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Exhibit 2.1 EXECUTION COPY PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement (including all exhibits, attachments and
schedules attached hereto, Agreement) is made and entered into as of the
13th day of April, 2004, by and between eFunds Corporation, a Delaware
corporation (Purchaser), Penley, Inc., a Georgia corporation (the
Company), and, for the limited purposes and in the capacities expressly set
forth herein, Bruce F. Lowthers, Jr. and Cleve B. Shultz (collectively, the
Principal Shareholders) and the other individuals and entities named on
Exhibit A attached hereto (together with the Principal Shareholders,
collectively, the Sellers and individually a Seller). WHEREAS, each Seller (a) is the owner of the number of issued and
outstanding shares of capital stock of the Company as is set forth opposite
such Sellers name on Exhibit A attached hereto, or (b) is the holder of the
right to acquire the number of shares of capital stock of the Company (the
Option Shares) set forth opposite such Sellers name on Exhibit A pursuant
to the Penley, Inc. Equity Compensation Plan (the Plan); and WHEREAS, the Sellers collectively own one hundred percent (100%) of the
issued and outstanding shares of capital stock of the Company and hold one
hundred percent (100%) of the outstanding options to acquire capital stock of
the Company; and WHEREAS, Purchaser desires to purchase and acquire all of the outstanding
shares of capital stock of the Company, including all of the rights to acquire
the Option Shares owned by Sellers (collectively referred to as the Shares),
on the terms and conditions set forth in this Agreement; and WHEREAS, Sellers are willing to sell the Shares to Purchaser upon the
terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the premises, the respective
covenants and commitments of Sellers, Purchaser and the Company set forth
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereby agree as follows: Article I.
Purchase and Sale of the Shares Upon the terms and subject to the conditions set forth in this Agreement,
each Seller hereby agrees to sell, assign and transfer the Shares of such
Seller to Purchaser, and Purchaser hereby agrees to purchase and acquire each
such Sellers Shares. Article II.
Purchase Price 2.1 Amount. The total purchase price to be paid by Purchaser for the
Shares shall be an amount equal to the sum of: (a) Five Million Dollars ($5,000,000); plus




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EXECUTION COPY (b) the Contingent Cash Payments (as defined on Exhibit B), if any,
calculated in accordance with Exhibit B to this Agreement. 2.2 Manner of Payment. All amounts set forth herein are stated in U.S.
dollars. The purchase price shall be paid to Sellers in the following manner: (a) On the Closing Date (as defined in Section 7.2 below), Purchaser
shall pay the Sellers Representative (as defined in Section 9.1 below)
four million five hundred thousand Dollars ($4,500,000) by wire transfer
to an interest bearing bank account at Wachovia in the name of
Bruce F. Lowthers, Jr. FBO Penley Shareholders Disbursement
Account (the Penley Disbursement Account). Sellers Representative
and Sellers have entered a separate agreement providing for disbursing
funds from the Penley Disbursement Account to the Sellers (the
Disbursement Agreement), pursuant to which, among other things,
Sellers Representative shall be permitted to deduct the costs and
expenses of Sellers (as contemplated by Section 10.9 below) and the costs
of administering the Penley Disbursement Account from the Penley
Disbursement Account prior to disbursing the funds in such Penley
Disbursement Account to the Sellers. By signing this Agreement, each
Seller acknowledges that all payments of the purchase price for the
Shares made to the Sellers Representative pursuant to this Agreement
shall constitute payment to the Sellers and that Purchaser has no
liability for Sellers Representatives failure to disburse the funds to
the Sellers in accordance with the Disbursement Agreement. The purchase
price amount to be allocated to each Seller as of the Closing (prior to
deducting expenses) is set forth opposite such Sellers name under the
heading Cash at Closing on Exhibit A. (b) Five hundred thousand ($500,000) shall be withheld and
retained by Purchaser in a separate interest bearing investment account,
and shall be invested in substantially the same manner and shall bear
interest or provide returns at a rate substantially similar to other
investment accounts maintained by Purchaser, in the exercise of
reasonable business judgment, for its own funds (the Penley
Indemnification Account). No disbursements, releases or transfers of
funds shall be made from the Penley Indemnification Account unless either
(i) a written consent of the Sellers Representative and an authorized
representative of Purchaser authorizing such action is executed and
delivered, or (ii) a final resolution occurs pursuant to the provisions
of Section 8.7 ordering the release of funds therefrom for the purpose of
paying the indemnification obligations of Sellers pursuant to Article
VIII of this Agreement or delivering funds to Sellers. All portions of
such retained amount in excess of the amount of Indemnification Losses
(as defined in Section 8.2 below) paid to Purchaser in accordance with
Article VIII or subject to a then outstanding Required Notice (as defined
in Section 8.5 below) which has not been settled in accordance with
Article VIII, together with any and all interest and returns accrued
thereon from the date of this Agreement through and including the date of
payment thereof is made to Sellers, shall be paid in cash by Purchaser by
check or wire transfer (at Sellers Representatives option) to Sellers
Representative on or before May 2, 2005 for payment by the
Sellers Representative to the Sellers (after deduction of expenses and
costs by the Sellers Representative pursuant to the Disbursement
Agreement) in the proportion that the 2




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EXECUTION COPY number of Shares held by each Seller bears to the total number of all
Shares held by all Sellers collectively, as shown on Exhibit A (the
Fully Diluted Percentage). (c) Any portion of the retained amount remaining in the Penley
Indemnification Account after payments to Sellers is made as required
pursuant to Section 2.2(b) above shall be held in such account until
final resolution of the Indemnification Claims (as defined in Section 8.4
below) with respect to which a Required Notice had been delivered prior
to the first anniversary of the Closing Date is achieved in accordance
with the terms of Article VIII below, and within two (2) business days of
such resolution, shall be paid (1) in the event and to the extent such
resolution favors Sellers, with interest thereon as specified in Section
2.2(b) above, to Sellers (after deduction of expenses and costs by the
Sellers Representative pursuant to the Disbursement Agreement) in the
same proportion as described in Section 2.2(b) above, or (2) in the event
and to the extent such resolution favors Purchaser, to Purchaser in
satisfaction of such Indemnification Claims. (d) The contingent cash amount, if any, of the purchase price shall
be paid in accordance with Exhibit B to the Sellers Representative,
subject to the Purchasers right to offset such amount as set forth in
Article VIII below. Article III.
Representations, Warranties and Covenants of the Company As a material inducement to Purchaser to enter into this Agreement and
with the understanding that Purchaser will be relying thereon in consummating
the purchase of the Shares contemplated hereunder, the Company represents,
warrants and agrees that, except as otherwise disclosed to Purchaser on the
Exhibits and Schedules to this Agreement: 3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Georgia and has all requisite corporate power and authority to own and lease
its assets and properties and to carry on its business as it is now being
conducted. The copies of the articles of incorporation and bylaws of the
Company, which have been delivered to Purchaser, are true and complete copies
of the articles of incorporation and bylaws of the Company currently in effect. 3.2 Subsidiaries, etc. The Company does not own an equity interest in any
corporation, partnership, joint venture, or other enterprise of any form or
nature. 3.3 Qualification. The Company is duly qualified to engage in business
as a foreign corporation in each of the states listed on Exhibit C, and there
is no other U.S. jurisdiction wherein the character of the properties owned or
leased by the Company or the nature of the business conducted by the
Company makes necessary the qualification, licensing or
domestication of the Company as a foreign corporation, except where failure to
so qualify is not reasonably likely, individually or in the aggregate, to have
a material adverse effect on the Companys financial condition or ability to
perform its obligations under this Agreement. 3.4 Financial Statements, (a) Attached to this Agreement as Exhibit D is
the balance sheet of the Company as of December 31, 2003 and the statements of
income and cash flow for the fiscal year then ended and the balance sheet of
the Company as of February 29, 2004 and the 3




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EXECUTION COPY statements of income and cash flow for the eleven-month period then ended.
Such financial statements (i) present fairly in all material respects the
financial condition of the Company as of their respective dates, (ii) present
fairly in all material respects the results of operations of the Company for
the periods covered by such financial statements, (iii) except for the lack of
both footnotes and statements of shareholders equity, except for period-end
adjustments (none of which will be material), and except as disclosed therein,
have been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with past practices (GAAP) and (iv) include
all adjustments required by GAAP to be made and that are necessary for a fair
presentation of the financial condition of the Company and the results of the
Companys business operations for the periods covered by such statements,
provided, however, such financial statements have not been audited. As of
February 29, 2004, the Company did not have any debts, liabilities or
obligations of any nature (whether absolute, accrued or contingent and whether
due or to become due) which are not reflected on Exhibit D or which are not
otherwise disclosed on Exhibits to this Agreement or Schedules delivered
pursuant to Section 3.6, other than those arising in the ordinary course of
business. The financial statements include appropriate reserves for all taxes
and other liabilities accrued as of February 29, 2004 but not yet payable. 3.5 Capitalization. The authorized capital stock of the
Company consists of (i) 15,000,000 shares of common stock, par value $0.001
per share (Common Stock), of which 2,000,000 shares are issued and
outstanding, and (ii) 5,000,000 shares of preferred stock, par value $0.001 per
share, of which no shares are issued and outstanding. Exhibit A sets forth the
names, number of Shares and the Fully Diluted Percentage of Shares held of
record by Sellers and the same constitute all of the issued and outstanding
shares of capital stock of the Company. All of the outstanding shares of the
Companys capital stock have been validly issued and are fully paid and
nonassessable. Except as reflected on Exhibit A and for the options outstanding
as of the date of this Agreement to purchase 70,000 shares of Common Stock
under the Plan, the Company has not issued and there are no outstanding
subscriptions, options, warrants, contracts, calls, commitments or other
purchase rights of any nature or character (including preemptive rights)
relating to the Companys authorized but unissued capital stock. Pursuant to
the provisions of Section 4.7, on the Closing Date and as of Closing (as
defined in Section 7.1 below), all Option Shares shall terminate and be
cancelled such that after the Closing Date no option or other rights to acquire
capital stock of the Company issued by the Company prior to Closing shall
exist. The Company has adopted the resolutions and taken appropriate action to
cause the Plan to be terminated and all options thereunder cancelled in
accordance with the provisions of Section 4.7 below. 3.6 Schedules. Each of the following Schedules, which have been furnished
to Purchaser by the Company and which are incorporated herein by reference, is
complete in all material respects and the information contained therein is
correct in all material respects as of the date of each Schedule which date
shall not be later than the date of this Agreement: Schedule 1: This Schedule lists all equipment, machinery,
furniture, fixtures, furnishings, leasehold improvements and other
similar property that is owned by the Company and that is material to
its business and is being used by the Company in connection with the
business conducted by it. 4




