Healthworld Agreement and Plan of Organization/US
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AGREEMENT AND PLAN OF ORGANIZATION
Dated as of the 23rd day of October, 1997
by and between
HEALTHWORLD CORPORATION,
and
XXXXXX XXXXXXXX,
XXXXXXX XXXXXX,
XXXXXXX XXXXXX,
and
XXXXXXX XXXXXXXXX
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TABLE OF CONTENTS
Page No.
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1 The Organization................................................................................................ 7
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1.1 Organization............................................................................... 7
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1.2 Directors and Officers..................................................................... 8
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2 Conversion of Stock............................................................................................. 8
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2.1 Manner of Conversion....................................................................... 8
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2.2 Beneficial Ownership of Shares............................................................. 8
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2.3 Allocation of Shares....................................................................... 8
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3 Delivery of Company Stock and Healthworld Stock................................................................ 10
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4 Closing........................................................................................................ 10
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5 Representations And Warranties of U.S. Stockholders............................................................ 10
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5.1 Due Organization.......................................................................... 11
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5.2 Prohibited Activities..................................................................... 12
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5.3 Capital Stock of the Company.............................................................. 12
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5.4 Transactions in Capital Stock............................................................. 13
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5.5 No Bonus Shares........................................................................... 13
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5.6 Subsidiaries.............................................................................. 13
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5.7 Predecessor Status; etc................................................................... 13
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5.8 Spin-off by the Company................................................................... 14
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5.9 Financial Statements...................................................................... 14
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5.10 Liabilities and obligations............................................................... 14
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5.11 Accounts and Notes Receivable............................................................. 15
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5.12 Permits and Intangibles................................................................... 15
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5.13 Environmental Matters..................................................................... 16
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5.14 Personal Property......................................................................... 16
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5.15 Significant Customers; Material Contracts and Commitments................................. 17
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5.16 Real Property............................................................................. 18
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5.17 Insurance................................................................................. 18
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5.18 Compensation; Employment Agreements; Organized Labor Matters.............................. 18
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5.19 Employee Plans............................................................................ 23
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5.20 Compliance with ERISA..................................................................... 24
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5.21 Conformity with Law; Litigation........................................................... 25
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5.22 Taxes..................................................................................... 25
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5.23 No Violations............................................................................. 28
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Page No.
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5.24 Government Contracts...................................................................... 29
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5.25 Absence of Changes........................................................................ 29
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5.26 Deposit Accounts; Powers of Attorney...................................................... 31
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5.27 Brokers and Agents........................................................................ 31
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5.28 Relations with Governments................................................................ 31
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5.29 Disclosure................................................................................ 32
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5.30 Authority; Ownership. ................................................................... 33
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5.31 Preemptive Rights......................................................................... 33
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5.32 No Intention to Dispose of Healthworld Stock.............................................. 33
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6 Representations of Healthworld................................................................................. 33
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6.1 Due Organization.......................................................................... 33
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6.2 Authorization............................................................................. 34
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6.3 Capital Stock of Healthworld.............................................................. 34
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6.4 Transactions in Capital Stock............................................................. 34
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6.5 Liabilities and Obligations............................................................... 34
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6.6 Conformity with Law; Litigation........................................................... 34
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6.7 Validity of Obligations................................................................... 35
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6.8 Limited Business Conducted................................................................ 35
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7 Covenants Prior to Closing..................................................................................... 35
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7.1 Access and Cooperation; Due Diligence..................................................... 35
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7.2 Conduct of Business Pending Closing....................................................... 36
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7.3 Prohibited Activities..................................................................... 37
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7.4 No Shop................................................................................... 38
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7.5 Further Assurances........................................................................ 38
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7.6 Agreements................................................................................ 39
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7.7 Notification of Certain Matters........................................................... 39
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7.8 Amendment of Schedules.................................................................... 39
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7.9 Cooperation in Preparation of Registration Statement...................................... 40
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8 Conditions Precedent to Obligations of U.S. Stockholders....................................................... 40
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8.1 Representations and Warranties; Performance of Obligations................................ 40
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8.2 Satisfaction.............................................................................. 41
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8.3 No Litigation............................................................................. 41
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8.4 Opinions of Counsel....................................................................... 41
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8.5 Consents and Approvals.................................................................... 41
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8.6 No Material Adverse Change................................................................ 41
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8.7 Secretary's Certificates; Good Standing................................................... 41
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8.8 Employment Agreements..................................................................... 42
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8.9 Simultaneous Closings..................................................................... 42
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8.10 Cater Share Purchase...................................................................... 42
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9 Conditions Precedent to Obligations of Healthworld............................................................. 42
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9.1 Representations and Warranties; Performance of Obligations................................ 42
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9.2 Satisfaction.............................................................................. 42
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9.3 No Litigation............................................................................. 43
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9.4 Opinion of Counsel........................................................................ 43
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9.5 Consents and Approvals.................................................................... 43
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9.6 No Material Adverse Change................................................................ 43
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9.7 Secretary's Certificates.................................................................. 43
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9.8 Employment Agreements. ................................................................... 43
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9.9 U.S. Stockholders' Release................................................................ 44
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9.10 Termination of Related Party Agreements................................................... 44
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9.11 Closings.................................................................................. 44
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9.12 Cater Share Purchase...................................................................... 44
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10 Covenants of Healthworld and the U.S. Stockholders after Closing............................................... 44
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10.1 Release From Guarantees; Repayment of Certain Obligations................................. 44
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10.2 Preservation of Tax and Accounting Treatment.............................................. 45
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10.3 Preparation and Filing of Tax Returns..................................................... 45
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10.4 Conformity With Xxxxxxxx/Xxxxxx Letter of Intent Regarding Governance..................... 46
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10.5 Distributions for Estimated Taxes......................................................... 46
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11 Indemnification................................................................................................ 47
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11.1 General Indemnification by the U.S. Stockholders.......................................... 47
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11.2 Indemnification by Healthworld............................................................ 48
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11.3 Third Person Claims....................................................................... 48
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11.4 Exclusive Remedy.......................................................................... 50
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11.5 Limitations on Indemnification............................................................ 50
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12 Termination of Agreement....................................................................................... 51
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12.1 Termination............................................................................... 51
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12.2 Liabilities in Event of Termination....................................................... 52
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13 Non-Competition; Non-Disclosure................................................................................ 52
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13.1 Non-Competition........................................................................... 52
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13.2 Nondisclosure............................................................................. 54
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13.3 Injunctive Relief; Damages................................................................ 55
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Page No.
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13.4 Reasonable Restraint...................................................................... 55
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13.5 Severability; Reformation................................................................. 55
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13.6 Independent Covenant...................................................................... 55
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13.7 Survival.................................................................................. 56
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14 Federal Securities Act Representations......................................................................... 56
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14.1 Compliance with Law....................................................................... 56
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14.2 Economic Risk; Sophistication............................................................. 56
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15 Registration Rights............................................................................................ 57
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15.1 Piggyback Registration Rights............................................................. 57
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15.2 Registration Procedures................................................................... 57
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15.3 Underwriting Agreement.................................................................... 58
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15.4 Availability of Rule 144.................................................................. 58
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16 General........................................................................................................ 58
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16.1 Cooperation............................................................................... 58
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16.2 Successors and Assigns.................................................................... 58
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16.3 Entire Agreement.......................................................................... 59
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16.4 Counterparts.............................................................................. 59
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16.5 Expenses.................................................................................. 59
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16.6 Notices................................................................................... 60
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16.7 Governing Law............................................................................. 61
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16.8 Exercise of Rights and Remedies........................................................... 61
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16.9 Time...................................................................................... 61
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16.10 Reformation and Severability.............................................................. 61
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16.11 Remedies Cumulative....................................................................... 62
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16.12 Captions.................................................................................. 62
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16.13 Amendments and Waivers.................................................................... 62
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AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (the "Agreement") is made as of the
____ day of October, 1997, by and between:
Healthworld Corporation, a Delaware corporation ("Healthworld"),
Xxxxxx Xxxxxxxx ("Xxxxxxxx") residing at 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxx
Xxxx 00000, Xxxxxxx Xxxxxx ("Xxxxxx"), residing at Xxx Xxxxxxx Xxxxx, Xxxxxxxxx
0X, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxxx Xxxxxx ("Xxxxxx") residing at Xxxx Xxxxxx
Xxx 0000, Xxxxx Xxxxxx, Xxx Xxxx 00000-0000, and Xxxxxxx Xxxxxxxxx
("Xxxxxxxxx"), residing at 0000 Xxxxxx Xxxx, Xxxx Xxxxxx, Xxx Xxxx 00000-0000
(Girgenti, Hughes, Xxxxxx and Xxxxxxxxx are hereafter referred to as the "U.S.
Stockholders").
WHEREAS, the U.S. Stockholders collectively own all of the issued and
outstanding shares of Girgenti, Hughes, Xxxxxx & XxXxxxxx, Inc. ("GHBM"), a New
York corporation, Black Cat Graphics, Inc. ("Black Cat"), a New York
Corporation, Medical Education Technologies, Inc. ("MET"), a New York
corporation, Brand Research Corporation ("Brand Research"), a New York
corporation, GHBM, Inc. ("GHBMINC"), a New York corporation and Syberactive,
Inc. ("Syberactive"), an Illinois corporation (each of GHBM, Black Cat, MET,
Brand Research, GHBMINC and Syberactive are hereafter referred to individually
as a "U.S. Company" and collectively as the "U.S. Companies"); and
WHEREAS, Xxxxxxx Xxxxxx Xxxxxx, (the "U.K. Stockholder") is the registered
and beneficial owner with full title guarantee of the entire issued share
capital of Xxxxxx Marketing Group Limited, a company incorporated in England and
Wales with registered no. 3113109 (the "U.K. Company"); and
WHEREAS, Bourne, Cater, Garnham and Moreton (the "Minority U.K.
Stockholders") own minority share interests in certain Subsidiaries of the U.K.
Company; and
WHEREAS, the U.S. Stockholders are sometimes hereinafter referred to
individually as a U.S. Stockholder or collectively as the U.S. Stockholders; and
WHEREAS, the U.S. Companies are sometimes hereinafter referred to
individually as a "Company" and collectively as the "Companies"; and
WHEREAS, Healthworld was formed on September 12, 1996, in the State of
Delaware, for the purpose of effecting the Healthworld Plan of Organization; and
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WHEREAS, the U.S. Stockholders desire to contribute all of their shares of
stock in the U.S. Companies into Healthworld in exchange for Healthworld Stock,
the U.K. Stockholder desires to contribute all of his shares of stock in the
U.K. Company into Healthworld in exchange for Healthworld Stock, and Garnham,
Moreton and Bourne desire to contribute all of their shares of stock in the
relevant Subsidiaries of the U.K. Company into Healthworld in exchange for
Healthworld Stock, all of the foregoing to occur contemporaneously with the
Pricing (hereafter defined); and
WHEREAS, all of the foregoing contributions together with the IPO
constitute the "Healthworld Plan of Organization"; and
WHEREAS, the parties intend that the Healthworld Plan of Organization shall
qualify as a tax-free reorganization under Section 351 of the Internal Revenue
Code of 1986, as amended (the "Code") and, where applicable, as a reorganization
within the meaning of Section 368 of the Code; and
WHEREAS, Cater owns a portion of the issued share capital of Xxxxxx Xxxxx
Limited, a company incorporated in England and Wales with registered no. 3196839
("MCL"); and
WHEREAS, Cater desires to transfer her shares of MCL in consideration for a
variation to her service agreement and not in exchange for Healthworld Stock;
and
WHEREAS, unless the context otherwise requires, capitalized terms used in
this Agreement or in any Schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Absolute Representations" shall have the meaning set forth in subparagraph
(ii) of the preliminary paragraphs of Section 5.
"Acquired Party" means any of the U.S. Companies and any Subsidiary
thereof.
"Affiliates" has the meaning set forth in Section 5.8.
"Aggregate Number of Founder Shares" has the meaning set forth in Section
2.3.
"Balance Sheet Date" shall mean December 31, 1996.
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"Bourne" means Xxxxxxx Xxxxxx, residing at 00 Xxxx Xxxxxx, Xxxx, Xxxxxxx,
Xxxxxxxxx, XX0 0XX, Xxxxxx Xxxxxxx.
"Xxxxxx" has the meaning set forth in the introductory paragraphs of this
Agreement.
"Cater" means Xxxxxx Xxxxx, residing at Back of Beyond, 76 The High Street,
Ardingly, Xxxx Xxxxxx, XX00 0XX, Xxxxxx Xxxxxxx.
"Closing" has the meaning set forth in Section 4.2.
"Closing Date" has the meaning set forth in Section 4.2.
"Code" has the meaning set forth in the introductory paragraphs of this
Agreement.
"Company" has the meaning set forth in the introductory paragraphs of this
Agreement.
"Company Financial Statements" has the meaning set forth in Section 5.9.
"Company Stock" has the meaning set forth in Section 2.1.
"Contributing Minority Stockholders" means Bourne, Garnham and Moreton.
"Disclosure Schedule" has the meaning set forth in the preliminary
paragraph of Section 5.
"Xxxxxxxxx" has the meaning set forth in the introductory paragraphs of
this Agreement.
"Encumbrance" means a mortgage, charge (whether fixed or floating), pledge,
lien, option, restriction, right of first refusal, right of preemption, third
party right or interest, other encumbrance or security interest of any kind and
whether legal or equitable, or another type of preferential arrangement
(including, without limitation, a title transfer and retention arrangement)
having similar effect.
"ERISA" has the meaning set forth in Section 5.19.
"Expiration Date" has the meaning set forth in Section 5.
"Garnham" means Xxxxxxx Xxxxxxx, residing at 00 Xxx Xxxxxxxx, Xxxxx,
Xxxxxxxxx, XX0 0XX, Xxxxxx Xxxxxxx.
"Xxxxxxxx" has the meaning set forth in the introductory paragraphs of this
Agreement.
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"Xxxxxxxx/Xxxxxx Letter of Intent" means a certain letter of intent of
November 14, 1996 regarding a reorganization of the U.S. Companies and the U.K.
Company in connection with a contemplated IPO, executed by Xxxxxxxx, GHBM, the
U.K. Stockholder and the U.K. Company.
"Healthworld" has the meaning set forth in the introductory paragraphs of
this Agreement.
"Healthworld License Agreement" means that certain License Agreement dated
February 27, 1997 by and between Healthworld and Healthworld B.V. pursuant to
which Healthworld has licensed from Healthworld B.V., among other things, the
right to use the name "Healthworld."
"Healthworld Plan of Organization" has the meaning set forth in the
introductory paragraphs of this Agreement.
"Healthworld Stock" means the common stock, par value $0.01 per share, of
Healthworld.
"Xxxxxx" has the meaning set forth in the introductory paragraphs of this
Agreement.
"IPO" means the initial public offering of Healthworld Stock pursuant to
the Registration Statement.
"Key Consultant Agreement" means any agreement with a consultant providing
for the services of an individual and requiring payment to the consultant of not
less than $150,000 per annum.
"Key Employee" means any employee whose compensation is not less than
$150,000 per annum.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"Minority Agreements of Organization" has the meaning set forth in Section
1.1.2.
