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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 23rd day of July 1999, among SilverPlatter Education, Inc., a
Massachusetts corporation ("Seller"), SilverPlatter Information, Inc.
("Shareholder"), and HealthStream, Inc., a Tennessee corporation ("Buyer").
Seller and Shareholder are sometimes hereinafter collectively referred to as the
"Selling Parties."
RECITAL:
WHEREAS, Seller desires to sell to Buyer at the Closing (as hereinafter
defined), and Buyer desires to purchase from Seller certain assets for
developing and providing continuing medical education programs to physicians on
CD-ROM and via the Internet under the names "SilverPlatter Education,"
"Physicians' Home Page" and "Core Curriculum" (the "Business") , as more fully
described herein, upon and subject to the terms and conditions contained in this
Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and of the mutual
representations, warranties and covenants which are made and to be performed by
the respective parties, it is agreed as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS
1.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of this
Agreement, on the Closing Date (as hereinafter defined), Seller shall sell,
transfer, convey, assign and deliver to Buyer and Buyer shall purchase, acquire
and accept from Seller, effective as of midnight on the Closing Date, all of
Seller's right, title and interest in and to the following described assets to
the extent used exclusively in the Business, wherever located (collectively, the
"Assets"):
(a) all fixed assets, machinery and equipment, software, tools, dies,
fixtures, furniture, furnishings, plant and office equipment identified on
Schedule 1.1(a);
(b) all inventories, including supplies, work-in-process, spare parts
and finished goods;
(c) all prepaid supplies and other prepaid expenses (other than prepaid
insurance and postage meter, as set forth on Schedule 1.1(c));
(d) all of Seller's rights in and under leases, contracts set forth on
Schedule 4.17, know-how licenses, purchase and sale orders, quotations and other
agreements to which Seller is a party as of the Closing Date;
(e) all operating data and records of Seller, including books, records,
sales and sales promotional data, advertising materials, customer lists, credit
information, cost and pricing information, supplier lists, business plans,
reference catalogs, and computer programs and electronic data processing
software related to any of the foregoing items, except that minute books and
corporate records, tax returns and litigation files of Seller shall not be
included in the Assets;
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(f) all engineering and production designs, drawings, formulae,
technology, trade secrets, know-how and other similar data of Seller;
(g) all titles produced by Seller listed in Schedule 1.1(h);
(h) all patents, patent applications, trademarks listed in Schedule
1.1(i), trade names, service marks, registered user entries, copyrights and all
of Seller's right, title and interest in any application for any of the
foregoing, and all claims and causes of action relating to any of the foregoing,
including claims and causes of action for past infringement; and all rights
under permits, licenses, franchises and similar authorizations used by Seller in
its business to the extent transferable;
(i) fifty percent (50%) of the cash collected prior to the Closing with
respect to Seller's core curriculum seminars which have a commencement date
following the Closing Date; and
(j) the goodwill of the business conducted by Seller.
1.2 EXCLUDED ASSETS. Notwithstanding anything else contained herein, the
following assets are excluded from the Assets being acquired by or transferred
to Buyer on the Closing Date (collectively, the "Excluded Assets"):
(a) cash and cash equivalents and securities of Seller, except as
provided in Sections 1.1(i) and 3.2(b)(vi);
(b) accounts receivable and fifty percent (50%) of the balance due on
the core curriculum lectures as of the Closing Date as set forth on Schedule
1.2(b);
(c) rights as lessee or occupant of 000 Xxxxx Xxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxxxx;
(d) all minute books and corporate records, tax returns and litigation
files of Seller;
(e) any right, title or interest of Seller in any Federal, state, local
or foreign tax refunds (and any income with respect thereto) and tax benefits;
and
(f) Seller's rights under any license to use the tradename
SilverPlatter Education, Inc., the compound trademark SILVERPLATTER EDUCATION,
the trademarks SILVERPLATTER (plus design) (which is the subject of United
States Trademark Registration No. 2,013,062), SILVERPLATTER (stylized) (which is
the subject of United States Trademark Registration No. 1,433,651), ______SPIRS
(which is the subject of United States Trademark Application No. 75/571,060),
WEBMEDLIT, PHYSICIANS' SILVERPLATTER and the design trademark which is the
subject of United States Registration No. 2,122,689, any trade names or
trademarks that are similar to any of the foregoing trade names or trademarks in
visual appearance, phonetic pronunciation or overall commercial impression.
1.3 ASSUMPTION OF LIABILITIES. Except as set forth on Schedule 1.3 hereto and
made a part hereof, or otherwise set forth in this Agreement, Buyer will not
assume any debts, liabilities, obligations, expenses, taxes, contracts or
commitments of Seller of any kind, character or description, whether accrued,
absolute, contingent or otherwise, no matter whether arising before or after the
Closing, and whether or not reflected or reserved against in Seller's financial
statements, books of accounts or records. The Selling Parties will indemnify
Buyer against and hold it harmless from any such obligations and liabilities not
assumed by Buyer. The liabilities and obligations set forth on Schedule 1.3 are
herein referred to as the "Assumed Liabilities."
1.4 ASSIGNMENT OF CONTRACTS. Anything in this Agreement to the contrary
notwithstanding, this
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Agreement shall not constitute an agreement to assign, and the Assets shall not
include, any claim, contract, instrument, agreement, license, lease, commitment,
sales order, purchase order or any claim or right, or any benefit arising
thereunder or resulting therefrom, if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a breach thereof or in
any way affect the rights of Buyer or Seller thereunder. Seller will use good
faith efforts to obtain the consent of any and all third parties to the
assignment of any such contract or agreement. Seller shall be responsible for
the payment of any transfer or assignment fees required by any third party to
effect the assignment of any such contracts or agreements listed on Schedule
4.17 attached hereto. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would affect such rights, Seller will
cooperate with Buyer (but shall not be obligated to incur any expenses in such
efforts) in any arrangement designed to provide for Buyer the benefits under any
such claims, contracts, instruments, agreements, licenses, leases, commitments,
sales orders or purchase orders, including, without limitation, enforcement for
the benefit of Buyer of any and all rights of Buyer or Seller against a third
party thereto arising out of a breach or cancellation by such third party or
otherwise; and any transfer or assignment to Buyer of any property or property
rights or any contract or agreement which shall require the consent or approval
of any third party shall be made subject to such consent or approval being
obtained.
ARTICLE 2. CONSIDERATION
2.1 PURCHASE PRICE. The purchase price for the Assets shall be $1,000,000 (the
"Purchase Price"). Fifty percent (50%) of the Purchase Price shall be paid to
the Seller at Closing by cashier's check or wire transfer of funds. Thirty
percent (30%) of the Purchase Price shall, at Closing, be deposited in an escrow
account at the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
pursuant to an Escrow Agreement under which Buyer shall receive all interest for
deposits in said account, in the form attached as Exhibit A, and shall be paid
to the Seller sixty (60) days from the Closing Date as defined herein by
certified check or wire transfer of funds. The remaining twenty percent (20%)
shall be paid to the Shareholder in the form of Buyer's Common Stock at Closing.
The value of Buyer's Common Stock as of the Closing Date shall be $7.52 per
share. This is the price per share that Buyer is currently offering Series C
Convertible Preferred Stock to a select group of investors. If Buyer sells
Series C Convertible Preferred Stock, or any other class of stock, at its next
round of financing which secures at least $3 million of proceeds for Buyer for
less than $7.52 per share, then the price per share of Buyer's Common Stock that
Seller receives under this Agreement shall be reset to the price per share paid
by investors at the Buyer's next round of financing, and Buyer shall issue to
the Shareholder that number of additional shares of Common Stock that would have
been issued at the lower price per share. If Buyer does not close a round of
financing which secures at least $3 million of proceeds by December 31, 1999,
then the value of the Common Stock shall be reset to $4.32 per share, and Buyer
shall issue to the Shareholder that number of additional shares of Common Stock
which would have been issued at $4.32 per share.
ARTICLE 3. CLOSING; OBLIGATIONS OF THE PARTIES
3.1 CLOSING DATE. The closing (the "Closing") shall take place on July 23, 1999,
at the offices of Buyer, 000 00xx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000, or at such other time and place as the parties hereto mutually agree (the
"Closing Date").
