EXHIBIT 10.6
STOCK PURCHASE AGREEMENT
by and among
CHOICEPOINT INC.,
CHOICEPOINT SERVICES INC.,
and
LABONE, INC.
Dated as of August 31, 2001
TABLE OF CONTENTS
PAGE
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Section 1. Purchase of Osborn Shares.......................................................................2
1.1 Transfer of Osborn Shares.......................................................................2
1.2 Purchase Price..................................................................................2
1.3 Delivery of Osborn Shares and Payment of Purchase Price.........................................2
1.4 Working Capital Adjustment......................................................................2
Section 2. Related Matters.................................................................................4
2.1 Transfer of Real Property.......................................................................4
2.2 Transfer of Personal Property and Intellectual Property.........................................4
2.3 Transfer of CHS Capital Stock...................................................................5
2.4 Sale of Osborn Canada Shares....................................................................5
2.5 Transfer of Accounts Receivable; Cooperation with Respect to Accounts Receivable................5
2.6 Distributions...................................................................................6
2.7 Transition Services.............................................................................6
2.8 Further Assurances..............................................................................6
Section 3. Representations and Warranties of the ChoicePoint Entities......................................6
3.1 Organization....................................................................................6
3.2 Authorization...................................................................................7
3.3 Absence of Restrictions and Conflicts...........................................................7
3.4 Capitalization..................................................................................8
3.5 Ownership of Assets and Related Matters.........................................................9
3.6 Financial Statements...........................................................................11
3.7 No Undisclosed Liabilities.....................................................................11
3.8 Absence of Certain Changes.....................................................................11
3.9 Legal Proceedings..............................................................................13
3.10 Licenses, Permits, and Compliance with Law.....................................................13
3.11 Material Contracts.............................................................................15
3.12 Tax Returns; Taxes.............................................................................16
3.13 Employees and Independent Contractors; Officers and Directors..................................19
3.14 ERISA and Related Matters......................................................................20
3.15 Labor Matters..................................................................................23
3.16 Insurance......................................................................................24
3.17 Intellectual Property..........................................................................24
3.18 Customers......................................................................................24
3.19 Related Party Agreements and Transactions......................................................25
3.20 Completeness of Disclosure.....................................................................25
3.21 Brokers, Finders, and Investment Bankers.......................................................25
Section 4. Representations and Warranties of the Parent...................................................25
4.1 Organization...................................................................................25
4.2 Authorization..................................................................................25
4.3 Absence of Restrictions and Conflicts..........................................................26
4.4 Brokers, Finders, and Investment Bankers.......................................................26
Section 5. Representations and Warranties of LabOne.......................................................26
5.1 Organization...................................................................................26
5.2 Authorization..................................................................................27
5.3 Absence of Restrictions and Conflicts..........................................................27
5.4 Brokers, Finders, and Investment Bankers.......................................................27
5.5 Purchase for Investment........................................................................27
5.6 Litigation.....................................................................................28
Section 6. Additional Covenants and Agreements............................................................28
6.1 Access to Information..........................................................................28
6.2 Consents.......................................................................................29
6.3 Fees and Expenses..............................................................................29
6.4 Public Announcements...........................................................................29
6.5 Employees; Employee Benefits...................................................................30
6.6 Use of ChoicePoint Corporate Name and Trademarks...............................................31
6.7 Transition Services Agreement..................................................................32
6.8 Investigation by LabOne........................................................................32
6.9 Audit of Osborn Year-End Financial Statements..................................................32
6.10 Insurance Matters..............................................................................33
Section 7. Restrictive Covenants..........................................................................33
7.1 Definitions....................................................................................33
7.2 Noncompetition.................................................................................34
7.3 Severability...................................................................................35
Section 8. Contemporaneous Actions........................................................................35
8.1 LabOne Documents...............................................................................36
8.2 Transfers Complete.............................................................................36
8.3 Third-Party Consents and Notices...............................................................36
8.4 ChoicePoint Documents..........................................................................37
Section 9. Survival of Representations and Warranties, Etc.; Indemnification..............................38
9.1 Survival of Representations, Warranties, Covenants and
Agreements; Right to Indemnification not Affected by Knowledge.................................38
9.2 Indemnification Obligations of the ChoicePoint Entities........................................38
9.3 Indemnification Obligations of LabOne..........................................................39
9.4 Indemnification Procedure......................................................................39
9.5 Claims Period..................................................................................41
9.6 Threshold Amount; Limitation Amount............................................................42
9.7 Limitations on Indemnification.................................................................42
9.8 Exclusive Remedy...............................................................................43
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Section 10. Tax Matters....................................................................................43
10.1 Preparation and Filing of Tax Returns..........................................................43
10.2 Payment of Taxes...............................................................................44
10.3 Tax Sharing Agreements.........................................................................44
10.4 Carryforwards and Carrybacks...................................................................45
10.5 Refunds and Credits............................................................................45
10.6 Tax Cooperation................................................................................45
10.7 Tax Indemnification............................................................................45
10.8 Tax Contests...................................................................................47
10.9 Definitions....................................................................................48
Section 11. Miscellaneous..................................................................................48
11.1 Notices........................................................................................48
11.2 Attachments....................................................................................49
11.3 Successors in Interest.........................................................................49
11.4 Number; Gender.................................................................................50
11.5 Captions.......................................................................................50
11.6 Knowledge......................................................................................50
11.7 Controlling Law; Integration; Amendment........................................................50
11.8 Severability...................................................................................50
11.9 Counterparts...................................................................................51
11.10 Enforcement of Certain Rights..................................................................51
11.11 Injunctive Relief..............................................................................51
11.12 Submission to Jurisdiction.....................................................................51
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ANNEXES
Annex 1 - Current Assets
Annex 2 - Current Liabilities
Annex 3 - Net Working Capital GAAP Exceptions
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of the 31st
day of August, 2001, is made and entered into by and among CHOICEPOINT INC., a
Georgia corporation (the "Parent"), CHOICEPOINT SERVICES INC., a Georgia
corporation and wholly owned subsidiary of the Parent ("ChoicePoint" and
together with the Parent, each individually, a "ChoicePoint Entity" and
collectively, the "ChoicePoint Entities"), and LABONE, INC., a Missouri
corporation ("LabOne").
WITNESSETH:
WHEREAS, ChoicePoint owns all of the issued and outstanding shares of
capital stock of Osborn Group Inc., a Delaware corporation ("Osborn");
WHEREAS, Osborn owns all of the issued and outstanding shares of
capital stock of Intellisys, Inc., a Georgia corporation ("Intellisys"),
ChoicePoint Health Systems Inc., a Kansas corporation ("CHS"), Applied
BioConcepts Inc., a Kansas corporation ("Applied"), and Osborn Laboratories
(Canada) Inc., a corporation organized under the Laws (as hereinafter defined)
of Canada ("Osborn Canada") (Intellisys, Applied and Osborn Canada (but not CHS)
are each hereinafter sometimes referred to individually as an "Osborn
Subsidiary" and collectively as the "Osborn Subsidiaries"; Osborn and the Osborn
Subsidiaries are each hereinafter sometimes referred to individually as an
"Osborn Entity" and collectively as the "Osborn Entities");
WHEREAS, subject to the terms and conditions of this Agreement,
ChoicePoint desires to sell, and LabOne desires to purchase, all of the issued
and outstanding shares of capital stock of Osborn (which, except as otherwise
provided in this Agreement, will continue to own all of the issued and
outstanding shares of capital stock or share capital of each of the Osborn
Subsidiaries);
WHEREAS, prior to the sale and purchase of the issued and outstanding
shares of capital stock of Osborn, the parties desire that the Osborn Entities
transfer to ChoicePoint or an Affiliate (as hereinafter defined) thereof, and
that ChoicePoint transfer to the Osborn Entities, certain assets and liabilities
described more particularly herein;
WHEREAS, immediately prior to the sale and purchase of the issued and
outstanding shares of capital stock of Osborn, the parties desire that Osborn
sell, and LabOne Canada, Inc. purchase, all of the issued and outstanding share
capital of Osborn Canada and that Osborn, in turn, transfer to ChoicePoint the
proceeds from the sale of the share capital of Osborn Canada; and
WHEREAS, in connection with the sale and purchase of the issued and
outstanding shares of capital stock of Osborn, LabOne desires to purchase from
ChoicePoint, and ChoicePoint desires to provide to LabOne, certain transition
services described more particularly herein;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. PURCHASE OF OSBORN SHARES.
1.1 Transfer of Osborn Shares. On the terms and subject to the
conditions set forth in this Agreement, ChoicePoint hereby sells, assigns,
transfers, and delivers to LabOne, and LabOne hereby purchases from ChoicePoint,
one (1) share of common stock of Osborn (the "Osborn Shares"), which Osborn
Shares constitute all of the issued and outstanding shares of capital stock of
Osborn.
1.2 Purchase Price. On the terms and subject to the conditions set
forth in this Agreement, in consideration for all of the Osborn Shares, subject
to adjustment pursuant to Section 1.4, LabOne shall pay to ChoicePoint the
purchase price (the "Purchase Price") for the Osborn Shares in the amount of
FORTY-EIGHT MILLION SIX HUNDRED FIFTY THOUSAND DOLLARS ($48,650,000), which
amount LabOne hereby pays in accordance with Section 1.3.
1.3 Delivery of Osborn Shares and Payment of Purchase Price.
Contemporaneously with the execution of this Agreement, (a) against delivery of
the Purchase Price, ChoicePoint is delivering to LabOne a certificate or
certificates in definitive form evidencing the Osborn Shares, duly endorsed for
transfer, or accompanied by a stock transfer power duly endorsed in blank, with
all requisite stock transfer Taxes (as hereinafter defined) paid and stamps
affixed, and (b) against delivery of the Osborn Shares, LabOne is delivering or
causing to be delivered to ChoicePoint by wire transfer of immediately available
funds the amount of FORTY-EIGHT MILLION SIX HUNDRED FIFTY THOUSAND DOLLARS
($48,650,000), which amount is being wire transferred to ChoicePoint's account
number 13-028-140 (ChoicePoint Inc. - Master Account) at Wachovia Bank of
Georgia (ABA #061-000-010), Atlanta, Georgia.
1.4 Working Capital Adjustment.
(a) Definition of Net Working Capital. For purposes of
this Section 1.4, the term "Net Working Capital" means the "Current
Assets" (as hereinafter defined) over the "Current Liabilities" (as
hereinafter defined) of the Osborn Entities, as of 5:00 p.m., Kansas
City, Missouri time, on the date hereof (the "Statement Date"), in each
case as determined, except as otherwise provided herein, in accordance
with generally accepted accounting principles applied consistently with
past practices ("GAAP"). As used herein, the term "Current Assets"
means those assets of the type listed on Annex 1 hereto (less
applicable reserves), and the term "Current Liabilities" means those
liabilities of the type listed on Annex 2 hereto. For the purposes of
determining the "Net Working Capital", it is understood that Osborn
Canada shall continue to be considered an Osborn Entity notwithstanding
the sale of the "Osborn Canada Shares" (as hereinafter defined) to
LabOne pursuant to Section 2.4 hereof prior to the sale and purchase of
the Osborn Shares.
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(b) Preparation of Proposed Working Capital Statement.
Within sixty (60) days after the date hereof, LabOne shall prepare and
deliver to ChoicePoint, at the sole expense of LabOne, a statement of
the Osborn Entities (the "Proposed Working Capital Statement"), which
Proposed Working Capital Statement shall set forth its proposed
calculation of the Current Assets, the Current Liabilities, and the Net
Working Capital as of the Statement Date and shall make available to
ChoicePoint for review and copying all work papers relating to the
Proposed Working Capital Statement. Except as otherwise provided herein
or set forth on Annex 3 hereto, the Proposed Working Capital Statement
shall be prepared in accordance with GAAP after giving effect (except
as hereinafter noted) to the transactions (the "Pre-Closing
Transactions") contemplated by this Agreement (including, without
limitation, each of the transactions described in Sections 2.1, 2.2,
2.3, 2.5 and 2.6 hereof, but excluding the transaction described in
Section 2.4 hereof ). For the purposes of the determination of the Net
Working Capital and the Final Working Capital Statement, the
Pre-Closing Transactions shall be deemed to have been completed on or
prior to the Statement Date.
(c) Examination of Proposed Working Capital Statement.
ChoicePoint shall review the Proposed Working Capital Statement to
confirm the accuracy of the Proposed Working Capital Statement and of
LabOne's calculation of the Net Working Capital. If ChoicePoint fails
to give LabOne written notice of any disputed amounts within thirty
(30) days after ChoicePoint receives the Proposed Working Capital
Statement (the "Review Period"), then the Proposed Working Capital
Statement shall become the "Final Working Capital Statement" (as
hereinafter defined) for purposes hereof. If ChoicePoint gives LabOne
written notice of any disputed items and its proposed calculation of
Net Working Capital within the Review Period, ChoicePoint and LabOne
shall attempt in good faith to agree on any adjustments that should be
made to the Proposed Working Capital Statement in order to reflect the
Net Working Capital. If ChoicePoint and LabOne are unable to resolve
any disputed amounts within sixty (60) days after ChoicePoint receives
the Proposed Working Capital Statement, ChoicePoint and LabOne will
engage the Kansas City, Missouri office of PricewaterhouseCoopers LLP
(the "Audit Firm") to resolve any such disputed matters in accordance
with the terms of this Agreement. If possible, the decision of the
Audit Firm shall be made within thirty (30) days after being engaged.
The decision of the Audit Firm shall be final and binding on the
parties. The Proposed Working Capital Statement shall be revised, if
necessary, to reflect the final determination of the Net Working
Capital (the final form of the Proposed Working Capital Statement,
including any revisions which are made thereto pursuant to this Section
1.4(c), is referred to herein as the "Final Working Capital
Statement").
(d) Adjustments. The parties hereto acknowledge that the
consideration being paid to ChoicePoint pursuant to Section 1.2 is
based on the assumption that the Net Working Capital of Osborn shall be
equal to -$719,731 (the "Assumed Net Working Capital"). Accordingly,
the parties hereto agree that if the Net Working Capital as reflected
on the Final Working Capital Statement is less than the Assumed Net
Working Capital (i.e., the Assumed Net Working Capital is -$719,732 or
a greater negative number) (the amount of such shortfall, if any, is
hereinafter referred to as the "Working Capital Deficit"), ChoicePoint
shall pay to LabOne, on a dollar for dollar basis, an amount equal to
the Working Capital Deficit (such payment shall be hereinafter referred
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to as a "Working Capital Payment"). The Working Capital Payment, if
any, shall be paid to LabOne within ten (10) days of the final
determination of the Final Working Capital Statement. If the Net
Working Capital as reflected on the Final Working Capital Statement is
greater than the Assumed Net Working Capital (i.e., the Assumed Net
Working Capital is -$719,730 or either a lesser negative number or zero
or a positive number) (the amount of such excess is hereinafter
referred to as the "Working Capital Surplus"), LabOne shall pay to
ChoicePoint, on a dollar for dollar basis, an amount equal to the
Working Capital Surplus. The Working Capital Surplus, if any, shall be
paid by LabOne to ChoicePoint within ten (10) days of the final
determination of the Final Working Capital Statement. The determination
of the Working Capital Deficit or the Working Capital Surplus, as the
case may be, shall be made immediately following the final
determination of the Final Working Capital Statement.
(e) Expenses of Audit Firm. In the event the parties
submit any unresolved objections to the Audit Firm for resolution as
provided in Section 1.4(c) above, LabOne, on the one hand, and the
ChoicePoint Entities, jointly and severally, on the other hand, will
each be obligated to pay fifty percent (50%) of the fees and expenses
of the Audit Firm; provided, however, that if the Audit Firm's final
determination of Net Working Capital varies from either LabOne's or
ChoicePoint's determination of Net Working Capital (but not both) by
more than ten percent (10%), the party whose determination of Net
Working Capital so varied by more than ten percent (10%) from that of
the Audit Firm shall bear one hundred percent (100%) of the Audit
Firm's fees and expenses.
SECTION 2. RELATED MATTERS.
2.1 Transfer of Real Property.
(a) Prior to or on the date hereof, the Osborn Entities
have transferred to ChoicePoint all of the Owned Real Property (as
defined in Section 3.5(a)), together with all benefits and liabilities
associated therewith.
(b) Prior to or on the date hereof, ChoicePoint has
transferred to the Osborn Entities the Retained Real Property Leases
(as defined in Section 3.5(a)), together with all benefits and
liabilities associated therewith.
2.2 Transfer of Personal Property and Intellectual Property.
(a) Prior to or on the date hereof, the Osborn Entities
have transferred to ChoicePoint or an Affiliate thereof (i) all of the
ChoicePoint Personal Property (as defined in Section 3.5(b)) and the
ChoicePoint Personal Property Leases (as defined in Section 3.5(b)),
together with all benefits and liabilities associated therewith and
(ii) the trademarks, tradenames, service marks, patents and other
intellectual property set forth on Schedule 2.2(a)(ii).
(b) Prior to or on the date hereof, ChoicePoint has
transferred, or caused to be transferred, to the Osborn Entities all of
the personal property and, if applicable, the leases related thereto
set forth on Schedule 2.2(b)(i), together with all benefits and
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liabilities associated therewith and (ii) the trademarks, tradenames
and service marks set forth on Schedule 2.2(b)(ii).
2.3 Transfer of CHS Capital Stock. Prior to or on the date hereof,
Osborn has transferred to ChoicePoint all of the capital stock of CHS, which
corporation owns the Appraise line of home test kits for the monitoring of
disease (the "Appraise Product").
2.4 Sale of Osborn Canada Shares. Immediately prior to the sale
and purchase of the Osborn Shares, pursuant to an agreement mutually acceptable
to the parties (the "Osborn Canada Stock Purchase Agreement"), ChoicePoint has
caused Osborn to sell, and LabOne has caused LabOne Canada, Inc. to purchase,
one hundred (100) shares of share capital of Osborn Canada (the "Osborn Canada
Shares"), which Osborn Canada Shares constitute all of the issued and
outstanding shares of share capital of Osborn Canada.
