Exhibit 10.1
STOCK PURCHASE AGREEMENT
by and among
CHOICEPOINT GOVERNMENT SERVICES INC.,
CHOICEPOINT INC.
and
GLOBALOPTIONS GROUP, INC.
Dated as of February 28, 2007
TABLE OF CONTENTS
Section 1. Purchase of Shares................................................1
1.1 Transfer of Shares................................................1
1.2 Purchase Price....................................................1
1.3 Payment of Purchase Price.........................................1
1.4 Adjustments to Purchase Price.....................................1
Section 2. Closing; Further Assurances; Related Matters......................3
2.1 Closing...........................................................3
2.2 Instruments of Conveyance.........................................3
2.3 Further Assurances................................................4
2.4 Corporate Services................................................4
Section 3. Representations and Warranties of ChoicePoint.....................4
3.1 Organization......................................................4
3.2 Authorization.....................................................5
3.3 Absence of Restrictions and Conflicts.............................5
3.4 Capitalization....................................................5
3.5 Ownership of Assets and Related Matters...........................6
3.6 Financial Statements..............................................7
3.7 No Undisclosed Liabilities........................................7
3.8 Absence of Certain Changes........................................7
3.9 Legal Proceedings.................................................7
3.10 Licenses, Permits, and Compliance with Law........................7
3.11 Company Contracts.................................................8
3.12 Tax Returns; Taxes................................................9
3.13 ERISA and Related Matters........................................10
3.14 Labor Matters....................................................11
3.15 Intellectual Property............................................11
3.16 Customers; Suppliers.............................................11
3.17 Brokers, Finders, and Investment Bankers.........................12
3.18 Books and Records................................................12
3.19 Prepayments and Deposits.........................................12
Section 4. Representations and Warranties of Buyer..........................12
4.1 Organization.....................................................12
4.2 Authorization....................................................12
4.3 Absence of Restrictions and Conflicts............................13
4.4 Brokers, Finders, and Investment Bankers.........................13
4.5 Purchase for Investment..........................................13
4.6 Litigation.......................................................13
4.7 Availability of Funds............................................13
Section 5. Additional Covenants and Agreements..............................13
5.1 Fees and Expenses................................................14
5.2 Confidentiality..................................................14
5.3 Employees; Employee Benefits.....................................14
5.4 Use of Corporate Names and Trademarks............................15
5.5 Lease Guaranty...................................................16
5.6 Retention of Records.............................................16
5.7 Audited Financials...............................................16
5.8 Limited Representations and Warranties...........................16
Section 6. Restrictive Covenants............................................17
6.1 Definitions......................................................17
6.2 Noncompetition...................................................17
6.3 Nonsolicitation of Company Employees.............................18
6.4 Severability.....................................................18
6.5 Injunctive Relief................................................18
Section 7. Contemporaneous Actions..........................................18
7.1 Stock Certificates...............................................18
7.2 Purchase Price...................................................19
7.3 Resignations of Directors and Officers...........................19
7.4 Transition Services Agreement....................................19
Section 8. Indemnification..................................................19
8.1 Indemnification Obligations of ChoicePoint.......................19
8.2 Indemnification Obligations of Buyer.............................19
8.3 Indemnification Procedure........................................19
8.4 Claims Period....................................................21
8.5 Threshold Amount; Limitation Amount..............................21
8.6 Limitations on Indemnification...................................21
8.7 Exclusive Remedy.................................................22
Section 9. Tax Matters......................................................22
9.1 Preparation and Filing of Tax Returns............................22
9.2 Payment of Taxes.................................................23
9.3 Tax Sharing Agreements...........................................23
9.4 Carryforwards and Carrybacks.....................................23
9.5 Refunds..........................................................24
9.6 Tax Cooperation..................................................24
9.7 Tax Indemnification..............................................24
9.8 Tax Contests.....................................................25
9.9 Definitions......................................................26
Section 10. Miscellaneous....................................................26
10.1 Notices..........................................................26
10.2 Attachments......................................................27
10.3 Successors in Interest...........................................27
10.4 Number; Gender; Currency.........................................28
10.5 Captions.........................................................28
10.6 Knowledge........................................................28
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10.7 Controlling Law; Integration; Amendment..........................28
10.8 Submission to Jurisdiction.......................................28
10.9 Severability.....................................................29
10.10 Counterparts.....................................................29
10.11 Enforcement of Certain Rights....................................29
10.12 Guaranty.........................................................29
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of the 28th day
of February, 2007 (the "EFFECTIVE DATE"), is made and entered into by and among
CHOICEPOINT GOVERNMENT SERVICES INC., a Georgia corporation ("CHOICEPOINT"),
CHOICEPOINT INC., a Georgia corporation ("PARENT"), and GLOBALOPTIONS GROUP,
INC, a Delaware corporation ("BUYER").
W I T N E S S E T H:
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WHEREAS, ChoicePoint owns all of the outstanding shares of capital
stock of The Bode Technology Group, Inc., a Virginia corporation (the
"Company");
WHEREAS, the Company is engaged in the business (the "BUSINESS") of
providing forensic DNA analysis, proprietary DNA collection products, and
related research services to law enforcement agencies, federal and state
governments, crime laboratories and disaster management organizations; and
WHEREAS, subject to the terms and conditions of this Agreement,
ChoicePoint desires to sell, and Buyer desires to purchase, all of the
outstanding shares of capital stock of the Company.
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 SHARES.
1.1 TRANSFER OF SHARES. Contemporaneously with the execution and
delivery of this Agreement, ChoicePoint hereby sells, assigns, transfers, and
delivers to Buyer, and Buyer hereby purchases from ChoicePoint, 1,000 shares of
common stock of the Company (the "SHARES"), which Shares constitute all of the
outstanding shares of capital stock of the Company.
1.2 PURCHASE PRICE. Contemporaneously with the execution and delivery of
this Agreement, in consideration for all of the Shares, subject to adjustments
pursuant to Section 1.4, the purchase price (the "PURCHASE PRICE") for the
Shares shall be Twelve Million Five Hundred Thousand ($12,500,000), which shall
be paid in accordance with Section 1.3.
1.3 PAYMENT OF PURCHASE PRICE. Contemporaneously with the execution
and delivery of this Agreement, Buyer shall pay the Purchase Price to
ChoicePoint by wire transfer of immediately available funds to the following
account: Wachovia Bank, N.A., Account No. 2079900421653, Account Name
ChoicePoint Inc. - Master Account.
1.4 ADJUSTMENTS TO PURCHASE PRICE.
(a) DEFINITION OF "NET WORKING CAPITAL." For purposes of this
Section 1.4, the term "NET WORKING CAPITAL" means the aggregate amount of
the current assets of the Company MINUS the aggregate amount of the
current liabilities of the Company, in each case as determined as of the
Effective Date in accordance with generally accepted accounting principles
in the United States applied consistently with past practices ("GAAP") and
the guidelines attached hereto as EXHIBIT A (the "WORKING CAPITAL
GUIDELINES").
(b) PREPARATION OF PROPOSED CLOSING STATEMENT. Within sixty (60)
days after the Effective Date, Buyer shall prepare and deliver to
ChoicePoint, at the sole expense of Buyer, a closing statement of the
Company as of the Effective Date (the "PROPOSED CLOSING STATEMENT"), which
Proposed Closing Statement shall set forth in reasonable detail the
proposed calculation of the Net Working Capital and shall be substantially
in the form attached hereto as EXHIBIT B. Buyer shall make available to
ChoicePoint for review and copying all books, records and work papers
relating to the Proposed Closing Statement. The Proposed Closing Statement
shall be prepared in accordance with the Working Capital Guidelines.
