FIRST AMENDMENT TO
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AND
EMPLOYMENTAND NON-COMPETITION AGREEMENT
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
and EMPLOYMENT AND NON-COMPETITION AGREEMENT (hereinafter this "Amendment
Agreement") is made and entered into effective as of May 17, 1999 (the
"Effective Date"), by and among Fair, ▇▇▇▇▇ and Company, Incorporated ("Fair,
▇▇▇▇▇"), a Delaware corporation; Credit & Risk Management Associates, Inc.
("CRMA"), a Delaware corporation; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇("▇▇▇▇▇") (collectively, the "former
CRMA Shareholders").
RECITALS:
A. Fair, ▇▇▇▇▇, as buyer, entered into that certain Agreement and
Plan of Merger and Reorganization dated as of September 30, 1996
(the "Merger Agreement") to acquire by forward subsidiary merger
all of the assets and business of Credit & Risk Management
Associates, Inc., as seller; and the former CRMA Shareholders, as
the owners of all of the issued and outstanding capital stock of
CRMA (the "Merger"), disposed of their interests in CRMA upon the
terms and conditions set forth therein. CRMA is now a wholly-owned
subsidiary of Fair, ▇▇▇▇▇.
B. The Merger Agreement provided for Earnout Payments to the former
CRMA Shareholders for each of the fiscal years ending September
30, 1997, September 30, 1998 and September 30, 1999.
C. The parties desire to amend the terms of the Merger Agreement
governing such Earnout Payments to provide for termination of the
Earnout Payments, on the terms and conditions set forth below.
D. In connection with the Merger, each of the former CRMA
Shareholders entered into a five-year Employment and
Non-Competition Agreement with Fair, ▇▇▇▇▇ as of September 30,
1996 (the "Employment Agreement") and now desire to amend that
Agreement as to ▇▇▇▇▇▇▇ and ▇▇▇▇▇ and terminate that Agreement as
to ▇▇▇▇▇▇▇▇, as set forth herein.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and for other valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties mutually
agree as follows
1. Meaning of Terms: Effective Date.
Except as otherwise stated in this Amendment Agreement, (a) all capitalized
terms in this Amendment Agreement will have the respective defined meanings
as stated in the Merger Agreement, and (b) the terms and provisions of this
Amendment Agreement will be considered to be effective as of the date of
this Amendment Agreement.
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2. Termination of Earnout Payments; Amendment of Employment Agreement.
(a) For and in consideration of the sum of $2,108,402.00 (the
"Consideration"), the former CRMA Shareholders agree as follows: (i)
Any and all obligations relating to Earnout Payments including but not
limited to those arising under Sections 2.2, 2.8 and 5.9 of the Merger
Agreement are terminated as of the Effective Date; and the parties'
rights and obligations thereunder are hereby replaced and superseded by
the terms of this Agreement.
(ii) On the Effective Date, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall execute and deliver
an amendment to the Employment Agreement for each such individual in
the form attached hereto as Exhibit A.
(iii) On the Effective Date, ▇▇▇▇▇▇▇▇ shall execute and deliver the
termination of the Employment Agreement in the form attached hereto as
Exhibit B.
(b) The Consideration shall be paid thirty-one percent (31%) in the form of
Buyer Common Stock valued at their Average Market Price as of the
Effective Date in proportion to their holdings of Seller Shares (such
holdings are defined in the Merger Agreement to be 500 shares each of
1500 shares total). The Buyer Common Stock issued hereunder shall be
subject to the Registration Rights Agreement described in Section 2.2
of the Merger Agreement. The balance of the Consideration (69%) will be
paid in cash and made by delivery of certified or cashier's check or
equivalent instruments or funds in proportion to their holdings of
Seller Shares within ten (10) business days of receipt by Fair, ▇▇▇▇▇
of the Amendment Agreement and Exhibits fully executed by the CRMA
Shareholders.
3. General Release and Waiver of Claims.
Except as expressly set forth in this Amendment Agreement, each former CRMA
Shareholder releases, remises and forever discharges CRMA and Fair, ▇▇▇▇▇,
and Fair, ▇▇▇▇▇ and CRMA release, remise and forever discharge the former
CRMA Shareholders, from any and all claims, counterclaims, liabilities,
demands and causes of action of any nature whatsoever whether known or
unknown, fixed or contingent, matured or unmatured, arising out of,
connected with or incidental to, the Earnout Payments determined under
Section 2.2, and 2.8 (including but not limited to those under Section 5.9)
of the Merger Agreement up to and as of the Effective Date, including but
not limited to claims that may have existed or were pending or threatened
before the Effective Date of this Agreement (all of which are referred to
collectively as the "Claims"). The provisions, waivers, releases of this
Section 3 shall inure to the benefit of the parties, including without
limitation, their agents, employees, attorneys, representatives, officers,
directors, divisions, participants, subsidiaries, Affiliates, assigns,
heirs, successors in interests and shareholders. The provisions herein
shall survive the full performance of all the terms of this Amendment
Agreement and the Merger Agreement
This is intended as a full settlement and compromise of each, every and all
Claims. The parties acknowledge that they may have claims against each
other of which they have no knowledge at the time of execution of this
Amendment Agreement. The parties agree that the waivers and releases in
this Section 3, are specifically intended to and do extend to claims,
demands, or causes of action of which they have no knowledge. The parties
specifically waive the benefit of Section 1542 of the California Civil
Code, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
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EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR."
4. Incorporation by Reference.
The Recitals and Exhibits A and B to this Amendment Agreement are hereby
incorporated by reference.
5. Construction.
Except as explicitly modified by this Amendment Agreement no other changes to
the Merger Agreement are being made and all provisions of the Merger Agreement
shall remain in full force and effect. This Agreement does not constitute a
renewal or novation of the Merger Agreement.
The headings and captions of this Amendment Agreement are provided for
convenience only and are intended to have no effect on construing or
interpreting this Amendment Agreement. The language in all parts of this
Amendment Agreement shall be in all cases construed according to its fair
meaning and not strictly for out against any party.
6. Counterparts.
This Amendment Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Execution and delivery of this Amendment Agreement
be exchange of facsimile copies bearing facsimile signature of a party hereto
shall constitute a valid and binding execution and delivery of this Amendment
Agreement by such party. Such facsimile copy shall constitute enforceable
original documents.
In Witness Whereof, this Amendment Agreement has been executed as of
the date first set forth above.
FAIR, ▇▇▇▇▇ AND COMPANY, INCORPORATED
By ______________________________________
Its ___________________________________
CREDIT & RISK MANAGEMENT ASSOCIATES, INC.
By ______________________________________
Its ___________________________________
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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