated hereby, or in any Schedule or Exhibit
hereto or thereto, or in any certificate or other instrument delivered or to be
delivered by or on behalf of the Shareholders or Leardata pursuant hereto or
thereto;
29
(ii) Any breach of warranty or inaccurate or erroneous representation
made by the Shareholders or Leardata herein, in any agreement contemplated
hereby, or in any Schedule or Exhibit hereto or thereto, or in any certificate
or other instrument delivered or to be delivered by or on behalf of the
Shareholders or Leardata pursuant hereto or thereto;
(iii) Any Taxes arising out of, resulting from, or in connection with
the operation and conduct of the Business prior to the Closing Date; and
(iv) Any liability arising out of any and all Actions, demands,
judgments, costs and expenses incident to any of the foregoing.
(b) Indemnification by Purchaser. Purchaser shall indemnify, defend
----------------------------
and hold harmless the Pledging Shareholders, and any of their respective
attorneys and representatives, and their respective heirs, executors,
administrators, successors and assigns (collectively, the "Shareholder
-----------
Representatives"), and shall reimburse the Pledging Shareholders and the
---------------
Shareholder Representatives, on demand, for any Damages resulting from any of
the following:
(i) Any breach or default in the performance by Purchaser of any
covenant or agreement of Purchaser contained herein, in any agreement
contemplated hereby, or in any Schedule or Exhibit hereto or thereto, or in any
certificate or other instrument delivered or to be delivered by or on behalf of
Purchaser pursuant hereto or thereto;
(ii) Any breach of warranty or inaccurate or erroneous representation
made by Purchaser herein, in any agreement contemplated hereby, or in any
Schedule or Exhibit hereto or thereto, or in any certificate or other instrument
delivered or to be delivered by or on behalf of Purchaser pursuant hereto or
thereto;
(iii) Leardata's operation and conduct of the Business after the Closing
Date, but only to the extent that such Damages are not caused by the gross
negligence, reckless or wilful misconduct of the Shareholders; and
(iv) Any liability arising out of any and all Actions, demands,
judgments, costs and expenses incident to any of the foregoing.
(c) Claims for Indemnity. Whenever a claim for Damages shall arise
--------------------
for which one party ("Indemnitee") shall be entitled to indemnification
----------
hereunder, Indemnitee shall notify the other party ("Indemnitor") in writing
----------
within 30 days of the first receipt of notice of such claim, and in any event
within such shorter period as may be necessary for Indemnitor to take
appropriate action to resist such claim. Such notice shall specify all facts
known to Indemnitee giving rise to such indemnity rights and shall estimate the
amount of the liability arising therefrom. The right of Indemnitee to
indemnification and the estimated amount thereof, as set forth in this notice,
shall be deemed agreed to by Indemnitor unless, within 30 days after the mailing
of such notice, Indemnitor shall notify Indemnitee in writing that it disputes
the right of
30
Indemnitee to indemnification, or that Indemnitor elects to defend such claim in
the manner provided in Section 12.3(d), below. If Indemnitee shall be duly
notified of such dispute, the parties shall attempt to settle and compromise the
same, or if unable to do so within 20 days of Indemnitor's delivery of notice of
a dispute, such dispute shall be settled by binding arbitration before a single
arbitrator in the County of Dallas, State of Texas, in proceedings conducted by
the American Arbitration Association and pursuant to such organization's rules
for commercial disputes, and any rights of indemnification established by reason
of such settlement, compromise or arbitration shall promptly thereafter be paid
and satisfied by Indemnitor.
