EXHIBIT NO. 2
__________________________________________________________________
__________________________________________________________________
STOCK EXCHANGE AGREEMENT
BY AND AMONG
EQUIFAX PAYMENT SERVICES, INC.
EQUIFAX INC.
AND
GOLDLEAF TECHNOLOGIES, INC.
DAVID L. PETERSON,
B.G. WETHERINGTON FARMS, L.P. and
BOBBY G. WETHERINGTON,
December 18, 1997,
__________________________________________________________________
__________________________________________________________________
Page
1. DEFINITIONS........................................................... 1
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2. COVENANTS AND UNDERTAKINGS............................................ 5
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2.1 Transfer of Company Stock......................................... 5
2.2 Consideration for Transfer........................................ 5
2.3 Conduct of the Business of the Company Prior to the Closing Date.. 5
2.4 Consents and Approvals............................................ 7
2.5 Examination of Records............................................ 7
2.6 Standstill........................................................ 7
2.7 Post-Closing Purchase Price Adjustment............................ 8
2.8 Release by Stockholders and Former Stockholders................... 9
2.9 Stockholder Certifications........................................ 9
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS..... 10
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3.1 Organization and Standing........................................ 10
3.2 Authority and Status............................................. 10
3.3 Capitalization................................................... 10
3.4 Equity Investments............................................... 11
3.5 Liabilities and Obligations of the Company....................... 11
3.6 Taxes............................................................ 11
3.7 Ownership of Assets and Leases, Etc.............................. 12
3.8 Agreement Related to Other Instruments........................... 14
3.9 Absence of Changes............................................... 14
3.10 Litigation and Claims............................................ 16
3.11 Licenses and Permits; Compliance With Law........................ 16
3.12 Contracts, Etc................................................... 17
3.13 Computer Programs and Software................................... 19
3.14 Intellectual Property Matters.................................... 21
3.15 Labor Matters.................................................... 22
3.16 ERISA and Related Matters........................................ 22
3.17 Certain Payments................................................. 24
3.18 Customers........................................................ 25
3.19 Insurance........................................................ 25
3.20 Approvals........................................................ 25
3.21 Transactions with Affiliates..................................... 26
3.22 Exhibits......................................................... 26
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS..................... 26
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4.1 Authority......................................................... 26
4.2 Ownership of Shares............................................... 27
4.3 Agreement Related to Other Instruments............................ 27
4.4 Litigation and Claims............................................ 27
4.5 Company Representations.......................................... 27
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................... 27
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5.1 Organization and Standing....................................... 27
5.2 Corporate Power and Authority................................... 27
5.3 Agreement Does Not Violate Other Instruments.................... 28
5.4 Shares Acquired for Investment.................................. 28
5.5 Stock Will be Validly Issued.................................... 28
5.6 Statements True and Correct..................................... 28
6. ADDITIONAL AGREEMENTS OF THE PARTIES................................... 29
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6.1 Resignation of Directors and Officers........................... 29
6.2 Release by the Stockholders and Former Stockholders............. 29
6.3 Covenant Not to Compete......................................... 29
6.4 Employment Agreement............................................ 29
6.5 Stockholders Agreements......................................... 29
6.6 Cooperation..................................................... 29
6.7 Escrow Agreement................................................ 29
6.8 Certain Tax Matters............................................. 29
6.9 Registration Rights Agreement................................... 30
6.10 Investment Letter............................................... 30
6.11 Covenant With Respect to COBRA Obligations...................... 30
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.................. 31
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7.1 Representations True at Closing.................................. 31
7.2 Covenants of the Stockholders and the Company.................... 31
7.3 No Injunction Etc................................................ 31
7.4 Opinion of Counsel............................................... 31
7.5 Consents and Waivers............................................. 31
7.6 Regulatory Approvals............................................. 32
7.7 Absence of Adverse Changes....................................... 32
7.8 Employment Agreement............................................. 32
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE STOCKHOLDERS........... 32
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8.1 Representations True at Closing.................................. 32
8.2 Covenants of the Purchaser....................................... 32
8.3 Approvals........................................................ 32
9. CLOSING............................................................... 33
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9.1 Time and Place of Closing........................................ 33
9.2 Transactions at Closing.......................................... 33
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10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION........ 34
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10.1 Survival of Representations and Warranties of the Stockholders
and the Company; Indemnification................................. 34
10.2 Survival of Representations and Warranties of the Purchaser;
Indemnification.................................................. 36
10.3 Indemnification Procedure........................................ 36
10.4 Limits on Indemnification Obligation............................. 37
11. TERMINATION............................................................ 38
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11.1 Method of Termination............................................ 38
12. GENERAL PROVISIONS..................................................... 39
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12.1 Notices.......................................................... 39
12.2 Brokers.......................................................... 40
12.3 Further Assurances............................................... 40
12.4 Waiver........................................................... 40
12.5 Expenses......................................................... 40
12.6 Binding Effect................................................... 41
12.7 Headings......................................................... 41
12.8 Entire Agreement................................................. 41
12.9 Governing Law.................................................... 41
12.10 Counterparts..................................................... 41
12.11 Number and Gender................................................ 41
12.12 Exhibits Incorporated............................................ 41
12.13 Confidentiality; Public Announcements............................ 41
LIST OF EXHIBITS............................................................ 45
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STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT made this 18th day of December, 1997, by and
among Equifax Payment Services, Inc., a Delaware corporation ("Purchaser"),
EQUIFAX INC., a Georgia corporation ("Equifax"), GOLDLEAF TECHNOLOGIES, INC., a
Georgia corporation (the "Company"), DAVID L. PETERSON ("Peterson"), B.G.
WETHERINGTON FARMS, L.P., a Georgia limited partnership ("Wetherington Farms"),
and BOBBY G. WETHERINGTON ("B. Wetherington") (Peterson and Wetherington Farms
are collectively referred to herein as the "Stockholders").
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Stockholders own all of the issued and outstanding shares of
capital stock of the Company; and
WHEREAS, B. Wetherington, as general partner of Wetherington Farms and a
former stockholder and current executive officer and board member of the
Company, and otherwise, will directly and indirectly benefit from the sale of
the shares of capital stock of the Company by Wetherington Farms; and
WHEREAS, the parties hereto desire to enter into this Stock Exchange Agreement
pursuant to which all of the capital stock of the Company will be exchanged for
a certain number of shares of the common stock of Equifax Inc., the parent of
the Purchaser (such transaction hereinafter referred to as the "Exchange"), upon
the terms and subject to the conditions hereinafter set forth; and
WHEREAS, the parties hereto wish to effectuate the Exchange as a nontaxable
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended;
NOW, THEREFORE, in consideration of the premises and the mutual promises,
representations, warranties and covenants hereinafter set forth, the sufficiency
of which is hereby acknowledged by all parties (including, without limitation,
B. Wetherington), the parties hereto agree as follows:
1. DEFINITIONS.
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As used herein, the following terms shall have the following meanings
unless the context otherwise requires:
"Action" shall have the meaning set forth in Section 10.3.1 hereto.
"Agreement" shall mean this Stock Exchange Agreement.
"Average Price" shall mean the average closing price of Equifax Common
Stock as listed on the NYSE for the ten trading days preceding the Closing Date.
"B. Wetherington" shall mean Bobby G. Wetherington.
"Basket" shall have the meaning set forth in Section 10.4.2.
"Benefit Plans" shall have the meaning set forth in Section 3.16.1 hereto.
"Canned Software" shall mean the commercial computer software shown in
Exhibit 1(a), which is resold by the Company to the Company's customers without
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modification or integration into the Proprietary Software (except for
installation on a customer's hardware) and which is licensed by the owner or
licensor directly to the end user.
"Closing" shall mean the consummation of the transactions provided for in
this Agreement.
"Closing Date" shall mean the date on which the Closing occurs pursuant to
Section 9.1 hereof.
"Closing Date Balance Sheet" shall have the meaning set forth in Section
2.7.1 hereof.
"Company Common Stock" shall have the meaning set forth in Section 3.3
hereof.
"Company" shall mean Goldleaf Technologies, Inc., a Georgia corporation,
and any subsidiaries thereof.
"Complaining Person" shall have the meaning set forth in Section 3.13.6
hereto.
"Consideration Amount" shall mean Eight Million Six Hundred Thousand
Dollars ($8,600,000).
"Customer Agreements" shall mean all verbal and written contracts and
agreements with present customers of the Company.
"Developers" shall have the meaning set forth in Section 3.13.2 hereto.
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"Developer Agreements" shall have the meaning set forth in Section 3.13.2
hereto.
"Equifax" shall mean Equifax Inc., a Georgia corporation and the parent of
the Purchaser.
"Equifax Common Stock" shall mean unregistered shares of the common stock
of Equifax.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" shall mean The Bank of New York.
"Escrow Agreement" shall have the meaning set forth in Section 6.7 hereto.
"Escrowed Amount" shall have the meaning set forth in Section 2.2.2 hereto.
"Exchange" shall have the meaning set forth in the recitals hereto.
"Financial Statements" shall have the meaning set forth in Section 3.5
hereto.
"Former Stockholders" shall have the meaning set forth in Section 2.8
hereto.
"Indemnified Party" shall have the meaning set forth in Section 10.3.1
hereto.
"Indemnifying Party" shall have the meaning set forth in Section 10.3.1
hereto.
"Indemnifying Stockholders" shall mean, severally but not jointly, (i)
Peterson, on the one hand, and (ii) B. Wetherington and Wetherington Farms
(jointly and severally), on the other hand (notwithstanding the fact that B.
Wetherington does not directly own any shares of the capital stock of the
Company).
"Intellectual Property" of a Person shall mean all copyrights, patents,
trademarks, tradenames, service marks, moral rights and rights therein owned by
or licensed to such Person (as well as any applications, registration or
certificates for any of the foregoing) and all software (other than the
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Software), technology, know how, trade secrets, methodology, formulations,
inventions, discoveries, proprietary processes, schematic drawings, and all
intellectual property rights incorporated in the foregoing; provided, however,
that "Intellectual Property" shall not include the Software.
"Internal Revenue Code" or "Code" shall mean the Internal Revenue Code of
1986, as amended.
"Licensed Software" shall mean the commercial computer software
applications shown in Exhibit 1(b) as licensed to the Company (but not directly
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to the end user) for use in the development of the Proprietary Software or
integration into the Proprietary Software.
"Licensors" shall have the meaning set forth in Section 3.13.2 hereto.
"Net Assets" shall mean total assets minus total liabilities.
"NYSE" shall mean the New York Stock Exchange.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"Person" shall mean an individual or a corporation, partnership, limited
liability company, trust, estate, unincorporated organization,
association or other entity.
"Proprietary Software" shall mean the software shown in Exhibit 1(c), which
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includes all computer software applications, programs and/or solutions that have
been developed by or for the Company and the Licensed Software, and interfaces
developed by the Company to the Licensed Software, together with all user
documentation in the Company's possession or which has been conveyed to the
customers of Goldleaf and all files created by the use of the Proprietary
Software.
"Purchaser" shall mean Equifax Payment Services, Inc., a Delaware
corporation.
"Settlement Date" shall have the meaning set forth in Section 2.7.1 hereof.
"Software" shall mean the Proprietary Software and the Canned Software.
"Stock Price" shall mean $31.91.
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"Stockholders" shall mean, collectively, Peterson and Wetherington Farms,
L.P.
"Wetherington Farms" shall mean B.G. Wetherington Farms, L.P., a Georgia
limited partnership.
2. COVENANTS AND UNDERTAKINGS.
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2.1 Transfer of Company Stock. Subject to the terms and conditions
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hereinafter set forth, the Stockholders shall, at the Closing, sell, assign,
transfer, convey and deliver to the Purchaser, free and clear of all liens,
claims, charges, security interests and other encumbrances of any nature
whatsoever, all of the issued and outstanding shares of capital stock of the
Company (collectively, the "Purchased Stock").
2.2 Consideration for Transfer.
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2.2.1 Subject to Sections 2.2.2 and 2.7 hereof, in exchange for the
Purchased Stock, Equifax will issue and cause to be delivered to the
Stockholders Two Hundred Sixty Nine Thousand Five Hundred Eight (269,508) shares
of Equifax Common Stock; provided, however, that if the Average Price is less
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than $28.72 or more than $35.10, the number of shares of Equifax Common Stock to
be delivered to the Stockholders shall be determined by dividing the
Consideration Amount by the Average Price. No fractional shares of Equifax
Common Stock shall be issued. The Equifax Common Stock shares to be issued
hereunder shall be divided among the Stockholders according to each
Stockholder's relative equity interest in the Company. Exhibit 2.2.1, attached
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hereto and incorporated herein, lists the number of Equifax Common Stock shares
to be issued to each Stockholder.