"Minority U.K. Stockholders" has the meaning set forth in the introductory
paragraphs of this Agreement.
"Moreton" means Xxxxxxx Xxxxxxx, residing at "Southcroft," Xxxxxx Xxxx,
Xxxxxxx, Xxxxxx, XX00 0XX, Xxxxxx Xxxxxxx.
"Offering Price" means (i) the offering price in the IPO if the Closing
Date occurs contemporaneously with the Pricing and (ii) the proposed mid-range
offering price in the IPO as
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reflected in the Registration Statement, as most recently amended, if the
Closing Date occurs prior to the Pricing.
"Organization" means the contribution of all the shares of stock of the
U.S. Companies and all of its Subsidiaries (with the exception of Healthworld
B.V.) to the capital of Healthworld in exchange for shares of Healthworld Stock.
"Prevailing Conversion Rate" means the prevailing exchange rate, as shown
in The Financial Times, between the U.S. dollar and the U.K. pound sterling at
the close of business on the business day immediately prior to the Closing Date.
"PBGC" has the meaning set forth in Section 5.20.
"Plans" has the meaning set forth in Section 5.19.
"Pricing" means the time and date of determination by Healthworld and the
Underwriters of the public offering price of the shares of Healthworld Stock in
the IPO and the execution of the Underwriting Agreement by Healthworld and the
Underwriters.
"Qualified Plans" has the meaning set forth in Section 5.20.
"Registration Statement" means that certain registration statement on Form
S-1 (Registration No. 333-34751) and any amendments thereto covering the shares
of Healthworld Stock to be issued in the IPO.
"Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax.
"Schedule" means each Schedule attached hereto, which shall reference the
relevant sections of this Agreement, on which parties hereto disclose
information as part of their respective representations, warranties and
covenants.
"SEC" means the United States Securities and Exchange Commission.
"Xxxxxx Xxxxxxx Employment Agreement" means that certain Employment
Agreement by and between Healthworld and Xxxxxx Xxxxxxx, dated August 18, 1997,
pursuant to which Healthworld has engaged the services of Xxxxxx Xxxxxxx.
"Subsidiary" means any corporation or other entity of which the relevant
corporation or entity owns a controlling voting interest, and any other
corporation or other entity which is
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similarly controlled by a Subsidiary or group of Subsidiaries of the relevant
corporation or entity.
"Tax" or "Taxes" means all Federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any nature
whatever, whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
"Underwriters" means Unterberg Harris and Pennsylvania Merchant Group Ltd.
"Underwriters' Engagement Letter" means the letter dated July 17, 1997,
pursuant to which the Underwriters were engaged by Healthworld.
"Underwriting Agreement" means the agreement to be negotiated between
Healthworld and the Underwriters regarding the Underwriters' representation of
Healthworld in the IPO.
"U.K. Agreement of Organization" has the meaning set forth in Section
1.1.1.
"U.K. Company" has the meaning set forth in the introductory paragraphs of
this Agreement.
"U.K. Percentage" has the meaning set forth in Section 2.3.1.
"U.K. Stockholder" has the meaning set forth in the introductory paragraphs
of this Agreement.
"U.S. Companies" has the meaning set forth in the introductory paragraphs
of this Agreement.
"U.S. Percentage" has the meaning set forth in Section 2.3.1.
"U.S. Stockholders" means Girgenti, Hughes, Xxxxxx & Xxxxxxxxx.
"Vote of a Majority in Interest of the U.S. Stockholders" means the vote,
by formal or informal meeting, in writing or otherwise, by U.S. Stockholders
having greater than 50% of the voting control of each of the U.S. Companies.
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1 The Organization.
1.1 Organization. The Closing of this Agreement shall take place as
described in Section 4, and all of the issued and outstanding
shares of each of the U.S. Companies shall be contributed by the
U.S. Stockholders to the capital of Healthworld in exchange for
the number of shares of Healthworld Stock set forth in Section
2.3. Simultaneously with the contribution described in the
immediately preceding sentence, in exchange for shares of stock of
Healthworld:
1.1.1 The U.K. Stockholder will be contributing all of the issued
and outstanding shares of the U.K. Company to the capital
of Healthworld, pursuant to an Agreement of Organization of
even date herewith (the "U.K. Agreement of Organization"),
1.1.2 The Contributing Minority Stockholders will be contributing
all of the issued and outstanding shares of such U.K.
Company's Subsidiaries (with the exception of Healthworld
B.V.) which are owned by them to the capital of
Healthworld, pursuant to separate Agreements of
Organization for each of the Subsidiaries of the U.K.
Company to which such contributions relate (the "Minority
Agreements of Organization"), and
1.1.3 The U.K. Company shall, on or prior to the Closing Date,
purchase Cater's shares owned by her in the U.K. Company
Subsidiary of which she is a minority owner, pursuant to a
certain Joint Venture Agreement dated May 23, 1996.
The contributions made by the U.S. Stockholders pursuant to this Agreement, the
contribution made pursuant to the U.K. Agreement of Organization, the
contributions made pursuant to the Minority Agreements of Organization, and the
contributions of cash by the public and/or the Underwriter in connection with
the IPO shall be considered as a single integrated transaction intended to
qualify as tax-free under Code Section 351. The Closing will occur
contemporaneously with the Pricing of the IPO, and all of the steps of the
Closing and the completion of the IPO are an integrated series of steps in a
series of transactions, none of which would have occurred without the
expectation and anticipation that the other steps will occur or will have
occurred.
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1.2 Directors and Officers. At the Closing, the directors and officers
of the Companies then holding office shall remain unchanged.
2 Conversion of Stock.
2.1 Manner of Conversion. The manner of converting the shares of
outstanding capital stock (the "Company Stock") of each of the
U.S. Companies issued and outstanding immediately prior to the
Closing into shares of Healthworld Stock shall be as follows: At
the Closing all of the shares of Company Stock issued and
outstanding immediately prior to the Closing shall, by virtue of
the capital contributions described in Section 1.1, and without
any action on the part of the holders thereof, automatically be
deemed to represent the right to receive the number of shares of
Healthworld Stock set forth in the table in Section 2.3 below.
2.2 Beneficial Ownership of Shares. All Healthworld Stock to be
received by the U.S. Stockholders pursuant to this Agreement
shall, except for restrictions described in Section 14 hereof,
have the same rights as all other shares of Healthworld Stock by
reason of the provisions of the Certificate of Incorporation of
Healthworld or as otherwise provided by the Delaware General
Corporation Law. All voting rights of such Healthworld Stock to be
received by the U.S. Stockholders shall be fully exercisable by
the U.S. Stockholders and the U.S. Stockholders shall not be
deprived nor restricted in exercising those rights. At the
Closing, Healthworld shall have no class of capital stock issued
and outstanding other than the Healthworld Stock.
2.3 Allocation of Shares. It is anticipated that the U.S.
Stockholders, the U.K. Stockholder and the Contributing Minority
Stockholders will own, in the aggregate, 5,000,000 shares (the
"Aggregate Number of Founder Shares") of Healthworld Stock
immediately following the Closing of the IPO. With respect to the
U.S. Stockholders, who presently own one hundred (100) shares of
Healthworld Stock in the aggregate, the conversion shall be made
in such a manner as to issue to them only that number of
additional shares of Healthworld Stock which are necessary to
attain the percentage of shares set forth below. The allocation of
the Aggregate Number of Founder Shares among all of the U.S.
Stockholders, the U.K. Stockholder and the Contributing Minority
Stockholders shall be made as follows:
2.3.1 69% of the Aggregate Number of Founder Shares shall be allocated
to the U.S. Stockholders (the "U.S. Percentage") and 31% of the
Aggregate
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Number of Founder Shares shall be allocated to the U.K.
Stockholders and the Contributing Minority Stockholders (the "U.K.
Percentage").
2.3.2 The number of shares of Healthworld Stock which results from
applying the U.S. Percentage against the Aggregate Number of
Founder Shares shall be divided among the U.S. Stockholders in the
following proportions:
Xxxxxxxx 63.65%
Xxxxxx 5.00%
Xxxxxx 14.06%
Xxxxxxxxx 17.29%
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Total 100.00%
2.3.3 The number of shares of Healthworld Stock which results from
applying the U.K. Percentage against the Aggregate Number of
Founder Shares shall be divided among the U.K. Stockholder and the
Contributing Minority Stockholders in the following manner:
2.3.3.1 Garnham shall receive that number of shares of Healthworld
Stock having a value of (pound)1,000,000, based on the
Offering Price and utilizing the Prevailing Conversion
Rate.
2.3.3.2 Bourne shall receive that number of shares of Healthworld
Stock having a value of (pound)276,448.35, based on the
Offering Price and utilizing the Prevailing Conversion
Rate.
2.3.3.3 Moreton shall receive that number of shares of Healthworld
Stock having a value of (pound)53,677 based on the Offering
Price and utilizing the Prevailing Conversion Rate.
2.3.3.4 The U.K. Stockholder shall receive the balance of the
shares of Healthworld Stock.
2.3.3.5 Cater shall not receive any shares of Healthworld Stock.
2.3.4 No Fractional Shares. No certificates or script representing
fractional shares of Healthworld shall be issued upon the
surrender and exchange of shares. Each holder of shares who
otherwise would have been entitled to receive a fractional share
of Healthworld (after taking into account all
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certificates surrendered by such holder) shall be entitled to
receive, in lieu thereof, a payment in the amount (without
interest) equal to such fractional part of a share of Healthworld,
multiplied by the offering price in the IPO and, where
appropriate, utilizing the Prevailing Conversion Rate.
3 Delivery of Company Stock and Healthworld Stock.
At the Closing, the U.S. Stockholders shall deliver to Healthworld duly
executed stock transfer forms effective to transfer into the name of Healthworld
or its nominee the entire issued and outstanding Company Stock together with
definitive certificate(s) therefor. The U.S. Stockholders agree to cure any
deficiencies prior to the Closing with respect to the endorsement of the stock
certificates or other documents of conveyance with respect to such Company Stock
or with respect to the stock transfer form accompanying any Company Stock.
Healthworld shall issue in the name of the U.S. Stockholders and deliver to the
U.S. Stockholders that number of shares of its stock which results from applying
the percentage as is set forth in Section 2.3, dated the Closing Date.
4 Closing.
On the earlier of November 12, 1997 or the Pricing, the parties shall
take all actions necessary to effect the Organization at the Closing, to effect
the conversion and delivery of shares referred to in Section 3 hereof, and to
consummate all transactions contemplated by this Agreement. The taking of such
actions shall occur at the offices of Todtman, Nachamie, Xxxxxxx & Spizz, P.C.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The date on which such actions occur
shall be referred to as the "Closing Date" and the consummation of the
transactions occurring on such date shall be referred to as the "Closing."
5 Representations And Warranties of U.S. Stockholders.
Preliminary Matters in Respect of Representations and Warranties:
Annexed hereto and made a part hereof is a disclosure schedule
(individually a "Disclosure Schedule" and collectively the "Disclosure
Schedules") for each of the U.S. Companies, setting forth all exceptions and/or
qualifications to the representations and warranties made herein. It is
understood and agreed that any disclosure made on any Disclosure Schedule
delivered pursuant hereto shall be deemed to have been disclosed for purposes of
any other Disclosure Schedule required hereby. The U.S. Stockholders shall make
a good faith effort to cross reference disclosure, as necessary or advisable,
between related Disclosure Schedules.
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For purposes of this Section 5, the term Company shall mean and refer to
each of the U.S. Companies.
The representations and warranties made herein are being made for the
benefit of Healthworld, the U.K. Stockholder and the Contributing Minority
Stockholders.
The U.S. Stockholders jointly and severally represent and warrant that
all of the following representations and warranties in this Section 5 are true
at the date of this Agreement and, subject to Section 7.8 hereof, shall be true
on the Closing Date. All representations and warranties contained in this
Section 5 shall survive the Closing Date for a period of twelve (12) months (the
last day of such period being the "Expiration Date"), except that
(i) the warranties and representations set forth in Section 5.22
hereof (regarding "Taxes") shall survive until such time as the
limitations period has run for all tax periods ended on or prior
to the Closing Date, which shall be deemed to be the Expiration
Date for Section 5.22;
(ii) the warranties and representations set forth in Sections 5.1,
5.3 and hereof (regarding "Due Organization; Capital Stock of the
Company; Authority; Ownership"), which shall be referred to in
this Agreement as the "Absolute Representations" shall survive
forever; and
(iii) solely for purposes of determining whether a claim for
indemnification under Section 11.1.4 hereof has been made on a
timely basis, and solely to the extent that in connection with the
IPO, Healthworld actually incurs liability under the 1933 Act, the
1934 Act, or any other Federal or state securities laws, the
representations and warranties set forth herein shall survive
until the expiration of any applicable limitations period, which
shall be deemed to be the Expiration Date for such purposes.
5.1 Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and is duly authorized and
qualified to do business under all applicable laws, regulations,
ordinances and orders of public authorities to carry on its
business in the places and in the manner as now conducted except
as set forth on Schedule 5.1 or where the failure to be so
authorized or qualified would not have a material adverse effect
on the business, operations, affairs, prospects, properties,
assets or condition (financial or otherwise), of the Company,
taken as a whole (as used herein with respect to the Company, or
with respect to any other person, a "Material Adverse Effect").
Schedule 5.1 sets forth the jurisdiction in which the Company is
incorporated and contains a list of all such jurisdictions in
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which the Company is authorized or qualified to do business. In
all material respects, all accounts, books, ledgers, financial and
other records of whatsoever kind of the Company have been fully,
properly and accurately maintained and are up to date, are in the
possession of the Company and contain true and accurate records of
all matters required by law to be entered therein and do not
contain or reflect any material inaccuracies or discrepancies. No
notice or allegation that any of the said records is incorrect, or
should be rectified, in any material respects has been received by
the Company. The most recent minutes of the Company, which are
dated no earlier than ten business days prior to the date hereof,
affirm and ratify all prior acts of the Company, and of its
officers and directors on behalf of the Company.
Within the five (5) year period ending with the date hereof, no order has
been made or petition presented or resolution passed for the winding-up or
administration of the Company nor has any distress, execution or other process
been levied against the Company or action taken to repossess goods in the
Company's possession and the Company is not insolvent or unable to pay its
debts.
Within the five (5) year period ending with the date hereof, no receiver,
administrative receiver or administrator has been appointed of the whole or any
material part of the assets of the Company nor are the U.S. Stockholders aware
of any circumstances likely to give rise to the appointment of any such
receiver, administrative receiver or administrator.
5.2 Prohibited Activities. Except as set forth on Schedule 5.2, the
Company has not, between the Balance Sheet Date and the date
hereof, taken any of the actions set forth in Section 7.3.
5.3 Capital Stock of the Company. The authorized capital stock of the
Company is as set forth in Schedule 5.3. All of the issued and
outstanding shares of the capital stock of the Company are owned
by the U.S. Stockholders in the amounts set forth in Schedule 5.3.
Except as set forth on Schedule 5.3, all of such shares are owned
free and clear of all Encumbrances and claims of every kind. All
of the issued and outstanding shares of the capital stock of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable, and are owned of record and beneficially
by the U.S. Stockholders. Such shares were offered, issued, sold
and delivered by the Company in compliance with all applicable
state and Federal laws concerning the issuance of securities. None
of such shares were issued in violation of the preemptive rights
of any past or present stockholder.