(d) Defense of Claims. Upon receipt by Indemnitor of a notice from
-----------------
Indemnitee with respect to any claim of a third party against Indemnitee, and
acknowledgment by Indemnitor (whether after resolution of a dispute or
otherwise) of Indemnitee's right to indemnification hereunder with respect to
such claim, Indemnitor shall assume the defense of such claim with counsel
reasonably satisfactory to Indemnitee and Indemnitee shall cooperate to the
extent reasonably requested by Indemnitor in defense or prosecution thereof and
shall furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested by Indemnitor in connection therewith. If Indemnitor shall
acknowledge Indemnitee's right to indemnification and elect to assume the
defense of such claim, Indemnitee shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of Indemnitee. If Indemnitor has assumed the defense of any claim
against Indemnitee, Indemnitor shall have the right to settle any claim for
which indemnification has been sought and is available hereunder; provided that,
to the extent that such settlement requires Indemnitee to take, or prohibits
Indemnitee from taking, any action or purports to obligate Indemnitee, then
Indemnitor shall not settle such claim without the prior written consent of
Indemnitee. If Indemnitor does not assume the defense of a third party claim and
disputes Indemnitee's right to indemnification, Indemnitor shall have the right
to participate in the defense of such claim through counsel of its choice, at
Indemnitor's expense, and Indemnitee shall have control over the litigation and
authority to resolve such claim subject to this Section 12.3. If the Pledging
Shareholders, as the indemnifying party, fail to give written notice to
Purchaser, as the indemnified party, of the Pledging Shareholders' intention to
contest or settle any such claim within 20 calendar days after Purchaser has
notified the Pledging Shareholders that any such claim has been made in writing
and received by Purchaser, or if any such notice is given but any such claim is
not properly contested by the Pledging Shareholders, notwithstanding any
provision herein to the contrary, Purchaser shall have the right to satisfy and
discharge the same by payment, compromise or otherwise, in accordance with the
procedures set forth in the Escrow Agreement. Purchaser's rights, benefits and
privileges, and the Pledging Shareholders' liabilities, obligations and
commitments, under and pursuant to the Escrow Agreement are more specifically
described therein and incorporated herein by this reference.
(e) Limitations on Warranty Claims.
------------------------------
31
(i) Notwithstanding anything to the contrary in Sections 12.3(a) and
(b), above, Indemnitor shall not be obligated to indemnify Indemnitee for any
Damages caused by or arising out of, and Indemnitee shall not be entitled to
make any claim for Damages due to, any breach of warranty or inaccurate or
erroneous representation made by Indemnitor herein (other than pursuant to
Section 3.7, above), in any agreement contemplated hereby, or in any Schedule or
Exhibit hereto or thereto, or in any certificate or other instrument delivered
or to be delivered by or on behalf of Indemnitor pursuant hereto or thereto
(collectively, "Warranty Claims"), unless and until the amount of all of such
---------------
Indemnitee's claims for Damages caused by or arising out of Warranty Claims, in
the aggregate, shall be equal to $100,000, in which case Indemnitee shall
indemnify Indemnitor for all Damages then sustained or incurred by Indemnitor
including such initial $100,000 in Damages.
(ii) Maximum Liability. Notwithstanding the foregoing, Purchaser also
-----------------
agrees that the maximum, aggregate amount of claims for Damages for which
Purchaser shall be entitled to indemnification under Warranty Claims and Section
12.3(a)(iii), above, is $5,500,000.
(f) Defense of Claimed Breaches. For purposes of this Section, any
---------------------------
assertion of fact and/or law by a third party which, if true, would constitute a
breach of a representation or warranty made by a party to this Agreement shall,
on the date that assertion is made, be deemed a breach of such representation or
warranty and immediately invoke that party's obligation to protect, defend, hold
harmless and indemnify the other party to this Agreement.
12.4 Restriction on Transfer. Except for a Permitted Transfer, no
-----------------------
Shareholder shall, directly or indirectly, during the one year period after the
Closing Date, sell or engage in any Transaction which may result in a change in
the legal, beneficial or record ownership of such Shareholders' Shares, or any
interest therein, including, without limitation, a voluntary or involuntary
sale, assignment, transfer, pledge, hypothecation, encumbrance, disposal, loan,
gift, attachment or levy (a "Transfer"), without first obtaining the prior
--------
written consent of Purchaser to the Transfer, which consent may be withheld by
Purchaser in its sole and absolute discretion.
12.5 Post-Closing Adjustment.
-----------------------
(a) Within 90 days after the Closing Date, Purchaser shall compute the
amount of the Leardata Adjusted Working Capital at the Closing Date and the
Leardata Adjusted Net Worth at the Closing Date, and shall provide to the
Pledging Shareholders, for the Pledging Shareholders' review and approval, its
computations and working papers reflecting how such computations were made. If
the Pledging Shareholders have any objections to the amount of Leardata Adjusted
Net Working Capital or Leardata Adjusted Net Worth determined by Purchaser, they
will deliver detailed statements describing their objections to Purchaser within
30 days after receiving Purchaser's computations and working papers reflecting
how Purchaser's computations were made. The parties will use their reasonable
efforts to resolve any such objections. If, however, the parties do not obtain
final resolution of this matter within 30 days after Purchaser has received the
statements of objections, the dispute shall be referred to Deloitte
32
& Touche LLP (the "Accountant") within 15 days following such 30-day period. The
----------
Accountant's determination of such Leardata Adjusted Working Capital and
Leardata Adjusted Net Working Capital shall be binding upon all parties.
