<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Rule 13d-(101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
PEDIATRIC SERVICES OF AMERICA, INC.
(NAME OF ISSUER)
COMMON STOCK
($.01 par value per share)
(TITLE OF CLASS OF SECURITIES)
705323103
(CUSIP NUMBER)
ChoicePoint Services Inc.
1000 Alderman Drive
Alpharetta, Georgia 30005
Attention: J. Michael de Janes, Esq.
Telephone No. (770) 752-5745
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
Copy to:
B. Lynn Walsh, Esq.
Hunton & Williams
NationsBank Plaza - Suite 4100
600 Peachtree Street, N.E.
Atlanta, Georgia 30308-2216
December 15, 1997
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1 (b)(3) or (4), check the following
box [ ].
NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1 (a) for other
parties to whom copies are to be sent.
(continued on following pages)
(Page 1 of 6 Pages)
- ---------------
(1) The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP No. 705323103 13D Page 2 of 6 Pages
--------------------- -------- --------
(1) Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons (Entities Only)
ChoicePoint Services Inc.
58-1276168
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(2) Check the Appropriate Box if a Member of a Group* (a) [ ]
(b) [ ]
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(3) SEC Use Only
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(4) SOURCE OF FUNDS*
00
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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(6) Citizenship or Place of Organization
Georgia
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(7) Sole Voting Power
Number of 495,050
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 495,050
--------------------------------------------------------
(10) Shared Dispositive Power
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
495,050
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(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares* [ ]
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(13) Percent of Class Represented by Amount in Row (11)
7.1%
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(14) Type of Reporting Person*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
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ITEM 1. SECURITY AND ISSUER.
This Statement relates to the common stock, $.01 par value per share
(the "Common Stock"), of Pediatric Services of America, Inc., a Delaware
corporation (the "Issuer"), having its principal offices at 3159 Campus Drive,
Norcross, Georgia 30071.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by ChoicePoint Services Inc. ("ChoicePoint
Services"), a Georgia corporation and wholly-owned subsidiary of ChoicePoint
Inc., a Georgia corporation ("CPI").
ChoicePoint Services and CPI provide risk management and fraud
prevention information and related technology solutions to the insurance
industry. ChoicePoint Services owns approximately 7.1% of the outstanding shares
of the Issuer. The principal place of business and principal executive offices
of both ChoicePoint Services and CPI are located at 1000 Alderman Drive,
Alpharetta Georgia, 30005.
The names, business addresses and occupational information for: (a)
each executive officer and director of ChoicePoint Services and (b) each
executive officer and director of CPI are set forth in Exhibit A. Neither
ChoicePoint Services nor CPI, nor to the best of the knowledge of ChoicePoint
Services and CPI, any of the persons listed on Exhibit A has (a) been convicted
in any criminal proceeding (excluding traffic violations or similar
misdemeanors), or (b) been a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of which
proceedings was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The securities of the Issuer subject to this Schedule 13D were acquired
pursuant to an Asset Purchase Agreement (the "Purchase Agreement") dated as of
December 2, 1997 (and which closed on December 15, 1997), by and among
ChoicePoint Services Inc., ChoicePoint Inc., Insurance Medical Reporter, Inc., a
California corporation, and the Issuer. Pursuant to the Purchase Agreement,
ChoicePoint Services agreed to sell its line of business relating to the
providing of paramedical examinations for the life and health insurance
industries in exchange for the aggregate purchase price of Twenty Six Million
Dollars and No/100 ($26,000,000), consisting of $16,000,000 in cash, subject to
certain adjustments at closing, and $10,000,000 in the form of 495,050 shares of
Common Stock, that are the subject of this Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
Except as described in the Purchase Agreement, ChoicePoint Services
does not have any plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
<PAGE> 4
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PAGE 4 OF 6 PAGES
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(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of
its subsidiaries;
(c) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries;
(d) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the
number or term of directors to fill any existing vacancies on
the board;
(e) any material change in the present capitalization or dividend
policy of the Issuer;
(f) any other material change in the Issuer's business or
corporate structure;
(g) changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person;
(h) causing a class of securities of the Issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) a class of equity securities of the Issuer to become eligible
for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or
(j) any action similar to those enumerated above.
ChoicePoint Services reserves the right to purchase or sell additional
shares of the Common Stock, at any time, without further notice or prior
amendment to this Schedule 13D. Choicepoint Services also reserves the right to
change its intentions with respect to any or all of the foregoing and its right
to act either alone or together with any other person or group.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
ChoicePoint Services beneficially owns 495,050 shares of Common Stock,
representing approximately 7.1% of the outstanding shares of Common Stock.
ChoicePoint Services holds sole voting and dispositive power with respect to
such shares.
Except as described in Item 3 of this Schedule 13D, ChoicePoint
Services has not had any transactions in the Common Stock within the past 60
days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
ChoicePoint Services has represented pursuant to the Purchase Agreement
that the shares that are the subject of this Schedule 13D are being acquired for
investment for ChoicePoint Services' own account, and not with a view to the
direct or indirect sale or distribution of such
<PAGE> 5
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PAGE 5 OF 6 PAGES
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shares. Pursuant to the Purchase Agreement, the certificates evidencing the
shares that are the subject of this Schedule 13D shall bear a restrictive legend
with respect to the sale or transfer of such shares, and such legend shall not
be removed in the absence of (i) an effective registration statement under the
Securities Act of 1933, as amended, and any other applicable state securities
laws or (ii) an opinion of counsel reasonably satisfactory to the Issuer, that
such registration is not required.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A Executive Officers and Directors of ChoicePoint Services and
CPI.
Exhibit B Asset Purchase Agreement by and among ChoicePoint Services
Inc., ChoicePoint Inc., Insurance Medical Reporter, Inc., a
California corporation, and the Issuer.
<PAGE> 6
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PAGE 6 OF 6 PAGES
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SIGNATURE
After reasonable inquiry and to the best of their knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
CHOICEPOINT SERVICES INC.
Date: December 22, 1997 By: /s/ Douglas C. Curling
---------------------------
Douglas C. Curling
Executive Vice President and
Chief Financial Officer
<PAGE> 7
EXHIBIT A
DIRECTORS AND EXECUTIVE OFFICERS
OF CHOICEPOINT SERVICES INC. AND
CHOICEPOINT INC.
I. CHOICEPOINT SERVICES INC.
<TABLE>
<CAPTION>
NAME OCCUPATION ADDRESS CITIZENSHIP
---- ---------- ------- -----------
<S> <C> <C> <C>
Derek V. Smith President and Director of 1000 Alderman Drive U.S.A.
ChoicePoint Services Inc. Alpharetta, Georgia
30005
President, Chief Executive 1000 Alderman Drive
Officer and Director of Alpharetta, Georgia
ChoicePoint Inc. 30005
Dan H. Rocco Executive Vice President 1000 Alderman Drive U.S.A.
of ChoicePoint Services Alpharetta, Georgia
Inc. 30005
Executive Vice President 1000 Alderman Drive
of ChoicePoint Inc. Alpharetta, Georgia
30005
Douglas C. Curling Executive Vice President 1000 Alderman Drive U.S.A.
and Treasurer of Alpharetta, Georgia
ChoicePoint Services Inc. 30005
Executive Vice President, 1000 Alderman Drive
Chief Financial Officer Alpharetta, Georgia
and Treasurer of 30005
ChoicePoint Inc.
</TABLE>
A-1
<PAGE> 8
<TABLE>
<S> <C> <C> <C>
K.R. Kavanaugh Vice President of 1000 Alderman Drive U.S.A.
ChoicePoint Services Inc. Alpharetta, Georgia
30005
J. Michael de Janes General Counsel and 1000 Alderman Drive U.S.A.
Secretary of ChoicePoint Alpharetta, Georgia
Services Inc. 30005
General Counsel and 1000 Alderman Drive
Assistant Secretary of Alpharetta, Georgia
ChoicePoint Inc. 30005
C.B. Rogers, Jr. Chairman of the Board of 1000 Alderman Drive U.S.A.
Directors of ChoicePoint Alpharetta, Georgia
Services Inc. 30005
Chairman of the Board of 1000 Alderman Drive
Directors of ChoicePoint Alpharetta, Georgia
Inc. 30005
Chairman of the Board of 1600 Peachtree Street, N.W.
Directors of Equifax Inc. Atlanta, Georgia 30309
Mary McLemore Assistant Secretary of 1000 Alderman Drive U.S.A.
ChoicePoint Services Inc. Alpharetta, Georgia
30005
Jeffrey B. Piefke Assistant Treasurer of 1000 Alderman Drive U.S.A.
ChoicePoint Services Inc. Alpharetta, Georgia
30005
</TABLE>
A-2
<PAGE> 9
II. CHOICEPOINT INC.
<TABLE>
<CAPTION>
NAME OCCUPATION ADDRESS CITIZENSHIP
---- ---------- ------- -----------
<S> <C> <C> <C>
Derek V. Smith President, Chief Executive 1000 Alderman Drive U.S.A.
Officer and Director of Alpharetta, Georgia
ChoicePoint Inc. 30005
President and Director of 1000 Alderman Drive
ChoicePoint Services Inc. Alpharetta, Georgia
30005
Dan H. Rocco Executive Vice President 1000 Alderman Drive U.S.A.
of ChoicePoint Inc. Alpharetta, Georgia
30005
Executive Vice President 1000 Alderman Drive
of ChoicePoint Services Alpharetta, Georgia
Inc. 30005
Douglas C. Curling Executive Vice President, 1000 Alderman Drive U.S.A.
Chief Financial Officer Alpharetta, Georgia
and Treasurer of 30005
ChoicePoint Inc.
Executive Vice President 1000 Alderman Drive
and Treasurer of Alpharetta, Georgia
ChoicePoint Services Inc. 30005
David T. Lee Senior Vice President 1000 Alderman Drive U.S.A.
Alpharetta, Georgia
30005
</TABLE>
A-3
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
J. Michael de Janes General Counsel and 1000 Alderman Drive U.S.A.
Assistant Secretary of Alpharetta, Georgia
ChoicePoint Inc. 30005
General Counsel and 1000 Alderman Drive
Secretary of ChoicePoint Alpharetta, Georgia
Services Inc. 30005
C.B. Rogers, Jr. Chairman of the Board of 1000 Alderman Drive U.S.A.
Directors of ChoicePoint Alpharetta, Georgia
Inc. 30005
Chairman of the Board of 1000 Alderman Drive
Directors of ChoicePoint Alpharetta, Georgia
Services Inc. 30005
Chairman of the Board of 1600 Peachtree Street, N.W.
Directors of Equifax Inc. Atlanta, Georgia 30309
Ron D. Barbaro Director of ChoicePoint 1000 Alderman Drive U.S.A.
Inc. Alpharetta, Georgia
30005
James M. Denny Director of ChoicePoint, 1000 Alderman Drive U.S.A.
Inc. Alpharetta, Georgia
30005
Managing Director of Sears Tower, Suite 8670
William Blair Capital 233 South Wacker
Partners, L.L.C. Chicago, Illinois 60606
Daniel W. McGlaughlin Director of ChoicePoint, 1000 Alderman Drive U.S.A.
Inc. Alpharetta, Georgia
30005
Vice Chairman of the Board 1600 Peachtree Street, N.W.
of Directors and Chief Atlanta, Georgia 30309
Executive Officer of
Equifax Inc.
</TABLE>
A-4
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
Julia B. North Director of ChoicePoint 1000 Alderman Drive U.S.A.
Inc. Alpharetta, Georgia
30005
President and Chief 5801 Goshen Springs Road
Executive Officer of VSI Norcross, Georgia 30371
Enterprises, Inc.
Charles I. Story Director of ChoicePoint 1000 Alderman Drive U.S.A.