3.2 OBLIGATIONS OF THE PARTIES AT THE CLOSING.
(a) At the Closing, Buyer shall deliver to Seller (or Seller's agent):
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(i) the consideration as specified in Section 2.1, as well as
payments for the services set forth in Sections 6.9 through 6.11,
should Buyer choose to request Seller to perform them;
(ii) payment for the pro rata share of July rent and utilities at
00 Xxxxxx Xxxxxx, Xxxxxx, which equals $1,325 and payment for the right
to continue to occupy space at 000 Xxxxx Xxxxx Xxxxx, Xxxxxxx for the
month following the Closing Date, which equals $5,000;
(iii) a copy of resolutions of the Board of Directors of Buyer,
certified by Buyer's Secretary, authorizing the execution, delivery and
performance of this Agreement and the other documents referred to
herein to be executed by Buyer, and the consummation of the
transactions contemplated hereby;
(iv) a certificate in the form of Exhibit B hereto of Buyer
certifying as to the accuracy of Buyer's representations and warranties
at and as of the Closing and that Buyer has performed or complied with
all of the covenants, agreements, terms, provisions and conditions to
be performed or complied with by Buyer at or before the Closing;
(iv) a copy of the Buyer's Charter, certified by the Tennessee
Secretary of State;
(v) certificates of existence and good standing for the Buyer,
certified by the Secretary of State of Tennessee, dated within ten (10)
business days of Closing:
(vi) the opinion of legal counsel for the Buyer, the terms of which
are substantially as set forth in Section 9.4;
(vii) an executed original of the Trademark License, in the form
attached as Exhibit C;
(viii) a license to the Selling Parties to MD Digests and Internet
Library, in the form attached as Exhibit D; and
(ix) a license to the Selling Parties to use the MD Digests and
Internet Library trademarks, in the form attached as Exhibit E;
(x) an executed copy of the Escrow Agreement, in the form attached
as Exhibit A;
(xi) permission to KnowledgeCite, Inc. to continue to occupy
certain space at 00 Xxxxxx Xxxxxx, Xxxxxx, until July 31, 1999 in the
form of Exhibit G-3; and
(xii) such other certificates and documents as Selling Parties or
their counsel may reasonably request.
(b) At the Closing, Selling Parties will deliver to Buyer:
(i) such bills of sale, assignments, and other good and sufficient
instruments of conveyance and transfer, in form and substance
reasonably satisfactory to Buyer, as shall be effective to vest in
Buyer all of Seller's and the Shareholders' title to and interest in
the Assets, and, simultaneously with such delivery, will take such
steps as may be necessary to put Buyer in actual possession and
operating control of the Assets;
(ii) a certificate of each of the Selling Parties in the form of
Exhibit F hereto certifying as to the accuracy of the Selling Parties
representations and warranties at and as of the Closing and that they
have performed or complied with all of the covenants, agreements,
terms,
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provisions and conditions to be performed or complied with by each of
them at or before the Closing;
(iii) copy of resolutions of the Board of Directors and
Shareholders of Seller, certified by Seller's Secretary, authorizing
the execution, delivery and performance of this Agreement and the other
documents referred to herein to be executed by Seller, and the
consummation of the transactions contemplated hereby;
(iv) the opinion of legal counsel for the Seller, the terms of
which are substantially as set forth in Section 8.4;
(v) an assignment of the lease for 00 Xxxxxx Xxxxxx, Xxxxxx, in the
form attached as Exhibit G-1, and permission to occupy space at 000
Xxxxx Xxxxx Xxxxx, in the form attached as Exhibit G-2;
(vi) fifty percent (50%) of the cash collected prior to the Closing
with respect to Seller's core curriculum seminars, which have a
commencement date following the Closing Date;
(vii) certificates of existence and good standing for the Seller,
certified by the Secretary of State of Massachusetts, dated July 14,
1999;
(viii) a license to Buyer to WebMedLit, in the form attached as
Exhibit H;
(ix) a license to Buyer to use the WebMedLit trademarks, in the
form attached as Exhibit I;
(x) a license to use the Medline database, buildware and SPIRS
software, in the form attached as Exhibit J;
(xi) Selling Parties shall have executed the Non-Competition
Agreement in the form of Exhibit K hereto and of even date herewith;
(xii) Selling Parties shall have executed the Shareholders'
Agreement in the form of Exhibit L hereto and of even date herewith;
(xiii) an executed Drug Information Handbook Database Agreement, in
the form attached as Exhibit M;
(xiv) Selling Parties shall have executed the Voting Agreement in
the form of Exhibit N hereto and of even date herewith;
(xv) Selling Parties shall have executed the Co-Sale Agreement in
the form of Exhibit O hereto and of even date herewith;
(xvi) payment for the right to continue to occupy 00 Xxxxxx Xxxxxx,
Xxxxxx until July 31, 1999, which equals $260.00; and
(xvii) such other certificates and documents as Buyer or its
counsel may reasonably request.
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ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY SELLING PARTIES
Selling Parties hereby represent and warrant as follows:
4.1 AUTHORIZATION. Seller has full corporate power and authority (including all
necessary approvals of Seller's shareholders) to enter into this Agreement and
perform its obligations hereunder and carry out the transactions contemplated
hereby. The Board of Directors of Seller has taken all action required by law,
its Articles of Incorporation and its Bylaws to authorize the execution and
delivery by Seller of this Agreement and the consummation by Seller of the
transactions contemplated hereby. This Agreement constitutes the valid and
binding agreement of Seller, enforceable against Seller in accordance with its
terms.
4.2 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts. Seller has full corporate power and authority to
transfer the Assets to Buyer, to carry on its business as now conducted and
possesses all governmental and other permits, licenses and other authorizations
to own, lease or operate its assets and properties as now owned, leased and
operated and to carry on its business as presently conducted. Seller is not
licensed or qualified to do business as a foreign corporation in any
jurisdiction and neither the properties owned or leased nor the business
transacted by Seller makes such licensing or qualification to do business as a
foreign corporation necessary, and no other jurisdiction has demanded, requested
or otherwise indicated that (or inquired whether) Seller is required so to
qualify.
4.3 SUBSIDIARIES. Seller neither owns nor has an interest in, directly or
indirectly, any other corporation, partnership, joint venture or other business
organization.
4.4 NO VIOLATION. The execution and delivery of this Agreement by Seller does
not, and the consummation of the transactions contemplated hereby will not, (a)
violate any provision of, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Seller is a party or by which any of Seller's assets
or properties are bound; (b) violate any provision of the Articles of
Incorporation or Bylaws of Seller; (c) violate any order, arbitration award,
judgment, writ, injunction, decree, statute, rule or regulation applicable to
Seller; or (d) violate any other contractual or legal obligation or restriction
to which Seller is subject.
4.5 FINANCIAL STATEMENTS. Seller has delivered to Buyer: (a) balance sheets of
Seller as at December 31 in each of the years 1996, 1997, and 1998 and for 1998
the related statements of income, changes in stockholders' equity and cash flow
including the notes thereto (the "Historical Financial Statements") and (b) a
balance sheet of Seller as at June 30, 1999 (the "Interim Balance Sheet") and
related statements of income, changes in shareholder's equity and cash flow for
the six (6) months then ended (collectively the "Interim Financial Statements,"
and together with the Historical Financial Statements, the "Financial
Statements"). The Financial Statements fairly present the assets, liabilities,
financial condition and results of operations of Seller as at the respective
dates thereof and for the periods therein referred to, and, with respect to
1998, in accordance with generally accepted United States accounting principles;
and the Financial Statements reflect the consistent application of such
accounting principles for 1998. The date of the Interim Balance Sheet included
in the Financial Statements is sometimes hereinafter referred to as the Balance
Sheet Date.
4.6 ASSETS. Except for the trademarks referenced in the Trademark Licenses
attached as Exhibits C, E and I hereto, the Assets constitute substantially all
the assets owned, leased or used by Seller which are necessary to the operation
of Seller's business as now being conducted.
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4.7 TANGIBLE ASSETS. Schedule 1.1(a) contains an accurate list as of December
31, 1998, of all material fixed and other tangible assets and personal property
owned by Seller. All such plants, structures, machinery and equipment are in
good working condition and repair, normal wear and tear excepted, and are
adequate for the operations as currently being conducted by Seller. All such
plants, structures, machinery and equipment conform in all material respects to
applicable health, sanitation, fire, safety and labor laws and ordinances.
Seller does not own or lease any real property.
4.8 TITLE TO PROPERTIES; ENCUMBRANCES. Except as set forth in Schedule 4.8,
Seller has good, valid and marketable title to all Assets, personal, tangible
and intangible, including, without limitation, the Assets reflected in the
Financial Statements (except for inventory sold since the date thereof in the
ordinary course of business and consistent with past practice). None of the
Assets is subject to any mortgage, pledge, lien, security interest, conditional
sale agreement, encumbrance or charge of any kind, except (a) liens shown on the
Financial Statements as securing specified liabilities (with respect to which no
default exists), (b) liens for current taxes not yet due, (c) minor
imperfections of title and encumbrances, if any, which are not substantial in
amount, do not detract from the value of the property subject thereto and do not
impair the use of the property subject thereto or impair the operations of
Seller including, but not limited to, those liens and encumbrances described on
Schedule 4.8.
4.9 TRADEMARKS, PATENTS, ETC. Schedule 4.9 is an accurate and complete list of
all registered patents, trademarks, tradenames, trademark registrations, service
names, service marks, copyrights, formulas and applications therefor owned by
Seller. Schedule 1.1(i) and the trademarks licensed under the Trademark License
and WebMedLit Trademark License are the complete list of trademarks, tradenames,
service names and service marks owned by Selling Parties or their affiliates
used by Seller in the operation of Seller's business, title to each of which is,
except as set forth on Schedule 4.9 hereto, held by Seller free and clear of all
adverse claims, liens, security agreements, restrictions or other encumbrances.