Purchaser and the Pledging Shareholders shall use their best efforts to aid the
Accountant in reaching a decision within 30 days from the date the Accountant is
so selected. Purchaser and the Shareholders will share responsibility for the
fees and expenses of the Accountant based on the degree to which the Accountant
accepts the respective positions of the parties, as conclusively determined by
the Accountant.
(b) If either the Leardata Adjusted Working Capital at the Closing
Date is less than $4.8 million or the Leardata Adjusted Net Worth at the Closing
Date is less than $5.0 million, then, in such event, the Pledging Shareholders
shall pay to Purchaser within 10 business days of such determination a cash
amount equal to the greater of the following:
(i) The difference between $4.9 million and the Leardata Adjusted
Working Capital at the Closing Date; and
(ii) The difference between $5.1 million and the Leardata
Adjusted Net Worth at the Closing Date.
12.6 Further Assurances. The Shareholders, at any time on or after the
------------------
Closing Date, will execute, acknowledge and deliver any further assignments and
other assurances, documents and instruments of transfer, reasonably requested by
Purchaser, and will take any other action that may be requested by Purchaser,
for the purpose of assigning, transferring, granting, conveying and confirming
to Purchaser, or reducing to possession, any or all of the Leardata Stock.
12.7 Expenses. The Shareholders will be solely responsible for and bear
--------
all of their and Leardata's respective cost and expenses, including, without
limitation, expenses of legal counsel, accountants, brokers, finders and other
advisors, incurred in connection with evaluating, negotiating and consummating
the proposed transaction incident to this Agreement. Purchaser will be solely
responsible for and bear all of its cost and expenses, including, without
limitation, expenses of legal counsel, accountants, brokers, finders and other
advisors, incurred in connection with evaluating, negotiating and consummating
the proposed transaction incident to this Agreement.
ARTICLE 13
COVENANT NOT TO COMPETE
-----------------------
13.1 Non-Compete Covenant. In consideration for the payment by Purchaser
--------------------
to the Shareholders of $100,000 of the Purchase Price, the Shareholders agree
that, from the Closing Date and ending on the third anniversary thereof (the
"Non-Compete Period"), each of the Shareholders who holds more than 150,000
-------------------
shares of the Leardata Stock (collectively, the "Obligated Shareholders") will
----------------------
not, without the prior written consent of Purchaser, directly or
33
indirectly, in the States of Arizona, Colorado, Kansas, Minnesota, Missouri,
Nebraska, New Mexico, Oklahoma, Oregon, Texas and Washington (the "Territory"),
---------
own, manage, finance, operate, join, control or participate in the ownership,
management, financing, operation or control of, or be employed or connected in
any manner with, any business that competes with the Business; provided,
--------
however, that, with respect to ▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇, the Non-Compete Period
-------
shall extend from the Closing Date through the third anniversary of the
termination of each of such Shareholder's ▇▇▇▇▇ Employment Agreement.
13.2 Definition of Compete. For purposes of this Agreement, with respect
---------------------
to the Obligated Shareholders other than GALP, the term "compete" shall mean (a)
calling on, soliciting or taking away, as a client or customer any individual,
partnership, corporation or association that is a client or customer of
Purchaser or Leardata or was a client or customer of Leardata during the 36
calendar month period immediately preceding any such act for the purpose of
competing with Purchaser; (b) hiring, soliciting, taking away or attempting to
hire, solicit or take away, either on behalf of itself or any other person or
entity, any person who is an employee or technical consultant of Leardata or
Purchaser, or was an employee or technical consultant of Leardata during the 12
calendar month period immediately preceding any such act; or (c) entering into
or attempting to enter into any business substantially similar to or competing
in any way with the Business within the Territory, either alone or with any
individual, partnership, corporation or association. With respect to GALP, the
term "compete" shall mean hiring, soliciting, taking away or attempting to hire,
solicit or take away, either on behalf of itself, its Affiliates or any other
person or entity, any person who is an employee or technical consultant of
Leardata or Purchaser, or was an employee or technical consultant of Leardata
during the 12 calendar month period immediately preceding any such act for the
purpose of competing with Purchaser.