2.2.2 The Stockholders shall, concurrently with their receipt thereof,
deliver an amount of the Equifax Common Stock shares received pursuant to this
Agreement having an aggregate value of Four Hundred Eighty Thousand Dollars
($480,000) (the "Escrowed Amount") to the Escrow Agent to be held, applied and
disbursed in accordance with Section 6.7 hereof and the Escrow Agreement. The
number of shares of Equifax Common Stock to be delivered to the Escrow Agent
pursuant to this Section 2.2.2 shall be determined by dividing the Escrowed
Amount by the Stock Price.
2.3 Conduct of the Business of the Company Prior to the Closing Date.
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Except with the consent in writing of Purchaser, and except as may be required
to effect the transactions contemplated by this Agreement, and except as set
forth on Exhibit 2.3, the Company shall, and each of the Stockholders shall
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cause the Company to, between the date of this Agreement and the Closing,
conduct and operate its business in the regular and ordinary course consistent
with past business practices. Without limiting the generality of the foregoing,
such parties shall, except as otherwise provided in this Agreement:
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2.3.1 use their commercially reasonable best efforts to preserve intact the
organization and goodwill of the Company and preserve the goodwill of customers,
vendors and others having business relations with the Company, which efforts
shall include, but not be limited to, the continuation of the Company's usual
and customary levels and standards of service and its usual and customary
billing and collection procedures and the payment of accounts payable;
2.3.2 maintain the properties of the Company in the same working order and
condition as such properties are in on the date of this Agreement, reasonable
wear and tear excepted and not make any capital expenditures in the aggregate in
excess of $25,000;
2.3.3 not sell, lease, mortgage, pledge or otherwise dispose of any of the
Company's assets or properties except for transactions in the ordinary and
regular course of business;
2.3.4 not make or permit any change in the Articles of Incorporation or
Bylaws of the Company, or in its authorized, issued or outstanding securities;
2.3.5 not sell or issue any shares of the Company's capital stock or any
class or grant any stock options, warrants, conversion or other rights to
acquire or purchase any security of the Company, sell or issue any security
convertible into such securities, or grant or enter into, any agreements,
commitments, arrangements or understandings of any kind, contingent or
otherwise, to sell or issue any such securities, or purchase, redeem, retire or
otherwise acquire any such securities, grant any bonuses (other than bonuses
heretofore agreed to by the parties and disclosed in this Agreement and the
Exhibits hereto), or agree to do any of the foregoing and the Company shall not
declare, set aside or pay any dividend in respect of its securities;
2.3.6 not make any changes in the Company's accounting methods;
2.3.7 not take any action or permit any action to be taken that would
materially and adversely affect any of the assets or the business of the Company
as a going concern, or that would impair the ability of the Stockholders or the
Company to consummate the transactions contemplated by this Agreement;
2.3.8 not increase or otherwise change the rate or nature of the
compensation (including but not limited to wages, salaries, benefits, bonuses
and employer contributions to 401(k) plans) which is paid or payable to any
employee, officer, director or consultants or independent contractors of the
Company except in the ordinary course of business in accordance with past
practices or pursuant to existing compensation and benefit plans, practices and
arrangements which have been disclosed in writing to Purchaser, and not enter
into, renew or allow the renewal of, any material employment or consulting
agreement or other contract or arrangement with respect to the performance of
personal services;
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2.3.9 promptly deliver to Purchaser all regularly prepared unaudited
financial statements of the Company, in the format historically utilized
internally, as soon as available;
2.3.10 not permit the Company to enter into any material contract,
commitment, arrangement or transaction of the type described in Section 3.12
hereof nor to modify, amend or waive any material provision of any contract,
instrument or agreement described on Exhibit 3.12 hereto except in the ordinary
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course consistent with past practice; and
2.3.11 promptly advise Purchaser, in writing, of any matters arising or
discovered after the date of this Agreement which, if existing or known at the
date hereof, would be required to be set forth or described in this Agreement or
the Exhibits hereto.
2.4 Consents and Approvals. The Company and each Stockholder agrees to
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apply for and obtain the waiver, consent and approval of all persons or entities
whose waiver, consent or approval is required in order to consummate the
transactions contemplated by this Agreement, or is required by any agreement,
lease, instrument, arrangement, judgment, decree, order or license to which any
Stockholder or the Company is a party or subject on the Closing Date (including,
without limitation, the consent of any customer, licensor or supplier of the
Company, if required), and which would prohibit, or require the waiver, consent
or approval of any Person to such transaction or under which, without such
waiver, consent or approval, such transaction would constitute an occurrence of
default under the provisions thereof, result in the acceleration of any
obligation thereunder, or give rise to a right of any party thereto to terminate
its obligations thereunder; provided, that neither the Company nor any
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Stockholder shall make any agreements or understandings affecting the Company as
a condition for obtaining any such waivers, consents or approvals, except with
the prior written consent of Purchaser. All obtained written waivers, consents
and approvals shall be produced at Closing in form and content reasonably
satisfactory to Purchaser.
2.5 Examination of Records. During the period prior to the Closing, the
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Company and each Stockholder shall allow Purchaser, its counsel and other
representatives full access during normal business hours to all the books,
records, files, documents, assets, properties, contracts and agreements of the
Company and shall furnish Purchaser, its officers and representatives with all
information concerning the affairs of the Company which may be reasonably
requested. Purchaser agrees that it will use its best efforts to prevent their
review of the foregoing materials from causing any disruption of the business of
the Company.
2.6 Standstill. During the period commencing on the date of this Agreement
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and terminating at the Closing or the termination of this Agreement pursuant to
Section 11.1 hereof, neither the Company nor any Stockholder nor any of their
affiliates shall, directly or indirectly, solicit, encourage or initiate any
discussions with, or negotiate or otherwise deal with, or provide information
to, any person or entity other than Purchaser concerning, or enter into any
agreement in respect of, (a) any merger, sale of substantially all of the assets
7
or business or any similar transaction involving or respecting the Company, or
(b) any sale of any of the outstanding capital stock of the Company; provided,
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however, that upon prior notice to the Purchaser, the Stockholders may make
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transfers for estate planning purposes and provided further that the recipient
of such shares shall execute this agreement as a stockholder.
2.7 Post-Closing Purchase Price Adjustment.
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2.7.1 Following the Closing, Purchaser shall prepare a balance sheet of the
Company, dated as of the Closing Date (the "Closing Date Balance Sheet"), with
supporting schedules thereto, in accordance with generally accepted accounting
principles and in the format of and consistent with the unaudited balance sheet
dated August 31, 1997 described in Section 3.5.1; provided, however, that the
Closing Date Balance Sheet shall include all adjusting journal entries necessary
to make it consistent with the Audited Financial Statements. Purchaser shall
cause the Closing Date Balance Sheet to be delivered to the Stockholders on or
prior to the date ninety (90) days subsequent to the Closing Date (the
"Settlement Date").
2.7.2 On the tenth day following the Settlement Date, the Stockholders shall
pay to the Purchaser, as an adjustment to the purchase price payable pursuant to
Section 2.2.1 hereof, unless the Stockholders wish to dispute any matter arising
out of the Closing Date Balance Sheet in the manner set forth below, Equifax
Common Stock worth, in the aggregate, the amount by which Net Assets on the
Closing Date Balance Sheet is less than $201,000. The parties acknowledge and
agree that the obligation of Stockholders under this Section 2.7.2 shall not be
limited by the Escrowed Amount and Purchaser shall have no obligation to apply
any of the Escrowed Amount to satisfy such obligation of Stockholders.
2.7.3 In the event that the Stockholders wish to dispute any matter arising
out of the Closing Date Balance Sheet, the Stockholders shall within ten (10)
days of receipt of the Closing Date Balance Sheet give written notice to
Purchaser (in accordance with Section 12.1 hereof) of such dispute and the
reason(s) therefor. The Stockholders and Purchaser shall attempt to resolve
such dispute within thirty (30) business days after receipt by Purchaser of such
notice, and in the event Purchaser and the Stockholders fail to resolve such
dispute within said period, the parties agree that the independent certified
public accounting firm of Arthur Andersen LLP (or any other independent
certified public accounting firm that shall be mutually agreed upon by such
parties) shall be employed to resolve such dispute as soon as reasonably
practicable, that any determination of such accounting firm as to the Closing
Date Balance Sheet shall be binding upon the parties hereto. In the event
Arthur Andersen LLP or any other accounting firm is employed, the costs of any
such independent accounting firm shall be divided equally among the parties
hereto. In the event an accounting firm is employed to resolve the dispute, all
amounts due hereunder shall be paid, in the manner set forth above, on or prior
to the fifth business day following the final determination of such accounting
firm.
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2.8 Release by Stockholders and Former Stockholders. Each Stockholder and
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former stockholder of the Company ("Former Stockholder") shall deliver at the
Closing to Purchaser an executed release, in the form and substance of Exhibit
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2.8(a), in which each Stockholder and Former Stockholder, except to the extent
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provided in Exhibit 2.8(b), completely and irrevocably releases the Company from
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any and all duties and obligations owed by the Company to such Stockholder as of
the Closing Date, and for any claims or possible claims, whether known or
unknown, foreseen or unforeseen, and the consequences thereof, that such
Stockholder has, or may have, or may claim to have, against the Company or any
of the Assets. The Former Stockholders are listed on Exhibit 2.8(c) hereto.
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2.9 Stockholder Certifications. Each Stockholder, by executing this
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Agreement, hereby certifies, represents and warrants and covenants to Purchaser,
with respect to the transactions contemplated by this Agreement, that:
(a) such Stockholder is not relying upon any representation or warranty
by Equifax, Purchaser, its affiliates, representatives and agents, or
anyone else, in connection with his decision to acquire Equifax Common
Stock hereunder, excepting only such representations and warranties
specifically set forth in this Agreement;
(b) such Stockholder has such knowledge and experience in financial and
business matters that he is capable of evaluating the risks and merits of
the transactions contemplated by this Agreement, including, without
limitation, an investment in the Equifax Common Stock deliverable to him;
(c) such Stockholder has received, reviewed and had adequate
opportunity to inquire respecting the Equifax annual report, proxy
statement and other reports delivered hereunder to him; and
(d) such Stockholder is an "accredited investor," as such term is
defined in the 1933 Act.
2.10 Registration Rights Agreement. At the Closing, Equifax and the
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Stockholders shall enter into a Registration Rights Agreement in the form of
Exhibit 2.10 hereto.
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2.11 Investment Letter. At the Closing, each Stockholder shall execute and
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deliver to Equifax an Investment Letter in the form of Exhibit 2.11 hereto.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.
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The Company and the Stockholders, jointly and severally, represent and
warrant to the Purchaser as follows:
3.1 Organization and Standing.
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3.1.1 The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Georgia and has the full power and
authority (corporate and otherwise) to carry on its business in the places and
as it is now being conducted and to own and lease the properties and assets
which it now owns or leases.
3.1.2 The Company is duly qualified and/or licensed to transact business as a
foreign corporation in the jurisdictions listed on Exhibit 3.1 hereto and is in
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good standing in each such jurisdiction. The character of the property owned or
leased by the Company and the nature of the business conducted by the Company do
not require it to be qualified or licensed in any other jurisdiction, except for
jurisdictions in which the failure to be so qualified or licensed will not have,
individually or in the aggregate, a materially adverse effect on the business,
assets, operations or financial condition of the Company.
3.2 Authority and Status. The execution, delivery and performance by the
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Company of this Agreement and each and every agreement, document and instrument
provided herein have been duly authorized and approved by all necessary
corporate action on the part of the Company. This Agreement and each agreement,
document and instrument provided for herein constitute or will, when executed
and delivered, constitute the legal, valid and binding obligations of the
Company and the Stockholders enforceable against each of them in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, applicable equitable principles, or
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally. Attached hereto as Exhibits 3.2(a) and 3.2(b), respectively,
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are true, correct and complete copies of the Articles of Incorporation, as
amended, and Bylaws, as amended, of the Company. The minute books of the
Company, true, correct and complete copies of which have previously been
delivered to Purchaser, contain accurate and complete minutes of all meetings
of, and accurate and complete consents to all actions taken without meetings by,
the Board of Directors (and any committee thereof) and the stockholders of the
Company since the formation of the Company.
3.3 Capitalization. The entire authorized capital stock of the Company
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consists of 100,000 shares of common stock, no par value ("Company Common
Stock"), of which 1,000 shares are issued and outstanding. All such shares of
Company
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Common Stock are owned of record by the Stockholders in the manner set
forth on Exhibit 3.3(a) hereto. All of such outstanding shares of the Company
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have been duly authorized and validly issued, and are fully paid and non-
assessable. All of such issued and outstanding shares of Company Common Stock
were offered and sold in compliance with all applicable state and Federal
securities laws, rules and regulations. There are no outstanding options,
warrants, calls, commitments or plans by the Company to issue any additional
shares of its capital stock, or to pay dividends on such shares, or to purchase,
redeem or retire any outstanding shares of its capital stock, nor are there
outstanding any securities or obligations that are convertible into or
exchangeable for any shares of capital stock of the Company. There are no stock
appreciation rights, phantom stock or similar rights in existence with respect
to the Company. There has been no change in the equity interest of the capital
stock of the Company in contemplation of this Exchange.
