ASSET PURCHASE AGREEMENT
BETWEEN
NATIONAL RESEARCH CORPORATION
AND
THE PICKER INSTITUTE, INC.
DATED AS OF MAY 7, 2001
TABLE OF CONTENTS
Page
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1. PURCHASE AND SALE OF ASSETS..........................................1
1.1 Definition of "Business"....................................1
1.2 Assets to be Transferred....................................1
1.3 Excluded Assets.............................................3
1.4 Nonassignable Contracts and Rights..........................3
2. ASSUMPTION OF CERTAIN SPECIFIC LIABILITIES...........................4
2.1 Certain Specific Liabilities to be Assumed..................4
2.2 Liabilities Not to be Assumed...............................5
3. PURCHASE PRICE - PAYMENT.............................................6
3.1 Purchase Price..............................................6
3.2 Payment of Purchase Price...................................6
3.3 Fixed Purchase Price........................................7
3.4 Allocation of Purchase Price................................7
4. REPRESENTATIONS AND WARRANTIES OF INSTITUTE..........................7
4.1 Institute...................................................7
4.2 Authority...................................................8
4.3 No Violation................................................8
4.4 Financial Statements........................................9
4.5 Tax Matters.................................................9
4.6 Work-In-Process.............................................9
4.7 Absence of Certain Material Changes........................10
4.8 Absence of Undisclosed Liabilities.........................11
4.9 No Litigation..............................................11
4.10 Compliance With Laws and Orders............................11
4.11 Title to and Condition of Properties.......................12
4.12 Insurance..................................................13
4.13 Contracts and Commitments..................................13
4.14 Employee Benefit Plans.....................................14
4.15 Trade Rights...............................................15
4.16 Warranty...................................................16
4.17 Affiliates' Relationships to Institute.....................16
4.18 Accounts Receivable; Costs in Excess of Xxxxxxxx;
Xxxxxxxx in Excess of Cost.................................16
4.19 Labor Matters..............................................16
4.20 No Brokers or Finders......................................16
4.21 Disclosure.................................................16
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5. REPRESENTATIONS AND WARRANTIES OF BUYER.............................17
5.1 Corporate..................................................17
5.2 Authority..................................................17
5.3 No Violation...............................................17
5.4 No Brokers or Finders......................................17
5.5 Disclosure.................................................18
5.6 Buyer Financial Statements.................................18
5.7 No Litigation..............................................18
5.8 Compliance With Laws and Orders............................18
6. RELATED MATTERS.....................................................19
6.1 Noncompetition; Confidentiality............................19
6.2 Escrow Agreement...........................................21
6.3 Access to Information and Records..........................21
6.4 Further Actions............................................21
6.5 Accounts Receivable........................................21
6.6 Massachusetts Public Charity Law...........................22
6.7 Termination of HBSI Arrangement............................22
6.8 Termination of Free Instrument Use.........................22
6.9 Termination of Subcontract.................................22
6.10 Confirmation and Assignment of Customer Contracts..........22
6.11 Business Audited Financial Statements......................23
6.12 Recent Developments........................................23
6.13 Institute Obligations......................................23
7. INDEMNIFICATION.....................................................23
7.1 By Institute...............................................23
7.2 By Buyer...................................................24
7.3 Indemnification of Third-Party Claims......................24
7.4 Payment....................................................25
7.5 Limitation on Indemnification..............................26
8. CLOSING.............................................................26
8.1 Documents to be Delivered by Institute.....................26
8.2 Documents to be Delivered by Buyer.........................27
9. RESOLUTION OF DISPUTES..............................................27
9.1 Arbitration................................................27
9.2 Arbitrators................................................28
9.3 Procedures; No Appeal......................................28
9.4 Authority..................................................28
9.5 Entry of Judgment..........................................28
9.6 Confidentiality............................................28
9.7 Continued Performance......................................28
9.8 Tolling....................................................28
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10. MISCELLANEOUS.......................................................29
10.1 Disclosure Schedule........................................29
10.2 Further Assurance..........................................29
10.3 Disclosures and Announcements..............................29
10.4 Assignment; Parties in Interest............................29
10.5 Law Governing Agreement....................................29
10.6 Amendment and Modification.................................29
10.7 Notice.....................................................30
10.8 Expenses...................................................31
10.9 Entire Agreement...........................................31
10.10 Counterparts...............................................31
10.11 Headings...................................................31
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement"), dated as of May 7, 2001, by and
between National Research Corporation, a Wisconsin corporation ("Buyer"), and
The Picker Institute, Inc., a Massachusetts charitable corporation ("Institute")
and a non-profit affiliate of CareGroup, Inc. ("CareGroup").
W I T N E S S E T H:
WHEREAS, Institute is an organization that focuses on promoting
patient-centered health care through the combination of patient satisfaction
services, educational programs and products and ongoing research.
WHEREAS, Buyer desires to purchase from Institute, and Institute desires to
sell to Buyer, certain of the property and assets of the Business (as
hereinafter defined), as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. PURCHASE AND SALE OF ASSETS
1.1 Definition of "Business". As used herein, the term "Business" shall
mean the worldwide (excluding the Institute European Territory, as hereinafter
defined) production, marketing, distribution and sale of survey-based
satisfaction/performance measurement, analysis and tracking services and
products for the health care industry. Where the context allows, the term
"Business" shall also mean Institute insofar as the operations of the Business,
as above defined, is concerned. As used herein, the term "Institute European
Territory" means the countries specified on Schedule 1.1.
1.2 Assets to be Transferred. Subject to the terms and conditions of this
Agreement, on the Closing Date (as hereinafter defined), Institute shall sell,
transfer, convey, assign and deliver to Buyer (or upon Buyer's request, to one
or more wholly owned subsidiaries of Buyer as designated by Buyer), and Buyer
shall purchase and accept, all of the business, rights, claims and assets (of
every kind, nature, character and description, whether personal, tangible or
intangible, accrued, contingent or otherwise, and wherever situated) of
Institute that relate to or are otherwise necessary to conduct the Business, but
only to the extent specifically provided for herein or in one of the schedules
attached hereto (collectively, the "Purchased Assets"). The Purchased Assets
shall include all of the following assets or rights of Institute, to the extent
so related or necessary to the Business:
1.2.(a) Contracts. All Institute's rights in, to and under all
customer/client contracts and sales orders of Institute described in
Schedule 1.2.(a) and the License
Agreement, dated May 31, 1996, as amended, between Institute and Children's
Medical Center Corporation (hereinafter collectively referred to as the
"Contracts").
1.2.(b) Customer/Client Databases, Records and Files. All historic
customer/client and benchmarking (or normative) databases, lists, records
and files (whether on paper, tape, disc, program or in some other
embodiment of information) of the Business. Buyer acknowledges that
Institute's agreements with customer/clients prevent Institute from
disclosing certain information regarding its customer/clients without the
consent of the customer/clients. Buyer shall seek such consent as part of
the Confirmation and Assignment of Customer Contracts described in Section
6.10 hereof.
1.2.(c) Survey Instruments, Data, Formats and Software Code. All of
the Business' survey instruments (including those patient and healthcare
survey instruments described in Schedule 1.2(c), which schedule also
describes the settings for each such survey instrument), patient and
healthcare survey data, report formats and software and software code
related to the processing and delivering of reports.
1.2.(d) Models and Reports. All of the Business' pricing models and
research validity and reliability reports for each survey instrument.
1.2.(e) Work-in-Process. All of the Business' work-in-process at the
Closing (as hereinafter defined).
1.2.(f) Licenses, Permits and Registrations. All licenses, permits,
registrations, certifications and approvals of the Business to the extent
transferable, including, without limitation, the ORYX
certifications/approvals, other than these relating solely to the operation
of Institute's facilities.
1.2.(g) Trade Rights. All of Institute's worldwide (excluding the
Institute European Territory) interests in any Trade Rights, including,
without limitation, the xxxx XXXXXX INSTITUTE. As used herein, the term
"Trade Rights" shall mean and include: (i) all trademark rights, business
identifiers, trade dress, service marks, trade names, and brand names; (ii)
all copyrights and all other rights associated therewith and the underlying
works of authorship; (iii) all patents and all proprietary rights
associated therewith; (iv) all contracts or agreements granting any right,
title, license or privilege under the intellectual property rights of any
third party; (v) all inventions, mask works and mask work registrations,
know-how, discoveries, improvements, designs, trade secrets, shop and
royalty rights, employee covenants and agreements respecting intellectual
property and noncompetition and all other types of intellectual property;
and (vi) all common law rights therein, all registrations, renewals,
reissues, extensions, applications and continuing applications therefor,
all goodwill associated with any of the foregoing, and all claims for
infringement or breach thereof.
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1.2.(h) General Intangibles. All causes of action, claims, demands and
rights against third parties arising out of occurrences after the Closing
under the Contracts, and all goodwill associated with the Business and the
Purchased Assets.
1.3 Excluded Assets. Except as otherwise provided in the other agreements
executed in connection with the transactions contemplated hereby, Institute
shall retain all of its rights, claims and assets not described in Section 1.2.
Without limiting the generality of the foregoing, and any contrary provisions of
Section 1.2 notwithstanding, Institute shall not sell, transfer, assign, convey
or deliver to Buyer, and Buyer will not purchase or accept, the following assets
of Institute:
1.3.(a) Cash and Cash Equivalents. All cash and cash equivalents.
1.3.(b) Consideration. The consideration delivered by Buyer to
Institute pursuant to this Agreement.
1.3.(c) Tax Credits and Records. Federal, state and local income and
franchise tax credits and tax refund claims and associated returns and
records. Buyer shall have reasonable access to such returns and records and
may make excerpts therefrom and copies thereof.
1.3.(d) Notes, and Accounts Receivable. All notes, drafts and accounts
receivable of Institute.