2.5 Transfer of Accounts Receivable; Cooperation with Respect to
Accounts Receivable.
(a) Prior to or on the date hereof, the Osborn Entities
have transferred to ChoicePoint all of the right, title and interest of
the Osborn Entities in and to all accounts receivable, including,
without limitation, trade and miscellaneous accounts receivable as of
the Statement Date (including accruals for earned rebates, either in
cash credit or materials), as well as unbilled business accounts for
services completed as of the Statement Date, related to the Business
(as hereinafter defined) (the "Accounts Receivable").
(b) After the date hereof and through December 31, 2001,
in connection with collection efforts with respect to the Accounts
Receivable, LabOne shall use its commercially reasonable efforts (which
in no event shall require referral for collection or instituting of any
litigation), and LabOne shall make available to the ChoicePoint
Entities employees of LabOne or the Osborn Entities (or the Contract
Employees (as hereinafter defined)) who are knowledgeable about the
Accounts Receivable and the background of the invoices and product
shipments underlying such Account Receivables, and, in connection with
such collection efforts, LabOne and the ChoicePoint Entities shall not
treat differently the Accounts Receivable and other accounts receivable
owned by LabOne. After the term of the Transition Services Agreement,
ChoicePoint and LabOne shall mutually agree upon procedures for
collection of the Accounts Receivable. LabOne and the ChoicePoint
Entities shall ensure that, when LabOne receives a payment for accounts
receivable after the date hereof, such payment can be specifically
identified to a particular invoice and/or bill of lading, so that such
payment can be applied to the applicable invoice and/or bill of lading
therefor. If a payment cannot be allocated to a particular invoice, it
shall be applied to the oldest invoice of that account debtor. LabOne
shall forward to ChoicePoint on a weekly basis all amounts received by
LabOne or any Osborn Entity with respect to the Accounts Receivable,
which amounts shall be wire transferred to ChoicePoint's account number
13-028-140 (ChoicePoint Inc. - Master Account) at Wachovia Bank of
Georgia (ABA #061-000-010), Atlanta, Georgia or such other bank account
as ChoicePoint shall designate.
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2.6 Distributions. Prior to or on the date hereof, the Osborn
Entities have transferred to ChoicePoint or one of its Affiliates all cash held
by the Osborn Entities by one or more cash dividends and/or other distributions.
Except as provided in Section 1.4, no adjustment shall be made to the Purchase
Price as a result of any such dividends or other distributions paid to
ChoicePoint or its Affiliates. LabOne agrees that, in order to effect the
distributions contemplated by this Section 2.6, on or prior to the date hereof,
ChoicePoint shall be permitted to make one or more withdrawals from the bank
accounts of the Osborn Entities for cash balances as of the close of business on
the Statement Date, and, subsequent to the date hereof, LabOne shall make one or
more wire transfers to ChoicePoint's account number 13-028-140 (ChoicePoint Inc.
- - Master Account) at Wachovia Bank of Georgia (ABA #061-000-010), Atlanta,
Georgia, for cash balances in such bank accounts as of the close of business on
the Statement Date.
2.7 Transition Services. Except as provided in the Transition
Services Agreement (as hereinafter defined), on the date hereof, ChoicePoint is
terminating all data processing, accounting, insurance, banking, personnel,
legal, communications, employee benefit programs and other services provided to
the Osborn Entities by ChoicePoint or any Affiliate of ChoicePoint, including
any agreements or understandings (written or oral) with respect thereto.
2.8 Further Assurances. Each party hereto shall on the date hereof
and from time to time hereafter, at any other party's reasonable request and
without further consideration, execute and deliver to such other party such
instruments of transfer, conveyance, and assignment in addition to those
delivered pursuant to this Section 2 as shall be reasonably requested to effect
the transactions contemplated by this Section 2.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE CHOICEPOINT ENTITIES.
Each of the ChoicePoint Entities hereby jointly and severally
represents and warrants to LabOne as follows:
3.1 Organization. ChoicePoint is a corporation duly incorporated,
validly existing, and in good standing under the Laws of the State of Georgia.
Osborn is a corporation duly incorporated, validly existing, and in good
standing under the Laws of the State of Delaware. Each of the Osborn
Subsidiaries is a corporation duly incorporated, validly existing, and in good
standing under the Laws of the jurisdiction of its incorporation. Each of
ChoicePoint and the Osborn Entities has all requisite corporate power and
authority to own, lease, and operate its properties and to carry on its business
as now being conducted. Except as disclosed on Schedule 3.1, each of the Osborn
Entities is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction where the character of its activities
or the location of its owned or leased properties requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect.
As used in this Agreement, the term "Material Adverse Effect" means any change,
effect, condition, event or circumstance that has been, is, or is reasonably
likely to be materially adverse to the financial condition, business, or results
of operations of the Osborn Entities. ChoicePoint has heretofore made available
to LabOne correct and complete copies of the charter documents and bylaws (or
other governing documents) as currently in effect and the minute books and stock
records of the Osborn Entities. The minute books and stock records of the Osborn
Entities are complete and correct and
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accurately reflect in all material respects all action taken at all meetings of
the shareholders and Boards of Directors (and committees thereof, if any) of
such entities and accurately record the issuance and transfer of all issued
shares of capital stock of such entities. Schedule 3.1 contains a correct and
complete list of the jurisdictions in which each of the Osborn Entities is
qualified to do business as a foreign corporation. None of the Osborn Entities
is in default in the performance, observance or fulfillment of any provision of
its charter or bylaws (or other governing documents).
3.2 Authorization. ChoicePoint has the corporate power and
authority to execute and deliver this Agreement, the Transition Services
Agreement and each other certificate, instrument and agreement executed and
delivered in connection with this Agreement (together with the Transition
Services Agreement, the "Ancillary Agreements") to which it is party, and
perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement and each Ancillary Agreement to which it is a party and the
performance by ChoicePoint of its covenants and agreements hereunder and
thereunder have been duly and validly authorized by the Board of Directors of
ChoicePoint, and no other corporate proceedings on the part of ChoicePoint or
its Affiliates are necessary to authorize the execution, delivery and
performance of this Agreement and each Ancillary Agreement to which it is a
party or the consummation of the transactions so contemplated. Each of this
Agreement and each Ancillary Agreement to which it is party has been duly
executed and delivered by ChoicePoint and constitutes a valid and binding
agreement of ChoicePoint, enforceable against ChoicePoint in accordance with its
terms, except that (a) such enforcement may be subject to any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other Laws, now
or hereafter in effect, relating to or limiting creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. As used herein,
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this Agreement, (i)
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract, or otherwise,
(ii) "controlling" and "controlled" have meanings correlative to the foregoing,
and (iii) "Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, or other
entity or any government or any agency or political subdivision thereof.
3.3 Absence of Restrictions and Conflicts. The execution,
delivery, and performance of this Agreement and the Ancillary Agreements, the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, and the fulfillment of and compliance with the terms and
conditions of this Agreement and the Ancillary Agreements do not and will not
(as the case may be), with or without the passing of time or the giving of
notice or both, violate or conflict with, constitute a breach of or default
under, result in any penalty or payment becoming due under, result in the loss
of any benefit under, or permit the acceleration or termination of any right or
obligation under, (a) any term or provision of the charter documents or bylaws
(or other governing documents) of ChoicePoint or any Osborn Entity, (b) except
as set forth on Schedule 3.3, any "Osborn Contract", "Retained Real Property
Lease", or "Retained Personal Property Lease" (all as hereinafter defined), (c)
except as set forth on Schedule 3.3, any judgment, decree, consent decree,
ruling, settlement agreement, stipulation,
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award, injunction, subpoena or order (each an "Order") of any court, tribunal,
arbitrator, securities exchange, or governmental, judicial or regulatory body,
authority or agency (each a "Governmental Authority") to which ChoicePoint or
any Osborn Entity is party or by which ChoicePoint or any Osborn Entity or any
of their respective properties or assets are bound, (d) except as set forth on
Schedule 3.3, any foreign or domestic statute, writ, ordinance, law, rule,
directive or guideline issued by a Governmental Authority (whether or not having
the force of law) or regulation (each a "Law") applicable to ChoicePoint or any
Osborn Entity, or (e) except as set forth on Schedule 3.3, any "License" (as
hereinafter defined). Except as set forth on Schedule 3.3, no consent, approval,
Order, or authorization of, or registration, declaration, or filing with, or
notice to, any Governmental Authority with respect to ChoicePoint or the Osborn
Entities is required in connection with the execution, delivery, or performance
of this Agreement and the Ancillary Agreements or the consummation of the
transactions contemplated hereby and thereby.
3.4 Capitalization.
(a) Osborn. The authorized capital stock of Osborn
consists solely of (i) 250,000 shares of common stock, $0.10 par value
per share (the "Osborn Common Stock"), of which one (1) share is issued
and outstanding, and (ii) 150,000 shares of preferred stock, $0.10 par
value per share, of which 100,000 have been designated as "Series A
Convertible Preferred Stock" and of which there are no shares issued
and outstanding. Except as set forth on Schedule 3.4(a), there are no
shares of Osborn Common Stock held as treasury stock by Osborn. Each
outstanding share of Osborn Common Stock is duly authorized, validly
issued, fully paid, nonassessable, and free of preemptive rights. No
such shares have been issued in violation of any preemptive rights,
rights of first refusal or other similar rights of any Person or any
federal or state securities Law and there are no outstanding proxies or
voting restrictions relating to such shares. Except as set forth in
this Section 3.4(a), there are no shares of capital stock of Osborn
outstanding, and there are no authorized or outstanding subscriptions,
options, convertible securities, calls, puts, rights, warrants, or
other agreements, claims, or commitments of any nature whatsoever
obligating Osborn to purchase, redeem, issue, transfer, deliver, or
sell, or cause to be purchased, redeemed, issued, transferred,
delivered, or sold, additional shares of the capital stock or other
securities of Osborn or obligating Osborn to grant, extend, or enter
into any such agreement or commitment. Except as set forth on Schedule
3.4(a), and other than with respect to dividends and other
distributions permitted by Section 2, there are no dividends which have
accrued or been declared but are unpaid on the capital stock or equity
of Osborn, and there are no stock appreciation, phantom stock, or
similar rights with respect to the capital stock or equity of Osborn.
ChoicePoint owns, beneficially and of record, and has the right to
transfer to LabOne, all of the Osborn Shares, free and clear of any and
all liens, pledges, security interests, charges, claims, restrictions,
leasehold interests, tenancies, restrictions, and encumbrances of any
nature whatsoever (hereinafter collectively referred to as "Liens").
(b) Osborn Subsidiaries. Set forth on Schedule 3.4(b) is
a complete and accurate list for each Osborn Subsidiary of: (i) its
jurisdiction of incorporation or organization, (ii) its authorized
capital stock or share capital, (iii) the number of issued and
outstanding shares of its capital stock or share capital and (iv) the
holder or holders
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of such shares. There are no shares of capital stock or share capital
held as treasury stock by any Osborn Subsidiary. Except for the
ownership of the Osborn Subsidiaries and as set forth on Schedule
3.4(b), none of the Osborn Entities owns beneficially or otherwise,
directly or indirectly, or has any obligation or option to acquire, any
capital stock of, other securities of, or other equity, ownership or
participating interest in, or has any obligation to form or participate
in, or advance, contribute or loan funds to, any corporation,
partnership or other Person. Osborn has good and marketable title to,
and is the record and beneficial owner of, the shares of capital stock
or share capital of each Osborn Subsidiary as set forth on Schedule
3.4(b), free and clear of any Liens. All of the outstanding shares of
capital stock or share capital of each of the Osborn Subsidiaries are
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. No such shares have been issued in violation of any
preemptive rights, rights of first refusal or similar rights of any
Person or any federal, state or provincial securities Law and there are
no outstanding proxies or voting restrictions relating to such shares.
Except as set forth on Schedule 3.4(b), there are no shares of capital
stock or share capital of any Osborn Subsidiary authorized or
outstanding, and there are no authorized or outstanding subscriptions,
options, convertible securities, calls, puts, rights, warrants, or
other agreements, claims, or commitments of any nature whatsoever
obligating Osborn or any Osborn Subsidiary to purchase, redeem, issue,
transfer, deliver, or sell, or cause to be purchased, redeemed, issued,
transferred, delivered, or sold, additional shares of the capital
stock, share capital or other securities of any Osborn Subsidiary or
obligating Osborn or any Osborn Subsidiary to grant, extend, or enter
into any such agreement or commitment. Except as set forth on Schedule
3.4(b), and other than with respect to dividends and other
distributions permitted by Section 2, there are no dividends which have
accrued or been declared but are unpaid on the capital stock or equity
of any Osborn Subsidiary, and there are no stock appreciation, phantom
stock, or similar rights with respect to the capital stock or equity of
any Osborn Subsidiary.
(c) Assets of CHS. The rights, properties and assets of
CHS, the stock of which is to be transferred to the ChoicePoint
Entities prior to or on the date hereof, are not necessary to conduct
the Business.
3.5 Ownership of Assets and Related Matters.
(a) Real Property. Schedule 3.5(a)(1) sets forth a
correct and complete list of all real property currently owned by any
Osborn Entity (the "Owned Real Property"). Schedule 3.5(a)(2) sets
forth a correct and complete list of all leases, subleases and other
agreements granting to any Osborn Entity possession of or rights to
real property (the "Retained Real Property Leases"). Each Osborn Entity
party to a Retained Real Property Lease has a valid and subsisting
leasehold interest in the real property subject thereto free and clear
of all Liens, and there exists no material default on the part of any
such Osborn Entity, or to the knowledge of ChoicePoint, any other party
thereto, under any such Retained Real Property Lease. The Osborn
Entities have at all times used and operated the real property subject
to the Retained Real Property Leases in material compliance and
conformity with all applicable Laws, Orders and Licenses relating
thereto.
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(b) ChoicePoint Personal Property. Part A of Schedule
3.5(b)(1) sets forth a correct and complete list of all personal
property currently leased by any Osborn Entity that is being
transferred to ChoicePoint pursuant to Section 2.2 (the "ChoicePoint
Leased Personal Property"), and Part B of Schedule 3.5(b)(1) sets forth
a correct and complete list (in each case identifying the Retained
Personal Property Lease relating thereto) of all personal property
currently leased by any Osborn Entity that is not being transferred to
ChoicePoint pursuant to Section 2.2 (the "Retained Leased Personal
Property"). Part A of Schedule 3.5(b)(2) sets forth a correct and
complete list of all leases and agreements granting any Osborn Entity
possession of or rights to ChoicePoint Leased Personal Property (the
"ChoicePoint Personal Property Leases"), and Part B of Schedule
3.5(b)(2) sets forth a correct and complete list of all leases and
agreements granting any Osborn Entity possession of or rights to
Retained Leased Personal Property (the "Retained Personal Property
Leases" and, together with the ChoicePoint Personal Property Leases,
the "Personal Property Leases"). Schedule 3.5(b)(3) sets forth a
correct and complete list of all personal property owned by any Osborn
Entity that is being transferred to ChoicePoint pursuant to Section 2.2
of this Agreement (the "ChoicePoint Owned Personal Property," and
together with the ChoicePoint Leased Personal Property, collectively,
the "ChoicePoint Personal Property").
(c) Ownership, Condition and Sufficiency of Assets.
Except as disclosed on Schedule 3.5(c), after giving effect to the
transfers contemplated by Section 2 of this Agreement, the Osborn
Entities own, free and clear of all Liens (other than (x) Liens for
taxes not yet due and payable or (y) imperfections of title that do not
interfere with or impair in any material respect the use or value of
the assets subject thereto ("Permitted Liens")), or have adequate
rights to use (with respect to (i) assets leased under the Retained
Real Property Leases and the Retained Personal Property Leases, (ii)
software licensed to the Osborn Entities, and (iii) assets owned by any
Affiliate of ChoicePoint other than the Osborn Entities that are to be
used to provide the services contemplated by the Transition Services
Agreement), all assets and properties currently used in, or necessary
to, the operation of the Business. Except as disclosed on Schedule
3.5(c), all tangible personal property owned by any Osborn Entity that
is not being transferred to ChoicePoint pursuant to Section 2 of this
Agreement (the "Retained Owned Personal Property") and all Retained
Leased Personal Property (the Retained Owned Personal Property and the
Retained Leased Personal Property being referred to herein,
collectively, as the "Retained Personal Property") (i) has been
maintained in a reasonable state of repair (ordinary wear and tear
excepted) and, in the case of Retained Leased Personal Property, in
compliance in all material respects with the Retained Personal Property
Leases relating thereto, and (ii) substantially conforms in all
material respects with all applicable Orders, Laws and Licenses
relating thereto, including, without limitation, all applicable
ordinances, codes, regulations and other legal requirements relating to
the environment or occupational safety, and no Law presently in effect
or condition precludes or restricts continuation of the present use of
such properties.
(d) List of Accounts. Schedule 3.5(d) contains a true and
correct list of (i) all bank and securities accounts and all safe
deposit boxes maintained by the Osborn Entities and a listing of the
Persons authorized to draw thereon or make withdrawals therefrom or,
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in the case of safe deposit boxes, with access thereto and (ii) all
Persons authorized to act under any corporate borrowing, depository and
transfer resolutions of any Osborn Entity.
3.6 Financial Statements. ChoicePoint has delivered to LabOne the
following:
(a) the unaudited consolidated balance sheets and related
unaudited statements of operations of the Osborn Entities as of and for
the fiscal years ended December 31, 1998, 1999 and 2000 (the "Year-End
Financial Statements"); and
(b) the unaudited consolidated and consolidating balance
sheet of the Osborn Entities as of July 31, 2001 (the "Interim Balance
Sheet") and the related unaudited statement of operations for the
seven-month period ended July 31, 2001 (together with the Interim
Balance Sheet, the "Interim Financial Statements"). The Year-End
Financial Statements and the Interim Financial Statements are
hereinafter referred to, collectively, as the "Financial Statements."
Copies of the Financial Statements are attached as Schedule 3.6(1).