(c) EXAMINATION OF STATEMENTS. ChoicePoint shall review the Proposed
Closing Statement to confirm the accuracy thereof and of Buyer's
calculation of the Net Working Capital, as applicable. If ChoicePoint
fails to give Buyer written notice of any disputed amounts within
forty-five (45) days after ChoicePoint receives the Proposed Closing
Statement (the "REVIEW PERIOD") or if ChoicePoint gives Buyers written
notice (the "ACCEPTANCE NOTICE") during the Review Period that ChoicePoint
accepts the Proposed Closing Statement as being accurate, then the
Proposed Closing Statement shall become the "Final Closing Statement" (as
hereinafter defined) for purposes hereof as of the earlier of (i) the date
Buyer receives the Acceptance Notice or (ii) the last day of the Review
Period (the earlier of such dates being referred to herein as the
"ACCEPTANCE DATE"). If ChoicePoint gives Buyer written notice of any
disputed items within the Review Period, ChoicePoint and Buyer shall
attempt in good faith to agree on any adjustments that should be made to
the Proposed Closing Statement in order to reflect the Net Working
Capital. If ChoicePoint and Buyer are unable to resolve any disputed
amounts within sixty (60) days after ChoicePoint receives the Proposed
Closing Statement, ChoicePoint and Buyer will engage the Atlanta, Georgia
office of Ernst & Young LLP (or such other independent accounting firm of
national standing that the parties shall mutually designate) (as
applicable, the "AUDIT FIRM") to resolve any such disputed matters in
accordance with the terms of this Agreement. The decision of the Audit
Firm shall be made, if possible, within thirty (30) days after being
engaged, and, in any event, shall be final and binding on the parties. The
Proposed Closing Statement shall be revised, if necessary, to reflect the
final determination of the Net Working Capital (the final form of the
Proposed Closing Statement, including any revisions which are made thereto
pursuant to this Section 1.4(c), is referred to herein as the "FINAL
CLOSING STATEMENT"). Such revisions, if any, shall be made by Buyer within
five (5) business days after any disputes with respect to the Proposed
Closing Statement have been resolved in accordance with this Section
1.4(c), and a copy of the Final Closing Statement shall be promptly
delivered by Buyer to ChoicePoint. For purposes of this Section 1.4, the
"FINAL DETERMINATION DATE" shall be deemed to be the earlier of (i) the
Acceptance Date or (ii) the date as of which ChoicePoint receives the
Final Closing Statement from Buyer pursuant to this Section 1.4(c).
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(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 shall be $7,546,000 (the
"ASSUMED WORKING CAPITAL"). Accordingly, the parties hereto agree that if
the Net Working Capital as reflected on the Final Closing Statement is
less than the Assumed Working Capital (the amount of such shortfall, if
any, is hereinafter referred to as the "WORKING CAPITAL DEFICIT"),
ChoicePoint shall pay to Buyer an amount equal to the Working Capital
Deficit (such payment being hereinafter referred to as a "DEFICIT
PAYMENT"). The Deficit Payment, if any, shall be paid to Buyer within ten
(10) days of the Final Determination Date. If the Net Working Capital as
reflected on the Final Closing Statement is greater than the Assumed
Working Capital (the amount of such excess is hereinafter referred to as
the "WORKING CAPITAL SURPLUS"), Buyer shall pay to ChoicePoint an amount
equal to the Working Capital Surplus (such payment being hereinafter
referred to as a "SURPLUS PAYMENT"). The Surplus Payment, if any, shall be
paid by Buyer to ChoicePoint within ten (10) days of the Final
Determination Date. Any adjustments pursuant to this Section 1.4 shall
constitute adjustments to the Purchase Price for Tax (as hereinafter
defined) purposes.
(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, Buyer, on the one hand, and ChoicePoint, on the
other hand, will bear responsibility for the fees and expenses of the
Audit Firm with respect to this Section 1.4 as follows:
(i) If the Audit Firm resolves the remaining objections, based
on aggregate dollar values involved with respect to such objections,
in favor of ChoicePoint, Buyer will be responsible for all such fees
and expenses of the Audit Firm;
(ii) If the Audit Firm resolves the remaining objections,
based on aggregate dollar values involved with respect to such
objections, in favor of Buyer, ChoicePoint will be responsible for
all such fees and expenses of the Audit Firm; and
(iii) If the Audit Firm resolves the remaining objections,
based on aggregate dollar values involved with respect to such
objections, in a manner which evenly divides those values between
Buyer and ChoicePoint, Buyer and ChoicePoint shall each be
responsible for one-half of all such fees and expenses of the Audit
Firm.
SECTION 2. CLOSING; FURTHER ASSURANCES; RELATED MATTERS.
2.1 CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place contemporaneously with the execution
and delivery of this Agreement via facsimile or electronic transmission as of
the Effective Date.
2.2 INSTRUMENTS OF CONVEYANCE. At the Closing, ChoicePoint shall deliver
any and all stock certificates representing the Shares to Buyer, duly endorsed
in blank (or accompanied by duly executed stock powers).
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2.3 FURTHER ASSURANCES. Each party hereto shall, on the Effective Date
and from time to time thereafter, 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 Section 2.2 as shall be reasonably requested to transfer,
convey, and assign the Shares to Buyer and otherwise to effect the transactions
contemplated by this Agreement.
2.4 CORPORATE SERVICES. At the Closing, except as set forth in the
Transition Services Agreement (as hereinafter defined) all arrangements for the
provision of data processing, accounting, insurance, treasury, human resources,
employee benefit programs, legal, tax compliance, communications (data and
voice), investor and media relations, real estate, corporate finance, payroll,
and other similar services to the Company by ChoicePoint or any of its
Affiliates (as hereinafter defined) (other than the Company), including any
agreements or understandings (written or oral) with respect thereto, shall
terminate. It is expressly understood that title to all assets and other
properties of ChoicePoint or its Affiliates (other than the Company) used to
provide any such data processing, accounting, insurance, treasury, human
resources, employee benefit programs, legal, tax compliance, communications
(data and voice), investor and media relations, real estate, corporate finance,
payroll, and other similar services to the Company (the "EXCLUDED ASSETS") shall
not be transferred to the Company or Buyer but shall be retained by ChoicePoint
or its Affiliates. As used herein, "AFFILIATE" of any specified Person (as
hereinafter defined) 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, (a) "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, (b) "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing, and (c) "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.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CHOICEPOINT.
Except as set forth in the disclosure schedules attached hereto (the
"DISCLOSURE SCHEDULE"), ChoicePoint hereby represents and warrants to Buyer as
follows:
3.1 ORGANIZATION. Each of ChoicePoint, Parent, and the Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its organization. The Company has all requisite
corporate power and authority to own, lease, and operate its properties and to
carry on its business as now being conducted. The Company is duly qualified to
transact business and is in good standing as a foreign entity in each
jurisdiction where the character of its activities requires such qualification,
except where the failure to so qualify would not have a Material Adverse Effect
(as hereinafter defined). As used in this Agreement, the term "MATERIAL ADVERSE
EFFECT" means any change or effect that is materially adverse to the financial
condition, business, or results of operations of the Company, taken as a whole;
PROVIDED, HOWEVER, that a Material Adverse Effect shall not include any change
in or effect upon the financial condition, business, or results of operations of
the Company, directly or indirectly, arising out of, attributable to or as a
consequence of: (a) conditions, events or circumstances affecting the forensics
industry in general or the overall U.S. or global economy; (b) the effect of any
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war, act of terrorism, civil unrest or similar event; (c) any generally
applicable change in law, rule or regulation or GAAP or interpretation thereof;
or (d) the announcement or consummation of either the execution of this
Agreement or the transactions contemplated hereunder.
3.2 AUTHORIZATION. Each of ChoicePoint and Parent has the corporate
power and authority to execute and deliver this Agreement and each other
certificate, agreement, document or instrument to be executed and delivered by
ChoicePoint in connection with the transactions contemplated by this Agreement
(the "CHOICEPOINT ANCILLARY DOCUMENTS"), and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
ChoicePoint Ancillary Documents and the performance by ChoicePoint and Parent of
their respective covenants and agreements hereunder and thereunder have been
duly and validly authorized by all necessary corporate action of ChoicePoint and
Parent. This Agreement and the ChoicePoint Ancillary Documents have been duly
executed and delivered by ChoicePoint and Parent and constitute the valid and
binding agreements of ChoicePoint and Parent, as applicable, enforceable against
ChoicePoint and Parent, as applicable, in accordance with their respective
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.
3.3 ABSENCE OF RESTRICTIONS AND CONFLICTS. Except as set forth in
SECTION 3.3 OF THE DISCLOSURE SCHEDULE, the execution, delivery, and performance
of this Agreement and the ChoicePoint Ancillary Documents, the consummation of
the transactions contemplated by this Agreement and the ChoicePoint Ancillary
Documents, and the fulfillment of and compliance with the terms and conditions
of this Agreement and the ChoicePoint Ancillary Documents do not violate or
conflict with, constitute a breach of or default under, or permit the
acceleration of any obligation under, (a) any term or provision of the charter
documents or bylaws of ChoicePoint, Parent, or the Company, (b) any judgment,
decree, or order of any court or governmental authority or agency to which
ChoicePoint, Parent, or the Company is a party or (c) any Company Contract (as
hereinafter defined), excluding from the foregoing clause (c) any such
violations, conflicts, breaches, defaults and rights that (i) would not have a
Material Adverse Effect or (ii) become applicable solely as a result of any acts
or omissions by, or the status of or any facts pertaining to, Buyer. Except as
set forth in SECTION 3.3 OF THE DISCLOSURE SCHEDULE, no consent, approval,
order, or authorization of, or registration, declaration, or filing with, any
governmental agency or public or regulatory unit, agency, body, or authority
with respect to ChoicePoint, Parent or the Company is required in connection
with the execution, delivery, or performance of this Agreement or the
consummation of the transactions contemplated by this Agreement.