3.4 Equity Investments. The Company does not own, of record or beneficially,
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either directly or indirectly, any capital stock or other equity or ownership or
proprietary interest in any Person.
3.5 Liabilities and Obligations of the Company.
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3.5.1 Attached hereto as Exhibit 3.5.1 are true, correct and complete copies
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of the Company's audited balance sheet and the related statements of earnings
and retained earnings and cash flows for the Company's fiscal years ended
December 31, 1994, 1995 and 1996 (collectively, the "Audited Financial
Statements"), and its unaudited balance sheet as of August 31, 1997 and the
related statements of earnings and retained earnings for the eight month period
then ended (collectively, the "Interim Financial Statements", and together with
the Audited Financial Statements, the "Financial Statements"). The Financial
Statements are complete, fairly present the financial condition and results of
operations of the Company as of the dates and for the periods thereof, and,
except as set forth in Exhibit 3.5.1, have been prepared in accordance with
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generally accepted accounting principles consistently applied.
3.5.2 The Company has no liability or obligation (whether accrued, absolute,
contingent or otherwise), except for (i) the liabilities and obligations of the
Company that are disclosed in the Interim Financial Statements on Exhibit 3.5.1
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hereto, to the extent and in the amounts so disclosed, (ii) liabilities and
obligations incurred or accrued in the ordinary course of business since June
30, 1997 and which do not, either individually or in the aggregate, have a
materially adverse effect on the business, assets, operations, prospects or
financial condition of the Company, and (iii) liabilities listed on Exhibit
-------
3.5.2.
- -----
3.6 Taxes. Except as described on Exhibit 3.6, the Company has, as of the
----- -----------
date hereof, and will have prior to the Closing Date, timely and accurately
filed all federal, state, foreign and local tax returns and reports required to
be filed by it prior to such date, and has timely and accurately paid or made
adequate provision for, or prior to the Closing Date will timely pay or make
adequate provision for, all taxes that are due and payable for all periods
through and including the Closing Date, including, without limitation, all
income, property, sales, intangible, use, franchise, added value, social
security, withholding or other payroll related taxes and all interest and
penalties thereon, whether disputed or not. All deposits required to be made by
the Company with respect to employees' withholding taxes have been
11
duly made. There are, and on the Closing Date will be, no unpaid taxes,
additions to tax, penalties, or interest payable by the Company or by any other
Person that are or could become a lien on any asset, or otherwise adversely
affect the business, properties or financial condition, of the Company. The
balance sheet contained in the Financial Statements fully and properly reflects,
as of the date thereof, the liabilities of the Company for all accrued taxes,
additions to tax, penalties and interest. Except as described on Exhibit 3.6,
-----------
the Company is not, nor will it become, subject to any additional taxes,
interest, penalties or other similar charges as a result of its filing or
failure to file timely or accurately, as required by applicable law, any such
tax return or to pay timely any amount required to be paid with respect thereto,
including, without limitation, any such taxes, interest, penalties or charges
resulting from the obtaining of an extension of time to file any return or to
pay any tax. No assessments or notices of deficiency or other communications
have been received by the Company with respect to any such return which has not
been paid, discharged, or fully reserved in the Interim Financial Statements,
and no amendments or applications for refund have been filed or are planned with
respect to any such return. The federal income tax liability of the Company for
all of its taxable years ending prior to and including the taxable year ended
December 31, 1993 have been closed as to deficiencies and refund of taxes by
applicable statutes of limitations. There are no agreements between the Company
and any taxing authority, including, without limitation, the Internal Revenue
Service, waiving or extending any statute of limitations with respect to any tax
return, and it has not filed any consent under Section 341(f) of the Internal
Revenue Code.
3.7 Ownership of Assets and Leases, Etc.
------------------------------------
3.7.1 Asset and Lease List. Exhibit 3.7 attached hereto contains a true,
-------------------- -----------
correct and complete list and brief description of all material items of
personal property owned or leased by the Company and of all real property used
or leased by the Company. The Company does not own and has never owned any real
property. Exhibit 3.7 identifies with particularity the real properties and
-----------
material personal properties leased by the Company and (a) all leases or
agreements under which the Company is lessor of such property and (b) all leases
or agreements under which the Company is lessee of or holds or operates any such
property, real or personal. Such assets, leases and agreements are sufficient
to enable the Company to conduct its business in the ordinary course. Exhibit
-------
3.7 also contains a list of all bank accounts, safe deposit boxes (and the
- ---
contents thereof) and powers of attorney of the Company and of all Persons
authorized to act with respect thereto. The Company has good and marketable
title to all of its properties and assets, including those listed and described
in Exhibit 3.7, in each case, free and clear of all liens, claims, charges,
-----------
options, forfeitures, rights of seizure, rights of tenants or other
encumbrances, except as specifically disclosed or reserved against in the
Financial Statements or on Exhibit 3.7 (to the extent and in the amounts so
-----------
disclosed or reserved against) and except and for liens arising from current
taxes not yet past due. Except pursuant to this Agreement, neither the Company
nor any Stockholder is a party to any contract or obligation whereby there has
been granted to any Person an absolute or contingent right to purchase, obtain
or acquire any rights in any of the assets, properties or operations of the
Company.
12
3.7.2 Enforceability of Leases. Each of the leases and agreements described
------------------------
in Exhibit 3.7 is in full force and effect and constitutes a legal, valid and
-----------
binding obligation of the respective parties thereto, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, applicable equitable principles or
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally. There is not under any of such leases or agreements existing
any default of the Company or, to the knowledge of the Company and the
Stockholders, of any of the other parties thereto (or event or condition which,
with notice or lapse of time, or both, would constitute a default). No consent
of any other party to any of such leases or agreements to the consummation of
the transactions contemplated by this Agreement is required for any of such
leases or agreements to remain in full force and effect following the Closing.
3.7.3 Operating Condition. All machinery and equipment owned or leased by
-------------------
the Company and used in the conduct of the Company's business are in good
operating condition and state of repair, subject only to ordinary wear and tear
which is not such as to affect adversely the operation of the business as
presently conducted.
3.7.4 No Notice of Violation. Neither the Company nor any Stockholder has
----------------------
received any notice of violation, and the Company and the Stockholders do not
otherwise have knowledge of violation, of any applicable zoning regulation,
ordinance or other law, regulation or requirement relating to any of the
Company's operations and properties, whether owned or leased, and there is no
such violation or grounds therefor which could adversely affect the business,
goodwill or financial condition of the Company or the operation of the business
as presently conducted.
3.7.5 Accounts Receivable.
-------------------
(i) All of the accounts receivable of the Company shown on the
Financial Statements or thereafter acquired (including, but not limited to, the
accounts receivable on the books of the Company as of the Closing Date) reflect
actual transactions and the granting of credit to customers in a manner
consistent with the past practices of the Company, arose in the ordinary course
of business, and are not subject to offset or deduction. All of the accounts
receivable of the Company have been collected, or will be collected (without
recourse to any judicial proceedings), within ninety (90) days of the date
incurred at the aggregate gross recorded amounts thereof. There are no facts or
circumstances known to the Company or the Stockholders which would prevent the
work-in-process of the Company from maturing in due course into collectible
accounts receivable.
(ii) The Company has complete and correct copies of all instruments,
documents and agreements evidencing all of its accounts receivable and of all
instruments, documents or agreements creating security therefor. Exhibit
-------
3.7.5(ii) contains a complete and accurate list of all such instruments,
- ---------
documents and agreements creating security for such accounts receivable.
13
3.8 Agreement Related to Other Instruments. Except as set forth on Exhibit
-------------------------------------- -------
3.8, the execution and delivery of this Agreement by the Company and the
- ---
Stockholders do not, and the consummation of the transactions contemplated
hereby will not, violate any provision of the Articles of Incorporation, as
amended, or Bylaws, as amended, of the Company or violate or constitute an
occurrence of default under any provision of, or conflict with, or result in
acceleration of any obligation under, or give rise to a right by any party to
terminate its obligations under, any mortgage, deed of trust, conveyance to
secure debt, note, loan, lien, lease, agreement or instrument, or any order,
judgment, decree or other arrangement to which the Company is a party or by
which it is bound or its assets are affected.
3.9 Absence of Changes. Since December 31, 1996, the Company has not,
------------------
except as specifically disclosed on Exhibit 3.9 attached hereto:
-----------
3.9.1 transferred, assigned or conveyed any of its assets or business or
entered into any transaction or incurred any liability or obligation, other than
in the ordinary course of its business and consistent with past practice;
3.9.2 suffered any adverse change in its business, operations, or financial
condition or become aware of any event which may result in any such adverse
change, the effect of which has had or could have an adverse effect on the
assets, business or financial condition of the Company;
3.9.3 written off as uncollectible any notes or accounts receivable or any
portion thereof, other than in the ordinary course of business;
3.9.4 suffered any destruction, damage or loss to property (casualty or
other), whether or not covered by insurance;
3.9.5 suffered, permitted or incurred the imposition of any lien, charge,
encumbrance (which as used herein includes, without limitation, any mortgage,
deed of trust, conveyance to secure debt or security interest) or claim upon any
of its assets, except for any current year lien with respect to personal taxes
not yet past due;
3.9.6 committed, suffered, permitted or incurred any default in any
material liability or obligation;
3.9.7 made or agreed to any material adverse change in the terms of any
contract or instrument to which it is a party;
3.9.8 waived, canceled, sold or otherwise disposed of, for less than the
face amount thereof, any material claim or right it has against others;
3.9.9 (a) disposed of or permitted to lapse, or otherwise failed to
preserve then existing exclusive rights, if any, of the Company to use any
(i) patent,
14
trademark, trademark registration, logo, assumed name, trade name,
copyright or copyright registration, or (ii) any patent, trademark, trade name
or copyright application, (b) disposed of or permitted to lapse any license,
permit or other form of authorization, or any trade name, or (c) disposed of or
disclosed to any Person any trade secret, formula or process;
3.9.10 made any change in any method of accounting or accounting practice;
3.9.11 declared, promised or made any distribution or other payment to any
Stockholder (other than compensation payable in the ordinary course to employees
of the Company consistent with past practice), or issued any additional shares
or rights, options or calls with respect to its shares, or redeemed, purchased
or otherwise acquired any of its shares, or made any change whatsoever in its
capital structure;
3.9.12 increased or changed, or agreed to increase or change, its obligation
for any payment for, any contribution or other amount to, or with respect to,
any employee benefit plan, or paid any bonus to, or granted any increase in the
compensation of, its directors, officers, agents or employees, or made any
increase in the pension, retirement or other benefits of its directors,
officers, agents or other employees;
3.9.13 paid, loaned or advanced any amount to or in respect of, or sold,
transferred or leased any properties or assets (whether real, personal, mixed,
tangible or intangible) to, or entered into any agreement, arrangement or
transaction with, any Stockholder, any of the officers or directors of the
Company, or any affiliate or associate of any of them, or any business or entity
in which any Stockholder or the Company or any affiliate or associate of either
of them has any direct or indirect interest, except for compensation to the
officers and employees of the Company or any Stockholder at rates not exceeding
the rates of compensation in effect as of August 31, 1997;
3.9.14 committed, suffered, permitted or incurred any transaction or event
which would increase its tax liability for any prior taxable year;
3.9.15 entered into any lease of real property or material lease of personal
property;
3.9.16 incurred any other liability or obligation or entered into any
transaction other than in the ordinary course of business;
3.9.17 terminated or amended or suffered the termination or amendment of, or
failed to perform in all material respects all of its obligations or suffered or
permitted any default to exist under any contract, lease, agreement or license;
15
3.9.18 received any notices that any supplier or customer has taken or
contemplates any steps which could materially and adversely disrupt the business
relationship of the Company with said supplier or customer; or
3.9.19 agreed, whether in writing or otherwise, to take any action described
in this Section 3.9.
3.10 Litigation and Claims. Except as otherwise set forth in Exhibit 3.10
--------------------- ------------
hereto, there is no suit, action, proceeding, claim or investigation pending or
threatened against or affecting the Company. There exists no basis or grounds
for any such suit, action, proceeding, claim or investigation. None of the
items described in Exhibit 3.10, singly or in the aggregate, if pursued and/or
------------
resulting in a judgment or decision against the Company, would have a material
adverse effect on the assets, business, goodwill or financial condition of the
Company or the ability of any party to consummate the transactions contemplated
hereby.
