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Exhibit 1
SHARE PURCHASE AGREEMENT
By and Between
PURCHASERS LISTED ON EXHIBIT A,
AS THE "PURCHASERS" HEREIN
and
FACTUAL DATA CORP.
Dated as of March 25, 1999
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CONTENTS
Section Page
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ARTICLE I THE SHARE PURCHASE ANCILLARY AGREEMENTS.................... 1
Section 1.1 Purchase of the Shares.................................. 1
Section 1.2 Purchase Price.......................................... 2
Section 1.3 Registration Rights..................................... 2
Section 1.4 Engagement Letter....................................... 2
ARTICLE II CLOSING.................................................... 2
Section 2.1 The Closing............................................. 2
Section 2.2 Deliveries by FDC....................................... 2
Section 2.3 Deliveries by the Purchasers............................ 3
Section 2.4 Further Assurances...................................... 3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF FDC...................... 3
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASERS............... 16
ARTICLE V COVENANTS OF FDC........................................... 18
Section 5.1 Conduct of Business..................................... 18
Section 5.2 Access and Information.................................. 21
Section 5.3 Information Following Closing........................... 21
Section 5.4 Use of Proceeds......................................... 22
Section 5.5 Exclusivity............................................. 22
Section 5.6 Consents under Agreements............................... 22
Section 5.7 Actions................................................. 22
Section 5.8. Additional Disclosure................................... 23
Section 5.9. Financial Statements.................................... 23
Section 5.10 Further Assurances....... .............................. 23
ARTICLE VI POST CLOSING COVENANTS.................................... 23
Section 6.1 Post Closing Covenants................................... 23
ARTICLE VII CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE............ 24
Section 7.1 Conditions to Obligations to Close....................... 24
ARTICLE VIII CONDITIONS TO FDC'S OBLIGATION TO CLOSE................... 25
Section 8.1 Conditions to FDC's Obligation to Close.................. 25
ARTICLE IX CONDITIONS TO PURCHASERS' OBLIGATION TO CLOSE............. 25
Section 9.1 Conditions to Purchasers' Obligation to Close............ 25
ARTICLE X TERMINATION, AMENDMENT AND WAIVER......................... 29
Section 10.1 Termination............................................ 29
Section 10.2 Effect of Termination.................................. 29
Section 10.3 Amendment.............................................. 29
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Section 10.4 Extension; Waiver...................................... 30
ARTICLE XI INVESTMENT BANKING FEES...................................... 30
ARTICLE XII INDEMNIFICATION AND CONTRIBUTION............................ 30
Section 12.1 Indemnity.............................................. 30
Section 12.2 Notice of Proceeding................................... 31
Section 12.3 Contribution........................................... 31
Section 12.4 Other Indemnification Provisions....................... 32
ARTICLE XIII NOTICES.................................................... 32
ARTICLE XIV CERTIFICATES OF OFFICERS AND DIRECTORS...................... 33
ARTICLE XV CONFIDENTIALITY.............................................. 33
ARTICLE XVI COUNTERPARTS................................................ 34
ARTICLE XVII MERGER CLAUSE AND COSTS, FEES AND EXPENSES................. 34
ARTICLE XVIII SEVERABILITY.............................................. 34
ARTICLE XIX BENEFIT..................................................... 35
ARTICLE XX WAIVER....................................................... 35
ARTICLE XXI HEADINGS.................................................... 35
ARTICLE XXII SURVIVAL................................................... 35
ARTICLE XXIII GOVERNING LAW............................................. 36
ARTICLE XXIV MISCELLANEOUS.............................................. 36
(a) Press Releases and Public Announcements....................... 36
(b) Succession and Assignment..................................... 36
(c) Amendments.................................................... 36
(d) Expenses...................................................... 36
(e) Specific Performance.......................................... 37
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (the "Agreement"), dated as of March 25,
1999, is made by and between Purchasers to be listed on Exhibit A (collectively,
the "Purchasers" or individually, a "Purchaser"), and Factual Data Corp., a
Colorado corporation ("FDC"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (collectively the "Majority Shareholders").
RECITALS:
A. On or about February 3, 1999, FDC represented to Purchasers the
general terms on which FDC would sell to Purchasers restricted shares of FDC
Common Stock (the "Shares"), together with certain other rights to be vested in
the Purchasers; and
B. The parties contemplated that they would enter into a definitive
agreement and prepare such other documentation as the parties and their
respective legal counsel determine is appropriate; and
C. The parties intend that this Share Purchase Agreement, together
with the exhibits attached hereto, serve as the definitive agreement between the
parties with respect to the above-mentioned transaction;
THEREFORE, in consideration of the covenants, representations,
warranties and mutual agreements herein set forth, the Purchasers and FDC hereby
agree as follows:
ARTICLE I
THE SHARE PURCHASE ANCILLARY AGREEMENTS
SECTION 1.1 Purchase of the Shares. Subject to and upon the terms
and conditions hereof and the representations, warranties and covenants
contained herein, on the Closing Date (as defined below) FDC shall sell,
transfer, assign and deliver certificate(s) representing shares of Common Stock
of FDC, and the Purchasers shall purchase the Shares from FDC, free and clear of
all liens, claims and encumbrances thereon (the "Purchase Transaction"). The
aggregate number of Shares to be offered to the Purchasers shall be that number
of shares of Common Stock of FDC equal to $15 million divided by the market
price (i.e., the average of the closing prices on the SmallCap Market for each
relevant day, the "Market Price") of FDC's Common Stock for the five prior
trading days ending the day this Agreement is executed (as so calculated, the
"Purchase Price" or, with respect to the per Share price, the "Purchase Price
per Share"), provided that, in no case shall the Purchase Price per Share exceed
$8.50. If, for any reason, Shareholder approval is required, Shareholder
approval shall be obtained for a Purchase Price per Share equal to the Market
Price. The exact number of Shares to be sold to each Purchaser shall be
determined immediately prior to Closing and shall be set forth on Exhibit A
hereto.
SECTION 1.2 Purchase Price.
(a) Upon the terms and subject to the conditions herein set
forth, FDC and the Purchasers agree that on the Closing Date FDC shall sell to
the Purchasers, and the Purchasers shall purchase from FDC, the Shares at the
Purchase Price per Share, for aggregate consideration of $15 million, payable in
United States currency by wire transfer in immediately available funds.
(b) At the Closing, FDC shall deliver to the Purchasers
certificates representing the Shares against delivery by the Purchasers to FDC
of the Purchase Price. Certificates for the securities comprising the Shares
shall be registered in such name or names and in such denominations as the
Purchasers may request in writing at least two full business days prior to the
Closing Date.
SECTION 1.3 Registration Rights. Contemporaneously with the
execution of this Agreement, the parties shall execute a registration rights
agreement (the "Registration Rights Agreement"), a copy of which is attached
hereto as Exhibit B and incorporated by reference herein, an investors agreement
(the "Investors Agreement"), a copy of which is attached hereto as Exhibit D,
and a voting agreement (the "Voting Agreement"), a copy of which is attached
hereto as Exhibit E.
SECTION 1.4 Engagement Letter. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. (the "Agent")
and FDC have entered into an Engagement Letter dated January 8, 1999 Agreement
(the "Letter"). Pursuant to the terms of the Letter, the Agent shall receive
compensation comprised of a 7% cash commission and warrants to acquire a number
of shares of Common Stock of FDC equal to 3% of the number of Shares sold to the
Purchasers pursuant to this Agreement. Any compensation payable to the Agent
shall be payable by FDC.
ARTICLE II
CLOSING
SECTION 2.1 The Closing. The closing of the sale of Shares
contemplated hereby (the "Closing") shall take place at a date and time to be
specified by the Purchasers and FDC (the "Closing Date") following satisfaction
or waiver of all conditions precedent to Closing as described in Articles VI,
VII and VIII hereof, which date, pursuant to the parties' best efforts, shall be
on or before March 31, 1999. The Closing shall take place at the offices of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or any
other place mutually agreeable to the parties, subject to the right of the
parties to close by exchange of executed counterpart documents on the Closing
Date.
SECTION 2.2 Deliveries by FDC. At the Closing, FDC shall deliver
to the Purchasers or cause to be delivered to the Purchasers the following
instruments and documents:
(a) A certificate or certificates representing the Shares
registered in the name of the Purchasers or in such name as may be designated by
the Purchasers. Any sales, stock
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transfer or other stock payable in connection with the sale to the Purchasers by
FDC of the Shares shall be paid by the Purchasers;
(b) The opinion of counsel for FDC as provided in Article IX
below; and
(c) Such other documents, instruments and certificates of the
officers of FDC as are described in Article IX or as may be reasonably requested
by the Purchasers.
SECTION 2.3 Deliveries by the Purchasers. At the Closing, the
Purchasers shall deliver to FDC or cause to be delivered to FDC the following
instruments and documents:
(a) The Purchase Price as provided in Sections 1.1 and 1.2(a)
hereof;
(b) As applicable to any or all of the Purchasers, evidence
of compliance with United States securities laws for shareholders owning in
excess of 5% or 10%, as the case may be, of a publicly held entity, including
filings of a Form 3 under Section 16(a) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and/or a Schedule 13G under Section 13 of the 1934
Act; provided, however, that none of the language set forth in this Agreement or
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the Registration Rights Agreement shall be deemed to constitute one or more of
the Purchasers to be a "group" for purposes of reporting obligations under the
1934 Act, it being the intention of the parties that the existence of a "group"
shall only be determined by the Purchasers and their counsel and any joint
action taken hereunder shall not in and of itself constitute the Purchasers to
be a "group" as defined under the 1934 Act; and
(c) Such other documents, instruments and certificates of the
officers of the Purchasers as may be reasonably requested by FDC.
SECTION 2.4 Further Assurances. FDC shall execute and deliver on
the Closing Date or thereafter any and all such other instruments, and take or
cause to be taken all such further action as may be necessary or appropriate to
vest fully and confirm to the Purchasers title to and possession of the Shares
to be delivered hereunder by FDC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FDC
As a material inducement to the Purchasers to (i) enter into this
Agreement, and (ii) purchase and acquire the Shares, FDC and its subsidiaries
represent and warrant to the Purchasers, that, except as specifically and
expressly set forth in the disclosure schedules attached hereto (the
"Schedules"), the statements contained in this Article III are true, correct and
complete as of the date of this Agreement and will be true, correct and complete
on the Closing Date.