3.4 CAPITALIZATION.
(a) The authorized capital stock of the Company consists solely of
1,000 shares of common stock, $1.00 par value per share. The Shares
constitute all of the issued and outstanding capital stock of the Company.
The Shares have been duly authorized, validly issued, fully paid,
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nonassessable, and have not been issued in violation of preemptive rights.
The Company does not own, beneficially or otherwise, directly or
indirectly, any capital stock of, or other securities, equity or ownership
interest in, nor does the Company have any obligation to form or
participate in, any corporation, partnership or other Person.
(b) ChoicePoint has good and marketable title to, and is the record
owner of, the Shares, free and clear of any and all liens, pledges,
leases, security interests, and encumbrances (hereinafter collectively
referred to as "LIENS").
(c) There are no subscriptions, options, convertible securities,
calls, puts, rights, warrants, or other agreements, claims, or commitments
of any nature whatsoever obligating the Company to purchase, redeem,
issue, transfer, deliver, or sell, or cause to be purchased, redeemed,
issued, transferred, delivered, or sold, additional shares or other
securities of the Company. There are no dividends which have accrued or
been declared but are unpaid on the shares or equity of the Company, and
there are no stock appreciation, phantom stock, or similar rights with
respect to the shares or equity of the Company.
3.5 OWNERSHIP OF ASSETS AND RELATED MATTERS.
(a) REAL PROPERTY.
(i) The Company does not currently own, and has not previously
owned, any real property.
(ii) SECTION 3.5(A)(II) OF THE DISCLOSURE SCHEDULE sets forth
a correct and complete list of all leases and agreements granting
the Company possession of or rights to real property (the "REAL
PROPERTY LEASES").
(b) PERSONAL PROPERTY. SECTION 3.5(B) OF THE DISCLOSURE SCHEDULE
sets forth a correct and complete list of all leases and agreements
granting the Company possession of or rights to personal property and
requiring lease payments in excess of $50,000 per annum (the "PERSONAL
PROPERTY LEASES").
(c) OWNERSHIP. Except as set forth in SECTION 3.5(C) OF THE
DISCLOSURE SCHEDULE and except for (i) the Excluded Assets, (ii) assets
leased under the Real Property Leases and the Personal Property Leases and
(iii) software licensed to the Company, all assets which are material to
the operation of the Business are owned by and in the possession of the
Company, free and clear of all Liens (other than the (A) liens for
utilities and current taxes not yet due and payable, (B) mechanics',
carriers', workers', repairers', materialmen's, warehousemen's and other
similar Liens arising or incurred in the ordinary course of business, (C)
utility easements, covenants and restrictions of record, (D) zoning or
similar laws, (E) Liens being contested in good faith, and (F) any other
Liens that do not materially interfere with the operation of the Company
(collectively, "PERMITTED LIENS")).
(d) ASSETS. Except for the assets to be used in connection with the
services provided pursuant to the Transition Services Agreement, the
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assets owned by the Company constitute all of the assets necessary to, in
all material respects, conduct the operations of the Business in the
manner presently conducted by the Company.
3.6 FINANCIAL STATEMENTS. ChoicePoint has delivered to Buyer the
unaudited balance sheets and related unaudited annual statements of income of
the Company as of and for the fiscal years ended December 31, 2005 and December
31, 2006 (the "FINANCIAL STATEMENTS"). Copies of the Financial Statements are
attached as SECTION 3.6 OF THE DISCLOSURE SCHEDULE. Except as noted in SECTION
3.6 OF THE DISCLOSURE SCHEDULE, the balance sheets included in the Financial
Statements fairly present, in all material respects, the financial position of
the Company, as of the respective dates thereof, and the statements of income
included in the Financial Statements fairly present, in all material respects,
the results of operations of the Company for the respective periods set forth
therein, in each case in accordance with GAAP.
3.7 NO UNDISCLOSED LIABILITIES. Except as set forth in SECTION 3.7 OF
THE DISCLOSURE SCHEDULE, the Company does not have any liabilities as of the
date hereof that would be required to be shown a balance sheet in accordance
with GAAP, except (a) to the extent reflected in the Financial Statements, (b)
those liabilities expressly disclosed in this Agreement (including the schedules
hereto), (c) those liabilities incurred in the ordinary course of business since
December 31, 2006, and (d) liabilities that would not, individually or in the
aggregate, exceed $100,000.
3.8 ABSENCE OF CERTAIN CHANGES. Except as set forth in SECTION 3.8 OF
THE DISCLOSURE SCHEDULE, since December 31, 2006, there has not been (a) any
Material Adverse Effect, (b) any damage, destruction, loss, or casualty to
property or assets of the Company in excess of $50,000 in the aggregate, (c) any
incurrence, assumption or guarantee by the Company of any indebtedness for
borrowed money, (d) any capital expenditure, or commitment for a capital
expenditure, by the Company with an aggregate value in excess of $50,000, or (e)
any sale of assets, loan or contribution, or other intercompany transaction
(other than in the ordinary course of business consistent with past practice)
between or among the Company, on the one hand, and ChoicePoint or any of its
Affiliates, on the other hand. Except as expressly contemplated by this
Agreement, since December 31, 2006, the Company has (i) extended credit to
customers, collected accounts receivable, and paid accounts payable and similar
obligations in the ordinary course of business consistent with past practice and
(ii) 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.
3.9 LEGAL PROCEEDINGS. Except as set forth in SECTION 3.9 OF THE
DISCLOSURE SCHEDULE, there are no suits, actions, claims, proceedings, or
investigations pending or, or to knowledge of ChoicePoint, threatened against
the Company before any court, arbitrator, or administrative or governmental
body. Except as set forth in SECTION 3.9 OF THE DISCLOSURE SCHEDULE, there is no
judgment, decree, injunction, rule or order of any governmental authority,
arbitrator or mediator outstanding against the Company.
3.10 LICENSES, PERMITS, AND COMPLIANCE WITH LAW.
(a) The Company has all authorizations, approvals, licenses,
permits, and orders of and from all governmental and regulatory offices
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and bodies necessary to carry on the Business as it is currently being
conducted, except where the failure to have such authorizations,
approvals, licenses, permits, and orders would not have a Material Adverse
Effect. The Company is in compliance in all material respects with all
applicable laws, regulations, and administrative orders of any country,
state, province, or municipality or of any subdivision thereof to which it
is subject.
(b) ENVIRONMENTAL MATTERS. Except as set forth in SECTION 3.10(B) OF
THE DISCLOSURE SCHEDULE:
(i) The Company possesses, and is in compliance with, in all
material respects, all material permits, licenses and government
authorizations relating to protection of the environment, pollution
control and hazardous materials ("ENVIRONMENTAL LAWS") applicable to
the Company;
(ii) The Company has not received notice that the Company is
subject to any pending claim incurred or imposed or based upon any
provision of any Environmental Law and arising out of any act or
omission of the Company, its employees, agents or representatives
or, to the knowledge of ChoicePoint, arising out of the ownership,
use, control or operation by the Company of any plant, facility,
site, area or property from which any hazardous materials were
released into the environment;
(iii) The Company has not entered into or agreed to enter into
any consent decree or order, and the Company is not subject to any
judgment, decree or judicial or administrative order relating to
compliance with, or the cleanup of hazardous materials under any
applicable Environmental Law; and
(iv) The Company has not paid any fine, penalty or assessment
within the prior five (5) years with respect to environmental
matters.