Inc. Alpharetta, Georgia
30005
President and Chief First American Center
Executive Officer of 315 Deaderick Street
INROADS, Inc. Box 97
Nashville, Tennessee
37238
</TABLE>
A-5
<PAGE> 12
EXHIBIT B
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, effective as of the 2nd day of December, 1997,
by and among CHOICEPOINT SERVICES, INC., a Georgia corporation ("Seller"),
CHOICEPOINT, INC., a Georgia corporation and the sole shareholder of Seller
("CPI"), INSURANCE MEDICAL REPORTER, INC., a California corporation ("Buyer"),
and PEDIATRIC SERVICES OF AMERICA, INC., a Delaware corporation and the ultimate
parent company of Buyer ("PSA");
W I T N E S S E T H:
WHEREAS, Buyer, in order to expand its operations and lines of
businesses wishes to purchase from Seller that portion of the Physical
Measurements Information ("PMI") line of business of Seller which relates only
to the providing of paramedical examinations for the life and health insurance
industries (the "Business" or the "PMI Business"); and
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, and other good and valuable
consideration in hand received, upon and subject to the terms and the conditions
hereinafter set forth, the parties do hereby agree as follows:
ARTICLE I
I. PURCHASE AND SALE OF ASSETS
1.01 Transfer of the Assets. Subject to the terms and conditions set
forth in this Agreement, as of the effective time of Closing on the Closing
Date, Seller agrees to sell, convey, assign, and transfer to Buyer, and Buyer
agrees to purchase, accept and take from Seller (i) all of the owned assets used
exclusively in the PMI Business, whether tangible or intangible, whether
accrued, contingent or otherwise, including, without limitation the assets,
properties and rights set forth on Schedule 1.01(a) (the "Owned Assets"), except
for those owned assets, properties and rights set forth on Schedule 1.01(b) (the
"Excluded Assets"), and (ii) all of the personal property leased by Seller and
used exclusively in the PMI Business, including without limitation, the leased
personal property set forth on Schedule 1.01(c) (the "Leased Assets"). The Owned
Assets, the Leased Assets and the Leased Real Property, as defined in Section
7.03(b) hereof, are collectively referred to as the "Assets").
1.02 Manner of Effecting Sale. The sale, conveyance, transfer,
assignment and delivery of the Assets by Seller to Buyer shall be effected by
such deeds, bills of sale, endorsements, assignments, transfers and other
instruments of transfer and conveyance in such form, including, without
limitation, warranties of title, as Buyer and Seller in good faith may mutually
agree upon.
In connection with the transfer of all intangible assets,
Seller shall provide to Buyer any and all material written or recorded
information in their possession concerning the Assets, including, without
limitation, documents evidencing Seller's right and title to the trademarks and
trade names used
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<PAGE> 13
in the PMI Business, Seller's PMI sales and purchase records, accounts and
similar documentation necessary for the ongoing operations of the Business
after the Closing.
1.03 Liabilities. It is understood and agreed that Buyer shall not
assume or become liable for the payment of any debts, liabilities, losses,
accounts payable, bank indebtedness, mortgages, litigation, claims or other
obligations of Seller, whether the same are known or unknown, now existing or
hereafter arising, of whatever nature or character, whether absolute or
contingent, liquidated or disputed, except as set forth in Section 7.03 or
pursuant to Buyer's indemnification obligations set forth in Section 7.06 and
10.01(b) to this Agreement.
1.04 Closing; Closing Date. The closing (the "Closing") of the
transactions contemplated by this Agreement shall take place at the offices of
Buyer and PSA located at 3159 Campus Drive, Norcross, Georgia 30071. The Closing
shall take place on or before the 17th day of December, 1997 (the "Closing
Date") unless delayed due to the action of third party regulatory authorities,
or mutual consent of the parties hereto, in which case the Closing shall occur
in as timely a manner as is possible. The parties agree that Seller, Buyer and
PSA shall use their respective commercially reasonable best efforts to close as
soon as possible after the execution of this Agreement and after the expiration
or early termination of the Hart-Scott-Rodino filing.
ARTICLE II
PURCHASE PRICE
2.01 (a) Aggregate Purchase Price of the Assets. The aggregate purchase
price of the Assets (the "Purchase Price") shall be Twenty-Six Million Dollars
and No/100 ($26,000,000), which shall be payable at Closing as follows: (i)
$16,000,000 to Seller at the Closing by wire transfer, subject to adjustment as
set forth in subsection (b) below, (ii) $10,000,000 shall be in the form of
shares of Common Stock of PSA (the "PSA Shares"). The exact number of PSA Shares
comprising the Purchase Price payable at Closing shall be determined by dividing
$10,000,000 by the average closing price of the Common Stock of PSA on the
NASDAQ National Market System for the 15-day period ended on the fifth business
day prior to the Closing Date ("Average Share Price"), with any fractional share
created by such computation rounded to the nearest whole number of shares.
(b) Adjustment to Purchase Price. In lieu of Seller transferring
(i) certain assets identified on the Asset and Liabilities Listing (included in
Schedule 4.04 hereto) and listed as Excluded Assets on Schedule 1.01(b) having
an aggregate value on September 30, 1997 of $7,776,580, and (ii) operating
liabilities associated with the PMI Business other than those described in
Section 7.03 hereof in the aggregate amount on September 30, 1997 of
$3,483,591, the parties agree that Buyer will reduce the amount of cash paid to
Seller at the Closing by $4,292,990, which is equal to the net amount of such
Excluded Assets and liabilities.
(c) Price Protection for PSA Shares. (i) For a period of one (1)
year following the Closing Date, Seller shall be protected from a decrease in
the Average Share Price of any PSA Shares sold in the marketplace if and to the
extent that any PSA Shares are sold by Seller for less than the Average Share
Price ("Price Decrease"). Buyer and PSA
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<PAGE> 14
shall each month reimburse Seller in cash for any Price Decrease by paying
Seller the difference between the actual sale price and the Average Sale Price
multiplied by the number of PSA Shares sold. If there is any net gain by Seller
in any month during the one-year period after Closing, then Seller shall
reimburse Buyer for amounts previously paid by Buyer to Seller pursuant to this
subsection to the extent of such net gains. Any of the aforementioned payments
shall be made within 15 days after the end of each calendar month during the
one-year period following Closing.
(ii) Buyer shall share equally with Seller in any
increase in value of the PSA Shares sold in the marketplace by Seller during
such one-year period if and to the extent that the average price per share of
all PSA Shares sold by Seller during the one-year period following Closing is
greater than 20% of the Average Share Price ("Share Price Increase"). The Share
Price Increase shall be multiplied by the number of PSA Shares sold to determine
the total payment due Buyer. Any such payment shall be made by Seller to Buyer
on the earlier to occur of (A) fifteen (15) days after the first anniversary of
the Closing Date, or (B) fifteen (15) days after the sale of all PSA Shares has
been completed.
(iii) For each sale of PSA Shares during the one-year
period, Seller shall submit to Buyer proof of the price at which such PSA
Shares were sold. For and in consideration of the foregoing make whole
provision, Seller covenants and agrees that it will work in good faith with PSA
and its financial advisors to effect an orderly sale of all of the PSA Shares
into the market during the one (1) year period. After such one (1) year period,
Seller shall be free to effect sales of PSA Shares without any duty to work with
or otherwise consult PSA or its financial advisors.
2.02 Manner and Basis of Transfer of PSA Shares. From and after the
Closing Date, Seller shall be entitled to receive the PSA Shares from Chase
Mellon Shareholder Services, as Transfer Agent. On the Closing Date, PSA shall
transmit irrevocable instructions in the form of Exhibit 8.06 hereto to the
Transfer Agent to issue the PSA Shares to Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLER REGARDING SECURITIES LAWS
The following representations are made by Seller to PSA and Buyer, and
shall survive the Closing but shall terminate and have no further effectiveness
upon the filing and effectiveness of the Registration Statement, as set forth in
Section 7.05 of this Agreement, or upon any other effective registration of the
PSA Shares.
3.01 Investment Intent. The agreement to issue the PSA Shares to Seller
is made in reliance upon the representations of Seller to PSA and Buyer, that
the PSA Shares to be acquired by Seller, will
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<PAGE> 15
be acquired for investment for Seller's own account, not as a nominee or agent,
and not with a view to the direct or indirect sale or distribution of any part
thereof. By executing this Agreement, Seller further represents that Seller has
no present intention of selling, transferring, granting any participation in, or
otherwise distributing any of the PSA Shares and that Seller has no contract,
undertaking, agreement, arrangement or understanding with any person to sell,
transfer, grant any participation in or otherwise distribute any of the PSA
Shares except upon registration as provided in Section 7.05.
(b) Seller hereby represents that it is domiciled in the State
of Georgia, having its principal place of business in such State. Seller
understands and acknowledges that the PSA Shares being offered and sold to it
pursuant to this Agreement will not be registered at the time of Closing under
the Securities Act of 1933, as amended (the "Securities Act"), or the Georgia
Securities Act of 1973, as amended (the "Georgia Act"), on the grounds that the
offering and sale of the PSA Shares are exempt from registration pursuant to,
inter alia, Section 4(2) of the Securities Act and Paragraph (13) of Code
Section 10-5-9 of the Georgia Act. Accordingly, Seller understands and agrees
that for a period of at least one year from the date of issuance of the PSA
Shares, there will be maintained on the certificates evidencing the PSA Shares,
or any substitutions therefor, the restrictive legend set forth below, except
that PSA shall cause the removal of such legend (i) upon the Registration
Statement filed pursuant to Section 7.05 hereof being declared effective by the
Securities and Exchange Commission, or (ii) if, in the opinion of counsel
reasonably satisfactory to PSA, such legend is not required at any time or with
regard to any proposed transfer of the PSA Shares in order to establish
compliance with any provisions of the Securities Act and applicable state
securities laws. From and after the Closing until the Registration Statement
filed pursuant to Section 7.05 hereof has been declared effective by the
Securities and Exchange Commission, PSA agrees to make available information to
satisfy the requirements of Rule 144(c) under the Securities Act and, except as
set forth in Section 7.05 herein, Seller understands PSA is under no obligation
to register the PSA Shares under the Securities Act or any state securities act
or to take any other action necessary to comply with an available exemption or
regulation under any such acts in order to permit Seller to sell, transfer or
otherwise dispose of the PSA Shares.
(c) Seller represents that it (i) has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of such prospective investment in the PSA Shares; (ii) has
received all the information requested from Buyer and PSA and necessary to
verify the accuracy of the information furnished by PSA pursuant to Section 5.04
hereof, and there has been made available to Seller the opportunity to ask
questions and to receive answers from representatives of Buyer and PSA relative
to its investment in the PSA Shares; and (iii) has the ability to be able to
bear the economic risks of such prospective investment and is able, without
materially impairing its financial condition, to hold the PSA Shares for an
indefinite period of time and to suffer a complete loss on its investment.
(d) Until the earlier to occur of (i) the effective date of
the registration statement filed pursuant to Section 7.05 hereof, or (ii) the
satisfaction of the conditions of Rule 144(k), all certificates for the PSA
Shares shall bear the following legends:
RESTRICTIVE LEGEND
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<PAGE> 16
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE GEORGIA SECURITIES ACT OF 1973, AS
AMENDED (THE "GEORGIA ACT"), IN RELIANCE ON THE EXEMPTIONS
FROM REGISTRATION CONTAINED IN SECTION 4(2) OF THE SECURITIES
ACT, AND PARAGRAPH (13) OF CODE SECTION 10-5-9 OF THE GEORGIA
ACT, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF (i) AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT THERETO UNDER
THE SECURITIES ACT, THE GEORGIA ACT, AND ANY OTHER APPLICABLE
STATE SECURITIES LAWS OR (ii) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO PSA THAT SUCH REGISTRATION IS NOT REQUIRED.