Except as disclosed on Schedule 3.6(2), the Financial Statements have been
prepared from, and are in accordance with, the books and records of the Osborn
Entities (which books and records are maintained in accordance with GAAP) and in
accordance with GAAP. Except as disclosed on Schedule 3.6(2), the balance sheets
included in the Financial Statements fairly present the financial position of
the Osborn Entities, as of the respective dates thereof, and the statements of
operations included in the Financial Statements fairly present the results of
operations of the Osborn Entities for the respective periods set forth therein,
in each case in accordance with GAAP, subject, in the case of the Interim
Financial Statements, to normal non-material year-end adjustments. The Osborn
Year-End Financial Statements (as hereinafter defined) are auditable.
3.7 No Undisclosed Liabilities. Except as disclosed on Schedule
3.7, the Osborn Entities do not have any liabilities, debts or obligations,
whether accrued, absolute, contingent, or otherwise, which are not adequately
reflected or provided for in the Financial Statements, except liabilities and
debts incurred since the date of the Interim Balance Sheet in the ordinary
course of business and except for obligations disclosed pursuant to this
Agreement or for obligations otherwise incurred in the ordinary course of
business which are not required to be disclosed in accordance with GAAP.
3.8 Absence of Certain Changes.
(a) Except as set forth on Schedule 3.8(a), except as
reflected or provided for in the Financial Statements and except for
the transactions expressly contemplated by this Agreement, since June
30, 2001, there has not been (i) any Material Adverse Effect, (ii) any
amendment to or modification of the charter documents or bylaws (or
other governing documents) of any Osborn Entity, (iii) any damage,
destruction, loss, or casualty to property or assets of any of the
Osborn Entities (whether or not covered by insurance), (iv) any
declaration, setting aside, or payment of any dividend or distribution
(whether in cash, stock, or property) in respect of the capital stock
of Osborn, any redemption or other acquisition by Osborn of any of the
capital stock of Osborn, or any split, combination, or reclassification
of shares of capital stock declared or made by
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Osborn, (v) other than cash distributions by the Osborn Subsidiaries to
Osborn made in the ordinary course of business, any transfer, lease,
sale, license or other disposition of assets, acquisition of assets,
assumption of debts or other liabilities or obligations, loan or
contribution, or other intercompany transaction, between or among any
of the Osborn Entities and any Affiliate (as hereinafter defined) of
the Osborn Entities, (vi) any acquisition of assets from Persons other
than Affiliates of the Osborn Entities other than in the ordinary
course of business and consistent with past practice or (vii) any
agreement to do any of the foregoing. Except as reflected or provided
for in the Financial Statements, since June 30, 2001, the Osborn
Entities have (1) extended credit to customers and paid accounts
payable and similar obligations only in the ordinary course of business
consistent with past practice and (2) conducted the Business in the
ordinary course on a basis consistent with past practice and not
engaged in any new line of business or entered into any agreement,
transaction, or activity or made any commitment except those in the
ordinary course of business and consistent with past practice.
(b) Except as set forth on Schedule 3.8(b), except as
reflected or provided for in the Financial Statements and except for
the transactions expressly contemplated by this Agreement, with respect
to the Osborn Entities, since June 30, 2001, there have not been (i)
any extraordinary losses suffered, (ii) any incurrence or assumption by
any Osborn Entity of any indebtedness for borrowed money or obligations
in respect of letters of credit or incurrence or assumption by any
Osborn Entity of any guarantees of any debts, liabilities or
obligations of any third Persons, (iii) any assets mortgaged, pledged,
or made subject to any Lien other than Permitted Liens, (iv) any
material liability or obligation (whether absolute, accrued,
contingent, or otherwise) incurred except in the ordinary course of
business and consistent with past practice, (v) any Liens, claims,
liabilities, debts or obligations (absolute, accrued, contingent or
otherwise) paid, discharged, or satisfied, other than in the ordinary
course of business and consistent with past practice, (vi) any notes or
guaranteed checks which have been written off as uncollectible, except
write-offs in the ordinary course of business consistent with past
practice the aggregate amount of which does not exceed $50,000 in the
aggregate, (vii) any write-down of the value of any asset or investment
on the books or records of any Osborn Entity, except for depreciation
and amortization taken in the ordinary course of business consistent
with past practice the aggregate amount of which does not exceed
$50,000 in the aggregate, (viii) any cancellation of any debts or
waiver or release of any claims or rights of value, or sale, lease,
license, transfer, or other disposition of any properties or assets
(real, personal, or mixed, tangible or intangible) of value, except, in
each such case, in transactions with Persons other than Affiliates in
the ordinary course of business consistent with past practice which in
any event do not exceed $50,000 in the aggregate based on purchase
price or net book value, (ix) (A) any increase in the compensation of
officers or directors, whether now or hereafter payable, or (B) any
increase in the compensation of employees, whether now or hereafter
payable, or any amendment to any employment, independent contractor,
severance or consulting agreement or other Company Benefit Plan (as
hereinafter defined) that increases the term thereof or the liabilities
or obligations of any Osborn Entity thereunder, other than in the
ordinary course of business consistent with past practice (x) any
material adverse change on any Osborn Entity's relations with its
employees, leased employees or suppliers or any Material Customer (as
hereinafter defined), (xi) any increase of any reserves for
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contingent liabilities (excluding any adjustment to bad debt, workers'
compensation, or group insurance reserves in the ordinary course of
business consistent with past practice), (xii) termination of any
employee of any Osborn Entity other than in the ordinary course of
business consistent with past practice, (xiii) any surrender or
revocation of any License (as hereinafter defined), (xiv) any
transactions entered into other than in the ordinary course of
business, (xv) any material change in prices charged any of the
Material Customers (as hereinafter defined), (xvi) any agreements to do
any of the foregoing, or (xvii) any change by Osborn in any method of
accounting or keeping its books of account or accounting practices.
(c) Schedule 3.8(c) sets forth a complete and correct
list of all capital expenditures in excess of $50,000 per project (or
series of related projects) made by the Osborn Entities from January 1,
2001 through June 30, 2001 and sets forth a complete and correct list
of all capital expenditures and commitments in excess of $50,000 per
project approved for fiscal year ending December 31, 2001 or
thereafter.
3.9 Legal Proceedings. Except as listed and described on Schedule
3.9, there are no suits, actions, claims, or proceedings, or, to the knowledge
of ChoicePoint, investigations pending or threatened against any of the Osborn
Entities or any of their properties or assets, by or before any Governmental
Authority. None of such suits, actions, claims, proceedings, or investigations,
if finally determined adversely, are reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect. There is no claim, action, suit,
proceeding or governmental investigation pending or, to the knowledge of
ChoicePoint, threatened against any of the ChoicePoint Entities or the Osborn
Entities, by or before any Governmental Authority or by any third party which
challenges the validity of this Agreement or which would be reasonably likely to
adversely affect or restrict either of the ChoicePoint Entities' ability to
consummate the transactions contemplated hereby.
3.10 Licenses, Permits, and Compliance with Law.
(a) The Osborn Entities have all authorizations,
approvals, franchises, licenses, permits, consents, and Orders of and
from all Governmental Authorities necessary to carry on the business of
the Osborn Entities as currently conducted and as conducted within the
six (6) months prior to the date hereof (other than the business
related to the Appraise Product) (the "Business") in all material
respects as it is currently being conducted (collectively, the
"Licenses"). A complete and correct list of the Licenses is set forth
on Schedule 3.10(a) hereto. Except as set forth on Schedule 3.10(a),
each of the Osborn Entities is in compliance in all material respects
with all Licenses and all applicable Laws and Orders to which it or any
of its properties or assets is subject. None of the ChoicePoint
Entities or the Osborn Entities has received any notice of any alleged
violation of any of such Licenses, Laws or Orders.
(b) Except as set forth on Schedule 3.10(b), (i) neither
the conduct of the Business nor the condition or use of any real
property owned or leased by the Osborn Entities violates any applicable
Environmental Law (as hereinafter defined); (ii) to the knowledge of
ChoicePoint, none of the Osborn Entities has stored or used any
pollutants, contaminants or hazardous or toxic wastes, substances or
materials in violation of any
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Environmental Law on or at any real property owned or leased by it (or
any predecessor thereof); (iii) no ChoicePoint Entity or Osborn Entity
has received any notice from any Governmental Authority advising it
that the condition any real property owned or leased by any Osborn
Entity or the operation of the Business is in violation of any
Environmental Law or any applicable Environmental Permit (as
hereinafter defined) or that any Osborn Entity is responsible (or
potentially responsible) for the cleanup of any pollutants,
contaminants or hazardous or toxic wastes, substances or materials at,
on or beneath any real property owned or leased by any Osborn Entity
(or any predecessor thereof) or at, on or beneath any land adjacent
thereto; (iv) none of the Osborn Entities is the subject of any
governmental or private litigation or proceedings involving a demand
for damages or other potential liability pursuant to any Environmental
Laws or Common Law Environmental Principles (as hereinafter defined);
(v) to the knowledge of ChoicePoint, none of the Osborn Entities have
at any time buried, dumped, disposed, spilled or released any
pollutants, contaminants or hazardous or toxic wastes, substances or
materials on, beneath or about any real property owned or leased by it
in violation of Environmental Laws; and (vi) to the knowledge of
ChoicePoint, there is no condition or circumstance at, on or beneath
any real property currently or previously owned or leased by any Osborn
Entity (or any predecessor thereof), or at, on or beneath any property
at which wastes of any Osborn Entity have been deposited or disposed by
or at the behest or direction of the any Osborn Entity (or any
predecessor thereof) that (x) requires abatement or correction by any
Osborn Entity under any Environmental Law or Common Law Environmental
Principle or (y) could reasonably be expected to give rise to any civil
or criminal liability of any Osborn Entity under any Environmental Law
or Common Law Environmental Principle. The Osborn Entities have timely
filed all reports and obtained and complied in all respects with all
Environmental Permits required to be filed or obtained by them under
applicable Environmental Laws with respect to the real property owned
or used by them and the operation of the Business, and each of the
Osborn Entities has generated and maintained all data, documentation
and records required to be generated or maintained by it under any
applicable Environmental Laws with respect thereto. As used herein, (A)
"Common Law Environmental Principles" means any principles of common
law under which a Person may be held liable for the release or
discharge of any pollutants, contaminants or hazardous or toxic wastes,
substances or materials into the environment, (B) "Environmental Law"
shall mean any Law or Order which relates to or otherwise imposes
liability or standards of conduct concerning discharges or releases of
any pollutants, contaminants or hazardous or toxic wastes, substances
or materials into ambient air, water or land, or otherwise relating to
the manufacture, processing, generation, distribution, use, treatment,
storage, disposal, cleanup, transport or handling of pollutants,
contaminants or hazardous or toxic wastes, substances or materials and
(C) "Environmental Permit" shall mean any Licenses required by or
pursuant to any applicable Environmental Law.
(c) None of the Osborn Entities nor any officer,
director, employee or agent thereof, nor any other Person acting on
behalf thereof, acting alone or together, has (i) received, directly or
indirectly, any rebates, payments, commissions, promotional allowances
or any other economic benefits, regardless of their nature or type,
from any customer, governmental employee or other Person with whom any
Osborn Entity has done business directly or indirectly or (ii) directly
or indirectly, given or agreed to give,
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in violation of Law, any gift or similar benefit to any customer,
governmental employee or other Person who is or may be in a position to
help or hinder the Business (or assist any Osborn Entity with any
actual or proposed transaction) which, under current Law, in the case
of either clause (i) or clause (ii) above, could reasonably be expected
to subject any Osborn Entity to any damage or penalty in any civil,
criminal or governmental litigation or proceeding.
3.11 Material Contracts. Schedule 3.11 sets forth a correct and
complete list of (and in the case of oral agreements, description of) all
Material Contracts (as hereinafter defined) (which, exclusive of the Company
Benefit Plans (as hereinafter defined), the Surety Bonds (as hereinafter
defined), the ChoicePoint Personal Property Leases, and any insurance contracts,
are herein referred to as the "Osborn Contracts"). Correct and complete copies
of all Osborn Contracts have been delivered to LabOne. There are no existing
material defaults (or events which, with notice or lapse of time or both, would
constitute material defaults) of any Osborn Entity under any Osborn Contract,
or, to the knowledge of ChoicePoint, of any of the other parties thereto. None
of the ChoicePoint Entities or the Osborn Entities have been notified of any
claim that any Osborn Contract is not valid and enforceable in accordance with
its terms for the periods stated therein, or that there is under any such
contract any existing default or event which, with notice or lapse of time, or
both, would constitute a default. For purposes of this Section 3.11, "Material
Contracts" include the following contracts, agreements, commitments,
arrangements, understandings, or other instruments (in each case whether oral or
written, but only to the extent legally binding) to which any Osborn Entity is a
party or which any ChoicePoint Entity has assigned to any Osborn Entity
(excluding any insurance contracts):
(a) Indentures, credit agreements, letters of credit,
security agreements, pledge agreements, guaranty agreements or other
agreements and instruments relating to the borrowing of money, the
extension of credit or the granting of Liens;
(b) (i) Management, employment, independent contractor,
severance and consulting agreements, (ii) all non-compete and
confidentiality agreements with employees, independent contractors and
other agents of any of the Osborn Entities or (iii) arrangements or
agreements related to temporary services of any kind that require
payments greater than $25,000 annually;
(c) Union or other collective bargaining agreements;
(d) Powers of attorney;
(e) Sales agency, manufacturer's representative, and
distributorship agreements or other distribution or commission
arrangements;
(f) Licenses of patents, trademarks, tradenames, logos,
service marks, software (excluding standard "off the shelf" software
with annual license payments less than $10,000), copyrights, know-how,
and other intellectual property or proprietary rights;
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(g) Agreements, orders, or commitments for the purchase
of services, materials, supplies, or products from any one supplier or
group of related suppliers for an amount in excess of $25,000;
(h) Agreements, orders, or commitments for the sale of
products or services for more than $25,000 to any single purchaser or
group of related purchasers;
(i) Agreements for capital expenditures in excess of
$25,000 for any single project or series of related projects;
(j) Joint venture agreements or other agreements
providing for the sharing of revenues or payment of royalties;
(k) Agreements requiring the consent of any party thereto
to the consummation of the transactions contemplated by this Agreement;
(l) Lease agreements under which any Osborn Entity is
lessor and lease agreements under which any Osborn Entity is lessee and
which have annual lease payments in excess of $25,000;
(m) Agreements prohibiting, partially restricting, or
otherwise limiting the ability of any Osborn Entity to compete, solicit
customers, or otherwise conduct any business anywhere in the world;
(n) Agreements relating to the acquisition or sale of any
company, business, division, or other enterprise, whether in the form
of stock purchase, asset acquisition, or otherwise and whether or not
such acquisition or disposition was completed;
(o) Surety bonds outstanding with respect to any Osborn
Entity (the "Surety Bonds"); or
(p) Other than as addressed above, other agreements,
contracts, and commitments that involve payments or receipts of more
than $25,000 in any single year, or that were entered into other than
in the ordinary course of business (but excluding any insurance
contracts).
3.12 Tax Returns; Taxes.
Except as set forth on Schedule 3.12:
(a) Either a ChoicePoint Entity or an Osborn Entity (i)
has timely filed or caused to be filed on a timely basis with the
appropriate taxing authorities all material Tax Returns (as hereinafter
defined) required to be filed by or with respect to each Osborn Entity
for all years and periods for which such Tax Returns have become due,
and (ii) has paid all Taxes (as hereinafter defined) with respect to
each such Osborn Entity (whether or not shown to be due on such Tax
Returns), or where payment is not yet due, has established consistent
with past practice, an adequate reserve on the books and records of
such Osborn Entity for the payment of all such Taxes with respect to
any
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taxable period (or portion thereof) ending on or prior to the date
hereof. Such Tax Returns are correct and complete in all material
respects.
(b) There are no Liens for Taxes with respect to the
assets of the Osborn Entities (except for statutory liens for current
Taxes not yet due); and (ii) neither the Osborn Entities nor any
ChoicePoint Entity on behalf of any Osborn Entity has filed a consent
pursuant to Section 341(f) of the Code.
(c) The period of assessment under applicable Law, after
giving effect to extensions or waivers, with respect to the Tax Returns
of each Osborn Entity and any affiliated, consolidated, combined or
unitary group of which any Osborn Entity is or was a member during a
taxable period ended after December 31, 1994 (a "Tax Group") has
expired for all of the taxable years of such Osborn Entity or such Tax
Group, as the case may be. Schedule 3.12 indicates those Tax Returns of
each Osborn Entity and any such Tax Group that, since 1994, either have
been audited or are currently the subject of an audit. There is no
dispute or claim (including any anticipated claim) concerning any Taxes
of any Osborn Entity or any Tax Group either (i) claimed or raised by
any authority in writing or (ii) as to which ChoicePoint or any of its
Affiliates has knowledge after due inquiry.
(d) For all periods from November 4, 1994, up to and
including the date hereof, each Osborn Entity has been an includible
member of the "affiliated group" (within the meaning of Section 1504 of
the Code) of which the Parent is currently the parent; for such periods
each Osborn Entity was entitled to report its income on consolidated
federal income tax returns filed on behalf of such affiliated group
and, for such periods, all federal income tax returns required to be
filed by each Osborn Entity have been (or will be) duly and timely
filed on behalf of such Osborn Entity on a consolidated basis. All
other Tax Returns of each Osborn Entity have been filed on a separate
company, non-combined, non-consolidated and non-unitary basis.
(e) No ChoicePoint Entity, Osborn Entity or any of their
Affiliates has (i) received or is the subject of an application for a
tax ruling or entered into a legally binding agreement (such as a
closing agreement) with a taxing authority, which ruling or agreement
could have an effect on the Taxes of any Osborn Entity after the date
hereof, or (ii) filed any election, or caused any deemed election,
under Section 338 of the Code.