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5.4 Transactions in Capital Stock. Except as set forth on Schedule
5.4, the Company has not acquired any Company Stock since January
1, 1995. Except as set forth on Schedule 5.4,
5.4.1 No person has the right (whether exercisable now or in the
future and whether contingent or not) to call for the
allotment, issue, sale, redemption or transfer of any share
or loan capital of the Company under any option or other
agreement (including conversion rights and rights of
pre-preemption);
5.4.2 The Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its shares or
any interests therein (or of any of its Subsidiaries) or to
pay any dividend or make any distribution in respect
thereof, nor do any of the Subsidiaries have any obligation
(contingent or otherwise) to purchase, redeem or otherwise
acquire any of their respective shares or any interest
therein or to pay any dividend or make any distribution in
respect thereof;
5.4.3 The Company has no obligation (contingent or otherwise) to
sell any of its shares or any interests therein; and
5.4.4 Neither the voting rights attaching to the shares in the
capital of the Company nor the relative ownership of shares
among any of their respective stockholders has been altered
or changed in contemplation of the Organization and/or the
Healthworld Plan of Organization.
5.5 No Bonus Shares. Except as set forth on Schedule 5.5, none of the
shares of Company Stock was issued pursuant to awards, grants or
bonuses.
5.6 Subsidiaries. Except as set forth on Schedule 5.6, the Company has
no Subsidiaries. Except as set forth in Schedule 5.6 and except
for any corporations or entities with respect to which the Company
owns less than 10% of the issued and outstanding stock, the
Company does not presently own, of record or beneficially, or
control, directly or indirectly, any capital stock, securities
convertible into capital stock or any other equity interest in any
corporation, association or business entity nor is the Company,
directly or indirectly, a participant in any joint venture,
partnership or other non-corporate entity.
5.7 Predecessor Status; etc. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of the Company, including
the names of any entities acquired by the Company (by stock
purchase, merger, or otherwise) or owned by
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the Company or from whom the Company previously acquired material
assets, since the earliest date upon which any U.S. Stockholder
acquired his or her stock in any Company. Except as disclosed on
Schedule 5.7, the Company has not been, within such period of
time, a Subsidiary or division of another corporation or a part of
an acquisition which was later rescinded.
5.8 Spin-off by the Company. Except as set forth on Schedule 5.8,
there has not been any sale, spin-off or split-up of material
assets of either the Company or any other person or entity that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with,
the Company ("Affiliates") since January 1, 1995.
5.9 Financial Statements. Attached hereto as Schedule 5.9 are copies
of the following financial statements (the "Company Financial
Statements") of the Company: the Company's audited Combined
Balance Sheets as of December 31, 1996 (the "1996 Balance Sheet")
and 1995 and unaudited Combined Balance Sheets as of June 30,
1997; audited Combined Statements of Income for each of the years
in the three-year period ended December 31, 1996 and unaudited
Combined Statements of Income for the six-month periods ending
June 30, 1996 and June 30, 1997; Combined Statements of
Stockholders' Equity for each of the years in the four-year period
ending December 31, 1996 and the unaudited Combined Statement of
Stockholders' Equity at June 30, 1997; and audited Combined
Statements of Cash Flows for each of the years in the three-year
period ended December 31, 1996 and the unaudited Combined
Statements of Cash Flows for the six-month periods ending June 30,
1996 and June 30, 1997. The Company Financial Statements which
were prepared on an audited basis have been prepared in accordance
with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except as noted
thereon or on Schedule 5.9). Except as set forth on Schedule 5.9,
such Combined Balance Sheets as of December 31, 1996 and 1995
present fairly the financial position of the Company as of the
dates indicated thereon, and the Company Financial Statements
present fairly the results of operations for the periods indicated
thereon.
5.10 Liabilities and obligations. Except (i) as set forth on Schedule
5.10, (ii) for liabilities to the extent reflected or reserved
against in the 1996 Balance Sheet and (iii) for obligations
required by this Agreement, since the Balance Sheet Date the
Company has not incurred any material liabilities of any kind,
character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities
incurred in the ordinary course of business. Schedule 5.10 also
includes, in the case of those contingent liabilities related to
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pending or threatened litigation, or other liabilities which are
not fixed or otherwise accrued or reserved, a good faith and
reasonable estimate of the maximum amount which may be payable.
For each such contingent liability or liability for which the
amount is not fixed or is contested, Schedule 5.10 includes the
following information:
5.10.1 a summary description of the liability together with the
following:
(i) copies of all relevant documentation relating
thereto;
(ii) amounts claimed and any other action or relief
sought; and
(iii) name of claimant and all other parties to the claim,
suit or proceeding;
5.10.2 the name of each court or agency before which such claim,
suit or proceeding is pending;
5.10.3 the date such claim, suit or proceeding was instituted; and
5.10.4 a good faith and reasonable estimate of the maximum amount,
if any, which is likely to become payable with respect to
each such liability. If no estimate is provided, the
estimate shall for purposes of this Agreement be deemed to
be zero.
5.11 Accounts and Notes Receivable. Schedule 5.11 includes an accurate
list of the accounts and notes receivable of the Company, as of
the Balance Sheet Date, including any such amounts which are not
reflected in the balance sheet as of the Balance Sheet Date, and
including receivables from and advances to employees and the U.S.
Stockholders. The U.S. Stockholders shall cause the Company to
provide to Healthworld, not later than the Closing Date:
5.11.1 an accurate list of all receivables obtained subsequent to
the Balance Sheet Date and
5.11.2 an aging of all accounts and notes receivable showing
amounts due in 30 day aging categories.
Such list and such aging report (the "A/R Aging Reports") shall be current as of
the end of the calendar month which immediately precedes the Closing Date.
5.12 Permits and Intangibles. The Company holds all licenses, permits
and other governmental authorizations the absence of any of which
could have a Material Adverse Effect on its business. Schedule
5.12 contains an accurate list and
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summary description of all such licenses, permits and other
governmental authorizations, including permits, titles (including
motor vehicle titles and current registrations), licenses,
certificates, trademarks, tradenames, patents, patent applications
and copyrights owned or held by the Company (including interests
in software or other technology systems, programs and intellectual
property other than software generally available in retail
markets). To the knowledge of the U.S. Stockholders, (a) the
licenses, permits and other governmental authorizations listed on
Schedule 5.12 are valid, and (b) the Company has not received any
notice that any governmental authority intends to cancel,
terminate or not renew any such license, permit or other
governmental authorization. The Company has conducted and is
conducting its business in compliance in all material respects
with the requirements, standards, criteria and conditions set
forth in the licenses, permits and other governmental
authorizations listed on Schedule 5.12 and is not in violation of
any of the foregoing except where such non-compliance or violation
would not have a Material Adverse Effect on the Company. Except as
specifically provided in Schedule 5.12, the transactions
contemplated by this Agreement will not result in a material
default under or a material breach or violation of, or materially
adversely affect the rights and benefits afforded to the Company
by, any such licenses, permits or government authorizations.
5.13 Environmental Matters. Except as set forth on Schedule 5.13, the
Company has, in all material respects, complied with and is in
compliance with all material Federal, state, local and, so far as
it is required, foreign statutes, laws, ordinances, regulations,
rules, notices, permits, judgments, orders and decrees applicable
to it or any of its respective properties, assets, operations and
businesses relating to environmental protection (collectively
"Environmental Laws"). The Company has no actual or contingent
liability in connection with any Environmental Laws which would
have a Material Adverse Effect.
5.14 Personal Property. Schedule 16 contains an accurate list of
5.14.1 all personal property with a value in excess of $2,000
included (or that will be included) in "depreciable plant,
property and equipment" on the 1996 Balance Sheet,
5.14.2 all other personal property owned by the Company with a
value in excess of $2,000 as of the Balance Sheet Date and
acquired since the Balance Sheet Date and
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5.14.3 all leases and agreements in respect of personal property
providing for payments of greater than $1,000 per annum,
including, (1) true, complete and correct copies of all such leases and (2) an
indication as to which assets are currently owned, or were formerly owned, by
U.S. Stockholders, relatives of U.S. Stockholders, or Affiliates of the Company.
Except as set forth on Schedule 5.14,
5.14.4 all personal property used by the Company in its business
is either owned by the Company or leased by the Company
pursuant to a lease included on Schedule 5.14,
5.14.5 all of the personal property listed on Schedule 5.14 is in
good working order and condition, ordinary wear and tear
excepted and
5.14.6 all leases and agreements included on Schedule 5.14 are in
full force and effect and constitute valid and binding
agreements of the parties (and their successors) thereto in
accordance with their respective terms.
5.15 Significant Customers; Material Contracts and Commitments.
Schedule 5.15 contains an accurate list of all significant
customers, it being understood and agreed that a "significant
customer," for purposes of this Section 5.15, means any customer
(or person or entity) representing 5% or more of the Company's
annual revenues for the one-year period ending with the Balance
Sheet Date. Except to the extent set forth on Schedule 5.15, none
of the Company's significant customers have canceled or
substantially reduced or, to the knowledge of the Company, are
currently attempting or threatening to cancel a contract or
substantially reduce utilization of the services provided by the
Company. Schedule 5.15 contains a list of all material contracts,
commitments and similar agreements to which the Company is a party
or by which it or any of its properties are bound (including, but
not limited to, contracts with significant customers, joint
venture or partnership agreements, contracts with any labor
organizations, strategic alliances and options to purchase land),
other than agreements listed on Schedule 5.10, 5.14 or 5.16, and
in each case the U.S. Stockholders have delivered true, complete
and correct copies of such agreements to Healthworld. The Company
has complied with all material commitments and obligations
pertaining to it, and is not in default in any material respect
under any contracts or agreements listed on Schedule 5.15 and no
notice of default under any such contract or agreement has been
received which default would have a Material Adverse Effect on the
Company. Also included in Schedule 5.15 is a summary description
of all material plans or projects involving the opening of
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new operations, expansion of existing operations, or the
acquisition of any personal property, business or assets.
5.16 Real Property. Schedule 5.16 includes an accurate list of all real
property owned or leased by the Company as of the Balance Sheet
Date and acquired since the Balance Sheet Date, and all other real
property, if any, used by the Company in the conduct of its
business. The Company has good and insurable title to the real
property owned by it, subject to no mortgage, pledge, lien,
conditional sales agreement, encumbrance or charge, except as set
forth in Schedule 5.16. The U.S. Stockholders have delivered true,
complete and correct copies of all leases and agreements in
respect of real property leased by the Company. Schedule 5.16
indicates which such properties, if any, are currently owned, or
were formerly owned, by any Affiliates, by any of the U.S.
Stockholders, by any relative of any U.S. Stockholder or by any
entity that directly, or indirectly through one or more
intermediaries, is controlled by any U.S. Stockholder or any of
his relatives. All of such leases included on Schedule 5.16 are in
full force and effect and constitute valid and binding agreements
of the parties (and their successors) thereto in accordance with
their respective terms.
5.17 Insurance. Schedule 5.17 includes
5.17.1 an accurate list as of the Balance Sheet Date of all
insurance policies carried by the Company; and
5.17.2 an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy
years.
The U.S. Stockholders have delivered to Healthworld true, complete and correct
copies of all insurance policies currently in effect. Such insurance policies
evidence all of the insurance that the Company is required to carry pursuant to
all of its contracts and other agreements and pursuant to all applicable laws.
All of such insurance policies are currently in full force and effect and shall
remain in full force and effect through the Closing Date. Since January 1, 1995,
no insurance carried by the Company has been canceled by the insurer and the
Company has not been denied any requested coverage.
5.18 Compensation; Employment Agreements; Organized Labor Matters.
5.18.1 Schedule 5.18 contains an accurate list showing all
officers, directors and Key Employees of the Company,
listing all employment agreements with such officers,
directors and Key Employees and the rate of compensation
(and the portions thereof
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attributable to salary, bonus and other compensation,
respectively) of each of such persons as of the Balance
Sheet Date and the date hereof. The U.S. Stockholders have
delivered true, complete and correct copies of any
employment agreements for persons listed on Schedule 5.18.
5.18.2 Except as set forth in Schedule 5.18, since the Balance
Sheet Date, there have been no increases in the
compensation payable or any special bonuses to any officer,
director, Key Employee or other employee, except ordinary
salary increases implemented on a basis consistent with
past practices.
5.18.3 Except as set forth on Schedule 5.18, the Company is not
bound by or subject to (and none of its respective assets
or properties is bound by or subject to) any arrangement
with any labor union, no employees of the Company are
represented by any labor union or covered by any collective
bargaining agreement, no campaign to establish such
representation is in progress and there is no pending or,
to the best of the U.S. Stockholders' knowledge, any
threatened labor dispute involving the Company and any
group of its employees nor has the Company experienced any
labor interruptions over the past three years.
5.18.4 The U.S. Stockholders believe that the Company's
relationship with its employees is good.
5.18.5 Except as set forth in Schedule 5.18, all appropriate
notices have been issued under all statutes, regulations
and codes of conduct relevant to the relations between the
Company and its employees or any recognized trade union,
except for notices the absence of which would not have a
Material Adverse Effect upon the Company and the Company
has maintained adequate and suitable records regarding the
service of its employees.
5.18.6 Except as set forth in Schedule 5.18, the Company has not
entered into any currently effective collective agreement
or arrangement (whether legally binding or not) with a
trade union, association of trade unions or other body
representing any of its employees nor has it done within
the two-year period ending with the date hereof any act
which might reasonably be construed as recognition of such
a union or body.
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5.18.7 Schedule 5.18 contains a listing of each written agreement
and a summary of the terms and conditions of each unwritten
agreement pursuant to which any officers, directors and Key
Employees and Key Consultants of the Company (and their
dependents) are engaged. The summary of unwritten
agreements shall include, without limitation, details of
all participation, profit sharing, incentive, bonus,
commission, share option, medical, permanent health
insurance, directors and officers insurance, travel, car
and other benefits, arrangements and understandings and
whether legally binding upon the Company or not and of all
Key Consultant Agreements with the Company which are in
place now or, to the extent now known, will be in place at
the Closing.
5,18.8 Except as set forth in Schedule 5.18, since January 1,
1997, there have been no increases in the fringe benefits
payable to or changes in the terms of service of any
officer, director or Key Employee of the Company.
5.18.9 Except as set forth in Schedule 5.18, there is not in
existence any contract of employment with officers,
directors or employees of the Company (or any contract for
services with any individual) which cannot be terminated by
three months notice or less or (where such a contract has
not been reduced to writing) by reasonable notice without
giving rise to a claim for damages or compensation (other
than statutory compensation for unfair dismissal).
5.18.10 Except as set forth in Schedule 5.18, no promise has been
made and the Company is not obliged to increase the fringe
benefits payable to or to vary the terms of service of any
of its directors, other officers and employees.
5.18.11 Except as set forth in Schedule 5.18, there are not, nor
will there be at Closing, outstanding offers of employment
or consultancy made by the Company and there is no one who
has accepted an offer of employment or consultancy made by
the Company but who has not yet taken up that employment
or consultancy.