ARTICLE IV
REPRESENTATIONS OF SELLER
Seller hereby represents and warrants, with respect to itself
and the Assets, to PSA and Buyer as follows (for purposes of the following
representations and warranties, any matters set forth on any Schedule relating
to any Subsidiary shall specifically refer to such Subsidiary):
4.01 Organization and Authorization.
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation and has
all requisite power and authority, corporate or otherwise, to carry on and
conduct its business as it is now being conducted and to own or lease its
properties and assets, and is duly qualified and in good standing in the states
set forth on Schedule 4.01(a). Seller is duly qualified and in good standing in
every state of the United States in which the conduct of the Business or the
ownership of the Assets requires it to be so qualified except where the failure
to be so qualified would not have a material adverse effect on the operations or
financial condition of the PMI Business or the Assets ("Material Adverse
Effect").
(b) Except as set forth on Schedule 4.01(b), Seller has no
direct or indirect wholly or partially owned subsidiaries ("Subsidiaries") or
owns any capital stock or other securities of, or any proprietary interest in,
any corporation, partnership, joint venture or other business entity related to
or through which any part of the PMI Business is operated.
4.02 Authority. Seller has the right, power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Seller and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Seller. This
Agreement, when executed by Seller, will constitute Seller's legal, valid and
binding obligations, enforceable in accordance with their terms, except as
enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the
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<PAGE> 17
enforcement of creditors rights generally, or by public policy with respect to
indemnification provisions hereof.
4.03 No Requirement for Shareholder Vote. The transactions contemplated
in this Agreement do not require the vote of the shareholders of Seller under
the Georgia Business Corporation Act.
4.04 Financial Statements. Seller has provided Buyer with unaudited
financial statements of CPI filed on Form 10Q for the periods ending June 30,
1997 and September 30, 1997. Buyer acknowledges that it is acquiring certain
assets of a line of business of Seller, and with respect to such line of
business only certain financial information is available. Schedule 4.04 contains
profit and loss information for the PMI Business for the period of October 1,
1996 through September 30, 1997 (the "P&L Statement"), and a listing of the
Assets and listing of the liabilities incurred by or allocated to the PMI
Business as of September 30, 1997 (the "Assets and Liabilities Listing", and
together with the P&L Statement, the "Financial Statements"). The Financial
Statements have been prepared in good faith by Seller and present fairly the
results of operations of the PMI Business and the revenues, direct costs and
allocated costs of the PMI Business, other than taxes and certain
post-employment and post-retirement obligations set forth on Schedule 4.04, as
of the period then ended. The Financial Statements have been prepared from the
books and records of Seller using the same procedures as used to prepare the
financial statements filed on Form 10-Q by CPI. The Financial Statements do not
contain any material items of special or nonrecurring income or any other income
not earned in the ordinary course of business.
4.05 No Undisclosed Liabilities. Since September 30, 1997, Seller has
not incurred any liability or obligation whatsoever with respect to the PMI
Business or Assets, except for liabilities and obligations incurred by Seller in
the ordinary course of business consistent with past practice or as reflected on
Schedule 4.05.
4.06 No Violation of Law. Except as reflected on Schedule 4.15, with
respect to the PMI Business or Assets, Seller is not, has not been and will not
be (by virtue of any past or present action, omission to act, contract to which
it is a party or any occurrence or state of facts whatsoever) in material
violation of any applicable local, state or federal law, ordinance, regulation,
order, injunction or decree, or any other requirement of any governmental body,
agency or authority or court binding on Seller, or material to its PMI Business
or Assets, or its advertising, sales or pricing practices (including, without
limitation, any antitrust laws and regulations), nor will Seller hereafter
suffer or incur any loss, liability, penalty or expense (including, without
limitation, attorneys' fees) by virtue of any such violation.
4.07 Property.
(a) The Assets and Liabilities Listing attached hereto as
Schedule 4.04(b) fairly presents the Owned Assets. Schedule 1.01(c) fairly
presents the Leased Assets. The Assets, together with the Majority Shared Leased
Space and Minority Shared Leased Space (both as defined in Section 7.03 hereof)
and the assets, services and resources to be shared or otherwise provided
pursuant to the Transition Support Agreement, the form of which is attached
hereto as Exhibit 6.07 and the Strategic Alliance Agreement, the form of which
is attached hereto as Exhibit 7.10, comprise those assets, properties and rights
necessary to operate the PMI Business substantially in the manner as it is
presently conducted.
(b) Seller (i) has good and valid title to all the Assets
which it purports to own, including all the real and personal properties and
assets reflected, but not shown as leased or encumbered, in the Asset and
Liability Listing (except for inventory and assets sold in the ordinary course
of business
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<PAGE> 18
consistent with past practice and supplies consumed in the ordinary course of
business consistent with past practice); and (ii) except for Permitted Liens (as
defined hereafter), owns such Assets free and clear of all liens, restrictions,
claims, charges, security interests, easements or other encumbrances of any
nature whatsoever, including any mortgages, leases, chattel mortgages,
conditional sales contracts, collateral security arrangements and other title or
interest retention arrangements. "Permitted Liens" shall mean (x) the security
interests, easements or other encumbrances described in Schedule 4.07(b); and
(y) liens for property taxes not yet due and payable. All Assets are in the
possession or control of Seller.
(c) Except as set forth on Schedule 4.07(c), the plants,
structures and equipment owned or leased by Seller in the PMI Business having a
book value in excess of $500 are in good operating condition and repair, subject
to ordinary wear and tear.
4.08 Intellectual Property.
(a) Generally. Schedule 4.08(a) sets forth a complete and
accurate list and description of (i) all material patents, trademarks, service
marks, trademark and service mark registrations, trademark and service mark
registration applications, label filings, copyrights, inventions, patents and
patent applications owned or used by Seller exclusively in the PMI Business and
all agreements with respect thereto, and the jurisdiction in or by which such
trademarks, service marks, trademark and service mark registrations, trademark
and service mark registration applications, label filings, copyrights, patents
and patent applications have been registered, filed or issued; (ii) all material
trade names owned or used by Seller exclusively in the PMI Business and, in the
case of each trade name owned by Seller, the jurisdiction in which such trade
name has been registered or filed; and (iii) all written contracts or agreements
relating to any of the items listed in clauses (i) and (ii) above that are owned
or used by Seller. There are no oral agreements relating to any of the items
listed in clauses (i) and (ii) above. Except as described in Schedule 4.08(a),
Seller is not aware of any adverse claim against the intellectual property set
forth on Schedule 4.08(a) and, except as set forth on Schedule 4.08(a), there
are no royalty, commission or similar arrangements, and no licenses, sublicenses
or agreements pertaining to any of the intellectual property set forth on
Schedule 4.08(a) which will remain in effect at Closing. To the knowledge of
Seller, Seller, in the operation of its PMI Business, has not heretofore
infringed upon, and is not now infringing upon, any patent, service mark, trade
name, trademark, copyright, trade secret, or other intellectual property
belonging to any other person and, except as set forth on Schedule 4.08(a),
Seller has not agreed to indemnify any person for or against any infringement of
or by the intellectual property set forth on Schedule 4.08(a). Seller does not
know of any person infringing upon any of Seller's patents, service marks,
trademarks, copyrights, trade secrets, or other intellectual property used
exclusively in the PMI Business.
(b) Computer Software and Databases. Schedule 4.08(b)
accurately identifies the function of all computer software and databases owned,
licensed, leased, internally developed exclusively for, or otherwise exclusively
used in connection with, billing and collection, payroll, information reports or
administration in the PMI Business (the "Systems"). Other systems are shared by
the PMI Business and other Seller units and, therefore, are not being
transferred pursuant to this Agreement. Provided, however, as an accommodation
to Buyer to assist in the transition of the PMI Business, Seller will make
available, as needed by Buyer, certain administrative support services, and
systems maintenance and
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<PAGE> 19
support provided by the Systems for the period running from Closing through and
including June 30, 1998, unless extended by mutual consent of Buyer and Seller.
The foregoing support will be provided pursuant to that certain Transition
Support Agreement, attached hereto as Exhibit 6.07.
4.09 Litigation. Schedule 4.09 sets forth (i) all suits, indictments,
arbitrations, grand jury investigations, or litigation, and (ii) all claims,
actions, investigations, indictments or other proceedings (together,
"Proceedings") to the knowledge of Seller pending (except for complaints arising
in the ordinary course of business, consistent with past practice which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, before any court, commission, arbitration tribunal, or
judicial, governmental or administrative department, body, agency, administrator
or official, grand jury, or any other forum for the resolution of grievances,
against Seller and involving or in any way relating to the PMI Business or
Assets. To the knowledge of Seller, no Proceedings are threatened against Seller
which could reasonably be expected to have a Material Adverse Effect. Further,
except as set forth in Schedule 4.09, there are no unsatisfied judgments,
orders, writs, injunctions, decrees, indictments or informations, grand jury
subpoenas or civil investigative demands, plea agreements, stipulations or
awards (whether rendered by a court, commission, arbitration tribunal, or
judicial, governmental or administrative department, body, agency, administrator
or official, grand jury or any other forum for the resolution of grievances)
against or relating to Seller and involving or in any way relating to the PMI
Business or Assets. Seller, upon Buyer's reasonable request, will make available
to Buyer true, correct and complete copies of pleadings, briefs and other
documents filed in each Proceeding listed in Schedule 4.09, and the unsatisfied
judgments, orders, writs, injunctions, decrees, indictments and informations,
grand jury subpoenas and civil investigative demands, plea agreements,
stipulations and awards listed in said Schedule except when, in the good faith
opinion of Seller's outside legal counsel, it is subject to the attorney-client
and/or work product privileges. Seller has no knowledge of any facts or
conditions that are reasonably likely to result in any Proceeding or any
Material Adverse Effect.
4.10 Employees. Schedule 4.10 sets forth the names and current
compensation (broken down by category, e.g., salary, bonus, commission) of all
employees utilized solely in the PMI Business ("Employees"), together with the
date and amount of the last increase in compensation for each such person.
Schedule 4.10 also lists any independent contractors utilized exclusively in the
PMI Business ("Contractors"), and the amounts paid to such Contractors from
January 1, 1997 through September 30, 1997. There are no employment agreements
for Employees.
4.11 Employee Benefits.
(a) Schedule 4.11 sets forth a complete and accurate list and
brief description of all written agreements, arrangements, commitments, plans,
trusts, policies or understandings of any kind (i) which relate to employee
benefits, including without limitation, any profit-sharing, pension, stock
option, severance, retirement, bonus, deferred compensation, group life and
health insurance; (ii) which pertain to Employees; and (iii) which were or are
currently maintained by, sponsored by, or contributed to by Seller, or any
employer which, under Section 414 of the Internal Revenue Code (the "Code"),
would constitute a single employer with Seller (a "Company Affiliate") or as to
which Seller or any Company Affiliate has any ongoing liability or obligation
whatsoever (collectively, "Employee Benefit Plans"), including, but not limited
to, all written: (A) employee benefit plans as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); (B) all
other deferred compensation, early retirement, incentive, profit-sharing,
thrift, stock ownership, stock appreciation rights,
B-8
<PAGE> 20
bonus, stock option, stock purchase, welfare or vacation, or other nonqualified
benefit plans or arrangements; and (C) trusts, group annuity contracts,
insurance policies or other funding media for the plans and arrangements
described hereinabove to the extent that any of the above are maintained or
contributed to by and of said entities for current Employees. Other than
identified on Schedule 4.11, neither Seller nor any Company Affiliate has
maintained or contributed to, or has ever maintained or contributed to, or been
obligated to contribute to, and no Employee Benefit Plan is, an "employee
pension benefit plan" within the meaning of ERISA ss.3(2), including any
"multiemployer plan" within the meaning of ERISA ss.3(37). All Employee Benefit
Plans have been operated and administered in material compliance with all
applicable laws.