Except for the copyright infringement claim by the American Academy of
Ophthalmology more particularly described in Schedule 4.9 (the "AAO Claim"),
there is no infringement action, lawsuit, claim or complaint which asserts that
Seller's operations violate or infringe the rights or the trade names,
trademarks, trademark registration, service name, service xxxx or copyright of
others with respect to any apparatus or method of Seller or any adversely held
trademark, trade name, trademark registration, service name, service xxxx or
copyright, and Seller is not in any way making use of any confidential
information or trade secrets of any person except with the consent of such
person.
4.10 NO UNDISCLOSED LIABILITY. Except as and to the extent of the amounts
specifically reflected or reserved against in the Financial Statements or
disclosed in the notes thereto, Seller does not have any knowledge of any
material liabilities or obligations of any nature, whether or not absolute,
accrued, asserted, liquidated, matured, contingent or otherwise and whether due
or to become due (including, without limitation, liabilities for taxes and
interest, penalties and other charges payable with respect thereto) which alone
or in the aggregate may affect Seller's ability to transfer the Assets hereby
or, from and after Closing, Buyer's right, title and interest in and to the
Assets and Buyer's use and enjoyment thereof.
4.11 ABSENCE OF CERTAIN CHANGES. Except as and to the extent set forth on
Schedule 4.11, since the Balance Sheet Date, Seller has not:
(a) suffered any material adverse change in its working capital,
financial condition, assets, liabilities, business or prospects, experienced any
labor difficulty, or suffered any material casualty loss (whether or not
insured);
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(b) made any change in its business or operations or in the manner of
conducting its business other than changes in the ordinary course of business;
incurred any obligations or liabilities (whether absolute, accrued, contingent
or otherwise and whether due or to become due), except items incurred in the
ordinary course of business and consistent with past practice, or experienced
any change in any assumptions underlying or methods of calculating any bad debt,
contingency or other reserves;
(c) paid, discharged or satisfied any claim, lien, encumbrance or
liability (whether absolute, accrued, contingent or otherwise and whether due or
to become due), other than claims, encumbrances or liabilities (i) which are
reflected or reserved against in the Financial Statements and which were paid,
discharged or satisfied since the date thereof in the ordinary course of
business and consistent with past practice, or (ii) which were incurred and
paid, discharged or satisfied since the Balance Sheet Date in the ordinary
course of business and consistent with past practice;
(d) written down the value of any inventory, or written off as
uncollectible any notes or accounts receivable or any portion thereof, except
for immaterial write-downs and write-offs made in the ordinary course of
business, consistent with past practice and at a rate no greater than during the
fiscal year ended December 31, 1998;
(e) canceled any other debts or claims, or waived any rights, of
substantial value;
(f) sold, transferred or conveyed any of its properties or assets
(whether real, personal or mixed, tangible or intangible), except in the
ordinary course of business and consistent with past practice;
(g) disposed of or permitted to lapse, or otherwise failed to preserve
the exclusive rights of Seller to use any registered patent, trademark, trade
name, logo or copyright or any such application, or disposed of or permitted to
lapse any license, permit or other form of authorization, or disposed of or
disclosed to any person any trade secret, formula, process or know-how;
(h) granted any increase in the compensation of any officer, director,
employee or agent (including, without limitation, any increase pursuant to any
bonus, pension, profit sharing or other plan or commitment) which is out of the
ordinary course of business, or adopted any such plan or other arrangements; and
no such increase, or the adoption of any such plan or arrangement, is planned or
required;
(i) made any capital expenditures or commitments in excess of $10,000
in the aggregate for replacements or additions to property, plant, equipment or
intangible capital assets;
(j) made any change in any method of accounting or accounting practice;
(k) paid, loaned or advanced any amount to or in respect of, or sold,
transferred or leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement, arrangement or
transaction with, any of the Selling Parties or the officers or directors of
Seller, any affiliates or associates of any Selling Party or any of their
respective officers or directors, or any business or entity in which any of such
persons has any direct or material indirect interest, except for compensation to
the officers and employees of Seller at rates not exceeding the rates of
compensation in effect at the Balance Sheet Date and advances to employees in
the ordinary course of business for travel and expense disbursements in
accordance with past practice; or
(l) agreed, whether in writing or otherwise, to take any action
described in this Section 4.11.
4.12 TAX MATTERS. Seller has duly filed all Tax reports and returns required to
be filed by it and has duly paid all Taxes and other charges (whether or not
shown on any Tax return) due or claimed to be due from it by federal, foreign,
state or local taxing authorities; and true and correct copies of all Tax
reports
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and returns relating to such Taxes and other charges for the period December 31,
1992 to December 31, 1998 have been heretofore delivered to Buyer. The reserves
for Taxes contained in the Financial Statements and carried on the books of
Seller are adequate to cover all Tax liabilities as of the date of this
Agreement. Since the Balance Sheet Date, Seller has not incurred any Tax
liabilities other than in the ordinary course of business; there are no Tax
liens (other than liens for current Taxes not yet due) upon any properties or
assets of Seller (whether real, personal or mixed, tangible or intangible), and,
except as reflected in the Financial Statements, there are no pending or
threatened questions or examinations relating to, or claims asserted for, Taxes
or assessments against Seller, and there is no basis for any such question or
claim. Seller has not granted or been requested to grant any extension of the
limitation period applicable to any claim for Taxes or assessments with respect
to Taxes. For purposes of this Agreement, "Tax" means any federal, state, local,
or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the Internal Revenue Code of 1986, as
amended ("Code")), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
4.13 COMPLIANCE WITH APPLICABLE LAW. To Seller's knowledge, Seller has in the
past duly materially complied and is presently duly materially complying, in the
conduct of its business and the ownership of its assets with all applicable
laws, whether statutory or otherwise, rules, regulations, orders, ordinances,
judgments and decrees of all governmental authorities (federal, state, local or
otherwise) (collectively, "Laws"). None of the Selling Parties has received any
notice of, or notice of any investigation of, a possible violation of any
applicable Laws, or any other Law or requirement relating to or affecting the
operations or properties of Seller.
4.14 LITIGATION. Except for the AAO Claim, to the best of the Selling Parties'
knowledge, there are no claims, actions, suits, proceedings or investigations
pending or threatened by or against, or otherwise affecting the Assets or the
Business at law or in equity or before or by any federal, state, municipal or
other governmental department, commission, board, agency, instrumentality or
authority. The Selling Parties do not know or have any reason to know of any
basis for any such claim, action, suit, proceeding or investigation.
4.15 INSURANCE. Seller has not been refused any insurance, nor has its coverage
been limited, by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the last five years.
4.16 EMPLOYEES AND FRINGE BENEFIT PLANS.
(a) Schedule 4.16 sets forth the names, ages and titles of all
employees of Seller earning in excess of $25,000 per annum, and the annual rate
of compensation (including bonuses) being paid to each such employee as of the
most recent practicable date.
(b) Schedule 4.16 lists each employment, bonus, deferred compensation,
pension, stock option, stock appreciation right, profit-sharing or retirement
plan, arrangement or practice, each medical, vacation, retiree medical,
severance pay plan, and each other agreement or fringe benefit plan, arrangement
or practice, of Seller, whether legally binding or not, which affects one or
more of its employees, (collectively, the "Plans"). Included in the Plans listed
on Schedule 4.16 are all "employee benefit plans" as defined by Section 3(3) of
the Employee Retirement Income Security Act of 1974, as
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amended ("ERISA"). Seller has delivered to Buyer a copy of the Xxxxxxx Herald
401(k) Profit Sharing Plan ("Seller's 401(k) Plan"). Seller maintains no Plans
which are subject to Title IV of ERISA or the minimum funding standards of
Section 412 of the Code.
(c) Seller does not have any commitment, whether formal or informal and
whether legally binding or not, (i) to create any additional such Plan, or (ii)
to modify or change any such Plan so as to provide greater benefits.
(d) To Seller's knowledge, Seller has complied in all material respects
with all applicable federal, state and local laws, rules and regulations
relating to employees' employment and/or employment relationships, including,
without limitation, wage related laws, antidiscrimination laws, employee safety
laws and COBRA (defined herein to mean the requirements of Code Section 4980B,
Proposed Treasury Regulations Section 1.162-26 and Section 54.4980B-1 and Part 6
of Subtitle B of Title I of ERISA).
(e) Seller is not a party to any contract or agreement or requirement
of law which would require Buyer to hire, or subject Buyer to liability if it
did not hire, any employee of Seller or which would require Buyer to pay or
provide, or subject Buyer to liability if it did not pay or provide, any
employee benefits (other than COBRA continuation coverage) to any employee of
Seller for periods prior to or after the Closing Date (including any and all
employee benefits and any compensatory, overtime, vacation, sick or holiday
pay).
(f) None of the Plans which are "welfare benefit plans," within the
meaning of Section 3(l) of ERISA, provide for continuing benefits or coverage
after termination or retirement from employment, except for COBRA rights under
Seller's group medical plan, a "group health plan" as defined in Code Section
4980B(g) and ERISA.
(g) Neither the Seller nor any affiliate of Seller (as defined in
ERISA) has ever participated in or withdrawn from a multi-employer plan as
defined in Section 4001(a)(3) of Title IV of ERISA, and Seller has not incurred
and does not owe any liability as a result of any partial or complete withdrawal
by any employer from such a multi-employer plan as described under Sections
4201, 4203, or 4205 of ERISA.