(f) No extensions of time have been granted to any Osborn
Entity or any Tax Group of which ChoicePoint is the common parent to
file any Tax Return required by applicable Law to be filed by it prior
to or on the date hereof, which have expired, or will expire, on or
before the date hereof without such Tax Return having been filed, (ii)
no deficiency or adjustment for any Taxes of any Osborn Entity or any
Tax Group of which ChoicePoint is the common parent has been proposed,
asserted or assessed in writing, and no federal, state, local,
provincial or foreign audits or other administrative proceedings or
court proceedings are pending with regard to any such Taxes of any
Osborn Entity, (iii) no waiver or consent extending any statute of
limitations for the assessment or collection of any Taxes has been
executed by any Osborn Entity, nor have any requests for such waivers
or consents been proposed in writing and (iv) none of the
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Osborn Entities owns or leases any interest in real property in any
jurisdiction in which a Tax will be payable with respect to such
interest in real property as a result of the transactions contemplated
hereby.
(g) None of the Osborn Entities nor any Tax Group of
which ChoicePoint is the common parent is or has ever been a party to
any tax-sharing or allocation agreements, arrangements or
understandings, whether written or oral.
(h) None of the Osborn Entities is a party to any
agreement, contract or arrangement that would result, by reason of the
consummation of any of the transactions contemplated herein, separately
or in the aggregate, in the payment by any Osborn Entity of any "excess
parachute payments" within the meaning of Section 280G of the Code
(i) Each Osborn Entity has complied with all applicable
Laws relating to the withholding of Taxes (including withholding of
Taxes pursuant to Sections 1441 and 1442 of the Code) and has, within
the time and within the manner prescribed by Law, withheld and paid
over to the proper taxing authorities all amounts required to be
withheld and paid over under all applicable Laws in connection with
amounts paid or owing to any employee, independent contractor,
creditor, stockholder or other third party.
(j) None of the Osborn Entities is required to include in
income any adjustment pursuant to Section 481(a) of the Code by reason
of a voluntary change in accounting method (nor has any taxing
authority proposed in writing any such adjustment or change of
accounting method).
(k) No power of attorney has been granted by or with
respect to any Osborn Entity with respect to any matter relating to
Taxes.
(l) ChoicePoint does not have an excess loss account
within the meaning of Treasury Regulation Section 1.1502-19 with
respect to the stock of any Osborn Entity.
(m) Since August 8, 1997 (and, to the knowledge of
ChoicePoint, from November 4, 1994 to August 8, 1997), no written
notice has been received, nor to the knowledge of ChoicePoint has any
oral notice been received, by any Osborn Entity from any Governmental
Authority in a jurisdiction where any Osborn Entity does not file Tax
Returns stating that any such Osborn Entity is required to file Tax
Returns with that jurisdiction.
(n) ChoicePoint has previously delivered or made
available to LabOne complete and accurate copies of each of: (i) all
audit reports, letter rulings and technical advice memoranda relating
to federal, state, local and foreign Taxes due from or with respect to
each Osborn Entity and each Tax Group of which ChoicePoint is the
common parent (but only to the extent they relate to an Osborn Entity)
since November 4, 1994, (ii) the federal, state, local and foreign Tax
Returns filed by each Osborn Entity since November 4, 1994 and (iii)
any closing agreements entered into by each Osborn Entity with any
taxing authority since November 4, 1994.
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(o) None of the assets of any Osborn Entity or any Tax
Group is required to be treated as being owned by any other Person
pursuant to the "safe harbor" leasing provision of Section 168(f)(8) of
the Internal Revenue Code of 1954, as in effect prior to the repeal
thereof.
(p) For purposes of this Agreement:
(i) "Tax" means any (A) federal, state,
provincial, local, or foreign income, gross receipts, gains,
license, payroll, employment, excise, severance, escheat,
stamp, occupation, premium, windfall profits, environmental,
customs duty, capital stock, franchise, profits, withholding
on amounts paid or received, social security, unemployment,
workers' compensation, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax,
governmental fee or other like assessment of any kind
whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not, (B) liability of any Osborn
Entity for the payment of any amounts of the type described in
(A) as a result of being a member of an affiliated,
consolidated, combined or unitary group for federal, state,
local or foreign Tax purposes, or being a party to any
agreement or arrangement whereby liability of any Osborn
Entity for payments of such amounts was determined or taken
into account with reference to the liability of any other
Person for any period (or portion thereof) ending on or prior
to the date hereof, and (C) liability of any Osborn Entity
with respect to the payment of any amounts described in (A) as
a result of any express or implied obligation to indemnify any
other Person;
(ii) "Tax Return" means any return, declaration,
report, claim for refund, estimate, or information return or
statement relating to Taxes or required by ERISA (as
hereinafter defined), including any schedule or attachment
thereto and any amendment thereof; and
(iii) "Code" means the Internal Revenue Code of
1986, as amended from time to time, and any regulations or
published ruling promulgated or issued thereunder.
3.13 Employees and Independent Contractors; Officers and Directors.
(a) Schedule 3.13(a) sets forth a correct and complete
list of all (i) employees employed by each of the Osborn Entities or
(ii) employees employed by the Parent, ChoicePoint and their Affiliates
(other than the Osborn Entities) who spend substantially all their time
performing services in connection with the administration and operation
of the Business (each an "Employee" and, collectively, the
"Employees"), together with their respective social security numbers,
job titles, dates of hire, current base salary or hourly rate, bonus
and severance arrangements with respect thereto and the subsidiary of
the Parent by which they are employed. No Osborn Entity is a statutory
employer, joint employer, single employer, alter ego, or any other form
of constructive employer with respect to any individual not listed on
Schedule 3.13(a) under any federal or state Laws
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governing labor and employment. Except as set forth on Schedule
3.13(a), and except for the consultants, independent contractors and
leased employees listed on Schedule 3.13(b), the Employees of the
Osborn Entities are all of employees employed by the Parent,
ChoicePoint and their Affiliates who spend substantially all their time
performing services in connection with the administration and operation
of the Business.
(b) Schedule 3.13(b) sets forth a correct and complete
list of all consultants to and independent contractors or leased
employees of each of the Osborn Entities, as of the date hereof,
together with their respective addresses, responsibilities, dates of
engagement, and compensation.
(c) Schedule 3.13(c) sets forth a correct and complete
list of each officer and director of each of the Osborn Entities.
(d) No individual who has been classified by any
ChoicePoint Entity or Osborn Entity as a non-employee (i.e., an
independent contractor, leased employee or consultant) has or will have
a claim against any Osborn Entity for eligibility to participate in any
employee benefit plan as a result of such individual being reclassified
as an employee of an Osborn Entity for the period prior to the date
hereof.
3.14 ERISA and Related Matters.
(a) Schedule 3.14 lists all deferred compensation,
pension, profit-sharing, and retirement plans, and all bonus, welfare,
severance pay, and other "employee benefit plans" (as defined in
Section 3(3) of ERISA), fringe benefit or stock option plans, including
individual contracts, employee agreements, programs, or arrangements,
providing the same or similar benefits, whether or not written, which
are or have been participated in, or maintained by any Osborn Entity
(or ChoicePoint Entity for the benefit of employees or former employees
of any of the Osborn Entities or their dependents and beneficiaries) or
with respect to which contributions are made or obligations assumed by
any Osborn Entity (including health, life insurance, and other benefit
plans maintained for former employees or retirees), at any time between
August 8, 1997 and the date hereof. Said plans or other arrangements
are sometimes individually referred to in this Agreement as a "Company
Benefit Plan" and sometimes collectively referred to in this Agreement
the "Company Benefit Plans." Copies of all Company Benefit Plans and
related documents, including those setting out all personnel policies
and procedures applicable to employees of the Osborn Entities, and
including any insurance contracts, trust agreements, or other
arrangements under which benefits are provided, as currently in effect,
and descriptions of any such plan which are not written have been
delivered or made available to LabOne. ChoicePoint has also delivered
to LabOne a copy of the summary plan description, if any, for each
Company Benefit Plan. As used herein, "Foreign Plan" means any employee
benefit, pension scheme, retirement, profit sharing, health, dental,
life or disability insurance plan, as well as any other plan, program
or arrangement involving direct or indirect compensation, under which
any Osborn Entity or ChoicePoint Entity has any present or future
obligations or liability on behalf of any of the non-United
States-based employees or former employees of any of the Osborn
Entities or their dependents and beneficiaries, but shall not include
any program pursuant
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to which an employee directs payroll-deduction contributions to a
personal savings account.
(b) Except as set forth on Schedule 3.14, each
ChoicePoint Entity or Osborn Entity, as applicable, has fulfilled its
obligations, to the extent applicable, under the minimum funding
requirements of Section 302 of ERISA and Section 412 of the Code, with
respect to each "employee benefit plan" (as defined in Section 3(3) of
ERISA) appearing on Schedule 3.14. Each Company Benefit Plan is in
substantial compliance with, and has been administered in all material
respects consistent with, the presently applicable provisions of ERISA,
the Code, and state Law including but not limited to the satisfaction
of all applicable reporting and disclosure requirements under the Code,
ERISA, and state Law. Each ChoicePoint Entity or Osborn Entity, as
applicable, has made all payments to all Company Benefit Plans required
by the terms of each such plan in accordance, if applicable, with the
actuarial and funding assumptions in effect as for the most recent
actuarial valuation of such plans. No actuarial valuations or reports
relating to said plans have been required by Law. The ChoicePoint
Entities or Osborn Entities, as applicable, have filed or caused to be
filed with the Internal Revenue Service annual reports on Form 5500 for
each Company Benefit Plan attributable to them for all years and
periods for which such reports were required and within the time period
required by ERISA and the Code. Except as disclosed on Schedule 3.14,
the ChoicePoint Entities or Osborn Entities, as applicable, have funded
or will fund each Company Benefit Plan attributable to them in
accordance with its terms through the date hereof including the payment
of applicable premiums on any insurance contract funding a Company
Benefit Plan for coverage provided through the date hereof. To the
extent that any annual contribution for the current year is not yet
required for any Company Benefit Plan as of the date hereof, the
ChoicePoint Entities or Osborn Entities, as applicable, have made a pro
rata contribution to said plan for the period ended at the date hereof
or said contribution has been accrued on the books of the ChoicePoint
Entities or Osborn Entities, as applicable.
(c) Except as set forth on Schedule 3.14, to the
knowledge of ChoicePoint, no non-exempt "prohibited transaction," as
defined in Section 406 of ERISA and Section 4975 of the Code has
occurred in respect of any such Company Benefit Plan, and no civil or
criminal action brought pursuant to Part 5 of Title I or ERISA is
pending or, to the knowledge of ChoicePoint, is threatened in writing
or orally against any fiduciary of any such plan.
(d) Except as set forth on Schedule 3.14, the Internal
Revenue Service has issued a letter for each employee pension benefit
plan which is a Company Benefit Plan, as defined in Section 3(2) of
ERISA listed on Schedule 3.14, determining that such plan is a
qualified plan under Section 401(a) of the Code and is exempt from
United States Federal Income Tax under Section 501(a) of the Code, and,
to the knowledge of ChoicePoint, there has been no occurrence since the
date of any such determination letter which has adversely affected such
qualification. Except as set forth on Schedule 3.14, none of the
Company Benefit Plans is intended to qualify under Section 501(c)(9) of
the Code.
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(e) Except as set forth on Schedule 3.14, each Company
Benefit Plan that provides medical benefits has been operated in
compliance in all material respects with all requirements of Section
4980B(f) of the Code and Sections 601 through 608 of ERISA relating to
continuation of coverage under certain circumstances in which coverage
would otherwise cease. All former employees of the Osborn Entities
entitled to such continuation of coverage, or other Persons entitled to
such continuation of coverage through relationship to said former
employees, are listed on Schedule 3.14.
(f) None of the ChoicePoint Entities or Osborn Entities
nor any entity that is treated as a single employer with any of them
pursuant to Section 414(b), (c), (m), or (o) of the Code currently
maintains or contributes to any Company Benefit Plan that is subject to
Title IV of ERISA, nor has previously maintained or contributed to any
such plan that has resulted in any liability or, to the knowledge of
ChoicePoint, potential liability for any of the ChoicePoint Entities or
Osborn Entities under said Title IV. As of the date hereof, there is no
outstanding unpaid minimum funding waiver within the meaning of Code
Section 412(d).
(g) Except as disclosed on Schedule 3.14, none of the
ChoicePoint Entities or Osborn Entities maintains any Company Benefit
Plan, plans or programs that provide post-retirement medical benefits
(other than benefits described in this Section 3.14 and those which are
required by Law), post-employment benefits, death benefits, or other
post-retirement welfare benefits to any employees or former employees
of any Osborn Entity or their dependents or beneficiaries. A copy of
any written description of post-retirement welfare benefits that has
been provided to any employees or former employees of any Osborn Entity
or their dependents or beneficiaries has been provided or made
available to LabOne. Copies of each plan document, insurance contract,
or other written instrument providing for such post-retirement welfare
benefits, together with a description of any advance funding
arrangement that has been established to fund post-retirement welfare
benefits, has been provided or made available to LabOne. Schedule 3.14
contains a list of those Persons who are currently retired as of the
date hereof with a right to any such future post-retirement welfare
benefits and also contains a list of employees of the Osborn Entities
who would be currently eligible for post-retirement welfare benefits if
they retired and satisfied any waiting period provided for under the
applicable plan.
(h) None of the ChoicePoint Entities or Osborn Entities
nor any employer referred to in Section 3.14(f) above maintains, nor
has contributed within the past five (5) years to, any multiemployer
plan within the meaning of Sections 3(37) or 4001(a)(3) of ERISA. No
ChoicePoint Entity or Osborn Entity nor any such employer currently has
any liability to make withdrawal liability payments to any
multiemployer plan. There is no pending dispute between any ChoicePoint
Entity or Osborn Entity or any such employer and any multiemployer plan
concerning payment of contributions or payment of withdrawal liability
payments.
(i) Except as set forth on Schedule 3.14, no lawsuit or
complaint against, by, or relating to any Company Benefit Plan or any
fiduciary, as defined in Section 3(21) of ERISA has been filed or is
pending.
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(j) Each Foreign Plan has been maintained in accordance
with all applicable Laws and in good standing with each applicable
Governmental Authority. All contributions have been made with respect
to all Foreign Plans on a timely basis. None of the Osborn Entities or
ChoicePoint Entities has incurred any obligation in connection with the
termination of or withdrawal from any Foreign Plan. The present value
of the accrued benefit liabilities (whether vested or not) under each
Foreign Plan, determined as of the end of the Osborn Entities' most
recently ended fiscal year on the basis of actuarial assumptions
provided for in such Foreign Plan, did not exceed the current value of
the assets of such Foreign Plan.
(k) Each Company Benefit Plan that allows loans to plan
participants has been operated in accordance with its terms, the plan's
written loan policy and all applicable Laws. In addition, all
outstanding loans from such Company Benefit Plans are current as of the
date hereof, and there are no loans in default, as to any employee of
an Osborn Entity.
(l) For purposes of this Agreement, (i) "ERISA" means the
Employee Retirement Income Security Act of 1974, as amended from time
to time, and any regulations or published rulings promulgated or issued
thereunder and (ii) all references to the ChoicePoint Entities shall be
deemed to be references to the Parent, ChoicePoint and their
Affiliates.
3.15 Labor Matters. Except as set forth on Schedule 3.15: (i) none
of the Osborn Entities is a party to any labor or collective bargaining
agreement, (ii) there are no labor or collective bargaining agreements that
pertain to any employees of any of the Osborn Entities, (iii) no employees of
any of the Osborn Entities are represented by any labor organization, (iv) no
labor organization or group of employees of any of the Osborn Entities has made
a demand for recognition, and there are no representation proceedings or
petitions seeking a representation proceeding presently pending or, to the
knowledge of ChoicePoint, threatened to be brought or filed with the National
Labor Relations Board or other labor relations tribunal relating to any of the
Osborn Entities, (v) there are no organizing activities involving any of the
Osborn Entities pending or, to the knowledge of ChoicePoint, threatened by any
labor organization or group of employees of any of the Osborn Entities, (vi)
there are no strikes, work stoppages, slowdowns, lockouts or arbitrations or
grievances or other labor disputes pending or, to the knowledge of the
ChoicePoint, threatened against or involving any of the Osborn Entities, (vii)
there are no unfair labor practice charges, grievances or complaints pending or,
to the knowledge of ChoicePoint, threatened against or involving any of the
Osborn Entities or any group of employees of any of the Osborn Entities, (viii)
there are no complaints, charges or claims against any of the Osborn Entities
pending or, to the knowledge of ChoicePoint, threatened to be brought or filed
with any Governmental Authority based on, arising out of, in connection with, or
otherwise relating to the employment by any of the Osborn Entities of any
individual, including any claim for workers' compensation, (ix) hours worked by
and payments made to employees of the Osborn Entities have not been in violation
of the federal Fair Labor Standards Act or any other Law dealing with such
matters, and (x) there are no controversies pending or, to the knowledge of
ChoicePoint, threatened, between any of the Osborn Entities and any of their
employees.
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3.16 Insurance.
(a) ChoicePoint has delivered to LabOne: (i) correct and
complete summaries of all policies of insurance to which any Osborn
Entity is a party or under which any Osborn Entity, or any director of
any Osborn Entity, is or has been covered at any time within the two
(2) years preceding the date hereof (the "Osborn Insurance Policies")
and (ii) a correct and complete description of all claims made in
respect of the Osborn Insurance Policies within such two (2) year
period.
(b) Except as set forth on Schedule 3.16(b), (i) each
Osborn Entity has paid all premiums due and, to the knowledge of
ChoicePoint, has otherwise performed all of its obligations under each
Osborn Insurance Policy, (ii) all Osborn Insurance Policies are in full
force and effect and (iii) no written notice of cancellation or
termination has been received with respect to any of the Osborn
Insurance Policies.