3.11 COMPANY CONTRACTS. SECTION 3.11 OF THE DISCLOSURE SCHEDULE sets
forth a correct and complete list of all Company Contracts (as hereinafter
defined). Except to the extent prohibited by law, correct and complete copies of
all Company Contracts have been made available to Buyer. To the knowledge of
ChoicePoint, there are no existing material defaults under any Company
Contracts. "COMPANY CONTRACTS" means 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 the
Company is a party (excluding any insurance contracts):
(a) the Real Property Leases and the Personal Property Leases;
(b) Indentures, security agreements, or other agreements and
instruments relating to the borrowing of money, the extension of credit or
the granting of Liens;
(c) Management, employment, or consulting agreements, or
arrangements or agreements related to temporary services of any kind that
require payments greater than $50,000 annually;
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(d) Union or other collective bargaining agreements;
(e) Sales agency, manufacturer's representative, and distributorship
agreements or other distribution or commission arrangements requiring
payments in excess of $50,000 per annum;
(f) Licenses of patent, trademark, software (excluding standard "off
the shelf" software or software with annual license payments less than
$25,000 per license), copyrights, know-how, and other intellectual
property rights requiring payments in excess of $100,000 per annum;
(g) Agreements, orders, or commitments, not made in the ordinary
course of business, for the purchase of services, materials, supplies, or
products from any single supplier for an amount in excess of $100,000 per
annum;
(h) Agreements, orders, or commitments, not made in the ordinary
course of business, for the sale of products or services to any single
customer for an amount in excess of $100,000 per annum;
(i) Agreements for capital expenditures in excess of $100,000 for
any single project;
(j) Agreements which, by their terms, prohibit or restrict the
ability of the Company to compete or solicit customers anywhere in the
world;
(k) 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; or
(l) Other than as addressed above, other agreements, contracts, and
commitments that involve payments or receipts of more than $100,000 per
annum and 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 in SECTION 3.12 OF THE
DISCLOSURE SCHEDULE:
(a) Either ChoicePoint, its Affiliates, or the Company (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 the Company, and (ii) has paid
or made adequate provision for the payment of all Taxes shown to be due on
such Tax Returns. 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
Company (except for statutory liens for current taxes not yet delinquent).
None of the Tax Returns applicable to the Company is currently being
audited or examined by any taxing authority. There is no material unpaid
tax deficiency, determination or assessment currently outstanding against
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the Company. There are no outstanding agreements or waivers extending the
statute of limitations relating to the assessment of Taxes applicable to
the Company.
(c) For purposes of this Agreement:
(i) "TAX" means any federal, state, provincial, local, or
foreign income, gross receipts, license, payroll, employment,
excise, severance, escheat, stamp, occupation, premium, windfall
profits, environmental, customs duty, capital stock, franchise,
profits, withholding, 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 of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not;
and
(ii) "TAX RETURN" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto and any amendment
thereof.
3.13 ERISA AND RELATED MATTERS.
(a) SECTION 3.13 OF THE DISCLOSURE SCHEDULE 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 participated in, or maintained by the Company or with
respect to which contributions are made or obligations assumed by the
Company in respect of the Company (including health, life insurance, and
other benefit plans maintained for former employees or retirees). 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."
(b) The Company has fulfilled its obligations, to the extent
applicable, under the minimum funding requirements of Section 302 of ERISA
and Section 412 of the Code, with respect to each "employee benefit plan"
(as defined in Section 3(3) of ERISA) appearing in SECTION 3.13 OF THE
DISCLOSURE SCHEDULE. 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.
(c) No "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 which would have a Material Adverse Effect, 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.
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(d) Neither the Company nor any entity that is treated as a single
employer with the Company pursuant to Section 414(b), (c), (m), or (o) of
the Code currently maintains or contributes to any 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. As of the
date hereof, there is no outstanding unpaid minimum funding waiver within
the meaning of Code Section 412(d).
(e) Neither the Company nor any employer referred to in Section
3.13(d) above maintains, or 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 such employer currently has any liability to make
withdrawal liability payments to any multiemployer plan. There is no
pending dispute between any such employer and any multiemployer plan
concerning payment of contributions or payment of withdrawal liability
payments.
For purposes of this Agreement, "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 "CODE" means the Internal
Revenue Code of 1986, as amended from time to time, and any regulations or
published ruling promulgated or issued thereunder.
3.14 LABOR MATTERS.
(a) SECTION 3.14(A) OF THE DISCLOSURE SCHEDULE sets forth a correct
and complete list, as of the date listed therein, of all employees of the
Business (each, a "BUSINESS EMPLOYEE" and, collectively, the "BUSINESS
EMPLOYEES"), together with their respective job titles, dates of hire, and
current base salary or hourly rate.
(b) There are no controversies pending or, to the knowledge of
ChoicePoint, threatened, between the Company and any of its employees,
which controversies have had or are reasonably likely to have a Material
Adverse Effect.
3.15 INTELLECTUAL PROPERTY. SECTION 3.15 OF THE DISCLOSURE SCHEDULE sets
forth a correct and complete list of: (a) all patents, trade secrets,
trademarks, and trade names (including all federal, state, and foreign
registrations pertaining thereto) and all copyright registrations owned by the
Company and material to the operation of the Business (collectively, the
"PROPRIETARY INTELLECTUAL PROPERTY"); and (b) all patents, trademarks, trade
names, copyrights, technology, and processes that are used by the Company
pursuant to a license granted by a third party and material to the operation of
the Business (except for licenses of "off the shelf" software and licenses of
software requiring payments per license of less than $10,000 per year)
(collectively, the "LICENSED INTELLECTUAL PROPERTY", and, together with the
Proprietary Intellectual Property, the "INTELLECTUAL PROPERTY"). To the
knowledge of ChoicePoint, no claims are pending against the Company by any
Person with respect to the use of any Intellectual Property or challenging or
questioning the validity or enforceability of any license or agreement relating
to the same. To the knowledge of ChoicePoint, the current use by the Company of
the Intellectual Property does not infringe in any material respect on the
rights of any third party.
3.16 CUSTOMERS; SUPPLIERS.
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(a) SECTION 3.16(A) OF THE DISCLOSURE SCHEDULE sets forth the
customers of the Business that accounted for billed revenue for calendar
year 2006 of greater than $250,000. Except as noted in SECTION 3.16(A) OF
THE DISCLOSURE SCHEDULE, since December 31, 2006, none of such customers
has canceled or terminated its relationship with the Company or notified
the Company in writing of any intention to cancel or terminate its
relationship with the Company.
(b) SECTION 3.16(B) OF THE DISCLOSURE SCHEDULE sets forth the
suppliers of the Business that accounted for total net sales to the
Business for calendar year 2006 of greater than $100,000. Except as noted
in SECTION 3.16(B) OF THE DISCLOSURE SCHEDULE, since December 31, 2006,
none of such suppliers has canceled or terminated its relationship with
the Company or notified the Company in writing of any intention to cancel
or terminate its relationship with the Company.
3.17 BROKERS, FINDERS, AND INVESTMENT BANKERS. Other than Genesis
Capital, LLC (whose fees and expenses shall be paid by ChoicePoint), none of
ChoicePoint, Parent, or the Company has engaged 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.
3.18 BOOKS AND RECORDS. The books of account and other financial records
of the Company are materially complete and correct and have been maintained in
accordance with reasonable business practices.
3.19 PREPAYMENTS AND DEPOSITS. SECTION 3.19 OF THE DISCLOSURE Schedule
sets forth a materially complete and materially accurate list of prepayments or
deposits from customers of the Business for services to be performed after the
Closing that have been received by the Company as of the date hereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to ChoicePoint as follows:
4.1 ORGANIZATION. Buyer is a Delaware corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
organization.
4.2 AUTHORIZATION. Buyer has the corporate power and authority to
execute and deliver this Agreement and each other certificate, agreement,
document or instrument to be executed and delivered by Buyer in connection with
the transactions contemplated by this Agreement (the "BUYER ANCILLARY
DOCUMENTS"), and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the Buyer Ancillary Documents and
the performance by Buyer of its covenants and agreements hereunder and
thereunder have been duly and validly authorized by all necessary corporate
action of Buyer. This Agreement and the Buyer Ancillary Documents have been duly
executed and delivered by Buyer and constitute the valid and binding agreements
of Buyer, enforceable against Buyer in accordance with their respective terms,
except that (a) such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws, now or hereafter
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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. The execution, delivery, and
performance of this Agreement and the Buyer Ancillary Documents, the
consummation of the transactions contemplated by this Agreement and the Buyer
Ancillary Documents, and the fulfillment of and compliance with the terms and
conditions of this Agreement and the Buyer Ancillary Documents do not violate or
conflict with, constitute a breach of or default under, or permit the
acceleration of any obligation under, (a) any term or provision of the charter
documents or bylaws of Buyer, (b) any contract, agreement or commitment to which
Buyer is bound, or (c) any judgment, decree, or order of any court or
governmental authority or agency to which Buyer is a party. No consent,
approval, order, or authorization of, or registration, declaration, or filing
with, any governmental agency or public or regulatory unit, agency, body, or
authority with respect to Buyer is required in connection with the execution,
delivery, or performance of this Agreement or the consummation of the
transactions contemplated by this Agreement.