(A) ORGANIZATION; POWER AND AUTHORITY; SUBSIDIARIES. FDC has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Colorado. Each subsidiary of FDC has been duly
organized and is validly existing and in good
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standing under the laws of its jurisdiction of incorporation or organization as
the case may be. Each of FDC and its subsidiaries has full corporate power and
authority to own its properties and conduct its business as currently being
carried on and is duly qualified to do business as a foreign corporation in good
standing under the corporation laws of each jurisdiction in which the conduct of
its business or ownership or lease of its properties requires such qualification
and where the failure to be so qualified could, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), earnings, business, prospects, assets,
results of operations or properties of FDC and its subsidiaries taken as a
whole. The copies of the Articles of Incorporation (certified by the Secretary
of the State of the state of incorporation) and the Bylaws of FDC, both as
amended to date, which have been delivered to Purchasers and attached as
Schedule 3(a) are complete and correct, and FDC is not in default under or in
violation of any provision of its Articles of Incorporation or Bylaws. The
minute books (containing the records of meeting of the shareholders, the Board
of Directors and any committees of the Board of Directors), the stock
certificate books and the stock record books of FDC, as made available to
Purchasers, are correct and complete.
(B) FINANCIAL STATEMENTS. The consolidated financial
statements of FDC, (together with the notes thereto for those years listed on
Schedule 3(b)) and the unaudited consolidated financial statements of FDC for
the interim periods after December 31, 1998, listed on Schedule 3(b) (all of
which are attached as Schedule 3(b)), fairly and accurately present the
consolidated financial condition of FDC and its consolidated subsidiaries as of
the dates indicated and the results of operations and changes in cash flows for
the periods therein specified in conformity with generally accepted accounting
principles consistently applied through the periods involved ("GAAP") and are
correct and complete.
(C) TRANSACTIONS. Except as disclosed on Schedule 3(c),
subsequent to December 31, 1998, neither FDC nor any of its subsidiaries has
incurred any Material (for purposes of this Agreement, an event or condition
shall be deemed to be "Material" if such event or condition, taken together with
all other events or conditions that are qualified by materiality, would, in the
aggregate, have an adverse effect that exceeds $150,000) liabilities or
obligations, direct or contingent, or entered into any Material transactions,
or, declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there has not been any change in the capital
stock, or any Material change in the short-term or long-term debt of FDC or of
FDC and its subsidiaries considered on a consolidated basis, or any Material
adverse change, or any development involving a prospective Material adverse
change, in the general affairs, condition (financial or otherwise), business,
key personnel, property, prospects, net worth or results of operations of FDC
and its subsidiaries, taken as a whole. Since December 31, 1998, FDC and its
subsidiaries have operated their business in the ordinary course, and have taken
(or not taken, as appropriate) each of the actions described in Section 5.1.
(D) LITIGATION. Except as disclosed on Schedule 3(d), there
is not pending or threatened or contemplated, any action, suit or proceeding to
which FDC or any of its subsidiaries is a party or to which either of their
assets may be subject, before or by any court or governmental agency, authority
or body, or any arbitrator, which might have a Material adverse effect on its or
their financial position, results of operations, business or prospects.
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(E) AUTHORIZATION, ETC.; CONFLICTS; CONSENTS. Each of this
Agreement, the Letter, the Registration Rights Agreement, and the Investors
Agreement has been duly authorized, executed and delivered by FDC and
constitutes a valid, legal and binding obligation of FDC, enforceable in
accordance with its terms. The execution, delivery and performance of this
Agreement, the Letter, the Registration Rights Agreement, and the Investors
Agreement and the consummation of the transactions herein or therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or require consent or notice under
or result in the creation of any lien, charge, encumbrance, security interest,
pledge or adverse claim in respect of any property of FDC or any subsidiary
under, any statute, any agreement or instrument to which FDC or a subsidiary is
a party or by which any of them is bound or to which any of their respective
properties is subject, FDC's charter or bylaws, or any order, rule, regulation,
judgment, ruling or decree of any court, arbitrator or governmental agency or
body having jurisdiction over FDC or any subsidiary or any of the properties of
FDC or any subsidiary; no consent, approval, authorization or order of, or
filing with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Letter or the
Registration Rights Agreement or for the consummation of the transactions
contemplated hereby or thereby. This Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly and unanimously
approved by the Board of Directors of FDC. FDC and its subsidiaries do not need
to obtain the approval of any shareholders for the execution, delivery and
performance of this Agreement, other than the approval of the shareholders who
are parties to this Agreement (and, such shareholders hereby agree to vote in
favor of the transactions contemplated by this Agreement).
(F) FDC'S CAPITAL STOCK. The authorized capitalization of
FDC consists of 10,000,000 shares of Common Stock and 1,000,000 shares of
Preferred Stock. As of the date hereof, 3,551,345 shares of Common Stock have
been duly authorized and validly issued and are outstanding, fully paid and
nonassessable, and no shares of Preferred Stock are issued or outstanding. All
of the issued and outstanding shares of capital stock of each of FDC's
subsidiaries have been duly and validly authorized and issued and are fully paid
and nonassessable, and FDC owns, of record and beneficially, free and clear of
any liens, all of the issued and outstanding shares of such stock. Except as set
forth in Schedule 3(f), there are no options, warrants, agreements, contracts or
other rights in existence to purchase or acquire from FDC or any subsidiary of
FDC any shares of the capital stock of the Company or of any subsidiary of FDC.
FDC has an authorized and outstanding capitalization as set forth in Schedule
3(f). For purposes of this agreement, "subsidiary" means any corporation (or
other entity) with respect to which a specified person (or a subsidiary thereof)
owns a 25% or more of the common stock (or other form of equity) or has the
power to vote or direct the voting of sufficient securities to elect 25% or more
of the directors (or other governing body or management). There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of FDC or any of its subsidiaries.
(G) AUTHORIZATION OF THE SHARES. The Shares have been duly
authorized by the Board of Directors of FDC and, when issued and delivered by
FDC against payment
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therefor, will be validly issued, fully paid and nonassessable, free and clear
of any liens or encumbrances; the issuance of the Shares is not subject to
preemptive or other similar rights.
(H) LICENSES, PERMITS, LAWS, ETC. FDC and each of its
subsidiaries holds, and is operating in compliance with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and order
of any governmental or self-regulatory body required for the conduct of its
business and all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in full force and
effect; the failure to hold or operate in compliance with the foregoing or the
lack of a validity, would not be Material, and FDC and each of its subsidiaries
is and has been in compliance in all respects with all applicable federal,
state, local and foreign laws, regulations, orders and decrees, except to the
extent that the failure to comply, individually or in the aggregate, would not
have a Material adverse effect on its financial position or results of
operations. FDC has not received any notice of any violation, probable violation
or default by FDC or any of its subsidiaries under any applicable law,
regulation, franchise, permit, license, authorization or order of any
governmental department, commission, board or agency or instrumentality,
domestic or foreign, having jurisdiction over FDC's or any of its subsidiaries'
operations which could adversely affect the business, operations, financial
condition, prospects, properties or assets of FDC or its subsidiaries, or the
ability to consummate the transaction contemplated hereby. FDC and its
subsidiaries have operated their business, and will continue to operate their
business, in compliance with all applicable federal and state laws and
regulations (including but not limited to the Truth in Lending Act, Fair Credit
Reporting Act, Real Estate Settlement Procedures Act and Fair Debt Collection
Practices Act) and in compliance with all applicable state laws and regulations.
FDC has given notice and obtained approvals of the transactions contemplated by
this Agreement to all government entities that require such notice or approvals.
(I) TITLE TO PROPERTIES. FDC and its subsidiaries have good
and marketable title to all property and assets used by them, located on their
premises, shown on their financial statements, or described in Schedule 3(i) as
being owned by them, in each case free and clear of all liens except such as are
described Schedule 3(i); the property held under leases by FDC and its
subsidiaries is held by them under valid, binding, subsisting and enforceable
leases with only such exceptions with respect to any particular lease as do not
interfere in any respect with the conduct of the business of FDC or its
subsidiaries. FDC is not in default under any such lease, and no circumstances
exist which, if unremedied would, either with or without notice or the passage
of time or both, result in a default under any such lease. Attached as Schedule
3(i) is a complete and accurate list of the real property held under lease by
FDC and its subsidiaries. Schedule 3(i) sets forth the lessor, location and
termination date for each such lease. Except for the leasehold interests set
forth in Schedule 3(i), FDC and its subsidiaries do not own any real property.
FDC and each of its subsidiaries owns or possesses all patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights, licenses, inventions, trade
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secrets and rights necessary for the conduct of the business of FDC and its
subsidiaries as currently carried on "Intellectual Property"; no name which FDC
or any of its subsidiaries uses and no other aspect of the business of FDC or
any of its subsidiaries will involve or give rise to any infringement of, or
license or similar fees for, any patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, inventions, trade secrets or other similar rights or
others to the business or prospects of FDC and neither FDC nor any of its
subsidiaries has received any notice alleging any such infringement or fee; to
the extent that FDC or each of its subsidiaries has licensed its trademarks,
service marks, tradenames and copyrights (including proprietary software) for
use by third parties, it has done so pursuant to written licenses that fully
protect and maintain FDC's or its susidiaries' rights in such trademarks,
service marks, tradenames and copyrights. All Key Technical Employees (as
defined below) of FDC and its subsidiaries have executed agreements with FDC or
its subsidiaries pursuant to which Key Technical Employees have assigned their
rights, title and interest in and to any Intellectual Property including without
limitation patents, copyrights and inventions to FDC or its subsidiaries. As
used in this Agreement, "Key Technical Employees" means all management level
employees, executives, officers, and members of the Board of Directors who have
worked in the development and/or maintenance of Intellectual Property.
(J) COMPLIANCE WITH ORGANIZATIONAL DOCUMENTS, ETC. Neither
FDC nor any of its subsidiaries is in violation of its respective charter or
bylaws (copies of which are attached as Schedule 3(j)); none of FDC nor any of
its subsidiaries is in breach of or otherwise in default in the performance of
any obligation, agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other contract, lease or other instrument to
which it is subject or by which any of them may be bound, or to which any of the
property or assets of FDC or any of its subsidiaries is subject.
(K) TAX RETURNS; TAXES. FDC and its subsidiaries have timely
filed all tax returns that are required to have been filed in any jurisdiction,
and all such tax returns are complete and accurate, and were prepared in
compliance with applicable law. FDC and its subsidiaries have paid all taxes
due, or claimed to be due by any taxing authority, whether or not shown on a tax
return, and FDC and its subsidiaries have paid all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which FDC or a subsidiary, as the
case may be, has established adequate reserves in accordance with GAAP. There is
no basis for any other tax, assessment, interest payment or penalty that could
have a Material adverse effect. The charges, accruals and reserves on the books
of FDC and its subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate in all respects. Except as set forth on Schedule
3(k), neither FDC nor any of its subsidiaries is currently the beneficiary of
any extension of time within which to file any tax return. No claim has been
made by an authority in a jurisdiction where FDC or any of its subsidiaries do
not file tax returns that any of them are or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of FDC or any
of its subsidiaries that arose in connection with any failure or alleged failure
to pay any tax. FDC and its subsidiaries have withheld and paid all taxes that
any of them are required to withhold and pay in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party. No action, suit, proceeding, audit, investigation, assessment,
dispute or claim concerning any tax liability of FDC or any of its subsidiaries
has been claimed or raised by any taxing authority. FDC and its subsidiaries
have not waived any statute of limitation in respect of
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taxes or agreed to any extension of time with respect to a tax assessment or
deficiency. FDC and its subsidiaries (i) have not been a member of an affiliated
group filing a consolidated federal income tax return other than the affiliated
group of which FDC is the parent, and (ii) have no liability for the taxes of
any person (other than FDC and its subsidiaries) under Treas. Reg. (S) 1.1502-6
(or any similar provision of state, local or foreign law), as a transferee or
successor, by contract or otherwise.