1.3.(e) Obligations of Affiliates. Notes, drafts, accounts receivable
or other obligations for the payment of money, made or owed by any
Affiliate of Institute. For purposes of this Agreement, the term
"Affiliate" shall mean and include all members, directors, trustees and
officers of Institute; the spouse of any such person; any person who would
be the heir or descendant of any such person if he or she were not living;
and any entity in which any of the foregoing has a direct or indirect
interest (except through ownership of less than 5% of the outstanding
shares of any entity whose securities are listed on a national securities
exchange or traded in the national over-the-counter market).
1.3.(f) Picker Institute Europe License. The rights of Institute as
licensor under that certain License Agreement dated March 5, 2001 between
Institute and Picker Institute Europe.
1.4 Nonassignable Contracts and Rights. Notwithstanding anything to the
contrary in this Agreement, no Contracts, properties, rights or other assets of
Institute shall be deemed sold, transferred or assigned to Buyer pursuant to
this Agreement if the attempted sale, transfer or assignment thereof to Buyer
without the consent or approval of another party or a governmental entity would
be ineffective or would constitute a breach of contract or a violation of any
Law (as hereinafter defined) or would in any other way adversely affect the
rights of Institute (or Buyer as transferee or assignee), and such consent or
approval is not obtained on or prior to the Closing Date. In such case, to the
extent possible, (i) the beneficial interest in
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or to such Contracts, properties, rights or assets (collectively, the
"Beneficial Rights") shall in any event pass as of the Closing to Buyer under
this Agreement; and (ii) pending such consent or approval, Buyer shall assume or
discharge the obligations of Institute under such Beneficial Rights (to the
extent such obligations are Assumed Liabilities, as hereinafter defined) as
agent for Institute, and Institute shall act as Buyer's agent in the receipt of
any benefits, rights or interest received from the Beneficial Rights. Buyer and
Institute shall use all reasonable efforts (and bear their respective costs of
such efforts) to obtain and secure any and all consents and approvals that may
be necessary to effect the legal and valid sale, transfer or assignment of the
Contracts, properties, rights or assets underlying the Beneficial Rights to
Buyer without material change in any of the material terms or conditions of such
Contracts, properties, rights or assets, including without limitation their
formal assignment or novation, if advisable. Buyer and Institute will make or
complete such transfers as soon as reasonably possible and cooperate with each
other in any other reasonable arrangement designed to provide for Buyer the
benefits of such Contracts, properties, rights and assets including enforcement
at the cost and for the account of Buyer of any and all rights of Institute
against the other party thereto arising out of the breach or cancellation
thereof by such other party or otherwise, and to provide for the discharge of
any liability or obligation under such Contracts, properties, rights or assets,
to the extent such liability or obligation constitutes an Assumed Liability.
Notwithstanding anything in this Section 1.4 to the contrary, it is the
responsibility of Institute to obtain any necessary consents to assignment.
Institute will indemnify, defend and hold Buyer harmless, in accordance with and
subject to the provisions of Article 7, in respect of any loss, damage, cost or
expense (including without limitation attorneys' fees but excluding
consequential damages) suffered or incurred by Buyer as a result of any breach
or violation effectuated by the attempted sale, transfer of assignment of any
properties, rights or assets without the necessary consent or approval. If and
to the extent that an arrangement acceptable to Buyer with respect to Beneficial
Rights cannot be made, Buyer, upon notice of Institute, shall have no obligation
pursuant to Section 2.1 or otherwise with respect to any such Contract,
property, right or other asset and any such Contract, property, right or other
asset shall not be deemed to be a Purchased Asset, and the related Liability
shall not be deemed an Assumed Liability, hereunder.
2. ASSUMPTION OF CERTAIN SPECIFIC LIABILITIES
2.1 Certain Specific Liabilities to be Assumed. As used in this Agreement,
the term "Liability" shall mean and include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown, asserted or
unasserted, liquidated or unliquidated, secured or unsecured. Subject to the
terms and conditions of this Agreement, on the Closing Date, Buyer shall assume
and agree to perform and discharge the following, and only the following,
Liabilities of Institute (collectively, the "Assumed Liabilities"):
2.1.(a) Contractual Liabilities. Institute's Liabilities arising from
and after the Closing under and pursuant to the Contracts described in
Schedule 1.2.(a); provided, that Buyer shall not assume any Liability of
Institute under or pursuant to the Contracts described in Schedule 1.2.(a)
that arises out of or in connection with or in
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any way relates to or results from any activity or operation of Institute
or the Business prior to the Closing.
2.2 Liabilities Not to be Assumed. Except as and to the extent specifically
set forth in Section 2.1, Buyer is not assuming any Liabilities of Institute and
all such Liabilities which are not Assumed Liabilities shall be and remain the
responsibility of Institute. Notwithstanding the provisions of Section 2.1,
Buyer is not assuming, and Institute shall not be deemed to have transferred to
Buyer, the following Liabilities of Institute:
2.2.(a) Taxes Arising from Transaction. Any Federal, foreign, state or
other taxes applicable to, imposed upon or arising out of the sale or
transfer of the Purchased Assets to Buyer and the other transactions
contemplated by this Agreement, including but not limited to any income,
transfer, sales, use, gross receipts or documentary stamp taxes.
2.2.(b) Income, Sales and Franchise Taxes. Any Liability of Institute
for Federal income taxes and any state or local income, profit, sales or
franchise taxes (and any penalties or interest due on account thereof).
2.2.(c) Insured Claims. Any Liability of Institute which Institute is
insured against, to the extent such Liability is or will be paid by an
insurer.
2.2.(d) Warranty and Rework. All product or service warranty, rework
or return Liabilities of Institute on products produced, or services
rendered, by the Business prior to the Closing.
2.2.(e) Litigation Matters. Any Liability with respect to any action,
suit, proceeding, arbitration, investigation or inquiry, whether civil,
criminal or administrative ("Litigation") whether or not described in
Schedule 4.9.
2.2.(f) Infringements. Any Liability to a third party for infringement
of such third party's Trade Rights (as hereinafter defined).
2.2.(g) Transaction Expenses. All Liabilities incurred by Institute in
connection with this Agreement and the transactions contemplated herein.
2.2.(h) Liability For Breach. Liabilities of Institute for any breach
or failure to perform any of Institute's covenants and agreements contained
in, or made pursuant to, this Agreement, or, prior to the Closing Date, any
other contract, whether or not assumed hereunder, including breach arising
from assignment of contracts hereunder without consent of third parties.
2.2.(i) Liabilities to Affiliates. Liabilities of Institute to its
present or former Affiliates.
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2.2.(j) Violation of Laws or Orders. Liabilities of Institute for any
violation of or failure to comply with any statute, law, ordinance, rule or
regulation (collectively, "Laws") or any order, writ, injunction, judgment,
plan or decree (collectively, "Orders") of any court, arbitrator,
department, commission, board, bureau, agency, authority, instrumentality
or other body, whether federal, state, municipal, foreign or other
(collectively, "Government Entities").
2.2.(k) Employees. Any Liability of Institute relating to employees of
Institute or the Business (such employees shall remain employees of
Institute after the Closing), including, without limitation, any Liability
of Institute under or with respect to any employee benefit plan, program,
contract or arrangement of Institute or the Business covering past or
present employees of Institute or the Business and their beneficiaries or
imposed by law as a result of the transactions contemplated hereby.
3. PURCHASE PRICE - PAYMENT
3.1 Purchase Price. The purchase price (the "Purchase Price") for the
Purchased Assets shall be (i) the assumption of the Assumed Liabilities, and
(ii) the Fixed Purchase Price (as hereinafter defined).
3.2 Payment of Purchase Price. The Purchase Price shall be paid by Buyer as
follows:
3.2.(a) Assumption of Liabilities. At the Closing, Buyer shall deliver
to Institute such documents and instruments as are reasonably required to
evidence the assumption of the Assumed Liabilities.
3.2.(b) Cash to Escrow Agent. At the Closing, Buyer shall deliver, or
cause to be delivered, to the Escrow Agent under the Escrow Agreement (both
as hereinafter defined), $350,000 of the Fixed Purchase Price.
3.2.(c) Cash to CareGroup and Scheduled Creditors. At the Closing,
Buyer shall deliver, or cause to be delivered, to CareGroup and to the
customers/clients and other creditors of Institute set forth in Schedule
3.2.(c) (in order to settle Institute's obligations to CareGroup and to
such customers/clients and other creditors) the portions of the Fixed
Purchase Price set forth opposite their names on such Schedule.
3.2.(d) Cash to Institute. Buyer shall deliver, or cause to be
delivered, to Institute at the Closing, the remaining portion of the Fixed
Purchase Price, as adjusted as provided for in Section 3.3.
3.2.(e) Method of Payment. All payments under this Section 3.2 shall
be made in the form of certified or bank cashier's check payable to the
order of the recipient or, at the recipient's option, by wire transfer of
immediately available funds to an account designated by the recipient not
less than 48 hours prior to the time for payment specified herein.
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3.3 Fixed Purchase Price. As used herein, the term "Fixed Purchase Price"
shall mean $3,500,000; however, the following amount shall be permanently
withheld from the Fixed Purchase Price paid to Institute (such amount shall be
retained by Buyer in order to be made whole on work to be performed by Buyer
post-Closing): the net amount, if any, of the Business' xxxxxxxx in excess of
cost over costs in excess of xxxxxxxx. At the Closing, the adjustment provided
for in Section 6.9 shall also be permanently withheld from the Fixed Purchase
Price paid to Institute (and retained by Buyer). For purposes of determining the
net amount of the Business' xxxxxxxx in excess of cost over costs in excess of
xxxxxxxx, Institute and Buyer shall, prior to Closing, jointly prepare and agree
on detailed schedules of the Business' xxxxxxxx in excess of cost and costs in
excess of xxxxxxxx as of the day prior to Closing (which shall form a part of
Schedule 4.18). In connection with the foregoing determination, Institute shall
provide Buyer with full and complete access to the books and records of the
Business and shall provide to Buyer such other information and detail as Buyer
shall reasonably request.