(b) Seller warrants that Buyer shall not be subject to any
liability resulting from the termination by Seller of any Employee, or
termination of or change in any Employee Benefit Plan with respect to the
Employees. Seller also warrants that Buyer shall not be liable for any accrued
vacation or sick leave benefits or pay with respect to any Employees, officers,
agents, or contractors of Seller. Buyer agrees to offer employment to any
Employees who are on short-term disability or maternity leave of absence as of
December 31, 1997, which employment shall commence upon the termination of such
leave of absence. Buyer shall not be required to offer employment to any
Employee who is on long-term disability leave as of December 31, 1997.
4.12 Collective Bargaining. There are no labor contracts, collective
bargaining agreements, letters of understanding or other arrangements, formal or
informal, with any union or labor organization covering any Employees and none
of said Employees are represented by any union or labor organization.
4.13 Labor Disputes. Seller is in material compliance with all federal
and state laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, with respect to the Employees and
Contractors. Seller is not and has not been engaged in any unfair labor
practice, and no unfair labor practice complaint against Seller is pending
before the National Labor Relations Board with respect to the Employees. Seller
does not know of any labor strike or other labor trouble actually pending, being
threatened against, or affecting Seller's Employees. Relations between
management and labor are amicable and there have not been, nor are there
presently, any attempts to organize non-union Employees, nor, to Seller's
knowledge, are there plans for any such attempts.
4.14 Tax Matters.
(a) Definitions. For purposes of this Agreement, the following
definitions shall apply:
(i) The term "Taxes" shall mean all taxes, however
denominated, including any interest, penalties or other
additions to tax that may become payable in respect thereof,
imposed by any federal, territorial, state, local or foreign
government or any agency or political subdivision of any such
government, which taxes shall include, without limiting the
generality of the foregoing, all income or profits taxes
(including, but not limited to, federal income taxes and state
income taxes), payroll and employee withholding taxes,
unemployment insurance, social security taxes, sales and use
taxes, ad valorem taxes, excise taxes, franchise taxes, gross
receipts taxes, business license taxes, occupation taxes, real
and personal property taxes, stamp taxes, environmental taxes,
transfer taxes, workers' compensation, Pension Benefit
Guaranty Corporation premiums
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<PAGE> 21
and other governmental charges, and other obligations of the
same or of a similar nature to any of the foregoing, which
Seller is required to pay, withhold or collect.
(ii) The term "Returns" shall mean all reports,
estimates, declarations of estimated tax, information
statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or
reports with respect to backup withholding and other payments
to third parties.
(b) Returns Filed and Taxes Paid. Within the times and in the
manner prescribed by law, Seller, with respect to the PMI Business and Assets,
has filed all Returns required to have been filed by Seller, and has timely paid
or made adequate provision for payment of all Taxes, assessments and penalties
when due and payable. On the Closing Date, except for Permitted Liens, there
will be no Tax liens or liabilities which are not paid against any of the PMI
Assets nor will there be any overdue Taxes which in any way affect the PMI
Business or Assets. As they relate to the PMI Business or Assets, Seller shall
pay, when due, all Taxes attributable to periods ending on and prior to the
Closing Date. Seller, with respect to the PMI Business and Assets has made all
payments and withholdings of Taxes and other sums as required by appropriate
governmental authorities and has withheld and paid to the appropriate
governmental authorities, or is holding for payment not yet due to such
authorities, and will pay when due, all amounts required to be withheld from
Employees of Seller or any of its Affiliates in the PMI Business, and is not
liable for any arrearages of wages, taxes, penalties or other sums for failure
to comply with any laws, rules or regulations relating to the foregoing.
4.15 Required Licenses and Permits. Seller has all licenses, permits or
other authorizations ("Licenses") of governmental authorities necessary for the
conduct of the PMI Business. A correct and complete list of all Licenses
applicable exclusively to the PMI Business is set forth on Schedule 4.15. Seller
has made available to Buyer true, correct and complete copies of all written
Licenses listed on Schedule 4.15, and except as set forth on Schedule 4.15, such
Licenses have not been suspended or revoked and there are no proceedings or
actions pending or, to the knowledge of Seller, threatened, to materially and
adversely modify or restrict, or to revoke any of such Licenses.
4.16 Environmental Requirements. Seller is, with respect to the the
Assets, including the PMI leased locations, in compliance with all applicable
requirements, restrictions, limitations, conditions, standards, prohibitions,
and obligations contained in all federal, state, and local laws relating to
environmental, land use, health, or safety matters, including any and all
regulations, codes, plans, orders, decrees, judgments, and notices issued,
entered, promulgated, or approved thereunder ("Environmental Laws"), except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. None of the PMI Assets or locations are, as a result of
any actions, operations, or activities of Seller or any officer, Affiliate,
agent, employee, or contractor of Seller on any federal or state "Superfund"
list or, to the knowledge of Seller, has been the site of any activity that
would violate any Environmental Laws.
4.17 Insurance Policies. Seller currently maintains, and for the past
two (2) years Seller or its predecessor in interest has maintained with respect
to the PMI Business and Assets, the listed insurance coverages exceeding the
minimum limits set forth below:
COVERAGES MINIMUM LIMITS
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<PAGE> 22
<TABLE>
<S> <C>
Property, Fire & Casualty Value of Property
Workmen's Compensation Statutory Limits
General Liability $1,000,000
Umbrella Policy $5,000,000
</TABLE>
(together "Insurance Policies")
Attached as Schedule 4.17 is, to the best of Seller's knowledge, a true, correct
and complete listing of all worker's compensation claims relating to the
Employees or the PMI Business for the last two years, and the disposition
thereof. Seller has not received notice of any pending or threatened termination
or premium increase (retroactive or otherwise) with respect thereto, and Seller
is in material compliance with all conditions contained therein. To the
knowledge of Seller, there have been no lapses (whether cured or not) in the
coverage provided under the Insurance Policies, referenced herein and as set
forth on Schedule 4.17, during the term of such policies, as extended or
renewed. Each of the general commercial liability policies of Seller is an
occurrence type policy, or if not, then Seller will carry claims made policies
that cover the former PMI Business and Employees for a period of at least two
(2) years after the Closing Date, but in no event will Seller be required to
purchase third party insurance coverage for any risk it currently self-insures.
4.18 Major Suppliers and Customer. Schedule 4.18 sets forth a list of
each major supplier of goods or services (excepting Contractors) exclusively to,
or customers or clients exclusively of, the PMI Business, who Seller paid to or
collected from in the aggregate more than $50,000 (solely with respect to the
PMI Business) during the 9-month period ended September 30, 1997, together with
the amount paid or billed during such period solely with respect to the PMI
Business. Seller is not engaged in any material dispute with any of such
suppliers, customers or clients. Seller has no actual knowledge that the
consummation of the transactions contemplated hereunder will materially and
adversely affect the relationship of the PMI Business with any such supplier,
customer or client.
4.19 Contracts and Commitments. The loans, mortgages, pledges,
guaranties, or similar agreements under which Seller may have any liability or
responsibility (contingent or otherwise) and the leases, agreements, and
contracts (or, where appropriate, forms of standardized contracts), all as
listed on Schedule 4.19 (hereinafter referred to collectively as the "Corporate
Agreements"), include all of the material loans, mortgages, pledges, guaranties,
or similar agreements and all leases, agreements, and contracts relating
exclusively to the PMI Business or Assets to which Seller is a party or by which
Seller is bound as of the date hereof. For purposes of the foregoing list of
Corporate Agreements, "material" means an obligation to pay or a right to
receive $50,000 or more. Seller has made available to Buyer true and correct
copies of the Corporate Agreements. Except as set forth on Schedule 4.19 and
except as may be limited by bankruptcy, insolvency, reorganization and other
similar laws affecting the rights and remedies of creditors generally, as well
as general principles of equity, the Corporate Agreements are all valid and
binding agreements of Seller and have not been modified or amended. Except as
disclosed on Schedule 4.19, neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will terminate, vary, or
constitute a material breach of any of the Corporate Agreements. No material
default by Seller has occurred, nor has any action been taken or omitted by
Seller which, with the lapse of time or the election of any person other than
Seller, will become a default by Seller, nor, to the knowledge of Seller has
there occurred any default by others or any event which, with the lapse of time
or the election of Seller, will become a default under, any of the Corporate
Agreements. Seller, to its knowledge, has not received notification that any
other party to any of the
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<PAGE> 23
Corporate Agreements will or may cancel any of the Corporate Agreements, or
that the performance of any Corporate Agreements will result in a material loss
to the PMI Business.
4.20 No Conflict. The execution and delivery of this Agreement by
Seller, the consummation of the transactions contemplated herein by Seller
(including the transfer of the Assets), and the performance of the covenants and
agreements of Seller, subject to fulfillment of the conditions set forth in
Sections 9.02 and 9.03 hereof, will not, with or without the giving of notice or
the lapse of time, or both, (i) violate or conflict with any of the provisions
of any charter document or bylaw of Seller; or (ii) except as set forth in
Schedule 4.20, violate, conflict with or result in a breach or default under or
cause termination of any term or condition of any material mortgage, indenture,
contract, license, permit, instrument, trust document, will, or other agreement,
document or instrument to which Seller is a party or by which Seller or any of
the Assets may be bound; or (iii) violate any provision of law, statute,
regulation, court order or ruling of any governmental authority, to which Seller
and the PMI Business are subject or by which the Assets or PMI Business may be
bound that is material to the PMI Business or the Assets, or (iv) result in the
creation or imposition of any lien, claim, charge, restriction, security
interest or encumbrance of any kind whatsoever upon any Asset.
4.21 Required Consents and Approvals. Except as set forth in Schedule
4.21, no material consent or approval is required by virtue of the execution
hereof by Seller or the consummation of any of the transactions contemplated
herein by Seller to avoid the violation or breach of, or the default under, or
the creation of a lien on the Assets pursuant to the terms of, any regulation,
order, decree or award of any court or governmental agency or any lease,
agreement, contract, mortgage, note, license, or any other instrument to which
Seller is a party or to which it or any of the Assets is subject.
4.22 Absence of Certain Changes and Events. Except as set forth in
Schedule 4.22, since September 30, 1997, Seller has conducted the PMI Business
only in the ordinary course, and has not with respect to the PMI Business:
(a) suffered any damage or destruction which could reasonably
be expected to have a Material Adverse Effect;
(b) suffered any material adverse change in the financial
condition, results of operations, business, prospects, Assets, or liabilities
(contingent or otherwise) which could reasonably be expected to have a Material
Adverse Effect;
(c) suffered any material adverse change in its working
relationships with any suppliers or customers listed on Schedule 4.18;
(d) except for customary increases based on term of service or
regular promotion of non-officer employees, increased (or announced any increase
in) the compensation payable or to become payable to any Employee or Contractor,
or increased (or announced any increase in) any bonus, insurance, pension or
other employee benefit plan, payment or arrangement for such Employees or
Contractors, or entered into or amended any employment, consulting, severance or
similar agreement;
(e) incurred, assumed or guaranteed any liability or
obligation (absolute, accrued, contingent or otherwise) other than in the
ordinary course of business consistent with past practice;
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<PAGE> 24
(f) paid, discharged, satisfied or renewed any claim,
liability or obligation other than payment in the ordinary course of business
and consistent with past practice;
(g) permitted any of the Assets to be subjected to any
mortgage, lien, security interest, restriction, charge or other encumbrance of
any kind except as set forth in Schedule 4.07(b) hereof;
(h) waived any material claims or rights;
(i) sold, transferred or otherwise disposed of any of the
Assets, except in the ordinary course of business consistent with past practice;
(j) made any single capital expenditure or investment in
excess of $50,000;
(k) made any change in any method, practice or principle of
financial or tax accounting;
(l) managed working capital components, including cash,
receivables, other current assets, trade payables and other current liabilities
in a fashion inconsistent with past practice, including failing to sell
inventory and other property in an orderly and prudent manner or failing to make
all budgeted and other normal capital expenditures, repairs, improvements and
dispositions;
(m) paid, loaned, advanced, sold, transferred or leased any
Asset to any employee, except for normal compensation involving salary and
benefits;
(n) entered into any material commitment or transaction, other
than in the ordinary course of business consistent with past practice, affecting
the PMI Business; or
(p) agreed in writing, or otherwise, to take any action
described in this Section.