5.18.12 Except as set forth in Schedule 5.18, neither the Company
nor any of its employees is involved in any industrial or
trade union
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dispute and there are no facts known to the Company which
might suggest that there may be any trade union or
industrial dispute involving the Company or that the
disposition of the Company Stock may lead to any trade
union or industrial dispute.
5.18.13 Except as set forth in Schedule 5.18, there are no amounts
owing or promised to any present or former directors,
employees or consultants of the Company other than
remuneration accrued due or for reimbursement of business
expenses and no directors, employees or consultants of the
Company have given or been given notice terminating their
contracts of employment or consultancy.
5.18.14 Except as set forth in Schedule 5.18, no claim has been
made and no liability has been incurred by the Company (a)
for breach of any contract of service or for compensation
for wrongful dismissal or unfair dismissal or for failure
to comply with any order for the reinstatement or
re-engagement of any employee or for the actual or pro-
posed termination or suspension of employment or variation
of any terms of employment of any present or former
employee of the Company or (b) in respect of any payment
to be made or benefit to be provided to any present or
former director, employee or consultant of the Company in
connection with the consummation of the transactions
contemplated hereby, or (c) for the breach of or the
actual or proposed termination or variation of any
contract for services or consultancy agreement for any
present or former consultant to the Company.
5.18.15 Except as set forth in Schedule 5.18, no gratuitous
payment has been made or promised by the Company in
connection with the disposition of the Company Stock or in
connection with the actual or proposed termination or
suspension of employment or variation of any contract or
employment of any present or former director or employee
or in connection with the proposed termination or
suspension or variation of any contract for services or
consultancy greement.
5.18.16 Except as set forth in Schedule 5.18, there are no
material claims pending or, to the knowledge of the U.S.
Stockholders, threatened against the Company:
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(i) by a present or former employee, director,
consultant or third party, in respect of an accident
or injury which is not fully covered by insurance;
or
(ii) by a present or former employee, director or
consultant in relation to his terms and conditions
of employment or (as the case may be) consultancy.
5.18.17 Except as set forth in Schedule 5.18, the Company has in
relation to each of its employees (and so far as relevant
to each of its former employees and persons seeking
employment) complied with in all material respects:
(i) all laws and codes of conduct and practice
relevant to the relations between it and its
employees, prospective employees or any trade
union;
(ii) all collective agreements and customs and
practices for the time being dealing with the
terms and conditions of service of its
employees; and
(iii) all relevant orders, declarations and awards
made under any relevant law or code of
conduct and practice affecting the conditions
of service of its employees.
5.18.18 Except as set forth in Schedule 5.18, no Key Employee has
ceased to be employed by the Company (other than through
death or retirement at normal retirement age) during the
twelve months prior to the date hereof and the Company has
no reason to believe that such employees intend or are
likely to leave their employment otherwise than through
retirement as aforesaid within the twelve months following
the Closing.
5.18.19 Except as set forth in Schedule 5.18, there are no
agreements, arrangements or schemes in operation by or in
relation to the Company pursuant to which any of its
employees or officers and/or former employees or officers
and/or their relatives and dependents is entitled to
shares or a commission or remuneration of any kind
calculated by reference in whole or in part to revenues,
profits or sales.
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5.18.20 Except as set forth in Schedule 5.18, there is no
liability whatsoever to make payment to or for the benefit
of any director or employee or ex-director or ex-employee
or the wife or widow or any other relative of any
director, ex-director, employee or ex-employee of the
Company in respect of past service, retirement, death or
disability by way of pension contribution, pension,
retirement benefit lump sum, gratuity or otherwise.
5.18.21 Except as set forth in Schedule 5.18, the Company has not
within a period of one year preceding the date of this
Agreement started consultations with any independent trade
union or association of unions.
5.19 Employee Plans. Schedule 5.19 contains an accurate list and
summary of all employee benefit plans (the "Plans") maintained by
the Company ( or any member of the Company's Controlled Group) or
to which the Company or any member of its Controlled Group
contributes or is obligated to contribute, including all
employment agreements and other agreements or arrangements
containing "golden parachute" or other similar provisions, and
deferred compensation agreements. The U.S. Stockholders have
delivered true, complete and correct copies of each of the Plans
and any agreements or trusts related thereto. Except for the
Plans, the Company does not sponsor, maintain or contribute to any
plan, program, fund or arrangement that constitutes an "employee
pension benefit plan," nor has the Company any obligation to
contribute to or accrue or pay any benefits under any deferred
compensation or retirement funding arrangement on behalf of any
employee or employees (such as, for example, and without
limitation, any individual retirement account or annuity, any
"excess benefit plan" (within the meaning of Section 3(36) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")) or any non-qualified deferred compensation
arrangement). For the purposes of this Agreement, the term
"employee pension benefit plan" shall have the same meaning as is
given that term in Section 3(2) of ERISA and the term "Controlled
Group" shall mean the Company and each other corporation or other
entity aggregated within the Company under the provisions of
Section 414(b), (c), (m) or (o) of the Code. The Company has not
sponsored, maintained or contributed to any employee pension
benefit plan other than the Plans, nor is the Company required to
contribute to any retirement plan pursuant to the provisions of
any collective bargaining agreement establishing the terms and
conditions or employment of any of Company's employees. The
Company is not now, nor can it as a result of its past activities
become, liable to the Pension Benefit Guaranty Corporation (the
"PBGC") or to any multi-employer employee pension benefit
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plan under the provisions of Title IV of ERISA. All Plans and the
administration thereof are in compliance in all material respects
with their terms and all applicable provisions of ERISA and the
regulations issued thereunder, as well as with all other
applicable federal, state and local statutes, ordinances and
regulations. All accrued contribution obligations of the Company
with respect to any Plan have either been fulfilled in their
entirety or are fully reflected on the balance sheet of the
Company as of the Balance Sheet Date.
5.20 Compliance with ERISA. All the Plans that are intended to qualify
(the "Qualified Plans") under Section 401(a) of the Code are, and
have been so qualified and have been determined by the Internal
Revenue Service to be so qualified, and true, correct and complete
copies of such determination letters have been delivered to
Healthworld by the U.S. Stockholders. All reports and other
documents required to be filed with any governmental agency or
distributed to Plan participants or beneficiaries (including, but
not limited to, actuarial reports, audits or tax returns) have
been timely filed or distributed, and true, correct and complete
copies thereof have been delivered by the U.S. Stockholders.
Neither the U.S. Stockholders, any Plan, nor the Company has
engaged in any transaction prohibited under the provisions of
Section 4975 of the Code or Section 406 of ERISA. No Plan has
incurred an accumulated funding deficiency (whether or not
waived), as defined in Section 412(a) of the Code and Section
302(l) of ERISA; and the Company has not incurred any liability
for excise tax or penalty due to the Internal Revenue Service nor
any liability to the PBGC. The U.S. Stockholders further represent
that: there have been no terminations, partial terminations or
discontinuance of contributions to any Qualified Plan without
notice to and approval by the Internal Revenue Service; no Plan
subject to the provisions of Title IV of ERISA has been
terminated; there have been no "reportable events" (as that phrase
is defined in Section 4043 of ERISA) with respect to any Plan;
neither the Company nor any member of its Controlled Group has
incurred liability under Sections 4062 or 4069 of ERISA; and no
circumstances exist pursuant to which the Company could have any
direct or indirect liability whatsoever (including, but not
limited to, any liability to any multi-employer plan or penalty,
or payment of any such liability) with respect to any plan
maintained by any member of the Controlled Group. The Company is
not subject to any legal, contractual, equitable, or other
obligation to (i) establish as of any date any employee benefit
plan of any nature, including, without limitation, any pension,
profit sharing, welfare, post-retirement welfare, stock option,
stock or cash award, non-qualified deferred compensation or
executive compensation plan, policy or practice or (ii) continue
any employee benefit plan of any nature, including, without
limitation any employee benefit or any other pension, profit
sharing , welfare, or post-retirement welfare, plan, or any stock
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option, stock or cash award, non-qualified deferred compensation
or executive compensation plan, policy or practice (or to continue
their participation in any such benefit plan, policy or practice)
on or after the Closing Date; and (b) the Company may, in any
manner, and without the consent of any employee, beneficiary or
other person, terminate, modify or amend any such employee benefit
plan or any other plan, program or practice (or its participation
in such employee benefit plan or any other plan, program or
practice) effective as of any date before, on or after the Closing
Date.
5.21 Conformity with Law; Litigation. Except to the extent set forth on
Schedule 5.10 or 5.13, the Company is not in violation or
contravention of any law or regulation or any order of any court
or Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality having
jurisdiction over any of them which would have a Material Adverse
Effect; and except to the extent set forth on Schedule 5.10 or
5.13, there are no material claims, actions, suits or proceedings,
commenced or, to the knowledge of the Company, threatened, against
or affecting the Company, at law or in equity, or before or by any
Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality having
jurisdiction over any of them and no notice of any material claim,
action, suit or proceeding, whether pending or threatened, has
been received. The Company has conducted and is conducting its
business in compliance, in all material respects, with the
requirements, standards, criteria and conditions set forth in
applicable Federal, state and local statutes, ordinances, permits,
licenses, orders, approvals, variances, rules and regulations,
including all such permits, licenses, orders and other
governmental approvals set forth on Schedules 5.12 and 5.13, and
is not in violation of any of the foregoing which might have a
Material Adverse Effect.
5.22 Taxes. Except to the extent reflected or reserved against in the
1996 Balance Sheet, full details of every matter or circumstance
which (whether of itself or by reason of any connection with any
other one or more transaction or events) will or may give rise to
any liability to Taxation for which the Company is or will or may
become liable is contained in Schedule 5.22 and the following
warranties are without prejudice to the generality of the
foregoing.
5.22.1 The Company's methods of accounting have not changed in the
past five years. The Company reports its income on the cash
basis of accounting, except that MET and Syberactive each
reports its income on the accrual basis of accounting. Upon
the consummation of the transactions contemplated hereby,
the Company will be required to change its method of
accounting to
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the accrual basis and will be required to report an
adjustment in its income pursuant to Section 481 of the
Code. Such adjustment will not exceed $750,000.
5.22.2 There have been properly completed and filed on a timely
basis and in correct form all Returns required to be filed
on or prior to the date hereof. As of the time of filing,
the foregoing Returns correctly reflected the facts
regarding the income, business, assets, operations,
activities, status or other matters of the Company or any
other information required to be shown thereon. In
particular, the foregoing returns are not subject to
penalties under section 6662 of the Code, relating to
accuracy-related penalties (or any corresponding provision
of the state, local or foreign Tax law). An extension of
time within which to file any Return which has not been
filed has not been requested or granted.
5.22.3 With respect to all amounts in respect of Taxes imposed
upon the Company, or for which the Company is or could be
liable, with respect to all taxable periods or portions of
periods ending on or before the Balance Sheet Date, all
applicable tax laws and agreements have been complied with
in all material respects, and all such amounts required to
be paid by the Company to taxing authorities in respect of
all periods ending on or before the Balance Sheet Date
have, or shall have, been paid on or before the Closing
Date.
5.22.4 No issues have been raised (and are currently pending) by
any taxing authority in connection with any of the Returns.
No waivers of statutes of limitation with respect to the
Returns for any taxable years for which the statute of
limitations has not yet expired have been given by or
requested from the Company. Schedule 5.22 sets forth (with
respect to taxable years for which the statute of
limitations has not yet expired, either by reason of waiver
or otherwise) those years for which examinations have been
completed, those years for which examinations are presently
being conducted, those years for which examinations have
not been initiated, and those years for which required
Returns have not yet been filed. Except to the extent shown
on Schedule 5.22, all deficiencies asserted or assessments
made as a result of any examinations have been fully paid,
or are fully reflected as a liability in the Company
Financial Statements or are being
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contested and an adequate reserve therefor has been
established and is fully reflected in the Financial
Statements of the Company.
5.22.5 There are no outstanding liens for Taxes upon the assets of
the Company.
5.22.6 The Company has never been a member of an affiliated group
of corporations, within the meaning of section 1504 of the
Code.
5.22.7 All material elections with respect to Taxes affecting the
Company as of the date hereof are set forth in Schedule
5.22. Schedule 5.22 sets forth the date the Company
commenced operations. For those Companies which have
elected to be treated as an S Corporation, Schedule 5.22
sets forth the date of such election for federal purposes
and, where applicable, for state purposes. Since such dates
the Companies which have made such elections have filed all
reports consistent with, and to maintain, their S
Corporation status for federal and state income tax
purposes. Further, neither the Company nor its shareholders
have revoked the S Corporation status of the Company and
neither the Company nor its shareholders have done anything
to cause a termination of such status.
5.22.8 The Company has not filed a consent pursuant to the
collapsible corporation provisions of section 341(f) of the
Code (or any corresponding provision of state, local or
foreign income Tax law) or agreed to have section 341(f)(2)
of the Code (or any corresponding provision of state, local
or foreign income Tax law) apply to any disposition of any
asset owned by it.
5.22.9 None of the assets of the Company is property which the
Company is required to treat as being owned by any other
person pursuant to the so-called "safe harbor lease"
provisions of former section 168(f)(8) of the Code.
5.22.10 None of the assets of the Company directly or indirectly
secures any debt the interest on which is tax exempt under
section 103(a) of the Code.
5.22.11 None of the assets of the Company is "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
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5.12.12 The Company has not participated in and will not
participate in) an international boycott within the meaning
of section 999 of the Code.
5.22.13 The Company is not a party to any agreement contract,
arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of section
280G of the Code.
5.22.14 The Company is not, and has not been a United States real
property holding corporation (as defined in section
897(c)((2) of the Code) during the applicable period
specified in section 897(c)(1)(A)(ii) of the Code.
5.22.15 None of the U.S. Stockholders is a person other than a
United States person within the meaning of the Code.
5.22.16 The transaction contemplated herein is not subject to the
tax withholding provisions of Code section 3406, or of
subchapter A of Chapter 3 of the Code or of any other
provision of law.
5.22.17 The Company does not have and has not had a permanent
establishment in any foreign country, as defined in any
applicable Tax treaty or convention between the United
States of America and such foreign country.
5.22.18 Except as set forth in Schedule 5.22, the Company is not a
party to any joint venture, partnership, or other
arrangement or contract which could be treated as a
partnership for federal income tax purposes.
5.23 No Violations. Neither the Company nor, to the knowledge of the
Company, any other party thereto, is in default in any material
respect under any lease, instrument, agreement, license, or permit
set forth on Schedule 5.12, 5.13, 5.14, 5.15 or 5.16, or any other
material agreement to which it is a party or by which its
properties are bound (the "Material Documents"). Except as set
forth in Schedule 5.23,
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5.23.1 The rights and benefits of the Company under the Material
Documents will not be materially adversely affected by the
transactions contemplated hereby;
5.23.2 The execution of this Agreement and the performance of the
obligations hereunder and the consummation of the
transactions contemplated hereby will not result in any
material violation or breach or constitute a material
default under, any of the terms or provisions of the
Material Documents or the Company's certificate of
incorporation or by-laws;
5.23.3 None of the Material Documents requires notice to or the
consent or approval of, any governmental agency or other
third party with respect to any of the transactions
contemplated hereby in order to remain in full force and
effect; and
5.23.4 Consummation of the transactions contemplated hereby will
not give rise to any right to termination, cancellation or
acceleration or loss of any material right or benefit.
