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AGREEMENT AND PLAN OF ORGANIZATION
Dated as of the _______ day of September, 1997
by and between
HEALTHWORLD CORPORATION
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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TABLE OF CONTENTS
Page No.
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1 The Organization..............................................................................-6-
1.1 Organization................................................................-6-
1.2 Directors and Officers......................................................-7-
2 Conversion of Stock...........................................................................-7-
2.1 Manner of Conversion........................................................-7-
2.2 Beneficial Ownership of Shares..............................................-7-
2.3 Allocation of Shares........................................................-7-
3 Delivery of U.K. Company Stock and Healthworld Stock; Disclaimer of Rights....................-9-
5 Representations And Warranties of the U.K. Stockholder.......................................-10-
5.1 Due Organization...........................................................-11-
5.2 Prohibited Activities......................................................-12-
5.3 Capital Stock of the Company...............................................-12-
5.4 Transactions in Capital Stock..............................................-12-
5.5 No Bonus Shares............................................................-13-
5.6 Subsidiaries...............................................................-13-
5.7 Predecessor Status; etc....................................................-13-
5.8 Spin-off by the Company....................................................-13-
5.9 Financial Statements.......................................................-13-
5.10 Liabilities and Obligations................................................-14-
5.11 Accounts and Notes Receivable..............................................-14-
5.12 Permits and Intangibles....................................................-15-
5.13 Environmental Matters......................................................-15-
5.14 Personal Property..........................................................-15-
5.15 Significant Customers; Material Contracts and Commitments..................-16-
5.16 Real Property..............................................................-17-
5.17 Insurance..................................................................-17-
5.18 Compensation; Employment Agreements; Organized Labor
Matters....................................................................-17-
5.19 Employee Benefits..........................................................-21-
5.20 Conformity with Law; Litigation............................................-22-
5.21 Taxes......................................................................-22-
5.22 No Violations..............................................................-24-
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5.23 Government Contracts.......................................................-25-
5.24 Absence of Changes.........................................................-25-
5.25 Deposit Accounts; Powers of Attorney.......................................-26-
5.26 Brokers and Agents.........................................................-27-
5.27 Relations with Governments.................................................-27-
5.28 Disclosure.................................................................-27-
5.29 Authority; Ownership. ....................................................-28-
5.30 Preemptive Rights..........................................................-28-
5.31 No Intention to Dispose of Healthworld Stock...............................-28-
6 Representations of Healthworld...............................................................-29-
6.1 Due Organization...........................................................-29-
6.2 Authorization..............................................................-29-
6.3 Capital Stock of Healthworld...............................................-29-
6.4 Transactions in Capital Stock..............................................-29-
6.5 Liabilities and Obligations................................................-30-
6.6 Conformity with Law; Litigation............................................-30-
6.7 Validity of Obligations....................................................-30-
6.8 Limited Business Conducted.................................................-30-
7 Covenants Prior to Closing...................................................................-31-
7.1 Access and Cooperation; Due Diligence......................................-31-
7.2 Conduct of Business Pending Closing........................................-31-
7.3 Prohibited Activities......................................................-32-
7.4 No Shop....................................................................-33-
7.5 Further Assurances.........................................................-34-
7.6 Agreements.................................................................-34-
7.7 Notification of Certain Matters............................................-34-
7.8 Amendment of Schedules.....................................................-34-
7.9 Cooperation in Preparation of Registration Statement.......................-35-
8 Conditions Precedent to Obligations of the U.K. Stockholder..................................-35-
8.1 Representations and Warranties; Performance of Obligations
by U.S. Stockholders and ▇▇▇▇▇▇............................................-35-
8.2 Satisfaction...............................................................-36-
8.3 No Litigation..............................................................-36-
8.4 Opinions of Counsel........................................................-36-
8.5 Consents and Approvals.....................................................-36-
8.6 No Material Adverse Change.................................................-36-
8.7 Secretary's Certificates; Good Standing....................................-36-
8.8 Employment Agreements......................................................-37-
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8.9 Conformity With ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter of Intent and
Underwriters' Engagement Letter............................................-37-
8.10 Simultaneous Closings......................................................-37-
9 Conditions Precedent to Obligations of Healthworld...........................................-37-
9.1 Representations and Warranties; Performance of Obligations.................-37-
9.2 Satisfaction...............................................................-38-
9.3 No Litigation..............................................................-38-
9.4 Opinions of Counsel........................................................-38-
9.5 Consents and Approvals.....................................................-38-
9.6 No Material Adverse Change.................................................-38-
9.7 Secretary's Certificates...................................................-38-
9.8 Employment Agreements......................................................-39-
9.9 Stockholder's Release......................................................-39-
9.10 Termination of Related Party Agreements....................................-39-
9.11 Simultaneous Closings......................................................-39-
10 Covenants of Healthworld and the U.K. Stockholder after Closing..............................-39-