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EXECUTION COPY Schedule 1A: This Schedule lists each motor vehicle owned by the Company,
together with vehicle identification numbers, the person to whom the vehicle
is assigned and the location of the vehicle, and the name of the lessor or
financing company and balance owed on any such lease or loan. Schedule 2: This Schedule lists each lease for real property, whether
written or oral, to which the Company is a party, and any other instrument
under which the Company claims or holds an interest in real property owned by
another person. Schedule 2A: This Schedule lists each lease and license agreement,
whether written or oral, to which the Company is a party, for the use of any
material personal property used by the Company in its business. Schedule 3: This Schedule lists all of the following intellectual
property owned or used by the Company in its business, which is material to
its business and the provision of its identity verification and fraud
prevention services to its customers: all trademarks, trade names, service
names, service marks, copyrights, patents, patent licenses, domain names,
trade secrets, applications for any and all of the foregoing and registrations
thereof, and software or computer programs. Schedule 4: This Schedule lists the following agreements to which the
Company is a party and which are in effect as of the Closing, to the extent
such agreements are not set forth on other Schedules: (i) Each contract, agreement or commitment the full performance of
which is not complete and which has been made in the ordinary course of
business by the Company involving an expenditure by the Company of more
than $25,000 in any fiscal year for the purchase of any services,
materials, supplies or equipment. (ii) Each contract, agreement or commitment the full performance of
which is not complete and which has been made by the Company for delivery
of its products or services which has a term extending more than ninety
(90) days from the date of this Agreement and pursuant to which the
Company was paid an aggregate amount of more than $25,000 during its
fiscal year ended December 31, 2003. (iii) Each contract or commitment for capital expenditures by the
Company in excess of $25,000 in any fiscal year. (iv) Each agreement for the sale of any capital asset of the
Company in excess of $25,000. (v) Each employment contract or agreement relating thereto between
the Company and any officer, consultant, director or employee, including
any bonus, incentive or deferred compensation plans, any confidentiality
or non-compete agreements, and any arrangements which encourage or
compensate the 5




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EXECUTION COPY Companys employees to remain employed or providing services to the
Company under such agreement following the Closing Date. (vi) Each plan or contract or arrangement of the Company, providing
for pensions, life insurance, medical insurance, disability insurance,
vacations, options or rights to acquire equity, and other employees
benefits or compensation plans whether written or oral. (vii) Each agreement, if any, with any union covering employees in
the bargaining unit represented by such union. (viii) Each material agreement not made in the ordinary course of
the Companys business. (ix) Each contract between the Company and any reseller, dealer,
distributor, broker, sales agent or sales representative with a term
extending beyond the date of this Agreement. (x) Each contract or agreement executed with respect to the
property listed in Schedule 3. (xi) Each agreement not otherwise listed on the Schedules to which
the Company is a party, the breach or default of which had, or is
reasonably likely to have, a material adverse effect on the Company. Schedule 5: This Schedule lists each policy of liability, property damage,
comprehensive, vehicle, workers compensation, key man, disability, fidelity,
errors and omissions, directors and officers and other forms of insurance
owned or maintained by the Company since January 1, 2003 (and not listed on
Schedule 4) and contains a brief description of any claims pending or made
thereunder in excess of one thousand dollars ($1,000) during such period of
time. Schedule 6: This Schedule lists all governmental permits, licenses,
exemptions, variances, and other governmental approvals and authorizations
held or required to be held by the Company which are necessary for the Company
to conduct its business as presently conducted. Schedule 7: This Schedule lists all personal property owned by any third
parties (whether a customer, supplier, employee, or other person) for which
the Company is a warehouseman or bailee as defined in Article 7, Section
7-102 of the Delaware Uniform Commercial Code  Documents of Title, other than
leased property set forth on Schedule 2A. Schedule 8: This Schedule lists each bank or other financial institution
in which the Company has an account or depository arrangement, including
account number, purpose of account and the names of all persons authorized to
take any actions with respect thereto. 6




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EXECUTION COPY Schedule 9: This Schedule lists each employee of the Company and
the position, title, remuneration (including any scheduled salary and
remuneration increases), the date of employment and accrued vacation pay
of each such employee. 3.7 No Defaults. Each of the leases, contracts, agreements and insurance
policies listed on Schedules 2, 2A, 4 and 5 referred to in Section 3.6 is in
full force and effect as of the date hereof. The Company is not in default or
breach in any material respect under any of such leases, contracts, agreements
and policies, and to the Companys knowledge, no other party to any such
leases, contracts, agreements and policies is in default or breach in any
material respect thereunder (other than failure by one or more of such other
parties to make timely payment of accounts receivable arising thereunder).
True and complete copies of all documents listed on any Schedule delivered
pursuant to Section 3.6 have heretofore been delivered or made available to
Purchaser or will be made available upon request. 3.8 Accounts and Notes Receivable. To the extent they exceed the reserves
for doubtful accounts, the accounts and notes receivable of the Company as set
forth in the financial statements attached as Exhibit D, and all accounts
receivable of the Company that have arisen since February 29, 2004 are valid
obligations due to the Company and to the Companys knowledge will be
collectible by the Company in the ordinary course of business. To the
Companys knowledge, such accounts and notes receivable are not subject to
valid defenses or offsets except routine customer complaints of an immaterial
nature. 3.9 Termination of 401 (k) Plan. Prior to the Closing Date, the Company
has adopted resolutions to terminate its 401(k) plan effective as of a time
prior to the Closing. 3.10 Taxes. The Company has filed all tax returns (including, but not
limited to: income, excise, franchise, property, payroll, sales, use and other
tax returns or reports) that are material and are required to be filed by it,
as of the date hereof (including any extensions available therefor), by any
foreign country, the United States of America and any state or other political
subdivision thereof. The Company has paid all taxes and assessments shown as
due with respect to the time periods covered by such returns or reports. The
amounts shown as provisions for taxes in the financial statements attached as
Exhibit D are sufficient for the payment of all unpaid federal, foreign, state
or local taxes of the Company accrued for or applicable to all periods ended on
or prior to the date of this Agreement. There are no present disputes between
the Company and any tax authority as to taxes of any nature payable by the
Company. The Companys income tax returns have not been audited by the
Internal Revenue Service nor any other taxing authority. 3.11 Lawsuits, Proceedings, etc. Except as set forth on Schedule 3.11,
there is no action or proceeding pending or, to the Companys knowledge,
threatened against the Company which if determined adversely to the Company is
reasonably likely to result in any material adverse change in the condition,
financial or otherwise, of the Companys business or assets, taken as a whole.
No order, writ, injunction or decree against the Company has been issued by or,
to the Companys knowledge, requested of, any court or governmental agency
which has or, if issued, is reasonably likely to result in any material adverse
change in the Companys assets or properties or in the financial condition of
the Company or its business. 7




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EXECUTION COPY 3.12 Compliance with Law. The Company is not currently being charged
with a violation of, nor is it operating its business in violation in any
material respect of any applicable federal, state or municipal laws,
regulations or ordinances including, without limitation, the federal Foreign
Corrupt Practices Act, the federal Occupational Safety and Health Act of 1970,
or the regulations promulgated thereunder (OSHA), the federal Fair Credit
Reporting Act, or any other applicable federal, state or municipal statute,
law, regulation or ordinance relating to occupational health and safety, nor is
the Company relying on any exemption from or deferral of any such applicable
statute, law or regulation that to its knowledge would not be available to it
after Purchaser acquires the Shares from Sellers. 3.13
Health and Safety Matters. (a) As used in this Section 3.13, the
following terms shall have the following meanings: (i) Health and Safety Laws and Regulations shall mean any
and all federal, state and local laws, statutes, codes,
ordinances, regulations, rules, policies, consent decrees,
judicial orders, administrative orders or other legal requirements
relating to human health, safety, the natural environment and the
workplace environment (including OSHA and the Americans with
Disabilities Act of 1990, as amended in the regulations
promulgated hereunder (ADA), all as amended or modified from
time to time). (ii) Property shall refer to any real property leased by
the Company pursuant to leases listed on Schedule 2A and any other
real property that has been previously owned or used by the
Company in the operation of its business. (iii) Regulatory Action(s) shall mean any claim, demand,
action or proceeding brought or instigated by any governmental
authority in connection with any Health and Safety Laws and
Regulations (including without limitation civil, criminal and/or
administrative proceedings), whether or not seeking costs,
damages, penalties or expenses. (b) The Company has complied with all Health and Safety Laws and
Regulations in the operation of its business. There have been no actual
or, to the Companys knowledge, threatened Regulatory Actions with
respect to or against the Company or its business. No toxic or hazardous
substances or wastes, pollutants or contaminants of any kind or nature
(including, without limitation, asbestos, urea formaldehyde, radon,
polychlorinated biphenyls, petroleum products, and any hazardous
substance as defined in any Health and Safety Laws and Regulations) have
been generated, treated, stored, released or disposed of by the Company,
or otherwise placed, deposited in or located by the Company or the
Property in violation in any material respect of any Health and Safety
Laws and Regulations. 3.14 Post Balance Sheet Changes. Except as set forth on the Schedules and
Exhibits to this Agreement, from the date of the financial statements through
the date of this Agreement, and except as contemplated by this Agreement, the
Company has not: (a) changed its authorized stock or issued, sold, bought or
redeemed any rights to subscribe to or warrants to purchase or entered into any
agreements, commitments or obligations to issue, sell, buy or redeem any shares 8




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EXECUTION COPY of its capital stock; (b) incurred any material obligation or liability
(absolute or contingent), other than current liabilities incurred, and
obligations under contracts entered into, in the ordinary course of business;
(c) discharged or satisfied any lien or encumbrance or paid any material
obligation or liability (absolute or contingent), other than liabilities shown
in the financial statements or current liabilities incurred in the ordinary
course of business; (d) mortgaged, pledged or subjected to lien, charge or
other encumbrance any asset, tangible or intangible, other than such Liens as
are permitted pursuant to Section 3.18 below; (e) waived any rights of
substantial value, whether or not in the ordinary course of business; (f)
suffered any claim, damage, destruction or loss, whether or not covered by
insurance, materially adversely affecting its assets or its business; (g) made
or suffered any amendment or termination of any material contract or agreement
which materially adversely affects its business; (h) received written notice or
had knowledge of any labor dispute other than routine grievance matters, none
of which is material; (i) increased the salaries or other compensation of any
of its directors, officers or employees or made any material increase in other
benefits to which such directors, officers or employees are entitled; (j)
instituted any bonus, benefit, profit sharing, stock option, pension,
retirement plan or similar arrangement, or made any changes in any such plans
or arrangements presently existing, except as provided in Sections 3.9, 4.4 and
4.7; (k) sold, assigned, transferred or otherwise disposed of any of its assets
or cancelled any material debts or claims, other than in the ordinary course of
business; (1) declared or made any distribution or dividend payments to any of
its shareholders, officers or employees, other than wages, salaries and
employee benefits paid or made available to employees in the ordinary course of
business; (m) made any declaration setting aside the payment of any dividend or
any distribution in respect of its capital stock or any redemption, purchase or
other acquisition of any capital stock of the Company; (n) modified its
articles of incorporation or bylaws; (o) revalued any of its assets, except for
write-offs, discounts and other write-downs made in the ordinary course of
business; or (p) entered into any transactions not in the ordinary course of
business. 3.15 No Breaches, etc. The Company is not (i) in violation or breach of
any of the terms or conditions of the Companys articles of incorporation or
bylaws or other organizational documents, (ii) in violation or breach of any
mortgage, bond, indenture, or other agreement, contract, instrument or
obligation for borrowed funds, to which the Company is a party or by which its
assets are bound or (iii) in violation or breach, in any material respect, of
any statute, regulation, judgment, writ, injunction or decree of any court,
entered in a proceeding or action in which the Company is or was a participant
or to which any of its assets are subject. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in any breach or acceleration of, any of
the terms or conditions of the Companys articles of incorporation or bylaws or
other organizational documents or of any mortgage, bond, indenture, agreement,
contract, license or other instrument or obligation to which the Company is a
party or by which its assets are bound, nor will they result in any violation
of any statute, regulation, judgment, writ, injunction or decree of any court
entered in a proceeding or action in which any of its assets are subject,
except, in each case, for breaches or violations which, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect
on the Company. 3.16 Condition of the Companys Assets. All of the Companys material
tangible assets are currently in good and usable condition, ordinary wear and
tear excepted. To the Companys knowledge, there are no material defects in
such assets which, in the aggregate, 9