4.4 BROKERS, FINDERS, AND INVESTMENT BANKERS. Buyer has not engaged 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.
4.5 PURCHASE FOR INVESTMENT.
(a) Buyer is acquiring the 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. Buyer understands
that the Shares have not been 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 and applicable regulations 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) Buyer is an "accredited investor" within the meaning of Rule 501
of Regulation D promulgated under the Securities Act.
4.6 LITIGATION. There is no claim, action, suit, proceeding or
governmental investigation pending or, to the knowledge of Buyer, threatened
against Buyer, by or before any court, governmental or regulatory authority or
by any third party which challenges the validity of this Agreement or which
would be reasonably likely to adversely affect or restrict Buyer's ability to
consummate the transactions contemplated hereby.
4.7 AVAILABILITY OF FUNDS. Buyer has sufficient available funds to pay
the Purchase Price and to pay any other amounts payable by Buyer pursuant to
this Agreement.
SECTION 5. ADDITIONAL COVENANTS AND AGREEMENTS.
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5.1 FEES AND EXPENSES. Except as otherwise set forth in this Agreement,
ChoicePoint will pay all costs and expenses incurred by ChoicePoint, Parent, or
the Company in connection with the transactions contemplated by this Agreement
(including, without limitation, attorneys' and accountants' fees and expenses).
Except as otherwise set forth in this Agreement, Buyer shall bear all such costs
and expenses incurred by Buyer in connection with the transactions contemplated
by this Agreement (including, without limitation, attorneys' and accountants'
fees and expenses).
5.2 CONFIDENTIALITY. Each of Buyer and ChoicePoint covenants and agrees
that neither it nor any of its respective Affiliates shall at any time disclose,
directly or indirectly, any of the terms or conditions of this Agreement or make
any public announcements regarding this Agreement or the transactions
contemplated by this Agreement to the financial community, government agencies,
employees, or the general public, except (a) with the other party's prior
written consent, (b) as required by the Securities Exchange Act of 1934, as
amended, or any applicable stock exchange rules, (c) as otherwise required by
applicable law, in which case the disclosing party shall give prompt written
notice to the non-disclosing party of such requirement and shall cooperate with
the non-disclosing party so that the non-disclosing party may seek a protective
order or other appropriate remedy, or (d) in connection with the enforcement of
its rights or satisfaction of its obligations hereunder. Buyer and ChoicePoint
shall cause its advisors or other representatives to comply with this Section
5.2.
5.3 EMPLOYEES; EMPLOYEE BENEFITS.
(a) For the period beginning on the Effective Date and ending no
earlier than the first (1st) anniversary of the Effective Date, Buyer
shall, or shall cause the Company to, provide each Business Employee with
compensation and benefits that are substantially comparable in the
aggregate to the compensation and benefits provided to each such Business
Employee immediately prior to the Closing (excluding special retention and
other similar bonuses paid or payable with respect to arrangements
established to ensure continuity of employment arising from this
transaction), provided that (i) Buyer, in providing such substantially
comparable compensation and benefits, shall not be required to provide or
maintain any particular plan or benefit which was provided to or
maintained for Business Employees prior to the Closing and (ii) nothing
herein shall be deemed to create anything other than an "at will"
employment relationship between the Buyer, the Company or any Affiliate
thereof, on the one hand, and any Business Employee, on the other hand.
Buyer shall treat all service completed by a Business Employee with the
Company or any Affiliate thereof, and any predecessor thereto, the same as
service completed with Buyer 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 Buyer on or after the Effective Date in which a
Business 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).
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(b) After the Effective Date, Buyer 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 relating to or arising out of (i) all
salaries, bonuses, commissions, vacation entitlements and other benefits
accrued by the Company but unpaid as of the Closing to the extent accrued
for on the Final Closing Statement, and (ii) any claims of, or damages or
penalties sought by, any Business Employee, or any governmental entity on
behalf of or concerning any Business Employee, with respect to any act or
failure to act by Buyer to the extent arising from the employment,
discharge, layoff or termination of any Business Employee.
(c) Prior to the Effective Date, ChoicePoint shall be responsible
for, and shall indemnify and hold harmless Buyer 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 relating to or arising out of (i) all
salaries, bonuses, commissions, vacation entitlements and other benefits
not accrued by the Company and unpaid as of the Closing to the extent not
accrued for on the Final Closing Statement, and (ii) any claims of, or
damages or penalties sought by, any Business Employee, or any governmental
entity on behalf of or concerning any Business Employee, with respect to
any act or failure to act by ChoicePoint to the extent arising from the
employment, discharge, layoff or termination of any Business Employee.
(d) Notwithstanding anything herein to the contrary, any liabilities
or obligations relating to the additional compensation to be paid to
certain employees of the Company pursuant to those certain retention
agreements executed by ChoicePoint and certain Business Employees (the
"RETENTION AGREEMENTS") relating to the potential sale of the Business
will be retained by ChoicePoint. ChoicePoint agrees to perform and
discharge its obligations under the Retention Agreements, and ChoicePoint
shall not amend, waive, modify or supplement any provision of the
Retention Agreements without the prior written consent of Buyer.
5.4 USE OF CORPORATE NAMES AND TRADEMARKS.
(a) The parties acknowledge that ChoicePoint is retaining all rights
with respect to the name "ChoicePoint" and all derivations and logos
thereof (collectively, the "CHOICEPOINT MARKS"). As soon as reasonably
practicable after the Effective Date, but in any event within thirty (30)
days after the Effective Date, Buyer will, at its own expense, (i) remove
any and all exterior signs and other identifiers located on the Company's
property or premises that refer or pertain to or that include the
ChoicePoint Marks, and (ii) remove from all of the Company's letterhead,
envelopes, invoices, supplies, labels, web site publications and other
communications media of any kind, all references to the ChoicePoint Marks.
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(b) The parties acknowledge that as of and after the Closing, Buyer
shall own all rights of ChoicePoint and its Affiliates with respect to the
name "Bode" or "Bode Technology" and all derivations and logos thereof
(collectively, the "BODE MARKS"). After the Closing, ChoicePoint shall not
use any trade name, trademark, service xxxx, or domain name that is the
same as, or is reasonably likely to cause confusion with, the Bode Marks.
5.5 LEASE GUARANTY. Buyer shall use its commercially reasonable best
efforts to have Parent released from the Real Property Lease guaranty executed
by Parent set forth on SCHEDULE 5.5 (the "LEASE GUARANTY") as promptly as
possible, but in no event later than ninety (90) days after the Effective Date,
and, Buyer shall indemnify and hold harmless Parent from and against any
liability which Parent may have with respect to the Lease Guaranty.
5.6 RETENTION OF RECORDS. Buyer agrees that it will maintain, for at
least seven (7) years or such longer time as may be required by law (the
"RETENTION PERIOD"), the books, records and documents of the Company existing as
of the Effective Date. During normal business hours, Buyer shall afford
ChoicePoint and its representatives full access, for reasonable purposes, to
such books, record and documents at all times during the Retention Period.
ChoicePoint agrees that it will maintain, for the Retention Period, the books,
records and documents solely relating to the Company existing as of the
Effective Date that are not property of the Company. During normal business
hours, ChoicePoint shall afford Buyer and its representatives full access, for
reasonable purposes, to such books, record and documents at all times during the
Retention Period.
5.7 AUDITED FINANCIALS. Buyer has engaged Xxxxxx & Xxxxxxxx LLP (the
"CPA FIRM"), and ChoicePoint has consented to such engagement, to audit the
Financial Statements, a draft of which is being delivered contemporaneously with
the execution of this Agreement (the "DRAFT AUDITED FINANCIAL Statements"). The
parties acknowledge that Buyer intends to prepare, or cause to be prepared,
final audited balance sheets and related audited annual statements of income of
the Company as of and for the fiscal years ended December 31, 2005 and December
31, 2006 and for the period from January 1, 2007 to the Effective Date (the
"FINAL AUDITED FINANCIAL STATEMENTS"), which shall meet the standards required
by the Securities and Exchange Commission for use in Buyer's Form 8-K and other
filings by Buyer as required by the Securities and Exchange Commission. For a
period of ninety (90) days following the Effective Date, ChoicePoint agrees to
use reasonable efforts to cooperate with and assist Buyer and the CPA Firm in
connection with the preparation of the Final Audited Financial Statements. The
costs of the CPA Firm relating to the Draft Audited Financial Statements and the
Final Audited Financial Statements shall be borne equally by ChoicePoint and
Buyer.