3.11 Licenses and Permits; Compliance With Law.
-----------------------------------------
3.11.1 The Company holds all licenses, certificates, permits, franchises and
rights from all appropriate foreign, domestic, federal, state, county, municipal
or other public authorities necessary for the conduct of its business. Except
as set forth in Exhibit 3.11, the Company is presently conducting its business
------------
so as to comply in all respects with all applicable foreign, domestic, federal,
state, and local statutes, ordinances, rules, regulations and orders of any
governmental authority and has not undertaken, directly or indirectly, any
action that would violate any provision of the Foreign Corrupt Practices Act of
1977, as amended, or any regulations established or promulgated thereunder.
Except as noted in Exhibit 3.11, the Company is not presently charged with or
------------
under governmental investigation with respect to, any actual or alleged
violation of any statute, ordinance, rule or regulation, or presently the
subject of any pending or threatened adverse proceeding by any regulatory
authority having jurisdiction over its business, properties or operations and
the Stockholders have no knowledge of any grounds or basis for any of the
foregoing. Neither the execution nor delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will result in the
termination of any license, certificate, permit, franchise or right held by the
Company and all such licenses, certificates, permits, franchises and rights will
remain vested in and inure to the benefit of the Company after the consummation
of the transactions contemplated by this Agreement.
3.11.2 Without limiting the generality of the foregoing Section 3.11.1, the
Company has obtained all licenses, certificates, permits, franchises and rights
which are required under federal, foreign, state or local laws relating to
public health and safety, worker health and safety and pollution or protection
of the environment, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants or hazardous or toxic
substances into ambient air, surface water, groundwater or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
16
disposal, transport or handling of pollutants, contaminants or hazardous or
toxic substances. The Company is in compliance in all respects with all terms
and conditions of the required licenses, certificates, permits, franchises and
rights and is also in compliance in all respects with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any federal, foreign, state or local law
or any rule, regulation, code, plan, order, decree or judgment relating to
public health and safety, worker health and safety and pollution or protection
of the environment. Neither the Company nor any Stockholder has received notice
or is otherwise aware that certain facts, events or conditions, interfere with
or prevent the Company's continued compliance with, or give rise to any common
law or legal liability under any law or regulation related to, the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant or hazardous or toxic substance.
3.12 Contracts, Etc. Exhibit 3.12 hereto consists of (a) a true, correct
--------------- ------------
and complete list of all contracts, agreements and other instruments (including
insurance policies) to which the Company is a party; provided, that no contract,
--------
agreement or instrument involving payments or potential payments by the Company
of less than $5,000 per year need be disclosed ("Immaterial Contracts"), and;
(b) a true, correct and complete set of the standard forms used for Customer
Agreements together with a description of any material deviations from such
standard forms, and a description of all special pricing arrangements and rebate
programs between the Company and its customers. The Company has made available
a true and complete copy of each such contract, agreement or instrument, or a
summary of oral agreements to which the Company is a party, including the
Customer Agreements. Except as specifically set forth and in detail described
in Exhibits 3.12, 3.13, 3.16 and 3.19 and except for Immaterial Contracts, the
------------- ---- ---- ----
Company is not a party or subject to, whether oral or written, any of the
following:
3.12.1 any contracts, commitments or agreements, the consummation or
performance of which would, either singly or in the aggregate, have an adverse
impact upon their business, operations or financial condition;
3.12.2 any contract or commitment which requires services to be provided
or performed by the Company or which authorizes others to perform services for,
through or on behalf of the Company;
3.12.3 any contract or commitment involving an obligation which cannot
be performed or terminated within thirty (30) days from the dates as of which
these representations are made;
3.12.4 any lease, rental agreement or other contract or commitment
affecting the ownership or leasing of, title to or use of any interest in real
or personal property;
17
3.12.5 any note receivable;
3.12.6 any contract or commitment which is outside of the normal,
ordinary and usual requirements of its businesses;
3.12.7 any franchise agreement;
3.12.8 any employment contract or arrangement which is not terminable
by them within fourteen (14) days without payment of any amount for any reason
whatsoever, or for any continuing payment of any type or nature, including,
without limitation, any bonuses;
3.12.9 any plan or other arrangement providing for life insurance,
disability insurance, medical insurance, dental insurance, pensions, stock
rights, distributions, options, deferred compensation, retirement payments,
profit sharing, medical reimbursements or other benefits for officers or other
employees;
3.12.10 any contract, agreement, understanding or arrangement
restricting the Company from carrying on its businesses anywhere in the world;
3.12.11 any instrument or arrangement evidencing or related to
indebtedness for money borrowed or to be borrowed, whether directly or
indirectly, by way of purchase money obligation, guaranty, subordination,
conditional sale, lease-purchase, or otherwise;
3.12.12 any contract with any labor organization;
3.12.13 any policy of life, fire, liability, medical or other form of
insurance;
3.12.14 any order or written approval of any federal, state or local
regulatory agency required to conduct their businesses; or
3.12.15 any contract or agreement, not of the type covered by any of the
other items of this Section 3.12, which is not in the ordinary course of
business or which has a material adverse impact on the business or assets of
the Company.
All of the contracts, agreements, policies of insurance or instruments
described in Exhibits 3.12, 3.13, 3,16 and 3.19 hereto are valid and binding
------------- ---- ---- ----
upon the Company and the other parties thereto, and are in full force and effect
and constitute legal, valid and binding obligations of the respective parties
thereto, enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, applicable equitable principles or similar laws from time to time in
effect affecting the enforcement of creditors' rights generally, and the Company
has not,
18
and to the best of the Company's and the Stockholders' knowledge, no other party
to any such contract, agreement or instrument has, breached any provision of, or
is in default in any respect (including any event or condition which, with
notice or lapse of time, or both, would constitute a default) under, the terms
thereof; and there are no existing facts or circumstances known to the Company
or any Stockholder which would prevent the work in process of the Company or its
contracts and agreements from maturing in due course into collectible accounts
receivable. No consent of any other party to any of such contracts, agreements
or instruments to the consummation of the transactions contemplated hereby is
required for any of such contracts, agreements or instruments to remain in full
force and effect following the Closing.
3.13 Computer Programs and Software.
------------------------------
3.13.1 The Proprietary Software performs in accordance with the user
documentation included in or provided with the Proprietary Software and is free
of known defects in programming and operation, which, individually or in the
aggregate, would have a material adverse effect on the utility or functionality
of the Proprietary Software to perform in accordance with the specifications set
forth in such user documentation. As of the Closing, the Company will have made
available to Purchaser complete and correct copies of all user and technical
documentation related to the Proprietary Software, a list of which is attached
to Exhibit 3.13 hereto.
------------
3.13.2 No employee of the Company is, or is now expected to be, in
default under any term of any employment contract, agreement or arrangement
relating to the Proprietary Software or any noncompetition arrangement, or any
other contract or any restrictive covenant relating to the Proprietary Software
or its development or exploitation. Except for the Licensed Software, the
Proprietary Software (and all prior versions, modifications, and releases
thereof) was developed solely and exclusively by the employees, consultants and
independent contractors of the Company listed on Exhibit 3.13 (the "Developers")
------------
during the time the Developers were employees, consultants or independent
contractors of the Company, and such Proprietary Software does not include any
inventions of the Developers made prior to the time such Developers became
employees, consultants or independent contractors of the Company nor any
intellectual property of any previous employer of such Developer, except for
commonly used types of commercial software. Except as set forth on Exhibit 3.13,
the Company has provided to Purchaser all employment contracts, independent
contractor agreements, invention assignment agreements, noncompete agreements
and confidentiality agreements between the Company, any affiliate of the
Company, and/or any predecessor in interest of the Company, on the one hand, and
each Developer, on the other hand, and/or any other documents (collectively, the
"Developer Agreements") evidencing that the Developers have assigned and
released any and all of their respective rights to the Proprietary Software
completely and irrevocably. Except as set forth in Exhibit 3.13, the Developer
------------
Agreements (i) constitute all of the agreements between the Company, any
affiliate of the Company, and any predecessor in interest of the Company, on the
one hand, and each and every Developer and any other employee, contractor or
other
19
person, who may, by virtue of having worked on, conceived or otherwise
contributed to the development of the Proprietary Software or for the Company,
have a claim or interest in the Proprietary Software, (ii) are authentic, (iii)
are supported by good and valuable consideration, (iv) are valid and effective
agreements and (v) validly and effectively assign all of the Developers' rights
and title to all Proprietary Software, inventions and rights created by the
Developers in the scope of performing services for the Company. The Company has
validly and effectively obtained the right and license to use, copy, modify and
distribute the Licensed Software contained in the Proprietary Software from any
and all parties holding rights in such third-party programming and materials
(the "Licensors"). Except as set forth in Exhibit 3,13, all right, title and
------------
interest in and to the Proprietary Software is owned by the Company, free and
clear of all liens, claims, charges or encumbrances of any Developer or
Licensor. Notwithstanding any failure to obtain fully executed Developer
Agreements from any Developer or any disclosure in Exhibit 3.13 hereto that any
------------
Developer or Licenser has not executed a Developer Agreement, the Company's
development, use, licensing, sublicensing or exploitation of the Proprietary
Software does not violate any rights of any Developer or Licensor and neither
the Stockholders nor the Company has received any communication alleging such a
violation. As of the Closing Date: (i) the Proprietary Software operates with
respect to dates occurring after September 9, 1999, with the same level of
functionality as the Proprietary Software currently operates, including, without
limitation, correctly storing, processing and presenting calendar dates falling
on or after September 9, 1999; (ii) the Proprietary Software is free from logic
and other errors attributable to dates falling on or after September 9, 1999 and
is not responsible for any error caused by any date falling on or after
September 9, 1999; and (iii) the Proprietary Software consistently handles date
input using dates before and after September 9, 1999 in a way that clearly and
accurately handles the ambiguity as to century.
3.13.3 All Licensed Software and Canned Software has been licensed
pursuant to valid license agreements and all royalties, license or other fees
due and payable thereunder have been paid or adequate provision therefor has
been made and accrued on the books of the Company. Except as set forth in
Exhibit 3.13, the Company has all necessary and required rights to license, use,
- ------------
sublicense and distribute the Licensed Software and the Canned Software in the
normal and ordinary course of its business and all royalties, license or other
fees due and payable by the Company with respect thereto have been paid or
adequate provision therefor has been made and accrued on the books of the
Company. Except as set forth in Exhibit 3.13, no consent or waiver is required
------------
with respect to the Licensed Software and the Canned Software to effect the
transactions as contemplated by this Agreement and, except as disclosed on
Exhibit 3.13, no Developer or Licensor has any interest in the Licensed Software
- ------------
and the Canned Software, including without limitation, any security interest,
license, royalty rights, contingent interest or otherwise.
3.13.4 The software listed on Exhibit 3.13 is all of the computer
------------
software used, licensed or sublicensed by the Company in the conduct of its
business. Except as set forth in Exhibit 3.13, the Company does not have any
------------
obligation to compensate any person or entity for the development, use, sale or
exploitation of the Software nor has
20
the Company granted to any other person or entity any license, option or other
rights to develop, use, sell or exploit in any manner the Software, whether
requiring the payment of royalties or not. The Company has not granted,
transferred or assigned any right or interest in the Software to any person or
entity, except pursuant to the license agreements identified as such on Exhibit
-------
3.12 hereto (each such agreement is hereinafter referred to as a "License").
- ----
Exhibit 3.12 sets forth, with respect to each License, the Software licensed
- ------------
thereunder. Except as set forth on Exhibits 3.12 and 3.13, each License
------------- ----
constitutes only an end-user agreement, each of which grants the end-user
thereunder solely the nonexclusive right and license to use the identified
Software and related user documentation for internal purposes only with no right
to sublicense or modify the Software in any manner. Except as set forth on
Exhibits 3.12 and 3.13, there are no contracts, agreements, licenses, or other
- ------------- ----
commitments or arrangements in effect with respect to the marketing,
distribution, licensing or promotion of the Software by any independent sales
person, distributor, licensor, sublicensor or other remarketer or sales
organization.
3.13.5 Except as set forth on Exhibit 3.13, the Company, the
------------
Stockholders and their respective affiliates have (i) kept secret and have not
disclosed the source code for the Proprietary Software to any person or entity,
and (ii) made adequate provision to preserve the proprietary nature of such
source code, other than the disclosure thereof to certain employees and
contractors and consultants of the Company who are subject to the terms of a
binding confidentiality agreement with respect thereto. The Company has taken
measures customary to protect the confidential and proprietary nature of the
Proprietary Software, including the use of confidentiality agreements with all
of its employees and independent contractors having access to the Proprietary
Software source and object code There have been no patents applied for and no
copyrights registered for any part of the Proprietary Software.