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EXECUTION COPY adversely affect the operation or value of such assets in the Companys
business. Such assets and the other properties being leased by the Company
pursuant to the leases described on Schedules 2 or 2A pursuant to Section 3.6
constitute all of the material operating assets being utilized by the Company
in the conduct of its business. 3.17 Changes in Suppliers and Customers. To the Companys knowledge, none
of the suppliers supplying products, components, data, materials or services to
the Company that are material to the Companys ability to provide its identity
verification and fraud protection products and services currently intends to
cease selling such products, data or services to the Company or to limit or
reduce such sales of products, data or services to the Company, nor has the
Company received written notice that any customer of the Company that paid in
excess of $10,000 to the Company during its fiscal year ended December 31, 2003
currently intends to terminate, limit or reduce in any material respect its
business relations with the Company. 3.18 No Liens or Encumbrances. The Company has good and marketable title
to all of the property and assets, tangible and intangible, owned by it and
employed in the operation of its business, free of any mortgages, liens,
claims, charges, leases, security interests, pledges, easements, encumbrances
and title retention agreements of any kind whatsoever (collectively, Liens)
except for (i) license and similar use rights granted to its customers,
resellers and others pursuant to agreements in the ordinary course of business,
(ii) such property and assets as may be leased by the Company pursuant to
leases described on Schedules 2 or 2A delivered pursuant to Section 3.6, and
(iii) such Liens as are set forth on the Schedules. 3.19 Employees. As of the date of this Agreement, the Company has
received no notice from management or key employees of the Company that such
management or key employee currently intends to terminate his or her employment
with the Company. There is not pending or, to the Companys knowledge,
threatened any labor dispute, strike or work stoppage against the Company which
is likely to interfere with the continued operation of the business activities
of the Company. Neither the Company nor any representative or employee of the
Company has committed any unfair labor practices in connection with the
operation of the Companys business, and there is not pending or, to the
Companys knowledge, threatened any charge or complaint against the Company by
the National Labor Relations Board or any comparable state agency. 3.20 Obligations and Liabilities. Since February 29, 2004, except as
contemplated by this Agreement, the Company has not incurred any indebtedness,
obligation, or liability of any kind or nature whatsoever, absolute or
contingent, known or unknown, choate or inchoate, liquidated or unliquidated,
secured or unsecured, except obligations and liabilities reflected on Exhibit D
or undertaken in or pursuant to any of the agreements listed on the Schedules
referred to in Section 3.6 or Section 3.11 or incurred in the ordinary course
of business. 3.21 Intangible Property Rights. (a) The Company owns or holds valid license or other rights to all
patents, trademarks, service marks, trade names, copyrights, trade
secrets and other intellectual property used in the conduct of the
Companys business as now conducted. Except as set forth on Schedule
3.21, to the Companys knowledge, the Company does not infringe 10




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EXECUTION COPY upon the right of any person under or with respect to any of the above.
The Company has not received any notice of any infringement or
misappropriation by, or conflict from, any third party with respect to
the Companys trademarks; no claim by any third party contesting the
validity of the Companys trademarks has been made, is currently
outstanding or, to the knowledge of the Company, is threatened; and the
Company has not received any written notice that the Companys
trademarks infringe, misappropriate or violate the intellectual property
rights of any third party. (b) To its knowledge, the Company is not obligated or under any
liability to make any payments by way of royalties, fees or otherwise to
any owner of, licensor of, or other claimant to any patent used in the
conduct of its business, nor is the Company presently under any license
or contract requiring it to pay royalties or fees with respect to third-
party trademarks, copyrights or other intellectual property in connection
with the conduct of the Companys business, other than fees or
obligations for the license or use of software, trademarks, logos and
similar property in the ordinary course of business. (c) The Company has not received notice of any claim, nor does it
have knowledge that the Company does not either (i) own or (ii) have the
right to the use of all know how, trade secrets, inventions, designs,
processes, computer programs and technical data necessary to the
development, manufacture, operation and sale of all products and services
sold by it, free and clear of any rights, liens and claims of others that
interfere with the Companys current ownership or use thereof in any
material adverse respect. To its knowledge, the Company is not using
any confidential information or trade secrets of any former employer of
any of its past or present employees in violation of any agreement with
respect thereto. (d) The Company has used and is using all third party software
required for its production platform under and in accordance with a valid
license from the respective third party, and each such license permits
the software to be used in production and as part of a service package.
Except as disclosed in the Schedules, the Company has a valid license to
use all third-party software which is material to developing and
providing its identity verification and fraud prevention products and
services to its customers as currently provided. (e) The Company has taken reasonable security measures to protect
the secrecy and confidentiality of the trade secrets referred to in
paragraph (c) of this Section 3.21. 3.22 No Brokers or Finders. The Company has not employed any broker or
finder or incurred any liability for any brokers commission or fee in
connection with the transactions contemplated by this Agreement. 3.23 Real Estate. The Company owns no real property. The real property
leased by the Company is generally suitable for the purposes for which it is
being used. To the knowledge of the Company, no condemnation proceeding is
pending or threatened with respect to any real property, building, improvement
or structure listed on Schedule 2. 11




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EXECUTION COPY 3.24 Affiliate Transactions. Other than pursuant to or as disclosed in
the Schedules and Exhibits to this Agreement, no officer, director, shareholder
of ten percent (10%) or more of the Companys capital stock or employee of the
Company or to the Companys knowledge, any entity in which any of such persons
owns any beneficial interest (other than any publicly-held corporation whose
stock is traded on a national or regional securities exchange, Nasdaq or in the
over-the-counter market and less than two percent of the stock of which is
beneficially owned by any of such persons) (collectively insiders), has any
agreement with the Company, including agreements involving indebtedness of
insiders to the Company (other than normal employment arrangements) or, to the
Companys knowledge, any interest in any property, real, personal or mixed,
intellectual, tangible, used in the business of the Company (other than
ownership of capital stock of the Company). 3.25 ERISA. With respect to each of the Companys employee benefit
plans that is listed on Schedule 4 to this Agreement and that is qualified for
federal income tax exemption under Sections 401 (a) or 501 (a) of the Internal
Revenue Code (the Code), each plan complies in all material respects with the
requirements of the Employee Retirement Income Security Act (ERISA) and the
Code (either as a matter of law or to obtain the intended tax treatment and tax
benefits). The Company (a) has not engaged in any transaction that would
subject it to a tax, penalty or liability for prohibited transactions imposed
under ERISA or Section 4975 of the Code in an amount which would be material
to the financial condition of the Company; (b) complied with all material
reporting, disclosure and other requirements of ERISA and the Code as they
related to such plan; (c) does not have an accumulated funding deficiency (as
defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived; and (d) has made all required contributions under each such plan for
all periods through and including the period ending prior to the date of this
Agreement. As of the date hereof, no material liability to the Pension
Benefit Guaranty Corporation has been or is expected to be incurred with
respect to any of such plans. 3.26 Consents (General). The Company has obtained all consents, waivers or
releases to the transactions contemplated by this Agreement that are required
under any of the agreements of the Company to effectively continue the business
and operation of the Company, as conducted immediately prior to Closing,
following the Closing of the transactions contemplated by this Agreement.
Notwithstanding the proceeding sentence of this Section 3.26, Company and
Purchaser hereby agree that this Section 3.26 shall not apply to any agreements
to which the Company is a party which are referenced in Section 3.27 below. 3.27 Customer, Reseller and Certain Other Consents. The Company has
obtained all consents, waivers or releases to the transactions contemplated by
this Agreement that are required to be obtained under any of the agreements set
forth on Exhibit F in order that the transactions contemplated by this
Agreement do not constitute a breach or violation of, or result in a right of
termination or acceleration under any such agreement. Notwithstanding
anything herein to the contrary, Company and Purchaser hereby agree that the
only co-location or reseller agreements or agreements with Company customers
subject to Indemnification Claims as set forth in Article VIII of this
Agreement are those set forth on Exhibit F hereto. 3.28 Withholding Taxes. The Company or Sellers Representative agrees
to (a) withhold from the proceeds otherwise distributable to any holder of
Option Shares all applicable 12




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EXECUTION COPY federal and state withholding taxes, and (b) to report and remit such taxes to
the appropriate taxing authorities. 3.29 March 31, 2004 Balance Sheet. The Company agrees to prepare and
deliver to Purchaser, on or before the tenth day following the Closing Date, a
balance sheet of the Company as of March 31, 2004 and statements of income and
cash flows for the twelve-month period then ended. Such financial statements
shall be prepared on the same basis as the financial statements delivered
pursuant to Section 3.4(a), and the delivery of such financial statements shall
be deemed to update the representations and warranties made by the Company in
Section 3.4. 3.30 Representations and Warranties. The representations and warranties
contained in this Article III have been made by the Company with the
understanding that the Purchaser is relying thereon, and subject to the
provisions of Article VIII, shall remain operative regardless of any
investigation at any time made by or on behalf of Purchaser and shall not be
deemed merged in any document or instruction so executed or delivered by
Company or Sellers. Article IV.
Representations, Warranties and Covenants of Each Seller As a material inducement to Purchaser to enter into this Agreement and
with the understanding that Purchaser will be relying thereon in consummating
the purchase of the Shares contemplated hereunder, each Seller, severally and
not jointly with any of the other Sellers, represents and warrants with
respect to itself and agrees (other than Section 4.8, which shall only apply
to the Principal Shareholders) as follows: 4.1 Share Ownership. Seller owns or has an option to acquire, beneficially
and of record, the number of Shares set forth opposite such Sellers name on
Exhibit A, which Shares will be sold to Purchaser free and clear of any
claims, liens, charges, options, equities, and encumbrances or other
restrictions which would in any way impair such Sellers right to effectively
sell or transfer such Shares. There are no outstanding subscriptions,
options, warrants, contracts, calls, commitments or other purchase rights of
any nature or character (including preemptive rights) arising out of the acts
or omissions of Seller relating to Sellers Shares. 4.2 No Brokers or Finders. Such Seller has not employed any broker or
finder or incurred any liability for any brokers or finders commission or fee
in connection with the transactions contemplated by this Agreement. 4.3 Other Business Information. For a period of one (1) year following the
Closing Date, such Seller shall, at Purchasers expense, make available to
Purchaser such other information relating to the past business operations of
the Company in such Sellers possession as Purchaser may reasonably request for
use in satisfying all federal Securities Exchange Commission (SEC) filing
requirements. 4.4 Termination of 401 (k) Plan. Sellers acknowledge that, prior to the
Closing Date, the Company has taken steps necessary to cause the Company to
terminate the Companys 401(k) plan effective as of a time prior to the
Closing. 13