(L) ACCOUNTING PROCEDURES. FDC and its subsidiaries maintain
a system of internal accounting controls to provide that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(M) AGENT'S FEE. Other than fees payable by FDC to the
Agent, neither FDC nor its subsidiaries has incurred any liability for any
finder's or broker's fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(N) DISCLOSURE. FDC has fairly described, in all Material
respects, the general nature of the business and principal properties of FDC and
its subsidiaries. This Agreement (including the Schedules hereto), the
documents, certificates or other writings delivered to the Purchaser by or on
behalf of FDC in connection with the transactions contemplated hereby, taken as
a whole, do not contain any untrue statement of a Material fact or omit to state
any Material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made. Except as disclosed in
this Agreement (including the Schedules), since December 31, 1998, there has
been no Material change in the financial condition, operations, business,
properties or prospects of FDC or any subsidiary. There is no Material fact
which adversely affects or may adversely affect FDC which has not been set forth
in writing in this Agreement or disclosed in the other documents, certificates
or written statements furnished to Purchasers by or on behalf of FDC in
connection herewith.
(O) COMPLIANCE WITH ERISA.
(i) FDC and each trade or business (whether or not
incorporated) that is a member of the group of which FDC is a member or is
treated as a single employer together with FDC under Section 414 of the Internal
Revenue Code of 1986, as amended (the "Code") (each such trade or business being
an "ERISA Affiliate"), have operated and administered each "employee pension
benefit plan" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as the same may be amended from time to time, and the
rules and regulations promulgated thereunder as from time to time in effect
("ERISA")) (each such Plan being a "Plan") in compliance with all applicable
laws except for such instances of noncompliance as have not resulted in any
liability and could not reasonably be expected to be
8
Material. Neither FDC nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans (as defined in Section 3 of ERISA),
and no event, transaction or condition has occurred or exists that could
reasonably be expected to result in the incurrence of any such liability by FDC
or any ERISA Affiliate, or in the imposition of any lien, charge or encumbrance
on any of the rights, properties or assets of FDC or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or liens, charge or encumbrance as would not be individually or in
the aggregate Material.
(ii) Each of FDC and each ERISA Affiliate do not
maintain or contribute to, and have not at any relevant time maintained,
contributed to or had any obligation to contribute to, any employee benefit plan
that is, or at such time was, subject to the provisions of title I, subtitle B,
part 3, of ERISA or Title IV of ERISA (including, without limitation, any
multiemployer plan within the meaning of ERISA (S) 3(37)(A))
(iii) Each Plan that is an employee pension benefit plan
within the meaning of Section 3(2) of ERISA is qualified in form and operation
under Code (S) 401(a), each trust for each such Plan is exempt from federal
income tax under Code (S) 401(a), each trust for each such Plan is exempt from
federal income tax under Code (S) 501(a) and FDC has applied for or obtained a
determination to such effect from the Internal Revenue Service. No event has
occurred or circumstance exists that will or could give rise to disqualification
or loss of tax-exempt status of any such Plan or trust. No Plan is a "qualified
foreign plan" (as such term is defined in Code Section 404A(e)), and no Plan is
subject to the laws of any jurisdiction other than the United States of America
or one of its political subdivisions.
(iv) FDC and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are material.
(v) The expected post-retirement benefit obligation
(determined as of the last date of FDC's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106, without
regard to liabilities attributable to continuation coverage mandated by Section
4980B of the Code) of FDC and its subsidiaries is not material.
(vi) The execution and delivery of this Agreement and
the issuance and sale of the Shares hereunder will not involve any transaction
that is subject to the prohibitions of Section 406 of ERISA or in connection
with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
Code.
(vii) No Plan, individually or collectively, provides
for any payment by FDC or any ERISA Affiliate to any employee or independent
contractor that is not deductible under Code Sections 162(a)(1) and (m) and 404
or that is an "excess parachute payment" pursuant to Code Section 280G. Each of
FDC and each ERISA Affiliate has the right to modify
9
and terminate benefits (other than vested and accrued pension benefits) with
respect to both retired and active employees. Each Plan could be terminated as
of the Closing without material liability in excess of any amount reflected as a
liability with respect to such Plan on the financial statements of FDC that are
referred to in Article III(b) hereof.
(P) USE OF PROCEEDS; MARGIN REGULATIONS. FDC will apply the
proceeds of the sale of the Shares for the purposes described in Section 5.4 and
no other purpose. No part of the proceeds from the sale of the Shares will be
used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve FDC in a
violation of Regulation X of said Board (12 CFR 224) or to involve any broker or
dealer in a violation of Regulation T of the Board (12 CFR 220).
(Q) NO DEFAULT ON DEBT. Neither FDC nor any subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any debt on which FDC or any subsidiary is obligated,
and no event or condition exists with respect to any debt of FDC or any
subsidiary that would permit (or that with notice of the lapse of time, or both,
would permit) one or more persons to cause such debt to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
(R) ENVIRONMENTAL LAWS.
(i) FDC and each of its subsidiaries have complied and
are in compliance with, and the Real Property and all improvements thereon are
in compliance with, all Environmental Laws.
(ii) Neither FDC nor any of its subsidiaries have any
liability under any Environmental Law, nor is FDC or any of its subsidiaries
responsible for any liability of any other person under Environmental Law. There
are no pending or threatened Claims or other proceedings based on, and neither
FDC nor any of its subsidiaries, nor any officer, director or stockholder
thereof has directly or indirectly received any notice of any complaint, order,
directive, citation, notice of responsibility, notice of potential
responsibility, or information request from any governmental authority or any
other person or entity or knows or suspects any fact(s) which might reasonably
form the basis for any such actions or notices arising out of or attributable
to: (A) the current or past presence, Release, or threatened Release of
Hazardous Materials at or from any part of the Real Property; (B) the off-site
disposal or treatment of Hazardous Materials originating on or from the Real
Property or the businesses or Assets of FDC or any Subsidiary; or (C) any
violation of Environmental Laws at any part of the Real Property or arising from
FDC's or any of its subsidiaries' activities (or the activities of FDC's or any
of its subsidiaries' predecessors in title) involving Hazardous Materials.
(iii) Neither FDC nor its subsidiaries owns, operates,
or has installed, and to the knowledge of FDC and its subsidiaries, the Real
Property contains no underground improvements, including but not limited to
treatment or storage tanks, or
10
underground piping associated with such tanks, used currently or in the past for
the management of Hazardous Materials. Neither FDC nor its subsidiaries has
used, and to the knowledge of FDC and its subsidiaries no portion of the Real
Property is or has been used as a dump or landfill or consists of or contains
filled in land or wetlands.
(iv) No lien, superlien, or other encumbrance in favor
of any person relating to or in connection with any Claims under any
Environmental Law has been filed or has attached to the Real Property.
(v) No authorization, notification, recording, filing,
consent, waiting period, remediation, investigation, or approval is required
under any Environmental Law in order to consummate the transaction contemplated
hereby.
(vi) As used in this Agreement: "Claims" means demands,
suits, orders, legal proceedings, claims, actions or causes of action,
assessments, losses, damages (including, without limitation, diminution in
value), liabilities, costs and expenses, including, without limitation,
interest, penalties and attorneys' fees and disbursement; "Environmental Laws"
means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, common law rulings, agreements or
governmental restrictions relating to pollution or the protection of human
health or the environment or the release of any materials into the environment,
including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. (S)(S) 9601 et seq.) and those related
to hazardous substances, wastes, air emissions, or discharges to waste or public
systems; "Hazardous Material" means any and all hazardous substances,
pollutants, contaminants, toxic or hazardous wastes or any other substances or
wastes that might pose a hazard to health or safety, the removal of which may be
required or the generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use, disposal, release,
discharge, spillage, seepage, or filtration of which is or shall be restricted,
regulated, prohibited or penalized by any applicable law (including, without
limitation, asbestos, petroleum or petroleum products (including, without
limitation, crude oil or any fraction thereof), urea formaldehyde foam
insulation and polychlorinated biphenyls); "Real Property" means the real
property currently or formerly owned, operated, leased, or used by FDC or its
subsidiaries; and "Release" means any emission, spill, seepage, leak, escape,
leaching, discharge, injection, pumping, pouring, emptying, dumping, disposal,
or release of materials from any source (including, without limitation, the Real
Property and property adjacent to the Real Property) into or upon the
environment, including the air, soil, improvements, surface water, groundwater,
the sewer, septic system, storm drain, publicly owned treatment works, or waste
treatment, storage, or disposal systems;
(S) YEAR 2000 COMPLIANCE. (i) The software and hardware
comprising the systems necessary to operate the business of FDC and its
subsidiaries ("Systems") are Year 2000 ready; (ii) are designed to be used prior
to, during, and after the calendar year 2000 A.D.; (iii) will operate
consistently, predictably and accurately, without Material interruption or
manual intervention, and in accordance with all requirements of the related
documentation, including without limitation all specification and/or
functionality and performance requirements, during each such time period, and
the transitions between them, in relation to dates it encounters or processes;
11
all date recognition and processing by the Systems will include four digit year
format and will correctly recognize and process the date of February 29, and any
related data, during leap years; and (iv) all date sorting by the Systems that
includes a "year category" shall be done based on the four digit year format.
(T) ACCOUNTS. Except as described on Schedule 3(t), all contracts or
agreements between FDC and/or its subsidiaries and the customers with which FDC
does business are valid and enforceable against FDC and/or its subsidiaries and
are not currently, and will not be at Closing, in default, invalid or
unenforceable in any manner, or and are not subject to threatened or imminent
termination. FDC and/or its subsidiaries have performed all of their
obligations and responsibilities as described under each such contract or
agreement, none of such contracts or agreements are subject to any counterclaim
or setoff, and all such contracts are in full force and effect and will continue
in full force and effect following the Closing. Except as described on Schedule
3(t), FDC has no reason to believe that amounts payable under such contracts or
agreements will not be paid substantially in accordance with the terms of such
contracts or agreements. Neither FDC nor its subsidiaries have received any
notices of default, claims, or any other type of notice with respect to any such
contract or agreement.