10.1 Release From Guarantees; Repayment of Certain
Obligations................................................................-39-
10.2 Preservation of Tax and Accounting Treatment...............................-39-
10.3 Preparation and Filing of Tax Returns......................................-40-
11 Indemnification..............................................................................-40-
11.1 General Indemnification by the U.K. Stockholder............................-40-
11.2 Indemnification by Healthworld.............................................-41-
11.3 Third Person Claims........................................................-42-
11.4 Exclusive Remedy...........................................................-43-
11.5 Limitations on Indemnification.............................................-43-
12 Termination of Agreement.....................................................................-44-
12.1 Termination................................................................-44-
12.2 Liabilities in Event of Termination........................................-45-
13 Non-Competition; Non-Disclosure..............................................................-46-
13.1 Non-Competition............................................................-46-
13.2 ▇▇▇▇▇▇▇▇▇▇▇▇▇..............................................................-▇▇-
▇▇.▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; Damages.................................................-48-
13.4 Reasonable Restraint.......................................................-48-
13.5 Severability; Reformation..................................................-48-
13.6 Independent Covenant.......................................................-49-
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13.7 Survival...................................................................-49-
14 Federal Securities Act Representations.......................................................-49-
14.1 Compliance with Law........................................................-49-
14.2 Economic Risk; Sophistication..............................................-50-
15 Registration Rights..........................................................................-50-
15.1 Piggyback Registration Rights..............................................-50-
15.2 Registration Procedures....................................................-51-
15.3 Underwriting Agreement.....................................................-51-
15.4 Availability of Rule 144...................................................-51-
16 General......................................................................................-51-
16.1 Cooperation................................................................-51-
16.2 Successors and Assigns.....................................................-52-
16.3 Entire Agreement...........................................................-52-
16.4 Counterparts...............................................................-52-
16.5 Expenses...................................................................-52-
16.6 Notices....................................................................-53-
16.7 Governing Law..............................................................-53-
16.8 Survival of Representations and Warranties.................................-53-
16.9 Exercise of Rights and Remedies............................................-54-
16.10 Time.......................................................................-54-
16.11 Reformation and Severability...............................................-54-
16.12 Remedies Cumulative........................................................-54-
16.13 Captions...................................................................-54-
16.14 Amendments and Waivers.....................................................-54-
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AGREEMENT AND PLAN OF ORGANIZATION
THIS AGREEMENT AND PLAN OF ORGANIZATION (the "Agreement") is made as of
the _______ day of September, 1997, by and between:
Healthworld Corporation, a Delaware corporation ("Healthworld"), and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "U.K. Stockholder"), residing at ________________.
WHEREAS, the U.K. Stockholder is the registered and beneficial owner
with full title and guarantee of a portion of the issued share capital of
Effective Sales Personnel Ltd. (f/k/a ▇▇▇▇▇▇ Headcount Limited), a company
incorporated in England with registered no. 2998311 (the "Company"); and
WHEREAS, the remainder of the issued share capital of the Company is
owned by ▇▇▇▇▇▇ Marketing Group Limited (the "U.K. Company"), which is
wholly-owned by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"); and
WHEREAS, Healthworld was formed on September 12, 1996, in the State of
Delaware, for the purpose of effecting the Healthworld Plan of Organization; and
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Bourne") owns a portion of the issued share
capital of ▇▇▇▇▇▇ Marketing Limited, a company incorporated in England with
registered no. 1385429 (the "Sister Company"); and
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Moreton") owns a portion of the issued share
capital of PDM Communications Limited, a company incorporated in England with
registered no. 1324588 ("PDM"); and
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇ ("Cater") owns a portion of the issued share
capital of ▇▇▇▇▇▇ ▇▇▇▇▇ Limited, a company incorporated in England with
registered no. 319839 ("MCL"); and
WHEREAS, the U.S. Stockholders collectively own all of the issued and
outstanding shares of Girgenti, Hughes, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Inc. ("GHBM"), a New
York corporation, Black Cat Graphics, Inc. ("Black Cat"), a New York
corporation, Medical Education Technologies, Inc. ("MET"), a New York
corporation, Brand Research Corporation ("Brand Research"), a New York
corporation, GHBM, Inc. ("GHBMINC"), a New York corporation and Syberactive,
Inc. ("Syberactive"), an Illinois corporation (each of GHBM, Black Cat, MET,
Brand Research, GHBMINC and
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Syberactive are hereafter referred to individually as a "U.S. Company" and
collectively as the "U.S. Companies"); and
WHEREAS, the U.S. Stockholders desire to contribute all of their shares
of stock in the U.S. Companies into Healthworld in exchange for Healthworld
Stock, the U.K. Stockholder desires to contribute all of his shares of stock in
the Company into Healthworld in exchange for Healthworld Stock, ▇▇▇▇▇▇ desires
to contribute all of his shares of stock in the U.K. Company into Healthworld in
exchange for Healthworld Stock, and Bourne desires to contribute all of his
shares of stock in the Sister Company into Healthworld in exchange for
Healthworld Stock, all of the foregoing to occur contemporaneously with the
Pricing of the IPO; and
WHEREAS, all of the foregoing contributions together with the Pricing
of the shares to be offered by Healthworld in the IPO constitute the
"Healthworld Plan of Organization"; and
WHEREAS, the parties intend that the Healthworld Plan of Organization
shall qualify as tax-free under Section 351 of the United States Internal
Revenue Code of 1986, as amended (the "Code") and , where applicable, as a
reorganization within the meaning of Section 368 of the Code; and
WHEREAS, unless the context otherwise requires, capitalized terms used
in this Agreement or in any Schedule attached hereto and not otherwise defined
shall have the following meanings for all purposes of this Agreement:
"1933 Act" means the United States Securities Act of 1933, as amended.