3.4 Allocation of Purchase Price. The aggregate Purchase Price (including
the assumption by Buyer of the Assumed Liabilities) shall be allocated among the
Purchased Assets for tax purposes in accordance with the principles of Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder, which allocation shall be determined by Buyer following
the Closing and be subject to Institute's advance written consent (which consent
shall not be unreasonably withheld). Institute and Buyer covenant and agree that
they will follow and use such allocation in all tax returns, filings or other
related reports made by them to any governmental agencies and will not take any
position for tax purposes or otherwise that is inconsistent with such
allocation. Buyer and Institute will disclose their respective Internal Revenue
Service ("IRS") Forms 8594 to the other ten (10) days prior to filing with the
IRS.
4. REPRESENTATIONS AND WARRANTIES OF INSTITUTE
Institute makes the following representations and warranties to Buyer, each
of which is true and correct on the date hereof, shall remain true and correct
to and including the Closing Date, shall be unaffected by any investigation
heretofore or hereafter made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedule (as hereinafter defined)
delivered to Buyer at the time of the execution of this Agreement, and shall
survive the Closing of the transactions provided for herein.
4.1 Institute.
4.1.(a) Organization. Institute is a charitable corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts.
4.1.(b) Power. Institute has all requisite power and authority to own,
operate and lease its properties, to carry on its business as and where
such is now being conducted, to enter into this Agreement and the other
documents and instruments to be
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executed and delivered by Institute pursuant hereto and to carry out the
transactions contemplated hereby and thereby.
4.1.(c) Qualification. Institute is duly licensed or qualified to do
business as a foreign charitable corporation, and is in good standing, in
each jurisdiction wherein the character of its properties which are
Purchased Assets or the nature of the Business makes such licensing or
qualification necessary; such jurisdictions are listed in Schedule 4.1.(c).
4.1.(d) No Subsidiaries. No portion of the Business is currently
conducted by Institute by means of any subsidiary or any other interest in
any corporation, partnership or other entity.
4.2 Authority. The execution and delivery of this Agreement and the other
documents and instruments to be executed and delivered by Institute pursuant
hereto and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by the Board of Directors of Institute and by
Institute's sole member, CareGroup. No other or further act or proceeding on the
part of Institute, CareGroup or their members or shareholders, respectively, is
necessary to authorize this Agreement or the other documents and instruments to
be executed and delivered by Institute pursuant hereto or the consummation of
the transactions contemplated hereby and thereby. This Agreement constitutes,
and when executed and delivered, the other documents and instruments to be
executed and delivered by Institute pursuant hereto will constitute, valid
binding agreements of Institute, enforceable against Institute in accordance
with their respective terms, except insofar as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by general equitable
principles.
4.3 No Violation. Except as set forth on Schedule 4.3, neither the
execution and delivery of this Agreement or the other documents and instruments
to be executed and delivered by Institute pursuant hereto, nor the consummation
by Institute of the transactions contemplated hereby and thereby (a) will
violate any Law or Order applicable to Institute, (b) except as may be required
by Section 8A of Chapter 180 of the Annotated Laws of Massachusetts (the
"Massachusetts Public Charity Law"), will require any authorization, consent,
approval, exemption or other action by or notice to any Government Entity
(including, without limitation, under any "plant-closing" or similar law), or
(c) subject to obtaining the consents referred to in Schedule 4.3, will violate
or conflict with, or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or will result in the
termination of, or accelerate the performance required by, or result in the
creation of any Lien (as hereinafter defined), upon any of the assets of
Institute under, any term or provision of (i) the articles of organization or
bylaws of Institute or (ii) any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which
Institute is a party or by which Institute or any of its assets or properties
may be bound or affected.
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4.4 Financial Statements. Included as Schedule 4.4 are true and complete
copies of the financial statements of Institute consisting of (i) an unaudited
balance sheet of Institute as of September 30, 2000, and the related unaudited
statements of income and cash flows for the year then ended (including the notes
contained therein or annexed thereto), which financial statements have been
incorporated into the audited consolidated financial statements of CareGroup,
which audited financial statements have reported on, and are accompanied by, the
signed, unqualified opinion of Ernst & Young LLP, independent auditors for
CareGroup for such year, and (ii) unaudited balance sheets of Institute as of
December 31, 2000 (the "Recent Balance Sheet") and March 31, 2001, and the
related unaudited statements of income for the respective three months then
ended. All of such financial statements (including all notes and schedules
contained therein or annexed thereto) are true, complete and accurate, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
(except, in the case of unaudited statements, for the absence of footnote
disclosure) applied on a consistent basis, have been prepared in accordance with
the books and records of Institute, and fairly present, in accordance with GAAP,
the assets, liabilities and financial position, the results of operations and
cash flows of Institute as of the dates and for the year and period indicated.
4.5 Tax Matters. Except as set forth on Schedule 4.5: (i) all state,
foreign, county, local and other tax returns relating primarily to the Business
or the Purchased Assets, or required to be filed by or on behalf of Institute in
any jurisdiction required to be listed in Schedule 4.1.(c) or any political
subdivision thereof, have been timely filed and the taxes paid or adequately
accrued; (ii) Institute has duly withheld and paid all taxes which it is
required to withhold and pay relating to salaries and other compensation
heretofore paid to the employees of the Business; and (iii) Institute has not
received any notice of underpayment of taxes or other deficiency which has not
been paid and there are outstanding no agreements or waivers extending the
statutory period of limitations applicable to any tax return or report relating
primarily to the Business or the Purchased Assets, or required to have been
filed by Institute in any jurisdiction required to be listed in Schedule 4.1.(c)
or any political subdivision thereof.
4.6 Work-In-Process. Except as disclosed on Schedule 4.6, all
work-in-process of the Business constitutes items in process of production
pursuant to contracts or open orders taken in the ordinary course of business,
from regular customers/clients of Institute with no recent history of credit
problems with respect to Institute; neither Institute nor, to Institute's
knowledge, any such customer/client is in material breach of the terms of any
obligation to the other, and, to Institute's knowledge, no valid grounds exist
for any set-off of amounts billable to such customers on the completion of
orders to which work-in-process relates. All work-in-process of the Business is
of a quality ordinarily produced in accordance with the requirements of the
orders to which such work-in-process is identified and such work-in-process
meets all deliverable requirements in all material respects and satisfies in all
material respects the percentage of completion method of revenue recognition (in
accordance with GAAP) and all contractual time and scope standards. Institute
shall not be liable to Buyer for any claim made by a customer against Buyer or
Institute if that claim arises out of Buyer's failure to perform services for
Institute's customers under that certain Agreement, dated February 2, 2001,
between Institute and Buyer, unless such failure was caused by an act or
omission of Institute.
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4.7 Absence of Certain Material Changes. Except as and to the extent set
forth in Schedule 4.7, since the date of the Recent Balance Sheet there has not
been:
4.7.(a) No Material Adverse Change. Any material adverse change in the
financial condition, assets, Liabilities, business, prospects or operations
of the Business;
4.7.(b) No Material Damage. Any loss, damage or destruction, whether
covered by insurance or not, having, or reasonably expected to have, a
material adverse effect upon the Business or the Purchased Assets;
4.7.(c) No Nonordinary Commitments. Any commitment or transaction by
Institute in connection with or affecting the Business (including, without
limitation, any borrowing or capital expenditure) other than in the
ordinary course of business consistent in amount and nature with past
practice;
4.7.(d) No Nonordinary Disposition of Property. Any sale, lease or
other transfer or disposition of any properties or assets of Institute that
are Purchased Assets (or would have been Purchased Assets had no sale,
lease, transfer or disposition occurred), except for the sale of inventory
items in the ordinary course of business consistent in amount and nature
with past practice;
4.7.(e) No Indebtedness. Any indebtedness for borrowed money incurred,
assumed or guaranteed by Institute which affects the Business or the
Purchased Assets;
4.7.(f) No Liens. Any Lien made on any of the properties or assets of
Institute that are Purchased Assets (or would become Purchased Assets if
not sold, leased, transferred or disposed of prior to the Closing Date)
other than mechanics' and materialmen's liens arising in the ordinary
course of business;
4.7.(g) No Amendment of Contracts. Any entering into, amendment or
termination by Institute of any Contract in connection with or affecting
the Business, or any waiver of material rights thereunder, other than in
the ordinary course of business consistent with past practice;
4.7.(h) Loans and Advances. Any loan or advance by the Business (other
than advances to employees in the ordinary course of business for travel,
entertainment or other business expenses in accordance with past practice);
4.7.(i) Credit and Price Concessions. Any grant of credit or price
concessions to any customer/client of the Business on terms or in amounts
more favorable than those which have been extended to such customer/client
in the past, any other change in the terms of any credit or price
concessions heretofore extended, or any other change of Institute's
policies or practices with respect to the granting of credit or price
concessions in connection with the Business;
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4.7.(j) No Labor Disputes. Any labor dispute or disturbance, other
than routine individual grievances which are not material to the financial
condition or results of operations of the Business;
4.7.(k) No Accounting Change. Any change in accounting methods or
practices affecting any of the properties or assets of Institute that are
Purchased Assets or the Business;
4.7.(l) No Unusual Events. Any other event or condition not in the
ordinary course of business of Institute's operation of the Business; or
4.7.(m) Agreements. Any agreements entered into to do any of the
foregoing.