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EXECUTION COPY 4.5 No Indebtedness to or Claims Against Company. Such Seller does not
owe any money to the Company. Except as set forth in the Schedules and Exhibits
hereto and except as provided in this Agreement and in the agreements entered
in connection herewith, such Seller has no claim or cause of action against the
Company except (if such Seller is an employee of or otherwise providing
services to the Company) for accrued compensation, benefits and expenses. 4.6 Each Seller to Pay Taxes. Each Seller agrees to pay all taxes,
assessments, charges, penalties or interest owed by such Seller as a result of
the purchase and sale of the Shares contemplated by this Agreement and any
actual or deemed distribution to such Seller in his, her or its capacity as a
shareholder or optionholder for any period ending on or prior to the Closing
Date or any transaction consummated on or prior to the Closing Date (excluding
the tax liability of the Company arising from the conduct of the Companys
business in the ordinary course of business operations) and shall indemnify and
hold the Purchaser, the Company and the other Sellers harmless from such
liability. 4.7 Option Matters. Each Seller acknowledges that he, she or it has been
informed that, on or before the Closing Date, the Company has adopted
resolutions to terminate, cancel or take such other steps as are necessary so
that all agreements and understandings between the Company or its employees,
representatives and other persons or entities with respect to subscriptions,
warrants, options, conversion rights or any agreements outstanding to purchase
or otherwise acquire from the Company any shares of capital stock or other
securities of the Company of any kind, including Option Shares, or any options
or warrant agreements or any option awards issued in connection with the Plan
are no longer in effect after the Closing Date. In furtherance of the
foregoing, effective upon consummation of the Closing, (i) the Company has
terminated its Plan and each agreement entered into with respect to the Plan
and (ii) each option or right with respect to Option Shares which is
outstanding prior to the Closing Date shall be cancelled and extinguished in
exchange for payment of the purchase price for such Option Shares as set forth
on Exhibit A, which is the net purchase price for such Option Shares (i.e.
which is net of the applicable strike price for such Option Shares). Except
as specifically provided in this Section 4.7, each warrant, option or other
right to acquire shares of the Company that is issued and outstanding
immediately prior to the Closing Date shall be canceled and no consideration
shall be paid or issued in exchange therefor. In addition, the Company shall
receive on or prior to the Closing Date a cancellation agreement from each
holder of an option and each holder of a warrant to purchase shares of Company
common stock in form and substance satisfactory to Purchaser
(Cancellation Agreements), acknowledging such cancellation and
termination of options, warrants and the Plan. The holders of Option Shares
acknowledge that the Company or Sellers Representative will withhold from the
payments described in Section 2 all amounts subject to applicable federal
and state withholding requirements. 14




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EXECUTION COPY Article V.
Representations, Warranties and Covenants of Purchaser As a material inducement to Sellers to enter into this Agreement and to
consummate the purchase and sale contemplated hereunder, and with the
understanding that Sellers will be relying thereon in consummating the
purchase of the Shares contemplated hereunder, Purchaser hereby represents,
warrants and covenants as follows: 5.1 Organization and Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware, and has all requisite corporate power and authority to own and lease
its assets and properties, to carry on its business as now conducted, to enter
into this Agreement and to consummate the transactions and perform the
obligations contemplated by this Agreement. 5.2 Corporate Authorization. The execution, delivery and performance of
this Agreement by Purchaser have been duly authorized by proper corporate
action of Purchaser and are within its corporate powers. This Agreement
constitutes the legal, valid and binding obligation of Purchaser and is
enforceable against Purchaser in accordance with its terms. 5.3 Qualification. Purchaser is duly qualified to engage in business as
a foreign corporation in each jurisdiction wherein the character of the
properties owned or leased by Purchaser or the nature of the business
conducted by Purchaser makes necessary the qualification, licensing or
domestication of Purchaser as a foreign corporation, except where failure to so
qualify is not reasonably likely, individually or in the aggregate, to have a
material adverse effect on the Purchasers financial condition or ability to
perform its obligations under this Agreement. 5.4 No Violation. No authorizations or consents of any third party or
governmental authority are necessary on behalf of Purchaser in connection with
the execution and delivery by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby. The
execution and delivery of this Agreement and the other purchase agreements
entered pursuant hereto to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
approved by the Board of Directors of Purchaser in accordance with its
certificate of incorporation and bylaws and with applicable laws. No other
corporate proceedings on the part of Purchaser are necessary for Purchaser to
execute and deliver this Agreement and for Purchaser to be bound by the terms
hereof. 5.5 Current Public Information; Financial Statements. Purchaser is a
reporting issuer and has a class of securities registered under Section 12(g)
of the Securities Exchange Act of 1934, as amended (the Exchange Act).
Purchaser has filed with the SEC its Annual Report on Form 10-K for the fiscal
year ended December 31, 2003 and all items and information required to be
disclosed, filed or furnished pursuant to Form 8-K or otherwise pursuant to the
Exchange Act and Securities Act of 1933, as amended since December 31, 2003
(collectively, the SEC Reports). 15




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EXECUTION COPY 5.6 No Breaches, etc. The negotiation of entering into this Agreement,
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in any breach or
acceleration of any of the terms or conditions of Purchasers certificate of
incorporation or bylaws or other organizational documents or of any mortgage,
bond, indenture, agreement, contract, license or other instrument or obligation
to which Purchaser is a party or by which its assets are bound, nor will they
result in any violation of any statute, regulation, judgment, writ, injunction
or decree of any court entered in a proceeding or action in which any of its
assets are subject, except, in each case, for breaches or violations which,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on Purchasers financial condition or ability to
perform its obligations under this Agreement. 5.7 No Brokers or Finders. No person, firm or corporation has or will
have, as a result of any act or omission of Purchaser or its Subsidiaries, any
right, interest or valid claim against Sellers (or any of them) for any
commission, fee or other compensation as a finder or broker in connection with
the transactions contemplated by this Agreement. 5.8 Investment Representations. Purchaser understands that the Shares
have not been registered under the Securities Act or any other securities laws.
Purchaser also understands that the Shares are being sold pursuant to an
exemption from registration contained in the Securities Act based in part upon
Purchasers representations contained in the Agreement. Purchaser represents
that it is an accredited investor within the meaning of Regulation D under the
Securities Act. Purchaser is acquiring the Shares for Purchasers own account
for investment only, and not with a view towards their distribution. Further
Purchaser has not made any general solicitation and is not aware of any
advertisement or other general solicitation in connection with the
transactions, contemplated in this Agreement. Neither Purchaser nor any agent
acting on its behalf has solicited or will solicit any offers to sell or has
offered to sell or will offer to sell all or any part of the Shares to any
person or persons so as to bring the sale of such Shares by the Sellers to the
Purchasers within the registration provisions of the Securities Act or any
other securities laws. Article VI.
Additional Covenants of Purchaser and the Company As a material inducement to Sellers to enter into this Agreement and to
consummate the purchase and sale contemplated hereunder, and with the
understanding that Sellers will be relying thereon in consummating the
purchase of the Shares contemplated hereunder, Purchaser and the Company (as
it exists after the Closing), jointly and severally, hereby covenant that,
from and after the Closing until all portions of the purchase price, including
all Contingent Cash Payments required to be made pursuant to Exhibit B: 6.1 Conduct of Business After Closing. The Company or its successor shall
conduct its business only in the ordinary course and consistent with prudent
business practices. 6.2 Funding of Business Plan. Purchaser shall, so long as
Company performs substantially in accordance with the business plan and budget
attached as Exhibit E to the 16




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EXECUTION COPY Agreement, provide the Company with such funding as is contemplated by the
aforementioned business plan and budget (as may be modified as contemplated
therein). 6.3 Access to Books and Records. Upon receipt of five (5) days notice or
upon the filing of an Indemnification Claim pursuant to Article VIII, the
Company shall permit the Principal Shareholders, the Sellers Representative
and their representatives reasonable access to the Companys books, records and
information relating to the Company, its assets, properties, operations,
obligations and liabilities, including, but not limited to, all books of
account (including the general ledger), tax records and filings, organizational
documents, capitalization, agreements, invoices, accounting records and
reports, accountants work papers, computer systems and reports, and any other
records and information relating to the Company and its operations in which
the Principal Shareholders, the Sellers Representative and their
representatives may have a reasonable interest pursuant to this Agreement
(including the performance by the Principal Shareholders of their
responsibilities as employees of the Company); provided that such
investigation shall be reasonably related to the rights and remedies of Sellers
under this Agreement, performance by the Principal Shareholders of their
responsibilities as employees of the Company, verification of the Contingent
Cash Payments, Indemnification Losses and Indemnification Claims, the factual
basis of Purchasers claims related to the foregoing; and provided, further
that such investigation shall not interfere unnecessarily with the normal
business operations of the Company. 6.4
401(k) Plan Matters. Prior to the Closing Date, the Company adopted
resolutions to terminate the 401(k) Plan prior to the Closing. The
distribution of 401(k) plan assets and dissolution of the 401(k) plan trust
shall occur as soon as administratively feasible following the Closing Date and
shall be the responsibility of the Company. The administrative costs incurred
in connection with such distribution and dissolution shall be borne by the
Company and shall be conducted at no cost or expense to Sellers, provided
however that nothing in this Section 6.4 shall be construed to limit Sellers,
Principal Shareholders or Companys liability for the representations made
under Section 3.25. Article VII.
Closing 7.1 General Procedure. At the closing of the purchase and sale of the
Shares pursuant to this Agreement (the Closing) each party shall deliver to
the other parties, as appropriate, the purchase price amounts and the
documents, certificates, agreements, instruments and materials described below.
All deliveries, payments, transfers, transactions and documents referenced in
this Article VII shall be interdependent, and none shall be effective unless
and until all are effective (except to the extent that the party entitled to
the benefit thereof has waived satisfaction and performance thereof as a
condition precedent to the Closing). 7.2 Time and Place. The Closing shall take place in the offices of eFunds
Corporation, Gainey Center II, Ste. 300, 8501 North Scottsdale Road,
Scottsdale, Arizona, at 10:00 oclock, a.m. on April 13, 2004 or at such other
time and place as shall be mutually acceptable to Purchaser and the Principal
Shareholders (the Closing Date). Communication and procedures necessary to
effect the Closing may be done by telephonic facsimile, telephone, electronic
mail or any other means that the parties mutually deem acceptable. 17