"1934 Act" means the United States Securities Exchange Act of 1934, as
amended.
"Acquired Party" means any of the U.K. Company and any Subsidiary
thereof.
"Affiliates" has the meaning set forth in Section 5.8.
"Aggregate Number of Founder Shares" has the meaning set forth in
Section .
"Balance Sheet Date" shall mean November 30, 1996.
"Bourne" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
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"▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" has the meaning set forth in the introductory paragraphs of this
Agreement.
"Company" has the meaning set forth in the introductory paragraphs of
this Agreement.
"Company Stock" has the meaning set forth in Section 2.1.
"▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, residing at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Encumbrance" means a mortgage, charge (whether fixed or floating),
pledge, lien, option, restriction, right of first refusal, right of preemption,
third party right or interest, other encumbrance or security interest of any
kind and whether legal or equitable, or another type of preferential arrangement
(including, without limitation, a title transfer and retention arrangement)
having similar effect.
"Expiration Date" has the meaning set forth in Section 6.
"▇▇▇▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, residing at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter of Intent" means a certain letter of intent of
November 14, 1996, as amended, regarding a reorganization of the U.S. Companies
and the U.K. Company in connection with a contemplated IPO, executed by
▇▇▇▇▇▇▇▇, the U.S. Companies, the U.K. Stockholder, the U.K. Company and the
Subsidiaries of the U.K. Company.
"Healthworld" has the meaning set forth in the introductory paragraphs
of this Agreement.
"Healthworld License Agreement" means that certain License Agreement by
and between Healthworld and Healthworld, B.V. pursuant to which Healthworld has
licensed from Healthworld, B.V., among other things, the right to use the name
"Healthworld."
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"Healthworld Plan of Organization" has the meaning set forth in the
introductory paragraphs of this Agreement.
"Healthworld Stock" means the common stock, par value $0.01 per share,
of Healthworld.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, residing at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"IPO" means the initial public offering of Healthworld Stock pursuant
to the Registration Statement.
"Key Consultant Agreement" means any agreement with a consultant
providing for the services of an individual and requiring payment to the
consultant of not less than (pound)93,750 per annum.
"Key Employee" means any employee whose compensation is not less than
(pound)93,750 per annum.
"Material Adverse Effect" has the meaning set forth in Section 5.1.
"▇▇▇▇▇▇" means ▇▇▇ ▇▇▇▇▇▇.
"Minority Stockholders" has the meaning set forth in the introductory
paragraphs of this Agreement.
"Organization" means the contribution of all the shares of stock of the
U.K. Company and all of its Subsidiaries (with the exception of Healthworld,
B.V.) to the capital of Healthworld in exchange for shares of Healthworld Stock.
"Plans" has the meaning set forth in Section 5.19.
"Pricing" means the time and date of determination by Healthworld and
the Underwriters of the public offering price of the shares of Healthworld Stock
in the IPO.
"Registration Statement" means that certain registration statement on
Form S-1 (Registration No. 333 [ ]) and any amendments covering the shares of
Healthworld Stock to be issued in the IPO.
"Returns" means any returns, reports or statements (including any
information returns) required to be filed for purposes of a particular Tax or
Taxation.
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"Schedule" means each Schedule attached hereto, which shall reference
the relevant sections of this Agreement, on which parties hereto disclose
information as part of their respective representations, warranties and
covenants.
"SEC" means the United States Securities and Exchange Commission.
"Sister Company" has the meaning set forth in the introductory
paragraphs of this Agreement.
"Subsidiary" has the meaning given thereto in Section 736 and 736A of
the United Kingdom Companies ▇▇▇ ▇▇▇▇ as substituted by ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Companies Act of 1989.
"Taxation" means all forms of tax, duty, levy or other imposition
whenever and by whatever authority imposed and whether of the United Kingdom or
elsewhere, including (without limitation) income tax, corporation tax, advance
corporation tax, capital gains tax, inheritance tax, value added tax, customs
duties, rates, stamp duty, stamp duty reserve tax, national insurance and social
security or other contributions, and any interest, penalty, fine or surcharge in
connection with any such taxation.