4.8 Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet or in Schedule 4.8 and except
for Liabilities not being assumed by Buyer under this Agreement, the Business
does not have any Liabilities, other than commercial liabilities and obligations
incurred since the date of the Recent Balance Sheet in the ordinary course of
business and consistent in amount and nature with past practice and none of
which has or will have a material adverse effect on the financial condition or
results of operations of the Business by Buyer after the Closing. Except as and
to the extent described in the Recent Balance Sheet or in Schedule 4.8 and
except for Liabilities not being assumed by Buyer under this Agreement,
Institute has no knowledge of any basis for the assertion against Institute of
any Liability in connection with or affecting the Business or the Purchased
Assets, and there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to such Liabilities,
except commercial liabilities and obligations incurred in the ordinary course of
the Business and consistent in amount and nature with past practice.
4.9 No Litigation. Except as set forth in Schedule 4.9, there is no
Litigation pending or, to Institute's knowledge, threatened against Institute or
its officers and directors (in such capacity) that in any way involves the
Business, the Purchased Assets or the Assumed Liabilities, nor does Institute
know, or have grounds to know, of any basis for any Litigation. Schedule 4.9
also identifies all Litigation that in any way involves the Business, the
Purchased Assets or the Assumed Liabilities to which Institute or any of its
officers or directors have been parties since January 1, 1997, including current
status thereof. Except as set forth in Schedule 4.9, neither Institute, the
Purchased Assets nor the Assumed Liabilities is subject to any Order of any
Government Entity.
4.10 Compliance With Laws and Orders.
4.10.(a) Compliance. Except as set forth in Schedule 4.10.(a), the
Business (including each and all of its operations, practices, properties
and assets) is in compliance with all applicable Laws and Orders,
including, without limitation, those applicable to discrimination in
employment, occupational safety and health, trade practices, competition
and pricing, product warranties, employment, retirement and
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labor relations, product advertising, storage, use and handling of toxic
and chemical substances and pollution, discharge, handling, disposal and
emission of wastes, materials and gases into the environment, other than
Laws which, if violated by Institute would not have a material adverse
effect on the Business. Except as set forth in Schedule 4.10.(a), Institute
has not received notice of any violation or alleged violation of, and is
subject to no Liability for past or continuing violation of, any Laws or
Orders with respect to the operations of the Business. All reports,
registrations and returns required to be filed by Institute with any
Government Entity have been filed, and were accurate and complete when
filed.
4.10.(b) Licenses, Permits and Registrations. Institute has all
licenses, permits, registrations, approvals, authorizations and consents of
all Government Entities and of all certification organizations required for
the conduct of the Business. All such licenses, permits, approvals,
authorizations and consents are described in Schedule 4.10.(b), are in full
force and effect and are assignable to Buyer in accordance with the terms
hereof. Except as set forth in Schedule 4.10.(b), the Business (including
its operations, properties and assets) is and has been in compliance in all
material respects with all such permits, registrations, licenses,
approvals, authorizations and consents.
4.11 Title to and Condition of Properties.
4.11.(a) Marketable Title. Institute has good and marketable title to
all the Purchased Assets, free and clear of all mortgages, liens (statutory
or otherwise), security interests, claims, pledges, licenses, equities,
options, conditional sales contracts, assessments, levies, covenants,
reservations, restrictions, exceptions, limitations, charges or
encumbrances of any nature whatsoever (collectively, "Liens") except those
described in Schedule 4.11.(a)(i). Subject to obtaining the consents
referred to in Schedule 4.3, none of the Purchased Assets are subject to
any restrictions with respect to the transferability thereof and
Institute's title thereto will not be affected in any way by the
transactions contemplated by this Agreement. Subject to obtaining the
consents referred to in Schedule 4.3, Institute has complete and
unrestricted power and right to sell, assign, convey and deliver the
Purchased Assets to Buyer as contemplated hereby. At the Closing, Buyer
will receive good and marketable title to all the Purchased Assets, free
and clear of all Liens of any nature whatsoever except those described in
Schedule 4.11.(a)(ii).
4.11.(b) Condition. Except as set forth in Schedule 4.11.(b), all
tangible property and assets constituting Purchased Assets hereunder are in
good operating condition and repair, free from any defects (except such
minor defects as do not interfere with the use thereof in the conduct of
the Business by Institute), have been maintained consistent with the
standards generally followed in the industry and are sufficient to carry on
the Business as conducted by Institute during the preceding 12 months.
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4.12 Insurance. Set forth in Schedule 4.12 is a complete and accurate list
and description of all policies of fire, liability, product liability, and other
forms of property or liability insurance presently in effect with respect to the
Business or the Purchased Assets, true and correct copies of which have
heretofore been delivered to Buyer. All such policies are valid, outstanding and
enforceable policies. No notice of cancellation or termination has been received
with respect to any such policy, and Institute has no knowledge of any act or
omission of Institute which could result in cancellation of any such policy
prior to its scheduled expiration date. Institute has duly and timely made all
claims it has been entitled to make under each policy of insurance. There is no
claim by Institute pending under any such policies as to which coverage has been
questioned, denied or disputed by the underwriters of such policies, and
Institute knows of no basis for denial of any claim under any such policy.
Institute has not received any written notice from or on behalf of any insurance
carrier issuing any such policy that insurance rates therefor will hereafter be
substantially increased (except to the extent that insurance rates may be
increased for all similarly situated risks) or that there will hereafter be a
cancellation or an increase in a deductible (or an increase in premiums in order
to maintain an existing deductible) or nonrenewal of any such policy. Such
policies are sufficient in all material respects for compliance by Institute
with all material requirements of Law and with the requirements of all material
contracts to which Institute is a party.
4.13 Contracts and Commitments.
4.13.(a) Sales Commitments. Except as set forth in Schedule 1.2.(a),
Institute has no sales contracts, commitments or orders to or with
customers/clients in connection with or affecting the Business or the
Purchased Assets. No such contracts or commitments are for a sales price
which would reasonably be expected to result in a loss to the Business. The
dollar value and specifications of the Contracts described in Schedule
1.2.(a) are true and correct. Schedule 1.2.(a) also sets forth the true and
correct customer/client balances and the work performed to date for each of
the Contracts.
4.13.(b) Subcontracting. Except as set forth in Schedule 4.13.(b),
Institute has no subcontracting agreements, understandings, contracts or
commitments (written or oral) in connection with or affecting the Business.
Schedule 4.14.(b) also sets forth all such subcontracting agreements of
Institute in effect at any time since January 1, 1999. All amounts owed by
Institute to any such subcontractors will be paid by Institute within five
(5) days of the Closing Date.
4.13.(c) Sales Promotion. Except for the agreement with HBS
International, Inc., Institute has no agreements or commitments for survey
sales promotion, marketing and/or services to potential clients of the
Business.
4.13.(d) No Default. Institute is not in default under any lease,
license, contract or commitment in its operation of the Business, nor has
any event or omission occurred which through the passage of time or the
giving of notice, or both, would constitute a default thereunder or cause
the acceleration of any of Institute's obligations
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or result in the creation of any Lien on any Purchased Asset. To
Institute's knowledge, no third party is in default under any such lease,
contract or commitment to which Institute is a party, nor has any event or
omission occurred which, through the passage of time or the giving of
notice, or both, would constitute a default thereunder, or give rise to an
automatic termination, or the right of discretionary termination thereof.
4.14 Employee Benefit Plans.
4.14.(a) Terminations, Proceedings, Penalties, etc. With respect to
each employee benefit plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), contributed
to or maintained by Institute to provide benefits to any persons employed
by Institute in its operation of the Business (hereinafter sometimes
referred to collectively as "Employee Plans/Agreements," and each
individually as an "Employee Plan/Agreement") that is subject to the
provisions of Title IV of ERISA and with respect to which Institute or any
of its assets may, directly or indirectly, be subject to any Liability,
contingent or otherwise, or the imposition of any Lien (whether by reason
of the complete or partial termination of any such plan, the funded status
of any such plan, any "complete withdrawal" (as defined in Section 4203 of
ERISA) or "partial withdrawal" (as defined in Section 4205 of ERISA) by any
person from any such plan, or otherwise):
(i) no such plan has been terminated so as to subject, directly
or indirectly, any Purchased Assets to any Liability or the imposition
of any Lien under Title IV of ERISA;
(ii) no proceeding has been initiated or threatened by any person
(including the Pension Benefit Guaranty Corporation ("PBGC")) to
terminate any such plan;
(iii) no condition or event currently exists or currently is
expected to occur that could subject, directly or indirectly, any
Purchased Assets to any Liability or the imposition of any Lien under
Title IV of ERISA, whether to the PBGC or to any other person or
otherwise on account of the termination of any such plan;
(iv) if any such plan were to be terminated as of the Closing
Date, no Purchased Assets would be subject, directly or indirectly, to
any Liability or the imposition of any Lien under Title IV of ERISA;
(v) no "reportable event" (as defined in Section 4043 of ERISA)
has occurred with respect to any such plan;
(vi) no such plan which is subject to Section 302 of ERISA or
Section 412 of the Code has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the
Code, respectively), whether or not waived; and
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(vii) no such plan is a multi-employer plan within the meaning of
Section 4001(a)(3) of ERISA or a plan described in Section 4064 of
ERISA.
4.14.(b) Prohibited Transactions, etc. No event or omission has
occurred in connection with any Employee Plan/Agreement, directly or
indirectly, that could subject the Business or the Purchased Assets to any
liability under ERISA, the Code or any other Law or Order applicable to any
Employee Plan/Agreement, or under any agreement, instrument, statute, Law
or Order pursuant to which Institute has agreed to indemnify or is required
to indemnify any person against liability incurred under any such Law or
Order. The consummation of the transactions contemplated by this Agreement,
will not result in any prohibited transaction described in Section 406 of
ERISA or Section 4975 of the Code for which an exemption is not available.
4.14.(c) Controlled Group; Affiliated Service Group; Leased Employees.