3.13.6 Excluding Developers and Licensors (whose rights are addressed
above), no person (a "Complaining Person"), by virtue of the Complaining
Person's independent development of computer software, has or could validly
claim that the Proprietary Software (excluding the Licensed Software) infringes
such Complaining Person's software.
3.13.7 The Company has not modified in any respect the Canned Software
or the Licensed Software.
3.14 Intellectual Property Matters. Exhibit 3.14 contains a true, correct
----------------------------- ------------
and complete list of all Intellectual Property owned, licensed, sublicensed or
used by the Company, or which the Company has the right to distribute or
sublicense, in the conduct of its business. Unless otherwise indicated on
Exhibits 3.12, 3.13, or 3.14, all Company Intellectual Property is owned totally
- ------------- ---- ----
and exclusively by the Company free and clear of any liens, claims, charges or
encumbrances of any type or nature whatsoever. The Company's Intellectual
Property and the Company's use thereof do not infringe upon any Intellectual
Property of any third party. The Company is not in default under, and has not
received any
21
notice of any claim of infringement or any other claim or proceeding relating to
any of the Company's Intellectual Property. No present or former employee of the
Company and no other Person owns or has any proprietary, financial or other
interest, direct or indirect, in whole or in part, in any of the Company's
Intellectual Property. Neither the Company nor any of the Stockholders are aware
of any infringement of the Company's Intellectual Property by any Person or any
Person's Intellectual Property. Exhibit 3.14 lists all confidentiality or non-
------------
disclosure agreements to which the Company or any of the Company's employees is
a party. The Company has delivered to the Purchaser true and correct copies of
the confidentiality and non-disclosure agreements required to be listed on
Exhibit 3.14.
- ------------
3.15 Labor Matters. Within the last three (3) years, the Company has
-------------
not been the subject of any union activity or labor dispute, nor has there been
any strike of any kind called, or threatened to be called against it, and it has
not violated any applicable federal or state law, rule or regulation relating to
labor or labor practices, including without limitation employment discrimination
laws relating to age, gender, ethnicity or minority status or sexual preference,
and is not a party to any collective bargaining agreement. The Company is not
bound by or subject to any labor agreement, union agreement or collective
bargaining agreement.
3.16 ERISA and Related Matters.
-------------------------
3.16.1 Exhibit 3.16 lists all deferred compensation, pension, profit-
------------
sharing and retirement plans, and all bonus, welfare, severance pay and other
"employee benefit plans" (as defined in Section 3(3) of ERISA), fringe benefit
or stock option plans, programs or arrangements, whether or not written,
participated in or maintained by the Company or any Stockholder in respect of
the Company or with respect to which contributions are made or obligations
assumed by the Company or any Stockholder in respect of the Company (including
health, life insurance and other benefit plans maintained for retirees). Said
plans, including but not limited to all plans or programs that constitute
"employee benefit plans" within the meaning of Section 3(3) of ERISA, are
sometimes collectively referred to in this Section 3.16 as "Benefit Plans."
Copies of all Benefit Plans and related documents, including those setting out
the Company's personnel policies and procedures, and including any insurance
contracts under which benefits are provided, as currently in effect, and
descriptions of any such plan which are not written have been to Purchaser. The
Company has also made available to Purchaser a copy of the Summary Plan
Description, if any, for each Benefit Plan, as well as copies of any other
summaries of descriptions of any such Benefit Plans which have been provided to
employees or other beneficiaries during the previous three (3) calendar years.
3.16.2 Except as set forth on Exhibit 3.16 hereto, the Company has
------------
fulfilled its obligations, to the extent applicable, under the minimum funding
requirements of Section 302 of ERISA and Section 412 of the Code, with respect
to each "employee benefit plan" (as defined in Section 3(3) of ERISA) appearing
in Exhibit 3.16. Each Benefit Plan is in compliance with, and has been
------------
administered in all respects consistent with, the presently
22
applicable provisions of ERISA, the Code and state law including but not limited
to the satisfaction of all applicable reporting and disclosure requirements
under the Code, ERISA and state law. The Company has made all payments to all
Benefit Plans as required by the terms of each such plan in accordance, if
applicable, with the actuarial and funding assumptions in effect as for the most
recent actuarial valuation of such plans. All required actuarial valuations and
reports relating to said plans have been prepared and a copy of the most recent
actuarial valuation and report for each pension plan, as defined in Section 3(2)
of ERISA, has been provided to Purchaser, if applicable. The Company has filed
or caused to be filed with the Internal Revenue Service annual reports on Form
5500 for each Benefit Plan attributable to them for all years and periods for
which such reports were required and within the time period required by ERISA
and the Code, and copies of such reports for the past five years have been
provided to Purchaser. Except as disclosed on Exhibit 3.16, the Company has
------------
funded or will fund each Benefit Plan attributable to it in accordance with its
terms through Closing including the payment of applicable premiums on any
insurance contract funding a Benefit Plan for coverage provided through Closing.
To the extent that any annual contribution for the current year is not yet
required for any Benefit Plan as of the Effective Time, the Company has made a
pro rata contribution to said plan for the period ended at the Effective Time or
said contribution has been accrued on the books of the Company.
3.16.3 Except as set forth on Exhibit 3.16 hereto, no "prohibited
------------
transaction," as defined in Section 406 of ERISA and Section 4975 of the Code,
has occurred in respect of any such Benefit Plan, and no civil or criminal
action brought pursuant to Part 5 of Title I of ERISA is pending or is
threatened in writing or orally against any fiduciary of any such plan.
3.16.4 Except as set forth on Exhibit 3.16, the Internal Revenue
------------
Service has issued a letter for each employee pension benefit plan, as defined
in Section 3(2) of ERISA listed on Exhibit 3.16, determining that such plan is a
------------
qualified plan under Section 401(a) of the Code and is exempt from United States
Federal Income Tax under Section 501(a) of the Code, and there has been no
occurrence since the date of any such determination letter which has adversely
affected such qualification. The Company does not maintain a plan or arrangement
intended to qualify under Section 501(c)(9) of the Code.
3.16.5 Except as set forth on Exhibit 3.16, each Benefit Plan that
------------
provides medical benefits has been operated in compliance with all requirements
of Section 4980B(f) of the Code and Sections 601 through 608 of ERISA relating
to continuation of coverage under certain circumstances in which coverage would
otherwise cease. All former employees or other persons entitled to such
continuation of coverage are listed on Exhibit 3.16.
------------
3.16.6 Neither the Company nor any entity that is treated as a single
employer with the Company pursuant to Section 414(b), (c), (m) or (o) of the
Code currently maintains or contributes to any Benefit Plan that is subject to
Title IV of ERISA, nor has
23
previously maintained or contributed to any such plan that has resulted in any
liability or potential liability for the Company under said Title IV. There
shall not be as of Closing any outstanding unpaid minimum funding waiver within
the meaning of Code Section 412(d).
3.16.7 Attached hereto as a part of Exhibit 3.16 is a 5-year
------------
contribution history indicating the dollar amount contributed and the level of
contribution as a percentage of compensation of covered participants for each
profit sharing plan, stock bonus plan or other retirement plan to which the
Company makes discretionary contributions.
3.16.8 The Company does not maintain any plans or programs that provide
post retirement medical benefits (other than benefits described in Section
3.16.5 and those which are required by law), post employment benefits, death
benefits or other post retirement welfare benefits. A copy of any written
description of post retirement welfare benefits that has been provided to
employees is attached hereto as a part of Exhibit 3.16. Copies of each plan
------------
document, insurance contract or other written instrument providing for post
retirement welfare benefits, together with a description of any advance funding
arrangement that has been established to fund post retirement welfare benefits,
are attached hereto as a part of Exhibit 3.16. Exhibit 3.16 contains a list of
------------ ------------
those persons who are currently retired with a right to future post retirement
welfare benefits and also contains a list of employees who would be currently
eligible for post retirement welfare benefits if they retired and satisfied any
waiting period provided for under the applicable plan. Except as otherwise
disclosed on Exhibit 3.16, all plans or programs for providing post retirement
------------
medical, death or other welfare benefits could be terminated by the Company as
of Closing without liability for such benefits to any employee who has not
retired on or before the Effective Time.
3.16.9 Neither the Company nor any employer referred to in Section
3.16.6 above, maintains, nor has contributed within the past five years to, any
multiemployer plan within the meaning of Sections 3(37) or 4001(a)(3) of ERISA.
No such employer currently has any liability to make withdrawal liability
payments to any multiemployer plan. There is no pending dispute between any such
employer and any multiemployer plan concerning payment of contributions or
payment of withdrawal liability payments.
3.16.10 All Benefit Plans have been operated and administered in
accordance with their respective terms and no inconsistent representation or
interpretation has been made to any plan participant. Except as set forth on
Exhibit 3.16, no lawsuit or complaint (including any dispute that might result
- ------------
in a lawsuit or complaint against, by, or relating to any Benefit Plan or any
fiduciary, as defined in Section 3(21) of ERISA) of a Benefit Plan has been
filed or is pending.
3.17 Certain Payments. Neither the Company nor any officer, employee,
----------------
agent or affiliate of the Company, including, without limitation, any
Stockholder, has, directly or indirectly, given or agreed to give or solicited
or received any gift, rebate or similar benefit
24
to any customer, supplier, governmental employee or other Person which (i) might
subject the Company to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) if not given in the past might have
had an adverse effect on the assets, business or operation of the Company or
(iii) if not continued in the future might adversely affect the Company's
assets, business, operations or prospects.
3.18 Customers. The Company has not lost, during the past eighteen (18)
---------
months, any customer or group of related customers or received notice of the
possibility of any such loss, which accounted for more than five percent (5%) of
the aggregate fees received, or products and services furnished by it during
such period.
3.19 Insurance. A true and correct list of all insurance contracts,
---------
including all policies of fire, liability (including products and environmental
liability), workers' compensation, casualty, business interruption and all other
forms of insurance owned, held by or maintained by or on behalf of the Company,
which policies are currently in full force and effect, is attached hereto as a
part of Exhibit 3.12. Copies of all such insurance contracts have been
------------
delivered to Purchaser. All such contracts are valid, outstanding, and
enforceable policies, provide insurance coverage typical for the type of
business engaged in by the Company, and provide that they will remain in full
force and effect through the Closing Date. The policies of fire and extended
coverage are in amounts that are not less than 100% of the full insurable value
of the properties and assets covered thereby. (The term "full insurable value"
as used herein shall mean actual replacement cost without deduction for physical
depreciation.) The liability, workers' compensation and casualty insurance
policies extend coverage and insure the liability associated with each and every
suit, action, proceeding, claim or investigation listed on Exhibit 3.10. There
------------
presently are no claims outstanding, nor, to the best of any Stockholder's
knowledge, any basis therefor, under any of the policies listed on Exhibit 3.12,
------------
except as disclosed on Exhibit 3.10. Attached as Exhibit 3.19 is a schedule
------------ ------------
setting forth the claims and loss history of the Company for the three (3) years
prior to Closing under all policies of worker's compensation insurance,
employers' liability insurance, general liability insurance and automobile
liability insurance, property insurance and errors and omissions insurance.
As soon as practicable after Closing, the Company covenants to purchase the
extended reporting period of the Company's Errors and Omissions insurance. The
extended reporting period should be purchased for a two (2) year period
commencing on the Closing Date and shall cover errors and omissions of the
Company occurring prior to the closing date.
3.20 Approvals. No filing or registration with, and no consent, approval,
---------
permit, authorization, license, certificate or order of any governmental
authority is required by any applicable law or by any applicable judgment, order
or decree or any applicable rule or regulation of any governmental authority to
permit the Company or any Stockholder to execute, deliver or perform this
Agreement or any document, instrument or agreement required to be executed by
such party at or prior to the Closing.
25
3.21 Transactions with Affiliates. Except as disclosed on Exhibit 3.21,
---------------------------- ------------
since December 31, 1996, the Company has not purchased, leased or otherwise
acquired any property or assets or obtained any property or assets or obtained
any services from, or sold, leased or otherwise disposed of any property or
assets or provided services to (except with respect to remuneration for services
rendered as an officer or employee of the Company in the ordinary course), (i)
any employee of the Company, (ii) any Stockholder, (iii) any Person that is,
directly or indirectly, controlled by any Stockholder, or (iv) any member of the
immediate family of a Stockholder (for purposes of this Section 3.21, each such
Person is referred to as an "Affiliate"). Except as set forth in Exhibit 3.21,
------------
(a) the contracts, instruments and agreements listed on Exhibit 3.12 do not
------------
include any obligation or commitment between the Company and any Affiliate, (b)
the assets of the Company do not include any receivable or other obligation from
an Affiliate to the Company, and (c) the liabilities reflected in the Financial
Statements, and those on the books and records of the Company as of the Closing
Date, do not include any obligation or commitment of any Affiliate.