"Taxes Act" means the United Kingdom Income and Corporation Taxes ▇▇▇
▇▇▇▇.
"Underwriters" means Unterberg Harris and Pennsylvania Merchant Group
Ltd.
"Underwriters' Engagement Letter" means the letter dated July 17, 1997,
pursuant to which the Underwriters were engaged by Healthworld.
"U.K. Company" has the meaning set forth in the introductory paragraphs
of this Agreement.
"U.K. Stockholder" has the meaning set forth in the introductory
paragraphs of this Agreement.
"U.S. Companies" has the meaning set forth in the introductory
paragraphs of this Agreement.
"U.S. Stockholders" means Girgenti, Hughes, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇.
"U.S. Tax" means all Federal, state, local or foreign net or gross
income, gross receipts, net proceeds, sales, use, ad valorem, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
deed, stamp, alternative or add on
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minimum, environmental or other taxes, assessments, duties, fees, levies or
other governmental charges of any nature whatever, whether disputed or not,
together with any interest, penalties, additions to tax or additional amounts
with respect thereto.
"Vote of a Majority in Interest of the U.S. Stockholders" means the
vote, by formal or informal meeting, in writing or otherwise, by U.S.
Stockholders having greater than 50% of the voting control of each of the U.S.
Companies.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
1 The Organization.
1.1 Organization. The Closing of this Agreement shall take place as
described in Section 4, and all of the issued share capital of the Company which
is owned by the U.K. Stockholder shall be contributed by the U.K. Stockholder to
the capital of Healthworld in exchange for the number of shares of Healthworld
Stock set forth in Section 2.3. Simultaneously with the contribution described
in the immediately preceding sentence, in exchange for shares of stock of
Healthworld:
1.1.1 the U.S. Stockholders will be contributing all of the
issued and outstanding shares of the U.S. Companies to the capital of
Healthworld, pursuant to an Agreement of Organization of even date herewith (the
"U.S. Agreement of Organization"),
1.1.2 Bourne and Moreton will be contributing all of the
issued and outstanding shares of the Sister Company and PDM which is owned by
them to the capital of Healthworld, pursuant to a separate Agreement of
Organization of even date herewith (the "Sister Company Agreements of
Organization"), and
1.1.3 The U.K. Company shall prior to the IPO purchase Cater's
shares owned by her in MCL pursuant to a certain Joint Venture Agreement dated
May 23, 1996, and
1.1.4 ▇▇▇▇▇▇ will be contributing all of the issued and
outstanding shares of the U.K. Company which is owned by him to the capital of
Healthworld, pursuant to an Agreement of Organization of even date hereiwth (the
"U.K. Agreement of Organization"). The contributions made by the U.K.
Stockholder pursuant to this Agreement, the contributions made pursuant to the
U.S. Agreement of Organization, the contribution made pursuant to the Sister
Company Agreement of Organization, and the
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contributions of cash by the public and/or the Underwriters in connection with
the IPO shall be considered as a single integrated transaction intended to
qualify as tax-free under Code Section 351. The Closing will occur
contemporaneously with the Pricing of the IPO, and all of the steps of the
Closing and the completion of the IPO are an integrated series of steps in a
series of transactions, none of which would have occurred without the
expectation and anticipation that the other steps will occur or will have
occurred.
1.2 Directors and Officers. At the Closing, the directors and officers
of the U.K. Company then holding office shall remain unchanged.
2 Conversion of Stock.
2.1 Manner of Conversion. The manner of converting the share capital
(the "Company Stock") of the U.K. Company issued and outstanding immediately
prior to the Closing into shares of Healthworld Stock shall be as follows: At
the Closing all of the share capital of the U.K. Company issued and outstanding
immediately prior to the Closing shall, by virtue of the capital contributions
described in Section 1.1, and without any action on the part of the U.K.
Stockholder, automatically be deemed to represent the right to receive the
number of shares of Healthworld Stock set forth in the table in Section 2.3
below.
2.2 Beneficial Ownership of Shares. All Healthworld Stock received by
the U.K. Stockholder pursuant to this Agreement shall, except for restrictions
described in Section hereof, have the same rights as all other shares of
Healthworld Stock by reason of the provisions of the Certificate of
Incorporation of Healthworld or as otherwise provided by the Delaware General
Corporation Law. All voting rights of such Healthworld Stock received by the
U.K. Stockholder shall be fully exercisable by the U.K. Stockholder and the U.K.
Stockholder shall not be deprived nor restricted in exercising those rights. At
the Closing, Healthworld shall have no class of capital stock issued and
outstanding other than the Healthworld Stock.