Except as set forth on Schedule 4.14.(c), Institute is not and never has
been a member of a controlled group of corporations as defined in Section
414(b) of the Code or in common control with any unincorporated trade or
business as determined under Section 414(c) of the Code. Except as set
forth on Schedule 4.14.(c), Institute is not and never has been a member of
an "affiliated service group" within the meaning of Section 414(m) of the
Code. There are not and never have been any leased employees within the
meaning of Section 414(n) of the Code who perform services for the
Business, and no individuals are expected to become leased employees with
the passage of time.
4.15 Trade Rights. Schedule 4.15 lists all Trade Rights of the type
described in clauses (i), (ii), (iii) or (iv) of the definition of Trade Rights
in which Institute has any interest and which relate to or are otherwise
necessary to conduct the Business, specifying whether such Trade Rights are
owned, controlled, used or held (under license or otherwise) by Institute, and
also indicating which of such Trade Rights are registered. In order to conduct
the Business, as such is currently being conducted or proposed to be conducted,
Institute does not require any Trade Rights that it does not already have.
Institute is not infringing and has not infringed any Trade Rights of another in
the operation of the Business, nor, to Institute's knowledge, is any other
person infringing the Trade Rights of Institute related to the Business. Except
as set forth on Schedule 4.15, Institute has not granted any license or made any
assignment of any Trade Right listed on Schedule 4.15, and no other person has
any right to use any such Trade Right. Except as set forth on Schedule 4.15,
Institute does not pay any royalties or other consideration for the right to use
any Trade Rights of others in connection with the operation of the Business.
There is no Litigation pending or, to Institute's knowledge, threatened to
challenge Institute's right, title and interest with respect to its continued
use and right to preclude others from using any Trade Rights of Institute. All
registered Trade Rights of Institute are valid, enforceable and in good standing
and all other Trade Rights of Institute are valid, enforceable and in good
standing to the extent of common law rights with respect thereto and, to the
knowledge of Institute, there are no equitable defenses to enforcement based on
any act or omission of Institute. The consummation of the transactions
contemplated by this Agreement will not alter or impair any Trade Rights of
Institute.
15
4.16 Warranty. Schedule 4.16 contains a true, correct and complete copy of
Institute's standard warranty or warranties for sales of products of the
Business and services rendered by Institute in the operation of the Business
and, except as stated in Schedule 4.16, there are no warranties, commitments or
obligations with respect to the return, repair, rework or replacement of
products or services of the Business. Schedule 4.16 sets forth the estimated
aggregate annual cost to Institute of performing warranty obligations for
customers/clients of the Business for each of the three (3) preceding fiscal
years.
4.17 Affiliates' Relationships to Institute.
4.17.(a) Contracts With Affiliates. All leases, contracts, agreements
or other arrangements concerning the Business between Institute and any
Affiliate or between the Business and other business units of Institute are
described on Schedule 4.17.(a).
4.17.(b) No Adverse Interests. Except as disclosed on Schedule
4.17.(b), no Affiliate has any direct or indirect interest in (i) any
entity which does business with Institute in connection with the operation
of, or is competitive with, the Business, or (ii) any property, asset or
right which is used by Institute in the conduct of the Business.
4.18 Accounts Receivable; Costs in Excess of Xxxxxxxx; Xxxxxxxx in Excess
of Cost. All accounts receivable, costs in excess of xxxxxxxx and xxxxxxxx in
excess of cost of the Business reflected on the Recent Balance Sheet, and as
incurred in the normal course of operating the Business since the date thereof,
represent arms-length sales actually made in the ordinary course of business;
are collectible (net of the reserves shown on the Recent Balance Sheet for
doubtful accounts) in the ordinary course of business without the necessity of
commencing legal proceedings; are subject to no counterclaim or setoff; and are
not in dispute. Schedule 4.18 contains an aged schedule of accounts receivable
included in the Recent Balance Sheet. Schedule 4.18 also contains a schedule, as
of the day prior to Closing, of all existing/outstanding accounts receivable,
costs in excess of xxxxxxxx and xxxxxxxx in excess of cost of the Business.
4.19 Labor Matters. Except as set forth in Schedule 4.19, since January 1,
1997 Institute has not experienced any labor disputes, union organization
attempts or any work stoppage due to labor disagreements in connection with the
Business.
4.20 No Brokers or Finders. Except for Deloitte & Touche LLP, neither
Institute nor any of its directors, trustees, officers, employees, agents or
shareholders have retained, employed or used any broker or finder in connection
with the transaction provided for herein or in connection with the negotiation
thereof.
4.21 Disclosure. No representation or warranty by Institute in this
Agreement, nor any statement, certificate, schedule or exhibit hereto furnished
or to be furnished by or on behalf of Institute pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall omit a material fact
necessary to make the statements contained therein not misleading. All
statements and information contained in any certificate, instrument, Disclosure
Schedule or
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document delivered by or on behalf of Institute shall be deemed representations
and warranties by Institute.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to Institute, each
of which is true and correct on the date hereof, shall remain true and correct
to and including the Closing Date, shall be unaffected by any investigation
heretofore or hereafter made by Institute or any notice to Institute, and shall
survive the Closing of the transactions provided for herein.
5.1 Corporate.
5.1.(a) Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Wisconsin.
5.1.(b) Corporate Power. Buyer has all requisite corporate power to
carry on its business as and where such is now being conducted, to enter
into this Agreement and the other documents and instruments to be executed
and delivered by Buyer and to carry out the transactions contemplated
hereby and thereby.
5.2 Authority. The execution and delivery of this Agreement and the other
documents and instruments to be executed and delivered by Buyer pursuant hereto
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by the Board of Directors of Buyer. No other corporate act
or proceeding on the part of Buyer or its shareholders is necessary to authorize
this Agreement or the other documents and instruments to be executed and
delivered by Buyer pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by Buyer pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except insofar as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors' rights
generally, and by general equitable principles.
5.3 No Violation. Neither the execution and delivery of this Agreement or
the other documents and instruments to be executed and delivered by Buyer
pursuant hereto, nor the consummation by Buyer of the transactions contemplated
hereby and thereby (a) will violate any Law or Order applicable to Buyer or (b)
will require any authorization, consent, approval, exemption or other action by
or notice to any Government Entity (including, without limitation, under any
"plant-closing" or similar law).
5.4 No Brokers or Finders. Except for Xxxxx Squared, LLC, neither Buyer nor
any of its directors, officers, employees or agents have retained, employed or
used any broker or finder in connection with the transaction provided for herein
or in connection with the negotiation thereof.
17
5.5 Disclosure. No representation or warranty by Buyer in this Agreement,
nor any statement, certificate, schedule, document or exhibit hereto furnished
or to be furnished by or on behalf of Buyer pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits or shall omit a material fact
necessary to make the statements contained therein not misleading. All
statements and information contained in any certificate, instrument or document
delivered by or on behalf of Buyer shall be deemed representations and
warranties by Buyer.
5.6 Buyer Financial Statements. Buyer has provided Institute with true and
complete copies of the financial statements of Buyer consisting of a balance
sheet of Buyer as of December 31, 2000, and the related statements of income and
cash flows for the year then ended (including the notes contained therein or
annexed thereto), which financial statements have been reported on, and are
accompanied by, the signed, unqualified opinion of KPMG LLP, independent
auditors for Buyer for such year. All of such financial statements (including
all notes and schedules contained therein or annexed thereto) are true, complete
and accurate, have been prepared in accordance with GAAP (except, in the case of
unaudited statements, for the absence of footnote disclosure) applied on a
consistent basis, have been prepared in accordance with the books and records of
Buyer, and fairly present, in accordance with GAAP, the assets, liabilities and
financial position, the results of operations and cash flows of Buyer as of the
dates and for the year and period indicated.
5.7 No Litigation. There is no Litigation pending or, to Buyer's knowledge,
threatened against Buyer or its officers and directors (in such capacity) that
in any way involves the transactions contemplated by this Agreement, nor does
Buyer know, or have grounds to know, of any basis for any such Litigation. Buyer
is not a party to any Litigation or governmental investigation that, if finally
determined adversely to Buyer, would have a material adverse effect on Buyer's
ability to perform its obligations under this Agreement.
5.8 Compliance With Laws and Orders.
5.8.(a) Compliance. Buyer (including each and all of its operations,
practices, properties and assets) is in compliance with all applicable Laws
and Orders, including, without limitation, those applicable to
discrimination in employment, occupational safety and health, trade
practices, competition and pricing, product warranties, employment,
retirement and labor relations, product advertising, storage, use and
handling of toxic and chemical substances and pollution, discharge,
handling, disposal and emission of wastes, materials and gases into the
environment, other than Laws which, if violated by Buyer would not have a
material adverse effect on Buyer or its ability to perform its obligations
under this Agreement. Buyer has not received notice of any violation or
alleged violation of, and is subject to no Liability for past or continuing
violation of, any Laws or Orders with respect to its operations. All
reports, registrations and returns required to be filed by Buyer with any
Government Entity have been filed, and were accurate and complete when
filed.
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5.8.(b) Licenses, Permits and Registrations. Buyer has all licenses,
permits, registrations, approvals, authorizations and consents of all
Government Entities and of all certification organizations required for the
conduct of its business. All such licenses, permits, approvals,
authorizations and consents are in full force and effect. Buyer (including
its operations, properties and assets) is and has been in compliance in all
material respects with all such permits, registrations, licenses,
approvals, authorizations and consents.