(h) Seller maintains for its eligible employees the Seller's 401(k)
Plan, a profit sharing plan that permits employee elective deferrals under
Section 401(k) of the Code. Buyer maintains for its eligible employees a profit
sharing plan that permits employee elective deferrals under Section 401(k) of
the Code ("Buyer's 401(k) Plan"). Seller's 401(k) Plan has been determined by
the Internal Revenue Service to be qualified under Section 401(a) of the Code
and the trust related thereto has been determined to be exempt from tax pursuant
to Section 501(a) of the Code. No event has occurred since the date of such
determination, including effective changes in laws or modifications to Seller's
401(k) Plan or arrangement, that would adversely affect such qualification or
tax exempt status, other than the failure to make any required amendments, the
time for adoption of which has not yet expired. Seller has delivered to Buyer
complete copies of the most recent Internal Revenue Service determination letter
with respect to Seller's 401(k) Plan.
4.17 CONTRACTS AND COMMITMENTS. Schedule 4.17 sets forth the list of contracts
included in the Assets. Except as set forth on Schedule 4.17:
(a) The legal enforceability after the Closing of the rights of Seller
under any of its contracts will not be affected in any manner by the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
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(b) Seller has no sales or purchase commitments which are in excess of
the normal, ordinary and usual capacity or requirements of its business.
(c) Except as described on Schedule 4.16, Seller is not a party to or
bound by (i) any outstanding contracts with officers, employees, agents,
consultants, advisors, salesmen, or sales representatives, that are not
cancelable by Seller on notice of not longer than 30 days and without liability,
penalty or premium, (ii) any agreement or arrangement providing for the payment
of any bonus or commission based on sales or earnings, or (iii) any agreements
that contain any severance or termination pay, liabilities or obligations.
(d) Seller is not a party to any licensing agreement as licensee.
(e) Seller is not restricted or purported to be restricted by agreement
or otherwise from carrying on its business anywhere in the world.
4.18 ACCOUNTS PAYABLE. All accounts and notes payable of Seller, whether
reflected in the Financial Statements or otherwise, with an invoice date prior
to the Closing shall be paid by the Selling Parties.
4.19 ORDERS, COMMITMENTS AND RETURNS. The aggregate of all accepted and unfilled
orders for the sale of merchandise entered into by Seller does not exceed an
amount which can reasonably be expected to be filled in the ordinary course of
business, assuming it is operated following the Closing in a comparable manner
as it is being operated prior to Closing (all of which orders, contracts and
commitments were made in the ordinary course of business). Seller does not know
or have reason to believe that either the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby will
result in any cancellations or withdrawals of accepted and unfilled orders for
the sale of Seller's merchandise.
4.20 SUPPLIERS. Neither of the Selling Parties has received any indication from
any supplier (or otherwise has any reason to believe) that any such supplier
will not continue as a supplier of Buyer after the Closing. Schedule 4.20
contains the name and address of the company which masters and duplicates
Sellers CD-ROMs, and fulfills the Physicians' SilverPlatter CD-ROMs.
4.21 LABOR AND EMPLOYMENT MATTERS. There are no collective bargaining agreements
in effect between Seller and labor unions or organizations representing any of
Seller's employees. During the past seven years, there has been no request for
collective bargaining or for an employee election from any employee, union or
the National Labor Relations Board. Seller is, to its knowledge, in compliance
with all federal, state and local laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice. There is no unfair labor practice
complaint against Seller pending or threatened before the National Labor
Relations Board or the United States Department of Labor or any state or local
governmental body or agency. There is no labor strike, dispute, slowdown or
stoppage in progress or threatened against or involving Seller. No question
concerning representation has been raised or is threatened respecting the
employees of Seller. No grievance or arbitration proceeding is pending and no
claim therefor exists. No private agreement restricts Seller from relocating,
closing or terminating any of its operations or facilities. Seller has not in
the past five years experienced any labor strike, dispute, slowdown, stoppage or
other labor difficulty.
4.22 NO BREACH. Each written contract or agreement referred to in this Agreement
or in any Schedule hereto under which Seller has any right, interest or
obligation is in full force and effect. Except for the AAO Claim, there have
been no threatened cancellations thereof nor outstanding disputes thereunder,
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and Seller has not breached any provision of, nor does there exist any default
in any material respect under, or event (including the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby)
which is, or with the giving of notice or the passage of time or both would
become, a breach or default in any material respect under the terms of any such
arrangement.
4.23 INVENTORY. All inventory of Seller, whether reflected in the Financial
Statements or otherwise, is of good and merchantable quality and is usable and
saleable in the ordinary course of business, except for items of obsolete
materials and materials of below standard quality, all of which have been
written down in the Financial Statements to realizable market value or for which
adequate reserves have been provided therein. The present quantities of all
inventory of Seller are reasonable in the present circumstances of its business.
Except as set forth in its end-user licenses, Seller is not under any liability
or obligation with respect to the return of inventory or merchandise in the
possession of wholesalers, retailers or other customers.
4.24 PROFESSIONAL FEES. Neither Seller nor any of the Selling Parties has done
anything to cause or incur any liability or obligation for investment banking,
brokerage, finders, agents or other fees, commissions, expenses or charges in
connection with the negotiation, preparation, execution or performance of this
Agreement or the consummation of the transactions contemplated hereby, and
Seller does not know of any claim by anyone for such a fee, commission, expense
or charge.
4.25 CONSENTS AND APPROVALS. Except as set forth in Section 4.17 regarding
Contracts or described in Section 4.29 regarding ACCME Accreditation, Seller has
obtained all consents, approvals, authorizations or orders of third parties,
including governmental authorities, necessary for the authorization, execution
and performance of this Agreement by Seller.
4.26 SHAREHOLDER AUTHORITY. This Agreement constitutes the legal, valid and
binding obligation of Shareholder, enforceable against the Shareholder in
accordance with its terms. Shareholder has the absolute and unrestricted right,
power, authority and capacity to execute and deliver this Agreement and to
perform his or its obligations under this Agreement.
4.27 CORPORATE RECORDS. Seller has delivered or provided to Buyer for its review
true complete and correct copies of the following items, as amended and
presently in effect, for Seller: (a) Articles of Incorporation, (b) Bylaws, (c)
minute books, and (d) stock certificate receipts (all hereinafter referred to as
the "Corporate Records"). The Minute Books contain a record of all shareholder
and director meetings and actions taken without a meeting from December 29, 1992
to the date hereof. The stock certificate receipts reflect all transactions in
Seller's capital stock from the date of its incorporation to the date hereof.
4.28 FULL DISCLOSURE. Neither the information provided by the Selling Parties in
this Agreement, nor any Schedule, exhibit, list, certificate or other instrument
and document furnished by any Selling Party to Buyer pursuant to this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact required to be stated herein or therein or necessary to make the statements
and information contained herein or therein not misleading. No Selling Party has
withheld from Buyer disclosure of any event, condition or fact which such
Selling Party knows, or has reasonable grounds to know, may materially adversely
affect Seller's assets, prospects or condition (financial or otherwise).
4.29 ACCME ACCREDITATION. To the best of Seller's knowledge, its continuing
medical education ("CME") product line complies with the rules and regulations
of the Accreditation Council for Continuing Medical Education ("ACCME").
Seller's CME product line conforms to the "Essentials and
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Guidelines" in the form of Exhibit P hereto as articulated by the ACCME. Seller
has no knowledge of any acts or omissions by Seller in its business practices
that would impede continued ACCME accreditation in the near future and Seller
shall, for up to one year following the Closing, use reasonable efforts to
assist Buyer in securing the CME accreditation of Seller's current CME titles
going forward. However, the ACCME operates outside the control of Seller and
Shareholder and therefore there can be no guarantees that ACCME accreditation
will continue into the future.
4.30 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with the Selling
Parties in reliance upon such Selling Parties' representation to the Buyer,
which by such Selling Parties' execution of this Agreement Selling Parties
hereby confirm, that the Common Stock to be purchased by Selling Parties (the
"Securities") will be acquired for investment for such Selling Parties' own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that Selling Parties have no present
intention of selling, granting any participation in, or otherwise distributing
the same. By executing this Agreement, Selling Parties further represent that
Selling Parties do not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participations to such person or to
any third person, with respect to any of the Securities.
4.31 RELIANCE UPON SELLING PARTIES' REPRESENTATIONS. Selling Parties understand
that the Common Stock is not registered under the Securities Act on the ground
that the sale provided for in this Agreement and the issuance of securities
hereunder is exempt from registration under the Securities Act pursuant to
Section 4(2) thereof, and that the Buyer's reliance on such exemption is
predicated on the Selling Parties' representations set forth herein.
4.32 RECEIPT OF INFORMATION. Selling Parties believe they have received all the
information Selling Parties consider necessary or appropriate for deciding
whether to purchase the Common Stock. Selling Parties further represent that
they have had an opportunity to ask questions and receive answers from the Buyer
regarding the terms and conditions of the offering of the Common Stock and the
business, properties, prospects, and financial condition of the Buyer and to
obtain additional information (to the extent the Buyer possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to Selling Parties
or to which Selling Parties had access. The foregoing, however, does not limit
or modify the representations and warranties of the Buyer in Section 5 of this
Agreement or the right of the Selling Parties to rely thereon.