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EXECUTION COPY 7.3 Specific Items Delivered at the Closing. Contemporaneously with the
execution and delivery of this Agreement at Closing, the parties shall deliver
the following items to the appropriate party: (a) To be delivered by Purchaser: (i) Wire transfer in the aggregate amount of four million
five hundred thousand Dollars ($4,500,000.00). Such amount shall
be paid by wire transfer to the Penley Disbursement Account for
and on behalf of each Seller as set forth in Section 2.2(a)
pursuant to the wire instructions attached hereto as Exhibit H; (ii) Employment letters substantially in the form attached
hereto as Exhibit I between Purchaser and each of the Principal
Shareholders; and letters offering employment to all other current
employees of the Company upon substantially the same terms of
their current employment; (iii) [Intentionally Omitted]; (iv) Certificate of good standing for Purchaser dated April
5, 2004 issued by the Secretary of State of the State of Delaware;
and (v) Secretarys certificate confirming that eFunds Board
of Directors has authorized the transactions contemplated by this
Agreement. (b) To be delivered by the Company or Sellers as appropriate: (i) Stock certificates representing all of the issued and
outstanding shares of capital stock of the Company, which stock
certificates shall be endorsed in blank, or lost share affidavits
in form and substance reasonably satisfactory to Purchaser; (ii) The Termination of Indemnification Agreements in
substantially the form attached hereto as Exhibit J; (iii) The Cancellation Agreements in substantially the form
attached hereto as Exhibit K; (iv) Stock record books, minute books, corporate seals and
all other books and records of the Company; (v) Resignations (subject to the terms of the employment
letters described above) of the officers and directors of the
Company in substantially the form attached hereto as Exhibit L; (vi) Employment letters substantially in the form of Exhibit
I whereby each of Bruce F. Lowthers, Jr. and Cleve B. Shultz
agrees to enter into an employment relationship with the
Purchaser; 18




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EXECUTION COPY (vii) Certificate of good standing for the Company dated
April 12, 2004 issued by the Secretary of State of the State of
Georgia; (viii) Copies of signed consents and notices from the parties
indicated on Exhibit M; (ix) Noncompetition and confidentiality arrangements in
substantially the form attached hereto as Exhibit N; (x) Letter agreement in substantially the form attached
hereto as Exhibit O terminating all agreements between the Company
and Morris, Manning & Martin, LLP regarding the preparation of the
customer identification policy, including the letter from Susan L.
Spencer to Bruce F. Lowthers, Jr. dated May 2, 2003. All amounts
owed by the Company pursuant to such letter agreement shall be
paid out of the operating funds of the Company; (xi) A legal opinion from Morris, Manning &
Martin, LLP in substantially the form attached hereto as
Exhibit P; and (xii) Secretarys certificate confirming that the
Companys Board of Directors has authorized the transactions
contemplated by this Agreement. Article VIII.
Indemnification and Disputes 8.1 Survival of Representations. The covenants, representations and
warranties of the parties shall survive the Closing and be in full force and
effect until May 31, 2006; provided, however, that the representations and
warranties other than those in Sections 3.5, 3.10, 3.21, 4.6 and 4.7 made by
the Company and the Sellers shall expire one (1) year after the Closing Date.
Notwithstanding the foregoing, if Required Notice of an Indemnification Claim
(as those terms are defined below) has been given prior to the expiration of
the applicable covenants, representations and warranties, then the relevant
covenants, representations and warranties shall survive as to such
Indemnification Claim, until such Indemnification Claim has been finally
resolved. 8.2 Limited Indemnification by Sellers and Principal Shareholders.
Subject to the limitations set forth in this Article VIII, Sellers, severally
and not jointly, agree to indemnify Purchaser with respect to, and hold
Purchaser harmless from, any out-of-pocket loss, liability or expense
(including, but not limited to, reasonable legal fees) (an Indemnification
Loss) which Purchaser or the Company incurs or suffers by reason of, or which
results from or arises out of any breach of any representation, warranty or
covenant required to be performed prior to Closing made by the Company in this
Agreement. In addition, each Seller, severally and not jointly with any other
Seller, agrees to indemnify Purchaser with respect to, and hold Purchaser
harmless from any Indemnification Loss which Purchaser incurs or suffers by
reason of, or which results from or arises out of the breach by such Seller of
any of such Sellers representations, warranties or covenants under this
Agreement. Notwithstanding anything to the contrary set forth herein: 19




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EXECUTION COPY (a) where Purchaser is entitled to indemnification pursuant to this
Article VIII, such Indemnification Loss (once established pursuant to the
procedures set forth below) must be satisfied first from the retained
amounts held in the Penley Indemnification Account; (b) to the extent that the retained amounts are insufficient to
cover such Purchasers Indemnification Loss, such Indemnification Loss
shall be paid next from offsetting such Indemnification Loss amount
against any and all Contingent Cash Payments to be calculated and paid to
Sellers in accordance with Exhibit B, whether such payments are payable
and due immediately or at some time in the future; (c) if, but only if, Purchaser is entitled to recover
hereunder for an Indemnification Loss incurred as a result of
breaches of the Companys or Sellers representations and warranties set
forth in Sections 3.5, 3.10, 3.21 and 4.7 (and only such representations
and warranties), the amount of which exceeds the retained amounts and
Contingent Cash Payment amounts described in Section 8.2(a) and (b) above
(the Primary Indemnification Amounts) then each Principal Shareholder,
severally and not jointly, agrees to indemnify Purchaser for the amount by
which such Indemnification Loss exceeds such Primary Indemnification
Amounts up to such Principal Shareholders Maximum Liability Amount;
provided, however, that such Principal Shareholders liability under this
Section 8.2(c) shall expire on the first anniversary of the Closing Date.
Except with regard to fraud, the maximum liability of each Principal
Shareholder as an indemnifying party hereunder shall be equal to the cash
purchase price amount received by such Principal Shareholder from
Purchaser at Closing (the Principal Shareholder Maximum Liability
Amount); and (d) except with regard to fraud, the amount of Indemnification Loss
payable pursuant to this Section 8.2 shall not exceed the sum of the
Primary Indemnification Amounts and the Principal Shareholder Maximum
Liability Amount for each Principal Shareholder, and no Seller shall have
any personal liability for any claims of Purchaser except, with respect to
the Principal Shareholders, for Indemnification Losses described in
Section 8.2(c) for which the Principal Shareholders have agreed to
indemnify Purchaser. 8.3 Indemnification by Purchaser. Subject to the limitations set forth in
this Article VIII, Purchaser agrees to indemnify Sellers (and each of them)
with respect to, and hold Sellers (and each of them) harmless from, any
Indemnification Loss which Sellers (or any of them) incur or suffer by reason
of, or which results from or arises out of the breach of any representation or
warranty made by Purchaser in this Agreement, the breach by Purchaser or the
Company of any of its covenants and agreements under this Agreement (including
the obligation to pay Contingent Cash Payments in accordance with this
Agreement and Exhibit B and subject to the procedures described therein). 8.4 Conditions of Indemnification. The obligations of the indemnifying
parties under this Article VIII to indemnify and hold an indemnitee harmless
from any Indemnification Loss shall only become operative after, and to the
extent that, the total amount of all claims for indemnification against an
indemnifying party hereunder (Indemnification Claims) exceeds 20




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EXECUTION COPY Fifty Thousand Dollars ($50,000), except that Indemnification Claims resulting
from the breach of the Companys representations contained in Sections 3.5,
3.10, and 3.21, from the breach of Sellers representations and covenants in
Sections 4.6 and 4.7 and from the breach of Purchasers representations,
agreements and covenants contained in Article II, Sections 5.7, 6.1, 6.2, 6.3
and 6.4 and Exhibit B shall not be subject to such limitations.
In addition,
except with respect to (i) Indemnification Claims arising out of a breach or
failure to comply with Sections 3.5, 3.10, 3.21, 4.6 and 4.7 which are made by
Purchaser with a delivery of Required notice on or before May 31, 2006, (ii)
Indemnification Claims for fraud or willful misconduct in violation of this
Agreement by Sellers, (iii) Indemnification Claims other than claims pursuant
to (i) which are made by Purchaser by delivery of a Required Notice prior to
the first anniversary of the Closing Date in accordance with the terms hereof,
but which are not resolved in accordance with the terms hereof by that date,
all of Sellers and the Principal Shareholders indemnification obligations
shall terminate on the first anniversary of the Closing Date. 8.5 Indemnification Claims Procedures. (a) Notice of Claims. The party entitled to indemnification
hereunder (the Claimant) shall promptly deliver to the party liable for
such indemnification hereunder (the Obligor) notice in writing (the
Required Notice) of any claim for recovery under this Article VIII,
specifying in reasonable detail the nature of the Indemnification Loss,
and, if known, the amount, or an estimate of the amount, of the liability
arising therefrom. The Claimant shall provide to the Obligor as promptly
as practicable thereafter information and documentation reasonably
requested by the Obligor to support and verify the Indemnification Claim
and Indemnification Loss asserted, provided that, in so doing, it may
restrict or condition any disclosure upon the advice of counsel in the
interest of preserving privileges of importance in any foreseeable
litigation. Except as set forth in Section 8.6 below, the failure to
deliver a Required Notice within a certain period of time shall not
preclude a Claimants right to indemnification hereunder unless such
failure or delay prejudices the rights of the Obligor in a material
adverse manner. (b) Defense of Third Party Claims. If the facts pertaining to the
Indemnification Loss arise out of the claim of any third party (other
than Purchaser and its affiliates, on the one hand, and Sellers and their
affiliates, on the other, whichever is entitled to indemnification for
such matter) and indemnification is available by virtue of the
circumstances of the Indemnification Loss, the Obligor has the right, to
be exercised by delivering written notice to the Claimant within thirty
(30) days of receipt of a Required Notice, to assume and control the
defense or the prosecution thereof, including the employment of counsel
or accountants, at its cost and expense. The assumption of the defense
of an Indemnification Claim by the Obligor shall not be construed as an
acknowledgement that the Obligor is liable to indemnify the Claimant in
respect of such Indemnification Claim, nor shall it constitute a waiver
by the Obligor of any defenses it may assert against the Claimants claim
for indemnification. The Claimant shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the Claimants expense
unless (i) the employment has been specifically authorized by the Obligor
in writing or (ii) the Obligor has failed to assume the defense and
employ counsel as contemplated above. Whether or not the Obligor
chooses to so defend or prosecute any such 21