5.8 LIMITED REPRESENTATIONS AND WARRANTIES.
(a) Buyer acknowledges that, except as expressly set forth in this
Agreement, none of ChoicePoint, ChoicePoint's Affiliates, the Company, or
any other Person has made any representation or warranty, express or
implied, as to the accuracy or completeness of any information regarding
the Company or the Business, and further agrees, except as expressly set
forth in this Agreement, none of ChoicePoint, ChoicePoint's Affiliates,
the Company, or any other Person will be subject to any liability to Buyer
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or any other Person resulting from the distribution to Buyer, or Buyer's
use of, any such information, including, without limitation, any
information document or material made available to Buyer or its
representatives in any "data room," management presentations or any other
form in expectation of the transactions contemplated by this Agreement.
(b) EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET
FORTH IN SECTIONS 3 AND 5, NONE OF CHOICEPOINT, CHOICEPOINT'S AFFILIATES,
OR THE COMPANY MAKES ANY REPRESENTATION OR WARRANTY EXPRESS OR IMPLIED, AT
LAW OR IN EQUITY, IN RESPECT OF THE COMPANY OR ANY OF THE ASSETS,
LIABILITIES OR OPERATIONS OF THE COMPANY.
SECTION 6. RESTRICTIVE COVENANTS.
6.1 DEFINITIONS. For the purposes of this section:
(a) "COMPANY ACTIVITIES" means, except as hereinafter provided in
this Section 6.1(a), the business of providing forensic DNA analysis,
proprietary DNA collection products, and DNA related research services to
law enforcement agencies, federal and state governments, crime
laboratories and disaster management organizations.
(b) "NONCOMPETITION PERIOD" means the period beginning on the
Effective Date and ending on the third (3rd) anniversary of the Effective
Date;
(c) "NONSOLICITATION PERIOD" means the period beginning on the
Effective Date and ending on the first (1st) anniversary of the Effective
Date;
(d) "PERMITTED ACTIVITIES" means any activities related to any
business, other than the Business, that ChoicePoint currently conducts or,
except with respect to activities which would constitute Company
Activities, may hereafter conduct; and
(e) "TERRITORY" means the United States of America, such area being
where customers and actively sought prospective customers of the Business
are located.
6.2 NONCOMPETITION.
(a) ACKNOWLEDGMENT. ChoicePoint acknowledges that the Company
conducts the Company Activities throughout the Territory and that to
protect adequately the interest of Buyer in the Business and goodwill of
the Company, it is essential that any noncompetition covenant with respect
thereto cover all Company Activities and the entire Territory for the
duration of the Noncompetition Period.
(b) NONCOMPETITION COVENANT. ChoicePoint hereby agrees that it, and
its majority-owned subsidiaries, will not, during the Noncompetition
Period, directly or indirectly, conduct Company Activities in the
Territory or otherwise engage in, or have an equity, debt or profit
interest in, any business that conducts any Company Activities in the
Territory. Notwithstanding anything in this Agreement to the contrary, (i)
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ChoicePoint may acquire up to five percent (5%) of any company whose
common stock is publicly traded on a national securities exchange or in
the over-the-counter market, and (ii) ChoicePoint may conduct the
Permitted Activities at any time, including during the Noncompetition
Period. Buyer acknowledges that in the course of acquiring business
entities or assets ("ACQUIRED Entities"), ChoicePoint may wish to acquire
an Acquired Entity that engages in the Company Activities as part of its
business activities. Buyer agrees that, subject to the remaining
provisions of this Section 6.2(b), nothing in this Agreement shall prevent
ChoicePoint from acquiring (and, thereafter, owning and operating) an
Acquired Entity during the Noncompetition Period that engages in the
Company Activities in the Territory, provided that the revenues derived
from the Company Activities in the Territory by the Acquired Entity at the
time of such acquisition do not exceed thirty percent (30%) of the total
revenue of the Acquired Entity during the twelve month period immediately
prior to such acquisition.
6.3 NONSOLICITATION OF COMPANY EMPLOYEES. ChoicePoint hereby agrees that
it will not, during the Nonsolicitation Period, directly or indirectly, recruit
or solicit or attempt to hire, recruit or solicit, on behalf ChoicePoint or any
other Person, any individual who is an employee of the Company on the date
hereof; PROVIDED, HOWEVER, that nothing in this Section 6.3 shall not prohibit
(a) the placing of any advertisements for positions to members of the public
generally, such as through newspapers or magazines (including industry-specific
magazines), radio, television or direct mail, (b) the recruitment, solicitation
or attempt to hire of any individual whose employment with the Company or its
Affiliates (including Buyer) terminated prior to commencement of employment
discussions, or (c) the recruitment, solicitation or attempt to hire of the
individuals set forth in SECTION 6.3 OF THE DISCLOSURE SCHEDULE.
6.4 SEVERABILITY. If a judicial determination is made that any of the
provisions of this Section 6 constitutes an unreasonable or otherwise
unenforceable restriction against ChoicePoint, the provisions of this Section 6
shall be rendered void only to the extent that such judicial determination finds
such provisions to be unreasonable or otherwise unenforceable with respect to
ChoicePoint. In this regard, ChoicePoint hereby agrees that any judicial
authority construing this Section 6 shall be empowered to sever any portion of
the Territory, any prohibited business activity or any time period from the
coverage of this Section 6, and to apply the provisions of this Section 6 to the
remaining portion of the Territory, the remaining business activities, and the
remaining time period not so severed by such judicial authority.
6.5 INJUNCTIVE RELIEF. ChoicePoint hereby agrees that any remedy at law
for any breach of the provisions contained this Section 6 shall be inadequate
and that Buyer shall be entitled to seek injunctive relief in addition to any
other remedy Buyer might have under this Section 6.
SECTION 7. CONTEMPORANEOUS ACTIONS. Contemporaneously with the execution
of this Agreement, the following actions have been taken:
7.1 STOCK CERTIFICATES. ChoicePoint has delivered all stock certificates
representing the Shares to Buyer, duly endorsed in blank (or accompanied by duly
executed stock powers).
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7.2 PURCHASE PRICE. Buyer has paid the Purchase Price to ChoicePoint by
wire transfer of immediately available funds to the account set forth in Section
1.3.
7.3 RESIGNATIONS OF DIRECTORS AND OFFICERS. The persons holding the
positions of a director or officer of the Company, in office immediately prior
to the Closing, have resigned from such positions in writing effective as of the
Closing.
7.4 TRANSITION SERVICES AGREEMENT. The Company and ChoicePoint have
executed and delivered the transition services agreement (the "TRANSITION
SERVICES AGREEMENT") in the form attached hereto as EXHIBIT C hereto.
SECTION 8. INDEMNIFICATION.
8.1 INDEMNIFICATION OBLIGATIONS OF CHOICEPOINT. ChoicePoint shall
indemnify, defend, and hold harmless Buyer and its successors and assigns
(collectively, the "BUYER 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 Sections 3 and 5 hereof (but excluding Section 3.12,
which is covered in Section 9.7); and
(b) any breach of any covenant, agreement, or undertaking made by
ChoicePoint in this Agreement (but excluding Section 9, which is covered
in Section 9.7).
For purposes of this Section 8, "LOSS" or "LOSSES" shall mean any and all
claims, liabilities, obligations, losses, 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). The Losses described in this
Section 8.1 as to which the Buyer Indemnified Parties are entitled to
indemnification are hereinafter referred to, collectively, as "BUYER LOSSES."
8.2 INDEMNIFICATION OBLIGATIONS OF BUYER. Buyer shall indemnify, defend
and hold harmless ChoicePoint and its successors and assigns (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 Buyer in Section 4;
(b) any breach of any covenant, agreement, or undertaking made by
Buyer in this Agreement; and
(c) any liabilities relating to the conduct or operation of the
Business after the Closing.