3.17 Intellectual Property. Schedule 3.17 sets forth a correct and
complete list of: (a) all patents, technical documentation, trade secrets,
trademarks, tradenames, service marks and copyrights (including all federal,
state, and foreign registrations pertaining thereto) and all applications
therefor that are owned by any Osborn Entity (collectively, the "Proprietary
Intellectual Property"); and (b) all patents, technical documentation, trade
secrets, trademarks, trade names, service marks, copyrights, software,
technology, and processes (except for licenses of "off the shelf" software
requiring payments less than $10,000 per year) that are used by any Osborn
Entity pursuant to a license or other right granted by a third party
(collectively, the "Licensed Intellectual Property", and together with the
Proprietary Intellectual Property, the "Intellectual Property"). The Osborn
Entities own, or have the right to use pursuant to valid and enforceable
licenses and agreements identified on Schedule 3.17, all Intellectual Property
and all software used in the Business. Except as set forth on Schedule 3.17, (i)
each Osborn Entity has complied, in all material respects, with its contractual
obligations relating to the protection of the Intellectual Property used by it
pursuant to licenses or other contracts, (ii) the consummation of the
transactions contemplated hereby will not alter or impair the right of any
Osborn Entity to use any Intellectual Property, (iii) no claims have been
asserted or, to the knowledge of ChoicePoint, threatened, with respect to the
use by any Osborn Entity of any Intellectual Property or otherwise for patent,
copyright or trademark infringement and (iv) to the knowledge of ChoicePoint, no
Person is infringing on or violating the Intellectual Property rights or
know-how used by the Osborn Entities.
3.18 Customers.
(a) Schedule 3.18 sets forth accurate listings of the top
twenty (20) customers of the Osborn Entities (i) based on the combined
revenues of the Osborn Entities during the fiscal year ended December
31, 2000 and (ii) based on the combined revenues of the Osborn Entities
during the six-month period ended June 30, 2001 (any such customer
listed on Schedule 3.18, a "Material Customer").
(b) Except as set forth on Schedule 3.18, since January
1, 2000, none of the Osborn Entities has lost, and, to the knowledge of
ChoicePoint, none of the ChoicePoint Entities or Osborn Entities has
been notified that any of them will lose or suffer
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diminution in, and no representative of a customer has notified any of
the ChoicePoint Entities or Osborn Entities that, in the event of a
sale of the Osborn Entities, any of the Osborn Entities would lose or
suffer diminution in, a relationship with any Material Customer. Except
as set forth on Schedule 3.18, none of the Osborn Entities is a party
to or bound by any contract, agreement or arrangement containing any
so-called "most favored nation" provisions or any similar provision
requiring any Osborn Entity to offer a Material Customer terms or
concessions at least as favorable as offered to one or more other
parties.
3.19 Related Party Agreements and Transactions. Except as set forth
on Schedule 3.19 and except as expressly contemplated by this Agreement and the
Ancillary Agreements, there are no existing agreements or proposed transactions
between (a) any of the Osborn Entities, on the one hand, and either ChoicePoint
Entity or any Affiliate thereof, on the other hand or (b) to the knowledge of
ChoicePoint, any Osborn Entity, on the one hand, and any officer, director or
employee of any ChoicePoint Entity or Osborn Entity (such officers, directors
and employees being hereinafter referred to as "Related Individuals") or any
business in which a Related Individual has a direct or indirect ownership
interest, on the other hand.
3.20 Completeness of Disclosure. No representation, warranty or
statement by the ChoicePoint Entities in this Agreement contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated herein or therein or necessary to make any
statement herein or therein, in light of the circumstances in which they were
made, not misleading.
3.21 Brokers, Finders, and Investment Bankers. Except as disclosed
on Schedule 3.21, neither the Osborn Entities nor ChoicePoint has employed any
broker, finder, investment banker, or other intermediary or incurred any
liability for any investment banking fees, financial advisory fees, brokerage
fees, finders' fees, or other similar fees in connection with the transactions
contemplated by this Agreement. The fees and expenses of the investment banker
listed on Schedule 3.21 shall be paid by ChoicePoint.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PARENT.
The Parent hereby represents and warrants to LabOne as
follows:
4.1 Organization. The Parent is a corporation duly incorporated,
validly existing, and in good standing under the Laws of the State of Georgia.
The Parent has all requisite corporate power and authority to own, lease, and
operate its properties and to carry on its business as now being conducted.
4.2 Authorization. The Parent has the corporate power and
authority to execute and deliver this Agreement and the Ancillary Agreements to
which it is party, and perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each Ancillary Agreement to which
it is a party and the performance by the Parent of its covenants and agreements
hereunder and thereunder have been duly and validly authorized by the Board of
Directors of the Parent, and no other corporate proceedings on the part of the
Parent or its Affiliates are necessary to authorize the execution, delivery and
performance of this Agreement,
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each Ancillary Agreement to which it is a party or the consummation of the
transactions so contemplated. Each of this Agreement and each Ancillary
Agreement to which it is a party has been duly executed and delivered by the
Parent and constitutes a valid and binding agreement of the Parent, enforceable
against the Parent in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other Laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.3 Absence of Restrictions and Conflicts. Except as set forth on
Schedule 4.3, the execution, delivery, and performance of this Agreement and the
Ancillary Agreements, the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements, and the fulfillment of and compliance
with the terms and conditions of this Agreement and the Ancillary Agreements do
not and will not (as the case may be), with or without the passing of time or
the giving of notice or both, violate or conflict with, constitute a breach of
or default under, result in any penalty or payment becoming due under, result in
the loss of any benefit under, or permit the acceleration or termination of any
right or obligation under, (a) any term or provision of the charter documents or
bylaws of the Parent, (b) any "Osborn Contract", "Retained Real Property Lease",
or "Retained Personal Property Lease", (c) any Order of any Governmental
Authority to which the Parent is party or by which the Parent or any of its
respective properties or assets are bound, (d) any Law applicable to the Parent,
or (e) any License. Except as set forth on Schedule 4.3 and except for
applicable requirements of Canadian regulatory authorities set forth on Schedule
4.3, no consent, approval, Order, or authorization of, or registration,
declaration, or filing with, or notice to, any Governmental Authority with
respect to the Parent is required in connection with the execution, delivery, or
performance of this Agreement and the Ancillary Agreements or the consummation
of the transactions contemplated hereby and thereby.
4.4 Brokers, Finders, and Investment Bankers. Except as disclosed
on Schedule 4.4, the Parent has not employed any broker, finder, investment
banker, or other intermediary or incurred any liability for any investment
banking fees, financial advisory fees, brokerage fees, finders' fees, or other
similar fees in connection with the transactions contemplated by this Agreement.
The fees and expenses of the investment banker listed on Schedule 4.4 shall be
paid by ChoicePoint.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF LABONE.
LabOne hereby represents and warrants to each of the
ChoicePoint Entities as follows:
5.1 Organization. LabOne is a corporation duly incorporated,
validly existing, and in good standing under the Laws of the State of Missouri.
LabOne has all requisite corporate power and authority to own, lease, and
operate its properties and to carry on its business as now being conducted.
-26-
5.2 Authorization. LabOne has the corporate power and authority to
execute and deliver this Agreement and each Ancillary Agreement to which it is
party and perform its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the Ancillary Agreements to which it is party and
the performance by LabOne of its covenants and agreements hereunder and
thereunder have been duly and validly authorized by the Board of Directors of
LabOne, and no other corporate proceedings on the part of LabOne or its
Affiliates are necessary to authorize the execution, delivery and performance of
this Agreement, the Ancillary Agreements or the consummation of the transactions
so contemplated. Each of this Agreement and each of the Ancillary Agreements to
which it is party has been duly executed and delivered by LabOne and constitutes
a valid and binding agreement of LabOne, enforceable against LabOne in
accordance with its terms, except that (a) such enforcement may be subject to
any bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other Laws, now or hereafter in effect, relating to or limiting creditors'
rights generally and (b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
5.3 Absence of Restrictions and Conflicts. Except as set forth on
Schedule 5.3, the execution, delivery, and performance of this Agreement and the
Ancillary Agreements to which LabOne is party, the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements and the
fulfillment of and compliance with the terms and conditions of this Agreement
and the Ancillary Agreements do not or will not (as the case may be), with or
without the passing of time or the giving of notice or both, violate or conflict
with, or constitute a breach of or default under, (a) any term or provision of
the articles of incorporation or bylaws of LabOne, (b) any Order to which LabOne
is a party or by which LabOne or any of its properties is bound or (c) any Law
applicable to LabOne or the business engaged in by LabOne. Except as set forth
on Schedule 5.3 and except for applicable requirements of Canadian regulatory
authorities set forth on Schedule 5.3, no consent, approval, Order or
authorization of, or registration, declaration, or filing with, or notice to,
any Governmental Authority with respect to LabOne is required in connection with
the execution, delivery, or performance of this Agreement or the Ancillary
Agreements to which LabOne is party by LabOne or the consummation of the
transactions contemplated by this Agreement or the Ancillary Agreements to which
LabOne is party by LabOne.
5.4 Brokers, Finders, and Investment Bankers. Except as set forth
on Schedule 5.4, LabOne has not employed any broker, finder, investment banker,
or other intermediary or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees, finders' fees, or other similar fees in
connection with the transactions contemplated by this Agreement. The fees and
expenses of the financial advisor listed on Schedule 5.4 shall be paid by
LabOne.
5.5 Purchase for Investment.
(a) LabOne is acquiring the Osborn Shares solely for
investment for its own account and not with the view to, or for resale
in connection with, any "distribution" (as such term is used in Section
2(11) of the Securities Act of 1933, as amended (the "Securities Act"))
thereof. LabOne understands that the Osborn Shares have not been
-27-
registered under the Securities Act or any state or foreign securities
Laws by reason of specified exemptions therefrom that depend upon,
among other things, the bona fide nature of its investment intent as
expressed herein and as explicitly acknowledged hereby and that under
such Laws such securities may not be resold without registration under
the Securities Act or under applicable state or foreign Law unless an
applicable exemption from registration is available.
(b) LabOne is an "accredited investor" within the meaning
of Rule 501 of Regulation D promulgated under the Securities Act.
LabOne, by reason of its business and financial experience in business,
has such knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and risks
of the purchase of the Osborn Shares, is able to bear the economic risk
of such investment in Osborn, and is able to afford a complete loss of
such investment.
5.6 Litigation. There is no claim, action, suit, proceeding or
governmental investigation pending or, to the knowledge of LabOne, threatened
against LabOne, by or before any Governmental Authority or by any third party
which challenges the validity of this Agreement or which would be reasonably
likely to adversely affect or restrict LabOne's ability to consummate the
transactions contemplated hereby.
SECTION 6. ADDITIONAL COVENANTS AND AGREEMENTS.
Each of the parties hereto shall comply with the following covenants
and agreements to the extent applicable to such party (unless compliance is
waived in advance in accordance with this Agreement):
6.1 Access to Information.
(a) All information concerning the ChoicePoint Entities
or any Osborn Entity furnished or provided by the ChoicePoint Entities,
the Osborn Entities or their representatives to LabOne or its
representatives (whether furnished before or after the date hereof)
shall be held subject to the confidentiality agreement by and between
the Parent and LabOne, dated as of January 25, 2001 (the
"Confidentiality Agreement").
(b) LabOne agrees that it will maintain in a location
reasonably convenient to the ChoicePoint Entities for at least seven
(7) years after the date hereof (the "Tax/Accounting Retention
Period"), the tax and accounting books, records, and documents (the
"Tax/Accounting Records") of the Osborn Entities existing as of the
date hereof. Notwithstanding the foregoing, in lieu of retaining any
specific Tax/Accounting Records, LabOne may offer in writing to deliver
such Tax/Accounting Records to the ChoicePoint Entities and, if such
offer is not accepted within ninety (90) days, the offered
Tax/Accounting Records may be destroyed or otherwise disposed of at any
time. If the ChoicePoint Entities shall request in writing prior to the
expiration of such 90-day period that any of Tax/Accounting Records
proposed to be destroyed or disposed of be delivered to the ChoicePoint
Entities, LabOne shall promptly arrange for delivery of such requested
Tax/Accounting Records (at the ChoicePoint Entities' cost). Upon
execution by ChoicePoint of a confidentiality agreement reasonably
satisfactory to LabOne and
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ChoicePoint, LabOne shall afford the ChoicePoint Entities and their
respective accountants, counsel, and representatives full access, for
reasonable purposes, during normal business hours to Tax/Accounting
Records at all times during the Tax/Accounting Retention Period.
(c) LabOne agrees that it will maintain in a location
reasonably convenient to the ChoicePoint Entities at least for the
longer of (i) two (2) years after the date hereof or (ii) the period of
time required by law (the "Non-Tax/Accounting Retention Period"), the
books, records, and documents other than the tax and accounting books,
records, and documents (the "Non-Tax/Accounting Records") of the Osborn
Entities existing as of the date hereof. Notwithstanding the foregoing,
in lieu of retaining any specific Non-Tax/Accounting Records, LabOne
may offer in writing to deliver such Non-Tax/Accounting Records to the
ChoicePoint Entities and, if such offer is not accepted within ninety
(90) days, the offered Non-Tax/Accounting Records may be destroyed or
otherwise disposed of at any time. If the ChoicePoint Entities shall
request in writing prior to the expiration of such 90-day period that
any of Non-Tax/Accounting Records proposed to be destroyed or disposed
of be delivered to the ChoicePoint Entities, LabOne shall promptly
arrange for delivery of such requested Non-Tax/Accounting Records (at
the ChoicePoint Entities' cost). Upon execution by ChoicePoint of a
confidentiality agreement reasonably satisfactory to LabOne and
ChoicePoint, LabOne shall afford the ChoicePoint Entities and their
respective accountants, counsel, and representatives full access, for
reasonable purposes, during normal business hours to such books,
records, and documents at all times during the Non-Tax/Accounting
Retention Period.
6.2 Consents. With respect to any agreements for which any
required consent or approval is not obtained prior to the date hereof, the
ChoicePoint Entities and LabOne shall each use their reasonable best efforts to
obtain any such consent or approval after the date hereof until such consent or
approval has been obtained.
6.3 Fees and Expenses. The ChoicePoint Entities will be jointly
and severally obligated to pay all costs and expenses incurred by the Osborn
Entities or the ChoicePoint Entities in connection with the negotiation,
preparation, execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, attorneys', accountants', brokers',
finders', and investment banking fees and expenses (collectively, "Expenses").
LabOne shall bear all such Expenses incurred by LabOne.
6.4 Public Announcements. Upon execution of this Agreement, no
party shall make, or allow any Affiliate, agent or representative thereof to
make, any public announcements regarding this Agreement or the Ancillary
Agreements or the transactions contemplated hereby or thereby, including,
without limitation, any announcement to the financial community or to any
Governmental Authorities, employees, customers, suppliers or the general public,
without the prior written approval of the other party as to the content, timing
and manner of presentation or publication thereof; provided, however, that each
party may issue the press release agreed upon prior to the execution of this
Agreement and each party may make such other announcements and such other
disclosures as such party shall determine are required to be made by applicable
Law (including, without limitation, by the applicable rules of the New York
Stock Exchange or
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the Nasdaq Stock Market). In the event that any party hereto believes in good
faith that any such disclosure is required by applicable Law, such party shall
nonetheless use its good faith efforts to consult (as to the content, timing and
manner of presentation or publication thereof) with the other party a reasonable
period of time prior to making such disclosure.
6.5 Employees; Employee Benefits.
(a) Except as provided below, nothing contained herein
shall require LabOne to assume any Company Benefit Plans or accept the
transfer of any assets or liabilities arising out of or associated with
any Company Benefit Plans. All liabilities and obligations for retiree
medical and life benefits payable on or after the date hereof to
current retirees of the Osborn Entities, as determined on the date
hereof, shall be paid by ChoicePoint.
(b) As of the date hereof, LabOne or an Affiliate thereof
shall continue the employment of the Employees listed on Schedule
6.5(b)(i) (each such Employee who continues such employment being
referred to individually herein as a "Transferred Employee" and all
such Employees who continue such employment being referred to
collectively herein as the "Transferred Employees"); provided, however,
nothing contained herein shall be deemed to create an employment
contract between LabOne and any Transferred Employee. Effective on the
date hereof, pursuant to an employee secondment agreement mutually
acceptable to the parties (the "Employee Secondment Agreement"), LabOne
shall lease from CHS, for the transition period or periods contemplated
by the Employee Secondment Agreement, the Employees listed on Schedule
6.5(b)(ii) (the "Osborn Contract Employees"), and all Osborn Contract
Employees shall become employees of CHS and shall remain eligible to
participate in the Company Benefit Plans for the duration of the
transition period.
(c) ChoicePoint shall be solely responsible for
terminating the Employees who are neither Transferred Employees nor
Osborn Contract Employees ("Unaffected Employees"). ChoicePoint shall
be solely responsible and assume liability for the termination of the
Osborn Contract Employees and for all notices or payments due to any
Unaffected Employees or Osborn Contract Employees prior to or
subsequent to the date hereof, and all notices, payments, fines or
assessments due to any Governmental Authority, pursuant to any
applicable Law with respect to the employment, discharge, constructive
discharge or layoff due to any Unaffected Employees or Osborn Contract
Employees before or after the date hereof, including but not limited to
the Workers Adjustment and Retraining Act (the "WARN Act") and the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and
any rules or regulations that have been issued in connection with the
foregoing.
(d) For the period beginning on the date hereof and
ending no earlier than December 31, 2001, LabOne shall, or shall cause
the Osborn Entities to, provide each Transferred Employee and each
Osborn Contract Employee who, subsequent to the transition period
contemplated by the Employee Secondment Agreement, accepts an offer of
employment with LabOne (collectively, the "Hired Employees") with
compensation and benefits that are substantially comparable in the
aggregate to the compensation and
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benefits provided to similarly situated LabOne employees. LabOne shall
treat all service completed by a Hired Employee with any of the Osborn
Entities or any Affiliate thereof, and any predecessor thereto, the
same as service completed with LabOne for all purposes, including
waiting periods relating to preexisting conditions under medical plans,
vacations, severance pay, eligibility to participate in, vesting or
payment of benefits under, and eligibility for early retirement or any
subsidized benefit provided for under any employee benefit plan
(including, but not limited to, any "employee benefit plan" as defined
in Section 3(3) of ERISA) maintained by LabOne on or after the date
hereof in which a Hired Employee participates, except for purposes of
computing benefits under the accrued benefit formula in a pension plan
(as defined in Section 3(2) of ERISA). Prior to the date hereof,
ChoicePoint has furnished LabOne with a list of the length of service
with the Osborn Entities or its Affiliates for each of the Employees.