4.23 Accounts Receivable. With respect to all accounts receivable
of the PMI Business, as listed on Schedule 4.23:
(a) each such account is based on an actual and bona fide
rendition of services or the provision of goods in the ordinary course of its
business and each such account is payable by a third party obligor or another
person which Seller has identified as being financially obligated to do so;
(b) the third party obligors and any other person identified
by Seller as being financially obligated to pay each account are obligated to
pay all amounts shown to be due on each such account without dispute, reduction
in an amount for any reason whatsoever, offset, defense or counterclaim, except
for normal adjustments in the ordinary course of business;
(c) except as set forth in Schedule 4.23, no account has
arisen based upon any contract with any federal or state agency;
(d) none of the accounts represent services furnished or
provided to or on behalf of any subsidiary, parent, person, associate or other
entity affiliated, directly or indirectly, with Seller except as listed on
Schedule 4.23;
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<PAGE> 25
(e) Seller is in possession of all material documents
necessary to obtain payment from the third party obligor or any other person
with respect to each account;
(f) each account is payable only in U.S. dollars; and
(g) except for a reserve of .69% and immaterial normal
adjustments in the ordinary course of business, all accounts are current and
fully collectible without resort to legal proceedings or collection agencies.
4.24 Due Diligence. Seller acknowledges that Ernst & Young, LLP,
performed financial due diligence on behalf of Buyer and PSA in connection with
this transaction, and hereby represents that all due diligence material provided
to Ernst & Young by Seller was accurate in all material respects.
4.25 Disclosure. No representations, warranties, assurances or
statements by Seller in this Agreement and no statement contained in any
Schedules hereto, certificates or other documents delivered to Buyer by Seller
or its agents (or caused to be furnished by Seller) on the date hereof, or from
the date hereof up to and including the Closing Date, pursuant to the provisions
hereof contains or will contain any untrue statement of material fact, or omits
or will omit to state any material fact necessary, in light of the circumstances
under which it was made, in order to make the statements herein or therein not
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PSA AND BUYER
Buyer and PSA hereby jointly and severally represent and
warrant to Seller and CPI as follows:
5.01 Organization. (a) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and has
all requisite power and authority, corporate or otherwise, to carry on and
conduct its business as it is now being conducted and to own or lease its
properties and assets, and is duly qualified and in good standing in every state
of the United States in which the conduct of the business of Buyer or the
ownership of its properties and assets requires it to be so qualified except
where the failure to be so qualified would not have a material adverse effect on
the operations or financial condition of Buyer.
(b) PSA is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and its capitalization
is 80,000,000 shares: 78,000,000 shares of Common Stock, $0.01 par value, of
which 6,268,228 are issued and outstanding immediately prior to the date of this
Agreement, and 2,000,000 shares of Preferred Stock, of which no shares are
issued and outstanding as of the date hereof. PSA has all requisite power and
authority, corporate or otherwise, to carry on and conduct its business as it is
now being conducted and to own or lease its properties and assets, and is duly
qualified and in good standing in every state of the United States in which the
conduct of the business of PSA or the ownership of its properties and assets
requires it to be so qualified except where the failure to be so qualified would
not have a material adverse effect on the operations or financial condition of
PSA.
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<PAGE> 26
5.02 Authorization. Each of PSA and Buyer has the right, power and
capacity to execute, deliver and perform this Agreement and all other
agreements, documents and instruments to be executed by PSA or Buyer, as
applicable, in connection with the transactions contemplated hereby (the
"Transaction Documents") and to consummate the transactions contemplated hereby.
The execution, delivery and performance of the Transaction Documents, and the
consummation of the transactions contemplated thereby, have been duly and
validly authorized by all necessary corporate action on the part of PSA and
Buyer. The Transaction Documents have been duly and validly executed and
delivered by PSA and Buyer and constitute, as applicable, PSA's and Buyer's
legal, valid and binding obligation, enforceable against each of them, as
applicable, in accordance with their terms, except as enforceability may be
limited by applicable equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws from time to time in effect
affecting the enforcement of creditors rights generally, or by public policy
with respect to indemnification provisions hereof.
5.03 No Conflict. The execution and delivery of the Transaction
Documents by PSA and Buyer, the consummation of the transactions contemplated
therein by PSA and Buyer, and the performance of the covenants and agreements of
PSA and Buyer will not, with or without the giving of notice or the lapse of
time, or both, (a) violate or conflict with any of the provisions of any charter
document or bylaw of PSA or Buyer; (b) violate, conflict with or result in
breach or default under or cause termination of any term or condition of any
mortgage, indenture, contract, license, permit, instrument, trust document, or
other agreement, document or instrument to which PSA or Buyer is a party or by
which PSA or Buyer or any of their respective properties may be bound; or (c)
violate any provision of law, statute, rule, regulation, court order, judgment
or decree, or ruling of any governmental authority, to which PSA or Buyer is a
party or by which PSA or Buyer or their respective properties may be bound.
5.04 Current Public Information; Material Facts. Buyer and PSA have
furnished Seller with copies of the following documents pertaining to PSA:
(a) An Annual Report of Form 10-K for the year ended September
30, 1996;
(b) an Annual Report to Shareholders (the "Annual Report") for
the year ended September 30, 1996;
(c) a proxy statement for PSA's 1996 Annual Meeting;
(d) Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1996, March 31, 1997, and June 30, 1997; and
(e) Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 if publicly released prior to the date
hereof.
(collectively, the "Disclosure Documents")
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<PAGE> 27
Since the date of the last filed Disclosure Document, PSA has not filed any
current reports on Form 8-K under the Securities Exchange Act of 1934, as
amended.
This Agreement and the Disclosure Documents and any other document,
certificate or other writing furnished to Seller by or on behalf of Buyer or PSA
in connection with the transactions contemplated hereby do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained herein or therein, in the light of the
circumstances under which they were made, not misleading.
5.05 No Violation of Law. Neither Buyer nor PSA is in material
violation of any applicable material local, state or federal law, ordinance,
regulation, order, injunction or decree, or any other requirement of any
governmental body, agency or authority or court binding on Buyer or PSA,
respectively, or material to their respective operations.
5.06 Litigation. There are no Proceedings pending, or to PSA's or
Buyer's knowledge, threatened before any court, commission, arbitration
tribunal, or judicial, governmental or administrative department, body, agency,
administrator or official, grand jury, or any other forum for the resolution of
grievances, against PSA or Buyer which could reasonably be expected to have a
Material Adverse Effect on either PSA or Buyer. Further, there are no judgments,
orders, writs, injunctions, decrees, indictments or informations, grand jury
subpoenas or civil investigative demands, plea agreements, stipulations or
awards (whether rendered by a court, commission, arbitration tribunal, or
judicial, governmental or administrative department, body, agency, administrator
or official, grand jury or any other forum for the resolution of grievances)
against or relating to either PSA or Buyer which could reasonably be expected to
have a Material Adverse Effect on either PSA or Buyer. Neither PSA nor Buyer has
knowledge of any facts or conditions that are reasonably likely to result in any
Proceeding or any Material Adverse Effect on either PSA or Buyer.
5.07 Returns Filed and Taxes Paid. Within the times and in the manner
prescribed by law, Buyer and PSA have filed all Returns required to have been
filed by them, and have timely paid or made adequate provision for payment of
all Taxes, assessments and penalties when due and payable.
5.08 Insurance Policies. Buyer and PSA currently maintain, and for the
past five years have maintained, the listed insurance coverages exceeding the
minimum limits set forth below with insurance companies rated "A" or better:
<TABLE>
<CAPTION>
COVERAGES MINIMUM LIMITS
<S> <C>
Property, Fire & Casualty Value of Property
Workmen's Compensation Statutory Limits
Errors and Omissions (including medical $1,000,000
malpractice or professional liability)
General Liability $1,000,000
Umbrella Policy $5,000,000
(together "Insurance Policies")
</TABLE>
B-16
<PAGE> 28
Attached as Schedule 5.08 are (i) insurance certificates evidencing current
coverage under the Insurance Policies. PSA and Buyer are in material compliance
with all conditions contained in the Insurance Policies. There have been no
lapses (whether cured or not) in the coverage provided under the Insurance
Policies, referenced herein and as set forth on Schedule 5.08, during the term
of such policies, as extended or renewed. PSA and Buyer will carry claims made
policies that cover their respective operations for a period of at least four
(4) years after the Closing Date.
5.09 Required Consents and Approvals. Except as set forth in Schedule
5.09, no material consent or approval is required by virtue of the execution
hereof by PSA or Buyer or the consummation of any of the transactions
contemplated herein by PSA or Buyer.
5.10 Absence of Certain Changes and Events. Since September 30, 1997,
Buyer has conducted its business only in the ordinary course, and PSA and Buyer
have not:
(a) suffered any damage or destruction which could reasonably
be expected to have a Material Adverse Effect;
(b) suffered any material adverse change in the financial
condition, results of operations, business, prospects, assets, or liabilities
(contingent or otherwise) which could reasonably be expected to have a Material
Adverse Effect;
(c) waived any material claims or rights;
(d) made any change in any method, practice or principle of
financial or tax accounting;
(e) managed working capital components, including cash,
receivables, other current assets, trade payables and other current liabilities
in a fashion materially inconsistent with past practice, including failing to
sell inventory and other property in an orderly and prudent manner or failing to
make all material budgeted and other normal capital expenditures, repairs,
improvements and dispositions;
(f) agreed in writing, or otherwise, to take any action
described in this Section.
5.11 Disclosure. No representations, warranties, assurances or
statements by PSA or Buyer in this Agreement and no statement contained in any
Schedules hereto, certificates or other writings furnished or to be furnished by
PSA or Buyer (or caused to be furnished by PSA or Buyer) to Seller or any of its
representatives pursuant to the provisions hereof contains or will contain any
untrue statement of material fact, or omits or will omit to state any material
fact necessary, in light of the circumstances under which it was made, in order
to make the statements herein or therein not misleading.
ARTICLE VI
COVENANTS OF SELLER
Seller hereby covenants to PSA and Buyer and agrees as follows:
B-17
<PAGE> 29
6.01 Pre-Closing Operations of the PMI Business. Seller hereby
covenants and agrees that, except as consented to in writing by Buyer, pending
the Closing, Seller will operate and conduct the PMI Business only in the
ordinary course in accordance with prior practice, and carry on the PMI Business
diligently and substantially in the manner as heretofore conducted and not make
or institute any methods of purchase, sale, lease, management, accounting or
operation except in the ordinary course of business consistent with past
practice. Pursuant to the foregoing sentence and not in limitation thereof:
(a) Seller shall manage the working capital, including cash,
receivables, other current assets, trade payables and other current liabilities
of the PMI Business, in a fashion consistent with past practice, including by
selling inventory and other property in an orderly and prudent manner and paying
outstanding obligations, trade accounts and other indebtedness as they come due.