Except as set forth on Schedule 5.23, none of the Material Documents prohibits
the use or publication by Healthworld or any of its Subsidiaries of the name of
any other party to such Material Document, and none of the Material Documents
prohibits or restricts the Company from freely providing services to any other
customer or potential customer of the Company, Healthworld, or any of their
respective Subsidiaries.
5.24 Government Contracts. Except as set forth on Schedule 5.24, the
Company is not now a party to any governmental contract subject to
price redetermination or renegotiation.
5.25 Absence of Changes. Since the Balance Sheet Date, except as set
forth on Schedule 5.25, there has not been:
5.25.1 any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or
business of the Company;
5.25.2 any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or
business of the Company;
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5.25.3 any change in the authorized capital of the Company or its
outstanding securities or any change in its ownership
interests or any grant of any options, warrants, calls,
conversion rights or commitments;
5.25.4 any declaration or payment of any dividend or distribution
in respect of the capital stock or any direct or indirect
redemption, purchase or other acquisition of any of the
capital stock of the Company (except for dividends which
the Company may declare and pay pursuant to Section 10.5
hereof);
5.25.5 any increase in the compensation, bonus, sales commissions
or fee arrangement payable or to become payable by the
Company to any of its officers, directors, stockholders,
employees, consultants or agents, except for ordinary and
customary bonuses and salary increases for employees in
accordance with past practice;
5.25.6 any work interruptions, labor grievances or claims filed,
or any other event or condition of any character materially
adversely affecting the business of the Company;
5.25.7 any sale or transfer, or any agreement to sell or transfer,
any material assets, property or rights of the Company to
any person, including, without limitation, the U.S.
Stockholders and their affiliates;
5.25.8 any cancellation, or agreement to cancel, any material
indebtedness or other obligation owing to the Company,
including without limitation any material indebtedness or
obligation of any U.S. Stockholders or any affiliate
thereof;
5.25.9 any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in
any of the assets, property or rights of the Company or
requiring consent of any party to the transfer and
assignment of any such assets, property or rights;
5.25.10 any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or
assets outside of the ordinary course of the Company's
business;
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5.25.11 any waiver of any material rights or claims of the
Company;
5.25.12 any material breach, amendment or termination of any
material contract, agreement, license, permit or other
right to which the Company is a party;
5.25.13 any transaction by the Company outside the ordinary course
of its respective businesses;
5.25.14 any cancellation or termination of a material contract
with a customer or client prior to the scheduled
termination date; or
5.25.15 any other distribution to or for the benefit of the U.K.
Stockholder of property or assets by the Company.
5.26 Deposit Accounts; Powers of Attorney. Schedule 5.26 contains an
accurate schedule as of the date of the Agreement of:
5.26.1 the name of each financial institution in which the Company
has accounts or safe deposit boxes;
5.26.2 the names in which the accounts or boxes are held;
5.26.3 the type of account and account number; and
5.26.4 the name of each person authorized to draw thereon or have
access thereto.
Schedule 5.26 also sets forth the name of each person, corporation, firm or
other entity holding a general or special power of attorney from the Company and
a description of the terms of such power.
5.27 Brokers and Agents. Except as disclosed on Schedule 5.27, the U.S.
Stockholders did not employ any broker or agent in connection with
this transaction.
5.28 Relations with Governments. Except for political contributions
made in a lawful manner which, in the aggregate, do not exceed
$10,000 per year for each year in which any U.S. Stockholder has
been a stockholder of the Company, the Company has not made,
offered or agreed to offer anything of value to any governmental
official, political party or candidate for government office nor
has it otherwise taken any action which would cause the Company to
be in violation
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of the Foreign Corrupt Practices Act of 1977, as amended or any
law of similar effect. If political contributions made by the
Company have exceeded $10,000 per year for each year in which any
U.S. Stockholder has been a stockholder of the Company, each
contribution in the amount of $5,000 or more shall be described on
Schedule 5.28.
5.29 Disclosure.
5.29.1 If, on or prior to the 25th day after the date of the final
prospectus of Healthworld utilized in connection with the
IPO, the U.S. Stockholders become aware of any fact or
circumstance which would change (or, if after the Closing
Date, would have changed) a representation or warranty of
the U.S. Stockholders in this Agreement or would affect any
document delivered pursuant hereto in any material respect,
the U.S. Stockholders shall immediately give notice of such
fact or circumstance to Healthworld. However, subject to
the provisions of Section 7.8, such notification shall not
relieve the U.S. Stockholders of their respective
obligations under this Agreement.
5.29.2 The U.S. Stockholders each acknowledge and agree:
(i) that there exists no firm commitment, binding
agreement, or promise or other assurance of any
kind, whether express or implied, oral or written,
that a Registration Statement will become effective
or that the IPO pursuant thereto will occur at a
particular price or within a particular range of
prices or occur at all;
(ii) that neither Healthworld nor any of its officers,
directors, agents or representatives nor any
Underwriter (other than as provided in the
Underwriting Agreement) shall have any liability to
the Company, the U.S. Stockholders or any other
person affiliated or associated with the Company for
any failure of the Registration Statement to become
effective, the IPO to occur at a particular price or
within a particular range of prices or to occur at
all; and
(iii) that the decision of the U.S. Stockholders to enter
into this Agreement,
(iv) has been or will be made independent of, and without
reliance upon, any statements, opinions or other
communications, or due diligence investigations
which have been or will be made or
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performed by any prospective underwriters, relative
to Healthworld or the IPO.
5.30 Authority; Ownership. Such U.S. Stockholder has the full legal
right, power and authority to enter into this Agreement. Such U.S.
Stockholder owns beneficially and of record all of the shares of
the Company Stock identified in Schedule 5.3 as being owned by
such U.S. Stockholder, and, except as set forth on Schedule 5.30,
such Company Stock is owned free and clear of all Encumbrances and
claims of every kind.
5.31 Preemptive Rights. Such U.S. Stockholder does not have, or hereby
waives, any preemptive or other right to acquire shares of Company
Stock or Healthworld Stock that such U.S. Stockholder has or may
have had other than rights of any U.S. Stockholder to acquire
Healthworld Stock pursuant to this Agreement or any option granted
by Healthworld.
5.32 No Intention to Dispose of Healthworld Stock. No U.S. Stockholder
is under any binding commitment or contract to sell, exchange or
otherwise dispose of shares of Healthworld Stock to be received in
connection with the Organization.
6 Representations of Healthworld.
Healthworld represents and warrants that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true on the Closing Date
and the Closing Date. All such representations and warranties shall survive the
Closing Date for a period of twelve (12) months (the last day of such period
being the "Expiration Date"), except that, solely for purposes of determining
whether a claim for indemnification under Section 11.2.4 hereof has been made on
a timely basis and solely to the extent that in connection with the IPO any
person claiming indemnification from Healthworld hereunder actually incurs
liability under the 1933 Act, the 1934 Act, or any other Federal or state
securities laws, the representations and warranties set forth herein shall
survive until the expiration of any applicable limitations period, which shall
be deemed to be the Expiration Date for such purposes.
6.1 Due Organization. Healthworld is a corporation duly organized,
validly existing and in good standing under the laws of the state
of Delaware, and is duly authorized and qualified to do business
under all applicable laws, regulations, ordinances and orders of
public authorities to carry on its business in the places and in
the manner as contemplated.
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6.2 Authorization. The representatives of Healthworld executing this
Agreement have the authority to enter into and bind Healthworld to
the terms of this Agreement. Healthworld has the full legal right,
power and authority to enter into this Agreement.
6.3 Capital Stock of Healthworld. The authorized capital stock of
Healthworld is as set forth in Schedule 6.3. All of the issued and
outstanding shares of the capital stock of Healthworld are owned
by the U.S. Stockholders in the amounts set forth in Schedule 6.3.
All of such shares are owned free and clear of all Encumbrances
and claims of every kind. All of the issued and outstanding shares
of the capital stock of Healthworld have been duly authorized and
validly issued, and are fully paid and nonassessable, are owned of
record and beneficially by Xxxxxxxx. Such shares were offered,
issued, sold and delivered by Healthworld in compliance with all
applicable state and Federal laws concerning the issuance of
securities.
6.4 Transactions in Capital Stock. Except for the obligations under
the agreements which form a part of the Healthworld Plan of
Organization or the obligations which will arise under the
Underwriting Agreement, no option, warrant, call, conversion right
or commitment of any kind exists which obligates Healthworld to
issue any of its authorized but unissued capital stock, and
Healthworld has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any of its equity securities
or any interests therein or to pay any dividend or make any
distribution in respect thereof. At the time of issuance thereof,
the Healthworld Stock to be delivered to the U.S. Stockholders
pursuant to this Agreement will constitute valid and legally
issued shares of Healthworld, fully paid and nonassessable. The
shares of Healthworld Stock to be issued to the U.S. Stockholders
pursuant to this Agreement will not be registered under the 1933
Act, except as provided in Section 15 hereof.
6.5 Liabilities and Obligations. Healthworld does not have any
liabilities, contingent or otherwise, except as set forth in or
contemplated by this Agreement and the other agreements forming a
part of the Healthworld Plan of Organization, including without
limitation, the Underwriting Agreement for fees incurred in
connection with the transactions contemplated hereby and thereby,
and any liabilities and obligations which may exist under the
Xxxxxx Xxxxxxx Employment Agreement and the Healthworld License
Agreement, copies of which are annexed to Schedule 6.5.
6.6 Conformity with Law; Litigation. Healthworld is not in violation
of any law or regulation or any order of any court or Federal,
state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality
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having jurisdiction over it which would have a Material Adverse
Effect; and there are no material claims, actions, suits or
proceedings pending or, to the knowledge of Healthworld,
threatened against or affecting Healthworld, at law or in equity,
or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over it and no notice of any
claim, action, suit or proceeding, whether pending or threatened,
has been received. Healthworld is not in violation of its
certificate of incorporation, its by-laws or any other corporate
governing instrument.
6.7 Validity of Obligations. The execution and delivery of this
Agreement by Healthworld and the performance of the transactions
contemplated herein have been duly and validly authorized by the
Board of Directors of Healthworld. This Agreement has been duly
and validly authorized by all necessary corporate action and is a
legal, valid and binding obligation of Healthworld.
6.8 Limited Business Conducted. Healthworld was formed on September
12, 1996 solely for the purpose of entering into and consummating
the Healthworld Plan of Organization. Healthworld has not filed
any Returns or extension requests in respect of Tax. Healthworld
has not since its formation conducted any business, acquired any
assets, incurred any liabilities or entered into any agreements,
except Healthworld has entered into the Xxxxxx Xxxxxxx Employment
Agreement and the Healthworld License Agreement and has engaged in
other limited startup activities. It is anticipated that prior to
the Closing, Healthworld will adopt a Stock Option Plan; however,
Healthworld covenants that no options will be granted before the
Registration Statement is declared effective by the SEC.
7 Covenants Prior to Closing.
7.1 Access and Cooperation; Due Diligence. Between the date of this
Agreement and the Closing Date, the U.S. Stockholders will cause
the Companies to afford to the U.K. Stockholder and his authorized
representatives reasonable access to all of the respective
Companies' sites, properties, books and records during normal
business hours and will furnish such additional financial and
operating data and other information as to the business and
properties of the respective Companies as may from time to time be
reasonably requested. Each of the respective U.S. Stockholders
will cooperate, and will cause the Companies to cooperate, in the
preparation of any documents or other material which may be
reasonably required in connection with any documents or materials
required by this Agreement. Each U.S. Stockholder and the Company
or other person will treat all information obtained in connection
with the negotiation and performance of this Agreement
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or the due diligence investigations conducted as confidential in
accordance with the provisions of Section 13.2 hereof.
7.2 Conduct of Business Pending Closing. Between the date of this
Agreement and the Closing Date, the U.S. Stockholders shall cause
the Companies to, except as set forth on Schedule 7.2 of its
respective Disclosure Schedule:
7.2.1 carry on its respective businesses in substantially the
same manner as it has heretofore been conducted and not
introduce any material new method of management, operation
or accounting;
7.2.2 maintain, in all material respects, its respective
properties and facilities, including those held under
leases, in as good working order and condition as at
present, ordinary wear and tear excepted;
7.2.3 perform in all material respects all of its respective
obligations under agreements relating to or affecting its
respective assets, properties or rights;
7.2.4 keep in full force and effect present insurance policies or
other comparable insurance coverage;
7.2.5 use its reasonable best efforts to maintain and preserve
its business organization intact, retain its respective
present key employees and maintain its respective
relationships with suppliers, customers and others having
business relations with the Company;
7.2.6 maintain compliance with all material permits, laws, rules
and regulations, consent orders, and all other orders of
applicable courts, regulatory agencies and similar
governmental authorities;
7.2.7 maintain present debt and lease instruments and not enter
into new or amended debt or lease instruments, except in
the ordinary course of business and except as may be
reasonably necessary to effectuate the IPO; and
7.2.8 maintain or reduce present salaries and commission levels
for all officers, directors, employees and agents except
for ordinary and customary bonus and salary increases for
employees in accordance with past practices.
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7.3 Prohibited Activities. Except as disclosed on Schedule 7.3 or as
otherwise contemplated by this Agreement, between the date hereof
and the Closing Date, the U.S. Stockholders will not permit the
Company to:
7.3.1 make any change in its certificate of incorporation or
by-laws;
7.3.2 issue any securities, options, warrants, calls, conversion
rights or commitments relating to its securities of any
kind other than in connection with the exercise of options
or warrants listed in Schedule 5.4;
7.3.3 declare or pay any dividend, or make any distribution in
respect of its stock whether now or hereafter outstanding,
or purchase, redeem or otherwise acquire or retire for
value any shares of its stock (provided that the Company
may declare and pay dividends pursuant to Section 10.5
hereof);
7.3.4 enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures,
except if it involves an amount not in excess of $10,000
and except if it involves the performance of services in
the ordinary course of business;
7.3.5 create, assume or permit to exist any mortgage, pledge or
other lien or encumbrance upon any assets or properties
whether now owned or hereafter acquired, except:
7.3.5.1 with respect to purchase money liens incurred in
connection with the acquisition of equipment with an
aggregate cost not in excess of $10,000 necessary or
desirable for the conduct of the businesses of the Company,
7.3.5.2 liens for taxes either not yet due or being
contested in good faith and by appropriate proceedings (and
for which contested taxes adequate reserves have been
established and are being maintained)
7.3.5.3 materialmen's, mechanics', workers', repairmen's,
employees' or other like liens arising in the ordinary
course of business, or
7.3.5.4 liens set forth on Schedule 5.10 hereto;
7.3.6 sell, assign, lease or otherwise transfer or dispose of any
property or equipment except in the ordinary course of
business;
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7.3.7 negotiate for the acquisition of any business or the
start-up of any new business;
7.3.8 merge or consolidate or agree to merge or consolidate with
or into any other corporation;
7.3.9 waive any material rights or claims of the Company,
provided that the Company may negotiate and adjust bills in
the course of good faith disputes with customers in a
manner consistent with past practice, provided, further,
that such adjustments shall not be deemed to be included in
Schedule 5.11 unless specifically listed thereon;
7.3.10 commit a material breach or amend or terminate any material
agreement, permit, license or other right of the Company;
or
7.3.11 enter into any other transaction outside the ordinary
course of its business or prohibited hereunder.