2.3 Allocation of Shares. Healthworld will issue to the U.S.
Stockholders, the U.K. Stockholder, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and Moreton, in the
aggregate, 5,000,000 shares (the "Aggregate Number of Founder Shares") of
Healthworld Stock at the Closing. With respect to ▇▇▇▇▇▇▇▇, who presently owns
one hundred (100) shares of Healthworld Stock, the conversion shall be made in
such a manner as to issue to him only that number of additional shares of
Healthworld Stock which are necessary to attain the percentage of shares set
forth below. The allocation of the Aggregate Number of Founder Shares among all
of the U.S. Stockholders, the U.K. Stockholder, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and Moreton shall
be made as follows:
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2.3.1 69% of the Aggregate Number of Founder Shares shall be
allocated to the U.S. Stockholders (the "U.S. Percentage") and 31% of the
Aggregate Number of Founder Shares shall be allocated to the U.K. Stockholder
and the Minority Stockholders (the "U.K. Percentage").
2.3.2 The number of shares of Healthworld Stock which results
from applying the U.S. Percentage against the Aggregate Number of Founder Shares
shall be divided among the U.S. Stockholders in the following proportions:
▇▇▇▇▇▇▇▇ 63.65%
▇▇▇▇▇▇ 5.00%
▇▇▇▇▇▇ 14.06%
▇▇▇▇▇▇▇▇▇ 17.29%
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Total 100.00%
2.3.3 The number of shares of Healthworld Stock which results
from applying the U.K. Percentage against the Aggregate Number of Founder Shares
shall be divided among the U.K. Stockholder, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and Moreton in the
following manner:
2.3.3.1 The U.K. Stockholder shall receive that
number of shares of Healthworld Stock having
a value of (pounds)1,000,000, based on the
offering price in the IPO and utilizing a
conversion rate of $1.65 dollars per pound
sterling.
2.3.3.2 Bourne shall receive that number of shares
of Healthworld Stock having a value of
(pounds)276,448.35, based on the offering
price in the IPO and utilizing a conversion
rate of $1.65 dollars per pound sterling.
2.3.3.3 Moreton shall receive that number of shares
having a value of (pounds)64,559 based on
the offering price of the IPO and utilizing
a conversion rate of $1.65 dollars per
pound.
2.3.3.4 ▇▇▇▇▇▇ shall receive the balance of the
shares of Healthworld Stock.
2.3.3.5 Cater shall not receive any shares of
Healthworld stock.
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2.3.4 No Fractional Shares. No certificates or script
representing fractional shares of Healthworld shall be issued upon the surrender
and exchange of shares. Each holder of shares who otherwise would have been
entitled to receive a fractional share of Healthworld (after taking into account
all certificates surrendered by such holder) shall be entitled to receive, in
lieu thereof, a payment in the amount (without interest) equal to such
fractional part of a share of Healthworld, multiplied by the offering price in
the IPO and, where appropriate, utilizing a conversion rate of $1.65 dollars per
pound sterling.
3 Delivery of U.K. Company Stock and Healthworld Stock; Disclaimer of
Rights.
3.1 At the Closing, the U.K. Stockholder shall deliver to Healthworld
duly executed stock transfer forms effective to transfer into the name of
Healthworld or its nominee the entire issued share capital which he owns in the
Company together with definitive certificate(s) therefor. The U.K. Stockholder
agrees promptly to cure any deficiencies with respect to the endorsement of the
share certificate(s) or other documents of conveyance with respect to the
Company Stock or with respect to the stock transfer powers accompanying any
Company Stock. At the Closing, Healthworld shall issue in the name of the U.K.
Stockholder and deliver to the U.K. Stockholder that number of shares of
Healthworld Stock as is set forth in Section 2.3, dated the Closing Date.
3.2 Other than the rights described in this Agreement, the U.K.
Stockholder hereby disclaims and renounces, effective as of the Closing Date,
all rights and entitlements which he has or may have had with respect to his
ownership of share capital of the Company, including without limitation any
rights which he may have had pursuant to any shareholders agreements pertaining
to the Company. No further writing or action shall be required to effectuate
this renunciation and disclaimer, which shall take effect automatically upon the
Closing of the transactions contemplated hereunder.
4 Closing.
At or immediately prior to the Pricing, the parties shall take all
actions necessary to effect the Organization, to effect the conversion and
delivery of shares referred to in Section 3 hereof and to consummate all
transactions contemplated by this Agreement. The taking of such actions shall
occur at the offices of Todtman, Young, Nachamie, ▇▇▇▇▇▇▇ & Spizz, P.C., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The date on which such actions occur
shall be referred to as the "Closing Date" and the
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consummation of the transactions occurring on such date shall be referred to as
the "Closing."
5 Representations And Warranties of the U.K. Stockholder.
Preliminary Matters in Respect of Representations and Warranties:
Annexed hereto and made a part hereof is a disclosure schedule
(individually a "Disclosure Schedule" and collectively the "Disclosure
Schedules") for the Company, setting forth all exceptions and/or qualifications
to the representations and warranties made herein. It is understood and agreed
that any disclosure made on any Disclosure Schedule delivered pursuant hereto
shall be deemed to have been disclosed for purposes of any other Disclosure
Schedule required hereby. The U.K. Stockholder shall make a good faith effort to
cross reference disclosure, as necessary or advisable, between related
Disclosure Schedules.