6. RELATED MATTERS
6.1 Noncompetition; Confidentiality. Subject to the Closing, and as an
inducement to Buyer to execute this Agreement and complete the transactions
contemplated hereby, and in order to preserve the goodwill associated with the
Business being acquired pursuant to this Agreement, Institute hereby covenants
and agrees as follows:
6.1.(a) Covenant Not to Compete. For a period of ten (10) years from
the Closing Date, Institute will not, directly or indirectly:
(i) engage in, continue in or carry on any business which
competes with the Business, or is substantially similar thereto,
including owning or controlling any financial interest in any
corporation, partnership, firm or other form of business organization
(including not-for-profit and government entities) which is so
engaged;
(ii) consult with, advise or assist in any way, whether or not
for consideration, any corporation, partnership, firm or other
business organization which is now or becomes a competitor of Buyer in
any aspect with respect to the Business, including, but not limited
to, advertising or otherwise endorsing the products of any such
competitor; soliciting customers or otherwise serving as an
intermediary for any such competitor; loaning money or rendering any
other form of financial assistance to or engaging in any form of
business transaction with any such competitor;
(iii) solicit for employment any person who is or was employed by
Buyer during the then immediately preceding twelve (12) months, or
actively induce or otherwise assist any other person or entity in
soliciting for employment any person who is or was employed by Buyer
during the then immediately preceding twelve (12) months, without the
prior written consent of Buyer;
(iv) unless agreed to by Buyer in writing and in advance,
solicit, request, induce or advise any then current client, customer
or vendor of the Business or Buyer or from any client, customer or
vendor of the Business or Buyer during the two year period prior to
the Closing Date to withdraw, curtail or cancel their business with
the Business or Buyer; or
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(v) engage in any practice the purpose of which is to evade the
provisions of this covenant not to compete;
provided, however, that the foregoing shall not prohibit (x) the ownership
of securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such corporation
or (y) Institute's continuing activities in sponsored research, education
and consulting (other than for, or with respect to, a direct competitor of
Buyer). The parties agree that, since the scope of the Business and the
business of Buyer is being, and will continue to be, carried on throughout
the world (excluding the Institute European Territory), the geographic
scope of this covenant not to compete shall extend throughout each country
in the world (excluding the Institute European Territory). The parties
agree that Buyer may sell, assign or otherwise transfer this covenant not
to compete, in whole or in part, to any person, corporation, firm or entity
that purchases all or part of the Business or the Purchased Assets. In the
event a court of competent jurisdiction determines that the provisions of
this covenant not to compete are excessively broad as to duration,
geographical scope or activity, it is expressly agreed that this covenant
not to compete shall be construed so that the remaining provisions shall
not be affected, but shall remain in full force and effect, and any such
over broad provisions shall be deemed, without further action on the part
of any person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction.
6.1.(b) Covenant of Confidentiality. Institute shall not at any time
subsequent to the Closing Date, except as explicitly requested by Buyer,
(i) use for any purpose, (ii) disclose to any person, or (iii) keep or make
copies of documents, tapes, discs or programs containing, any confidential
information concerning the Business, the Purchased Assets or the Assumed
Liabilities, except those described in Section 1.3 or those reasonably
required to perform obligations under this Agreement or relating to
Liabilities not Assumed Liabilities hereunder. For purposes hereof,
"confidential information" shall mean and include, without limitation, all
client or customer information of the Business and all Trade Rights of the
Business.
6.1.(c) Equitable Relief for Violations. Institute agrees that the
provisions and restrictions contained in this Section 6.1 are necessary to
protect the legitimate continuing interests of Buyer in acquiring the
Business through the purchase of the Purchased Assets and the assumption of
the Assumed Liabilities, and that any violation or breach of these
provisions will result in irreparable injury to Buyer for which a remedy at
law would be inadequate and that, in addition to any relief at law which
may be available to Buyer for such violation or breach and regardless of
any other provision contained in this Agreement, Buyer shall be entitled to
injunctive and other equitable relief as a court may grant after
considering the intent of this Section 6.1.
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6.2 Escrow Agreement. At the Closing, Buyer and Institute shall execute and
deliver an Escrow Agreement (the "Escrow Agreement"), in substantially the form
attached hereto as Exhibit A, along with Firstar Bank, N.A., as escrow agent
("Escrow Agent").
6.3 Access to Information and Records. After the Closing Date, each party
will afford the other party, its counsel, accountants and other representatives,
during normal business hours, reasonable access to the books, records and other
data in such party's possession relating directly or indirectly to the
properties, liabilities or operations of the Business, with respect to periods
prior to the Closing, and the right to make copies and extracts therefrom, to
the extent that such access may be reasonably required by the requesting party
for any proper business purpose. Each party agrees for a period extending six
(6) years after the Closing not to destroy or otherwise dispose of any such
records without first offering in writing to surrender such records to the other
party, which party shall have ten (10) days after receipt of such offer to agree
in writing to take possession thereof.
6.4 Further Actions. Subject to the terms and conditions hereof, Institute
and Buyer shall use their commercially reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, and to cooperate fully with
each other with respect to, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including, if necessary, using all commercially reasonable efforts to obtain
after the Closing Date all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and
parties to Contracts with Institute that are necessary for the consummation of
the transactions contemplated by this Agreement; provided, however, that none of
the Institute, its Affiliates, Buyer or Buyer's affiliates (as defined in
Section 9.1) shall be required to (i) make any material payments or (ii) enter
into or amend any contractual arrangements in connection with any obligations of
any of them contained in this Section 6.6 in a manner that is materially
disadvantageous to the Business. With regard to consents from third parties to
the Contracts described in Schedule 4.3, Institute shall initiate contact to
obtain such consents only in conjunction and cooperation with Buyer.
6.5 Accounts Receivable. Following the Closing Date, Institute shall cease
its collection efforts and Buyer shall exercise commercially reasonable efforts
to collect, on behalf of Institute, the accounts receivable of the Business
reflected on Schedule 4.18 (the "Closing Date A/Rs"). All payments received by
Buyer or Institute from customers/clients of the Business who have outstanding
Closing Date A/Rs shall either be retained by the recipient or promptly remitted
to the other party, as the case may be, in accordance with the following
procedure: all payments from such customers/clients shall be credited to the
specific invoices for which such payments are submitted and, assuming compliance
with the foregoing, checks received by Buyer that are payable to Institute will
be directly turned over to Institute. Funds shall be remitted to the proper
party on a daily business day basis and any funds not remitted to the proper
party within ten (10) days after receipt shall accrue interest at the prime
interest rate, as published in the "Money Rates" section of The Wall Street
Journal plus two percent (2%). Notwithstanding anything contained in this
Section 6.5 to the contrary, Buyer shall undertake collection efforts in
substantially the same manner following the Closing Date as is
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customary in the collection of accounts receivable arising in Buyer's own
business prior to the Closing Date, provided that Buyer shall not be required to
file suit, employ the services of a collection agency or commence any other
official proceeding in order to collect any delinquent accounts included in the
accounts receivable, and further provided that Buyer shall have no authority to
forgive, compromise or write off any of Institute's accounts receivable. Buyer
shall inform Institute in writing, on a weekly basis, of the status of
delinquent accounts and amounts collected on account of invoices rendered by
Institute prior to the Closing and shall provide Institute with an accounts
receivable aging report. Institute shall have the right to review Buyer's books
and records to verify Buyer's performance of its obligations under this Section
6.5. Institute may elect, at any time, to collect any or all of its own
receivables, in which event Buyer shall turn over all materials relating to such
receivables (except Buyer shall be entitled to retain copies of all of such
records) to Institute and cease collection efforts on behalf of Institute.
6.6 Massachusetts Public Charity Law. To the extent such filings have not
been completed prior to the execution of this Agreement, Institute shall, in
cooperation with Buyer, file any reports or notifications that may be required
to be filed by it under the Massachusetts Public Charity Law with the Public
Charities Division of the Commonwealth of Massachusetts' Attorney General's
office. Prior to making any communication, written or oral, with the Public
Charities Division of the Massachusetts' Attorney General's office or any other
governmental agency or authority or members of their respective staffs with
respect to this Agreement or the transactions contemplated hereby, Institute
shall consult with Buyer.
6.7 Termination of HBSI Arrangement. Prior to the Closing, Institute shall
terminate its arrangements/agreements with HBS International, Inc. for survey
sales promotion, marketing and services to clients of the Business, including
all related terms and conditions thereof.
6.8 Termination of Free Instrument Use. Unless otherwise agreed to in
writing by Buyer, prior to the Closing Institute shall terminate all existing
arrangements/agreements with all entities that allow for the free use of
Institute survey instruments outside of the Institute European Territory.
6.9 Termination of Subcontract. Effective as of the Closing, all provisions
of that certain Agreement, dated February 2, 2001, by and between Buyer and
Institute regarding marketing research services, shall automatically terminate
without any deed or action by any party and all obligations of Institute to pay
Buyer's fees thereunder shall be settled at the Closing as an adjustment to the
Fixed Purchase Price. Buyer agrees that upon such settlement, its security
interest in Institute's accounts receivable shall terminate, and Buyer shall
file termination statements with the appropriate state and municipal offices as
reasonably directed by Institute.
6.10 Confirmation and Assignment of Customer Contracts. Within two (2)
business days after the Closing, Institute shall make a written request (in form
and substance acceptable to Buyer) that each customer/client of the Business
with a Contract listed on Schedule 1.2.(a)
22
provide to Buyer a written confirmation, the terms of which are acceptable to
Buyer, from such customer/client that its Contract with the Business is in full
force and effect and detailing the scope and specifications of such Contract, as
well as the agreement of such customer/client to the assignment of its Contract
to Buyer. In implementing the foregoing, Institute agrees (a) to not make any
calls or visits to such customers/clients of the Business without a
representative of Buyer being advised in advance and present (unless Buyer
consents in advance to such call and/or visit without a representative of Buyer
being present) and (b) subject to the availability of personnel, to use its best
efforts to work with Buyer in obtaining such consents.