7.4 No Shop. None of the U.S. Stockholders shall, and they shall not
permit any of the Companies, nor any agent, officer, director,
trustee or any representative of any of the foregoing will, during
the period commencing on the date of this Agreement and ending
with the earlier to occur of the Closing Date or the termination
of this Agreement in accordance with its terms, directly or
indirectly, to:
7.4.1 solicit or initiate the submission of proposals or offers
from any person for,
7.4.2 participate in any discussions pertaining to, or
7.4.3 furnish any information to any person other than
Healthworld or its authorized agents relating to, any
acquisition or purchase of all or a material amount of the
assets of, or any equity interest in, the Company, or a
consolidation or business combination of the Company.
7.5 Further Assurances. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further
instruments or documents or take such other action as may be
reasonably necessary or convenient to carry out the transactions
contemplated hereby
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7.6 Agreements. The U.S. Stockholders shall, and they shall cause the
Company to, terminate any stockholders agreements, voting
agreements, voting trusts, options, warrants and employment
agreements between the Company and any employee listed on Schedule
9.10 on or prior to the Closing Date. Such terminations shall be
delivered to the Escrow Agent on the Closing Date.
7.7 Notification of Certain Matters. The U.S. Stockholders shall give
prompt notice to Healthworld and the U.K. Stockholder of:
7.7.1 the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to
cause any representation or warranty of the U.S.
Stockholders contained herein to be untrue or inaccurate in
any material respect at or prior to the Closing; and
7.7.2 any material failure of any U.S. Stockholder or any Company
to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by such person
hereunder.
The delivery of any notice pursuant to this Section 7.7 shall not be deemed to
7.7.3 modify the representations or warranties hereunder of the
party delivering such notice, which modification may only
be made pursuant to Section 7.8,
7.7.4 modify the conditions set forth in Sections 8 and 9, or
7.7.5 limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
7.8 Amendment of Schedules. Each party hereto agrees that, with
respect to the representations and warranties of such party
contained in this Agreement, such party shall have the continuing
obligation until 24 hours prior to the anticipated effectiveness
of the Registration Statement to supplement or amend promptly the
Schedules hereto with respect to any matter hereafter arising or
discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described
in the Schedules, provided however, that supplements and
amendments to Schedules 5.10, 5.11, 5.14 and 5.15 shall only have
to be delivered at the Closing Date, unless such Schedule is to be
amended to reflect an event occurring other than in the ordinary
course of business.
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7.9 Cooperation in Preparation of Registration Statement. The U.S.
Stockholders shall furnish or cause to be furnished to Healthworld
and the Underwriters all of the information concerning the
Companies and the U.S. Stockholders required for inclusion in, and
will cooperate with Healthworld and the Underwriters in the
preparation of, the Registration Statement and the prospectus
included therein (including audited and unaudited financial
statements, prepared in accordance with generally accepted
accounting principles, in form suitable for inclusion in the
Registration Statement). The U.S. Stockholders agree promptly to
advise Healthworld if at any time during the period in which a
prospectus relating to the IPO is required to be delivered under
the 1933 Act, any information contained in the prospectus
concerning the Companies or the U.S. Stockholders becomes
incorrect or incomplete in any material respect, and to provide
the information needed to correct such inaccuracy. Insofar as the
information relates solely to each respective U.S. Stockholder and
the Companies respectively owned by them, each U.S. Stockholder
represents and warrants, as to such information with respect to
such Company and himself that the Registration Statement will not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that the U.S.
Stockholders shall not have responsibility for any such inclusions
or omissions to the extent they relate to the U.K. Company or any
of its subsidiaries and do not relate to the U.S. Companies.
8 Conditions Precedent to Obligations of U.S. Stockholders.
The obligations of the U.S. Stockholders with respect to actions to be
taken on the Closing Date are subject to the satisfaction or waiver on or prior
to the Closing Date of all of the following conditions.
8.1 Representations and Warranties; Performance of Obligations. All
representations and warranties of the U.K. Stockholder and the
Contributing Minority Stockholders contained in their respective
Organization Agreements shall, if qualified as to materiality, be true
and correct in all material respects, and if not so qualified, be true
and correct, as of the Closing Date as though such representations and
warranties had been made as of that time. All of the terms, covenants and
conditions of the U.K. Stockholder and the Contributing Minority
Stockholders contained in their respective Organization Agreements shall
have been duly complied with and performed in all material respects.
Certificates to the foregoing effect dated the Closing Date, signed by
the U.K. Stockholder and each of the Contributing Minority Stockholders,
shall have been delivered to the U.S. Stockholders.
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8.2 Satisfaction. All actions, proceedings, instruments and documents
required to carry out this Agreement and the respective
Organization Agreements of the U.K. Stockholder and the
Contributing Minority Stockholders and any other agreement
incidental hereto or thereto and all other related legal matters
shall be reasonably satisfactory to the U.S. Stockholders and
their respective counsel. The U.S. Stockholders shall be
reasonably satisfied that the Registration Statement and the
prospectus forming a part thereof, including any amendments
thereof or supplements thereto, shall not contain any untrue
statement of a material fact, or omit to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that the condition
contained in this sentence shall be deemed satisfied if the U.S.
Stockholders shall have failed to inform Healthworld in writing
prior to the effectiveness of the Registration Statement of the
existence of an untrue statement of a material fact or the
omission of such a statement of a material fact.
8.3 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or
threatened to restrain or prohibit the Organization or the IPO and
no governmental agency or body shall have taken any other action
or made any request of any of the Companies or the U.S.
Stockholders as a result of which the U.S. Stockholders deem it
inadvisable to proceed with the transactions hereunder.
8.4 Opinions of Counsel. The U.S. Stockholders shall have received an
opinion from counsel for the U.K. Stockholder and counsel for the
Contributing Minority Stockholders, dated the Closing Date, in
form and substance reasonably acceptable to counsel for the U.S.
Stockholders.
8.5 Consents and Approvals. All necessary consents of and filings with
any governmental authority or agency relating to the consummation
of the transaction contemplated herein shall have been obtained
and made.
8.6 No Material Adverse Change. No event or circumstance shall have
occurred with respect to the U.K. Company or any of its
Subsidiaries which would constitute a Material Adverse Effect.
8.7 Secretary's Certificates; Good Standing. The U.S. Stockholders
shall have received (a) certificates, dated the Closing Date and
signed by the secretary of the U.K. Company and each of its
Subsidiaries, certifying the truth and correctness of attached
copies of the U.K. Company's and each of its Subsidiaries'
Memorandum and Articles of Association (including amendments
thereto) and such other
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matters as may reasonably be requested by the U.S. Stockholders,
(b) a certificate dated the Closing Date and signed by the
secretary of Healthworld, certifying the truth and correctness of
attached copies of Healthworld's certificate of incorporation
(including amendments thereto) and by-laws (including amendments
thereto), and (c) a certificate of good standing for Healthworld
in the State of Delaware.
8.8 Employment Agreements. Healthworld shall have executed an
employment agreement substantially in the form of Exhibit hereto,
for the annual compensation set forth on Schedule 8.8.
8.9 Simultaneous Closings. The Closings pursuant to the Organization
Agreements with respect to the U.K. Stockholder and the
Contributing Minority Stockholders shall have occurred
simultaneously with the Closing hereunder.
8.10 Cater Share Purchase. The U.K. Company shall have purchased
Cater's shares as described in Section 1.1.3.
9 Conditions Precedent to Obligations of Healthworld.
The obligations of Healthworld with respect to actions to be taken on the
Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the following conditions.
9.1 Representations and Warranties; Performance of Obligations. All
the representations and warranties of the U.S. Stockholders and
the Company contained in this Agreement shall, if qualified as to
materiality, be true and correct in all material respects, and if
not so qualified, be true and correct, as of the Closing Date with
the same effect as though such representations and warranties had
been made on and as of such date. All of the terms, covenants and
conditions of this Agreement to be complied with or performed by
the U.S. Stockholders and the Company on or before the Closing
Date shall have been duly performed or complied with in all
material respects; and the U.S. Stockholders shall have delivered
to Healthworld certificates dated the Closing Date and signed by
them to such effect.
9.2 Satisfaction. All actions, proceedings, instruments and documents
required to carry out this Agreement and the respective
Organization Agreements of the U.K. Stockholder and the
Contributing Minority Stockholders and any other agreement
incidental hereto or thereto and all other related legal matters
shall be reasonably satisfactory to Healthworld and its counsel.
Healthworld shall be reasonably
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satisfied that the Registration Statement and the prospectus
forming a part thereof, including any amendments thereof or
supplements thereto, shall not contain any untrue statement of a
material fact, or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein
not misleading.
9.3 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or
threatened to restrain or prohibit the Organization or the IPO and
no governmental agency or body shall have taken any other action
or made any request of Healthworld as a result of which the
management of Healthworld deems it inadvisable to proceed with the
transactions hereunder.
9.4 Opinion of Counsel. Healthworld shall have received an opinion
from counsel to the U.S. Stockholders, dated the Closing Date, in
form and substance reasonably acceptable to counsel for
Healthworld.
9.5 Consents and Approvals. All necessary consents of and filings with
any governmental authority or agency relating to the consummation
of the transaction contemplated herein shall have been obtained
and made and no action or proceeding shall have been instituted or
threatened to restrain or prohibit the Organization and no
governmental agency or body shall have taken any other action or
made any request of any Company as a result of which Healthworld
deems it inadvisable to proceed with the transactions hereunder.
9.6 No Material Adverse Change. No event or circumstance shall have
occurred with respect to any of the Companies which would
constitute a Material Adverse Effect, and none of the Companies
shall have suffered any material loss or damages to any of its
properties or assets, whether or not covered by insurance, which
change, loss or damage materially affects or impairs the ability
of the Company to conduct its business.
9.7 Secretary's Certificates. Healthworld shall have received
certificates, dated the Closing Date and signed by the secretary
of each of the Companies, certifying the truth and correctness of
attached copies of each of the Company's Certificate of
Incorporation (including amendments thereto), By-Laws (including
amendments thereto).
9.8 Employment Agreements. The U.S. Stockholders shall have executed
employment agreements substantially in the form of Exhibit hereto,
for the annual compensation set forth on Schedule 8.8.
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9.9 U.S. Stockholders' Release. Each of the U.S. Stockholders shall
have delivered to Healthworld an instrument dated the Closing Date
releasing the Company from any and all claims of such U.S.
Stockholder against the Company and Healthworld and obligations of
the Company and Healthworld to such U.S. Stockholder, except for
(x) items specifically identified on Schedules 5.10 and 5.15 as
being claims of or obligations to such U.S. Stockholder, (y)
continuing obligations to such U.S. Stockholder relating to his
employment by the Company and (z) obligations arising under this
Agreement or the transactions contemplated hereby.
9.10 Termination of Related Party Agreements. Except as set forth on
Schedule 9.10, all existing agreements between the Company and the
U.S. Stockholders shall have been canceled effective as of the
Closing Date.
9.11 Closings. The closing of the Organization agreements with respect
to the U.K. Stockholder and the Contributing Minority Stockholders
shall simultaneously occur with the closing of the transactions
contemplated by this Agreement.
9.12 Cater Share Purchase. The U.K. Company shall have purchased
Cater's shares as described in Section 1.1.3.
10 Covenants of Healthworld and the U.S. Stockholders after Closing.
10.1 Release From Guarantees; Repayment of Certain Obligations.
Healthworld shall use commercially reasonable efforts to have each
of the U.S. Stockholders released from any and all guarantees on
any indebtedness or obligation that he personally guaranteed and
from any and all pledges of assets that he pledged to secure such
indebtedness or obligation for the benefit of the Company, with
all such guarantees on indebtedness or obligation being assumed by
Healthworld. In the event that Healthworld cannot obtain such
releases from the lenders of any such guaranteed indebtedness or
the obligee of any guaranteed obligation on or prior to 120 days
subsequent to the Closing Date, Healthworld shall pay off or
otherwise refinance or retire such indebtedness or obligation.
From and after the Closing Date and until such time as all of such
indebtedness or obligation is paid off, refinanced or retired,
Healthworld shall maintain unencumbered funds in amounts
sufficient to provide for such pay off, refinancing or retirement,
provided that Healthworld may use such funds for other purposes,
in its sole discretion, with the prior written consent of each
U.S. Stockholder who has not as of that time been released from
his guarantee as described above and whose indebtedness as
described above has not as of that time been paid off, refinanced
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or retired. Furthermore, Healthworld shall assume all obligations
which any the U.S. Stockholder may have incurred to guarantee any
lease of the Company and shall indemnify and hold harmless the
U.S. Stockholders from any cost or expense arising under any such
lease guarantee.
10.2 Preservation of Tax and Accounting Treatment. Except as
contemplated by this Agreement or the Registration Statement,
after the Closing Date, Healthworld shall not and shall not permit
any of its Subsidiaries to undertake any act that would jeopardize
the tax-free status of the Organization.
10.3 Preparation and Filing of Tax Returns.
10.3.1 The Companies shall file or cause to be filed all required
separate Federal income Tax Returns (and any State and
local Tax Returns filed on the basis similar to that of S
Corporations under Federal income Tax rules) of any
Acquired Party for all taxable periods that end on or
before the Closing Date in a manner prepared under the
instructions of the U.S. Stockholders, consistent with
historical practices. Each U.S. Stockholder shall pay or
cause to be paid all Tax liabilities (in excess of all
amounts already paid with respect thereto or properly
accrued or reserved with respect thereto on the Company
Financial Statements) shown by such Returns to be due.
10.3.2 Healthworld shall file or cause to be filed all separate
Returns of, or that include, any Acquired Party for all
taxable periods ending after the Closing Date.
10.3.3 Each party hereto shall, and shall cause its Subsidiaries
and Affiliates to, provide to each of the other parties
hereto such cooperation and information as any of them
reasonably may request in filing any Return, amended Return
or claim for refund, determining a liability for Taxes or a
right to refund of Taxes or in conducting any audit or
other proceedings in respect of Taxes. Such cooperation and
information shall include providing copies of all relevant
portions of relevant Returns, together with relevant
accompanying schedules and relevant work papers, relevant
documents relating to rulings or other determinations by
Taxing Authorities and relevant records concerning the
ownership and Tax basis of property, which such party may
possess. Each party shall make its employees reasonably
available on a mutually convenient basis at its cost to
provide explanation of any documents or information so
provided.
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Subject to the preceding sentence, each party required to
file Returns pursuant to this Agreement shall bear all
costs of filing such Returns.
10.3.4 Each of the Companies, Healthworld and each U.S.
Stockholder shall comply with the Tax reporting
requirements of Section 1.351-3 of the Treasury Regulations
promulgated under the Code, and treat the transaction as a
tax-free contribution under Section 351(a) of the Code.
10.3.5 Without limiting the generality of the foregoing,
Healthworld shall retain, and shall cause the Company to
retain, and the U.S. Stockholders shall retain, until the
applicable statutes of limitations (including any
extensions) have expired, copies of all Returns, supporting
work schedules and other records or information which may
be relevant to such Returns for all tax periods or portions
thereof ending before or including the Closing Date and
shall not destroy or otherwise dispose of any such records
without first providing the other party with a reasonable
opportunity to review and copy the same.