(b) No material contract or commitment of any kind relating to
the PMI Business or Assets shall be entered into without the prior written
consent of Buyer (for purposes of this subsection, the word "material" shall
refer to any contract or commitment which entitles or obligates, or has the
potential to entitle or obligate, Seller to receive or pay $100,000 or more in
any twelve-month period). Any such contract entered into with the knowledge and
written consent of Buyer shall be deemed to have been disclosed in the
appropriate Schedule hereto.
(c) Seller shall maintain the Assets in the present state of
repair (ordinary wear and tear excepted), shall use its commercially reasonable
best efforts to keep available the services of the Employees and Contractors
retained by Seller on the date of this Agreement, and preserve the good will of
the PMI Business and relationships with customers, suppliers, distributors and
others with whom Seller has business relations with respect to the PMI Business
or the Assets.
(d) Seller shall not take any of the following actions after
the date of this Agreement with respect to the PMI Business without the prior
written consent of Buyer:
(i) Dispose of any Assets other than in the ordinary
course of business consistent with past practice;
(ii) Mortgage, pledge or subject to liens or other
encumbrances any Assets except as disclosed to Buyer in
writing;
(iii) Purchase or commit to purchase any capital asset
for a price exceeding $50,000;
(iv) Except for planned or normal increases in the
ordinary course of business consistent with past practice with
respect to non-officer or director Employees, increase or
announce any increase of any salaries, wages or employee
benefits or hire, commit to hire or terminate any Employee;
(v) With respect to any Employee, pay any bonus,
except in the ordinary course of business consistent with past
practice;
B-18
<PAGE> 30
(vi) Amend or terminate any material agreement
relating to the PMI Business, the Assets or the Employees,
including any Employee Benefit Plan or any Insurance Policy in
force on the date hereof (except as otherwise contemplated by
this Agreement or any other agreement entered into between
Seller and Buyer);
(vii) Solicit or entertain any offer for, or sell or
agree to sell the PMI Business or the Assets, except as
disclosed to Buyer;
(viii) Make any changes in accounting methods,
principles or practices; or
(ix) Do any act, omit to do any act or permit any act
within Seller's control which will cause a breach of any
representation, warranty or obligation contained in this
Agreement or any obligations contained in any contract.
6.02 Access. From the date of this Agreement through the Closing Date,
Seller shall (i) provide Buyer and its designees (officers, counsel,
accountants, actuaries, and other authorized representatives) with such
information as Buyer may from time to time reasonably request with respect to
the PMI Business, the Assets and the transactions contemplated by this
Agreement; (ii) provide Buyer and its designees access during regular business
hours and upon reasonable notice to the books, records, offices, personnel,
counsel, accountants and actuaries of Seller, as Buyer or its designees may from
time to time reasonably request; and (iii) permit Buyer and its designees to
make such inspections thereof as Buyer may reasonably request. Any investigation
shall be conducted in such a manner so as not to interfere unreasonably with the
operation of the PMI Business. No such investigation shall limit or modify in
any way obligations of Seller with respect to any breach of their
representations, warranties, covenants or agreements contained herein.
6.03 Interim Financials. Seller shall provide to Buyer an updated P&L
Statement through the end of the calendar month preceding the Closing Date, if
available.
6.04 Employee Benefits Plans. Buyer shall not be required to adopt,
assume or otherwise become responsible for, either primarily or as a successor
employer, any assets or liabilities of any employee benefit plans, arrangements,
commitments or policies currently provided by Seller or by any entity which,
together with Seller, would constitute a single employer under Section 414(b),
(c), (m) or (o) of the Code (including but not limited to the Employee Benefit
Plans identified on Schedule 4.11); if and to the extent that Buyer is deemed by
law or otherwise to be liable as a successor employer for such purposes, Seller
shall indemnify Buyer for the full and complete costs, fees and other
liabilities which result. Additionally, Seller agrees not to assert that Buyer
is a successor employer of Seller or any entity which, together with Seller,
would constitute a single employer under Section 414(b), (c), (m) or (o) of the
Code. In particular, Buyer shall not assume liability for any group health
continuation coverage or coverage rights under Section 4980B of the Code or Part
6 of Title I of ERISA applicable to a group health plan maintained by Seller at
any time prior to the Closing Date, and if and to the extent that Buyer is
deemed by law or otherwise to be liable as a successor employer for such group
health continuation
B-19
<PAGE> 31
coverage purposes, Seller shall indemnify Buyer for the full and complete costs,
fees and other liabilities which result.
6.05 Notice of Breach; Update of Schedules. Seller shall promptly
notify Buyer of any change, circumstance or event which would cause any of the
representations or warranties made by Seller pursuant to this Agreement to be
untrue as of the date hereof, or thereafter up to and including the Closing
Date, or which would prevent Seller from complying with any of its obligations
hereunder. Seller shall have an obligation to update all of the Schedules to
this Agreement on and as of the Closing Date.
6.06 Approvals of Third Parties; Satisfaction of Conditions to Closing.
Seller will use its reasonable, good faith efforts, and will cooperate with PSA
and Buyer, as soon as practicable after the date hereof, to secure those
necessary consents of third parties identified on Schedule 6.06. Seller will use
its reasonable, good faith efforts to obtain the satisfaction of the conditions
specified in Article IX.
6.07 Computer and Administrative Support. Certain software and computer
systems are shared by PMI and other of Seller's divisions or units. Seller shall
make available certain computer and administrative support services pursuant to
an agreement to be entered into at Closing in the form of Exhibit 6.07 hereto
(the "Transition Support Agreement").
ARTICLE VII
COVENANTS OF PSA AND BUYER
PSA and Buyer, respectively, hereby covenant to Sellers and agree as
follows:
7.01 Issuance of PSA Shares. The PSA Shares, when issued by the
Transfer Agent, Chase Mellon Shareholder Services, shall have been duly
authorized, validly issued, fully paid and nonassessable, and will be free and
clear of any liens, encumbrances, pledges, security agreements, costs, or other
charges.
7.02 Approvals of Third Parties; Satisfaction of Conditions to Closing.
PSA and Buyer will use their reasonable, good faith efforts, and will cooperate
with Seller, to secure all necessary consents, approvals, authorizations and
exemptions from governmental agencies and other third parties, including,
without limitation, all consents required by Sections 8.02 and 8.03, or as are
necessary to consummate the transactions contemplated hereby. Buyer and PSA will
use their reasonable, good faith efforts to cause or obtain the satisfaction of
the conditions specified in Article VIII.
7.03 Assumption of Certain Liabilities by Buyer.
(a) In General. Effective upon the Closing, Buyer shall by
written instrument, in the form of Exhibit 7.03 attached hereto, assume and
agree to pay, perform, and discharge, and to indemnify and hold harmless Seller,
its successors and assigns, against and hold it harmless from obligations and
liabilities of the PMI Business or Assets arising out of Buyer's operation of
the PMI Business or ownership of the Assets after the Closing. Under no
circumstances shall Buyer be responsible for claims,
B-20
<PAGE> 32
obligations and liabilities, actual or contingent arising out of events prior to
the Closing Date, including any claims or litigation, or arising out of Seller's
operation of the PMI Business prior to the Closing Date, except as set forth
specifically on Schedule 7.03(a) (the "Assumed Liabilities").
(b) Certain Leases. Included in the Assumed Liabilities are
certain office space lease obligations. The parties agree that at Closing Seller
will assign or sublease to Buyer those leases for office space in the locations
set forth on Schedule 7.03(b), and with respect to which (i) the PMI Business is
the sole tenant (the "Leased Real Property"), and (ii) the PMI Business occupies
a majority of space in a shared environment with Seller (the "Majority Shared
Leased Space" and, together with the Leased Real Property, the "Leases"). Buyer
will, subject to proper assignments being obtained by Seller, assume
responsibility for all of Seller's obligations under the Leases. Buyer agrees to
sublease to Seller and Seller agrees to be obligated as a sublessee, on an
allocated cost basis, for that portion of the Majority Shared Leased Space as
Seller currently occupied for the duration of the current term of each of such
leases. Seller shall remain as primary lessee with respect to all leased office
space in which the PMI Business occupies a minority of space in a shared
environment with Seller (the "Minority Shared Leased Space"). Seller shall
sublease to Buyer and Buyer agrees to be obligated as a sublessee, on an
allocated cost basis, for that portion of the space that the PMI Business
currently occupies for the duration of the current term of each of such leases.
As soon as practicable following the Closing Date, Buyer and Seller
shall cooperate to obtain all requisite landlord consents to the above
- -described lease assignments and subleases, and will share equally any costs
associated with such consents, including reasonable attorneys fees of any
landlord, but excluding any rent increase. Buyer agrees to obtain all lease
guarantees necessary to obtain such consents. If a landlord of any Leased Real
Property refuses to consent to the assignment or sublease of the lease to Buyer
and proceeds to terminate the lease and require the PMI Business to vacate the
premises, Seller will remain liable as lessee on such Leased Real Property and
Majority Shared Leased Space, and shall share equally Buyer's out of pocket
expenses associated with relocating to new office space. Notwithstanding the
foregoing, Seller shall not be obligated under such circumstances to pay for any
increase in Buyer's rent in the new office space. Seller further agrees to
assign to Buyer all leases for certain office machines (including the
photocopier, facsimile machines, telephone switch and similar machines) used at
the Leased Real Property, and Buyer agrees to assume all of Seller's liabilities
under such leases. Seller agrees to make available to Buyer, on an allocated
cost basis certain office machines (as described above) currently shared by the
PMI Business and Seller's other lines of business in the Majority Shared Office
Space and the Minority Shared Office Space.
7.04 SEC Filings of PSA. From and after the date of this Agreement
until the Closing Date, PSA shall deliver to Seller all documents and papers
filed with the Securities and Exchange Commission by or on behalf of PSA.
7.05 Registration of PSA Shares. PSA will, subject to its right to
otherwise register the PSA Shares in accordance with Section 7.09 hereof,
(a) as soon as reasonably possible and not later than 60 days
after the Closing Date, and as permitted by applicable SEC rules and
regulations, after the Closing Date, file with the SEC in conformity with the
requirements of the Securities Act of 1933, a Registration Statement on SEC Form
S-3 (the "Registration Statement") pursuant to Rule 415 under the Securities Act
with respect to the resale by Seller, or any successor in interest, of the PSA
Shares, and shall cause the Registration
B-21
<PAGE> 33
Statement to become effective under the Securities Act within 90 days of the
Closing Date, subject to any delay materially caused by Seller;
(b) prepare in conformity with the requirements of the
Securities Act and file with the SEC such amendments (including pre-effective
and post-effective amendments) and supplements to the Registration Statement and
the prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all of the PSA Shares until
the first to occur of (i) all of the PSA Shares having been sold by Seller, or
(ii) the PSA Shares being eligible for sale by Seller pursuant to Rule 144 under
the Securities Act;
(c) furnish to Seller such number of copies of the
Registration Statement and of each such amendment and supplement thereto (in
each case including all exhibits) such number of copies of the prospectus
included in the Registration Statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as Seller may reasonably request in
order to facilitate the disposition of the PSA Shares;
(d) until all of the PSA Shares have been sold by Seller,
notify Seller of the happening of any event as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and prepare and furnish to Seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; and
(e) pay the costs and expenses incurred by PSA in connection
with the filing of the Registration Statement and any amendments or supplements
thereto, including without limitation, NASDAQ listing fees, printing, legal,
accounting, and "blue sky" fees and expenses and SEC filing fees.