6.11 Business Audited Financial Statements. Prior to and after the Closing,
Institute shall cooperate with Buyer in connection with the scheduling and
performance of an audit, by an auditor of Buyer's choice, of the financial
statements of the Business, on a stand-alone basis. The costs and expenses of
the auditor in preparing such financial statements shall be borne by Buyer.
6.12 Recent Developments. The parties agree that the matters identified on
Schedule 6.12 will be handled in the way specified on such Schedule.
6.13 Institute Obligations. Institute shall have no obligations after the
Closing other than as explicitly set forth in this Agreement. Buyer acknowledges
that it has not relied on the expectation of Institute's performance of any
other future activities or services that are not explicitly set forth herein.
7. INDEMNIFICATION
7.1 By Institute. Subject to the terms and conditions of this Article 7,
Institute hereby agrees to indemnify, defend and hold harmless Buyer, and its
directors, officers, employees, agents and controlled and controlling persons
(hereinafter "Buyer's affiliates"), from and against all Claims (as hereinafter
defined) asserted against, resulting to, imposed upon, or incurred by Buyer,
Buyer's affiliates, the Business or the Purchased Assets, directly or
indirectly, by reason of, arising out of or resulting from (a) the inaccuracy or
breach of any representation or warranty of Institute contained in or made
pursuant to this Agreement; (b) the breach of any covenant of Institute
contained in this Agreement; (c) any Claim against Buyer or the Purchased Assets
relating to any product or service warranty, rework, return or refund
Liabilities of Institute or the Business on products produced, or services
rendered, by Institute prior to the Closing Date; or (d) any Claim of or against
Buyer, the Purchased Assets or Institute not specifically assumed by Buyer
pursuant hereto. As used in this Article 7, the term "Claim" shall include (i)
all Liabilities; (ii) all losses, damages (including, without limitation,
consequential damages), judgments, awards, settlements, costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated matter), penalties, court costs and attorneys fees and expenses); and
(iii) all demands, claims, actions, costs of investigation, causes of action,
proceedings and assessments, whether or not ultimately determined to be valid.
23
7.2 By Buyer. Subject to the terms and conditions of this Article 7, Buyer
hereby agrees to indemnify, defend and hold harmless Institute and its
directors, officers, employees, agents and controlling persons, from and against
all Claims asserted against, resulting to, imposed upon or incurred by any such
person, directly or indirectly, by reason of or resulting from (a) the
inaccuracy or breach of any representation or warranty of Buyer contained in or
made pursuant to this Agreement; (b) the breach of any covenant of Buyer
contained in this Agreement; (c) all Claims of or against Institute specifically
assumed by Buyer pursuant hereto; or (d) all Claims against Institute arising
out of Buyer's operation of the Business after the Closing.
7.3 Indemnification of Third-Party Claims. The obligations and liabilities
of any party to indemnify any other under this Article 7 with respect to Claims
relating to third parties shall be subject to the following terms and
conditions:
7.3.(a) Notice and Defense. The party or parties to be indemnified
(whether one or more, the "Indemnified Party") will give the party from
whom indemnification is sought (the "Indemnifying Party") prompt written
notice of any such Claim, and the Indemnifying Party will undertake the
defense thereof by representatives chosen by it upon written notice to the
Indemnified Party. Failure of the Indemnified Party to give such notice
shall not affect the Indemnifying Party's duty or obligations under this
Article 7, except to the extent the Indemnifying Party is prejudiced
thereby. If the Indemnifying Party undertakes the defense of any such
Claim, then the Indemnifying Party shall be deemed to accept that it has an
indemnification obligation to the Indemnified Party under this Article 7
with respect to such Claim. So long as the Indemnifying Party is defending
any such Claim actively and in good faith, the Indemnified Party shall not
settle such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its representatives all records and other materials
required by them and in the possession or under the control of the
Indemnified Party, for the use of the Indemnifying Party and its
representatives in defending any such Claim, and shall in other respects
give reasonable cooperation in such defense.
7.3.(b) Failure to Defend. If the Indemnifying Party, within 10 days
after receipt by the Indemnifying Party of notice of any such Claim (or
sooner if the nature of the Claim so requires), fails to defend such Claim
actively and in good faith, the Indemnified Party will (upon further notice
to the Indemnifying Party) have the right to undertake the defense,
compromise or settlement of such Claim, or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the account and
risk of the Indemnifying Party, and the Indemnifying Party shall thereafter
have no right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment.
7.3.(c) Indemnified Party's Rights. Anything in this Section 7.3 to
the contrary notwithstanding, (i) if there is a reasonable probability that
a Claim may materially and adversely affect the Indemnified Party other
than as a result of money damages or other money payments, the Indemnified
Party shall have the right to
24
defend, compromise or settle such Claim, and (ii) the Indemnifying Party
shall not, without the written consent of the Indemnified Party, settle or
compromise any Claim or consent to the entry of any judgment which does not
include as an unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all Liability in
respect of such Claim.
7.4 Payment. The Indemnifying Party shall promptly pay the Indemnified
Party any amount due under this Article 7. The right to pursue Claims under any
one or more provisions of this Article 7 shall not be exclusive of any other
rights or remedies at law or equity which the Indemnified Party may have against
the Indemnifying Party under this Article 7.
7.4.(a) Set-Off. At the option of the Indemnified Party, such Claim
may be satisfied (or partially satisfied) by the Indemnified Party setting
off any Claim amount against other amounts owed to the Indemnifying Party
by the Indemnified Party. Prior to any such set-off, the Indemnified Party
shall provide the Indemnifying Party with at least 15 days' advance notice
of such intention to exercise such set-off rights. Such notice shall
include a description of the Claim, including the amount thereof, and the
method by which the Indemnified Party intends to exercise such set-off
rights. If, during such 15-day period, the Indemnifying Party objects to
the exercise of such set-off rights, the Indemnifying Party shall notify
the Indemnified Party of such objection in writing, and shall describe the
basis for such objection and the amount of the Claim as to which the
Indemnifying Party does not believe should be subject to such set-off
rights. Upon receipt of such notice of objection, both the Indemnified
Party and the Indemnifying Party shall use all reasonable efforts to
cooperate and arrive at a mutually acceptable resolution of such dispute
within the next 30 days. If a mutually acceptable resolution cannot be
reached between the Indemnified Party and the Indemnifying Party within
such 30-day period, either party may submit the dispute for resolution by
arbitration as provided for in Article 9. During the pendency of any
dispute under this Section 7.4.(a), the Claim amounts owed to the
Indemnifying Party by the Indemnified Party which are the subject of the
disputed set-off shall be withheld from payment until the dispute is
finally resolved. If it is finally determined that all or a portion of such
withheld amount was not owed to the Indemnified Party, the Indemnified
Party shall promptly pay the Indemnifying Party such amount not owed,
together with the interest from the date that payment should have been made
until the date of actual payment, at an annual rate equal to the prime
interest rate as set forth in The Wall Street Journal in effect on the date
that payment should have been made.
7.4.(b) Payment of Third Party Claim. Upon judgment, determination,
settlement or compromise of any third party Claim, the Indemnifying Party
shall pay promptly on behalf of the Indemnified Party, and/or to the
Indemnified Party in reimbursement of any amount theretofore required to be
paid by it, the amount so determined by judgment, determination, settlement
or compromise and all other Claims of the Indemnified Party with respect
thereto, unless in the case of a judgment an appeal is made from the
judgment. If the Indemnifying Party desires to appeal from an adverse
judgment, then the Indemnifying Party shall post and pay the cost of the
25
security or bond to stay execution of the judgment pending appeal. Upon the
payment in full by the Indemnifying Party of such amounts, the Indemnifying
Party shall succeed to the rights of such Indemnified Party, to the extent
not waived in settlement, against the third party who made such third party
Claim.
7.5 Limitation on Indemnification. Except with respect to Claims for (a)
any fraudulent breach or misrepresentation or (b) breach of any representation
or warranty made in or pursuant to Section 4.11.(a), as to which Claims may be
brought without limitation as to time, no Claim shall be brought under this
Article 7 for breach of a representation or warranty after the lapse of twelve
(12) months following the Closing Date.
8. CLOSING
The closing of this transaction ("xxx Xxxxxxx") shall take place at the
offices of Xxxxxx, XxXxxxxxx & Fish, LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, on the date hereof, or on such other date or at such other
place as the parties hereto shall agree upon. The actual date of Closing is
referred to in this Agreement as the "Closing Date."
8.1 Documents to be Delivered by Institute. At the Closing, Institute shall
deliver, or caused to be delivered, to Buyer the following documents, in each
case duly executed or otherwise in proper form:
8.1.(a) Bills of Sale. Bills of sale and such other instruments of
assignment, transfer, conveyance and endorsement as will be sufficient in
the opinion of Buyer and its counsel to transfer, assign, convey and
deliver to Buyer the Purchased Assets free and clear of all Liens, except
those described in Schedule 4.11.(a)(ii).
8.1.(b) Compliance Certificate. A certificate signed by Xxxxx
Xxxxxx-Xxxxxxx, the President of Institute, that each of the
representations and warranties made by Institute in this Agreement is true
and correct on and as of the Closing Date, and that Institute had performed
and complied in all material respects with all of its obligations under
this Agreement which are to be performed or complied with on or prior to
the Closing Date. Such certificate shall constitute a representation and
warranty of Institute as to the matters set forth therein.
8.1.(c) Opinion of Counsel. A written opinion of Xxxxxx, XxXxxxxxx &
Fish, LLP, counsel to Institute, dated as of the Closing Date, addressed to
Buyer, substantially in the form of Exhibit B hereto.
8.1.(d) Escrow Agreement. The Escrow Agreement referred to in Section
6.2, duly executed by Institute and the Escrow Agent.
8.1.(e) Certified Resolutions. Certified copies of the resolutions of
the Boards of Directors of Institute and CareGroup authorizing and
approving this Agreement and the consummation of the transactions
contemplated by this Agreement.