(U) LICENSE AGREEMENTS. Attached as Schedule 3(u) is a complete and
accurate list of any license agreements to which FDC or any of its subsidiaries
is a party as of the date hereof relating to their credit reporting business
(other than customary, off-the-shelf licenses. Also stated on Schedule 3(u) is
the expiration date of each such license agreement. Except as described on
Schedule 3(u), all such license agreements are valid and enforceable against FDC
or its subsidiaries, as the case may be, and are not currently, and will not be
at Closing, in default, invalid or unenforceable. To the extent the
transactions contemplated by this Agreement requires the consent of any third
party, FDC shall use its commercially reasonable efforts to obtain such
consents. FDC has not received any written notices of default or claims with
respect to any license agreement.
(V) CONTRACTS.
(i) Neither FDC nor any of its subsidiaries is a party to, or
bound by, any contract, distributorship agreement, license agreement, agency
agreement, or any other agreement, indenture, mortgage, deed of trust, lease,
loan agreement or instrument which would be in default or which would terminate
by virtue of this Agreement.
(ii) Schedule 3(v) lists the following contracts and other
agreements to which any of FDC and its subsidiaries is a party:
(A) any agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000;
(B) any agreement concerning a partnership or joint
venture;
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(C) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation, in excess of $50,000 or
under which it has imposed a security interest on any of its assets, tangible or
intangible;
(D) any agreement concerning confidentiality or
noncompetition;
(E) any agreement with any of the stockholders of FDC, or
any affiliates of such stockholders;
(F) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement for
the benefit of its current or former directors, officers, and employees;
(G) any collective bargaining agreement;
(H) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $50,000 or providing severance benefits;
(I) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees;
(J) any agreement under which the consequences of a default
or termination could have an adverse effect on the business, financial
condition, operations, results of operations, or future prospects of any of FDC
and its subsidiaries; or
(K) any agreement involving a license or franchise to
operate in the type of business that FDC engages.
FDC has delivered to Purchaser a correct and complete copy of each written
agreement listed in Schedule 3(v) and a written summary setting forth the terms
and conditions of each oral agreement referred to in Schedule 3(v). With
respect to each such agreement: (1) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (2) the agreement will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (3) no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (4) no party has
repudiated any provision of the agreement.
(W) ABSENCE OF UNDISCLOSED OR CONTINGENT LIABILITIES. Except as
described in Schedule 3(d), FDC has no liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise, whether due or to become due, whether
known or unknown, and
13
regardless of when asserted) in excess of $25,000 in any single instance or
$150,000 in the aggregate.
(X) CONDITION OF ASSETS. The fixed assets necessary for the conduct
of FDC's and its subsidiaries' businesses are in good condition and repair,
ordinary wear and tear excepted, and are usable in the ordinary course of
business. There are no defects in such fixed assets or other conditions
relating thereto which could adversely affect the operation or value of such
fixed assets. FDC and its subsidiaries own, or lease under valid leases, all
equipment and other tangible assets necessary for the conduct of their business.
(Y) EMPLOYEES. To the best of FDC's knowledge, no significant
employee (including Key Technical Employees and Key Employees, as those terms
are defined herein) of FDC or any of its subsidiaries, or any group of their
employees, has any plan or intention to terminate his, her or its employment
following the Closing. FDC and its subsidiaries have complied with all laws
relating to the employment of labor, including provisions thereof relating to
wages, hours, equal opportunity, collective bargaining and the payment of social
security and other taxes. FDC and its subsidiaries have no labor relations
problem pending, and their labor relations are satisfactory. There are no
workmen's compensation, sexual harassment, discrimination or claims pending
against FDC or any of its subsidiaries, and there are no facts that would give
rise to such claims. No employee of FDC or any of its subsidiaries is subject
to any secrecy or non-competition agreement or any other agreement or
restriction of any kind that would impede in any way the ability of such
employee to carry out fully all activities of such employee in furtherance of
the business of FDC or its subsidiaries. No employee or former employee of FDC
or any of its subsidiaries has any claim with respect to any intellectual
property rights of FDC or any of its subsidiaries. None of FDC or any of its
subsidiaries is a party to or bound by any collective bargaining agreement, nor
has any of them experienced any strikes, grievances, claims of unfair labor
practices, or other collective bargaining disputes. None of FDC or any of its
subsidiaries has committed any unfair labor practice. There are no
organizational efforts presently being made or threatened by or on behalf of any
labor union with respect to employees of any of FDC or any of its subsidiaries.
(Z) GIFTS. Neither FDC, its subsidiaries, nor any of their officers,
directors or shareholders has made or agreed to make gifts of money, other
property or similar benefits (other than incidental gifts of articles of nominal
value) to any actual or potential customer, supplier, governmental employee,
political party, candidate for office, governmental agency or instrumentality or
any other person in a position to assist or hinder FDC in connection with any
actual or proposed business transaction.
(AA) SUBSIDIARIES. Schedule 3(aa) sets forth for each subsidiary of
FDC (i) its name and jurisdiction of incorporation, (ii) the number of shares of
authorized capital stock of each class of its capital stock, (iii) the number of
issued and outstanding shares of each class of its capital stock, the names of
the holders thereof, and the number of shares held by each such holder, and (iv)
the number of shares of its capital stock held in treasury. All of the issued
and outstanding shares of capital stock of each subsidiary of FDC have been duly
authorized and are validly issued, fully paid, and nonassessable. One of FDC
and its subsidiaries holds of record and owns
14
beneficially all of the outstanding shares of each subsidiary of FDC, free and
clear of any restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), taxes, security interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require any of FDC and its subsidiaries to
sell, transfer, or otherwise dispose of any capital stock of any of its
subsidiaries or that could require any subsidiary of FDC to issue, sell, or
otherwise cause to become outstanding any of its own capital stock. There are no
outstanding stock appreciation, phantom stock, profit participation, or similar
rights with respect to any subsidiary of FDC. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of any
capital stock of any subsidiary of FDC. None of FDC and its subsidiaries
controls directly or indirectly or has any direct or indirect equity
participation in any corporation, partnership, trust, or other business
association which is not a subsidiary of FDC.
(BB) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of FDC and its subsidiaries are reflected properly on their books and records,
are valid receivables subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts.
(CC) POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of any of FDC and its subsidiaries.
(DD) INSURANCE. Schedule 3(dd) sets forth the following information
with respect to each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which any of FDC and its subsidiaries has been a party, a named
insured, or otherwise the beneficiary of coverage at any time within the past
seven years:
(i) the name, address, and telephone number of the agent;
(ii) the name of the insurer, the name of the policyholder, and
the name of each covered insured;
(iii) the policy number and the period of coverage
(iv) the scope (including an indication of whether the coverage
was on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
(v) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) the policy will continue
to be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (C) neither any of FDC and its subsidiaries nor any other party to the
policy
15
is in breach or default (including with respect to the payment of premiums or
the giving of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (D) no party to the policy
has repudiated any provision thereof. Each of FDC and its subsidiaries has been
covered during the past seven years by insurance in scope and amount customary
and reasonable for the businesses in which it has engaged during the
aforementioned period. Schedule 3(dd) describes any self-insurance arrangements
affecting any of FDC and its subsidiaries.
(EE) PRODUCT WARRANTY. No product sold or delivered by any of FDC and
its subsidiaries is subject to any guaranty, warranty, or other indemnity.
(FF) CERTAIN BUSINESS RELATIONSHIPS WITH FDC AND ITS SUBSIDIARIES.
None of the stockholders of FDC or its subsidiaries, or their officers,
directors or employees, has been involved in any business arrangement or
relationship with any of FDC and its subsidiaries within the past 12 months, and
no such person owns any asset, tangible or intangible, which is used in the
business of any of FDC and its subsidiaries.
(GG) SMALL BUSINESS INVESTMENT COMPANY ACT MATTERS. FDC, together
with its "affiliates" (as that term is defined in Title 13, Code of Federal
Regulations, (S) 121.103), is a "small business concern" within the meaning of
Section 103(5) of the Small Business Act of 1958 and the regulations thereunder.
Each of FDC and its Subsidiaries does not presently engage in, and neither FDC
nor any of its Subsidiaries shall hereafter engage in, any activities, nor shall
FDC or any Subsidiary use directly or indirectly the proceeds from the sale of
the shares hereunder for any purpose for which a Small Business Investment
Company is prohibited from providing funds by the Small Business Investment Act
of 1958 and the regulations thereunder, including Title 13, Code of Federal
Regulations, (S) 107.720.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
As an inducement to FDC to enter into this Agreement and the
Registration Rights Agreement, each Purchaser severally, and not jointly,
represents and warrants to FDC that:
(a) Each Purchaser that is a corporation or other business
entity is duly organized, validly existing and in good standing under the laws
of the applicable jurisdictions of incorporation, and such corporations as
business entities are qualified to transaction business as foreign corporations
in all other jurisdictions in which the character of Purchasers' businesses
requires the Purchasers to be so qualified; such corporations or business
entities have all of the power necessary to engage in the businesses in which
they are presently engaged; and each such corporation or business entity is an
accredited investor as described in Rule 501(a) adopted under the ▇▇▇▇ ▇▇▇.
(b) Each Purchaser warrants and represents that the Purchaser is
and was not organized or reorganized for the specific purpose of acquiring the
Shares and that the individual
16
executing this Agreement has the power and authority to execute and deliver this
Agreement on behalf of such partnership, joint venture, corporation or trust.
Furthermore, in the event a Purchaser is one of the foregoing entities, such
Purchaser represents that all of the equity owners are accredited investors as
defined in (a) above or, if not, such Purchaser otherwise qualifies as an
accredited investor with total assets in excess of $5 million.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions herein contemplated, will conflict with or
result in the breach of, or accelerate the performance required by, any terms of
any agreement, or result in the creation of any lien, charge or encumbrance upon
any of the properties or assets of the Purchasers under the terms of any such
agreement.
(d) The Purchasers have all requisite power and authority to
execute, deliver and perform this Agreement and the Registration Rights
Agreement, and have all requisite power and authority to purchase and own the
Shares. All necessary corporate proceedings of the Purchasers have been duly
taken to authorize the execution, delivery and performance by the Purchasers of
this Agreement and the Registration Rights Agreement. This Agreement has been
duly authorized, executed and delivered by the Purchasers, and is enforceable as
to the Purchasers in accordance with its terms. No consent, authorization,
approval, order, license, certificate or permit of or from, or declaration or
filing with, any United States federal, state, local or other governmental
authority or any court or other tribunal is required by the Purchasers for the
execution, delivery or performance by the Purchasers of either this Agreement or
the Registration Rights Agreement other than (i) filings described in Section
2.3(b), (ii) filings that may be required with bank regulatory agencies, and
(iii) filings that may need to be made with the small business administration.