7.06 Indemnification With Respect to Registration Statement.
(a) PSA shall indemnify and hold harmless Seller, and each
other person who controls Seller within the meaning of the Securities Act
("Seller Parties"), against and from any damages or costs, including attorneys
fees and court costs, incurred by such Seller Parties which arise out of or are
based upon (i) any untrue statement of any material fact contained in the
Registration Statement or any amendment or supplement thereto, or (ii) any
omission to state therein a material fact required to be stated in the
Registration Statement, or any amendment or supplement thereto, or necessary to
make the statements therein not misleading, unless the foregoing is based upon
an untrue statement or omission of the Seller Parties.
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<PAGE> 34
(b) The Seller Parties shall indemnify and hold harmless PSA,
the directors and officers of PSA, and each other person who controls PSA within
the meaning of the Securities Act ("PSA Parties"), against and from any damages
or costs, including attorneys fees and court costs, incurred by such PSA Parties
which arise out of or are based upon (i) any untrue statement of any material
fact contained in the Registration Statement or any amendment or supplement
thereto, or (ii) any omission to state therein a material fact required to be
stated in the Registration Statement, or any amendment or supplement thereto, or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to PSA Parties by Seller Parties specifically for inclusion in such
registration statement, or any amendment or supplement thereto.
7.07 Hart-Scott-Rodino Notification. Buyer shall promptly prepare and
file a notification with the United States Justice Department (the "Justice
Department") and the Federal Trade Commission (the "FTC") as required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"). Seller
and Buyer shall cooperate with each other in connection with the preparation of
such notification, including sharing information concerning sales and ownership
and such other information as may be needed to complete such notification. Each
of Seller and Buyer shall keep all information about the other obtained in
connection with the preparation of such notification confidential. Buyer shall
pay the filing fee required by the regulations promulgated under HSR. In the
event Seller and Buyer shall receive a request for additional information or
documentary material from the Justice Department or the FTC, Buyer shall respond
to such request as promptly as possible.
7.08 Employees. Seller agrees to continue the employment of the
Employees through midnight on December 31, 1997, subject to Seller's right to
terminate any given Employee for normal cause and replace any such terminated
Employee, and Buyer shall offer employment to said Employees as of January 1,
1998, on terms reasonably similar to the terms of said Employees with Seller.
During the period from the Closing Date through December 31, 1997 (the
"Transition Period"), Seller shall make available to Buyer the services of the
Employees (which term shall include replacements of said Employees, as described
above, for purposes of this Section 7.08) to continue the PMI Business. The
Employees shall remain the common-law employees of Seller during the Transition
Period, and shall be subject to Seller's control and direction. The parties
shall enter into a separate agreement for provision of services, consistent with
this Section 7.08, if deemed necessary or desirable by Seller.
Buyer shall reimburse Seller for all costs incurred by Seller with
respect to the continued employment of the Employees during the Transition
Period. Buyer shall also indemnify Seller and hold Seller harmless from any and
all losses, claims, expenses or costs incurred by Seller as a direct or indirect
consequence of the continued employment of the Employees during the Transition
Period. It is understood by the parties that said continued employment is
intended as an accommodation by Seller of Buyer's acquisition of the PMI
Business on the Closing Date, and it is the intent of this covenant that Seller
be placed in the economic position of having terminated the employment of the
Employees as of the Closing Date, and this covenant shall be interpreted
consistent with said intent. For purposes hereof, "costs incurred by Seller with
respect to the continued employment of the Employees during the Transition
Period" shall include but not be limited to the compensation paid by Seller to
said Employees (which shall not be increased during the Transition Period), the
costs of all employment, FICA, FUTA, Medicare and other taxes assessed on said
compensation and payable by the Seller, the cost of all employee benefits and
benefit plans, including the amounts reimbursed to the Employees or their
dependents under Seller's
B-23
<PAGE> 35
welfare benefit plans and Seller's contributions to its 401(k) plan for the
Employees, any and all insurance premiums and prorated administrative expenses
pertinent to employee benefits made available to the Employees, and all other
similar costs and expenses. Reimbursement by Buyer shall be limited to costs and
expenses attributable to the Transition Period only. Buyer shall reimburse
Seller in the requested amounts within fifteen (15) days of receipt of Seller's
certified statement of costs incurred, which statements may be supplied on an
interim basis from time to time.
Buyer shall provide its standard benefit plans to those Employees who
accept Buyer's offer of employment, as of January 1, 1998, and Buyer shall
credit all service that is credited by Seller (for purposes of Seller's plans)
for purposes of calculating eligibility service requirements for any of Buyer's
plans and shall waive all waiting periods and all pre-existing condition
exclusions with respect to medical, dental or vision plans.
7.09 PSA Public Offering. PSA shall not be obligated to register the
PSA Shares in accordance with Section 7.05 hereof if, within the 90- day period
therein referenced PSA proposes to register for sale in an underwritten public
offering all of the PSA Shares (along with other shares of PSA common stock),
and PSA causes the PSA Shares to be included in the securities to be covered by
the registration statement proposed to be filed by PSA, with all of the PSA
Shares included in the underwriting on the same terms and conditions as the
shares of common stock otherwise being sold through underwriters under such
registration; provided, however, that unless Seller shall otherwise agree in
writing, PSA's obligation to register the PSA Shares under Section 7.05 hereof
shall continue if such underwritten public offering is not closed and funded on
or before the 90th day after the Closing Date. PSA shall bear the expenses
associated with such registration.
7.10 Strategic Alliance Agreement. The parties shall enter into a
Strategic Alliance Agreement in the form of Exhibit 7.10 hereto.
7.11 Transfer Taxes. All sales or transfer taxes, including but not
limited to, bulk sales taxes, document recording fees, real property transfer
taxes, and excise taxes, arising out of or in connection with the consummation
of the transactions contemplated hereby shall be paid by Buyer.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF SELLER
Each of the obligations of Seller to be performed hereunder
shall be subject to the satisfaction (or waiver by Seller) at or prior to the
Closing Date of each of the following conditions:
8.01 Representations and Warranties True at Closing Date. Each of
Buyer's and PSA's representations and warranties contained in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of such date; Buyer and PSA shall
have complied in all material respects with the covenants and agreements set
forth herein to be performed or complied with by them on or before the Closing
Date; and Buyer and PSA shall have delivered to Seller a certificate dated the
Closing Date and signed by a duly authorized officer of Buyer and PSA to all
such effects, and confirming
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<PAGE> 36
such other matters as may be reasonably requested by Seller.
8.02 Required Governmental Approvals. All governmental authorizations,
consents and approvals necessary for the valid consummation of the transactions
contemplated hereby shall have been obtained and shall be in full force and
effect.
8.03 Other Necessary Consents. Seller shall have obtained all consents
and approvals listed on Schedule 4.23. With respect to each such consent or
approval, Seller shall have received written evidence, satisfactory to it, that
such consent or approval has been duly and lawfully filed, given, obtained or
taken and is effective, valid and subsisting.
8.04 Intentionally Omitted.
8.05 Opinion of General Counsel of Buyer and PSA. Seller shall have
received from General Counsel to Buyer and PSA an opinion, dated as of the
Closing Date, in the form of Exhibit 8.05(a), and an opinion of outside counsel
to PSA with respect to the PSA Shares in the form of Exhibit 8.05(b).
8.06 Chase Mellon Letter. PSA shall have delivered irrevocable
instructions to issue the PSA Shares to its transfer agent, Chase Mellon, in the
form of Exhibit 8.06.
8.07 No Material Change. PSA and Buyer shall not have suffered any
material adverse change in their business, financial condition, working capital,
assets, liabilities (absolute, accrued, contingent or otherwise), reserves or
operations, which would materially affect the value to Seller of the PSA Shares
and the transactions contemplated hereunder.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF PSA AND BUYER
The obligations of PSA and Buyer to be performed hereunder shall
be subject to the satisfaction (or waiver by Buyer) on or before the Closing
Date of each of the following conditions:
9.01 Representations and Warranties True at Closing Date. Each of
Seller's representations and warranties contained in this Agreement shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of such date; Seller shall have complied in
all material respects with the covenants and agreements set forth herein to be
performed or complied with by them on or before the Closing Date; and Seller
shall have delivered to Buyer a certificate dated the Closing Date and signed by
a duly authorized officer of Seller to all such effects, and confirming such
other matters as may be reasonably requested by Buyer.
9.02 Required Governmental Approvals. All governmental authorizations,
consents and approvals necessary for the valid consummation of the transactions
contemplated hereby shall have been obtained and shall be in full force and
effect.
9.03 Intentionally Omitted.
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9.04 No Material Change. Except as disclosed on Schedule 4.22, the PMI
Business shall not have suffered any Material Adverse Change since September 30,
1997, or any event or condition since September 30, 1997, which could reasonably
be expected to have a Material Adverse Effect.
9.05 Opinion of Counsel to Seller. PSA and Buyer shall have received
from counsel to Seller an opinion, dated the Closing Date, in the form of
Exhibit 9.05.
9.06 Non-Competition Agreement. Seller shall have executed and
delivered a non-competition agreement in the form of Exhibit 9.06.
9.07 Intentionally Omitted.
9.08 Support Agreement. Buyer and Seller shall have entered into the
Support Agreement attached hereto as Exhibit 6.07.
9.09 Intentionally Omitted.
ARTICLE X
INDEMNIFICATION BY THE PARTIES
10.01 Indemnification.
(a) By Seller and CPI. Except as otherwise limited by this
Article X, Seller and CPI shall jointly and severally indemnify and reimburse
PSA and Buyer for any and all claims, losses, liabilities, damages, costs
(including court costs) and expenses (including reasonable attorneys' and
accountants' fees) incurred by PSA and Buyer, or any successors or assigns
thereto, and their respective directors, officers and employees (the "Protected
Parties"), (hereinafter "Loss" or "Losses") suffered or incurred by PSA or Buyer
as a result of, or with respect to, (i) any breach or inaccuracy of any
representation or warranty of Seller set forth in this Agreement or in any
certificate or other document delivered pursuant hereto or in connection
herewith; (ii) any breach of or noncompliance by Seller with any covenant or
agreement of Seller contained in this Agreement, and (iii) those matters set
forth on Schedule 4.09 hereto.
(b) By PSA and Buyer. Except as otherwise limited by this
Article X, PSA and Buyer shall jointly and severally indemnify and reimburse
Seller for any and all claims, losses, liabilities, damages, costs (including
court costs) and expenses (including reasonable attorneys' and accountants'
fees) incurred by Seller, or any successors or assigns thereto, and their
respective directors, officers and employees (the "Protected Parties"),
(hereinafter "Loss" or "Losses") suffered or incurred by Seller as a result of,
or with respect to, (i) any breach or inaccuracy of any representation or
warranty of PSA or Buyer set forth in this Agreement or in any certificate or
other document delivered pursuant hereto or in connection herewith; (ii) any
breach of or noncompliance by PSA or Buyer with any covenant or agreement of PSA
or Buyer contained in this Agreement, and (iii) those matters set forth on
Schedule 8.01(b).
10.02 Indemnity Claims.
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(a) Survival. The representations and warranties of any party
contained herein or in any certificate or other document delivered pursuant
hereto or in connection herewith shall not be extinguished by the Closing but
shall survive the Closing, subject to the limitations set forth in Section
10.02(b) hereof with respect to the time periods within which claims for
indemnity must be asserted. No investigation or other examination by Buyer or
PSA on the one hand, or Seller on the other hand, or their respective designees
or representatives shall affect the term of survival of any representation or
warranty contained herein or in any certificate or other document delivered
pursuant hereto or in connection herewith, or the term of the right of the
Protected Parties to seek indemnification with respect to any of the Surviving
Matters (as defined in Section 10.02(b) hereof).
(b) Time to Assert Claims. All claims for indemnification
hereunder shall be asserted no later than two (2) years after the Closing Date,
except claims made by any party hereto where the basis for the claim is fraud or
intentional misrepresentation (the "Surviving Matters"), may be made without
limitation, except as may be limited by any applicable statute of limitations.