26
8.1.(f) Other Documents. All other documents, instruments or writings
required to be delivered to Buyer at or prior to the Closing pursuant to
this Agreement and such other certificates of authority and documents as
Buyer may reasonably request.
8.2 Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver
to Institute the following documents, in each case duly executed or otherwise in
proper form:
8.2.(a) Fixed Purchase Price. To each of Institute, Escrow Agent,
CareGroup and the customer/clients and other creditors set forth in
Schedule 3.2.(d), a certified or bank cashier's check (or wire transfer) as
required by Section 3.2.
8.2.(b) Assumption of Liabilities. Such undertakings and instruments
of assumption as will be reasonably sufficient in the opinion of Institute
and its counsel to evidence the assumption by Buyer of the Assumed
Liabilities.
8.2.(c) Compliance Certificate. A certificate signed by Xxxxxxx X.
Beans, the Vice President, Treasurer, Chief Financial Officer and Secretary
of Buyer that the representations and warranties made by Buyer in this
Agreement are true and correct on and as of the Closing Date, and that
Buyer has performed and complied in all material respects with all of
Buyer's obligations under this Agreement which are to be performed or
complied with on or prior to the Closing Date. Such certificate shall
constitute a representation and warranty of Buyer as to the matters set
forth therein.
8.2.(d) Opinion of Counsel. A written opinion of Xxxxx & Xxxxxxx,
counsel to Buyer, dated as of the Closing Date, addressed to Institute, in
substantially the form of Exhibit C hereto.
8.2.(e) Escrow Agreement. The Escrow Agreement referred to in Section
6.2, duly executed by Buyer and the Escrow Agent.
8.2.(f) Certified Resolutions. A certified copy of the resolutions of
the Board of Directors of Buyer authorizing and approving this Agreement
and the consummation of the transactions contemplated by this Agreement.
8.2.(g) Other Documents. All other documents, instruments or writings
required to be delivered to Institute at or prior to the Closing pursuant
to this Agreement and such other certificates of authority and documents as
Institute may reasonably request.
9. RESOLUTION OF DISPUTES
9.1 Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement or any contract or agreement entered into pursuant
hereto or the performance by the parties of its or their terms shall be settled
by binding arbitration (irrespective of the amount in controversy) held in
Chicago, Illinois in accordance with the commercial rules of
27
the American Arbitration Association then in effect, except as specifically
otherwise provided in this Article 9. Except as modified herein, the Federal
Arbitration Act, 9 USC ss.1 et seq. shall apply to any such arbitration
hereunder. Notwithstanding the foregoing, either party may, in its discretion,
apply to a court of competent jurisdiction for equitable relief whenever such
relief would otherwise be permitted by law.
9.2 Arbitrators. If the matter in controversy (exclusive of attorney fees
and expenses) shall appear, at the time of the demand for arbitration, to exceed
$200,000, then the panel to be jointly appointed by Buyer and Institute shall
consist of three mutually acceptable independent and impartial arbitrators;
otherwise, one mutually acceptable independent and impartial arbitrator shall be
appointed.
9.3 Procedures; No Appeal. The arbitrator(s) shall allow such discovery as
the arbitrator(s) determine appropriate under the circumstances and shall
resolve the dispute as expeditiously as practicable, and if reasonably
practicable, within 120 days after the selection of the arbitrator(s). The
arbitrator(s) shall give the parties written notice of the decision, with the
reasons therefor set out, and shall have 30 days thereafter to reconsider and
modify such decision if any party so requests within 10 days after the decision.
Thereafter, the decision of the arbitrator(s) shall be final, binding, and
non-appealable with respect to all persons, including (without limitation)
persons who have failed or refused to participate in the arbitration process.
9.4 Authority. The arbitrator(s) shall have authority to award damages and
to allocate responsibility for the costs of the arbitration and to award
recovery of attorneys fees and expenses in such manner as is determined to be
appropriate by the arbitrator(s).
9.5 Entry of Judgment. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having in personam and subject matter
jurisdiction. Institute and Buyer hereby submit to the in personam jurisdiction
of the Federal and State courts in Illinois, for the purpose of confirming any
such award and entering judgment thereon.
9.6 Confidentiality. All proceedings under this Article 9, and all evidence
given or discovered pursuant hereto, shall be maintained in confidence by all
parties, except as necessary for entry of judgment in a court of competent
jurisdiction or to enforce such judgment.
9.7 Continued Performance. The fact that the dispute resolution procedures
specified in this Article 11 shall have been or may be invoked shall not excuse
any party from performing its obligations under this Agreement and during the
pendency of any such procedure all parties shall continue to perform their
respective obligations in good faith, subject to any rights to terminate this
Agreement that may be available to any party and to the right of setoff provided
in Section 7.4 hereof.
9.8 Tolling. All applicable statutes of limitation shall be tolled while
the procedures specified in this Article 9 are pending. The parties will take
such action, if any, required to effectuate such tolling.
28
10. MISCELLANEOUS
10.1 Disclosure Schedule. The Schedules to this Agreement have been
compiled in a bound volume ("Disclosure Schedule"), executed by Institute and
dated and delivered to Buyer on the date of this Agreement (with a substantially
complete preliminary copy thereof delivered by or on behalf of Institute to
Buyer at least three business days prior to the date hereof). Information set
forth in the Disclosure Schedule specifically refers to the Article and Section
of this Agreement to which such information is responsive and such information
shall not be deemed to have been disclosed with respect to any other Article or
Section of this Agreement or for any other purpose.
10.2 Further Assurance. From time to time, at Buyer's request and without
further consideration, Institute will execute and deliver to Buyer such
documents and take such other action as Buyer may reasonably request in order to
consummate more effectively the transactions contemplated hereby and to vest in
Buyer good, valid and marketable title to the Business and the Purchased Assets
being transferred hereunder.
10.3 Disclosures and Announcements. Immediately following the Closing, the
parties shall prepare and release a mutually agreeable press release describing
the transactions contemplated by this Agreement. Thereafter, either party shall
be free to publicly discuss the transaction, provided that neither party shall
reveal confidential business information regarding the other nor make any
disparaging comments or any comments which could diminish the brand name of the
other.
10.4 Assignment; Parties in Interest.
10.4.(a) Assignment. Except as expressly provided herein, the rights
and obligations of a party hereunder may not be assigned, transferred or
encumbered without the prior written consent of the other party.
Notwithstanding the foregoing, Buyer may, without the consent of Institute,
cause one or more subsidiaries of Buyer to carry out all or part of the
transactions contemplated hereby but the same shall not relieve Buyer of
liability for such subsidiaries' failure to so perform.
10.4.(b) Parties in Interest. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successors
and permitted assigns of the parties hereto. Nothing contained herein shall
be deemed to confer upon any other person any right or remedy under or by
reason of this Agreement.
10.5 Law Governing Agreement. This Agreement may not be modified or
terminated orally, and shall be construed and interpreted according to the
internal laws of the State of Wisconsin, excluding any choice of law rules
that may direct the application of the laws of another jurisdiction.
10.6 Amendment and Modification. Buyer and Institute may amend, modify
and supplement this Agreement in such manner as may be agreed upon by them
in writing.
29
10.7 Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
(a) If to Buyer, to:
National Research Corporation
0000 "X" Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: President and Chief Executive Officer
Facsimile: (000) 000-0000
(with a copy to)
Xxxxxxxx X. Xxxxxx, III
Xxxxxxx X. Xxxx
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to Institute in
writing.
(b) If to Institute, to:
The Picker Institute, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
(with a copy to)
Xxxxx X. Xxxxx
Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other person or address as Institute shall furnish to Buyer in
writing.
30
If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this paragraph, such communication shall be deemed delivered
upon receipt; and if sent by U.S. mail pursuant to this paragraph, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal. Any party
to this Agreement may change its address for the purposes of this Agreement by
giving notice thereof in accordance with this Section.
10.8 Expenses. Regardless of whether or not the transactions contemplated
hereby are consummated:
10.8.(a) Brokerage. Buyer agrees to indemnify, defend and hold
harmless Institute from and against all claims for brokerage commissions or
finder's fees incurred through any act of Buyer in connection with the
execution of this Agreement or the transactions provided for herein.
Institute agrees to indemnify, defend and hold harmless Buyer from and
against all claims for brokerage commissions or finder's fees incurred
through any act of Institute in connection with the execution of this
Agreement or the transactions provided for herein.
10.8.(b) Other Expenses. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its counsel and
other agents in connection with the transactions contemplated hereby.
10.8.(c) Costs of Litigation or Arbitration. The parties agree that
the prevailing party in any action or arbitration brought with respect to
or to enforce any right or remedy under this Agreement shall be entitled to
recover from the other party or parties all reasonable costs and expenses
of any nature whatsoever incurred by the prevailing party in connection
with such action or arbitration, including without limitation attorneys'
fees and prejudgment interest.
10.9 Entire Agreement. This Agreement, along with the other documents and
instruments to be executed and delivered by either party pursuant hereto, embody
the entire agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements, representations
or warranties between the parties other than those set forth or provided for
herein.
10.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.11 Headings. The headings in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
[Rest of this page intentionally left blank.]
31
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
NATIONAL RESEARCH CORPORATION
("Buyer")
By: /s/ Xxxxxxx X. Beans
-------------------------------------
Name: Xxxxxxx X. Beans
Title: V.P. and Treasurer
THE PICKER INSTITUTE, INC.
("Institute")
By: /s/ Xxxxx Xxxxxx-Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx-Xxxxxxx
Title: President
32
EXHIBIT INDEX
TO
ASSET PURCHASE AGREEMENT
Exhibit Title of Document
------- -----------------
A Escrow Agreement
B Opinion of Xxxxxx, XxXxxxxxx & Fish, LLP
C Opinion of Xxxxx & Lardner