8.3 INDEMNIFICATION PROCEDURE.
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(a) Promptly after receipt by a Buyer Indemnified Party or a
ChoicePoint Indemnified Party (hereinafter referred to as, collectively,
an "INDEMNIFIED PARTY") of notice by a third party of any claim or the
commencement of any action or proceeding with respect to which such
Indemnified Party may be entitled to receive payment from any other party
for any Losses (ignoring, for this purpose, the Threshold Amount (as
hereinafter defined)), such Indemnified Party shall, within ten (10) days,
notify Buyer or ChoicePoint, as the appropriate indemnifying party or
representative thereof (the "INDEMNIFYING PARTY"), of such claim or of the
commencement of such action or proceeding; PROVIDED, HOWEVER, that the
failure to so notify the Indemnifying Party shall relieve the Indemnifying
Party from liability under this Agreement with respect to such 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 claim. The Indemnifying Party shall have the right, upon written
notice delivered to the Indemnified Party within twenty (20) days
thereafter, to assume the responsibility and defense of such action or
proceeding, including the engagement 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 responsibility and defense of the action or
proceeding and to employ counsel reasonably satisfactory to the
Indemnified Party, in either case within such 20-day period, then such
Indemnified Party may employ counsel to represent or defend it in any such
action or proceeding, and the Indemnifying Party shall pay the reasonable
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
each other with respect to the defense of any such action.
(b) No Indemnified Party may settle or compromise any claim or
consent to the entry of any judgment with respect to which indemnification
is being sought hereunder without the prior written consent of the
Indemnifying Party, unless such settlement, compromise, or consent
includes an unconditional release of the Indemnifying Party from all
liability arising out of such claim and is not conditioned upon the
payment of any amount by the Indemnifying Party (or for which
indemnification may be sought hereunder), or does not contain or result in
any restriction, interference, or condition that would apply to such
Indemnifying Party or its Affiliates or to the conduct of any of their
respective businesses (whether through injunctive or equitable relief or
otherwise). An Indemnifying Party may not, without the prior written
consent of the Indemnified Party, settle or compromise any claim or
consent to the entry of any judgment with respect to which indemnification
is being sought hereunder unless (i) the Indemnifying Party shall pay or
cause to be paid all amounts arising out of such settlement or judgment
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concurrently with the effectiveness thereof; (ii) the terms or effect of
the settlement shall not encumber any of the assets of any Indemnified
Party or any Affiliate thereof, or contain or result in any restriction,
interference or condition that would apply to such Indemnified Party or
its Affiliates or to the conduct of any of their respective businesses;
and (iii) the Indemnifying Party shall obtain, as a condition of such
settlement, a complete unconditional release of each Indemnified Party.
(c) In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written
notice of such claim to the appropriate Indemnifying Party. Such notice
shall specify the basis for such claim. As promptly as possible after the
Indemnified Party has given such notice, such Indemnified Party and the
appropriate Indemnifying Party shall establish the merits and amount of
such claim (by mutual agreement or in accordance with Section 10.8 hereof)
and, within five (5) business days of the final determination of the
merits and amount of such claim, the Indemnifying Party shall pay to the
Indemnified Party immediately available funds in an amount, if any, equal
to such claim as determined hereunder.
8.4 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 Effective Date and (b) terminate as follows:
(i) with respect to Losses arising under Section 8.1(a) or
Section 8.2(a) hereof, the Claims Period shall terminate on the
first (1st) anniversary of the Effective Date; and
(ii) with respect to all other Losses, the Claims Period shall
extend indefinitely, except as limited by law (including by
applicable statutes of limitations).
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.
8.5 THRESHOLD AMOUNT; LIMITATION AMOUNT. Notwithstanding anything to the
contrary set forth herein, ChoicePoint shall be liable for Buyer Losses arising
under Section 8.1(a) only to the extent that any such Losses exceed, in the
aggregate, $125,000 (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 ChoicePoint under Section 8.1(a)
exceed $5,000,000 (the "LIMITATION AMOUNT"). Notwithstanding the foregoing,
Losses arising under Section 8.1(b) or pursuant to any matter constituting fraud
under applicable law by ChoicePoint shall not be subject to the Threshold Amount
or the Limitation Amount.
8.6 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything contained
herein to the contrary:
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(a) The amount of Losses to which an Indemnified Party may be
entitled to be indemnified against and reimbursed for under this Section 8
shall be (i) reduced by any indemnity or other recovery under any contract
between an Indemnified Party and any third party, (ii) reduced by any
insurance proceeds received by an Indemnified Party with respect to such
Losses, and (iii) reduced by the net present value of any tax benefits
reasonably expected to be derived by an Indemnified Party as a result of
such Losses. The parties shall cooperate with each other with respect to
making claims under any contracts between the Company and any third
parties, which contracts provide indemnification or similar rights for the
benefit of the Company. 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 8
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 any action which directly or indirectly would affect
such claims that the Indemnifying Party may have with respect thereto and
shall cooperate fully with the Indemnified Party in pursuing such claims.
(c) No Indemnifying Party shall be liable hereunder for any special,
incidental, indirect or consequential damages of any kind or nature,
including lost profits or loss of opportunity.
(d) Attorney, consultant, and other professional fees and
disbursements incurred by an Indemnified Party in connection with this
Section 8 shall be reasonable and based only on time actually spent which
shall be charged at no more than such professional's standard hourly rate.
8.7 EXCLUSIVE REMEDY. Except (a) as provided in Section 9 and (b) for a
breach of any representation, warranty, or covenant as a result of any matter
constituting fraud under applicable law, following the Closing, the
indemnification provisions of this Section 8 shall be the exclusive remedy of
the parties hereto against any other party with respect to matters arising under
or in connection with this Agreement and the transactions contemplated hereby.
SECTION 9. TAX MATTERS.
9.1 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
Company that (a) are required to be filed on or before the Effective Date or (b)
are required to be filed after the Effective Date and (i) are Consolidated Tax
Returns (as hereinafter defined) or (ii) are with respect to Income Taxes (as
hereinafter defined) and are required to be filed on a separate Tax Return basis
for any Tax period ending on or before the Effective Date. Buyer will prepare or
cause to be prepared and will timely file or cause to be timely filed all other
Tax Returns required of Buyer and its subsidiaries and Affiliates (including the
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Company), or in respect of their assets or activities. Any such Tax Returns that
include periods ending on or before the Effective Date or that include the
activities of the Company prior to the Effective Date will, insofar as they
relate to the Company, be on a basis consistent with the last previous such Tax
Returns filed in respect of the Company, unless ChoicePoint or Buyer, as the
case may be, reasonably concludes, and notifies the other party in writing, that
there is no reasonable basis for such position. None of Buyer or its Affiliates
will file any amended Tax Returns for any periods for or in respect of the
Company (or its assets or activities) with respect to which Buyer is not
obligated to prepare or cause to be prepared the original such Tax Returns
pursuant to this Section 9.1 without the prior written consent of ChoicePoint,
which shall not be unreasonably withheld or delayed.
9.2 PAYMENT OF TAXES.
(a) ChoicePoint shall 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 9.1 and (b) all Taxes other than
Income Taxes due on or before the Effective Date for which no Tax Return
is required to be filed, except, in each case, to the extent the liability
for such Taxes was accrued on the Final Closing Statement. Buyer shall pay
or cause to be paid (a) all Income Taxes shown as due with respect to Tax
Returns which Buyer is obligated to prepare and file or cause to be
prepared and filed pursuant to Section 9.1 and (b) all Taxes owed by the
Company other than Taxes described in the preceding sentence of this
Section 9.2.
(b) With respect to each Tax liability, calculated pursuant to the
provisions of Section 9.7(d), due for a taxable period that includes (but
does not end on) the Effective Date (a "STRADDLE Period"), ChoicePoint
shall, upon receipt of a reasonably documented request from Buyer,
promptly reimburse Buyer for the amount of any such Tax liability that
would have been due for the Pre-Closing Tax Period (as hereinafter
defined) attributable to the Company to the extent, if any, such Tax
liability exceeds the sum of (i) any estimated payments, deposits or
credits made or applied prior to the Effective Date and (ii) any amount
accrued as a liability for Taxes on the Final Closing Statement. Buyer
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
Effective Date with respect to such Tax for the Straddle Period exceeds
the amount of such Taxes.
9.3 TAX SHARING AGREEMENTS. On the Effective Date, all Tax sharing
agreements and arrangements between (a) the Company, on the one side, and (b)
ChoicePoint or any of its 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 Effective Date in respect of a redetermination of Tax
liabilities or otherwise.