No consent of any party to any contract, agreement, instrument, lease, license,
arrangement or understanding to which the Purchasers are a party, or to which
any of their properties or assets are subject, is required for the execution,
delivery or performance of either this Agreement or the Registration Rights
Agreement.
(e) The Purchasers are acquiring the Shares, upon payment for and
delivery thereof, not with a view to the distribution or public resale thereof
within the meaning of the 1933 Act. The Purchasers further agree that FDC may
cause to be set forth on the certificates for the Shares, to be delivered to the
Purchasers hereunder, a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED
AND SOLD ONLY IF REGISTERED PURSUANT TO THE PROVISIONS
OF THAT ACT OR IF, IN THE OPINION OF COUNSEL TO THE
SELLER AN EXEMPTION FROM REGISTRATION THEREUNDER IS
AVAILABLE.
17
ARTICLE V
COVENANTS OF FDC
SECTION 5.1 Conduct of Business. From the date hereof until the
Closing, or as otherwise consented to by the Purchasers in writing each of FDC
and its subsidiaries :
(a) Carry on its business only in the ordinary course, in
accordance with all laws, regulations and rules in the same manner in which it
previously has been conducted but not including pursuing and implementing its
consolidation strategy (which will require the prior written consent of
Purchaser);
(b) Maintain its real and personal property in as good condition
and repair as of the date hereof, except for ordinary wear and tear;
(c) Perform in all Material respects all of its Material
obligations under all contracts to which FDC is a party;
(d) Use reasonable efforts to preserve intact its present
business organization and to keep available the services of its present officers
and employees;
(e) Not amend its charter or Bylaws or otherwise alter its
corporate existence or powers;
(f) Not take any action or engage in any transaction which would
cause any of the representations made by FDC herein to be untrue as of the
Closing Date or would cause FDC to be in breach of the terms and conditions of
this Agreement;
(g) Maintain its books, accounts and records in its usual,
regular and ordinary manner;
(h) Comply with all filing and reporting requirements of the 1934
Act;
(i) Maintain a listing of the Common Stock with The Nasdaq Stock
Market, Inc.;
(j) Not issue any shares of its capital stock, except upon the
exercise of any currently outstanding option, warrant, convertible security or
similar right which is listed on Schedule 5.1(j);
(k) Not increase, decrease, or exchange any of its outstanding
Common Stock for a different number or class of securities through
reorganization, reclassification, share dividend, share split or similar change
in the capitalization of FDC;
18
(l) not enter into or become subject to any agreement,
transaction, or commitment which (i) would have a Material effect on its
business, or (ii) restrict or in any way impair its ability to comply with the
terms of this Agreement;
(m) not create, incur, assume, guarantee or otherwise become
liable with respect to any indebtedness, and not sell, pledge, encumber or
otherwise subject its assets to any security interest, claim or indebtedness not
in existence prior to the execution of this Agreement;
(n) not declare or pay any dividend, make any distribution on
shares of its capital stock or redeem, repurchase or otherwise acquire any
shares of its capital stock;
(o) promptly notify Purchasers in writing after becoming actually
aware of the occurrence or threatened occurrence of any event which would cause
or constitute a breach of any warranty, representation, covenant or agreement
contained herein, and use all commercially reasonable efforts to prevent or
promptly remedy such breach or threatened breach; and promptly notify Purchasers
in writing if it shall discover that any representation or warranty made in
Article III of this Agreement was when made, or has subsequently become, untrue;
(p) not, directly or indirectly, (i) enter into or modify
(whether in writing or orally) any employment, collective bargaining, severance
or similar agreements or arrangements with, or grant any bonuses, salary
increases, severance or termination paid to, any employees, officers or
directors or consultants, or (ii) grant or promise any bonuses, salary
increases, severance or termination pay, or benefits for any officers,
employees, or directors;
(q) not adopt or amend any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment or other
employee benefit plan, trust, fund or arrangement for the benefit or welfare of
any employee, director, or officer;
(r) not cancel or terminate its current insurance policies or
cause any of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies providing coverage
equal to or greater than the coverage under the canceled, terminated or lapsed
policies for substantially similar premiums are in full force and effect;
(s) use its commercially reasonable efforts to preserve intact
its business organization and goodwill, keep available the services of its
officers and employees as a group and maintain satisfactory relationships with
suppliers, distributors, customers and others having business relationships with
it up to the Closing;
(t) confer on a weekly basis with representatives of Purchasers
to report operational matters and the general status of ongoing operations;
(u) not take any action which would render, or which reasonably
would be expected to render, any representation or warranty made by it in the
Agreement untrue at the Closing;
19
(v) notify Purchasers of any emergency or other change in the
normal course of its business or in the operation of its properties and of any
governmental or third party complaints, investigations or hearings (or
communications indicating that the same may be contemplated) if, in each case,
such emergency, change, complaint, investigation or hearing would, individually
or in the aggregate, have an adverse effect on its business, operations or
financial condition or to its ability to consummate the transactions
contemplated by this Agreement;
(w) not sell any of its assets, tangible or intangible;
(x) not enter into any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses) either
involving more than $15,000 or outside the ordinary course of business;
(y) not make any capital expenditure (or series of related
capital expenditures) either involving more than $100,000;
(z) not make any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other person (or series of
related capital investments, loans, and acquisitions) either involving more than
$15,000 or outside the ordinary course of business;
(aa) not delay or postpone the payment of accounts payable and
other liabilities outside the ordinary course of business;
(bb) not cancel, compromise, waive, or release any right or claim
(or series of related rights and claims) either involving more than $15,000 or
outside the ordinary course of business;
(cc) not grant any license or sublicense of any rights under or
with respect to any Intellectual Property;
(dd) not make any loan to, or enter into any other transaction
with, any of its directors, officers, or employees;
(ee) not make or pledge to make any charitable or other capital
contribution
(ff) maintain reasonable business insurance; commit no waste of
assets; not dispose or otherwise change the nature of any asset such that cash
or accounts receivable are increased; not create or suffer to exist any lien,
charge or encumbrance on any asset or incur any indebtedness for borrowed money;
and maintain and preserve their business organizations intact and maintain their
relationships with suppliers, employees, customers and others;
(gg) refrain from making capital expenditures or commitments for
additions to property, plant or equipment or enter into transactions which could
reasonably be expected to alter or affect their operations (unless approved in
writing in advance by Purchasers); and
20
(hh) not commit to any of the foregoing.
SECTION 5.2 Access and Information. FDC shall give to the Purchasers
and their representatives full access at all reasonable times prior to the
Closing to the properties, books and records of FDC and to furnish such
information and documents in its possession relating to FDC as the Purchasers
may reasonably request.
SECTION 5.3 Information Following Closing. Beginning with execution
of this Agreement and continuing beyond Closing for so long as Purchasers own
more than five percent of the common stock of FDC, FDC shall furnish Purchasers,
without charge, the following documents:
(a) As soon as practicable after they have been filed with the
Commission, one copy of each annual and interim financial and other report or
communication filed with the Commission;
(b) Such additional publicly filed documents and publicly
available information with respect to FDC and its affairs as the Purchasers may
from time to time reasonably request;
(c) as soon as available, and in any event within 90 days after
the end of each fiscal year of FDC, duplicate copies of the audited financial
statements of FDC and its subsidiaries reported on by a firm of independent
certified public accountants of national recognition, and stating in comparative
form the figures as of the end of and for the previous fiscal year, accompanied
by a report thereon containing an opinion by such independent certified public
accountants that the financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied, except as may be
noted otherwise;
(d) as soon as available, and in any event within 30 days after
the end of each month commencing with the end of the month of January 1999, a
copy of the consolidated interim financial statements of FDC and its
subsidiaries, consisting at a minimum of: (i) the balance sheet as of the end of
the month, and (ii) a statement of income for the month and for the partial or
full fiscal year ended as of the end of the month, all in reasonable detail and,
in the case of a month which is the end of FDC's fiscal quarter, setting forth
in comparative form corresponding budgeted figures for such partial or full
fiscal year prepared in accordance with generally accepted accounting principles
consistently applied, except as may be noted otherwise;
(e) by December 1 of each year copies of the FDC budget for
operations for the next fiscal year;
(f) as soon as available, and in any event within 45 days after
the end of a fiscal year, a report of the financial information of FDC on an
actual versus as budgeted basis;
(g) within 30 days of filing, copies of all returns and
documents filed by FDC and its subsidiaries with any federal governmental
authority, including, without limitation, the
21
U.S. Internal Revenue Service, the U.S. Environmental Protection Agency, the
U.S. Occupational Safety & Health Administration, the Small Business
Administration and the Securities and Exchange Commission;
(h) within 30 days of receipt thereof, a copy of the complaint,
motion for judgment or other such pleadings served on or by FDC and its
subsidiaries or any of their respective officers or directors, as the case may
be, relating to any litigation to which any of FDC and its subsidiaries, or any
of their respective officers or directors is made a party after the date of this
Agreement by mailing to the Purchasers; and
(i) within ten days of receipt thereof, notice of any default
declared with respect to any lease, contract or loan of any of FDC and its
subsidiaries or any judgment entered against any of FDC and its subsidiaries if
such default or judgment involves an amount exceeding $10,000.
SECTION 5.4 Use of Proceeds. FDC will use the proceeds from the sale
of the Shares hereunder (a) to consummate future acquisitions by the Company,
and (b) as corporate working capital in the ordinary course of business.
ADDITIONAL PRE-CLOSING COVENANTS
--------------------------------
SECTION 5.5 Exclusivity. Prior to the Closing, none of FDC, its
subsidiaries, or any of their officers or directors, or those FDC shareholders
who are party to this Agreement, shall cause FDC to, directly or indirectly,
through any officer, director, agent or otherwise, solicit, initiate or
encourage submission of any proposal or offer from any person or entity
(including any of its or their officers or employees) relating to any
liquidation, dissolution, recapitalization, merger, consolidation or acquisition
or the purchase of all or any portion of the assets of, or any equity interest
in, FDC or any similar transaction or business combination involving FDC, or
participate in any negotiations regarding, or furnish to any other person, any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt by any other
person or entity to do or seek any of the foregoing. FDC shall within one
business day notify Purchasers of any such proposal or offer, or any inquiry
from or contact with any person with respect thereto, and shall promptly provide
Purchasers with such information regarding such proposal, offer, inquiry or
contact as Purchasers may request.
SECTION 5.6 Consents under Agreements. FDC agrees that, prior to the
Closing, it and its subsidiaries will secure the approval under all agreements
(if any) as to which consent to the transactions contemplated hereunder is
required.
SECTION 5.7 Actions. Prior to the Closing, none of FDC, its
shareholders who are parties to this Agreement, and its subsidiaries will take
or permit to be taken any action that would be in breach of the terms or
provisions of this Agreement or that would cause any of their representations
and warranties contained herein to be or become untrue.