13.3 Direct or Indirect Competition. For purposes of this Agreement, the
------------------------------
words "directly or indirectly" as they modify the word "compete" shall mean (a)
acting as an agent, representative, consultant, officer, director, independent
contractor or employee of any entity or enterprise, which is competing (as
defined in Section 13.2, above) with the Business; (b) participating in any such
competing entity or enterprise, or the Affiliate of such entity or enterprise,
as an owner, partner, limited partner, joint venturer, creditor or shareholder;
or (c) communicating to any such competing entity or enterprise the names or
addresses or any other information concerning any past, present or identified
prospective client or customer of Leardata.
13.4 Confidential Data. The Shareholders agree that, during the period set
-----------------
forth in Section 13.1, above, and thereafter, each of them will keep
confidential and not directly or indirectly divulge, furnish, make accessible to
anyone, or appropriate for their own use any confidential information of
Leardata, and that at no time will either of them divulge, furnish and make
accessible to anyone or appropriate for their own use any trade secrets of
Leardata. Each of the Shareholders and Leardata further acknowledges and agrees
that Purchaser has a legitimate interest in protecting proprietary customer
information from misappropriation or diversion by the Shareholders or any
competitor. The Shareholders hereby acknowledge and agree that the prohibitions
against disclosure of confidential data recited herein are in addition to, and
not in lieu
34
of, any rights or remedies which Purchaser may have available pursuant to the
Laws of any jurisdiction or at common law to prevent the disclosure of trade
secrets and other confidential proprietary data, and the enforcement by
Purchaser of its rights and remedies pursuant to this Agreement shall not be
construed as a waiver of any other rights or available remedies which it may
possess in Law or equity absent this Agreement.
13.5 Reasonableness of Restrictions. The Obligated Shareholders recognize
------------------------------
that the territorial and time limitations set forth in Section 13.1, above, are
reasonable, not burdensome and are properly required by Law for the adequate
protection of Purchaser, and in the event that such territorial or time
limitations are deemed to be unreasonable by a court of competent jurisdiction,
then the Obligated Shareholders and Purchaser agree and submit to the reduction
of either said territorial or time limitation, or both, to such an area or
period as said court shall deem reasonable.
13.6 Injunctive Relief. The Obligated Shareholders acknowledge that their
-----------------
expertise in the Business is of a special, unique, unusual, extraordinary and
intellectual character, which gives said expertise a peculiar value, and that a
breach by either or all of them of the provisions of this Agreement cannot be
reasonably or adequately compensated in Damages in an Action at Law and that
such breach will cause Purchaser and Leardata irreparable injury and damage. The
Obligated Shareholders further acknowledge that each of them possesses unique
skills, knowledge and ability that competition in violation of this Agreement
would be extremely detrimental to Purchaser and Leardata. By reason thereof, the
Obligated Shareholders agree that Purchaser and Leardata shall be entitled, in
addition to any other remedies each of them may have under this Agreement or
otherwise, to temporary, preliminary and/or permanent injunctive and other
equitable relief to prevent or curtail any breach of this Agreement, without
proof of actual damages that have been or may be caused to Purchaser or Leardata
by such breach or threatened breach; provided, however, that no specification in
-------- -------
this Agreement of a specific legal or equitable remedy shall be construed as a
waiver or prohibition against the pursuing of other legal or equitable remedies
in the event of a breach, by either party.
ARTICLE 14
MISCELLANEOUS PROVISIONS
------------------------
14.1 Entire Agreement. This Agreement, together with the agreements
----------------
referred to herein and in the Schedules and Exhibits hereto and thereto, set
forth the entire agreement between the parties with regard to the subject matter
of this Agreement. All agreements, covenants, representations and warranties,
express or implied, oral and written, of the parties with regard to the subject
matter of this Agreement (including, without limitation, the letter of intent
between the parties dated October 29, 1996) are contained in this Agreement, in
the Schedules and Exhibits to this Agreement, and the documents referred to or
implementing the provisions of this Agreement. This is an integrated agreement.
35
14.2 Governing Law. The validity, construction and performance of this
-------------
Agreement, and any Action arising out of or relating to this Agreement or any of
the Ancillary Agreements, shall be governed by the Laws, without regard to the
Laws as to choice or conflict of Laws, of the State of California. Each party
agrees to accept service of process in any such Action in the manner provided
for in Section 14.7, below.
14.3 Interpretation. The language in all parts of this Agreement and each
--------------
of the other Ancillary Agreements shall be in all cases construed simply
according to its fair meaning and not strictly for or against any party.
Whenever the context requires, all words used in the singular will be construed
to have been used in the plural, and vice versa, and each gender will include
any other gender. The captions of the Sections and Subsections of this
Agreement are for convenience only and shall not affect the construction or
interpretation of any of the provisions of this Agreement.