9.4 CARRYFORWARDS AND CARRYBACKS. Buyer will cause the Company to elect,
where permitted by law, to carry forward any net operating loss, net capital
loss, charitable contribution or other item arising after the Effective Date
that could, in the absence of such an election, be carried back to a taxable
period of the Company ending on or before the Effective Date in which the
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Company was included in a Consolidated Tax Return. Buyer, 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 the
Company for any Tax year ending on any date following the Effective Date to any
period of the Company ending on or before the Effective Date with respect to
which the Company was included in a Consolidated Tax Return.
9.5 REFUNDS. ChoicePoint will be entitled to retain, or receive
immediate payment from Buyer or any of its subsidiaries or Affiliates (including
the Company) of, any refund or credit arising with respect to the Company
(including refunds and credits arising by reason of amended Tax Returns filed
after the Effective Date or otherwise) relating to Taxes with respect to any Tax
period ending on or before the Effective Date. Buyer and the Company 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 Effective Date relating to the Company. Buyer and ChoicePoint will
equitably apportion any refund or credit with respect to Taxes with respect to
any Straddle Period.
9.6 TAX COOPERATION. Each of Buyer 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 the Company. Buyer will prepare or cause the Company
to prepare, within sixty (60) days after the Effective Date, in a manner
consistent with past practice, the Tax work paper preparation package or
packages necessary to enable ChoicePoint to prepare Tax Returns that ChoicePoint
is obligated to prepare or cause to be prepared pursuant to Section 9.1.
9.7 TAX INDEMNIFICATION.
(a) ChoicePoint will indemnify, defend and hold Buyer Indemnified
Parties harmless from and against (i) all liability for Taxes of the
Company for any taxable period that ends on or before the Effective Date
and the portion of any Straddle Period ending on the Effective Date
(except to the extent accrued as a liability for Taxes on the Final
Closing Statement), (ii) all liability for any breach of ChoicePoint's
representations and warranties contained in Section 3.12 or ChoicePoint's
covenants contained in this Section 9 and (iii) all liability for
reasonable legal, accounting and appraisal fees and expenses with respect
to any item described in clause (i) or (ii) above. Notwithstanding the
foregoing, ChoicePoint will not indemnify, defend or hold harmless any
Buyer Indemnified Parties from any liability for Taxes attributable to any
action taken after the Closing by Buyer, any of its subsidiaries or
Affiliates (including the Company), or any transferee of Buyer or any of
its subsidiaries or Affiliates (other than any such action expressly
required or otherwise expressly contemplated by this Agreement) (a "BUYER
TAX ACT").
(b) Buyer will indemnify, defend and hold the ChoicePoint
Indemnified Parties harmless from and against (i) except to the extent
ChoicePoint is otherwise required to indemnify Buyer for such Tax pursuant
to Section 9.7(a), all liability for Taxes of the Company for any taxable
period ending after the Effective Date, (ii) all liability for Taxes
attributable to a Buyer Tax Act, and (iii) all liability for reasonable
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legal, accounting and appraisal fees and expenses with respect to any item
described in clause (i) or (ii) above.
(c) The obligations of the parties to indemnify, defend and hold
harmless pursuant to Sections 9.7(a) and 9.7(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 the Company that are not based on
income or receipts (e.g., property Taxes) for the portion of any
Straddle Period ending on the Effective Date (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 the Company for the Pre-Closing Tax Period
(other than Taxes described in Section 9.7(d)(i) above) will be
computed as if such taxable period ended as of the close of business
on the Effective Date, and, 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 Effective Date; and
(iii) Income Taxes of the Company for which a Consolidated Tax
Return is filed will be computed as if separate returns had been
filed for the Company for such Pre-Closing Tax Period and all prior
taxable periods.
(e) Any indemnity payment required to be made pursuant to this
Section 9.7 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).
(f) The limitations described in Section 8.6 shall apply to tax
indemnification under this Section 9.7.
9.8 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 Buyer Indemnified
Parties or the ChoicePoint Indemnified Parties pursuant to Section 9.7,
the Indemnified Party will promptly notify the Indemnifying Party of such
claim (a "TAX CLAIM"); PROVIDED, HOWEVER, that the failure to give such
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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 Effective Date or to any other
taxable period in which the Company 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 xxx for a refund
where applicable law permits such refund suits or contest the Tax Claim in
any permissible manner. Buyer 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 9.8(b) or a Tax Claim
described in Section 9.8(c) (including selection of counsel).
(c) ChoicePoint and Buyer will jointly control and participate in
all proceedings taken in connection with any Tax Claim relating to Taxes
of the Company for any Straddle Period. Neither ChoicePoint nor Buyer will
settle any such Tax Claim without the prior written consent of the other
(which consent shall not be unreasonably withheld).
(d) Each of Buyer, the Company and their respective Affiliates, on
the one hand, and ChoicePoint and its 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.
9.9 DEFINITIONS. As used in this Agreement:
(a) "CONSOLIDATED TAX RETURNS" means Tax Returns which include the
Company, on the one hand, and ChoicePoint or any of its subsidiaries or
Affiliates (other than the Company), on the other hand; and
(b) "INCOME TAXES" means all Taxes based upon, measured by, or
calculated with respect to (i) 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 (ii) 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 (i) of
this definition.
SECTION 10. MISCELLANEOUS.
10.1 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
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delivered personally 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 ChoicePoint or Parent:
ChoicePoint Services Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
with a copy to:
King & Spalding LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
To Buyer:
GlobalOptions Group, Inc.
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx, CFO
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
0000 00xx Xxxxxx X.X.
Xxxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
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.
10.2 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.
10.3 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 hereunder without the consent of all parties; PROVIDED THAT, each of
ChoicePoint and Buyer shall, without the obligation to obtain the consent of any
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other party, be entitled to assign this Agreement or all or any part of its
rights hereunder to any one (1) or more of its respective Affiliates; PROVIDED
FURTHER THAT, no such assignment shall relieve or discharge ChoicePoint or Buyer
of its obligations hereunder.
10.4 NUMBER; GENDER; CURRENCY. 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. Unless
otherwise expressly noted to the contrary, all references in this Agreement to
"dollars" or "$" shall mean United States dollars.
10.5 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.
10.6 KNOWLEDGE. "TO THE KNOWLEDGE OF CHOICEPOINT" or any similar phrase
contained in this Agreement shall mean to the actual knowledge of those
individuals listed in SECTION 10.6 OF THE DISCLOSURE SCHEDULE.
10.7 CONTROLLING LAW; INTEGRATION; AMENDMENT. This Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York without reference to New York choice of law rules (other
than Section 5-1401 of the New York General Obligations Law). This Agreement
supersedes all negotiations, agreements, and understandings among the parties
with respect to the subject matter hereof. This Agreement, together with any
agreements entered into on or subsequent to the Effective Date, constitute the
entire agreement among the parties hereto. This Agreement may not be amended,
modified, or supplemented except by written agreement of Buyer, ChoicePoint and
Parent. No provision of this Agreement shall be construed against or interpreted
to the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party or its counsel having or being deemed
to have structured or drafted such provision.
10.8 SUBMISSION TO JURISDICTION. Each of the parties hereto agrees that
any suit, action or proceeding arising out of or relating to this Agreement, the
ChoicePoint Ancillary Documents or the Buyer Ancillary Documents, their subject
matter, the performance by the parties of their respective obligations with
respect to this Agreement, the ChoicePoint Ancillary Documents or the Buyer
Ancillary Documents 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 Atlanta, Georgia, 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,
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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, the ChoicePoint
Ancillary Documents or the Buyer Ancillary Documents 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.
10.9 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 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.
10.10 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.
10.11 ENFORCEMENT OF CERTAIN RIGHTS. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person,
firm or corporation 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, firm, or corporation being
deemed a third-party beneficiary of this Agreement.
10.12 GUARANTY. Parent hereby unconditionally guarantees to Buyer the due
and punctual payment and/or performance of all liabilities, obligations or
undertakings of ChoicePoint under this Agreement.
[SIGNATURES FOLLOW ON NEXT PAGE.]
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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 GOVERNMENT SERVICES INC.
By: /s/ J. Xxxxxxx xx Xxxxx
--------------------------------
Name: Xxxxxxx xx Xxxxx
Title: Chief Data Officer
CHOICEPOINT INC.
By: /s/ J. Xxxxxxx xx Xxxxx
--------------------------------
Name: Xxxxxxx xx Xxxxx
Title: Chief Data Officer
GLOBALOPTIONS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx, Ph.D.
Title: Chairman and Chief Executive Officer