4.33 INVESTMENT EXPERIENCE. Selling Parties represent that they are experienced
in evaluating and investing in private placement transactions of securities of
companies in a similar stage of development and acknowledges that Selling
Parties are able to fend for himself, herself or itself, can bear the economic
risk of Selling Parties' investment, and has such knowledge and experience in
financial and business matters that such investor is capable of evaluating the
merits and risks of the investment in the Common Stock. If other than an
individual, Selling Parties also represent that the 100% shareholder of each
Selling Party (each an "Investor Owner") meets the requirements of the preceding
sentence.
4.34 ACCREDITED INVESTOR.
(a) The term "Accredited Investor" as used herein refers to any
corporation not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000;
(b) Shareholder, but not Seller, represents to the Buyer that
Shareholder (and its Investor Owner) is an Accredited Investor.
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4.35 RESTRICTED SECURITIES. Selling Parties understand that the Common Stock may
not be sold, transferred, or otherwise disposed of without registration under
the Securities Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Common Stock or an available
exemption from registration under the Securities Act, the Common Stock must be
held indefinitely. In particular, Selling Parties are aware that the Common
Stock may not be sold pursuant to Rule 144 promulgated under the Securities Act
unless all of the conditions of that Rule are met. Among the conditions for use
of Rule 144 may be the availability of current information to the public about
the Buyer. Such information is not now available and the Buyer has no present
plans to make such information available.
4.36 LEGENDS. To the extent applicable, each certificate or other document
evidencing any of the Common Stock shall be endorsed with the legends
substantially in the form set forth below:
(a) The following legend under the Securities Act:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT, OR UNLESS THE BUYER HAS RECEIVED AN OPINION
OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE BUYER AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) Any legend imposed or required by applicable state securities laws.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Tennessee
and has full corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby.
5.2 AUTHORIZATION. Buyer has full corporate power and authority (including all
necessary approvals of Buyer's shareholders) to carry on its business as now
conducted and as proposed to be conducted, to enter into this Agreement, issue
the Common Stock to Seller, and perform its obligations hereunder and carry out
the transactions contemplated hereby. The Board of Directors of Buyer has taken
all action required by law, its Articles of Incorporation, its Bylaws and
otherwise to authorize the execution and delivery by Buyer of this Agreement and
the consummation by Buyer of the transactions contemplated hereby.
5.3 VALID AND BINDING AGREEMENT. This Agreement constitutes a valid and binding
agreement of Buyer, enforceable against Buyer in accordance with its terms.
5.4 NO VIOLATION. The execution and delivery of this Agreement by Buyer does
not, and the consummation of the transactions contemplated hereby will not, (a)
violate any provision, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Buyer is a party or by which it is bound; (b) violate
any provision
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of Buyer's Articles of Incorporation or Bylaws; (c) violate any order,
arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to Buyer; or (d) violate any other contractual or legal
obligation or restriction to which Buyer is subject.
5.5 PROFESSIONAL FEES. Buyer has not done anything to cause or incur any
liability for investment banking, brokerage, finders, agents or other fees,
commissions, expenses or charges in connection with the negotiation,
preparation, execution and performance this Agreement or the consummation of the
transactions contemplated hereby, and Buyer does not know of any claim by anyone
for such a commission or fee.
5.6 CONSENTS AND APPROVALS. Buyer has obtained all consents, approvals,
authorizations or orders of third parties, including governmental authorities,
necessary for the authorization, execution and performance of this Agreement by
Buyer.
5.7 FINANCIAL STATEMENTS. Buyer has delivered to Seller the audited consolidated
balance sheet of the Buyer and its subsidiaries as of the end of December 31,
1998, and the related consolidated statements of income, stockholders' equity
and changes in financial position for the fiscal year then ended, prepared in
accordance with generally accepted accounting principles and accompanied by an
opinion of a firm of independent public accountants of recognized national
standing selected by the Board of Directors of the, the last fiscal year, and
the related consolidated statements of income, stockholders' equity and changes
in financial position for the fiscal year then ended, prepared in accordance
with generally accepted accounting principles. These financial statements fairly
present the assets, liabilities, financial condition and results of operations
of Buyer as of December 31, 1998 and for the period therein referred to.
5.8 FULL DISCLOSURE. To the best of Buyer's knowledge, neither the information
provided by the Buyer in this Agreement, nor any Schedule, exhibit, list,
certificate or other instrument and document furnished by Buyer to the Selling
Parties pursuant to this Agreement, contains any untrue statement of a material
fact or omits to state any material fact required to be stated herein or therein
or necessary to make the statements and information contained herein or therein
not misleading. Buyer has not withheld from the Selling Parties disclosure of
any event, condition or fact which Buyer knows, or has reasonable grounds to
know, may materially adversely affect Buyer's assets, prospects or condition
(financial or otherwise).
5.9 LITIGATION. To the best of Buyer's knowledge, there are no claims, actions,
suits, proceedings or investigations pending or threatened by or against, or
otherwise affecting Buyer at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, agency,
instrumentality or authority. The Buyer does not know or have any reason to know
of any basis for any such claim, action, suit, proceeding or investigation.
5.10 AUTHORIZED CAPITAL STOCK. The authorized capital stock of the Buyer
consists of (i) 76,000 shares of Series A Convertible Preferred Stock, (ii)
1,436,961 shares of Series B Convertible Preferred Stock, and (iii) 20,000,000
shares of Common Stock, in each case with no par value. Immediately prior to the
Closing, 76,000 shares of the Series A Convertible Preferred Stock, 527,751
shares of the Series B Convertible Preferred Stock, and 1,991,647 shares of the
Common Stock will be validly issued and outstanding, fully paid and
nonassessable. The designations, powers, preferences, rights, qualifications
limitations and restrictions in respect of each class and series of authorized
capital stock of the Buyer are as set forth in the Charter, a copy of which, as
certified by the Secretary of State of Tennessee, is attached as Exhibit Q, and
all such designations, powers, preferences, rights qualifications, limitations
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and restrictions are valid, binding and enforceable and in accordance with all
applicable laws. All of the outstanding securities of the Buyer were issued in
compliance with all applicable federal and state securities laws.
5.11 BY-LAWS. The current by-laws of the Buyer are attached as Exhibit R.
5.12 ACCOUNTS PAYABLE. All accounts and notes payable relating to the Assets or
the Business, with a due date following the Closing shall be paid by the Buyer.
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER
Seller agrees that from the date hereof until the Closing, and
thereafter if so specified, it will, and Shareholder will cause Seller to,
fulfill the following covenants and agreements unless otherwise consented to by
Buyer in writing:
6.1 CONDUCT OF BUSINESS PENDING THE CLOSING.
(a) Seller will take such action as may be necessary to maintain,
preserve, renew and keep in full force and effect the existence, rights and
franchises of Seller, to preserve the business organizations of Seller intact,
and will use good faith efforts to preserve for Buyer the present relationships
of Seller with its employees, suppliers and customers and others having business
relationships with it.
(b) Seller will not do or omit to do any act, or permit any act or
omission to act, which may cause a breach of any contract, commitment or
obligation of Seller, or any breach of any representation, warranty, covenant or
agreement made by Seller herein.
(c) Seller will duly comply with all laws applicable to it and its
respective business and operations and all laws, compliance with which is
required for the valid consummation of the transactions contemplated by this
Agreement.
(d) Seller will not (i) grant any increase in the wages or salary of
any officer, employee or agent of Seller, except normal wage or salary increases
for employees (other than officers and other management employees) in the
ordinary course of business and consistent with past practice; (ii) by means of
any bonus or pursuant to any plan or arrangement or otherwise, increase by any
amount or to any extent the benefits or compensation of any such officer,
employee or agent; (iii) enter into any employment agreement, sales agency or
other contract or arrangement with respect to the performance of personal
services which is not terminable by it without liability on not more than 30
days notice; (iv) enter into or extend any labor contract with any hourly-paid
employees or any union; or (v) agree to take any such action.
(e) Seller will not terminate or modify any lease, license, permit,
contract or other agreement to which it is a party.
(f) Seller will not mortgage, pledge or subject to lien or any other
encumbrance, any of Seller's assets.
(g) Seller will not enter into any transaction involving more than
$10,000 or a commitment extending more than three months.
(h) None of the Selling Parties will directly or indirectly (through a
representative or otherwise) solicit or furnish information to any prospective
acquirors, commence negotiations with any
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other party or enter into any agreement with any other party concerning the sale
of Seller's capital stock or assets or any part thereof, or involving the
merger, consolidation or combination of or share exchange with any other entity.
(i) Seller will not enter into any transaction outside the ordinary
course of business. For purposes of this Agreement, the term "ordinary course of
business" shall mean the conduct of Seller's business as it has historically
been conducted over the past 24 months.
(j) Selling Parties will not enter into any agreement to do any of the
foregoing.