3.22 Exhibits. All Exhibits attached hereto are true, correct and complete.
--------
Matters disclosed on each Exhibit shall be deemed disclosed only for purposes of
the matters to be disclosed in such Exhibit and shall not be deemed to be
disclosed for any other purpose, unless expressly provided therein. This
Agreement and the Exhibits hereto disclose all facts material to the Company,
its assets and business. No statement contained herein or in any certificate,
Exhibit, document or other instrument furnished to Purchaser pursuant to the
provisions hereof contains any untrue statement of any material fact or omits to
state a material fact necessary in order to make the statement contained herein
or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS.
--------------------------------------------------
Each Stockholder represents and warrants as follows:
4.1 Authority. If such Stockholder is not an individual, (a) such
---------
Stockholder is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, (b) the execution,
delivery and performance by such Stockholder of this Agreement and each and
every agreement, document and instrument contemplated hereby have been duly
authorized and approved by all necessary action on the part of such Stockholder,
and (c) the execution and delivery by such Stockholder of this Agreement and the
other agreements, documents and instruments contemplated hereby and the
consummation of the transactions contemplated hereby and thereby do not require
the act or consent of any other Person. If such Stockholder is an individual,
such Stockholder has the capacity and authority to execute and deliver this
Agreement and the other agreements, documents and instruments contemplated
hereby, and to consummate the transactions contemplated hereby and thereby
without the necessity of any act or consent of any other Person.
26
4.2 Ownership of Shares. Such Stockholder owns, beneficially and of
-------------------
record, each of the shares of Common Stock shown as being held by such
Stockholder on Exhibit 3.3 hereto, free and clear of all liens, claims, charges,
-----------
security interests or other encumbrances of any type or nature whatsoever,
except as set forth on Exhibit 4.2. Except as set forth in Exhibit 4.2, such
----------- -----------
Stockholder does not own, beneficially or of record, either directly or
indirectly, more than one percent (1%) of the capital stock or other equity or
ownership or proprietary interest in any Person that is in competition with the
Company. Except as set forth on Exhibit 4.2, there are no outstanding options,
-----------
warrants, calls or commitments granted by such Stockholder with respect to the
shares of Common Stock shown as being owned by such Stockholder on Exhibit 3.3
-----------
hereto.
4.3 Agreement Related to Other Instruments. The execution and delivery of
--------------------------------------
this Agreement and the other documents, instruments and agreements contemplated
hereby by such Stockholder do not, and the consummation of the transactions
contemplated hereby will not, violate or constitute an occurrence of default
under any provision of, or conflict with, or result in any acceleration of any
obligation under, or give rise to a right by any party to terminate its
obligations under, any mortgage, deed of trust, conveyance to secure debt, note,
loan, lien, lease, agreement or instrument, or any order, judgment, decree or
other arrangement to which either the Company or such Stockholder is a party or
by which any such party is bound or their assets affected.
4.4 Litigation and Claims. Except as otherwise set forth on Exhibit 4.4
--------------------- -----------
hereto, there is no suit, action, proceeding, claim or investigation pending or
the knowledge of such Stockholder, threatened against or affecting such
Stockholder which would have a material adverse effect on the assets, business
or financial condition of such Stockholder or the Company or the ability of such
Stockholder to consummate the transactions contemplated hereby.
4.5 Company Representations. To the best knowledge of each Stockholder,
-----------------------
the representations and warranties of the Company contained in Section 3 hereof
are true and correct in all respects.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
-----------------------------------------------
The Purchaser represents and warrants to each of the Stockholders as
follows:
5.1 Organization and Standing. The Purchaser is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Georgia.
5.2 Corporate Power and Authority. The Purchaser has the full power and
-----------------------------
authority (corporate and otherwise) to execute and deliver this Agreement, to
perform hereunder, and to consummate the transactions contemplated hereby
without the necessity of any act, approval or consent of any other person or
entity whomsoever. The execution, delivery and performance by the Purchaser of
this Agreement and each and every agreement,
27
document and instrument provided for herein have been duly authorized and
approved by the Board of Directors, or the Executive Committee thereof, of the
Purchaser. This Agreement, and each and every other agreement, document and
instrument to be executed, delivered and performed in connection herewith
constitute or will, when executed and delivered, constitute the legal, valid and
binding obligations of the Purchaser enforceable against it in accordance with
their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, applicable equitable principles, or
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally.
5.3 Agreement Does Not Violate Other Instruments. The execution and
--------------------------------------------
delivery of this Agreement by the Purchaser does not, and the consummation of
the transactions contemplated hereby will not, violate any provisions of the
Articles of Incorporation, as amended, or Bylaws, as amended, of the Purchaser
or violate or constitute an occurrence of default under any provision of, or
conflict with, result in acceleration of any obligation under, or give rise to a
right by any party to terminate its obligations under, any mortgage, deed of
trust, conveyance to secure debt, note, loan, lien, lease, agreement,
instrument, or any order, judgment, decree or other arrangement to which it is a
party or by which it is bound or its assets are affected.
5.4 Shares Acquired for Investment. The Purchaser is acquiring the
------------------------------
Company's shares for its own account as an investment and not with a view to any
distribution thereof. The Purchaser acknowledges and understands that none of
the Company's shares have been registered under the 1933 Act, or under any other
federal, state or local statute or regulation and that, as a consequence, the
Purchaser may not sell or otherwise dispose of any of such shares unless such
shares are registered or an exemption from such registration is available to the
Purchaser at the time of and in connection with any proposed sale or
disposition.
5.5 Stock Will be Validly Issued. Upon consummation of the Exchange as
----------------------------
herein contemplated and satisfaction of all other terms and conditions hereof,
the shares of Equifax Common Stock to be issued to the Stockholders pursuant
hereto will be duly authorized, validly issued and outstanding, fully paid and
nonassessable.
5.6 Statements True and Correct. No statement contained herein or in any
---------------------------
certificate, Exhibit, document or other instrument furnished to the Company or
the Stockholders pursuant to the provisions hereof concerning Purchaser contains
any untrue statement of any material fact or omits to state a material fact
necessary in order to make the statement contained herein or therein not
misleading.
5.7 Purchaser Status. Purchaser is owned directly by Equifax Inc.
----------------
28
6. ADDITIONAL AGREEMENTS OF THE PARTIES.
------------------------------------
6.1 Resignation of Directors and Officers. At the Closing, the Stockholders
-------------------------------------
covenant and agree to cause all officers and all members of the Board of
Directors of the Company to resign, effective immediately following the Closing
after the issuance of a certificate representing the shares acquired hereunder
in the name of the Purchaser as contemplated by Section 9.2.1(a) hereto.
6.2 Release by the Stockholders and Former Stockholders. Each of the
---------------------------------------------------
Stockholders hereby totally and irrevocably releases the Company from any and
all duties and obligations owed by the Company to such Stockholder as of the
Closing Date, and from any claims or possible claims, whether known or unknown,
that such Stockholder has or may have against the Company or any of its assets,
and agrees at Closing to deliver an executed Release in the form of Exhibit
-------
2.8(a) attached hereto. Each Stockholder agrees to use his or its best efforts
- ------
to cause each Former Stockholder to deliver an executed Release in the form of
Exhibit 2.8(a) attached hereto.
- --------------
6.3 Covenant Not to Compete. Each Stockholder agrees to execute and
-----------------------
deliver at the Closing a Covenant Not to Compete agreement in the form of
Exhibit 6.3 attached hereto, and agrees to use his or its best efforts to cause
- -----------
each Former Stockholder to deliver an executed Covenant Not to Compete agreement
in the form of Exhibit 6.3 attached hereto.
-----------
6.4 Employment Agreement. Peterson agrees to execute and deliver at the
--------------------
Closing an Employment Agreement together with the attached agreements in the
form of Exhibit 6.4 attached hereto.
-----------
6.5 Stockholders Agreements. At the Closing, the Company and the
-----------------------
Stockholders shall take all actions necessary to terminate any existing
stockholders agreements relating to the Company's stock.
6.6 Cooperation. Purchaser, Company and Stockholders will cooperate in all
-----------
respects in connection with (i) securing any nongovernmental approvals, consents
and waivers of third parties necessary for the consummation of the transactions
contemplated hereby and (ii) giving notices to any governmental authority, or
securing the permission, approval, determination, consent or waiver of any
governmental authority, required by law in connection with the transactions
contemplated hereby.
6.7 Escrow Agreement. Each of the Stockholders hereby agrees at Closing to
----------------
deliver an executed Escrow Agreement in the form of Exhibit 6.7 attached hereto.
-----------
6.8 Certain Tax Matters. If the Company is required to file a state, local,
-------------------
or foreign income tax return for a taxable period covering days before and after
the Closing Date, the Purchaser shall cause such return to be filed, but the
Stockholders shall pay in Equifax Common Stock to the Purchaser (as an
adjustment to the purchase price) the amount
29
by which the tax attributable to the period through the Closing Date exceeds the
amount accrued for such tax and reflected on the Closing Date Balance Sheet. The
tax attributable to the period through the Closing Date shall be determined as
if that period were a separate taxable year. If the tax attributable to such
period is more than the amount reflected on the Closing Date Balance Sheet, the
Purchaser shall notify the Stockholders in writing of the amount of the excess.
Within 10 days after the date of such notification, the Stockholders shall pay
such amount to the Purchaser or inform the Purchaser in writing that the
Stockholders disagree with the computation of the amount. In the latter case,
the Stockholders and the Purchaser shall proceed in good faith to determine the
correct amount, and the Stockholders' payment to the Purchaser shall be due ten
(10) days after the Stockholders and the Purchaser agree to the amount payable.
Any payment made more than 10 days after the Purchaser initially notifies the
Stockholders of the excess shall include interest at the rate of 10 percent
(10%) per annum from the end of such 10-day period to the date of payment.
6.9 Registration Rights Agreement. At the Closing, Equifax and the
-----------------------------
Stockholders shall enter into a Registration Rights Agreement in the form of
Exhibit 2.10 hereto.
- ------------
6.10 Investment Letter. At the Closing, each Stockholder shall execute and
-----------------
deliver to Equifax an Investment Letter in the form of Exhibit 2.11 hereto.
------------
6.11 Covenant With Respect to COBRA Obligations. The Stockholders agree that
------------------------------------------
they and each of them will be responsible for the amount, if any, by which
Reimbursement Costs (as defined herein) exceed Health Premiums (as defined
herein); provided, however, that in no event shall the aggregate liability
expressed by the foregoing formula exceed the sum of Fifty Thousand Dollars
($50,000) (the "COBRA Liability"). An amount equal to the maximum potential
COBRA Liability ($50,000) shall be withheld from the Purchase Price referred to
in Section 2.2.1 above and shall be placed in escrow pursuant to Section 6.7
above and expended or released as provided therein. For purposes of the
foregoing, the term "Reimbursement Costs" shall mean the aggregate cost of
benefits actually paid to Qualified Beneficiaries (as defined herein) for
reimbursable expenses incurred after the Closing under any group health plan
(within the meaning of Section 5000(b)(1) of the Code) maintained by or on
behalf of the Company plus any necessary legal or court costs attributable to
any properly denied claims for benefits by Qualified Beneficiaries; the term
"Health Premiums" shall mean the aggregate contributions paid by Qualified
Beneficiaries for continuation coverage under any such group health plan
following the Closing; and the term "Qualified Beneficiaries" shall mean the
persons identified on Exhibit 3.16 in response to the disclosure required by
Section 3.16.5 hereof, or any other persons, whether so identified or not, who
are entitled to such benefits as a consequence of the maintenance of such a
group health plan by the Company prior to and/or through the Closing.
Notwithstanding anything to the contrary stated herein, the limitation included
in Section 10.4.2 hereto shall not apply to the indemnification obligations of
the Stockholders contained in this Section 6.11.
30
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.
----------------------------------------------------
The obligations of the Purchaser to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each and every one of the following conditions, all or any of which may
be waived in writing, in whole or in part, by the Purchaser for purposes of
consummating such transactions, but without prejudice to any other right or
remedy which the Purchaser may have hereunder as a result of any
misrepresentations by, or breach of any covenant or warranty of any Stockholder
or the Company contained in this Agreement or any other certificate or
instrument furnished by any Stockholder or the Company hereunder:
7.1 Representations True at Closing. The representations and warranties
-------------------------------
made by the Stockholders and the Company in this Agreement, the Exhibits hereto
or any document or instrument delivered to the Purchaser or its representatives
hereunder shall be true and correct on the Closing Date hereunder with the same
force and effect as though such representations and warranties had been made on
and as of such time (except for changes contemplated by this Agreement or
occurring in the ordinary course of business which do not singly or in the
aggregate have a material adverse effect on the business, operations or
financial condition of the Company).