10.3.6 Each U.S. Stockholder shall furnish Healthworld with an
affidavit, stating, under penalty of perjury, the
transferor's United States taxpayer identification number
and that the transferor is not a foreign person, pursuant
to section 1445(b)(2) of the Code.
10.4 Conformity With Xxxxxxxx/Xxxxxx Letter of Intent Regarding
Governance. Corporate governance at the date of the closing of the
IPO shall be in accordance with section 1.3 of the Xxxxxxxx/Xxxxxx
Letter of Intent.
10.5 Distributions for Estimated Taxes. The Company may, after the
Balance Sheet Date and on or before the Closing Date, pay to each
U.S. Stockholder the amount equal to the sum of his estimated
Federal, state and local income taxes on the Company's S
Corporation earnings taxable to such U.S. Stockholder for (i) the
period after the Balance Sheet Date and ending with the Closing
and (ii) for the fiscal year ending with the Balance Sheet Date;
provided, however, that distributions described above may be made
only to the extent not made prior to the Balance Sheet Date.
Unless otherwise demonstrated by a U.S. Stockholder, it shall be
presumed that a combined effective tax rate of 45% shall apply in
determining the estimated taxes to be distributed pursuant to this
section.
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11 Indemnification.
The U.S. Stockholders and Healthworld each make the following covenants
that are applicable to them, respectively:
11.1 General Indemnification by the U.S. Stockholders. The U.S.
Stockholders covenant and agree that they, jointly and severally,
will indemnify, defend, protect and hold harmless Healthworld at
all times, from and after the date of this Agreement until the
Expiration Date, from and against all claims, damages, actions,
suits, proceedings, demands, assessments, adjustments, costs and
expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation) incurred
by Healthworld as a result of or arising from:
11.1.1 any breach of the representations and warranties of the
U.S. Stockholders set forth herein or on the Disclosure
Schedules or certificates delivered in connection herewith,
11.1.2 any breach of any covenant or agreement on the part of the
U.S. Stockholders under this Agreement,
11.1.3 any liability under the 1933 Act, the 1934 Act or other
Federal or state law or regulation, at common law or
otherwise, arising out of or based upon any untrue written
statement or alleged untrue written statement of a material
fact relating to any of the Companies or the U.S.
Stockholders, and provided to Healthworld or its counsel by
the U.S. Stockholders in the Registration Statement or any
prospectus forming a part thereof, or any amendment thereof
or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material
fact relating to any of the Companies or the U.S.
Stockholders required to be stated therein or necessary to
make the statements therein not misleading.
provided, however, that no U.S. Stockholder shall be liable for any
indemnification obligation pursuant to this Section 11.1 to the extent
attributable to a breach of any representation, warranty or agreement made
herein individually by any other U.S. Stockholder. To the extent that any U.S.
Stockholder shall have indemnified Healthworld in an amount which exceeds his
proportionate share of the total amount indemnified, he shall have the right of
indemnification against the other U.S. Stockholders to the extent they have paid
less than their respective proportionate shares, with proportions being
determined in relation to relative stock ownership in the Company as of the date
hereof.
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11.2 Indemnification by Healthworld. Healthworld covenants and agrees
that it will indemnify, defend, protect and hold harmless the U.S.
Stockholders at all times from and after the date of this
Agreement until the Expiration Date, from and against all claims,
damages, actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including specifically, but
without limitation, reasonable attorneys, fees and expenses of
investigation) incurred by the U.S. Stockholders as a result of or
arising from:
11.2.1 any breach by Healthworld of its representations and
warranties set forth herein or on the Disclosure Schedules
or certificates attached hereto,
11.2.2 any breach of any covenant or agreement .on the part of
Healthworld under this Agreement,
11.2.3 any liability under the 1933 Act, the 1934 Act or other
Federal or state law or regulation, at common law or
otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
relating to Healthworld or any of the other company forming
a part of the Healthworld Plan of Organization contained in
any preliminary prospectus, the Registration Statement or
any prospectus forming a part thereof, or any amendment
thereof or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a
material fact relating to Healthworld or any other company
forming a part of the Healthworld Plan of Organization
required to be stated therein or necessary to make the
statements therein not misleading, or
11.2.4 any representation or warranty relating to Healthworld's
right, authority or capacity to enter into and consummate
the terms of this Agreement.
11.3 Third Person Claims. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge
of any claim by a person not a party to this Agreement ("Third
Person"), or the commencement of any action or proceeding by a
Third Person, the Indemnified Party shall, as a condition
precedent to a claim with respect thereto being made against any
party obligated to provide indemnification pursuant to Section
11.1 or 11.2 hereof (hereinafter the "Indemnifying Party"), give
the Indemnifying Party written notice of such claim or the
commencement of such action or proceeding. Such notice shall state
the nature and the basis of such claim and a reasonable estimate
of the amount thereof. The Indemnifying Party shall have the right
to defend and settle, at its own expense and by its own counsel,
any such matter so long as the Indemnifying Party pursues the same
in good faith and diligently, provided that
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the Indemnifying Party shall not settle any criminal proceeding or
any other proceeding to the extent that relief other than the
payment of money is sought, without the written consent of the
Indemnified Party. If the Indemnifying Party undertakes to defend
or settle, it shall promptly notify the Indemnified Party of its
intention to do so, and the Indemnified Party shall cooperate with
the Indemnifying Party and its counsel in the defense thereof and
in any settlement thereof. Such cooperation shall include, but
shall not be limited to, furnishing the Indemnifying Party with
any books, records or information reasonably requested by the
Indemnifying Party that are in the Indemnified Party's possession
or control. All Indemnified Parties shall use the same counsel,
which shall be the counsel selected by Indemnifying Party,
provided that if counsel to the Indemnifying Party shall have a
conflict of interest that prevents counsel for the Indemnifying
Party from representing Indemnified Party, Indemnified Party shall
have the right to participate in such matter through counsel of
its own choosing and Indemnifying Party shall reimburse the
Indemnified Party for the reasonable expenses of its counsel.
After the Indemnifying Party has notified the Indemnified Party of
its intention to undertake to defend or settle any such asserted
liability, and for so long as the Indemnifying Party diligently
pursues such defense, the Indemnifying Party shall not be liable
for any additional legal expenses incurred by the Indemnified
Party in connection with any defense or settlement of such
asserted liability, except as set forth in the preceding sentence
and to the extent such participation is requested by the
Indemnifying Party, in which event the Indemnified Party shall be
reimbursed by the Indemnifying Party for reasonable additional
legal expenses and out-of-pocket expenses. If the Indemnifying
Party desires to accept a final and complete settlement of any
such Third Person claim and the Indemnified Party refuses to
consent to such settlement, then the Indemnifying Party's
liability under this Section with respect to such Third Person
claim shall be limited to the amount so offered in settlement by
said Third Person. Upon agreement as to such settlement between
said Third Person and the Indemnifying Party, the Indemnifying
Party shall, in exchange for a complete release from the
Indemnified Party, promptly pay to the Indemnified Party the
amount agreed to in such settlement and the Indemnified Party
shall, from that moment on, bear full responsibility for any
additional costs of defense which it subsequently incurs with
respect to such claim and all additional costs of settlement or
judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to
indemnification hereunder, or fails diligently to pursue such
defense, the Indemnified Party may undertake such defense through
counsel of its choice, at the cost and expense of the Indemnifying
Party, and the Indemnified Party may settle such matter, and the
Indemnifying Party shall reimburse the Indemnified Party for the
amount paid in such settlement and any other liabilities or
expenses incurred by the Indemnified
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Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person
claim without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld or delayed. All
settlements hereunder shall effect a complete release of the
Indemnified Party, unless the Indemnified Party otherwise agrees
in writing. The parties hereto will make appropriate adjustments
for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 Exclusive Remedy. The indemnification provided for in this Section
11 shall (except as prohibited by ERISA) be the exclusive remedy
in any action seeking damages or any other form of monetary relief
brought by any party to this Agreement against another party,
provided that, nothing herein shall be construed to limit the
right of a party, in a proper case, to seek injunctive relief for
a breach of this Agreement.
11.5 Limitations on Indemnification.
11.5.1 Healthworld shall not assert any claim for indemnification
hereunder against any U.S. Stockholders until such time as,
and solely to the extent that, the aggregate of all claims
which Healthworld may have against such U.S. Stockholder
shall exceed one-half (0.5%) percent of the value of the
Healthworld Stock delivered to such U.S. Stockholder,
calculated at the IPO price (the "Indemnification
Threshold"), provided, however, that Healthworld may assert
and shall be indemnified for any claim under any Absolute
Representation at any time, regardless of whether the
aggregate of all claims which such persons may have against
such U.S. Stockholder exceeds the Indemnification
Threshold, it being understood that the amount of any such
claim under any Absolute Representation shall not be
counted towards the Indemnification Threshold.
11.5.2 None of the U.S. Stockholders shall assert any claim for
indemnification hereunder against Healthworld until such
time as, and solely to the extent that, the aggregate of
all claims which the U.S. Stockholders may have against
Healthworld shall exceed $50,000, provided, however that
the U.S. Stockholders may assert and shall be indemnified
for any claim under Section 11.2.4 at any time, regardless
of whether the aggregate of all claims which the U.S.
Stockholders may have against Healthworld exceeds $50,000,
it being understood that the amount of any such claim under
Section 11.2.4 shall not be counted towards such $50,000
amount.
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11.5.3 No person shall be entitled to indemnification under this
Section 11 if and to the extent that such person's claim
for indemnification is directly or indirectly related to a
breach by such person of any representation, warranty,
covenant or other agreement set forth in this Agreement.
Notwithstanding any other term of this Agreement (except
the proviso to this sentence), no U.S. Stockholder shall be
liable under this Section 11 for an amount which exceeds
the value of the Healthworld Stock to be received by such
U.S. Stockholder in connection with the Organization,
provided that a U.S. Stockholder's indemnification
obligations pursuant to any Absolute Representation shall
not be limited. For purposes of calculating the value of
the Healthworld Stock to be received by a U.S. Stockholder,
Healthworld Stock shall be valued at its initial public
offering price as set forth in the Registration Statement.
It is hereby understood and agreed that a U.S. Stockholder
may satisfy an indemnification obligation through payment
of Healthworld Stock, such satisfaction to be to the extent
of the then fair market value of Healthworld Stock conveyed
by the Indemnifying Party pursuant to such indemnification.
12 Termination of Agreement.
12.1 Termination. This Agreement may be terminated at anytime prior to
the Closing Date solely:
12.1.1 by mutual consent of all of the U.S. Stockholders, with the
consent of the U.K. Stockholder;
12.1.2 by Vote of a Majority in Interest of the U.S. Stockholders
if the transactions contemplated by this Agreement to take
place at the Closing shall not have been consummated by
December 31, 1997, unless the failure of such transactions
to be consummated is due to the willful failure of the
party seeking to terminate this Agreement to perform any of
its obligations under this Agreement to the extent required
to be performed by it prior to or on the Closing Date;
12.1.3 by Vote of a Majority in Interest of the U.S. Stockholders,
on the one hand, or by Healthworld, on the other hand, if a
material breach or default shall be made by the other party
in the observance or in the due and timely performance of
any of the covenants, agreements or conditions contained
herein, and the curing of such default shall not have been
made on or before the Closing Date; or
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12.1.4 by either a Vote of a Majority in Interest of the U.S.
Stockholders or by Healthworld, if a material breach or
default shall be made by the U.K. Stockholder or the
Contributing Minority Stockholders in the observance or in
the due and timely performance of any of the covenants,
agreements or conditions contained in their respective
agreements, and the curing of such default shall not have
been made on or before the Closing Date.
12.2 Liabilities in Event of Termination.
The termination of this Agreement will in no way limit any obligation or
liability of any party based on or arising from a breach or default by such
party with respect to any of its representations, warranties, covenants or
agreements contained in this Agreement including, but not limited to, legal and
audit costs and out of pocket expenses.
13 Non-Competition; Non-Disclosure.
13.1 Non-Competition. Each of the U.S. Stockholders will not, for a
period (the "Restrictive Period") commencing with the date hereof
and concluding two (2) years following the Closing Date, for any
reason whatsoever, directly or indirectly, for himself or on
behalf of or in conjunction with any other person, persons,
company, partnership, corporation or business of whatever nature:
13.1.1 as an officer, director, shareholder, owner, partner, joint
venture, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or
as a sales representative (except that a U.S. Stockholder
may be employed by any entity engaged in the advertising
business so long as he does not have contact with or
provide services to or for the benefit of any such client)
within the "Territory" (hereafter defined):
13.1.1.1 engage in any advertising business having as a
client any corporation or any other entity which was
a client of Healthworld or any of its Subsidiaries
at any time within the Restrictive Period; or
13.1.1.2 engage in any mass media communication of
health-related information, whether by means of
publishing, television, radio, the internet or
otherwise; or
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13.1.1.3 engage in any other business engaged in by
Healthworld or any of its subsidiaries at any time
during the "Contact Period" (hereafter defined).
The term "Territory" means each of the geographic areas which lie within a 100
mile radius of any location at which Healthworld or any of its subsidiaries
(which were subsidiaries of Healthworld at any time during the "Contact Period,"
hereafter defined) conducted any business during the Restrictive Period. The
term "Contact Period" means the period commencing with the date hereof and
ending with the later to occur of (i) the Closing Date or (ii) the date upon
which the respective Stockholder is no longer engaged as an officer, employee or
director of Healthworld or any of its subsidiaries.
13.1.2 call upon any person who is, at that time, an employee of
Healthworld (including the subsidiaries thereof) in a sales
representative or managerial capacity for the purpose or
with the intent of enticing such employee away from or out
of the employ of Healthworld (including the subsidiaries
thereof), provided that the U.S. Stockholders shall be
permitted to call upon and hire any member of his or her
immediate family;
13.1.3 call upon any person or entity which is, at that time, or
which has been, at any time within the Restrictive Period,
a customer of Healthworld (including the subsidiaries
thereof) for the purpose of soliciting or selling products
or services in direct competition with Healthworld within
the Territory;
13.1.4 call upon any prospective acquisition candidate, on the
U.S. Stockholder's own behalf or on behalf of any
competitor in the advertising business or in the business
of communicating health information through mass media,
which candidate, to the actual knowledge of the U.S.
Stockholder after due inquiry, was called upon by
Healthworld (including the subsidiaries thereof) at any
time during the Restrictive Period or for which, to the
actual knowledge of the U.S. Stockholder after due inquiry,
Healthworld (or any subsidiary thereof) at any time during
the Restrictive Period made an acquisition analysis, for
the purpose of acquiring such entity; or
13.1.5 disclose customers, whether in existence or proposed, of
Healthworld (or any subsidiary thereof) to any person,
firm, partnership, corporation or business for any reason
or purpose whatsoever except to the extent that Healthworld
(or any subsidiary thereof) has in the past disclosed such
information to the public for valid business reasons.
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Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit the any of the U.S. Stockholders from acquiring as an investment not
more than one percent (1%) of the capital stock of a competing business whose
stock is traded on a national securities exchange or over-the-counter.