For purposes of computing deductible amounts (or like adjustments or
limitations on coverage) under any employee welfare benefit plan
(including, without limitation, any "employee welfare benefit plan" as
defined in Section 3(l) of ERISA), expenses and claims previously
recognized for similar purposes under the applicable welfare benefit
plan of any of the Osborn Entities or any Affiliate shall be credited
or recognized under the comparable plan maintained after the date
hereof by LabOne.
(e) After the date hereof, LabOne shall be responsible
for, and shall indemnify and hold harmless ChoicePoint and its
Affiliates and their officers, directors, employees, Affiliates and
agents and the fiduciaries (including plan administrators) of the
Company Benefit Plans, from and against, any and all claims, losses,
damages, costs and expenses (including, without limitation, attorneys'
fees and expenses) and other liabilities and obligations, with respect
to the Transferred Employees, relating to or arising out of all
salaries, bonuses, commissions, vacation entitlements and other
benefits accrued and included on the Final Working Capital Statement by
any of the Osborn Entities but unpaid as of the date hereof.
(f) After the Closing Date, ChoicePoint agrees to use its
best efforts to facilitate as soon as reasonably practicable, in accord
with applicable Law, any request made by any Hired Employee for a
rollover of an account balance from the ChoicePoint Inc. 401(k) Profit
Sharing Plan to the LabOne 401(k) Plan (the "LabOne 401(k) Plan").
LabOne agrees to accept such rollovers into the LabOne 401(k) Plan upon
the receipt of satisfactory documentation from ChoicePoint.
(g) ChoicePoint agrees to assign to LabOne all rights
associated with and pertaining to all nondisclosure, confidentiality,
invention assignment and noncompetition agreements between any of the
Employees and ChoicePoint or any of its Affiliates.
6.6 Use of ChoicePoint Corporate Name and Trademarks. As soon as
reasonably practicable after the date hereof, but in any event within sixty (60)
days after the date hereof, LabOne will, at its own expense, remove any and all
exterior signs and other identifiers located on any of its property or premises
that refer or pertain to the ChoicePoint Entities or that include the
ChoicePoint Entities' name and logo or other trademark or intellectual property.
Additionally, as soon as reasonably practicable after the date hereof, but in
any event within sixty (60) days after the date hereof, LabOne will remove from
all letterhead, envelopes,
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invoices, and other communications media of any kind, all references to the
ChoicePoint Entities, including the ChoicePoint Entities' name and logo or other
trademark or intellectual property.
6.7 Transition Services Agreement. Contemporaneously with the
execution of this Agreement, ChoicePoint and LabOne are entering into a
transition services agreement mutually acceptable to the parties (the
"Transition Services Agreement") concerning certain services to be provided by
ChoicePoint to LabOne.
6.8 Investigation by LabOne. LabOne has conducted its own
independent review and analysis of the business, operations, technology, assets,
liabilities, results of operations, financial condition and prospects of the
Osborn Entities and acknowledges that the ChoicePoint Entities have provided
LabOne with access to the personnel, properties, premises and records of the
Osborn Entities for this purpose. In entering into this Agreement, LabOne has
relied upon its own investigation and analysis, and LabOne (a) acknowledges
that, except as otherwise specifically provided in this Agreement, neither the
ChoicePoint Entities, the Osborn Entities nor any of their respective directors,
officers, employees, Affiliates, controlling Persons, agents or representatives
makes or has made any representation or warranty, either express or implied, as
to the accuracy or completeness of any of the information provided or made
available to LabOne or its directors, officers, employees, Affiliates,
controlling Persons, agents or representatives, and (b) agrees, to the fullest
extent permitted by Law, that neither ChoicePoint, the Osborn Entities nor any
of their respective directors, officers, employees, Affiliates, controlling
Persons, agents or representatives shall have any liability or responsibility
whatsoever to LabOne or its directors, officers, employees, Affiliates,
controlling Persons, agents or representatives on any basis (including, without
limitation, in contract or tort, under federal or state securities Laws or
otherwise) based upon any information provided or made available, or statements
made, to LabOne or its directors, officers, employees, Affiliates, controlling
Persons, agents or representatives (or any omissions therefrom), except as and
only to the extent expressly set forth herein with respect to the
representations and warranties of the ChoicePoint Entities in Section 3 and
Section 4 of this Agreement and subject to the limitations and restrictions
contained herein.
6.9 Audit of Osborn Year-End Financial Statements. On or before
the date hereof, the ChoicePoint Entities have caused their independent auditors
(the "ChoicePoint Auditors") to commence an audit of the unaudited consolidated
balance sheets and related unaudited statements of operations, cash flows and
stockholders' equity (deficit) of the Osborn Entities as of and for the fiscal
years ended December 31, 1998, 1999 and 2000 (the "Osborn Year-End Financial
Statements") (such audit, together with the preparation and audit of any
Required Pro Forma Financials (as hereinafter defined), the "Audit"). From and
after the date hereof, the ChoicePoint Entities shall use their commercially
reasonable efforts to, and shall use their commercially reasonable efforts to
cause the ChoicePoint Auditors to, at the option of LabOne either (x) complete
the Audit or (y) assist with and facilitate the completion of the Audit, in
either case, on or prior to the sixtieth (60th) day following the date hereof.
If requested by LabOne, the ChoicePoint Entities shall (A) if the Audit is
completed by the ChoicePoint Auditors, use their commercially reasonable efforts
to cause such auditors to deliver such representations, reports and consents as
are requested by LabOne in order to comply with the rules and regulations of the
Securities and Exchange Commission (the "SEC") and other Laws applicable to
LabOne and (B) if any pro forma financial statements are required by such SEC
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rules and regulations or other Laws ("Required Pro Forma Financials"), use their
commercially reasonable efforts to, and use their commercially reasonable
efforts to cause the ChoicePoint Auditors to, assist with and facilitate the
completion and audit of such Required Pro Forma Financials prior to the sixtieth
(60th day) following the date hereof. Additionally, the ChoicePoint Entities
shall from time to time hereafter, at LabOne's reasonable request, cooperate
with LabOne in connection with the Audit. LabOne shall pay the fees and expenses
of the ChoicePoint Auditors in connection with the Audit and any other services
provided pursuant to this Section 6.9.
6.10 Insurance Matters. All Surety Bonds and Osborn Insurance
Policies shall be terminated as of the date hereof.
SECTION 7. RESTRICTIVE COVENANTS.
7.1 Definitions. For the purposes of this section:
(a) "Osborn Activities" means insurance laboratory
testing services, management of ordering and receipt of life and health
insurance underwriting and claim information requirements and status
reports, and teleunderwriting services, but excluding the Permitted
Activities (as hereinafter defined);
(b) "Noncompetition Period" or "Nonsolicitation Period"
means the period beginning on the date hereof and ending on the fifth
(5th) anniversary of the date hereof;
(c) "Permitted Activities" means
(i) the following underwriting and claims
information services activities provided by the Parent or its
Affiliates to insurance companies to assist those companies in
assessing the insurability and associated policy pricing of
individuals and property: the furnishing of access to motor
vehicle reports, the maintenance of a database of claims
histories, the provision of automated claims verification
information services to both the property and casualty and the
life and health insurance markets, and the provision of
database marketing services, including pre-screened and direct
marketing lists;
(ii) those activities provided by the Parent or
its Affiliates related to pre-employment background
investigations, pre-employment and regulatory compliance drug
testing services (but not drug testing), shareholder locator
searches, credential verification services, and due diligence
and public record information searches;
(iii) those activities provided by the Parent or
its Affiliates related to modeling services, customized policy
rating and issuance software, property inspections and audits
to the commercial insurance market, and technology solutions
to the life insurance market other than the management of
ordering and receipt of life and health insurance underwriting
and claim information requirements and status reports;
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(iv) those activities provided by the Parent or
its Affiliates related to forensics and human identification,
paternity testing, population genetics, and advanced research
(including, but not limited to, validation studies, genetic
sequencing and database construction, genetic diversity
studies, species origin analysis, and mitochondrial typing);
(v) those activities provided by the Parent or
its Affiliates related to (A) the Appraise Product and (B) the
intellectual property set forth on Schedule 2.2(a)(ii); and
(vi) those activities contemplated in the
Transition Services Agreement.
(d) "Territory" means the United States of America and
Canada, such area being where customers and actively sought prospective
customers of the Osborn Entities are located.
7.2 Noncompetition.
(a) Acknowledgment. The ChoicePoint Entities acknowledges
that the Osborn Entities conduct the Osborn Activities throughout the
Territory and that, to protect adequately the interest of LabOne in the
Business and goodwill of the Osborn Entities, it is essential that any
noncompetition covenant with respect thereto cover all Osborn
Activities and the entire Territory for the duration of the
Noncompetition Period.
(b) Trade Name. The ChoicePoint Entities hereby agree
that, during the Noncompetition Period, neither of the ChoicePoint
Entities nor any of their Affiliates will, directly or indirectly, own,
manage, operate, join, control, or participate in the ownership,
management, operation, or control of any business conducted under any
corporate, product, or trade name or trademark of, the Osborn Entities,
or name or mark similar thereto, without the prior written consent of
LabOne.
(c) Noncompetition Covenant. The ChoicePoint Entities
hereby agree that neither of the ChoicePoint Entities nor any of their
Affiliates will, during the Noncompetition Period, directly or
indirectly, conduct Osborn Activities in the Territory or otherwise
engage in, have an equity or profit interest in, or render services (of
an executive, marketing, manufacturing, research and development,
administrative, financial, or consulting nature) to any business that
conducts any of Osborn Activities in the Territory. Notwithstanding
anything in this Agreement to the contrary, each of the ChoicePoint
Entities and their Affiliates may acquire up to two percent (2%) of any
company whose common stock is publicly traded on a national securities
exchange or in the over-the-counter market and may conduct the
Permitted Activities. The ChoicePoint Entities and LabOne acknowledge
that, in the course of acquiring business entities or assets ("Acquired
Entities"), the ChoicePoint Entities may wish to acquire an Acquired
Entity or Acquired Entities that engage in the Osborn Activities as
part of its business activities. The ChoicePoint Entities and LabOne
acknowledge that nothing in this Agreement shall prevent the
ChoicePoint Entities or their Affiliates from acquiring (and,
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thereafter, owning and operating) an Acquired Entity or Acquired
Entities during the Noncompetition Period that engage in the Osborn
Activities, provided that the trailing twelve-month revenues derived
from the Osborn Activities by the Acquired Entity or Acquired Entities,
in the aggregate, do not exceed $30,000,000; provided, however, that,
if, subsequent to the purchase of such Acquired Entity or Acquired
Entities, the ChoicePoint Entities or their Affiliates receive and wish
to accept a bona fide offer to dispose of the portion of the business
of the Acquired Entity or Acquired Entities engaged in the Osborn
Activities, the ChoicePoint Entities or their Affiliates, as the case
may be, shall offer to sell to LabOne the portion of the business of
the Acquired Entity or Acquired Entities engaged in the Osborn
Activities at the price and under the terms offered by such bona fide
offeror.
(d) Nonsolicitation. The ChoicePoint Entities hereby
agree that they will not, during the Nonsolicitation Period, directly
or indirectly:
(i) solicit or attempt to solicit, any business
from any of the Osborn Entities' customers existing as of the
date hereof or during the one-year period prior to the date
hereof, for purposes of providing products or services that
are competitive with those provided by the Osborn Entities in
their conduct of the Osborn Activities; or
(ii) hire, recruit, or solicit or attempt to
hire, recruit, or solicit, on behalf of any ChoicePoint Entity
or Affiliate thereof or on behalf of any other Person, firm,
or corporation, any employee or independent contractor of any
Osborn Entity, other than (A) those individuals listed on
Schedule 7.2(d)(ii), (B) any individual who is not hired by
LabOne or the Osborn Entities following the termination of the
Employee Secondment Agreement, and (C) any individual who is
hired by LabOne or the Osborn Entities but whose employment is
thereafter terminated by LabOne or the Osborn Entities;
provided, however, any individual covered by Section
7.2(d)(ii)(C) shall remain subject to any non-compete and
confidentiality agreements with LabOne.
7.3 Severability. If a judicial or arbitral determination is made
that any of the provisions of this Agreement constitutes an unreasonable or
otherwise unenforceable restriction against the ChoicePoint Entities, the
provisions of this Agreement shall be rendered void only to the extent that such
judicial or arbitral determination finds such provisions to be unreasonable or
otherwise unenforceable with respect to the ChoicePoint Entities. In this
regard, the ChoicePoint Entities hereby agree that any Governmental Authority
construing this Agreement shall be empowered to sever any portion of the
Territory, any prohibited business activity or any time period from the coverage
of this Agreement, and to apply the provisions of this Agreement to the
remaining portion of the Territory, the remaining business activities, and the
remaining time period not so severed by such judicial or arbitral authority.
SECTION 8. CONTEMPORANEOUS ACTIONS.
Contemporaneously with the execution of this Agreement, the following
actions have been taken:
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8.1 LabOne Documents. LabOne has delivered, or caused to be
delivered, to ChoicePoint the following:
(a) the Purchase Price;
(b) an opinion mutually acceptable to the parties of
Reboul, MacMurray, Hewitt, Maynard & Kristol, special counsel to
LabOne, and an opinion mutually acceptable to the parties of Morrison &
Hecker, Missouri counsel to LabOne;
(c) a mutual release mutually acceptable to the parties
executed by LabOne (the "Release");
(d) the Transition Services Agreement executed by LabOne;
(e) a lease agreement mutually acceptable to the parties
executed by LabOne (the "Lease Agreement");
(f) a sublease agreement mutually acceptable to the
parties executed by LabOne (the "Kit Factory Sublease Agreement");
(g) the Employee Secondment Agreement executed by LabOne;
(h) a software license agreement mutually acceptable to
the parties executed by LabOne or one of its Affiliates (the "Software
License Agreement");
(i) a trademark license agreement mutually acceptable to
the parties executed by LabOne or one of its Affiliates (the "Trademark
License Agreement");
(j) a technology license agreement mutually acceptable to
the parties executed by LabOne or one of its Affiliates (the
"Technology License Agreement");
(k) a motor vehicle record reseller agreement mutually
acceptable to the parties executed by LabOne or one of its Affiliates
(the "MVR Agreement");
(l) the Osborn Canada Stock Purchase Agreement executed
by LabOne Canada, Inc.; and
(m) such other documents executed by LabOne and/or one or
more of its Affiliates as shall be mutually agreed upon by the parties.
8.2 Transfers Complete. The transfers contemplated by Section 2 of
this Agreement have been completed pursuant to a contribution and distribution
agreement and the other documents of transfer of title mutually acceptable to
the parties.
8.3 Third-Party Consents and Notices. All contractual and other
third party consents and notices required to be obtained or made prior to the
date hereof by any of the ChoicePoint Entities or any of the Osborn Entities in
connection with the execution and delivery of this Agreement or any Ancillary
Agreement and/or the consummation of the transactions
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contemplated hereby and thereby that are listed on Schedule 8.3 have been
obtained and copies thereof have been delivered to LabOne.
8.4 ChoicePoint Documents. ChoicePoint has delivered, or caused to
be delivered, to LabOne the following:
(a) the stock certificates representing the Osborn Shares
and accompanying stock powers evidencing the transfer of the Osborn
Shares to LabOne;
(b) the stock certificates representing the outstanding
shares of capital stock of the Osborn Subsidiaries;
(c) the organizational record books, minute books, stock
books and corporate seals of the Osborn Entities;
(d) a list of personal property owned by any Osborn
Entity which is not being transferred to ChoicePoint pursuant to
Section 2.2 of this Agreement;
(e) an opinion mutually acceptable to the parties of King
& Spalding, counsel to ChoicePoint;
(f) the Release executed by each of the Choice Point
Entities on behalf of the ChoicePoint Entities and their Affiliates
(other than the Osborn Entities);
(g) written resignations of each of the officers and
directors of the Osborn Entities (other than those identified in
writing by LabOne to ChoicePoint prior to the date hereof);
(h) the Transition Services Agreement executed by
ChoicePoint;
(i) the Lease Agreement executed by ChoicePoint;
(j) the Kit Factory Sublease Agreement executed by
ChoicePoint;
(k) the Employee Secondment Agreement executed by CHS;
(l) the Software License Agreement executed by
ChoicePoint or one of its Affiliates;
(m) the Trademark License Agreement executed by
ChoicePoint or one of its Affiliates;
(n) the Technology License Agreement executed by
ChoicePoint or one of its Affiliates;
(o) the MVR Agreement executed by ChoicePoint or one of
its Affiliates;
(p) the Osborn Canada Stock Purchase Agreement executed
by Osborn; and
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(q) such other documents executed by ChoicePoint and/or
one or more of its Affiliates as shall be mutually agreed upon by the
parties.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.;
INDEMNIFICATION.
9.1 Survival of Representations, Warranties, Covenants and
Agreements; Right to Indemnification not Affected by Knowledge. The
representations, warranties, covenants and agreements made by the parties in
this Agreement and in the Ancillary Agreements shall survive the date hereof for
the Claims Period (as hereinafter defined) applicable thereto. The right of any
party to seek indemnification under this Section 9 or any other remedy based on
the representations, warranties, covenants and agreements contained in this
Agreement or in any Ancillary Agreement will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and
delivery of this Agreement, with respect to the accuracy or inaccuracy of, or
compliance with, any such representation, warranty, covenant or agreement.