For purposes of this Section 5, the term Company shall mean and refer
to the U.K. Company and each of the Subsidiaries of the U.K. Company and to any
other predecessor by way of merger or other business combination effectuated
within the past one (1) year.
The representations and warranties made herein are being made for the
benefit of Healthworld and the U.S. Stockholders. The U.K. Stockholder
represents and warrants that all of the following representations and warranties
in this Section 5 are true with respect to the U.K. Company and each of the
Subsidiaries of the U.K. Company at the date of this Agreement and, subject to
Section 7.8 hereof, shall be true on the Closing Date. All representations and
warranties contained in this Section 5 shall survive the Closing Date for a
period of twelve (12) months (the last day of such period being the "Expiration
Date"), except that
(i) the warranties and representations set forth in Section
5.21 hereof (regarding "Taxes") shall survive until such time
as the limitations period has run for all tax periods ended on
or prior to the Closing Date, which shall be deemed to be the
Expiration Date for Section 5.21;
(ii) the warranties and representations set forth in Section
5.29 hereof (regarding "Authority; Ownership") shall survive
forever; and
(iii) solely for purposes of determining whether a claim for
indemnification under Section 11.1 hereof has been made on a
timely basis, and solely to the extent that in connection with
the IPO, Healthworld
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actually incurs liability under the 1933 Act, the 1934 Act, or
any other Federal or state securities laws, the
representations and warranties set forth herein shall survive
until the expiration of any applicable limitations period,
which shall be deemed to be the Expiration Date for such
purposes.
5.1 Due Organization. The Company is a corporation duly incorporated
under the laws of the jurisdiction of its incorporation, and is duly authorized
and qualified under all applicable laws, regulations, ordinances and orders of
public authorities to carry on its business in the places and in the manner as
now conducted except as set forth on Schedule 5.1 or where the failure to be so
authorized or qualified would not have a material adverse effect on the
business, operations, affairs, prospects, properties, assets or condition
(financial or otherwise), of the Company, taken as a whole (as used herein with
respect to the Company, or with respect to any other person, a "Material Adverse
Effect"). Schedule 5.1 sets forth the jurisdiction in which the Company is
incorporated and contains a list of all jurisdictions in which the Company is
authorized or qualified to do business. In all material respects, all accounts,
books, ledgers, financial and other records of whatsoever kind of the Company
have been fully, properly and accurately maintained and are up to date, are in
the possession of the Company and contain true and accurate records of all
matters required by law to be entered therein and do not contain or reflect any
material inaccuracies or discrepancies. No notice or allegation that any of the
said records is incorrect, or should be rectified, in any material respect, has
been received by the Company. The most recent minutes of the Company, which are
dated no earlier than ten business days prior to the date hereof, affirm and
ratify all prior acts of the Company, and of its officers and directors on
behalf of the Company.
Within the five (5) year period ending with the date hereof, no order
has been made or petition presented or resolution passed for the winding-up or
administration of the Company nor has any distress, execution or other process
been levied against the Company or action taken to repossess goods in the
Company's possession and the Company is not insolvent or unable to pay its debts
for the purposes of the Insolvency ▇▇▇ ▇▇▇▇.
Within the five (5) year period ending with the date hereof, no
receiver, administrative receiver or administrator has been appointed of the
whole or any material part of the assets of the Company nor is the U.K.
Stockholder aware of any circumstances likely to give rise to the appointment of
any such receiver, administrative receiver or administrator.
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The Company has complied in all material respects with the provisions
of the Companies ▇▇▇ ▇▇▇▇ and the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and all Returns,
particulars, resolutions and other documents required under the legislation to
be delivered on behalf of the Company to the Registrar of Companies in the
United Kingdom have in all material respects been properly made and delivered.
5.2 Prohibited Activities. Except as set forth on Schedule 5.2, the
Company has not, between the Balance Sheet Date and the date hereof, taken any
of the actions set forth in Section 7.3.
5.3 Capital Stock of the Company. The authorized and issued share
capital of the Company is as set forth in Schedule 5.3. Except as set forth on
Schedule 5.3, all of such shares are owned free and clear of all Encumbrances
and claims of every kind. All of the issued shares of the Company have been
properly issued and allotted and are fully paid or credited as fully paid. Such
shares were offered, issued, sold and delivered by the Company in compliance
with all applicable laws concerning the issuance of securities. None of such
shares were issued in violation of the preemptive rights of any past or present
stockholder.