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EXECUTION COPY Indemnification Claim, all the parties hereto shall cooperate in good
faith and in a reasonable manner in the defense or prosecution thereof
and shall furnish such records, materials, information, witnesses and
testimony, and attend such conferences, discovery proceedings, hearings,
trials and appeals, as may be reasonably requested in connection
therewith. Reasonable costs and expenses incurred by the Claimant in
assuming and controlling the defense or prosecution of such third party
claims shall be an Indemnification Loss. In any event, neither the
Claimant nor the Obligor shall be liable for any settlement of any such
Indemnification Claim effected without its prior written consent, which
shall not be unreasonably withheld, delayed or conditioned, and no third
party Indemnification Claim may be settled by the Obligor without the
prior written consent of the Claimant, which consent shall not be
unreasonably withheld. 8.6 Limitations. Notwithstanding anything in this Article VIII to the
contrary: (a) Notwithstanding anything in this Article VIII to the contrary
there shall be no limitation on the time during which indemnification may
be sought or obtained for an instance of fraud or any knowing and willful
breach of any provision of this Agreement. (b) Except in cases of fraud and knowing and willful breach of this
Agreement, no Seller (other than the Principal Shareholders pursuant to
Section 8.2(c) above) shall have personal liability to Purchaser or the
Company; and (c) The parties each acknowledge and agree that this Article VIII is
the exclusive remedy of each of them for damages for breaches of or under
this Agreement, except in cases of fraud or knowing and willful breach of
this Agreement. Anything to the contrary notwithstanding, nothing in this
Agreement will prevent any party from filing an action to the extent such
action is based in good faith upon fraud or knowing and willful breach of
the provisions of this Agreement. 8.7 Disputes; Arbitration. The parties agree to negotiate in good faith
in an attempt to resolve all disputes regarding this Agreement or the matters
set forth herein, including disputes regarding any Contingent Cash Payments,
Indemnification Claim, Indemnification Loss or their liability under this
Article VIII. In the event of a dispute in which the parties involved cannot
reach agreement, such dispute shall be submitted to and settled by arbitration
in accordance with the then prevailing commercial arbitration rules of the
American Arbitration Association. Such arbitration shall be held in Denver,
Colorado before a panel of three arbitrators, one selected by Sellers
Representative, one selected by Purchase and the third selected by mutual
agreement of the first two arbitrators, and all of whom shall be independent
and impartial under the rules of the American Arbitration Association. The
decision of the arbitrators shall be final and binding as to any matter
submitted under this Agreement. In the event that there is a final resolution
in accordance with this Section 8.7 concluding that either party has not
brought or defended a claim in good faith, the arbitrators will have discretion
to award the prevailing party reasonable attorneys fees and 10% interest over
and above the award amount accruing from the date the claim was initially
brought. 22




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EXECUTION COPY Article IX.
Sellers Representative 9.1 Appointment; Acceptance. At the Closing and by operation of this
Agreement, Bruce F. Lowthers, Jr., and each of his successors, acting as
hereinafter provided (the Sellers Representative), is hereby fully
authorized and empowered by each Seller to act for and on behalf of such
Sellers in connection with the transactions and agreements contemplated by this
Agreement with respect to matters subsequent to the Closing Date, and each
Seller acknowledges that such appointment is coupled with an interest and is
irrevocable. In this regard (a) the Sellers Representative shall have full
and complete authorization, on behalf of Sellers and each of them (i) to
dispute or to refrain from disputing any claim made by Purchaser under this
Agreement, (ii) to negotiate and compromise any dispute which may arise under,
and to exercise or refrain from exercising remedies available to Sellers or any
of them under this Agreement and to sign any release or other document with
respect to such dispute or remedy, and (iii) to give such instructions and to
do such other things and refrain from doing such other things as the Sellers
Representative shall deem necessary or appropriate to carry out the provisions
of this Agreement; and (b) Sellers and each of them shall be bound by
all agreements and determinations made by and documents executed and
delivered by the Sellers Representative under this Agreement. By
executing this Agreement under the heading Sellers
Representative, Bruce F. Lowthers, Jr. hereby (i) accepts his appointment and
authorization to act as Sellers Representative as attorney-in-fact and agent
on behalf of the Sellers in accordance with the terms of this Agreement, and
(ii) agrees to perform his obligations under, and otherwise comply with this
Article IX. 9.2 Actions. Seller, by approval of this Agreement, expressly
acknowledges and agrees that the Sellers Representative is authorized to act
on his, her or its behalf, notwithstanding any dispute or disagreement between
or among the Sellers or any of them, and that Purchaser and any other person or
entity shall be entitled to rely on any and all actions taken by the Sellers
Representatives under this Agreement without any liability to, or obligation to
inquire of, any other Sellers. In addition, Sellers agree that the Sellers
Representative shall have no personal liability for any action or failure to
act unless the same was made in bad faith and in willful violation of the terms
of the Disbursement Agreement. Notwithstanding anything herein to the contrary,
Purchaser acknowledges that nothing in this Article IX shall create or increase
the liability of Bruce F. Lowthers, Jr. to Purchaser under this Agreement. 9.3 Successors. If the Sellers Representative ceases to function in his
capacity as a Sellers Representative for any reason whatsoever, then Cleve B.
Shultz shall be appointed as his successor, and if both cease to function in
such capacity for any reason whatsoever, then Sellers, by action of Sellers who
formerly held a majority of the Companys Common Stock immediately prior to the
Closing Date, shall have the right to appoint his successor; provided, however,
that if for any reason no successor has been appointed pursuant to the
foregoing within sixty (60) calendar days, then Purchaser shall have the right
to appoint a successor. In the event of any change in the individual serving
as the Sellers Representative, written notice of such change shall be given by
the new Sellers Representative to Purchaser and Sellers. 9.4 Effectiveness. The authorizations of the Sellers Representative
shall be effective until its rights and obligations under this Agreement and
the Disbursement Agreement terminate 23




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EXECUTION COPY by virtue of the termination of any and all obligations of Sellers to
Purchaser and of Purchaser to the Sellers under this Agreement. The
authorizations of the Sellers Representative shall be effective with respect
to each Seller in his, her or its capacity as a shareholder, option holder or
former shareholder or option holder of the Company and Sellers rights and
obligations under this Agreement, but not under any other agreement (e.g.,
employment agreements, indemnification agreements) unless otherwise expressly
stated in such agreement between or among one or more parties to this
Agreement. Article X.
Miscellaneous 10.1 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable against the parties hereto and their respective
successors. 10.2 Cooperation and Exchange of Tax Information. The parties agree to
furnish, or to cause to be furnished in good faith to each other, such
cooperation and assistance as is reasonably necessary to file any future
returns, to respond to audits, to negotiate settlements with tax authorities
and to prosecute and defend against tax claims. 10.3 Governing Law. This Agreement shall in all respects be governed
by, and enforced and interpreted in accordance with, the laws of the State of
Delaware. 10.4 Notices. All notices, consents, requests, instructions or other
communications provided for herein shall be in writing and shall be deemed
validly given, made and served when (a) delivered personally, (b) sent by
certified or registered mail, postage prepaid, (c) sent by reputable overnight
delivery service, or (d) sent by telephonic facsimile transmission and, pending
the designation of another address, addressed as follows: If to Sellers (or any of them)to the Sellers Representative at:
    
    Bruce F. Lowthers, Jr.Sellers Representative5850 Hershinger CloseDuluth, GA 30097If to the Company:
    
    Penley, Inc.6470 East Johns CrossingSuite 330Duluth, GA 30097Attention: Chief Executive OfficerTelecopy: (678) 475-0390In each case, with a copy to:
    
    Morris, Manning & Martin, LLP1600 Atlanta Financial Center3343 Peachtree Road, N.E.Atlanta, GA 30326Attention: Susan L. SpencerTelecopy: (404) 365-9532
 24




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EXECUTION COPY If to Purchaser:
    
    eFunds CorporationGainey Center II, Ste. 3008501 North Scottsdale Rd.Scottsdale, AZ 85253Attention: General CounselTelecopy: (480) 629-7661with an additional copy to:
    
    Dorsey & Whitney LLP50 South 6th StreetSuite 1500Minneapolis, MN 55402Attention: Robert A. RosenbaumTelecopy: (612) 340-7800
 10.5 Entire Agreement and Counterparts. This Agreement, the Exhibits
attached hereto, and any Schedules delivered pursuant to the provisions hereof,
set forth the entire agreement between Sellers and Purchaser relating to the
Shares, superseding in all respects any and all prior oral or written
agreements or understandings between them pertaining to the transactions
contemplated by this Agreement. This Agreement shall be amended or modified
only by written instrument signed by Sellers and Purchaser. This Agreement may
be executed in one or more counterparts, any one of which need not contain the
signatures of more than one party and each of which shall be deemed an original
and all of which, taken together, shall constitute one agreement. A telephonic
facsimile signature will be considered an original. 10.6 Headings. Section and article headings used in this Agreement have
no legal significance and are used solely for convenience of reference. 10.7 Assignment. Company and Sellers hereby agree that (a) Purchaser may
assign or transfer its rights or delegate its responsibilities under this
Agreement to a wholly-owned subsidiary or to an acquirer of Purchaser or all or
substantially all of the assets of Purchaser, (whether by merger, stock
purchase, purchase of assets, operation of law or otherwise); provided,
however, that Purchaser shall remain liable for all obligations of Purchaser
and (from and after the Closing) the Company hereunder, (b) each Seller may
assign or transfer his, her or its rights to receive payments of the purchase
price hereunder provided advance written notice thereof is delivered by such
Seller to the Sellers Representative and provided further that such Seller
shall remain liable for its obligations hereunder. Other than as expressly
permitted above, no party may assign or transfer its rights or obligations
under this Agreement, in whole or in part (whether by merger, stock purchase,
purchase of assets, operation of law or otherwise), without the prior written
consent of the Purchaser and the Company (in the event of an assignment or
transfer by Sellers or any of them) and the Principal Shareholders (in the
event of any assignment or transfer by Purchaser or the Company). 10.8 Expenses. Except to the extent otherwise provided in this Agreement,
each party shall pay for its own legal, accounting and other similar expenses
incurred in connection with the transactions contemplated by this Agreement.
All legal, accounting or other similar professional 25




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EXECUTION COPY advisory expenses incurred by the Company for the purpose of negotiating this
transaction on behalf of the Company shall be regarded as expenses of Sellers. 10.9 Publicity. Except as required by law, all notices to third parties
and other publicity relating to the matters contemplated by this Agreement
shall be jointly planned and coordinated between the Principal Shareholders and
Purchaser, and none of the parties shall unilaterally release such notices or
publicity without the prior, written approval of the Principal Shareholders and
Purchaser. [Signatures begin on next page] 26




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IN WITNESS WHEREOF, Sellers and Purchaser have executed this
Purchase and Sale Agreement as of the date set forth in the first
paragraph. PURCHASER
eFunds CorporationBy:
    /s/ Rahul GuptaName:
    Rahul GuptaTitle:
    SVP, Division ExecutiveTHE COMPANY
Penley, Inc.By:
    /s/ Bruce F. Lowthers, Jr.Name:
    Bruce F. Lowthers, Jr.Title:
    Chief Executive Officer and PresidentSELLERS
Principal Shareholders:/s/ Bruce F. Lowthers, Jr.Bruce F. Lowthers, Jr./s/ Cleve B. ShultzCleve B. Shultz Signature Page to
Purchase and Sale Agreement




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Other Shareholders or Holders of Options:/s/ Bruce F. Lowthers, Sr.Bruce F. Lowthers, Sr./s/ Eleanor M. LowthersEleanor M. Lowthers/s/ Charles H. SmithCharles H. Smith/s/ Rolfe HannaRolfe HannaHabif Arogeti & Wynn LLP Profit Sharing
Plan f/b/o Jonathan L. MillerName: /s/ Jonathan L. MillerTitle: Trustee/s/ Baron J. FrankelBaron J. Frankel/s/ Joseph D. SimmsJoseph D. Simms/s/ Cynthia MacPhersonCynthia MacPherson/s/ Kevin F. BernierKevin F. Bernier/s/ Kenneth B. CoxKenneth B. Cox/s/ Richard J. DewittRichard J. DewittLKL Investments, Inc.Name: /s/ Steve E. CopelandTitle: President




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/s/ Richard A. WilliamsRichard A. Williams/s/ Robert A. JetmundsenRobert A. Jetmundsen/s/ Vivian van ZylVivian van Zyl/s/ Alisa BarchieAlisa Barchie/s/ Aaron CaffeyAaron Caffey/s/ Winnie PhillipWinnie Phillip/s/ Tina DawsonTina Dawson/s/ Andrew CollinsAndrew Collins/s/ Goodman G. LedyardGoodman G. Ledyard/s/ Michael D. EasterlyMichael D. Easterly/s/ Robert GattoRobert Gatto/s/ Marco PiovesanMarco PiovesanSELLERS REPRESENTATIVE/s/ Bruce F. Lowthers, Jr.Bruce F. Lowthers, Jr.Attorney-in-fact
 Signature Page to Purchase and Sale Agreement




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List Indentifying
Contents
of Omitted Schedules The
following Exhibits and Schedules have been omitted from this Exhibit
2.1: Exhibit
A, Sellers List and Payment Information The
registrant will furnish supplementally a copy of any omitted Schedule
or Exhibit to the Securities and Exchange Commission upon the request
of the Commission.