9.2 Indemnification Obligations of the ChoicePoint Entities. The
ChoicePoint Entities shall, jointly and severally, indemnify, defend, and hold
harmless LabOne and its officers, directors, employees, and Affiliates
(including, after the date hereof, the Osborn Entities), and each of the heirs,
executors, successors, and assigns of any of the foregoing (collectively, the
"LabOne Indemnified Parties") from, against, and in respect of any and all
Losses (as hereinafter defined) arising out of or relating to:
(a) any breach or inaccuracy of any representation or
warranty made by ChoicePoint in Section 3 hereof (but excluding any
Losses relating to any breach or inaccuracy of the representations and
warranties contained in Section 3.12 to the extent such Losses are
reduced as a result of payments made under Section 10.7) or by the
Parent in Section 4 hereof;
(b) any breach of any covenant, agreement, or undertaking
made by the ChoicePoint Entities in this Agreement or any Ancillary
Agreement;
(c) any liabilities of the Osborn Entities relating to
the Owned Real Property, the ChoicePoint Personal Property, the
ChoicePoint Personal Property Leases, and the distributions to the
Parent and its Affiliates contemplated by Section 2 hereof;
(d) any (i) indebtedness for borrowed money of any Osborn
Entity existing as of the date hereof; (ii) liabilities or obligations
of any Osborn Entity in respect of guaranties entered into or letters
of credit issued prior to the date hereof; (iii) the deferred purchase
price of assets or services purchased prior to the date hereof which,
in accordance with GAAP, should be shown on the liability side of a
consolidated balance sheet of the Osborn Entities; (iv) any obligation
of any Osborn Entity to pay a specified purchase price for goods or
services whether or not delivered or accepted pursuant to any agreement
entered into prior to the date hereof; or (v) liabilities or
obligations of any Osborn Entity, as lessee, under any lease of
property (whether real, personal or mixed) entered into prior to the
date hereof which, in accordance with GAAP, should be shown as a
capital lease on a consolidated balance sheet of the Osborn Entities;
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(e) any claim, action, proceeding or investigation
brought against any of the Osborn Entities prior to or after the date
hereof based upon any event or omission occurring in respect of the
assets, properties, activities or operations of the Osborn Entities
prior to the date hereof;
(f) any liability for or obligation to pay severance to
any Unaffected Employee or Osborn Contract Employee; and
(g) (i) all salaries, bonuses, commissions, vacation
entitlements and other benefits or compensation earned or accrued prior
to or after the Statement Date by any Unaffected Employee or any Osborn
Contract Employee, (ii) all salaries, bonuses, commissions, vacation
entitlements and other benefits or compensation earned or accrued prior
to the Statement Date by any Transferred Employee, (iii) any
liabilities or obligations in respect of any Company Benefit Plan, (iv)
any claims of, or damages or penalties sought by, any Unaffected
Employee or any Osborn Contract Employee with respect to any act or
failure to act by any ChoicePoint Entity to the extent arising from the
employment, discharge, layoff or termination of any such employee, (v)
any liabilities under COBRA or the WARN Act as a result of the
termination of any Unaffected Employee or Osborn Contract Employee and
(vi) all liabilities and obligations for retiree medical and life
benefits payable on and after the date hereof to current retirees of
the Osborn Entities, as determined on the date hereof.
For purposes of this Section 9, "Loss" or "Losses" shall mean any and
all claims, liabilities, obligations, losses (including any diminution in the
value of the Osborn Shares and the Osborn Canada Shares), costs, expenses,
penalties, fines, judgments, and damages whenever arising or incurred
(including, without limitation, amounts paid in settlement, costs of
investigation, and reasonable attorneys' and accountants' fees and expenses)
incurred by an Indemnified Party; provided, however, that an Indemnified Party
shall not be entitled to indemnification hereunder to the extent an accrual of
liability or a specific reserve for such matter is included in the Final Working
Capital Statement.
9.3 Indemnification Obligations of LabOne. LabOne shall indemnify
and hold harmless each of the ChoicePoint Entities and their respective
officers, directors, employees, and Affiliates, and each of the heirs,
executors, successors, and assigns of any of the foregoing (collectively, the
"ChoicePoint Indemnified Parties") from, against, and in respect of any and all
Losses arising out of or relating to:
(a) any breach or inaccuracy of any representation or
warranty made by LabOne in Section 5; and
(b) any breach of any covenant, agreement, or undertaking
made by LabOne in this Agreement or any Ancillary Agreement.
9.4 Indemnification Procedure.
(a) Promptly after receipt by a LabOne Indemnified Party
or a ChoicePoint Indemnified Party (hereinafter referred to as, the
"Indemnified Party") of notice by a third party of any claim or the
commencement of any action or proceeding with respect to
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which such Indemnified Party may be entitled to receive payment from
the other party for any Losses (ignoring, for this purpose, the
Threshold Amount (as hereinafter defined)), such Indemnified Party
shall, within ten (10) days, notify LabOne or ChoicePoint, as the
appropriate indemnifying party or representative thereof (the
"Indemnifying Party"), of such third-party claim or of the commencement
of such action or proceeding; provided, however, that the failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party
from liability for such third-party claim arising otherwise than under
this Agreement and such failure to so notify the Indemnifying Party
shall relieve the Indemnifying Party from liability under this
Agreement with respect to such third-party claim only if, and only to
the extent that, such failure to notify the Indemnifying Party results
in the forfeiture by the Indemnifying Party of any rights or defenses
otherwise available to the Indemnifying Party with respect to such
third-party claim. Unless the Indemnifying Party is also a party to
such third-party claim and the Indemnified Party determines in good
faith after conferring with its outside counsel that joint
representation would be inappropriate, the Indemnifying Party shall
have the right, upon written notice delivered to the Indemnified Party
within twenty (20) days thereafter (or, if earlier, by the tenth (10th)
day preceding the day on which an answer or other pleading must be
served in order to prevent judgment by default in favor of the Person
asserting such claim), to assume the defense of such action or
proceeding, including the employment of counsel reasonably satisfactory
to the Indemnified Party and the payment of the fees and disbursements
of such counsel. In the event, however, that the Indemnifying Party
declines or fails to assume the defense of the action or proceeding or
to employ counsel reasonably satisfactory to the Indemnified Party, in
either case within such 20-day period (or earlier 10-day period, if
applicable), then such Indemnified Party may employ counsel to
represent or defend it in any such action or proceeding for the account
and risk of the Indemnifying Party, and the Indemnifying Party shall
pay the fees and disbursements of such counsel as incurred; provided,
however, that the Indemnifying Party shall not be required to pay the
fees and disbursements of more than one counsel for all Indemnified
Parties in any jurisdiction in any single action or proceeding. In any
action or proceeding with respect to which indemnification is being
sought hereunder, the Indemnified Party or the Indemnifying Party,
whichever is not assuming the defense of such action, shall have the
right to participate in such litigation and to retain its own counsel
at such party's own expense. The Indemnifying Party or the Indemnified
Party, as the case may be, shall at all times use reasonable efforts to
keep the Indemnifying Party or the Indemnified Party, as the case may
be, reasonably apprised of the status of the defense of any action, the
defense of which it is maintaining, and to cooperate in good faith with
the other with respect to the defense of any such action. Anything in
this Section 9.4 to the contrary notwithstanding, the Indemnifying
Party shall not be entitled to assume the defense of any third-party
claim (and shall pay the fees and expenses of counsel incurred by the
Indemnified Party in defending such third-party claim as incurred) if
the third-party claim seeks an injunction or other equitable relief or
any other relief other than money damages against the Indemnified Party
that the Indemnified Party reasonably determines, after conferring with
its outside counsel, cannot be separated from any related claim for
money damages.
(b) If an Indemnifying Party assumes the defense of any
third-party claim pursuant to paragraph (a) above, the Indemnifying
Party may not, without the prior
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written consent of the Indemnified Party, settle or compromise such
third claim or consent to the entry of any judgment in respect thereof
unless (A) the sole relief provided to such third party is the payment
of monetary damages which the Indemnifying Party pays or causes to be
paid concurrently with the effectiveness thereof; (B) there is no
finding or admission of any violation of Law or any violation of the
rights of any Person and, in the good faith judgment of the Indemnified
Party, no effect on any other claims that may be made against the
Indemnified Party; and (C) the Indemnifying Party shall obtain, as a
condition of such settlement, a complete unconditional release of the
Indemnified Party. The Indemnified Party will have no liability with
respect to any compromise or settlement of any third-party claim that
is effected in violation of clause (ii) of the preceding sentence.
(c) In the event any Indemnified Party should have a
claim against any Indemnifying Party that does not involve a
third-party claim being asserted against or sought to be collected from
such Indemnified Party, the Indemnified Party shall deliver notice of
such claim (together with a reasonably detailed description of the
facts giving rise thereto, the provision of this Section 9 under which
indemnification is being sought and the amount (or estimated amount) of
Losses relating thereto) with reasonable promptness to the Indemnifying
Party. The failure by any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any
liability that it may have to such Indemnified Party except to the
extent that the Indemnifying Party demonstrates that it has been
materially prejudiced by such failure. If the Indemnifying Party does
not notify the Indemnified Party within twenty (20) days following its
receipt of such notice that the Indemnifying Party disputes its
liability to the Indemnified Party, such claim specified by the
Indemnified Party in such notice shall be conclusively deemed a
liability of the Indemnifying Party and the Indemnifying Party shall
pay the amount of such liability to the Indemnified Party on demand or,
in the case of any notice in which the amount of the claim (or any
portion thereof) is estimated, on such later date when the amount of
such claim (or such portion thereof) becomes finally determined. If the
Indemnifying Party has timely disputed its liability with respect to
such claim, as provided above, the Indemnifying Party shall promptly
pay any amount of such claim that is not disputed and the Indemnifying
Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved in accordance with Section
11.12.
9.5 Claims Period. For purposes of this Agreement, a "Claims
Period" shall be the period during which a claim for indemnification may be
asserted under this Agreement by an Indemnified Party, which period shall (a)
begin on the date hereof and (b) terminate as follows:
(i) with respect to any Losses covered by Sections
9.2(a) or 9.3(a) hereof, the Claims Period shall terminate on
the date that is eighteen (18) months from the date hereof;
provided, however, the Claims Period shall (A) continue until
the expiration of any applicable statute of limitations
(giving effect to any extensions thereof) with respect to any
Losses resulting from any breach or inaccuracy of any
representation or warranty contained in Section 3.12 or
Section 3.14 hereof; and (B) the Claims Period shall continue
indefinitely with respect to any Losses resulting from any
breach or inaccuracy of any representation or
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warranty contained in Section 3.1, 3.2, 3.4, 4.1, 4.2, 5.1 or
5.2 hereof; and
(ii) with respect to any Losses covered by
Sections 9.2(b), 9.2(c), 9.2(d), 9.2(e), 9.2(f), 9.2(g) or
9.3(b) hereof, the Claims Period shall continue until
expiration of the applicable statute of limitations (after
giving effect to any extensions thereof).
Notwithstanding the foregoing, if prior to the close of business on the
last day of the applicable Claims Period, an Indemnifying Party shall have been
properly notified of a claim for indemnity hereunder and such claim shall not
have been finally resolved or disposed of at such date, such claim shall
continue to survive and shall remain a basis for indemnity hereunder until such
claim is finally resolved or disposed of in accordance with the terms hereof.
9.6 Threshold Amount; Limitation Amount. Notwithstanding anything
to the contrary set forth herein, the ChoicePoint Entities shall be liable for
Losses arising under Section 9.2(a) only to the extent that any such Losses
exceed, in the aggregate, $500,000 (the "Threshold Amount"), and such liability
shall be only for amounts which, in the aggregate, are in excess of the
Threshold Amount, and in no event shall the aggregate liability of the
ChoicePoint Entities under Section 9.2(a) exceed $9,750,000 (the "Limitation
Amount"). Notwithstanding the foregoing, Losses arising under or pursuant to any
matter constituting fraud or criminal activity under applicable Law by either of
the ChoicePoint Entities or, prior to the date hereof, any Osborn Entity shall
not be subject to the Threshold Amount or the Limitation Amount.
9.7 Limitations on Indemnification. Notwithstanding anything
contained herein to the contrary:
(a) The amount of Losses to which an Indemnified Party
may be entitled to be indemnified against and reimbursed for under this
Section 9 shall be (i) reduced by any indemnity or other recovery under
any contract between an Indemnified Party and any third party and (ii)
reduced by any insurance proceeds received by an Indemnified Party with
respect to such Losses, (iii) reduced by any Tax benefits derived by an
Indemnified Party as a result of such Losses; and (iv) increased by any
Tax detriment suffered by an Indemnified Party as a result of its
receipt of, or entitlement to, any indemnification payments including
any increase in such payments pursuant to clause (iii). The parties
shall cooperate with each other with respect to making claims under any
contracts between an Indemnified Party and any third parties which
agreements provide indemnification or similar rights for the benefit of
the Indemnified Party. Such cooperation shall include making all
reasonable claims and demands against any such third parties and
pursuing such claims and demands in a commercially reasonable and
timely manner.
(b) If the Indemnifying Party makes any payment under
this Section 9 with respect to any Losses, the Indemnifying Party shall
be subrogated, to the extent of such payment, to the rights of the
Indemnified Party against any insurer or other party with respect to
such Losses, and the Indemnified Party shall assign to the Indemnifying
Party any and all rights with respect to which and to the extent to
which indemnification shall have been sought or made under this
Agreement, and the Indemnified Party shall not take
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any action which directly or indirectly would affect such claims that
the Indemnifying Party may have with respect thereto and shall
cooperate in a timely and commercially reasonable manner with the
Indemnifying Party in pursuing such claims.
(c) Attorney, consultant, and other professional fees and
disbursements incurred by an Indemnified Party in connection with this
Section 9 shall be reasonable and based only on time actually spent
which shall be charged at no more than such professional's standard
hourly rate.
9.8 Exclusive Remedy. Except as provided in Section 10 and Section
1.4, except to the extent a party may be entitled to the remedy of specific
performance, and except for a breach of any representation, warranty, or
covenant as a result of any matter constituting fraud or criminal activity under
applicable Law, the indemnification provisions of this Section 9 shall be the
exclusive remedy of the parties hereto against any other party under this
Agreement or otherwise with respect to Losses.
SECTION 10. TAX MATTERS.
10.1 Preparation and Filing of Tax Returns. ChoicePoint will
prepare and timely file or will cause to be prepared and timely filed all
appropriate Federal, state, provincial, local and foreign Tax Returns in respect
of the Osborn Entities and their assets or activities that (a) are required to
be filed on or before the date hereof or (b) are required to be filed after the
date hereof and (i) are Consolidated Tax Returns or (ii) are with respect to
Income Taxes and are required to be filed on a separate Tax Return basis for any
Tax period ending on or before the date hereof. It is understood that any Income
Taxes attributable to (x) the distributions contemplated by Section 2 of this
Agreement or (y) any "deferred intercompany transaction" under Treasury
Regulation Section 1.1502-13 or 1.1502-14 or any transaction governed by a
similar provision that will be recognized as a result of the transactions
completed by this Agreement shall be reported on the Tax Returns described in
clause (b) of the foregoing sentence. It is further understood that any sales,
use, transfer or similar Taxes attributable to the distributions contemplated by
Section 2 of this Agreement shall be the sole responsibility of ChoicePoint and
that ChoicePoint shall be solely responsible for the preparation of any Tax
Returns relating to such Taxes. LabOne will prepare or cause to be prepared and
will timely file or cause to be timely filed all other Tax Returns required of
LabOne and its subsidiaries and Affiliates (including the Osborn Entities), or
in respect of their assets or activities. Any such Tax Returns that include
periods ending on or before the date hereof or that include the activities of
any of the Osborn Entities prior to the date hereof will be prepared with the
assistance of the ChoicePoint Entities, and will, insofar as they relate to the
Osborn Entities, be on a basis consistent with the last previous such Tax
Returns filed in respect of the Osborn Entities, unless ChoicePoint or LabOne,
as the case may be, concludes that there is no reasonable basis for such
position. Any reasonable out-of-pocket costs and expenses incurred in connection
with the preparation and filing of any Tax Return referred to in the preceding
sentence shall be borne by the ChoicePoint Entities and LabOne in proportion to
their responsibility for the Taxes reported on such Tax Return, whether or not
previously paid. None of LabOne or its Affiliates will file any amended Tax
Returns for any periods for or in respect of the Osborn Entities with respect to
which LabOne is not obligated to prepare or cause to be prepared the original
such Tax Returns pursuant to this Section 10.1 without the prior written consent
of ChoicePoint.
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10.2 Payment of Taxes.
(a) The ChoicePoint Entities shall be jointly and
severally obligated to timely pay or cause to be paid (a) all Income
Taxes, and all Taxes shown as due other than Income Taxes, with respect
to Tax Returns which ChoicePoint is obligated to prepare and file or
cause to be prepared and filed pursuant to Section 10.1 and (b) all
Taxes other than Income Taxes due on or before the date hereof for
which no Tax Return is required to be filed. Subject to the ChoicePoint
Entities' obligations described in Section 10.2(b) to pay LabOne an
amount equal to the amount of any Taxes attributable to a Pre-Closing
Tax Period, LabOne shall pay or cause to be paid (a) all Taxes shown as
due with respect to any Tax Return for any taxable period that includes
(but does not end on) the date hereof (a "Straddle Period") which
LabOne is obligated to prepare and file or cause to be prepared and
filed pursuant to Section 10.1 and (b) all Taxes owed by any of the
Osborn Entities for all taxable periods beginning after the date
hereof.