6.2 ACCESS; FURTHER ASSURANCES.
(a) After the execution of this Agreement and continuing until the
Closing, Selling Parties shall cause Seller to permit Buyer and its counsel,
accountants, engineers and other representatives full access during normal
business hours, upon reasonable notice, to all of the directors, officers,
facilities, properties, books, contracts, commitments and records of or relating
to Seller (including without limitation, the right to conduct any physical count
of inventory of Seller or otherwise be present at or participate in any such
occurrence at any time prior to the Closing) and will furnish Buyer and its
representatives during such period with all such information concerning Seller's
affairs and such copies of such documents relating thereto, as Buyer or its
representatives may reasonably request.
(b) At any time and from time to time after the Closing, at Buyer's
request and without further consideration, Selling Parties will execute and
deliver such other instruments of sale, transfer, conveyance, assignment, and
delivery and confirmation and take such action as the Buyer may reasonably deem
necessary or desirable in order more effectively to transfer, convey and assign
to Buyer and to place Buyer in possession and control of, and to confirm Buyer's
title to, the Assets, and to assist Buyer in exercising all rights and enjoying
all benefits with respect thereto.
6.3 SCHEDULES. Selling Parties shall have, until the Closing, the continuing
obligation to supplement or amend promptly the Schedules being delivered
pursuant to this Agreement 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 these Schedules. Furthermore,
Selling Parties shall have the right, but not the obligation, within 14 days of
the Closing to supplement or amend Exhibit T, the Accrued but untaken Vacation
schedule, and other schedules or exhibits to be accurate as of the Closing Date.
6.4 TAXES. Shareholder or Seller will be responsible for, and hereby agree to
assume and pay, all sales and similar taxes which may be due to any jurisdiction
or governmental body as a result of the sale and transfer of the Assets; except
that Buyer agrees to pay ordinary transfer fees arising by virtue of the
transfer of the Assets hereunder, including fees, if any, for the assignment of
the lease at 00 Xxxxxx Xxxxxx, Xxxxxx.
6.5 CONSENTS AND APPROVALS. Seller shall, in a timely, accurate and complete
manner, take all necessary corporate and other action and use all reasonable
efforts to obtain all consents, approvals, permits, licenses and amendments of
agreements required of Seller to carry out the transactions contemplated in this
Agreement and shall provide to Buyer such information as Buyer may reasonably
require to make such filings and prepare such applications as may be required
for the consummation by Buyer of the transactions contemplated by this
Agreement. Notwithstanding the above, Buyer acknowledges that Seller cannot
assure that ACCME accreditation will continue in the future.
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6.6 BULK SALES COMPLIANCE. Buyer acknowledges that Seller is not complying with
the provisions of the bulk sales or similar laws of any and all states (the
"Bulk Sales Laws"), and Seller covenants and agrees to pay and discharge when
due all claims, liabilities and related expenses which may be asserted against
Buyer by reason of such noncompliance to the extent that such liabilities are
not part of the Assumed Liabilities.
6.7 SELLER'S 401(K) PLAN. Buyer shall not adopt Seller's 401(k) Plan and the
participants in Seller's 401(k) Plan who become employees of Buyer shall be
entitled to a distribution of their benefits under the terms of Seller's 401(k)
Plan.
6.8 PAYMENTS OF FUTURE CASH RECEIVED. Seller will promptly pay to Buyer any cash
received after the Closing Date for subscriptions, if the cash does not relate
to an account receivable as of the Closing Date. Seller will promptly pay to
Buyer fifty percent (50%) of any cash received after the Closing Date for core
curriculum lectures if the cash relates to a "balance due" on Schedule 1.2(b).
6.9 EMAIL FORWARDING. Until December 31, 1999, Seller shall forward emails sent
to the addresses set forth on Schedule 6.12 to addresses which Buyer shall
provide. Seller shall have absolutely no liability under this provision except
for willful misconduct. Seller agrees to perform email forwarding services for
Buyer set forth on Schedule 6.12 in exchange for $2,000 paid to Seller at
Closing.
6.10 URL REDIRECTING. Until December 31, 1999, Seller shall redirect the URLs
set forth on Schedule 6.13 to the URLs which Buyer shall provide. Seller shall
have absolutely no liability under this provision except for willful misconduct.
Seller agrees to perform URL forwarding services for Buyer set forth on Schedule
6.13 in exchange for $2,000 paid to Seller at Closing.
6.11 ACCOUNTING SERVICES. Until July 31, 1999, Seller shall perform the
accounting services for Buyer set forth on Schedule 6.14. Seller shall have
absolutely no liability under this provision except for willful misconduct.
Seller agrees to perform the accounting services for Buyer set forth on Schedule
6.14 during the month of August, 1999 in exchange for $4,000 paid to Seller at
Closing.
6.12 BONUS. Shareholder has agreed to pay bonuses to Seller's employees and one
contractor for assisting in the transition to Buyer. Shareholder will pay the
bonus to Xxxxx Xxxxx and Xxxxxxx Xxxx promptly following the Closing.
Shareholder will not pay bonuses to the other individuals until six (6) months
following the Closing Date, provided, however, that Shareholder will pay the
bonus to these individuals sooner if Buyer terminates the employment of these
individuals prior to six (6) months following the Closing Date. Shareholder will
not pay the bonus to these individuals if the individual voluntarily leaves
employment with the Buyer or if Buyer terminates the individual for cause prior
to six (6) months following the Closing Date.
ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER
Buyer agrees that from the date hereof until the Closing, and
thereafter if so specified, it will fulfill the following covenants and
agreements unless otherwise consented to by Seller in writing:
7.1 CONFIDENTIALITY. In the event the transactions contemplated by this
Agreement are not consummated, for any reason, Buyer promptly will return to
Seller all records and information provided to Buyer from Selling Parties. Buyer
and Seller have entered into a separate confidentiality agreement
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dated February 9, 1999 (the "Confidentiality Agreement"), which shall survive
the execution of this Agreement, a copy of which is attached hereto as Exhibit
S. Subject to specific exceptions contained in the Confidentiality Agreement,
Buyer shall not at any time, before or after Closing, disclose the Purchase
Price paid hereby.
7.2 CONSENTS AND APPROVALS. Buyer shall, in a timely, accurate and complete
manner, take all necessary corporate and other action and use all reasonable
efforts to obtain all consents, approvals, permits, licenses and amendments of
agreements required of Buyer to carry out the transactions contemplated in this
Agreement and shall provide to Seller such information as Seller may reasonably
require to make such filings and prepare such applications as may be required
for the consummation by Seller of the transactions contemplated by this
Agreement.
7.3 FULFILLMENT OF UNEXPIRED SUBSCRIPTIONS. Buyer shall fulfill all unexpired
subscriptions set forth on Exhibit T.
7.4 RETENTION OF EMPLOYEES. Buyer agrees to continue to employ all individuals
currently employed by Seller at salaries no less than those currently received
by such employees. Should Buyer terminate any of such employees unless for cause
prior to 12 months following the Closing Date, Buyer shall offer any such
employee one month salary for each full year of employment as an employee of
Seller or Buyer, in the aggregate, up to a maximum of four months salary, plus
any accrued and untaken vacation time, and shall reimburse up to $3,000 in
outplacement fees, if incurred by the employee within 12 months of the date of
termination, all in exchange for such employee's full release of claims against
Buyer and the Selling Parties.
7.5 FINANCIAL STATEMENTS. The Buyer shall furnish to the Seller within one
hundred twenty (120) days after the end of each fiscal year of the Buyer an
audited consolidated balance sheet of the Buyer and its subsidiaries as of the
end of such fiscal year and the related consolidated statements of income,
stockholders' equity and changes in financial position for the fiscal year then
ended, prepared in accordance with generally accepted accounting principles and
accompanied by an opinion of a firm of independent public accountants of
recognized national standing selected by the Board of Directors of the Buyer.
7.6 ASSIGNMENT OF 00 XXXXXX XXXXXX LEASE. The Buyer shall be responsible for
paying to Shareholder pro rata any rent for July, 1999 which the Shareholder or
an affiliate has already paid to the landlord of 00 Xxxxxx Xxxxxx.
7.7 ACCOUNTS RECEIVABLE. The Buyer shall promptly pay to Seller any amounts that
it collects on accounts receivable which existed as of the Closing Date. The
Buyer will promptly pay to Seller 50% of any cash received after the Closing
Date for core curriculum lectures if the cash relates to a "balance due" on
Schedule 1.2(b).
7.8 PAYMENT OF ASSUMED LIABILITIES. The Buyer shall pay when due all Assumed
Liabilities.
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7.9 PAYMENT OF CERTAIN PREPAID ROYALTIES. The Buyer will pay to Seller royalties
for the products shown on Schedule 7.11 up to the amounts shown as "balance" on
Schedule 7.11.
ARTICLE 8. CONDITIONS TO BUYER'S OBLIGATIONS
All obligations of Buyer hereunder are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties made by
the Selling Parties in this Agreement and the statements contained on the
Schedules attached hereto or in any instrument, list, certificate or writing
delivered by the Selling Parties pursuant to this Agreement shall be true when
made and at and as of the time of the Closing as though such representations and
warranties were made at and as of the Closing.
8.2 PERFORMANCE BY SELLING PARTIES. Selling Parties shall have performed and
complied in all material respects with all covenants, agreements, obligations
and conditions required by this Agreement, the Non-Competition Agreement and the
Warrant Agreement to be so complied with or performed.