Nothing herein shall be deemed to prevent a party from making a claim for a Loss
hereunder for potential or contingent claims or demands provided the notice of
Loss sets forth the specific basis for any such potential or contingent claim or
demand to the extent then feasible and such claiming party has reasonable
grounds to believe that such a claim or demand may become actual.
10.03 Limitation on Indemnification. Claims for Losses by Buyer and PSA
shall not exceed, in the aggregate, the total Purchase Price (the "Ceiling"),
unless Buyer and PSA suffer a Loss or Losses greater than the Ceiling due to
fraud or an intentional material misrepresentation or omission by Seller.
Seller's indemnity obligation with respect to breaches of representations,
warranties and covenants herein contained are subject to a de minimus threshold
of $3,000, and no claim may be made by any party hereto until the aggregate
amount of the Loss or Losses equals or exceeds 1% of the Purchase Price (the
"Basket"), at which time the party claiming such Loss or Losses (the
"Indemnitee") may make a claim for all Losses in excess of the Basket.
Notwithstanding the foregoing sentence, a claim for a Loss by Seller resulting
from PSA's breach of Sections 7.05, 7.06 or 7.08 shall not be subject to the
Basket.
10.04 Notice of Claim.
(a) By PSA or Buyer. Buyer shall notify Seller, in writing,
of any claim for indemnification, specifying in reasonable detail the
nature of the Loss, and, if known, the amount, or an estimate of the amount, of
the liability arising therefrom. Buyer shall provide to Seller as promptly as
practicable thereafter such information and documentation as may be reasonably
requested by Seller to support and verify the claim asserted, so long as such
disclosure would not violate the attorney-client privilege of Buyer or PSA.
(b) Seller. Seller shall notify PSA and Buyer in writing of
any claim for indemnification, specifying in reasonable detail the nature of the
Loss, and, if known, the amount, or an estimate of the amount, of the liability
arising therefrom. Seller shall provide to PSA and Buyer as promptly as
practicable thereafter such information and documentation as may be reasonably
requested by the PSA and Buyer to support and verify the claim asserted, so long
as such disclosure would not violate the attorney-client privilege of Seller.
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<PAGE> 39
10.05 Defense. If the facts pertaining to a Loss arise out of the claim
of any third party, or if there is any claim against a third party (other than a
Protected Party) available by virtue of the circumstances of the Loss, the party
against whom such Loss is claimed (the "Indemnitor") may assume the defense or
the prosecution thereof by prompt written notice to the Indemnitee and the
affected Protected Party, including the employment of counsel or accountants, at
its cost and expense. The Indemnitee and the affected Protected Party shall have
the right to employ counsel separate from counsel employed by the Indemnitor in
any such action and to participate therein, but the fees and expenses of such
counsel employed by Indemnitee and the affected Protected Party shall be at
their expense. The Indemnitor shall not be liable for any settlement of any such
claim effected without its prior written consent, which shall not be
unreasonably withheld; provided that if the Indemnitor does not assume the
defense or prosecution of a claim as provided above within thirty (30) days
after notice thereof from any Protected Party, the Indemnitee and the affected
Protected Party may settle such claim without the Indemnitor's consent. The
Indemnitor shall not agree to a settlement of any claim which provides for any
relief other than the payment of monetary damages or which could have a material
precedential impact or effect on the business or financial condition of any
Protected Party without the Indemnitee's and the affected Protected Party's
prior written consent. Whether or not the Indemnitor does choose to so defend or
prosecute such claim, all the parties hereto shall cooperate in the defense or
prosecution thereof and shall furnish such records, information and testimony,
and attend such conferences, discovery proceedings, hearings, trials and
appeals, as may be reasonably requested in connection therewith. The Indemnitor
shall be subrogated to all rights and remedies of any Protected Party, except to
the extent they apply against another Protected Party.
10.06 Sole Remedy. The indemnification obligations of each party herein
contained shall be the sole remedies of the parties hereto, except to the extent
that public policy precludes exclusion of other remedies.
ARTICLE XI
TERMINATION PRIOR TO CLOSING
11.01 Termination of Agreement. This Agreement may be terminated at any
time prior to the Closing:
(a) By the mutual written consent of Buyer and Seller;
(b) By Seller in writing, without liability, if Buyer or PSA
shall (i) fail to perform in any material respect their agreements contained
herein required to be performed by them on or prior to the Closing Date, or (ii)
materially breach any of their representations, warranties or covenants
contained herein, which failure or breach is not cured within ten (10) days
after Seller has notified Buyer of its intent to terminate this Agreement
pursuant to this subparagraph;
(c) By Buyer in writing, without liability, if Seller shall
(i) fail to perform in any material respect their agreements contained herein
required to be performed by it on or prior to the Closing Date, or (ii)
materially breach any of its representations, warranties or covenants contained
herein,
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<PAGE> 40
which failure or breach is not cured within ten (10) days after the Buyer has
notified Seller of its intent to terminate this Agreement pursuant to this
subparagraph;
(d) By either Seller or Buyer in writing, without liability,
if there shall be any order, writ, injunction or decree of any court or
governmental or regulatory agency binding on Buyer, PSA, or Seller, which
prohibits or restrains such party from consummating the transactions
contemplated hereby, provided that such party shall have used their reasonable,
good faith efforts to have any such order, writ, injunction or decree lifted and
the same shall not have been lifted within 30 days after entry by any such court
or governmental or regulatory agency; or
(e) By either Seller or Buyer, in writing, if the Closing has
not occurred by December 17, 1997, other than as a result of the breach of this
Agreement by the party attempting to terminate the Agreement.
11.02 Termination of Obligations. Termination of this
Agreement pursuant to this Article XII shall terminate all of the
obligations of the parties hereunder except those obligations specifically
intended or stated to survive termination. Provided that termination pursuant to
subparagraphs (b),(c) or (d) above shall not relieve a defaulting or breaching
party from any liability to the other party hereto.
ARTICLE XII
MISCELLANEOUS
12.01 Entire Agreement. This Agreement (including the Schedules and
Exhibits) constitutes the sole understanding of the parties with respect to the
subject matter hereof and terminates the Letter of Intent, dated October 10,
1997, except the provisions contained therein which are stated to expressly
survive the termination of the Letter of Intent; provided, however, that this
provision is not intended to abrogate any other written agreement between the
parties executed with or after this Agreement.
12.02 Amendment. No amendment, modification or alteration of the terms
or provisions of this Agreement shall be binding unless the same shall be in
writing and duly executed by the parties hereto.
12.03 Parties Bound by Agreement; Successors and Assigns. The terms,
conditions and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and the respective successors and assigns
thereof. No party may assign its rights, duties or obligations hereunder or any
part thereof to any other person or entity.
12.04 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
12.05 Headings. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
12.06 Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof. No waiver of any of
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<PAGE> 41
the provisions of this Agreement shall be deemed to or shall constitute a waiver
of any other provision hereof (whether or not similar).
12.07 Expenses. Except as otherwise provided herein, Seller, PSA and
Buyer shall each pay all costs and expenses incurred by each of them,
or on their behalf respectively, in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of their own
financial consultants, accountants and counsel.
12.08 Notices. Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party hereto shall be in
writing and delivered personally (including by confirmed facsimile) or sent by
registered or certified mail (including by overnight courier or express mail
service), postage or fees prepaid,
if to Seller to:
Derek V. Smith, Chief Executive Officer
And
Michael de Janes, General Counsel
ChoicePoint, Inc.
1000 Alderman Drive
Alpharetta, Georgia 30005
Telephone: (770) 752-5745
Facsimile: (770) 752-5939
with a copy to:
Adam Salassi, Esq.
Hunton & Williams
Suite 4100
600 Peachtree Street, N.E.
Atlanta, Georgia 30308-2216
Telephone: (404) 888-4000
Facsimile: (404) 888-4190
if to PSA or Buyer to:
Joseph D. Sansone, Chief Executive Officer
Pediatric Services of America, Inc.
3159 Campus Drive
Norcross, Georgia 30071
Telephone: (770) 840-3234
Facsimile: (770) 729-0316
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or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or the office of such party. Any notice which is addressed
and mailed in the manner herein provided shall be conclusively presumed to have
been duly given to the party to which it is addressed at the close of business,
local time of the recipient, on the fourth business day after the day it is so
placed in the mail or, if delivered earlier, the time of actual receipt.
12.09 Brokerage. Seller, on the one hand, and PSA and Buyer, on the
other hand, do hereby expressly warrant and represent, each to the other, that
no broker, agent, or finder has rendered services in connection with the
transactions contemplated under this Agreement, and expressly agree to indemnify
and hold harmless the other party from and against any and all losses, costs,
damages, and expenses (including reasonable attorneys' fees) arising or
resulting, or sustained or incurred by the indemnified party, by reason of any
claim by any broker, agent, finder, or other person or entity based upon any
arrangement or agreement made or alleged to have been made by the indemnifying
party in connection with the transaction contemplated under this Agreement.
12.10 Governing Law. This Agreement is executed by Buyer in, and shall
be construed in accordance with and governed by the laws of the State of Georgia
without giving effect to the principles of conflicts of law thereof.
12.11 The Seller's Knowledge. As used herein, the terms "the Seller's
knowledge" or "to the knowledge of Seller" shall mean the actual current
knowledge of Derek V. Smith, Douglas Curling, Ralph Haygood, Tom Klebeck and Ken
Kavanaugh without any duty of inquiry.
12.12 No Third-Party Beneficiaries. With the exception of the parties
to this Agreement and the Protected Parties, there shall exist no right of any
person to claim a beneficial interest in this Agreement or any rights occurring
by virtue of this Agreement.
12.13 "Including." Words of inclusion shall not be construed as terms
of limitation herein, so that references to "included" matters shall be regarded
as non-exclusive, non-characterizing illustrations.
12.14 References. Whenever reference is made in this Agreement to any
Article, Section, Schedule or Exhibit, such reference shall be deemed to apply
to the specified Article or Section of this Agreement or the specified Schedule
or Exhibit to this Agreement.
12.15 Public Announcements. No public announcement shall be made by any
person under the control of Buyer, PSA or Seller with regard to the transactions
contemplated by this Agreement without the prior consent of the Seller and
Buyer; provided that any party hereto may make such disclosure if advised by
counsel that it is legally required to do so. The Seller and Buyer will discuss
any public announcements or disclosures concerning the transactions contemplated
by this Agreement prior to making such announcements or disclosures.
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<PAGE> 43
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date indicated on the
first page hereof.
SELLER:
CHOICEPOINT SERVICES, INC.
/s/ Douglas C. Curling
---------------------------------
By: Douglas C. Curling, Executive
Vice President, CFO and
Treasurer
Attest:
By: /s/ Michael de Janes
-----------------------------
Michael de Janes, Secretary
CPI:
CHOICEPOINT, INC.
/s/ Douglas C. Curling
---------------------------------
By: Douglas C. Curling, Executive
Vice President, CFO and
Treasurer
Attest:
By: /s/ Michael de Janes
-----------------------------
Michael de Janes, Assistant
Secretary
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<PAGE> 44
BUYER:
INSURANCE MEDICAL REPORTER, INC.
By: /s/ Joseph D. Sansone
------------------------------
Joseph D. Sansone, President
Attest:
By: /s/ Stephen M. Mengert
------------------------------
Stephen M. Mengert, Secretary
PSA:
PEDIATRIC SERVICES OF AMERICA,
INC.
By: /s/ Joseph D. Sansone
------------------------------
Joseph D. Sansone, President
Attest:
By: /s/ Stephen M. Mengert
------------------------------
Stephen M. Mengert, Secretary
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