14.4 Waiver and Amendment. This Agreement may be amended, supplemented,
--------------------
modified and/or rescinded only through an express written instrument signed by
all parties or their respective successors and permitted assigns. Any party may
specifically and expressly waive in writing any portion of this Agreement or any
breach hereof, but only to the extent such provision is for the benefit of the
waiving party, and no such waiver shall constitute a further or continuing
waiver of any preceding or succeeding breach of the same or any other provision.
The consent by one party to any act for which such consent was required shall
not be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or similar acts in the future, and no forbearance by a
party to seek a remedy for noncompliance or breach by another party shall be
construed as a waiver of any right or remedy with respect to such noncompliance
or breach.
14.5 Assignment. Except as specifically provided otherwise in this
----------
Agreement, neither this Agreement nor any interest herein shall be assignable
(voluntarily, involuntarily, by judicial process, operation of Law or
otherwise), in whole or in part, by any party without the prior written consent
of all other parties. Any attempt at such an assignment without such consent
shall be void and, at the option of the non-consenting party, shall be an
incurable breach of this Agreement resulting in the termination of this
Agreement. Notwithstanding the foregoing, Purchaser may, without the consent of
the Shareholders or Leardata, assign all of its rights and obligations under
this Agreement (other than the issuance of the Shareholders' Shares) to any
Affiliate of Purchaser.
14.6 Successors and Assigns. Each of the terms, provisions and obligations
----------------------
of this Agreement shall be binding upon, shall inure to the benefit of, and
shall be enforceable by the parties and their respective legal representatives,
successors and permitted assigns.
14.7 Notices. All notices, requests, demands and other communications made
-------
under this Agreement shall be in writing, correctly addressed to the recipient
at the addresses set forth under such recipient's signature on the signature
page hereto and shall be deemed to have been duly given; (a) upon delivery, if
served personally on the party to whom notice is to be given; or (b) on
36
the date or receipt, refusal or non-delivery indicated on the receipt if mailed
to the party to whom notice is to be given by first class mail, registered or
certified, postage prepaid, or by air courier. Any party may give written notice
of a change of address in accordance with the provisions of this Section 14.7
and after such notice of change has been received, any subsequent notice shall
be given to such party in the manner described at such new address.
14.8 Severability. Each provision of this Agreement is intended to be
------------
severable. Should any provision of this Agreement or the application thereof be
judicially declared to be or becomes illegal, invalid, unenforceable or void,
the remainder of this Agreement will continue in full force and effect and the
application of such provision to other persons or circumstances will be
interpreted so as reasonably to effect the intent of the parties.
14.9 Specific Performance. Each party's obligations under this Agreement
--------------------
are unique. If any party should default in any of its obligations under this
Agreement, the parties each acknowledge that it would be impracticable to
measure the resulting damages. Accordingly, without prejudice to the right to
seek and recover monetary damages, each nondefaulting party shall be entitled to
▇▇▇ in equity for specific performance of this Agreement or other injunctive
relief, and each party hereby waives any defense that a remedy in damages would
be adequate.
14.10 Cumulative Remedies. No remedy made available hereunder by any of
-------------------
the provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise.
14.11 Warranty of Authority. Each of the individuals signing this
---------------------
Agreement on behalf of a party hereto warrants and represents that such
individual is duly authorized and empowered to enter into this Agreement and
bind such party hereto.
14.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single agreement.
[rest of page intentionally left blank]
37
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first set forth above.
"PURCHASER": THE "PLEDGING SHAREHOLDERS":
DATA PROCESSING GENERAL ATLANTIC LEARDATA
RESOURCES CORPORATION, PARTNERS, L.P., a Delaware limited
a California corporation partnership
By: General Atlantic Partners, LLC,
By:_________________________ a Delaware limited liability company,
Its:________________________ its general partner
Address: By:___________________________________
-------- ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Managing Member
Suite 610 Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ --------
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
"LEARDATA":
LEARDATA INFO-SERVICES, -------------------------------------
INC., a Texas corporation ▇▇▇▇▇ ▇. ▇▇▇▇▇
Address:
By:_________________________ --------
Its:________________________ c/o Leardata Info-Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Address: ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------- Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
5910 North Central Expressway FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇ -------------------------------------
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Address:
--------
c/o Leardata Info-Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
38
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Address:
--------
c/o Leardata Info-Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Address:
--------
c/o Leardata Info-Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address:
--------
c/o Leardata Info-Services, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
39