8.3 CERTIFICATES OF SELLING PARTIES. Each of the Selling Parties shall have
delivered to Buyer a certificate in the form of Exhibit F hereto, dated the
Closing Date, certifying as to the fulfillment of the conditions specified in
Sections 8.1 and 8.2.
8.4 OPINION OF COUNSEL FOR SELLING PARTIES. Buyer shall have received an opinion
of the Seller's counsel dated the Closing Date, in form and substance
satisfactory to Buyer's counsel, (a final draft of which shall have been
furnished to Buyer's counsel not less than three days before the Closing), to
the effect that:
(a) Seller is a corporation duly incorporated, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts, and has full
corporate power and authority to enter into this Agreement, to carry out the
transactions contemplated hereby and to carry on its business as presently
conducted.
(b) This Agreement has been duly executed and delivered by each of the
Selling Parties.
(c) Neither the execution nor the delivery of this Agreement nor the
consummation of the transactions contemplated hereby, or compliance with and
fulfillment of the terms and provisions hereof will conflict with or result in
the breach of the terms, conditions or provisions of, or constitute a default
under, the Articles of Incorporation or the Bylaws of Seller or any agreement or
instrument known to such counsel to which any Selling Party is a party or by
which any of them is bound or any laws or regulatory provisions which are known
to such counsel to be applicable to any of them.
(d) To the knowledge of such counsel, except for the AAO Claim, there
are no claims, actions, suits, proceedings or investigations pending or
threatened by or against, or otherwise affecting the Assets or the transactions
contemplated by this Agreement, at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, agency,
instrumentality or authority.
(e) Except as set forth in Schedules 4.17 and 4.29 and as set forth in
the Software & Database Licensing Agreement, Selling Parties have obtained all
consents, approvals, authorizations or orders of
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third parties, including governmental authorities, necessary for the
authorization, execution and delivery of this Agreement and the Non-Compete
Agreements and the consummation of the transactions contemplated hereby.
(f) Such opinion shall also cover such other matters incident to the
transactions contemplated by the Agreement as Buyer may reasonably request.
8.5 CONSENTS AND APPROVALS. Buyer shall have received from the Selling Parties
executed counterparts of the consents referred to in Section 4.25, all of which
consents shall be in form and substance satisfactory to Buyer.
8.6 LITIGATION. On the date of the Closing, there shall be no lawsuits pending
against any of the Selling Parties seeking to enjoin, prohibit, restrain or
otherwise prevent the transactions contemplated hereby or which might adversely
affect Seller's ability to transfer Assets hereby or, from and after Closing,
and except for the AAO Claim, Buyer's right, title or interest in the Assets or
Buyer's use and enjoyment thereof.
ARTICLE 9. CONDITIONS TO SELLING PARTIES' OBLIGATIONS
All obligations of the Selling Parties under this Agreement are subject
to the fulfillment, prior to or at the Closing, of each of the following
conditions:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties made by
the Buyer in this Agreement shall be true when made and at and as of the time of
the Closing as though such representations and warranties were made at and as of
such date.
9.2 PERFORMANCE. Buyer shall have performed and complied with all agreements,
obligations and conditions required by this Agreement, the Escrow Agreement, the
Non-Competition Agreement and the Warrant Agreement to be so complied with or
performed including payment of the Purchase Price.
9.3 OFFICER'S CERTIFICATE. Buyer shall have delivered to Selling Parties a
Certificate of the President of Buyer in the form as Exhibit B hereto, in his
representative capacity and not individually, dated the Closing Date, certifying
as to the fulfillment of and/or the conditions specified in Sections 9.1 and
9.2.
9.4 OPINION OF COUNSEL FOR BUYER. Seller shall have received opinions of Buyer's
counsel dated the Closing Date, in form and substance satisfactory to Seller's
counsel (a final draft of which shall have been provided to Seller's counsel not
less than three days before the Closing), to the effect that:
(a) Buyer is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Tennessee and has full corporate
power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby.
(b) This Agreement has been duly executed and delivered by Buyer.
(c) This Agreement is a valid and binding obligation of Buyer
enforceable against Buyer and subject to any applicable bankruptcy,
reorganization, insolvency or other laws, now or hereafter in effect, affecting
creditors' rights generally and subject to equitable defenses and to the
discretion of the Court before which any proceeding therefor may be brought.
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(d) Neither the execution nor the delivery of this nor the consummation
of the transactions contemplated hereby or thereby, nor compliance with and
fulfillment of the terms and provisions hereof or thereof will conflict with or
result in the breach of the terms, conditions or provisions of, or constitute a
default under, the Charter or the Bylaws of Buyer or any agreement or instrument
known to such counsel to which Buyer is a party or by which it is bound.
(e) The authorized capital stock of the Buyer consists of (i) 76,000
shares of Series A Convertible Preferred Stock, (ii) 1,436,961 shares of Series
B Convertible Preferred Stock, and (iii) 20,000,000 shares of Common Stock, in
each case with no par value. Immediately prior to the Closing, 76,000 shares of
the Series A Convertible Preferred Stock, 527,751 shares of the Series B
Convertible Preferred Stock, and 1,991,647 shares of the Common Stock will be
validly issued and outstanding, fully paid and nonassessable. The designations,
powers, preferences, rights, qualifications limitations and restrictions in
respect of each class and series of authorized capital stock of the Buyer are as
set forth in the Charter, a copy of which, as certified by the Secretary of
State of Tennessee, is attached as Exhibit Q, and all such designations, powers,
preferences, rights qualifications, limitations and restrictions are valid,
binding and enforceable and in accordance with all applicable laws. All of the
outstanding securities of the Buyer were issued in compliance with all
applicable federal and state securities laws.
9.5 LITIGATION. On the date of the Closing, there shall be no lawsuits pending
against the Buyer seeking to enjoin, prohibit, restrain or otherwise prevent the
transactions contemplated hereby.
ARTICLE 10. INDEMNIFICATION
10.1 INDEMNIFICATION BY SELLING PARTIES. Selling Parties, jointly and severally,
hereby agree to defend, indemnify and hold harmless Buyer, the Subsidiaries,
each fiduciary of Buyer's employee benefit plans and each of Buyer's
shareholders, affiliates, officers, directors, employees, agents, successors and
assigns ("Buyer's Indemnified Persons") and shall reimburse Buyer's Indemnified
Persons for, from and against each claim, fine, judgment, oversight cost,
assessment, loss, liability, cost and expense (including without limitation,
interest, penalties, costs of preparation and investigation, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors but excluding consequential damages, including without
limitation, lost profits) (collectively, "Losses"), directly or indirectly
relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant, agreement or other obligation by or of any
Selling Party contained herein, any Schedule hereto or in any certificate,
document or instrument delivered to Buyer pursuant hereto.
(b) Any Tax liability of Seller relating to the Assets not previously
paid, or for which adequate reserves have not been established in the balance
sheet included in the Financial Statements, which is successfully asserted or
assessed against it for any event or period prior to the Closing Date
(regardless of whether the possibility of the assertion or assessment of any
such Tax liability shall have been disclosed to Buyer at or prior to the
Closing).
(c) Any obligation or liability of Seller not included in the Assumed
Liabilities, and any and all loss, liability or damage suffered or incurred by
Buyer by reason of the failure by Seller to comply with Bulk Sales Laws.
(d) The AAO Claim;
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(e) Any other Losses incidental to any of the foregoing.
10.2 EXPIRATION AND LIMITATION. Notwithstanding the foregoing:
(a) The indemnification obligations under this Article 10, or under any
certificate or writing furnished in connection herewith, shall terminate as
follows:
(i) with respect to claims relating to, resulting from or arising
out of Sections 10.1(b) and (c) or the representations and warranties
set forth in Section 4.1 , Section 4.8, Section 4.12 or Section 4.24,
(A) the date that is six (6) months after the expiration of the longest
applicable federal or state statute of limitation (including extensions
thereof), or (B) if there is no applicable statute of limitation, five
(5) years after the Closing Date for any other claim covered by clause
(i) of this Section 10.2(a); or
(ii) with respect to all claims other than those referred to in
clause (i) of this Section 10.2(a), on the date that is 12 months
following the Closing Date.
(b) The aggregate amount of the Selling Parties' liability under this
Article 10 shall not exceed $500,000. There shall be no liability for
indemnification under Section 10.1 unless the aggregate amount of Losses exceeds
$25,000, provided, however, that at such time as the aggregate amount of Losses
exceeds $25,000, the Selling Parties shall be liable for the full amount of the
Losses. The Selling Parties have the right, but not the obligation, to pay its
obligations hereunder by transferring to the Buyer that number of shares of
Common Stock, which for this purpose only shall have the same value as on the
date of issuance.
(c) The Selling Parties' obligations to indemnify hereunder shall not
extend to Losses attributable to Buyer's negligence or willful misconduct.