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EXHIBIT B Contingent Purchase Price Payment (Earnout) As part of the purchase price for the Shares, Purchaser shall pay the
Contingent Cash Payment, if any, calculated and payable in accordance with
the provisions of this Exhibit B. 1. Definitions. As used in this Exhibit B, the following terms shall have the following
meanings: All capitalized terms, not defined in this Exhibit B, shall have the meanings
ascribed thereto in the Agreement. Agreement shall mean the Purchase and Sale Agreement with respect to the
Shares of the Companys capital stock dated April 13, 2004 between eFunds
Corporation, Penley Inc. and the Sellers identified therein. Base Period Amount shall mean with respect to Contingent Period 1, Two
Million Five Hundred Thousand Dollars ($2,500,000) and with respect to
Contingent Period 2, (i) the Revenue for Contingent Period 1 if such Revenue is
Three Million Dollars ($3,000,000) or greater; or (ii) Three Million Dollars
($3,000,000) if such Revenue is less than Three Million Dollars ($3,000,000). Contingent Cash Payments shall mean the additional purchase price amounts
payable with respect to the purchase of the Shares, as such amounts are
determined in accordance with Section 2 of this Exhibit B
and Schedule B-1
attached hereto for each of Contingent Period 1 and Contingent Period 2, as
each may be reduced (but not below zero) by Section 2(b) of this Exhibit B.
Anything herein to the contrary notwithstanding, the aggregate Contingent Cash
Payments shall not exceed Twenty-One Million Dollars ($21,000,000). Contingent Payment Date shall have the meaning set forth in Section 2(a) of
this Exhibit B. Contingent Period 1 shall mean the period commencing on April 1, 2004 and
ending on March 31,2005. Contingent Period 2 shall mean the period commencing on April 1, 2005 and
ending on March 31,2006. Contingent Periods shall mean both Contingent Period 1 and Contingent Period
2. Controlled Group shall mean collectively, the Company, the Purchaser, or a
direct or indirect parent, majority-owned subsidiary or other entity similarly
controlling, controlled by or under common control with the Company. Disability shall mean the inability, as a result of illness, disease,
injury, mental or physical impairment or similar cause, as determined by a
qualified medical practitioner, to fulfill B-1




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substantially Executives employment obligations to the Company, the Purchaser,
or another member of the Controlled Group employing such person at the time
such inability arises, either for any consecutive 180 day period or for any
period of 180 days (whether or not consecutive) within any consecutive 365 day
period. Executive shall mean, as applicable, either Bruce F. Lowthers, Jr. or
Cleve B. Shultz.GAAP shall mean U.S. generally accepted accounting
principles. Profit Margin shall mean the ratio, expressed as a percentage, of net income
to total revenue of the Company (as if operated on a stand-alone basis);
provided that no allocations of ordinary course of business overhead corporate
costs shall be taken into consideration for purposes of determining the Profit
Margin of the Company. Purchaser Certificate shall have the meaning set forth in Section 2(d)(i)
of this Exhibit B.Qualified Revenue shall mean Revenue reduced by the
Base Period Amount. Remaining Contingent Period Percentage shall mean, with respect to Contingent
Period 1 and Contingent Period 2: 1- Management Period where
    365 Management Period means the number of days in Contingent Period 1 or
Contingent Period 2, as the case may be, during which Mr. Lowthers or Mr.
Shultz, as the case may be, was employed by or otherwise providing
services under a consulting agreement or similar arrangement to the
Company, the Purchaser or a direct or indirect parent or subsidiary of
the Company or the Purchaser. In the event Mr. Lowthers or Mr. Shultz
suffers a Termination Without Cause (as defined below) during a
Contingent Period, then the Management Period of such person for such
Contingent Period and any subsequent Contingent Period shall be deemed to
be 365. Revenue shall mean the total revenue of the Company for the applicable
Contingent Period as determined in accordance with GAAP and Section 2(c) of
this Exhibit B. Review Accounting Firm shall have the meaning set forth in Section 2(d)(iii)
of this Exhibit B. Termination with Cause shall mean any termination by the Company, the
Purchaser, or another member of the Controlled Group of Executives employment
with the Company, the Purchaser, or another member of the Controlled Group by
reason of:  (i)
    
    Executives engagement in illegal conduct or willful misconduct
that is
demonstrably injurious to the business of the Company or any
member of the Controlled Group;(ii)
    
    The continued failure by Executive to (other than as the result
of death or
Disability) to substantially perform Executives material
duties, after a B-2




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written demand for substantial performance is delivered to
Executive by the executive officer of the Company to which
Executive reports;(iii)
    
    Executive commits an act, or omits to take action, and in bad
faith which
action or inaction results in a material detriment to one or
more members of the Controlled Group;(iv)
    
    Executive commits an act of fraud, misappropriation, embezzlement
or
other acts of dishonesty in connection with any member of the
Controlled Group or their customers or vendors;(v)
    
    Executive is convicted of or pleads guilty or nolo contendre to
criminal
misconduct constituting a felony or gross misdemeanor
involving a breach of ethics, moral turpitude or other
immoral conduct reflecting adversely upon the reputation or
interests of any member of the Controlled Group or their
customers or vendors or Executive becomes subject to criminal
sanctions that will prevent Executive from performing his
duties in the ordinary course for a period of time that is
likely to exceed 30 days;(vi)
    
    Executives use of narcotics, liquor or illicit drugs has had a
continuing
and demonstrable negative effect on Executives ability to
perform his duties or responsibilities to the members of the
Controlled Group; or(vii)
    
    Executive is in default under any agreement between Executive and
the
members of the Controlled Group or Executive refuses to
execute and deliver any lawful agreement that the Company
generally requires Executives peer executives to sign. Termination Without Cause shall mean any termination of employment by the
Purchaser or by another member of the Controlled Group, if applicable, that is
not a result of a Termination for Cause, a termination of employment by the
Purchaser or by another member of the Controlled Group, if applicable, as a
result of death, or a termination by the Purchaser or by another member of the
Controlled Group, if applicable, as a result of a Disability. 2. Calculation of Contingent Cash Payments. (a) General. The Contingent Cash Payment for each of Contingent
Period 1 and Contingent Period 2, respectively, shall be determined by
calculating the Qualified Revenue for Contingent Period 1 or Contingent
Period 2, as the case may be, by locating such Qualified Revenue amount
under the heading Qualified Revenue on Schedule B-1 for the applicable
Contingent Period, and then multiplying such Qualified Revenue amount as
indicated under the heading Contingent Cash Payment Amount in the
applicable table on Schedule B-1. On or before the sixtieth (60th) day
following the end of each of Contingent Period 1 and Contingent Period 2
(each a Contingent Payment Date) or on the immediately following
business day if the Contingent Payment Date is not a business day, and in
addition to the portion of the purchase price provided for in Section 2.1
(a) of the Agreement, Purchaser shall pay the applicable Contingent Cash
Payments to Sellers Representative by wire transfer pursuant to Section
2.2 of the Agreement as additional purchase price consideration for the
purchase of the Shares. Sellers Representative shall pay such funds to
the Sellers in accordance with the percentages set forth opposite such
Sellers name under the heading Cash at Closing on Exhibit A to the
Agreement and the Disbursement Agreement. Notwithstanding anything B-3




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herein to the contrary, no Contingent Cash Payment shall be paid with respect
to any Contingent Period in which the Company does not attain a Profit Margin
of fifteen percent (15%) or greater, and the aggregate amount paid in
Contingent Cash Payments shall not exceed Twenty-One Million Dollars
($21,000,000). (b) Restrictions. It is hereby expressly acknowledged and agreed that
Purchasers agreement to pay a portion of the purchase price for the Shares and
the Sellers agreement to accept such portion of the purchase price in a
contingent manner is based, in part, upon the anticipated future performance of
the Company as operated in a manner which is substantially consistent with its
operations before Closing. Therefore, anything herein to the contrary
notwithstanding, the Contingent Cash Payment for Contingent Period 1 and
Contingent Period 2 shall be reduced by an amount determined by multiplying the
Remaining Contingent Period Percentages by fifty percent (50%) of the
Contingent Cash Payment for such Contingent Periods if either Bruce F.
Lowthers, Jr. or Cleve B. Shultz is not employed by or otherwise providing
services under a consulting agreement or similar arrangement to the Company,
the Purchaser, or a direct or indirect parent, subsidiary or other affiliate of
the Company or the Purchaser for the entire sixth (6th) month period following
the Closing Date, or by an amount determined by multiplying the Remaining
Contingent Period Percentages by one hundred percent (100%) of the Contingent
Cash Payment for such Contingent Periods in the event both Bruce F. Lowthers,
Jr. and Cleve B. Shultz are not employed by or otherwise providing services
under a consulting agreement or similar arrangement to the Company, the
Purchaser or a direct or indirect parent, subsidiary or other affiliate of the
Company or the Purchaser as of the end of such six (6) month period following
the Closing Date, in each case except to the extent that either Mr. Lowthers or
Mr. Shultz has suffered a Termination Without Cause (in which case no reduction
of the Contingent Cash Payments shall be made). (c) Determination of Revenue; Operation of the Company. For purposes of
calculating Revenue, all effects of purchase accounting adjustments caused by
the acquisition of the Company by Purchaser shall be disregarded. For purposes
of calculating the Contingent Cash Payments owed in the case of standard
Company products and services sold directly by Purchaser or another member of
the Controlled Group (other than the Company), Revenues shall include the
amount of revenue generated by such sales as if the Purchaser or such other
member of the Controlled Group (other than the Company) was operating as the
third-party reseller of the Company conducting sales of a substantially similar
nature with the most favorable discount or reseller rate then applicable to
such substantially similar sales. As a material inducement to Purchaser to
enter into the Agreement, Sellers, Purchaser and the Company agree that from
and after the Closing Date, the business shall be operated and managed in
compliance with the ordinary and customary policies and procedures of
Purchaser, including those policies and procedures set forth in the Global
Corporate Commitment Authority, attached hereto as Schedule B-2, as the same
may be amended from time to time. All amounts to be determined in calculating
the Contingent Cash Payments under the Agreement and this Exhibit B shall be
determined in accordance with GAAP as consistently applied by Purchaser as
reflected in its SEC Reports. Company and Sellers further understand and agree
that the transactions contemplated by the Agreement B-4