5.4 Transactions in Capital Stock. Except as set forth on Schedule 5.4,
the Company has not acquired any Company Stock or any stock of any of the
Subsidiaries since January 1, 1995. Except as set forth on Schedule 5.4,
5.4.1 No person has the right (whether exercisable now or in
the future and whether contingent or not) to call for the allotment, issue,
sale, redemption or transfer of any share or loan capital of the Company under
any option or other agreement (including conversion rights and rights of
pre-preemption);
5.4.2 the Company has no obligation (contingent or otherwise)
to purchase, redeem or otherwise acquire any of its shares or any interests
therein (or of any of its Subsidiaries) or to pay any dividend or make any
distribution in respect thereof, nor do any of the Subsidiaries have any
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any of their respective shares or any interest therein or to pay any dividend or
make any distribution in respect thereof;
5.4.3 the Company has no obligation (contingent or otherwise)
to sell any of its shares or any interests therein; and
5.4.4 neither the voting rights attaching to the shares in the
capital of the Company nor the relative ownership of shares among any of its
stockholders has been
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altered or changed in contemplation of the Organization and/or the Healthworld
Plan of Organization.
5.5 No Bonus Shares. Except as set forth on Schedule 5.5, none of the
shares of Company Stock was issued pursuant to awards, grants or bonuses.
5.6 Subsidiaries. Except as set forth on Schedule 5.6, the Company has
no Subsidiaries. Except as set forth in Schedule 5.6 and except for any
corporations or entities with respect to which the Company owns less than 10% of
the issued and outstanding stock, the Company does not presently own, of record
or beneficially, or control, directly or indirectly, any capital stock,
securities convertible into capital stock or any other equity interest in any
corporation, association or business entity nor is the Company, directly or
indirectly, a participant in any joint venture, partnership or other
non-corporate entity.
5.7 Predecessor Status; etc. Set forth in Schedule 5.7 is a listing of
all names of all predecessor companies of the Company, including the names of
any entities acquired by the Company (by stock purchase, merger, or otherwise)
or owned by the Company or from whom the Company previously acquired material
assets, since the date of the Company's incorporation or the date of
incorporation of any predecessor by merger or other business combination,
whichever is earlier. Except as disclosed on Schedule 5.7, the Company has not
been, within such period of time, a Subsidiary or division of another
corporation or a part of an acquisition which was later rescinded.
5.8 Spin-off by the Company. Except as set forth on Schedule 5.8, there
has not been any sale, spin-off or split-up of material assets of either the
Company or any other person or entity that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the Company ("Affiliates") since January 1, 1995.
5.9 Financial Statements. Attached hereto as Schedule 5.9 are copies of
the following financial statements (the "Company Financial Statements") of the
Company: the Company's audited Consolidated Balance Sheets as of November 30,
1996 (the "1996 Balance Sheet"), 1995 and 1994 and Profit and Loss Accounts,
Directors' and Auditors' reports thereon and the notes thereto and all other
documents annexed thereto for each of the years in the three-year period ended
November 30, 1996, the financial statements for the period between the Balance
Sheet Date and June 30, 1997, and the unaudited balance sheet as of June 30,
1997. Such Financial Statements have been prepared in accordance with the
Companies ▇▇▇ ▇▇▇▇, generally accepted accounting principles including all
statements of Standard Accounting Practice and Financial Reporting Standards
applied on a consistent basis throughout the periods indicated (except as noted
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thereon or on Schedule 5.9). Except as set forth on Schedule 5.9, such
Consolidated Balance Sheets as of November 30, 1996, 1995 and 1994 give a true
and fair view of the assets and liabilities and the financial position of the
U.K. Company and the Subsidiaries of the U.K. Company as of the dates indicated
thereon, and the Company Financial Statements give a true and fair view of the
profits and losses for the periods indicated thereon.
5.10 Liabilities and Obligations. Except (i) as set forth on Schedule
5.10, (ii) for liabilities to the extent reflected or reserved against in the
1996 Balance Sheet and (iii) for obligations required by this Agreement, since
the Balance Sheet Date the Company has not incurred any material liabilities of
any kind, character and description, whether accrued, absolute, secured or
unsecured, contingent or otherwise, other than liabilities incurred in the
ordinary course of business. Schedule 5.10 also includes, in the case of those
contingent liabilities related to pending or threatened litigation, or other
liabilities which are not fixed or otherwise accrued or reserved, a good faith
and reasonable estimate of the maximum amount which may be payable. For each
such contingent liability or liability for which the amount is not fixed or is
contested, Schedule 5.10 includes the following information:
5.10.1 a summary description of the liability together with
the following:
5.10.1.1 copies of all relevant documentation
relating thereto;
5.10.1.2 amounts claimed and any other action
or relief sought; and
5.10.1.3 name of claimant and all other
parties to the claim, suit or
proceeding;
5.10.2 the name of each court or agency before which such
claim, suit or proceeding is pending;
5.10.3 the date such claim, suit or proceeding was instituted;
and
5.10.4 a good faith and reasonable estimate of the maximum
amount, if any, which is likely to become payable with respect to each such
liability. If no estimate is provided, the estimate shall for purposes of this
Agreement be deemed to be zero.