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SECTION 5.8. Additional Disclosure. Prior to the Closing, FDC will
promptly advise Purchasers of each event that occurs after execution of this
Agreement, if such event would have had to be disclosed on any schedule to this
Agreement had it occurred prior to the execution of this Agreement, or if such
event otherwise would lead to a breach or inaccuracy of any representation,
warranty, or covenant of FDC or its subsidiaries.
SECTION 5.9. Financial Statements. Prior to the Closing, FDC will
deliver monthly financial statements to Purchasers within 10 days of the end of
each month after the date hereof.
SECTION 5.10 Further Assurances. Prior to Closing, each of the
parties will use its reasonable best efforts to take all action and to do all
things necessary, proper, or advisable in order to consummate and make effective
the transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in this Agreement).
ARTICLE VI
POST CLOSING COVENANTS
Section 6.1 Post Closing Covenants.
(A) NONCOMPETE/NON-SOLICIT.
(i) During the five year period commencing with the
date hereof (the "Non-Compete Period"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Key Employees") agree that they
shall not (and shall not direct or assist others to contact or solicit, offer
employment to, hire, or otherwise attempt to hire any person employed by the
Company. The Key Employees shall not encourage, induce or assist others in
inducing any employee of the Company to terminate his or her employment with the
Company or in any way interfere with the Company's respective relationships with
their employees.
(ii) During the Non-Compete Period, the Key Employees
agree that they shall not contact or solicit, or direct or assist others to
contact or solicit any customers, suppliers or other business associates of the
Company existing prior to Closing, shall not engage in the diversion of good-
will regarding the activities conducted by the Company prior to Closing; and
shall not otherwise interfere in any way with the relationships between the
Company and their customers, suppliers or business associates, existing prior to
Closing.
(iii) During the Non-Compete period, the Key Employees
shall not directly or indirectly compete with the Company in any manner in any
state where the Company is engaged or presently proposes to engage in business;
provided that such restriction on competition will be limited to those
businesses of the Company in which the Company was engaged prior to the date of
this Agreement; provided further that, notwithstanding the foregoing, any Key
Employee may make passive investments of not more than 5% of the outstanding
shares of, or 5% of any other equity interest in, any company or entity listed
or traded on a national securities exchange or in an over-the-counter securities
market. Without limiting the generality of
23
this paragraph, each Key Employee agrees that the restrictions on competition
contained herein shall also prohibit serving as a consultant to any entity if
such consulting services would help such entity compete against the Company.
Additionally, except as expressly set forth in this Agreement, no Key Employee
shall have any interest (as owner, principal, general or limited partner, agent,
employee, officer, director, or stockholder) in any entity which competes with
the Company. The Key Employees agree that this covenant not to compete is made
in connection with the Purchasers' acquisition of the Company's common stock.
(B) FURTHER ASSURANCES. In case at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party reasonably may request, all at the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
this Agreement).
(C) KEY MAN LIFE INSURANCE. FDC shall acquire key man life
insurance policies on those persons, in such amounts, and with designated
beneficiaries as determined from time to time and at any time by the Special
Committee (as defined in the Investors Agreement).
(D) INTELLECTUAL PROPERTY. Within 30 days of Closing, FDC shall
cause all FDC employees, all employees of FDC subsidiaries, and all independent
contractors who have worked in the development and/or maintenance of
Intellectual Property (as defined in Section 3(i)) to execute agreements with
FDC or its subsidiaries to assign their rights, title and interest in and to any
Intellectual Property including, without limitation, patents, copyrights and
inventions to FDC or its subsidiaries.
ARTICLE VII
CONDITIONS TO EACH PARTY'S OBLIGATION TO CLOSE
SECTION 7.1 Conditions to Obligations to Close.
In addition to those specific conditions set forth in Articles VIII
and IX below, the obligations of the Purchasers and FDC to consummate the
transactions described herein shall be subject to the following:
(a) No government regulatory body or agency shall have
instituted court action or legal proceedings seeking preliminary or permanent
injunctive relief prohibiting purchase of the Shares.
(b) The performance of all conditions precedent to Closing set
forth in Articles VIII and IX below.
(c) From the date of this Agreement to the Closing Date, there
shall have been no Material adverse change (i) in the business or properties of
FDC, or (ii) in the
24
financial condition of FDC, and the property, business and operations of FDC
shall have not been Materially and adversely affected due to any fire, accident
or other casualty or by any act of God, whether or not insured.
ARTICLE VIII
CONDITIONS TO FDC'S OBLIGATION TO CLOSE
SECTION 8.1 Conditions to FDC's Obligations to Close.
FDC's obligation to complete the transaction is provided for herein
shall be subject to the performance by the Purchasers of all their agreements to
be performed hereunder on or before the Closing, and to the further conditions
that:
(a) The representations and warranties of the Purchasers
contained in Article IV hereof are true and correct in all Material respects as
of the Closing with the same effect as if made on and as of such date and the
officers or managing directors of the Purchasers shall so certify thereto.
(b) The Purchasers shall have performed and complied with all the
terms and conditions required by this Agreement to be performed or complied with
by them prior to the Closing.
ARTICLE IX
CONDITIONS TO PURCHASERS' OBLIGATION TO CLOSE
SECTION 9.1 Conditions to Purchasers' Obligation to Close.
The Purchasers' obligation to complete the transactions provided for herein
shall be subject to the performance by FDC of all agreements to be performed
hereunder on or before the Closing, and to the further conditions that:
(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of FDC contained in Article III and the covenants of FDC contained in
Article V hereof are true and correct and have been performed or satisfied in
all respects as of the Closing with the same effect as if made or performed on
and as of such date and FDC shall so certify to the Purchasers.
(B) NO ADVERSE CHANGES. There shall have been no event or change
occurring between the execution of this Agreement and the Closing which in the
aggregate may be deemed to have an adverse effect on the business, operations,
financial condition or properties of FDC or its subsidiaries. There shall have
been no adverse changes in the operating results or financial condition of FDC
since December 31, 1998, except as described in Schedule 9(b) and FDC shall so
certify in writing to the Purchasers.
25
(C) OPINION. The Purchasers shall have received from counsel to FDC,
an opinion dated the Closing, to the following effect:
(i) FDC is a corporation duly organized, validly existing and in
good standing under the laws of Colorado.
(ii) FDC has all corporate power and authority necessary to
engage in the business in which it is presently engaged and to execute, deliver
and perform its obligations under this Agreement. There are no options, puts,
calls, or other rights outstanding to purchase or sell FDC's securities, other
than as contemplated in this Agreement or as disclosed in the Schedules.
(iii) FDC's authorized capitalization consists of 10,000,000
shares of Common Stock and 1,000,000 shares of Preferred Stock. At the Closing
Date and prior to the issuance of the Shares, there will be 3,551,346 shares of
Common Stock issued and outstanding, and no shares of Preferred Stock issued and
outstanding. All of such outstanding shares of capital stock have been duly
authorized and are validly issued and are fully paid and nonassessable, subject
to certain escrow provisions.
(iv) Execution and delivery of this Agreement and the
Registration Rights Agreement, and the consummation of the transactions
contemplated thereby have been duly and validly authorized by all necessary
action, corporate or otherwise, by FDC. This Agreement and the Registration
Rights Agreement are legal, valid and binding obligations of FDC, enforceable
against FDC in accordance with their terms except as enforcement may be limited
by general equitable principles or bankruptcy, insolvency or similar laws
affecting creditors' rights generally. FDC has all requisite power and authority
to execute, deliver and perform this Agreement and the Registration Rights
Agreement. All necessary corporate proceedings of FDC have been taken to
authorize the execution, delivery and performance by FDC of this Agreement and
the Registration Rights Agreement.
(v) There are no preemptive rights to acquire FDC's Common Stock
or Preferred Stock.
(vi) The Shares, when issued in accordance with the terms and
conditions of this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable and will be free and clear of any adverse claim, security
interest, lien, pledge, option, encumbrance or restriction; provided, however,
that the Shares will be "restricted securities" as such term is defined under
the 1933 Act (unless registered for sale as described in the Registration Rights
Agreement) and the certificates representing the Shares will contain a legend to
reflect such status; and provided further that any Purchaser, if deemed an
"affiliate" under the 1933 Act, may be subject to certain restrictions as
provided in the 1933 Act, the 1934 Act or the rules and regulations thereunder.
26
(vii) To the best knowledge of such counsel, FDC is not in
violation or default of any provision of its Articles of Incorporation, Bylaws
or of any provision of any instrument or contract to which it is a party or by
which it is bound or, of any provision of any federal, state or local judgment,
writ, decree, order, law, statute, rule or government regulation, applicable to
it. To the best knowledge of such counsel, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a violation or default under any such provision or an event which results in the
creation of any lien, charge of encumbrance upon any asset of FDC. No consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with any federal, state, local or other governmental
authority or any court or other tribunal is required by FDC for the execution,
delivery or performance by FDC of this Agreement or the Registration Rights
Agreement. To the best knowledge of such counsel, except for obligations under
its listing agreement with The Nasdaq Stock Market, Inc., no consent of any
party to any contract, agreement, instrument, lease, license, arrangement or
understanding to which FDC is a party, or to which any of its properties or
assets are subject, is required for the execution, delivery or performance of
this Agreement or the Registration Rights Agreement.
(viii) The Shares shall have been approved for additional
listing by The Nasdaq Stock Market, Inc.
(ix) Except as disclosed in this Agreement or the
Schedules, such counsel is not aware of any pending or threatened action, suit,
proceeding or investigation before any court or any public, regulatory, or
governmental agency, authority or body, involving FDC or any of its existing
officers or directors and such counsel do not know of any legal matter or
government proceedings regarding FDC.
In rendering such an opinions counsel for FDC may rely (i) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of FDC; and (ii) to the extent they deem proper, upon written
statements or certificates of officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing
of FDC, provided that copies of any such statements or certificates shall be
delivered to counsel for the Purchasers.
(D) PERFORMANCE OF CONDITIONS. FDC shall have performed and
complied with all the terms and conditions required by this Agreement and the
Registration Rights Agreement to be performed or complied with by it on or
before the Closing.
(E) ACTION. All action necessary to authorize the execution,
delivery and performance of this Agreement by FDC and the consummation of the
transactions contemplated hereby shall have been duly and validly taken by FDC.
FDC shall have furnished Purchasers with copies of all consents or resolutions
adopted or executed by FDC in connection with such actions.
(F) NO ACTION OR PROCEEDING. As of the Closing, no action, suit
or proceeding shall be pending or threatened before any court or administrative
body, and there shall
27
have been no threats, to (i) prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation, (iii) affect adversely
the right of Purchasers to own the Shares and to exercise their ownership rights
with respect to the Shares, or (iv) affect adversely the right of any of FDC and
its subsidiaries to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect).
(G) CONSENTS & APPROVALS. FDC shall have obtained and given each
consent and notice required in connection with the transactions contemplated
herein (as specified in Schedule 3(e).