7.2 Covenants of the Stockholders and the Company. The Stockholders and
---------------------------------------------
the Company shall have duly performed all of the covenants, acts and
undertakings to be performed by them on or prior to the Closing Date and they
shall deliver to the Purchaser certificates dated as of the Closing Date
certifying to the fulfillment of this condition and the condition set forth in
Section 7.1 hereof. Such certificates shall be deemed representations and
warranties of the Stockholders and the Company hereunder.
7.3 No Injunction Etc. No action, proceeding, investigation, regulation or
------------------
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain, prohibit, or obtain
substantial damages in respect of, or which is related to, or arises out of,
this Agreement or the consummation of the transactions contemplated hereby, or
which is related to or arises out of the business of the Company or the
Stockholders, if such action, proceeding, investigation, regulation or
legislation, in the judgment of the Purchaser, would make it inadvisable to
consummate such transactions.
7.4 Opinion of Counsel. A favorable opinion of Powell, Goldstein, Frazer &
------------------
Murphy LLP, counsel for the Stockholders and the Company, shall have been
delivered to the Purchaser, dated as of the Closing Date, substantially in form
and substance of the opinion attached hereto as Exhibit 7.4.
-----------
7.5 Consents and Waivers. The Purchaser shall have received from the
--------------------
Stockholders and the Company a true and correct copy of each consent and waiver
required
31
(a) in Section 2.4 hereof, or (b) for the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby.
7.6 Regulatory Approvals. The execution and the delivery of this Agreement
--------------------
and the consummation of the transactions contemplated hereby shall have been
approved by all regulatory authorities whose approvals are required by law.
7.7 Absence of Adverse Changes. Since June 30, 1997, the Company shall not
--------------------------
have suffered (a) any change in its financial condition, business, properties or
assets which singly or in the aggregate adversely affects the business, assets,
operations or financial condition of the Company, or (b) any transaction or
event described in Section 3.9 hereof, and the President of the Company shall
deliver to the Purchaser a certificate to such effect.
7.8 Employment Agreement. Peterson shall have executed and delivered an
--------------------
Employment Agreement in the form of Exhibit 6.4 hereto.
-----------
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE STOCKHOLDERS.
-----------------------------------------------------------
The obligations of the Stockholders to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each and every one of the following conditions, all
or any of which may be waived, in whole or in part, by the Stockholders but
without prejudice to any other right or remedy which the Stockholders may have
hereunder as a result of any misrepresentation by, or breach of any covenant or
warranty of the Purchaser contained in this Agreement, or any certificate or
instrument furnished by it hereunder:
8.1 Representations True at Closing. The representations and warranties
-------------------------------
made by the Purchaser in this Agreement or any document or instrument delivered
to the Stockholders or their representatives hereunder shall be true and correct
on the Closing Date hereunder with the same force and effect as though such
representations and warranties had been made on and as of such date, except for
changes contemplated by this Agreement.
8.2 Covenants of the Purchaser. The Purchaser shall have duly performed
--------------------------
all of the covenants, acts and undertakings to be performed by it on or prior to
the Closing Date, and a duly authorized officer of the Purchaser shall deliver
to the Stockholders a certificate dated as of the Closing Date certifying to the
fulfillment of this condition and the condition set forth under Section 8.1
above. Said certificate shall be deemed a representation and warranty of the
Purchaser hereunder.
8.3 Approvals. The execution and the delivery of this Agreement and the
---------
consummation of the transactions contemplated hereby shall have been approved by
all regulatory authorities whose approvals are required by law.
32
9. CLOSING.
-------
9.1 Time and Place of Closing. The Closing shall be held at the offices of
-------------------------
Hunton & Williams, 600 Peachtree Street, N.E., Suite 4100, Atlanta, Georgia, on
December __, 1997, commencing at 10:00 a.m. Atlanta time, or at such other place
or on such other date as is agreed to in writing by the parties hereto.
9.2 Transactions at Closing. At the Closing, each of the following
-----------------------
transactions shall occur:
9.2.1 The Stockholders' Performance. At the Closing, the Stockholders
-----------------------------
shall deliver to the Purchaser the following:
(a) certificates representing all of the Purchased Stock, duly endorsed
for transfer or accompanied by instruments of transfer satisfactory in form
and substance to the Purchaser and its counsel, together with a new
certificate representing such shares issued in the name of the Purchaser;
(b) certificates of compliance or certificates of good standing of the
Company, as of the most recent practicable date, from the Secretary of State,
or other appropriate governmental authority, of each of the jurisdictions
listed on Exhibit 3.1 hereto;
-----------
(c) certified copies of resolutions of the Board of Directors of Company
approving the transactions set forth in this Agreement;
(d) opinion of counsel for the Stockholders and the Company in the form
of Exhibit 7.4 hereto;
-----------
(e) evidence of the resignations described in Section 6.1;
(f) incumbency certificates for the officers of the Company executing
this Agreement or any document or agreement ancillary hereto;
(g) executed Release agreements in the form of Exhibit 6.2 hereto, as
-----------
contemplated by Section 6.2 hereof;
(h) executed Covenant Not to Compete agreements in the form of Exhibit
-------
6.3 hereto, as contemplated by Section 6.3 hereof;
---
(i) executed Employment Agreement in the form of Exhibit 6.4 hereto, as
-----------
contemplated by Section 6.4 hereof;
(j) executed Escrow Agreement for Stockholders in the form of Exhibit
-------
6.7 hereto, as contemplated by Section 6.7 hereof;
---
33
(k) executed Registration Rights Agreement in the form of Exhibit 2.10
------------
hereto, as contemplated by Section 2.10 hereof;
(l) such other evidence of the performance of all covenants and
satisfaction of all conditions required of the Stockholders by this Agreement
as the Purchaser or its counsel may reasonably require.
9.2.2 Performance by the Purchaser. At the Closing, the Purchaser shall
----------------------------
deliver to the Stockholders the following, as applicable:
(a) to the Stockholders, certificates of the Equifax Common Stock, duly
issued, to the Stockholders, as contemplated by Section 2.3 hereof;
(b) certified copies of resolutions of the Board of Directors of the
Purchaser, or the Executive Committee thereof, approving the transactions set
forth in this Agreement;
(c) incumbency certificate for the officers of the Purchaser executing
this Agreement or any agreement delivered ancillary hereto;
(d) executed Employment Agreement in the form of Exhibit 6.4 hereto, as
-----------
contemplated by Section 6.4 hereof;
(e) executed Escrow Agreement in the form of Exhibit 6.7 hereto, as
-----------
contemplated by Section 6.7 hereof;
(f) executed Registration Rights Agreement in the form of Exhibit 2.10
------------
hereto, as contemplated by Section 2.10 hereof;
(g) such other evidence of all covenants and satisfaction of all
conditions required of Purchaser by this Agreement, as the Stockholders or
their counsel may reasonably require.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION.
--------------------------------------------------------------
10.1 Survival of Representations and Warranties of the Stockholders and the
----------------------------------------------------------------------
Company; Indemnification.
- ------------------------
10.1.1 All representations and warranties by the Stockholders and the
Company in this Agreement, the Exhibits hereto, or in any document or instrument
executed and delivered pursuant hereto are material, have been relied upon by
the Purchaser, shall survive the Closing hereunder and shall not merge in the
performance of any obligation by any party hereto. Any examination, inspection
or audit of the properties, financial condition or other matters of the Company
and its business conducted by the Purchaser or on its behalf
34
on or prior to the Closing Date shall in no way limit, affect or impair the
ability of Purchaser to rely upon the representations, warranties, covenants and
obligations of the Stockholders and the Company set forth herein.
10.1.2 Subject to Section 10.4 hereto, each Indemnifying Stockholder
hereby agrees to indemnify and hold the Purchaser harmless on an after-tax basis
from and against all liability, loss, damage, or injury and all reasonable costs
and expenses (including reasonable counsel fees and costs of any investigation
or suit related thereto) actually incurred, net of any resulting income tax
benefits actually realized by the Purchaser, and arising from (i) any
misrepresentation, or breach of any covenant or warranty of the Company
contained in this Agreement or the Exhibits hereto, or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by the Company hereunder; (ii) any claim for
workers' compensation that relates to an occurrence prior to Closing, to the
extent not covered by insurance maintained by the Company prior to Closing;
(iii) the payment by the Company of federal, state, local or foreign taxes
(together with any interest and penalties thereon), including, without
limitation, any income, unemployment compensation, social security, payroll,
sales, intangible, use, excise, privilege, ad valorem, franchise, license and
any other tax under the laws of the United States or any foreign jurisdiction or
any state, province, or municipal or political subdivision thereof, if any, that
accrued or relates to any period through and including the Closing Date and is
in excess of the amount accrued therefor on the Closing Date Balance Sheet; (iv)
any suit, action, proceeding, claim or investigation, pending or threatened, or
which may be filed in the future, which relates to the operations of the Company
or its officers, directors, employees or affiliates with regard to matters
arising prior to Closing, regardless of whether it is disclosed on Exhibits 3.10
-------------
or 3.11 hereto; or (v) any suit, action, proceeding, claim or investigation
----
arising from any claim by or on behalf of any party that such party has a
direct, equitable or beneficial interest in the Company. The parties to this
Agreement agree that the Indemnifying Stockholders will have no right of
reimbursement or contribution from the Company with respect to any right of
recovery against the Indemnifying Stockholders by the Purchaser. For all
purposes of this Article 10, any liability, loss, damage or injury and
reasonable costs and expenses (including, without limitation, reasonable counsel
fees and costs of any investigation or suit related thereto) suffered or
incurred by the Company arising from any such breach of a covenant,
representation or warranty by any Stockholder or the Company as aforesaid
against which Purchaser is indemnified and held harmless hereinabove shall be
deemed suffered and incurred by Purchaser, which shall, either independently or
jointly with the Company, be entitled to enforce such covenants of indemnity.
10.1.3 Each Indemnifying Stockholder hereby agrees to indemnify and
hold the Purchaser harmless from and against all liability, loss, damage, or
injury and all reasonable costs and expenses (including reasonable counsel fees
and costs of any investigation or suit related thereto) actually incurred and
arising from any misrepresentation, or breach of any covenant or warranty of a
Stockholder contained in this Agreement or the Exhibits hereto, or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by a Stockholder hereunder.
35
10.2 Survival of Representations and Warranties of the Purchaser;
------------------------------------------------------------
Indemnification. All representations, warranties, agreements, covenants and
- ---------------
obligations made or undertaken by the Purchaser in this Agreement or in any
document or instrument executed and delivered pursuant hereto are material, have
been relied upon by the Stockholders, shall survive the Closing hereunder and
shall not merge in the performance of any obligation by any party hereto. The
Purchaser agrees to indemnify and hold the Stockholders harmless from and
against all liability, loss, damage or injury and all reasonable costs and
expenses (including reasonable counsel fees and costs of any suit related
thereto) actually incurred by the Stockholders arising from any
misrepresentations, or breach of any covenant or warranty of the Purchaser
contained in this Agreement or the Exhibits hereto, or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by the Purchaser hereunder.
10.3 Indemnification Procedure.
-------------------------
10.3.1 Any party entitled to indemnification hereunder (the "Indemnified
Party") shall notify the party obliged to indemnify (the "Indemnifying Party")
promptly after it becomes aware of any suit, claim, action, proceeding,
arbitration or investigation (each, an "Action") as to which indemnity may be
sought. In the event that the Indemnifying Party acknowledges in writing its
indemnification obligation with respect to any such Action, the Indemnifying
Party shall be entitled, at its expense, to control the defense of such Action;
provided, however, that (i) counsel for the Indemnifying Party must be approved
- -------- -------
by the Indemnified Party (which approval shall not be unreasonably withheld),
and (ii) the Indemnified Party may also participate in such defense at its own
expense; provided, further, that an Indemnifying Party shall not be entitled to
-------- -------
assume the defense or control of any Action if: (v) the Indemnified Party
agrees, in writing, to assume the cost of such Action and forgo any indemnity
claimed under this Section 10, (w) in the reasonable opinion of legal counsel
for the Indemnified Party, such Action involves the potential imposition of a
criminal liability on the Indemnified Party, its officers, directors, employees
or agents, (x) in the reasonable opinion of legal counsel for the Indemnified
Party, an actual or potential conflict of interest exists where it is advisable
for such Indemnified Party to be represented by separate counsel, (y) with
respect to Purchaser only, failure to stay the enforcement of such Action will
result in the imminent risk of sale, forfeiture or loss of the assets of the
Company or any material portion thereof or a material disruption in the
operation of the Business, or (z) with respect to Purchaser only, such Action
results in the creation of any lien on the assets of the Company or the
Business, or any portion thereof unless the Indemnifying Party shall have filed
with the court an appropriate security bond securing payment of any such lien
and all costs associated therewith; provided, however, with respect to clauses
-------- -------
(x) and (y) in this Section 10.3.1, the Indemnified Party shall conduct the
defense of the Action in a manner, in the Indemnified Party's reasonable good
faith judgment, reasonably designed to avoid or minimize potential damages for
which the Indemnifying Party will ultimately be responsible for hereunder. In
the circumstances described in the foregoing subsections 10.3.1(v) through (z),
(I) the Indemnified Party shall provide notice to the Indemnifying Party of the
assumption of the defense by the Indemnified Party and shall be entitled to
36
control and assume responsibility for the defense of such Action, at the cost
and expense of the Indemnifying Party; (II) the Indemnifying Party may, in any
event, participate in all such proceedings at its own cost and expense; and
(III) the Indemnified Party will provide copies of pleadings and other documents
necessary to permit the Indemnifying Party to participate in such proceedings or
to follow the course of such proceedings.