13.2 Nondisclosure.
13.2.1 Definitions. Each of the U.S. Stockholders recognizes and
acknowledges that he has had in the past, currently has,
and in the future may possibly have, access to certain
confidential information of Healthworld or any of its
Subsidiaries, such as operational policies, and pricing and
cost policies that are valuable, special and unique assets
of Healthworld and its Subsidiaries, and/or their
respective businesses (the "Confidential Information").
Confidential Information shall not include any information:
(i) which becomes known to the public generally through
no fault of the U.S. Stockholder,
(ii) as to which disclosure is required by law or the
order of any governmental authority under color of
law; provided, that prior to disclosing any
information pursuant to this clause (ii), the U.S.
Stockholder shall give prior written notice thereof
to Healthworld and provide Healthworld with the
opportunity to contest such disclosure, or
(iii) as to which the disclosing party reasonably believes
that such disclosure is required in connection with
the defense of a lawsuit against the disclosing
party.
13.2.2 Covenant to Maintain Confidentiality. The U.S. Stockholder
agrees that until the later to occur of (i) five (5) years
following the Closing Date or (ii) with respect to any
portion of the Confidential Information the date upon which
such portion no longer meets the definition of
"Confidential Information", he will not disclose
Confidential Information to any person, firm, corporation,
association or other entity for any purpose or reason
whatsoever, except
(i) to authorized representatives of Healthworld,
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(ii) during the course of the U.S. Stockholder's
employment by Healthworld or any of its
Subsidiaries, such information may be disclosed by
the U.S. Stockholder as is required in the course of
performing his duties and
(iii) to counsel and other advisers, provided that such
advisers (other than counsel) agree to the
confidentiality provisions of this Section 13.2.
13.3 Injunctive Relief; Damages. Because of the difficulty of measuring
economic losses to Healthworld as a result of a breach of the
foregoing covenants in this Section 13, and because of the
immediate and irreparable damage that could be caused to
Healthworld for which it would have no other adequate remedy, each
of the U.S. Stockholders agrees that the foregoing covenants may
be enforced by Healthworld in the event of breach by him, by
injunctions and restraining orders. Nothing herein shall be
construed as prohibiting Healthworld from pursuing any other
available remedy for such breach or threatened breach, including
the recovery of damages.
13.4 Reasonable Restraint. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable
restraint on the U.S. Stockholder in light of the activities and
business of Healthworld (including the subsidiaries thereof) on
the date of the execution of this Agreement and the current plans
of Healthworld.
13.5 Severability; Reformation. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific
covenant shall not affect the provisions of any other covenant.
Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set
forth are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the
court deems reasonable, and the Agreement shall thereby be
reformed.
13.6 Independent Covenant. All of the covenants in this Section 13
shall be construed as an agreement independent of any other
provision in this Agreement, and the existence of any claim or
cause of action by a U.S. Stockholder against Healthworld
(including the subsidiaries thereof), whether predicated on this
Agreement or otherwise, shall not constitute a defense to the
enforcement by Healthworld of such covenants. It is specifically
agreed that the Restrictive Period stated at the beginning of
Section 13, during which the agreements and covenants of the U.S.
Stockholder made in Section 13 shall be effective, shall be
computed
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by extending the Restrictive Period by the amount of time during
which the U.S. Stockholder is in violation of any provision of
Section 13. The covenants contained in this 13 shall not be
affected by any breach of any other provision hereof by any party
hereto.
13.7 Survival. The obligations of the parties under this Section 13
shall survive the termination of this Agreement.
14 Federal Securities Act Representations.
The U.S. Stockholders acknowledge that the shares of Healthworld Stock to
be delivered to the U.S. Stockholders pursuant to this Agreement have not been
and will not be registered under the 1933 Act and therefore may not be resold
without compliance with the 1933 Act. The Healthworld Stock to be acquired by
such U.S. Stockholders pursuant to this Agreement is being acquired solely for
their own respective accounts, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of it in connection
with a distribution.
14.1 Compliance with Law. The U.S. Stockholders covenant, warrant and
represent that none of the shares of Healthworld Stock issued to
such U.S. Stockholders will be offered, sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of except after
full compliance with all of the applicable provisions of the Act
and the rules and regulations of the SEC. All the Healthworld
Stock shall bear the following legend: THE SHARES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IF THE
HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE SECURITIES LAW.
14.2 Economic Risk; Sophistication. The U.S. Stockholders are able to
bear the economic risk of an investment in the Healthworld Stock
acquired pursuant to this Agreement and can afford to sustain a
total loss of such investment and have such knowledge and
experience in financial and business matters that they are capable
of evaluating the merits and risks of the proposed investment in
the Healthworld Stock. The U.S. Stockholders party hereto have had
an adequate opportunity to ask questions and receive answers from
the officers of Healthworld concerning any and all matters
relating to the transactions described herein including, without
limitation, the background and experience of the current and
proposed officers and directors of Healthworld, the plans for the
operations of the business of Healthworld, the business,
operations and financial condition of the companies which are
entering into the Organization but are not owned by the respective
U.S.
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Stockholder, and any plans for additional acquisitions and the
like. The U.S. Stockholders have asked any and all questions in
the nature described in the preceding sentence and all questions
have been answered to their satisfaction.
15 Registration Rights.
15.1 Piggyback Registration Rights. At any time commencing one (1) year
following the Closing, whenever Healthworld proposes to register
any Healthworld Stock for its own or others' account under the
1933 Act for a public offering, other than any shelf registration
of shares to be used as consideration for acquisitions of
additional businesses by Healthworld and registrations relating to
employee benefit plans, Healthworld shall give each of the U.S.
Stockholders prompt written notice of its intent to do so. Upon
the written request of any of the U.S. Stockholders given within
30 days after receipt of such notice, Healthworld shall cause to
be included in such registration all of the Healthworld Stock
issued to the U.S. Stockholders pursuant to this Agreement
(including any stock issued as (or issuable upon the conversion or
exchange of any convertible security, warrant, right or other
security which is issued by Healthworld as) a dividend or other
distribution with respect to, or in exchange for, or in
replacement of such Healthworld Stock) which any such U.S.
Stockholder requests, provided that Healthworld shall have the
right to reduce the number of shares included in such registration
to the extent that inclusion of such shares could, in the opinion
of counsel to Healthworld or its independent auditors, jeopardize
the status of the transactions contemplated hereby and by the
Registration Statement as a tax-free organization or jeopardize
the ability of Healthworld to utilize pooling-of-interest
accounting. In addition, Healthworld shall have the right to
reduce the number of shares included in such registration if and
to the extent Healthworld is advised by the underwriters of an
underwritten offering of the securities being offered pursuant to
any registration statement under this Section 15.1 that the number
of shares to be sold by persons other than Healthworld is greater
than the number of such shares which can be offered without
adversely affecting the offering. Any such reduction shall be made
pro rata based on the number of shares offered for the accounts of
such persons (based upon the number of shares held by such person)
to a number deemed satisfactory by the Underwriter.
15.2 Registration Procedures. All expenses incurred in connection with
the registrations under this Article (including all registration,
filing, qualification, legal, printer and accounting fees, but
excluding underwriting commissions and discounts), shall be borne
by Healthworld. In connection with registrations under Section
15.1, Healthworld shall use its best efforts to prepare and file
with the SEC as soon as reasonably practicable, a registration
statement with respect to the
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Healthworld Stock and use its best efforts to cause such
registration to promptly become and remain effective for a period
of at least 90 days (or such shorter period during which holders
shall have sold all Healthworld Stock which they requested to be
registered); use its best efforts to register and qualify the
Healthworld Stock covered by such registration statement under
applicable state securities laws as the holders shall reasonably
request for the distribution for the Healthworld Stock; and take
such other actions as are reasonable and necessary to comply with
the requirements of the 1933 Act and the regulations thereunder.
15.3 Underwriting Agreement. In connection with each registration
pursuant to Section 15.1 covering an underwritten registration
public offering, Healthworld and each participating holder agree
to enter into a written agreement with the underwriter in such
form and containing such provisions as are customary in the
securities business for such an arrangement between the
underwriter and companies of Healthworld's size and investment
stature, including indemnification.
15.4 Availability of Rule 144. Healthworld shall not be obligated to
register shares of Healthworld Stock held by any U.S. Stockholder
at any time when the resale provisions of Rule 144(k) (or any
similar or successor provision) promulgated under the 1933 Act are
available to such U.S. Stockholder.
16 General.
16.1 Cooperation. The U.S. Stockholders and Healthworld shall each
deliver or cause to be delivered and the U.S. Stockholder shall
cause the Companies to deliver, to the other on the Closing Date,
and at such other times and places as shall be reasonably agreed
to, such additional instruments as the other may reasonably
request for the purpose of carrying out this Agreement. The U.S.
Stockholder shall cause the Companies to cooperate and use their
reasonable efforts to have their respective present officers,
directors and employees cooperate with Healthworld on and after
the Closing Date in furnishing information, evidence, testimony
and other assistance in connection with any Tax Return filing
obligations, actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to
the Closing Date.
16.2 Successors and Assigns. This Agreement and the rights of the
parties hereunder may not be assigned (except by operation of law)
and shall be binding upon and shall inure to the benefit of the
parties hereto, the successors of Healthworld, and the heirs and
legal representatives of the U.S. Stockholders.
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16.3 Entire Agreement. This Agreement (including the schedules,
exhibits and annexes attached hereto) and the documents delivered
pursuant hereto constitute the entire agreement and understanding
among the U.S. Stockholders and Healthworld and supersede any
prior agreement and understanding relating to the subject matter
of this Agreement. This Agreement, upon execution, constitutes a
valid and binding agreement of the parties hereto enforceable in
accordance with its terms and may be modified or amended only by a
written instrument executed by the U.S. Stockholders and
Healthworld (acting through its officers, duly authorized by its
Board of Directors).
16.4 Counterparts. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and
the same-instrument.
16.5 Expenses. If the transactions herein contemplated shall be
consummated, Healthworld will pay the fees, expenses and
disbursements of Healthworld and its agents, representatives,
accountants and counsel incurred in connection with the
preparation and filing of the registration statement, the
underwriting and the IPO, including all costs and expenses
incurred in the performance and compliance with all conditions to
be performed by Healthworld under this Agreement, including the
fees and expenses of Xxxxxx Xxxxxxxx, LLP, Xxxxxxxx & Xxxxx LLP,
Todtman, Nachamie, Xxxxxxx & Spizz, P.C. (as they relate to the
subject matter described in this paragraph), the Underwriters or
any other person or entity retained by Healthworld (the "IPO
costs").
If the transactions herein contemplated shall not be
consummated, then the IPO costs shall be paid 69% by the
U.S. Companies and 31% by the U.K. Company. The U.S.
Companies and the U.K. Company shall contribute to (and, if
necessary, reimburse each other for) any such required
payments in such proportions. Notwithstanding the
foregoing, in the event any indemnity obligation arises to
the Underwriters pursuant to any agreement between the
Underwriters and Healthworld, the U.K. Stockholder, the
U.S. Stockholders, the U.K. Company and/or the U.S.
Companies with respect to the Underwriters' services in
contemplation of the IPO, then the breaching party shall be
solely responsible for such indemnification obligations and
the non-breaching party shall be entitled to reimbursement
from the breaching party for any payment made by the
non-breaching party in respect thereof.
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If the transactions herein contemplated shall be
consummated, Healthworld shall pay the fees, expenses and
disbursements of Healthworld and the U.S. Stockholders and
their respective agents, representatives, accountants and
counsel incurred in connection with the negotiation and
consummation of this Agreement and any amendments thereto,
including all counsel and professional costs of the U.S.
Stockholder relating to the negotiation and consummation of
this Agreement (the "Reorganization Costs"), but not
including the cost of any broker or agent described in
Section 5.27.
If the transactions herein contemplated shall not be
consummated, the U.S. Stockholders shall pay their
Reorganization Costs.
Any other costs and expenses of the U.S. Stockholders which
are not described as IPO Costs or Reorganization Costs
shall be paid by the U.S. Stockholders, including but not
limited to the cost of any broker or agent described in
Section 5.27, except that Healthworld shall pay all stock
transfer and/or recording taxes or duties imposed with
respect to stock transfers effectuated pursuant to the
Organization. Each U.S. Stockholder acknowledges that he,
and not Healthworld, will pay all Taxes due upon receipt of
the consideration payable pursuant to Section 2 hereof, and
will assume all Tax risks and liabilities of such U.S.
Stockholder in connection with the transactions
contemplated hereby, except as otherwise specifically
contemplated in this Section 16.5.
16.6 Notices. All notices of communication required or permitted
hereunder shall be in writing and may be given by depositing the
same in United States mail, addressed to the party to be notified,
postage prepaid and registered or certified with return receipt
requested, or by delivering the same in person to an officer or
agent of such party.
(a) If to Healthworld:
000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Chairman of the Board and
Chief Executive Officer
With copies to:
Rosenman & Colin LLP Todtman, Nachamie,
000 Xxxxxxx Xxxxxx Xxxxxxx & Spizz, P.C.
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Xxx Xxxx, X.X. 00000 000 Xxxx Xxxxxx
Xxxx: Xxxxxx Xxxxxx, Esq. Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxx, Esq.
If to any U.S. Stockholder, addressed to him at his address first
set forth hereinabove together with copies to:
Xxxx & Priest, LLP Rakisons
00 X. 00xx Xx. 20 Chancery Lane
New York, N.Y. 10024 Xxxxxx XX0X INF
Attn: Xxxxxx X. Xxxxxx, Esq. Attn: Xxxxxxxx Xxxxx, Esq.
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 16.6 from time to time.
16.7 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of New York, without giving effect to
any requirements thereof which might otherwise cause the
application of the law of another jurisdiction, and the parties
consent to New York as the exclusive venue for resolving any and
all disputes that may arise concerning this Agreement.
16.8 Exercise of Rights and Remedies. Except as otherwise provided
herein, no delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any
such right, power or remedy, nor shall it be construed as a waiver
of or acquiescence in any such breach or default, or of any
similar breach or default occurring later; nor shall any waiver of
any single breach or default be deemed a waiver of any other
breach or default occurring before or after that waiver.
16.9 Time. Time is of the essence with respect to this Agreement.
16.10 Reformation and Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, it shall, to
the extent possible, be modified in such manner as to be valid,
legal and enforceable but so as to most nearly retain the intent
of the parties, and if such modification is not possible, such
provision shall be severed from this Agreement, and in either case
the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or
impaired thereby.
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16.11 Remedies Cumulative. No right, remedy or election given by any
term of this Agreement shall be deemed exclusive but each shall be
cumulative with all other rights, remedies an elections available
at law or in equity.
16.12 Captions. The headings of this Agreement are inserted for
convenience only, shall not constitute a part of this Agreement or
be used to construe or interpret any provision hereof.
16.13 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived
only by mutual consent of Healthworld and the Vote of a Majority
in Interest of the U.S. Stockholders.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
HEALTHWORLD CORPORATION
By:____________________________________
Xxxxxx Xxxxxxxx, Chairman and CEO
and By:______________________________________
Xxxxxxx Xxxxxx Xxxxxx, President
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XXXXXX XXXXXXXX XXXXXXX XXXXXX
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XXXXXXX XXXXXX XXXXXXX XXXXXXXXX
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