10.3 INDEMNIFICATION BY BUYER. Buyer hereby agrees to defend, indemnify and hold
harmless the Selling Parties, their respective subsidiaries, each fiduciary of
the Selling Parties' employee benefit plans and each of the Selling Parties'
shareholders, affiliates, officers, directors, employees, agents, successors and
assigns ("Selling Parties' Indemnified Persons") and shall reimburse the Selling
Parties' Indemnified Persons for, from and against each claim, fine, judgment,
oversight cost, assessment, loss, liability, cost and expense (including without
limitation, interest, penalties, costs of preparation and investigation, and the
reasonable fees, disbursements and expenses of attorneys, accountants and other
professional advisors but excluding consequential damages, including without
limitation, lost profits) (collectively, "Losses"), directly or indirectly
relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
non-fulfillment of any covenant, agreement or other obligation by or of Buyer
contained herein or in any certificate, document or instrument delivered to
Selling Parties pursuant hereto.
(b) Any Assumed Liabilities.
(c) Any Losses with respect to the operations of Seller following
Closing, other than (i) those Losses which are determined by a court to arise
out of any breach by Seller of any covenant, representation or warranty
contained in this Agreement, or (ii) those Losses that are determined by a court
to be subject to indemnification by Seller under Section 10.1.
(d) Any other Losses incidental to the foregoing.
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The aggregate amount of the Buyer's liability under this Article 10 shall not
exceed $500,000. In addition, there shall be no liability for indemnification
under this Section 10.3 unless, the aggregate amount of Losses exceeds $25,000,
provided, however, that at such time as the aggregate amount of Losses exceeds
$25,000, the Buyers shall be liable for the full amount of the Losses, provided
that such $25,000 minimum indemnification shall not apply to Losses related to
Assumed Liabilities. For the Assumed Liabilities, Buyer has the obligation to
repay these to the Selling Parties without reaching any minimum.
10.4 PROCEDURE. The indemnified party shall promptly notify the indemnifying
party of any claim, demand, action or proceeding for which indemnification will
be sought under Sections 10.1 or 10.3, and, if such claim, demand, action or
proceeding is a third party claim, demand, action or proceeding, the
indemnifying party will have the right at its expense to assume the defense
thereof using counsel reasonably acceptable to the indemnified party. The
indemnified party shall have the right to participate, at its own expense, with
respect to any such third party claim, demand, action or proceeding. In
connection with any such third party claim, demand, action or proceeding, Buyer
and the Selling Parties shall cooperate with each other and provide each other
with access to relevant books and records in their possession. No such third
party claim, demand, action or proceeding shall be settled without the prior
written consent of the indemnified party. If a firm written offer is made to
settle any such third party claim, demand, action or proceeding, which offer
does not involve any injunctive or non-monetary relief against the indemnified
party, and the indemnifying party proposes to accept such settlement and the
indemnified party refuses to consent to such settlement, then: (i) the
indemnifying party shall be excused from, and the indemnified party shall be
solely responsible for, all further defense of such third party claim, demand,
action or proceeding; and (ii) the maximum liability of the indemnifying party
relating to such third party claim, demand, action or proceeding shall be the
amount of the proposed settlement if the amount thereafter recovered from the
indemnified party on such third party claim, demand, action or proceeding is
greater than the amount of the proposed settlement.
ARTICLE 11. SURVIVAL OF REPRESENTATIONS
11.1 SURVIVAL OF REPRESENTATIONS. All representations, warranties, covenants and
agreements by the parties contained in this Agreement shall survive the Closing
and any investigation at any time made by or on behalf of any party hereto for a
period to one (1) year from the Closing Date; provided, however, that the
representations of Seller contained in Sections 4.1, 4.8, 4.12 and 4.24 shall
survive for the duration of the applicable statute of limitations period.
11.2 REMEDIES CUMULATIVE. The remedies provided herein shall be cumulative and
shall not preclude the assertion by any party hereto of any other rights or the
seeking of any other remedies against the other party hereto.
ARTICLE 12. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time prior to the Closing:
(a) By mutual agreement of Selling Parties and Buyer.
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(b) By Buyer, upon ten (10) business days' prior written notice to
Selling Parties if (i) there has been a material violation or breach by any of
the Selling Parties of any of the agreements, representations or warranties
contained in this Agreement, or (ii) if any of the conditions set forth in
Article 8 have not been materially satisfied by the Closing and either (i) or
(ii) have not been waived in writing by Buyer or cured within such ten-day
period.
(c) By Selling Parties, upon ten (10) business days' prior written
notice to Buyer if (i) there has been a material violation or breach by the
Buyer of any of the agreements, representations or warranties contained in this
Agreement, or (ii) if any of the conditions set forth in Article 9 have not been
materially satisfied by the Closing and either (i) or (ii) have not been waived
in writing by Seller or cured within such ten-day period.
(d) By either Buyer or Selling Parties if the transactions contemplated
by this Agreement shall not have been consummated on or before July 30, 1999.
(e) By either Buyer or Selling Parties if any of the other makes an
assignment for the benefit of creditors, files a voluntary petition in
bankruptcy or seeks or consents to any reorganization or similar relief under
any present or future bankruptcy act or similar law, or is adjudicated a
bankrupt or insolvent, or if a third party commences any bankruptcy, insolvency,
reorganization or similar proceeding involving the other.
ARTICLE 13. MISCELLANEOUS
13.1 EXPENSES. All fees and expenses incurred by Seller, including without
limitation, legal fees and expenses in connection with this Agreement will be
borne by Seller or the Shareholder as they may determine and all fees and
expenses incurred by Buyer, including without limitation, legal fees and
expenses, in connection with this Agreement will be borne by Buyer.
13.2 ASSIGNABILITY; PARTIES IN INTEREST.
(a) Buyer may assign any or all of its rights hereunder to any
affiliate or any direct or indirect subsidiary of Buyer, and Buyer shall advise
Selling Parties of any such assignment and shall designate such party as the
assignee and transferee of the Assets purchased. Any such assignee shall assume
all of Buyer's duties, obligations and undertakings hereunder, but the Buyer
shall remain liable hereunder.
(b) Seller may not assign, transfer or otherwise dispose of any of its
rights hereunder without the prior written consent of Buyer.
(c) All the terms and provisions of this Agreement shall be binding
upon, shall inure to the benefit of and shall be enforceable by the respective
heirs, successors, assigns and legal or personal representatives of the parties
hereto, provided that the rights and obligations under all licenses of
trademarks hereunder shall under no circumstances be assignable.
13.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price for the Assets shall be
allocated as set forth on Schedule 13.3. The parties agree to follow the
allocation for federal and state income tax purposes.
13.4 KNOWLEDGE. An individual will be deemed to have "knowledge" of a particular
fact or other matter if: (i) such individual is actually aware of such fact or
other matter; or (ii) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
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conducting a reasonably comprehensive investigation concerning the existence of
such fact or other matter. A person (other than an individual) will be deemed to
have "knowledge" of a particular fact or other matter if any individual who is
serving, or who has within the last eight months served, as a director, officer
or trustee of such person (or in any similar capacity) has, or at any time had
knowledge of such fact or other matter.
13.5 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including the exhibits,
Schedules, lists and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, and the Confidentiality
Agreement set forth as Exhibit F contain the entire understanding of the parties
with respect to its subject matter. There are no restrictions, agreements,
promises, warranties, covenants or undertakings other than those expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter, except
for the Confidentiality Agreement. This Agreement may be amended only by a
written instrument duly executed by all parties or their respective heirs,
successors, assigns or legal personal representatives. Any condition to a
party's obligations hereunder may be waived but only by a written instrument
signed by the party entitled to the benefits thereof. The failure or delay of
any party at any time or times to require performance of any provision or to
exercise its rights with respect to any provision hereof, shall in no manner
operate as a waiver of or affect such party's right at a later time to enforce
the same.
13.6 HEADINGS. The section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretations of this Agreement.
13.7 REFERENCES. References to a section or subsection when used without further
attribution shall refer to the particular section or subsection of this
Agreement.
13.8 SEVERABILITY. The invalidity of any term or terms of this Agreement shall
not affect any other term of this Agreement, which shall remain in full force
and effect.
13.9 NOTICES. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed (registered or certified mail, postage prepaid, return
receipt requested) as follows:
If to Selling Parties:
Xxxxx Xxxxxxx
Vice President and General Counsel
SilverPlatter Information, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
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If to Buyer:
Xxxxxx X. Xxxxx, Xx.
Vice President and General Counsel
HealthStream, Inc.
000 00xx Xxx. Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
13.10 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Tennessee, without regard
to its conflict of laws rules.
13.11 COUNTERPARTS. This Agreement may be executed simultaneously in one or more
counterparts, with the same effect as if the signatories executing the several
counterparts had executed one counterpart, provided, however, that the several
executed counterparts shall together have been signed by all parties to be bound
hereby. This Agreement shall be binding upon each signatory hereto when one or
more counterparts, as provided above, have been signed by Buyer, Seller and the
Shareholders. All such executed counterparts shall together constitute one and
the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of Buyer and by each of the Selling Parties on the date
first above written.
BUYER:
HEALTHSTREAM, INC.
000 00xx Xxx. Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
By:
--------------------------------
Title:
-----------------------------
SELLER:
SILVERPLATTER EDUCATION, INC.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
By:
--------------------------------
Title:
-----------------------------
SHAREHOLDER:
SILVERPLATTER INFORMATION, INC.
000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
By:
--------------------------------
Title:
-----------------------------