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constitute a transfer of control to Purchaser, and accordingly, Purchaser and
its representatives will exercise its and their business judgment regarding the
operations of Company or its successors in a manner consistent with its and
their duties to the shareholders of Purchaser. From and after the Closing Date,
Purchaser, consistent with its duties and obligations set forth in the
preceding sentence, and the Company shall use commercially reasonable efforts
to operate and manage the business of the Company in such a manner as to
provide a reasonable opportunity for the achievement of the objectives
contemplated by this Exhibit B. In the event that a Company product or service
is non-compliant in any material respect with applicable federal and/or state
legislation, including but not limited to the Fair Credit Reporting Act,
Purchaser may decide, in the exercise of commercially reasonable business
judgment, not to market the non-compliant product or service unless and until
modification to bring the product or service into compliance can be done at a
reasonable cost. Company and Sellers acknowledge and accept that some or all of
the revenue associated with non-compliant products or services in the Companys
business plan for the Contingent Periods may not be realized if there is a
delay in marketing of those non-compliant products or services and that any
revenue shortfall associated with such a delay will decrease the likelihood of
the Company achieving the targets required for Contingent Cash Payments.
Without limiting the generality of the preceding sentence, Purchaser and the
Company hereby confirm their covenants and agreements as set forth in Article
VI of the Agreement, and further agree that from the Closing Date until the
expiration of Contingent Period 2, Purchaser shall, so long as Company performs
substantially in accordance with the business plan and budget attached as
Exhibit E to the Agreement, provide the Company with such funding as is
contemplated by the aforementioned business plan and budget (as may be modified
as contemplated therein). (d) Calculation Process and Administration. The amount of each
Contingent Cash Payment shall be calculated and agreed upon by the parties
as follows: (i) At least thirty (30) days prior to each Contingent
Payment Date, Purchaser shall deliver to Sellers Representative a
certificate signed by a duly authorized official of Purchaser setting
forth the calculation of the amount of the Contingent Cash Payment, if
any, payable on such Contingent Payment Date (the Purchaser
Certificate"'). The Purchaser Certificate shall set forth the facts
forming the basis of such calculation and details of such calculation in
sufficient detail and with inclusion of facts sufficient to enable
Sellers Representative to determine the accuracy thereof. Purchaser and
the Company shall deliver all reasonably requested information to the
Sellers Representative pursuant to Section 6.5 of the Agreement in
connection with the matters presented in the Purchaser Certificate. The
parties acknowledge and agree that each Contingent Cash Payment shall be
calculated in accordance with this Exhibit B. (ii) The calculation of any Contingent Cash Payment as set
forth in the Purchaser Certificate shall be binding on the parties hereto
if the Sellers Representative has been previously granted access to all
information requested pursuant to Section 2(e)(i) above and Section 6.5
of the Agreement and the Sellers Representative has not delivered
written notice of any objection of the B-5




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Sellers (or any of them) to such calculations within thirty (30) days following
receipt by the Sellers Representative of the Purchaser Certificate. The
written notice by the Sellers Representative shall specify the items and
calculations objected to, and Purchaser and Sellers Representative will seek
in good faith, for a period of thirty (30) days following receipt of such
written notice, to resolve promptly the matters set forth in the notice. From
and after the date of any written notice of objection, that portion of the
Contingent Cash Payment not in dispute shall be promptly paid by Purchaser to
Sellers and that portion of the Contingent Cash Payment in dispute shall not be
paid until a final determination is made pursuant to this Section 2(e) of the
Contingent Cash Payment to be paid. (iii)
In the event the parties are unable to resolve such differences
during the period described in Section 2(e)(ii) above, the parties will submit
the matter for review by a mutually agreed upon accounting firm (the Review
Accounting Firm), and such review by the Review Accounting Firm shall be
limited to (A) such items and calculations as were addressed in the written
notice of objection of Sellers Representative that have not been resolved by
the parties, and (B) any factual or mathematical errors contained in the
Purchaser Certificate or in the underlying information necessary to derive the
statements reflected therein. The parties shall cause the Review Accounting
Firm to review, subject to the limitations of the previous sentence, the
calculation of the Contingent Cash Payment and to make, subject to the
limitations of the previous sentence, such corrections thereto as it deems
appropriate consistent with the terms of the Agreement and this Exhibit B.
Within thirty (30) days after the matter is submitted to the Review Accounting
Firm, the Review Accounting Firm shall issue a written report of its review,
setting forth in reasonable detail its calculation of such Contingent Cash
Payment. The determination of the Contingent Cash Payment as calculated by the
Review Accounting Firm and set forth in its report shall be conclusive and
binding on the parties to this Agreement and shall be the sole and exclusive
means of resolving such disputes. Following a final determination of the amount
of the Contingent Cash Payment, if any, such amount shall be paid together with
interest as provided below, promptly by Purchaser to Sellers Representative in
accordance with the terms of this Exhibit B but in any event no later than ten
(10) business days after the Review Accounting Firms report is delivered to
Purchaser. In the event the parties cannot mutually agree upon an accounting
firm, the parties will submit the matter to be reviewed and settled in
arbitration in accordance with Section 8.7 of the Agreement; provided, however
that under this Section 2(e)(iii), only arbitrators, who specialize in
accounting matters, shall be selected and such arbitrators shall limit their
review to the matters identified in this Section 2(e)(iii). (iv)
In the event Purchaser and Sellers submit any unresolved
differences to the Review Accounting Firm for resolution as provided in Section
2(e)(iii) above, Purchaser shall be responsible for the fees and expenses of
the Review Accounting Firm in proportion to the percentage of the dollar amount
of such unresolved differences as are resolved in favor of Sellers and Sellers
will be responsible for the remainder of such fees and expenses. In the event
that such B-6




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fees and expenses are unable to be so allocated, each party shall pay
fifty percent (50%) of such fees and expenses. (v) Interest shall accrue with respect to all unpaid
Contingent Cash Payment amounts, or portions thereof, from the applicable
Contingent Payment date until paid in full pursuant to the foregoing
provisions, at the annual interest rate of six percent (6%). (e) Tax Treatment. The Contingent Cash Payments are provided for as a
result of the Purchasers and the Sellers uncertainty concerning the value of
Sellers Shares. The value of Sellers Shares depends upon many factors,
including but not limited to the revenue of the Company, the net operating
results of the Company, the continued participation of management in the
business of the Company, and many other factors affecting the Companys future
performance. Therefore, the parties agree that the contingency reflected in the
Agreement and this Exhibit B is the best method to determine the ultimate
amount of consideration payable to all of the Sellers in exchange for their
Shares. The parties further agree that for federal, state and local income tax
purposes, the Contingent Cash Payments will be treated as payments in exchange
for Sellers Shares and Purchaser and the Company agree to prepare and file all
tax returns and other reports in a manner consistent with the Agreement and
this Exhibit B. B-7




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SCHEDULE B-1 Contingent Cash Payment Schedule Contingent Period 1 Qualified Revenue
    
    Contingent Cash Payment Amount*0 to 1,500,000
    
    2.00 times Qualified Revenue1,500,001 to 1,650,000
    
    2.05 times Qualified Revenue1,650,001 to 1,800,000
    
    2.10 times Qualified Revenue1,800,001 to 1,950,000
    
    2.15 times Qualified Revenue1,950,001 and above
    
    2.20 times Qualified Revenue
 Contingent Period 2 Qualified Revenue
    
    Contingent Cash Payment Amount*$0 to 1,999,999
    
    $
    02,000,000 to 2,179,999
    
    1.60 times Qualified Revenue2,180,000 to 2,219,999
    
    1.70 times Qualified Revenue2,220,000 to 2,359,999
    
    1.80 times Qualified Revenue2,360,000 to 2,499,999
    
    1.90 times Qualified Revenue2,500,000 to 2,639,999
    
    2.00 times Qualified Revenue2,640,000 to 2,779,999
    
    2.05 times Qualified Revenue2,880,000 to 2,919,999
    
    2.10 times Qualified Revenue2,920,000 to 3,059,999
    
    2.15 times Qualified Revenue3,060,000 and above
    
    2.20 times Qualified Revenue
 *Subject to reduction as per Sections 2(a) and (b) of this Exhibit B. By way of example, and to further clarify the calculation of the Contingent Cash Payment amounts: (A) If total Revenue for Contingent Period 1 is $4,300,000 and for Contingent Period 2 is
$6,900,000 and the Profit Margin is equal to or greater than 15% for both Contingent Periods, the
Contingent Cash Payments would be calculated as follows: B-8




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Contingent Period 1 Qualified
Revenue = $4,300,000  2,500,000 = $1,800,000 Contingent
Cash Payment Amount = $1,800,000 x 2.1 = $3,780,000 Contingent Period 2 Qualified
Revenue = $6,900,000  4,300,000 = $2,600,000 Contingent Cash Payment = $2,600,000 x 2 = $5,200,000 (B) If total Revenue for Contingent Period 1 is $2,400,000 and for Contingent
Period 2 is $5,100,000 and the Profit Margin is equal to or greater than 15%
for Contingent Period 2, the Contingent Cash Payments would be calculated as
follows: Contingent Period 1 Qualified
Revenue = $2,400,000  2,500,000 = ($100,000) Contingent
Cash Payment Amount = $0 Contingent Period 2 Qualified
Revenue  $5,300,000  3,000,000 = $2,300,000 Contingent
Cash Payment = $2,300,000 x 1.8 = $4,140,000 (C) If total Revenue for Contingent Period 1 is $8,000,000 and for Contingent
Period 2 is $13,000,000 and the Profit Margin is equal to or greater than 15%
for both Contingent Periods, the Contingent Cash Payments would be calculated
as follows: Contingent Period 1 Qualified
Revenue = $8,000,000  2,500,000  $5,500,000 Contingent
Cash Payment Amount = $5,500,000 x 2.2 = $12,100,000 Contingent Period 2 Qualified
Revenue = $13,000,000  8,000,000 = $5,000,000 Contingent
Cash Payment = $5,000,000 x 2.2 = $11,000,000 of which only
$8,900,000 will be paid because the aggregate of Contingent Cash Payments
cannot exceed $21,000,000. (D) If total Revenue for Contingent Period 1 is $4,000,000 and for Contingent
Period 2 is $6,000,000 and the Profit Margin is 14% for both Contingent
Periods, no Contingent Cash Payments would be made because of the failure to
attain a Profit Margin equal to or greater than 15%. B-9




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Notwithstanding anything to the contrary in the Agreement, Exhibit B or this
Schedule B-1, under no circumstances will the aggregate amount of Contingent
Cash Payments exceed Twenty-One Million Dollars and under no circumstances will
Revenue for which a Contingent Cash Payment for Contingent Period 1 has been
paid also be counted as Revenue for Contingent Period 2. B-10