(b) LabOne shall deliver to ChoicePoint copies of any
Straddle Period Tax Return that LabOne is obligated to prepare and file
or cause to be prepared and filed pursuant to Section 10.1 no later
than ten (10) business days before filing for approval by ChoicePoint,
which approval shall not be unreasonably withheld. Any such Tax Return
shall be accompanied with a calculation by LabOne pursuant to the
provisions of Section 10.7(b) of the amount of the Taxes shown on such
Tax Return that are attributable to the Pre-Closing Tax Period, and
that are therefore the joint and several responsibility of the
ChoicePoint Entities. No later than three (3) business days prior to
the due date of any such Straddle Period Tax Return, the ChoicePoint
Entities shall be jointly and severally obligated to pay to LabOne an
amount equal to the amount of such Taxes attributable to the
Pre-Closing Tax Period pursuant to such calculation to the extent, if
any, that such amount exceeds the sum of any estimated payments,
deposits or credits made or applied prior to the date hereof and any
amount reserved for tax liabilities on the Final Working Capital
Statement with respect to the Taxes to which such Straddle Period Tax
Return relates. In the event that ChoicePoint disagrees with such
calculation, the ChoicePoint Entities shall not be relieved of their
joint and several obligation to pay the amount resulting from such
calculation, but may instead request that such calculation be reviewed
by an independent accounting firm mutually agreeable to both
ChoicePoint and LabOne. The decision of such independent accounting
firm shall be final and binding upon the parties hereto, and the
ChoicePoint Entities and LabOne shall each bear one-half of the fees
and expenses of such accounting firm. LabOne shall pay to ChoicePoint
the amount, if any, by which the sum of any estimated payments,
deposits or credits made or applied prior to the date hereof with
respect to such Tax for the Straddle Period exceeds the amount of such
Taxes.
10.3 Tax Sharing Agreements. On the date hereof, all Tax sharing
agreements and arrangements between (a) any of the Osborn Entities, on the one
side and (b) either of the ChoicePoint Entities or any of their subsidiaries or
Affiliates, on the other side, will be terminated and have no further effect for
any taxable year or period (whether a past, present or future year or period),
and no additional payments will be made thereunder on or after the date hereof
in respect of a re-determination of Tax liabilities or otherwise.
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10.4 Carryforwards and Carrybacks. LabOne will cause each of the
Osborn Entities to elect, where permitted by Law, to carry forward any net
operating loss, net capital loss, charitable contribution or other item arising
after the date hereof that could, in the absence of such an election, be carried
back to a taxable period of any of the Osborn Entities ending on or before the
date hereof in which any of the Osborn Entities were included in a Consolidated
Tax Return. LabOne, on its own behalf and on behalf of its Affiliates, hereby
waives any right to use or apply any net operating loss, net capital loss,
charitable contribution or other item of any Osborn Entity for any Tax year
ending on any date following the date hereof to any period of any Osborn Entity
ending on or before the date hereof with respect to which any of the Osborn
Entities was included in a Consolidated Tax Return.
10.5 Refunds and Credits. ChoicePoint will be entitled to retain,
or receive immediate payment from LabOne or any of its subsidiaries or
Affiliates (including the Osborn Entities) of any refund or credit arising with
respect to any of the Osborn Entities (including, refunds and credits arising by
reason of amended Tax Returns filed after the date hereof or otherwise) relating
to Taxes with respect to any Tax period ending on or before the date hereof,
including, without limitation, any refund relating to Kansas income Taxes with
respect to the Tax period ending December 31, 1998; provided, however, that no
value shall be assigned to any such prospective refund or credit on the Final
Working Capital Statement. LabOne and the Osborn Entities will be entitled to
retain, or receive immediate payment from ChoicePoint of, any refund or credit
with respect to Taxes with respect to any taxable period beginning after the
date hereof relating to any of the Osborn Entities. LabOne and ChoicePoint will
equitably apportion any refund or credit with respect to Income Taxes with
respect to any Straddle Period. Notwithstanding any other provision of this
Section 10.5, ChoicePoint will be entitled to receive payment from LabOne of an
amount equal to the amount of any credit claimed by LabOne or its subsidiaries
(including the Osborn Entities) in any Tax Period beginning after the date
hereof that is attributable to any consolidated unused foreign tax which is paid
or accrued on or before the date hereof and attributed to any of the Osborn
Entities under Treas. Reg ss. 1.1502-79(d); provided, however, that no value
shall be assigned to any such foreign tax credit on the Final Working Capital
Statement.
10.6 Tax Cooperation. Each of LabOne and ChoicePoint will provide
the other party with such information and records and make such of its
Representatives available as may reasonably be requested by such other party in
connection with the preparation of any Tax Return or any audit or other
proceeding that relates to any of the Osborn Entities.
10.7 Tax Indemnification.
(a) The ChoicePoint Entities will jointly and severally
indemnify, defend and hold the LabOne Indemnified Parties harmless from
and against (i) all liability for Taxes of the Osborn Entities for any
taxable period that ends on or before the date hereof and the portion
of any Straddle Period ending on the date hereof, (ii) all liability
(as a result of Treas. Reg.ss.1.1502-6(a) or otherwise) for Income
Taxes of any ChoicePoint Entity or any other Person (other than the
Osborn Entities) which is or has ever been affiliated with any of the
Osborn Entities, or with whom any of the Osborn Entities otherwise
joins or has ever joined (or is or has ever been required to join) in
filing any consolidated, combined or unitary Tax Return, prior to the
date hereof, (iii) all liability for any breach
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of ChoicePoint's representations and warranties contained in Section
3.12 or the ChoicePoint Entities' covenants contained in this Section
10, (iv) all liability for any Taxes arising out of, or attributable to
any of the distributions contemplated by Section 2 of this Agreement,
and (v) all liability for reasonable legal, accounting and appraisal
fees and expenses with respect to any item described in clause (i),
(ii), (iii) or (iv) above; provided, however, that a LabOne Indemnified
Party shall not be entitled to indemnification hereunder to the extent
an accrual of liability or a specific reserve for such matter is
included in the Final Working Capital Statement. Notwithstanding the
foregoing, ChoicePoint will not indemnify, defend or hold harmless any
member of the LabOne Indemnified Parties from any liability for Taxes
attributable to any action taken on the date hereof by LabOne, any of
its subsidiaries or Affiliates (including the Osborn Entities), or any
transferee of LabOne or any of its subsidiaries or Affiliates (other
than any such action taken in the ordinary course of business or
expressly required or otherwise expressly contemplated by this
Agreement) (a "LabOne Tax Act").
(b) LabOne will indemnify, defend and hold the
ChoicePoint Indemnified Parties harmless from and against (i) except to
the extent any of the ChoicePoint Entities is otherwise required to
indemnify LabOne for such Tax pursuant to Section 10.7(a), all
liability for Taxes of each of the Osborn Entities for any taxable
period beginning after the date hereof and the portion of any Straddle
Period beginning after the date hereof, (ii) all liability for Taxes
attributable to a LabOne Tax Act, (iii) all liability for Taxes
attributable to an election by LabOne under section 338 of the Code
with respect to the purchase of the Osborn Entities and (iv) all
liability for reasonable legal, accounting and appraisal fees and
expenses with respect to any item described in clause (i), (ii) or
(iii) above.
(c) The obligations of each party to indemnify, defend
and hold harmless the other party or parties and other Persons,
pursuant to Sections 10.7(a) and 10.7(b), will terminate upon the
expiration of all applicable statutes of limitations (giving effect to
any extensions thereof); provided, however, that such obligations to
indemnify, defend and hold harmless will not terminate with respect to
any individual item as to which an Indemnified Party shall have, before
the expiration of the applicable period, previously made a claim by
delivering a notice (stating in reasonable detail the basis of such
claim) to the applicable Indemnifying Party.
(d) In the case of any Straddle Period:
(i) The periodic Taxes of each of the Osborn
Entities that are not based on income or receipts (e.g.,
property Taxes) for the portion of any Straddle Period ending
on the date hereof (the "Pre-Closing Tax Period") shall be
computed based on the ratio of the number of days in the
Pre-Closing Tax Period and the number of days in the entire
Tax period;
(ii) Taxes of each of the Osborn Entities for the
Pre-Closing Tax Period (other than Taxes described in Section
10.7(d)(i) above) will be computed as if such taxable period
ended as of the close of business on the date hereof, and, in
the case of any Taxes of any of the Osborn Entities
attributable to the
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ownership by any of the Osborn Entities of any equity interest
in any partnership or other "flowthrough" entity, as if a
taxable period of such partnership or other "flowthrough"
entity ended as of the close of business on the date hereof,
and, in each case, if such Taxes are Income Taxes, such Income
Taxes shall be computed by determining the items of income,
expense, deduction, loss or credit on a "closing of the books"
basis as of the end of the date hereof; and
(iii) Income Taxes of each of the Osborn Entities
for which a Consolidated Tax Return is filed will be computed
in accordance with the principles of Treas. Reg.ss. 1.1502-76
as if separate returns had been filed for each of the Osborn
Entities for such Pre-Closing Tax Period and all prior taxable
periods.
(e) Any indemnity payment required to be made pursuant to
this Section 10.7 will be paid within thirty (30) days after the
Indemnified Party makes written demand upon the Indemnifying Party, but
in no case earlier than five (5) business days prior to the date on
which the relevant Taxes are required to be paid (or would be required
to be paid if no such Taxes are due) to the relevant taxing authority
(including estimated Tax payments).
10.8 Tax Contests.
(a) If a claim is made by any taxing authority which, if
successful, might result in an indemnity payment to any member of the
LabOne Indemnified Parties or ChoicePoint Indemnified Parties pursuant
to Section 10.7, the Indemnified Party will promptly notify the
Indemnifying Party of such claim (a "Tax Claim"); provided, however,
that the failure to give such notice will not affect the
indemnification provided hereunder except to the extent the
Indemnifying Party has actually been prejudiced as a result of such
failure.
(b) With respect to any Tax Claim relating to Taxes and
relating to a taxable period ending on or before the date hereof or to
any other taxable period in which any of the Osborn Entities joined in
filing any Consolidated Tax Return, ChoicePoint will control all
proceedings and may make all decisions in connection with such Tax
Claim (including selection of counsel) and, without limiting the
foregoing, may in its sole discretion pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with any
taxing authority with respect thereto, and may, in its sole discretion,
either pay the Tax claimed and sue for a refund where applicable Law
permits such refund suits or contest the Tax Claim in any permissible
manner. LabOne will control all proceedings and may make all decisions
in connection with any Tax Claim other than a Tax Claim described in
the first sentence of this Section 10.8(b) or a Tax Claim described in
Section 10.8(c) (including selection of counsel).
(c) ChoicePoint and LabOne will jointly control and
participate in all proceedings taken in connection with any Tax Claim
relating to Taxes of any of the Osborn Entities for any Straddle
Period. Neither ChoicePoint nor LabOne will settle any
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such Tax Claim without the prior written consent of the other (which
consent shall not be unreasonably withheld).
(d) Each of LabOne, the Osborn Entities and their
respective Affiliates, on the one hand, and the ChoicePoint Entities
and their respective Affiliates, on the other, will cooperate in
contesting any Tax Claim, which cooperation will include the retention
and (upon request) the provision to the requesting party of records and
information which are reasonably relevant to such Tax Claim, and making
employees available on a mutually convenient basis to provide
additional information or explanation of any material provided
hereunder or to testify at proceedings relating to such Tax Claim.
10.9 Definitions. As used in this Agreement:
(a) "Consolidated Tax Returns" means Tax Returns which
include the Osborn Entities, on the one hand, and the ChoicePoint
Entities or any of their subsidiaries or Affiliates (other than the
Osborn Entities), on the other hand; and
(b) "Income Taxes" means all Taxes based upon, measured
by, or calculated with respect to (a) net income or profits (including
any capital gains, minimum taxes and any Taxes on items of tax
preference, but not including sales, use, real property gains, real or
personal property, gross or net receipts, transfer or other similar
Taxes) or (b) multiple bases (including corporate franchise, doing
business or occupation Taxes) if one or more of the bases upon which
such Tax may be based upon, measured by, or calculated with respect to
is described in clause (a) of this definition.
SECTION 11. MISCELLANEOUS.
11.1 Notices. All notices, communications and deliveries hereunder
shall be made in writing signed by the party making the same, shall specify the
section hereunder pursuant to which it is given or being made, and shall be
delivered personally or by telecopy transmission or sent by registered or
certified mail or by any express mail or courier delivery service (with postage
and other fees prepaid) as follows:
To the ChoicePoint Entities:
ChoicePoint Services Inc.
1000 Alderman Drive
Alpharetta, Georgia 30005
Attention: J. Michael de Janes, Esq.
Telephone: (770) 752-5745
Telecopy: (770) 752-5939
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with a copy to:
King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
Attention: Russell B. Richards, Esq.
Telephone: (404) 572-4695
Telecopy: (404) 572-5100
To LabOne:
10101 Renner Boulevard
Lenexa, Kansas 66219
Attention: W. Thomas Grant, II
Telephone: (913) 888-1770
Telecopy: (913) 859-6804
with a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York
Attention: Othon A. Prounis, Esq.
Telephone: (212) 841-5785
Telecopy: (212) 841-5725
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing. Such notice shall be
effective upon the date of delivery or refusal of delivery, if sent by personal
delivery, registered, certified, or express mail, or courier delivery, or upon
transmission by telecopy transmission, if immediately confirmed by telephone or
electronic means.
11.2 Attachments. All schedules, annexes and exhibits attached
hereto are hereby incorporated into this Agreement and are hereby made a part
hereof as if set out in full in this Agreement.
11.3 Successors in Interest. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and each of their
respective successors and permitted assigns. No party may assign this Agreement
or its rights or obligations hereunder without, if any ChoicePoint Entity
intends to assign, the consent of LabOne or, if LabOne intends to assign, the
consent of the Parent. Any attempted assignment in violation of this Section
11.3 shall be null and void. Notwithstanding the foregoing, from and after the
date hereof, any party may assign this Agreement to any purchaser of a majority
of its capital stock (whether by merger or otherwise) or all or substantially
all of its assets.
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11.4 Number; Gender. Whenever the context so requires, the singular
number shall include the plural and the plural shall include the singular, and
the gender of any pronoun shall include the other genders.
11.5 Captions. The titles, captions, and table of contents
contained in this Agreement are inserted herein only as a matter of convenience
and for reference and in no way define, limit, extend, or describe the scope of
this Agreement or the intent of any provision hereof. Unless otherwise specified
to the contrary, all references to sections are references to sections of this
Agreement and all references to exhibits, annexes and schedules are references
to exhibits, annexes and schedules to this Agreement.
11.6 Knowledge.
(a) "To the knowledge of ChoicePoint" or any similar
phrase contained in this Agreement shall mean to the actual knowledge,
after reasonable investigation, of Douglas C. Curling, Michael S. Wood,
J. Michael de Janes, Dan H. Rocco, Gilbert P. Bourk, Roger A. Lewis,
James Musatto, Jeff McCauley, Betsy Sears or any executive officer or
director of any of the Osborn Entities (the "ChoicePoint Executives").
(b) "To the knowledge of LabOne" or any similar phrase
contained in this Agreement shall mean to the actual knowledge, after
reasonable investigation, of any executive officer or director of
LabOne.
11.7 Controlling Law; Integration; Amendment. This Agreement shall
be governed by and construed and enforced in accordance with the internal Laws
of the State of Delaware without reference to Delaware choice of law rules. This
Agreement, together with the Ancillary Agreements, constitute the entire
agreement among the parties hereto and supersede all prior written and oral
agreements between the parties with respect to the subject matter hereof;
provided, however, the Confidentiality Agreement shall remain in full force and
effect after the date hereof. This Agreement may not be amended, modified, or
supplemented except by written agreement of LabOne and the Parent and no
provision hereof shall be deemed to have been waived by any party hereto unless
such waiver is in writing and signed by the party against whom enforcement is
sought. It is understood and agreed by the parties that no failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise thereof preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege hereunder. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement, including without limitation any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representations, warranties,
covenants or agreements contained in this Agreement. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other Governmental Authority or by any board of
arbitrators by reason of such party or its counsel having or being deemed to
have structured or drafted such provision.
11.8 Severability. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition
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or unenforceability in any jurisdiction will not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by Law, the parties hereto waive any provision of Law which renders any such
provision prohibited or unenforceable in any respect.
11.9 Counterparts. This Agreement may be executed in counterparts
each of which shall be deemed an original and all of which together shall
constitute one and the same agreement.
11.10 Enforcement of Certain Rights. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or give any
Person other than the parties hereto, and their successors or permitted assigns,
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, or result in such Person being deemed a third-party beneficiary of
this Agreement.
11.11 Injunctive Relief. Each of the parties hereby agrees that any
remedy at law for any breach of any provision contained this Agreement shall be
inadequate and that a party shall be entitled to seek injunctive relief, without
proof of actual damages or the necessity of posting bond, in addition to any
other remedy such party might have under this Agreement.
11.12 Submission to Jurisdiction. Each of the parties hereto agrees
that any suit, action or proceeding arising out of or relating to this Agreement
or the Ancillary Agreements, their subject matter, the performance by the
parties of their respective obligations with respect to this Agreement and the
Ancillary Agreements or the claimed breach thereof, whether brought at law or in
equity and whether based in tort, contract or otherwise, or for recognition and
enforcement of any judgment in respect thereof, shall be brought by any of such
parties or any of their respective successors or permitted assigns in any
federal or state court located in the County of New Castle, Delaware, and each
of such parties hereby submits with regard to any such suit, action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts. Each of
the parties hereto hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any such suit, action or
proceeding (a) any claim that it is not personally subject to the jurisdiction
of such courts for any reason other than the failure to lawfully serve process,
(b) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through
service of notice, attachment prior to judgment, attachment in aid of execution
of judgment, execution of judgment or otherwise), (c) that the suit, action or
proceeding in any such court is brought in an inconvenient forum, (d) that the
venue of such suit, action or proceeding is improper, (e) that this Agreement or
any Ancillary Agreement or the subject matter hereof or thereof may not be
enforced in or by such courts or (f) any right to a trial by jury. Each of the
parties hereto irrevocably consents to the service of process in any such
proceeding by the mailing of copies thereof by certified mail, postage prepaid,
to such party's address for notices under this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date and year first above written.
CHOICEPOINT INC.
By: /s/ J. Michael de Janes
-------------------------------------------
Name: J. Michael de Janes
Title: General Counsel and Secretary
CHOICEPOINT SERVICES INC.
By: /s/ J. Michael de Janes
-------------------------------------------
Name: J. Michael de Janes
Title: General Counsel and Secretary
LABONE, INC.
By: /s/ W. Thomas Grant II
-------------------------------------------
Name: W. Thomas Grant II
Title: President and CEO