10.3.2 The failure of the Indemnified Party to give notice as provided
herein shall relieve the Indemnifying Party of any obligation under this Article
10 only if and to the extent that such failure materially prejudices the ability
of the Indemnifying Party to defend such action, and such failure shall in no
event relieve the Indemnifying Party of any liability that the Indemnifying
Party may have to the Indemnified Party otherwise than under Article 10.
10.3.3 In the defense of any such Action, regardless of who is in
control thereof, the controlling party shall not, except with the prior written
consent of the non-controlling party, consent to entry of any judgment or enter
into any settlement, which consent of the non-controlling party will not be
unreasonably withheld provided such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to the non-
controlling party of a release from liability with respect to such claim or
litigation and, in the case of indemnification under Section 10.1 hereof, would
not result in a material impairment of Purchaser's ability to conduct the
business of the Company in the ordinary course.
10.3.4 In the defense of any such Action, regardless of who is in
control thereof, the Indemnifying Party and the Indemnified Party shall
cooperate fully with each other, and shall cause their legal counsel,
accountants and affiliates to do so, and shall make available to the other party
all relevant books, records and information (in such party's control) during
normal business hours, and shall furnish to each other, at the Indemnifying
Party's expense, such other assistance as the other party may reasonably require
in connection with such defense.
10.4 Limits on Indemnification Obligation. Notwithstanding anything in
------------------------------------
Sections 10.1 and 10.2 to the contrary or in conflict:
10.4.1 Subject to the applicable statutes of limitation, a claim for
indemnification by the Purchaser may be made at any time based on the
representations and warranties contained in Sections 3.1.1, 3.2, 3.6, 3.11.2,
3.13.2, 3.16, 4.1 and 4.2 (collectively, "Type I Claims"). A claim for
indemnification by the Purchaser based on the representations and warranties
contained in Section 3.13.6 (a "Type II Claim") shall be forever barred unless
made by notifying the Stockholders within twenty-four (24) months after the
Closing Date. Except for Type I Claims and Type II Claims, a claim for
indemnification by the Purchaser under this Agreement shall be forever barred
unless made by notifying the Indemnifying Stockholders within three (3) years
37
after the Closing Date. The Indemnifying Stockholders shall be liable to
Purchaser for all Losses based on the representations and warranties contained
in Sections 3.13.2, 4.2 and the fifth sentence of Section 3.16.2 hereto without
regard to the limitation included in Section 10.4.2 hereto.
10.4.2 Neither the Indemnifying Stockholders nor the Purchaser shall be
liable under the indemnity provisions of Section 10.1 or Section 10.2, as
applicable, in any instance until such time as the aggregate liability under
such section exceeds $86,000 (the "Basket"), in which event the Indemnifying
Stockholders or the Purchaser, as is applicable, shall be liable to the full
extent of such liability, including the Basket.
10.4.3 In no event shall the liability of the Indemnifying Stockholders
under Section 10.1 for all Losses of Purchaser exceed, in the aggregate, the
Purchase Price.
10.4.4 In determining the amount of any loss, liability or expense for
which any indemnified party is entitled to indemnification under this Agreement,
the gross amount thereof will be reduced by any insurance proceeds actually paid
to any indemnified party; provided, however, that if such party has been
indemnified hereunder but does not actually receive such proceeds until after
being indemnified, such party shall reimburse the indemnifying party for amounts
paid to such party to the extent of the insurance proceeds so received.
11. TERMINATION.
-----------
11.1 Method of Termination. This Agreement constitutes the binding and
---------------------
irrevocable agreement of the parties to consummate the transactions contemplated
hereby, the consideration for which is (a) the covenants set forth in Articles 2
and 6 hereof, and (b) expenditures and obligations incurred and to be incurred
by the Purchaser and the Stockholders in respect of this Agreement, and this
Agreement may be terminated or abandoned only as follows:
11.1.1 by the mutual consent of the Purchaser and the Stockholders;
11.1.2 by the Purchaser on or after December 31, 1997, if any of the
conditions set forth in Article 7 hereof, to which the obligations of the
Purchaser are subject, have not been fulfilled or waived, unless such
fulfillment has been frustrated or made impossible by any act or failure to act
of the Purchaser;
11.1.3 by the Stockholders on or after December 31, 1997, if any of the
conditions set forth in Article 8 hereof, to which the obligations of the
Stockholders are subject, have not been fulfilled or waived, unless such
fulfillment has been frustrated or made impossible by any act or failure to act
of the Company or the Stockholders.
38
12. GENERAL PROVISIONS.
------------------
12.1 Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be delivered by hand or overnight
courier or mailed by registered or certified mail, return receipt requested,
first class postage prepaid, addressed (or sent) as follows:
12.1.1 If to the Company, at:
Goldleaf Technologies, Inc.
100 West Main Street
Hahira, Georgia 31832
Attn: David L. Peterson
If to Peterson, at:
David L. Peterson
307 E. Lawson Street
Hahira, Georgia 31632
If to Wetherington Farms or B. Wetherington at:
c/o Bobby G. Wetherington
4121 Georgia Highway 122 East
Hahira, Georgia 31632
With a copy to:
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, Suite 1600
Atlanta, Georgia 30303
Attn: Kathryn L. Knudson, Esq.
12.1.2 If to the Purchaser, at:
Equifax Payment Services, Inc.
11601 Roosevelt Boulevard, N.
St. Petersburg, Florida 33716
Attn: Howard Franzblau
39
With a copy to:
Equifax Payment Services, Inc.
Legal Department
11601 Roosevelt Blvd., N.
St. Petersburg, FL 33716
Attention: Stephen Koch, Esq.
With a copy to:
Hunton & Williams
NationsBank Plaza - Suite 4100
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attention: J. William Gibson, Esq.
12.1.3 If delivered personally or by overnight courier, the date on which a
notice, request, instruction or document is delivered shall be the date on which
shall delivery is made and, if delivered by mail, the date on which such notice,
request, instruction or document is received shall be deemed to be the third
business day following the date of mailing.
12.1.4 Any party hereto may change its address specified for notices herein
by designating a new address by notice in accordance with this Section 12.1.
12.2 Brokers. The Purchaser, on the one hand, and the Stockholders and the
-------
Company, on the other, represent and warrant to each other that no broker or
finder has acted for them or any entity controlling, controlled by or under
common control with them in connection with this Agreement.
12.3 Further Assurances. At any time, and from time to time, after the
------------------
Closing Date, the Stockholders shall execute such additional instruments and
take such actions as may be reasonably requested by the Purchaser to confirm or
perfect or otherwise to carry out the intent and purposes of this Agreement.
12.4 Waiver. Any failure on the part of any party hereto to comply with
------
any of its obligations, agreements or conditions hereunder may be waived by the
party or parties to whom such compliance is owed. No waiver of any provision of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be effective unless it is made in writing and delivered
as provided in this Agreement.
12.5 Expenses. All expenses incurred by the parties hereto in connection
--------
with or related to the authorization, preparation and execution of this
Agreement and the Closing of
40
the transactions contemplated hereby, including, without limitation of the
generality of the foregoing, all fees and expenses of agents, representatives,
counsel and accountants employed by any such party, shall be borne solely and
entirely by the party or parties which has incurred the same, except that all
expenses of the Company shall be borne solely by the Stockholders.
12.6 Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto and their respective successors and assigns.
12.7 Headings. The section and other headings in this Agreement are
--------
inserted solely as a matter of convenience and for reference, and are not and
shall not be deemed to be a part of this Agreement.
12.8 Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the parties hereto relating to the transactions contemplated hereby or the
subject matter herein. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by an agreement in
writing signed by both parties.
12.9 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia.
12.10 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.11 Number and Gender. Whenever the context requires, references in this
-----------------
Agreement to the singular number shall include the plural, the plural number
shall include the singular and words denoting gender shall include the
masculine, feminine and neuter.
12.12 Exhibits Incorporated. All Exhibits attached hereto are incorporated
---------------------
herein by reference.
12.13 Confidentiality; Public Announcements. The Company, each Stockholder
-------------------------------------
and Purchaser agree that each will maintain the confidentiality of the terms and
provisions of this Agreement and the information and materials marked as
Confidential and delivered to them or made available for their inspection
pursuant to this Agreement. In the event the Closing does not occur, the
Company, each Stockholder and Purchaser will as soon as practicable return all
material of or concerning the other party obtained from such other party then in
their possession and hereby covenant to keep confidential any information
concerning the other party and ascertained from their review for a period of two
years commencing upon the termination of this Agreement. Notwithstanding the
foregoing, the prohibitions and restrictions set forth in this Section 12.13
shall not apply to any information (a) in the public
41
domain not as a result of the violation of Purchaser's, any Stockholder's or the
Company's undertaking herein, (b) available to Purchaser, the Stockholders or
the Company on a non-confidential basis without regard to the disclosure by
Purchaser, the Stockholders or the Company to the other party, (c) available to
Purchaser, the Stockholders or the Company from a source other than the other
party (provided that such source in so acting is not violating any duty or
agreement of confidentiality), or (d) required to be disclosed by any law, rule
or regulation.
No party hereto shall, without the approval of the other parties hereto, make
any press release or other public announcement concerning the transactions
contemplated by this Agreement prior to Closing unless such party determines in
good faith, based on the advice of legal counsel, that such disclosure is
required by law or is mutually agreed by the parties, in which case that party
will consult with the other prior to making such disclosure.
42
IN WITNESS WHEREOF, each party hereto has executed or caused this Agreement to
be executed on its behalf, all on the day and year first above written.
THE PURCHASER:
EQUIFAX PAYMENT SERVICES, INC.
By:/s/ Lee A. Kennedy
-------------------------------------------
Name: Lee A. Kennedy
Title: Executive Vice President and Group
Executive
EQUIFAX INC.
By:/s/ David A. Post
-------------------------------------------
Name: David A. Post
Title: Corporate Vice President and Chief
Financial Officer
THE STOCKHOLDERS:
/s/ David L. Peterson
----------------------------------------------
David L. Peterson
B.G. WETHERINGTON FARMS, L.P.
By:/s/ Bobby G. Wetherington
-------------------------------------------
Name: Bobby G. Wetherington
Title: General Partner
43
B. WETHERINGTON:
/s/ Bobby G. Wetherington
----------------------------------------------
Bobby G. Wetherington
THE COMPANY:
GOLDLEAF TECHNOLOGIES, INC.
By:/s/ David L. Peterson
---------------------------------------------
Name: David L. Peterson
Title: President
44
LIST OF EXHIBITS
EXHIBITS
- --------
1(a) Canned Software
1(b) Licensed Software
1(c) Proprietary Software
2.2.1 Stockholders Respective Shares of Equifax Common Stock
2.3 Exceptions to Conduct of the Business of the Company
2.8(a) Release
2.8(b) Exceptions to Release
2.8(c) Former Stockholders
2.10 Registration Rights Agreement
2.11 Investment Letter
3.1 Organization and Standing
3.2(a) Articles of Incorporation of the Company
3.2(b) Bylaws of the Company
3.3(a) Capitalization of Company
3.5.1 Financial Statements
3.5.2 Additional Liabilities of the Company
3.6 List of Additional Taxes, Interest, Penalties, etc.
3.7 List of Assets and Leases
3.7.5(ii) List of Instruments, Documents and Agreements creating
Securities for Accounts Receivable
45
3.8 List of Violations of Terms of Agreements
3.9 List of Changes
3.10 List of Litigation
3.11 List of License and Permit Problems
3.12 List of Contracts
3.13 Computer Software Matters
3.14 List of Trademarks, Trade Names, Service Marks,
Service Names, etc.
3.16 ERISA Matters
3.19 Schedule of Claims History
3.21 Transaction and Affiliates
4.2 Liens on Purchased Stock
4.4 List of Stockholder Litigation
6.3 Form of Covenant Not to Compete
6.4 Form of Peterson Employment Agreement
6.7 Form of Escrow Agreement
7.4 Opinion of Counsel for the Stockholders and the Company
46