(H) GOVERNMENTAL FILINGS. All governmental filings, authorizations
and approvals that are required for the consummation of the transactions
contemplated hereby shall have been duly made and obtained by FDC and its
subsidiaries.
(I) DISCOVERY OF FACTS OR CIRCUMSTANCES. Purchasers shall not have
discovered any fact or circumstance existing as of the date of this Agreement
which has not been disclosed to Purchasers as of the date of this Agreement
regarding the business, assets, liabilities, properties, condition (financial or
otherwise), results of operations or prospects of FDC which is, individually or
in the aggregate with other such facts and circumstances, adverse to FDC, its
financial position, results of operations or the value of its assets.
(J) DAMAGE. There shall have been no damage, destruction or loss of
or to any property or properties owned or used by FDC, or to its assets, whether
or not covered by insurance which, in the aggregate, has or would be reasonably
likely to have, an adverse effect on FDC.
(K) CONFIDENTIALITY AGREEMENT. FDC shall have entered into a
confidentiality agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in form and substance as set
forth in Exhibit C, and the same shall be in full force and effect;
(L) INVESTORS AGREEMENT. FDC shall have entered into the Investors
Agreement with the Purchasers in form and substance as set forth in Exhibit D,
and the same shall be in full force and effect;
(M) VOTING AGREEMENT. Certain shareholders of FDC (as identified in
Exhibit E) shall have entered the Voting Agreement with the Purchasers in form
and substance as set forth in Exhibit E, and the same shall be in full force and
effect;
(O) ACQUISITIONS. There shall have been no adverse changes from that
contemplated on March 12, 1999, with respect to the valuation of, or the terms
of the transactions with, FDC's proposed acquisition targets, United Data
Services, Inc., Imfax, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ d/b/a
Quality Credit Reporting of Texas, Mortgage Credit Services, Inc. (Oklahoma),
and Credit ▇▇▇▇, Inc.
28
(P) OFFICER'S CERTIFICATE. The President of FDC and its subsidiaries
shall have delivered to Purchasers a certificate to the effect that each of the
conditions specified above in Sections VIII(a), (b), (d), (e), (f), (g), (h),
and (j) is satisfied in all respects.
(Q) PRESIDENT'S CERTIFICATE. A certificate of the President of FDC,
certifying that FDC is not in violation or default without knowledge qualifier.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.1 Termination. This Agreement and each agreement contemplated
hereby may be terminated at any time prior to the Closing:
(A) MUTUAL CONSENT. By the mutual written consent of the Purchasers
and FDC.
(B) BREACH. By FDC if there has been a breach of any representation,
warranty or agreement on the part of the Purchasers set forth in this Agreement,
or by the Purchasers if there has been a breach of any representation, warranty,
covenant or agreement on the part of FDC set forth in this Agreement.
(C) NO CONSUMMATION. By either FDC or the Purchasers if the Purchase
Transaction shall not have been consummated on or before April 21, 1999, by
reason of the failure of any condition precedent under Article VIV (with respect
to Purchasers) or Article VIII (with respect to FDC), unless the failure of such
condition precedent results primarily from the party seeking to terminate being
in breach of any representation, warranty, or covenant contained in this
Agreement; provided, however, that if the consummation of the Purchase
Transaction requires Shareholder approval or consent, then such date shall
automatically be extended to sixty days from the date on which determination is
made that such Shareholder approval or consent is required, and provided further
that such date may be extended at any time upon mutual agreement of the Parties.
(D) LITIGATION. By either FDC or the Purchasers if any litigation or
proceeding has been instituted with a view of restraining or prohibiting
consummation of the transaction contemplated by this Agreement.
SECTION 10.2 Effect of Termination. In the event of termination of this
Agreement or any agreement contemplated hereby, or to be executed simultaneously
herewith, this Agreement or any such other agreements shall forthwith become
void and there shall be no liability or obligation hereunder or thereunder on
the part of any party hereto, except for liability of any party for breaches of
this agreement and liability under Section 24(d).
SECTION 10.3 Amendment. This Agreement may be amended by the parties hereto
at any time before or after approval hereof. This Agreement or any agreement
contemplated hereby may not be amended except by an instrument in writing signed
on behalf of each of the parties thereto.
29
SECTION 10.4 Extension; Waiver. At any time prior to the Closing
the parties hereto may, to the extent legally allowed, (a) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument signed on behalf of such party.
ARTICLE XI
INVESTMENT BANKING FEES
FDC and the Purchasers each represent that, except as described in the
referenced Letter, neither has employed any broker or agent or entered into any
agreement for the payment of any fees or compensation to any other person, firm
or corporation in connection with this transaction.
ARTICLE XII
INDEMNIFICATION AND CONTRIBUTION
SECTION 12.1 Indemnity. Subject to the conditions set forth below,
FDC agrees to indemnify and hold harmless the Purchasers, their members,
managers, officers, directors, partners, employees, agents, and counsel, and
each person, if any, who controls the Purchasers within the meaning of Section
15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage and expense whatsoever (which shall include, for all
purposes of this Article XII, but not be limited to, attorneys' fees and any and
all expense whatsoever incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation), arising out of,
resulting from, based upon, or in connection with any breach of any Material
representation, warranty, covenant, or agreement of FDC contained in this
Agreement. Notwithstanding anything to the contrary, FDC shall indemnify the
Purchasers for their proportionate share (based on the percentage of the total
outstanding Common Stock owned by the Purchasers) any Material taxes, tax costs,
assessments, penalties or interest incurred by FDC in conjunction with or as a
result of any acquisitions or other transactions entered into prior to the date
of this Agreement by FDC or its subsidiaries. The foregoing agreement to
indemnify shall be in addition to any liability FDC may otherwise have,
including liabilities arising under this Agreement. Any amount paid to
Purchasers under this Section 12 shall be grossed up by multiplying the amount
of any such claim by an amount equal to (i) one, plus (ii) (A) the number of
shares owned by Purchasers, divided by (B) the number of shares that are owned
by persons other than Purchasers. The Purchasers agree to indemnify and hold
harmless FDC, its officers, directors, partners, employees, agents, and counsel
and each person, if any, who controls FDC within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage, and expense whatsoever (which shall include, for all
purposes of this Article XII, but not be limited to, attorneys' fees and any and
all expense whatsoever incurred in investigating, preparing, or defending
against any litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in
30
settlement of any claim or litigation), arising out of, resulting from, based
upon, or in connection with any breach of any Material representation, warranty,
covenant, or agreement of Purchasers contained in this Agreement.
Except as otherwise agreed by the parties in Article XI hereof, (i)
FDC shall indemnify the Purchasers for any broker's or finder's fees which may
become payable as a result of any promise or contract which may have been made
by FDC to or with any such broker or finder and (ii) the Purchasers shall
indemnify FDC for any broker's or finder's fees which may become payable as a
result of any promise or contract which may have been made by the Purchasers to
or with any such broker or finder.
SECTION 12.2 Notice of Proceeding. If any action is brought
against FDC, the Purchasers or any of their members, managers, officers,
directors, employees, agents or counsel, or any controlling persons (an
"Indemnified Party" or collectively "Indemnified Parties"), in respect of which
indemnity may be sought against the other party (the "Indemnifying Party")
pursuant to the foregoing paragraph, such Indemnified Party or Parties shall
promptly notify the Indemnifying Party in writing of the institution of such
action (but the failure so to notify shall not relieve the Indemnifying Party
from any liability it may have) and the Indemnifying Party shall promptly assume
the defense of such action including the employment of counsel satisfactory to
such Indemnified Party or Parties and payment of expenses. Such Indemnified
Party or Parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party or Parties, unless (1) the employment of such counsel
shall have been authorized in writing by the Indemnifying Party in connection
with the defense of such action or (2) the Indemnifying Party shall not have
promptly employed counsel satisfactory to the Indemnified Party or Parties to
have charge of the defense of such action or (3) such Indemnified Party or
Parties shall have reasonably concluded that there may be one or more legal
defenses available to it or them or other indemnified parties which are
different from or additional to those available to the Indemnifying Party or (4)
the Indemnifying Party does not provide the Indemnified Party with evidence
reasonably acceptable to the Indemnified Party of that the Indemnifying Party
will have the financial resources to defend against the claim and fulfill its
indemnification obligations hereunder, such evidence to be provided within 5
business days after the Indemnified Party requests such evidence, (5) the claim
involves only money damages and does not seek an injunction or other equitable
relief, and (6) the Indemnifying Party conducts the defense of the claim
actively and diligently, in any of which events such fees and expenses shall be
borne by the Indemnifying Party and the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified Party or
Parties.
SECTION 12.3 Contribution. To provide for just and equitable
contribution if (i) an Indemnified Party makes a claim for indemnification
pursuant to the language set forth in Sections 12.1 and 12.2 above, but it is
found in a final judicial determination, not subject to further appeal, that
such indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case, or (ii) any
Indemnified Parties seek contribution under the 1933 Act, the 1934 Act, or
otherwise, then the parties shall contribute to any and all losses, liabilities,
claims, damages and expenses whatsoever to which any of them may be subject, in
accordance with the relative fault of the parties in connection with the facts
which result in such
31
losses, liabilities, claims, damages and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by FDC or the Purchasers, the parties' relative intent, access to information
and the opportunity to correct such statement, alleged statement, omission or
alleged omission. The parties agree that it would be unjust and inequitable if
the respective obligations of each of the parties for contribution were
determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages and expenses or by any other method of allocation
that does not reflect the equitable considerations referred to herein. No
persons guilty of a fraudulent misrepresentation within the meaning of Section
11(f) of the 1933 Act shall be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation.
SECTION 12.4 Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy any party may have for breach of
representation, warranty, or covenant.
ARTICLE XIII
NOTICES
Any notice given under this Agreement shall be deemed to have been
given sufficiently if in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, by receipt confirmed facsimile
transmission, or by tested telex, telegram or cable addressed as follows:
If to FDC: Factual Data Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and, if to the Purchasers, at such address as appears on Exhibit A hereto, or to
any other address or addresses which may hereafter be designated by any party by
notice given in such manner. All notices shall be deemed to have been given as
of the date of receipt.
32
ARTICLE XIV
CERTIFICATES OF OFFICERS AND DIRECTORS
The Purchasers and FDC shall provide to each other certificates at the
Closing verifying the representations and warranties made by each party hereto.
Any certificate or other document executed by any officer of FDC or the
Purchasers and delivered to the other party or their counsel shall be deemed a
representation and warranty by such officer on behalf of FDC or the Purchasers
as to the statements made therein.
ARTICLE XV
CONFIDENTIALITY
In connection with this Agreement, the Purchasers acknowledge that
they have received from FDC certain proprietary information, trade secrets,
financial statements and supporting information, together with statistics,
analyses, compilations, studies and other documents or records prepared by any
person including the Purchasers, their agents, advisors, affiliates or
representatives (collectively "Representatives") which contain or otherwise
reflect or are generated from such information (collectively the "Confidential
Material"). The Purchasers agree to take commercially reasonable measures to
ensure that the Confidential Material has not and will not be used other than in
connection with the purchase of the Shares. The Purchasers have and will make
all commercially reasonable efforts to safeguard the Confidential Material from
disclosure to anyone other than as permitted hereby. Without the prior written
consent of FDC, the Purchasers will not, except as required by law, and will
direct their representatives not to, disclose to any person the fact that the
Confidential Material has been made available to the Purchasers or that the
Purchasers have inspected any portion of the Confidential Material. The term
"person" as used herein shall be broadly interpreted to include without
limitation, any corporation, company, partnership and individual or group.
In the event that any Purchasers or any of their Representatives are
requested or required (by oral question or request for information or documents
in legal proceedings, interrogatories, subpoena, civil investigative demand or
similar process) to disclose any information supplied to such Purchaser in the
course of its dealings with FDC or its Representatives, it is agreed that any
such Purchaser will provide FDC with prompt notice of any request or requirement
so that either the Purchaser or FDC or both of them may seek an appropriate
protective order and/or, by mutual written agreement, waive the Purchaser's
compliance with the provisions of this Agreement. It is further agreed that if,
in the absence of a protective order or receipt of a waiver, any of the
Purchasers or any of their Representatives is nonetheless, in the reasonable
written opinion of their counsel, compelled to disclose information concerning
FDC to any court or else stand liable for contempt or suffer other censure, the
Purchasers or such Representative may make disclosure of such information to
such court. In any event, the Purchasers will not oppose action by, and will
cooperate (to the extent commercially reasonable) with, FDC to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded to such information.
The term "Confidential Material" does not include information (i)
which was known to the Purchasers or that the Purchasers had in their possession
prior to the disclosure of
33
confidential information by FDC hereunder, (ii) which becomes generally
available to the public other than as a result of a disclosure by the Purchasers
or their Representatives, (iii) which becomes available to the Purchasers on a
non-confidential basis from a source other than FDC or its Representatives,
provided that such source is not bound by a confidentiality agreement with FDC
or its Representatives or otherwise prohibited from transmitting the information
to the Purchasers by a contractual, legal or fiduciary obligation, or (iv) which
otherwise becomes known to the Purchasers in a manner which does not violate the
proprietary rights of FDC.
Any of the Confidential Material shall be the property of FDC and, if
the transactions, upon request of FDC, all such Confidential Material shall be
returned to FDC or furnished to FDC without the Purchasers retaining any copy
thereof. The obligation of Purchasers under this Article XV will terminate two
years after the Closing.
It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this Article XV by the Purchasers or their
Representatives. FDC shall be entitled to seek injunctive and any other such
relief as maybe necessary to enforce the terms of this Article XV in the event
of a breach by the Purchasers or their Representatives. Injunctive relief shall
not be deemed to be an exclusive remedy for the Purchasers' breach of this
Article XV, but shall be in addition to all of the remedies available at law or
equity to FDC.
ARTICLE XVI
COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be an original, but all of such
counterparts shall constitute one and the same instrument.
ARTICLE XVII
MERGER CLAUSE AND COSTS, FEES AND EXPENSES
This Agreement supersedes all prior agreements and understandings
between the parties, and may not be changed or terminated orally, and no
attempted change, termination or waiver of any of the provisions hereof shall be
binding unless in writing and signed by the parties hereto. Each party shall
pay its own expenses incident to the preparation, execution and delivery of this
Agreement and the consummation of the transactions described herein including,
without limitation, all fees of counsel, accountants and other professional fees
and expenses.
ARTICLE XVIII
SEVERABILITY
In the event that any provision of this Agreement is determined to be
partially or wholly invalid, illegal or unenforceable, then such provision shall
be deemed to be modified or restricted to the extent necessary to make such
provision valid, binding and enforceable or, if such a provision cannot be
modified or restricted in a manner so as to make such provision valid, binding
and enforceable, then such provision shall be deemed to be excised from this
Agreement and the
34
validity, binding effect and unenforceability of the remaining provisions of
this Agreement shall not be affected or impaired in any manner.
ARTICLE XIX
BENEFIT
The terms and conditions of this Agreement shall inure to the benefit
of, and shall be binding upon, the successors and assigns of the parties hereto,
and the persons and entities referred to in Article XI who are entitled to
indemnification or contribution and their respective successors, legal
representatives and assigns and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement, the Registration Rights Agreement, or the Letter or
any provision herein or therein contained.
ARTICLE XX
WAIVER
The failure of any party to insist upon the strict performance of any
of the provisions of this Agreement shall not be considered as a waiver of any
subsequent default of the same or similar nature. Time is of the essence in
this Agreement.
ARTICLE XXI
HEADINGS
The headings for the sections of this Agreement are inserted for
convenience in reference only and shall not constitute a part hereof.
ARTICLE XXII
SURVIVAL
The respective agreements, representations, warranties, covenants and
other statements of the Purchasers and FDC set forth in this Agreement shall
survive and remain in full force and effect for a period of fifteen months from
the Closing; provided that the representations in Sections 3(a), 3(e), and 3(g)
shall survive indefinitely and the representations in Sections 3(k) (Tax), 3(o)
(ERISA) and 3(r) (Environmental) shall survive until the expiration of all
statues of limitation, in each case regardless of any investigation or
inspection made on behalf of the Purchasers or FDC; notwithstanding the
foregoing, if the party seeking indemnification makes a written claim for
indemnification within such survival period, then the indemnifying party agrees
to indemnify the party seeking indemnification from and against the entirety of
any adverse consequences party seeking indemnification may suffer through and
after the date of the claim for indemnification (including any adverse
consequences the party seeking indemnification may suffer after the end of any
applicable survival period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach (or the alleged breach).
35
ARTICLE XXIII
GOVERNING LAW
This Agreement shall be governed by and construed according to the
laws of the State of Illinois, without giving effect to conflict of laws.
ARTICLE XXIV
MISCELLANEOUS
(A) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of FDC and the Purchasers;
provided, however, that any party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing party
will advise and consult with the other parties prior to making the disclosure).
(B) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the prior
written approval of the Purchasers and FDC; provided, however, that Purchasers
may (i) assign any or all of their rights and interests hereunder to one or more
of their affiliates and (ii) designate one or more of their affiliates to
perform their obligations hereunder.
(c) AMENDMENTS. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by FDC and the
Purchasers.
(D) EXPENSES. Each of the parties will bear its own costs and
expenses (including, without limitation, attorneys', accountants' and agents'
fees and disbursements) incurred in connection with this Agreement and the
transactions contemplated hereby; provided, however, FDC agrees to reimburse
Purchasers for all reasonable out-of-pocket expenses (including, without
limitation, attorneys', accountants' and agents' fees and disbursements)
incurred by Purchasers in connection with this proposed investment and in its
facilitation of the acquisition financing line, if either:
(i) Purchasers elect not to complete the purchase of
securities from FDC due to (A) the disclosure of materially adverse information
about FDC or its subsidiaries not known to Purchasers as of March 12, 1999
(which is the date of the letter of intent, which letter of intent was
countersigned by FDC on March 13, 1999) (the "Letter of Intent"), (B) a Material
adverse change in FDC's or its subsidiaries' condition (financial or otherwise)
from that reflected in its most recent financial statements, as had been
provided to Purchasers prior to March 12, 1999, (C) FDC's failure to comply with
the provisions of the Letter of Intent, the Term Sheet attached to the Letter of
Intent, or this Agreement, or (D) FDC's inability to obtain shareholder approval
of the transaction (to the extent required) within 60 days from which a
determination is made that such shareholder approval is required, or
36
(ii) FDC elects not to complete the issuance of securities to
Purchasers for any reason other than Purchasers' failure to comply in with the
provisions of the Letter of Intent, the Term Sheet that is attached to the
Letter of Intent, or this Agreement.
(E) SPECIFIC PERFORMANCE. Each of the parties acknowledges and
agrees that the other parties would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
agrees that the other parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter , in addition to any other remedy
to which they may be entitled, at law or in equity
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first above written.
▇▇▇▇▇ LLC
By: _____________________________
Name: _____________________________
Title: _____________________________
▇▇▇▇▇▇▇▇ FINANCIAL PARTNERS, L.P.
By: _____________________________
Name: _____________________________
Title: _____________________________
BCI GROWTH V, L.P.
By Glenpointe Associates V, LLC
General Partner
By: _____________________________
Name: _____________________________
Title: _____________________________
BCI INVESTORS, LLC
By: _____________________________
Name: _____________________________
Title: _____________________________
FACTUAL DATA CORP.
By: _____________________________
Name: _____________________________
Title: _____________________________
By: _____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _____________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXHIBITS
No. Description
--- -----------
A Schedule of Purchasers
B Registration Rights Agreement
C Confidentiality Agreement
D Investors Agreement
E Voting Agreement
EXHIBIT A
INFORMATION RELATING TO PURCHASERS
Number of Shares
Name and Address of Purchaser To be Purchased
----------------------------- ---------------
▇▇▇▇▇ LLC
c/o Continental Illinois Venture Corporation
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BCI Growth V, L.P.
c/o BCI Advisors, Inc.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BCI Investors, LLC
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Financial Partners, L.P.
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.▇.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FACTUAL DATA CORP.
FULLY DILUTED SHARES OUTSTANDING (3/9/99)
FULLY-DILUTED
ASSUMES ALL SHARES SHARES
EXERCISED OUTSTANDING
--------- -----------
Common Shares Outstanding 3,551,346 3,551,346
Warrants, $7.15 exercise price 1,380,000 24,866
Warrants, $9.15 exercise price 120,000
Option, IPO Underwriter, $7.04 exercise price 120,000 3,975
Options, 1997 Stock Incentive Plan (200,000
authorized)
10,000 shares at $5.60 10,000 2,309
5,000 shares at $6.50 5,000 536
17,000 shares at $5.60 17,000 3,925
--------- ---------
TOTAL 5,203,346 71.03% 3,586,958 62.83%
▇▇▇▇▇ ▇▇▇▇▇▇▇ Warrants, assumes $7.2812 exercise 61,803 0.84% 61,803 1.08%
price
Private Placement Common Shares at $7.2812 2,060,100 28.12% 2,060,100 36.09%
--------- ---------
Fully-diluted shares outstanding 7,325,249 100.00% 5,708,861 100.00%
Market Price as of 3/9/99 $7.2812
Assumes $15,000,000 Common Stock Private Placement
EXHIBIT C
CONFIDENTIALITY AGREEMENT
EXHIBIT D
INVESTORS AGREEMENT
EXHIBIT E
VOTING AGREEMENT