5.11 Accounts and Notes Receivable. Schedule 5.11 includes an accurate
list of the accounts and notes receivable of the Company, as of the Balance
Sheet Date, including any such amounts which are not reflected in the balance
sheet as of the
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Balance Sheet Date, and including receivables from and advances to employees and
the U.K. Stockholder. The U.K. Stockholder shall cause the Company to provide to
Healthworld, not later than the Closing Date, (i) an accurate list of all
receivables obtained subsequent to the Balance Sheet Date and (ii) an aging of
all accounts and notes receivable showing amounts due in 30 day aging
categories. Such list and such aging report (the "A/R Aging Reports") shall be
current as of the end of the calendar month which immediately precedes the
Closing Date.
5.12 Permits and Intangibles. The Company holds all licenses, permits
and other governmental authorizations the absence of any of which could have a
Material Adverse Effect on its business. Schedule 5.12 contains an accurate list
and summary description of all such licenses, permits and other governmental
authorizations, including permits, titles (including motor vehicle titles and
current registrations), licenses, certificates, trademarks, tradenames, patents,
patent applications and copyrights owned or held by the Company (including
interests in software or other technology systems, programs and intellectual
property other than software generally available in retail markets). To the
knowledge of the U.K. Stockholder, (a) the licenses, permits and other
governmental authorizations listed on Schedule 5.12 are valid, and (b) the
Company has not received any notice that any governmental authority intends to
cancel, terminate or not renew any such license, permit or other governmental
authorization. The Company has conducted and is conducting its business in
compliance in all material respects with the requirements, standards, criteria
and conditions set forth in the licenses, permits and other governmental
authorizations listed on Schedule 5.12 and is not in violation of any of the
foregoing except where such non-compliance or violation would not have a
Material Adverse Effect on the Company. Except as specifically provided in
Schedule 5.12, the transactions contemplated by this Agreement will not result
in a material default under or a material breach or violation of, or materially
adversely affect the rights and benefits afforded to the Company by, any such
licenses, permits or government authorizations.
5.13 Environmental Matters. Except as set forth on Schedule 5.13, the
Company has, in all material respects, complied with and is in compliance with
all material national, state, local and foreign statutes, laws, ordinances,
regulations, rules, notices, permits, judgments, orders and decrees applicable
to it or any of its respective properties, assets, operations and businesses
relating to environmental protection (collectively "Environmental Laws"). The
Company has no actual or contingent liability in connection with any
Environmental Laws which would have a Material Adverse Effect.
5.14 Personal Property. Schedule 5.14 contains an accurate list of
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5.14.1 all personal property with a value in excess of
(pound)1,250 included (or that will be included) in "depreciable plant, property
and equipment" on the 1996 Balance Sheet,
5.14.2 all other personal property owned by the Company with a
value in excess of (pound)1,250 as of the Balance Sheet Date and acquired since
the Balance Sheet Date and
5.14.3 all leases and agreements in respect of personal
property providing for payments of greater than (pound)625 per annum, including,
(1) true, complete and correct copies of all such leases and (2) an indication
as to which assets are currently owned, or were formerly owned, by the U.K.
Stockholder, relatives of the U.K. Stockholder, or Affiliates of the Company.
Except as set forth on Schedule 5.14,
5.14.4 all personal property used by the Company in its
business is either owned by the Company or leased by the Company pursuant to a
lease included on Schedule 5.14,
5.14.5 all of the personal property listed on Schedule 5.14 is
in good working order and condition, ordinary wear and tear excepted and
5.14.6 all leases and agreements included on Schedule 5.14 are
in full force and effect and constitute valid and binding agreements of the
parties (and their successors) thereto in accordance with their respective
terms.
5.15 Significant Customers; Material Contracts and Commitments.
Schedule 5.15 contains an accurate list of all significant customers, it being
understood and agreed that a "significant customer," for purposes of this
Section 5.15, means any customer (or person or entity) representing 5% or more
of the Company's annual revenues for the one-year period ending with the Balance
Sheet Date. Except to the extent set forth on Schedule 5.15, none of the
Company's significant customers have canceled or substantially reduced or, to
the knowledge of the Company, are currently attempting or threatening to cancel
a contract or substantially reduce utilization of the services provided by the
Company. Schedule 5.15 contains a list of all material contracts, commitments
and similar agreements to which the Company is a party or by which it or any of
its properties are bound (including, but not limited to, contracts with
significant customers, joint venture or partnership agreements, contracts with
any labor organizations, strategic alliances and options to purchase land),
other than agreements listed on Schedule 5.10, 5.14 or 5.16, and in each case
the U.K. Stockholder has
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delivered true, complete and correct copies of such agreements to Healthworld.
The Company has complied with all material commitments and obligations
pertaining to it, and is not in default in any material respect under any
contracts or agreements listed on Schedule 5.15 and no notice of default under
any such contract or agreement has been received which default would have a
Material Adverse Effect on the Company. Also included in Schedule 5.15 is a
summary description of all material plans or projects involving the opening of
new operations, expansion of existing operations, or the acquisition of any
personal property, business or assets.
5.16 Real Property. Schedule 5.16 includes an accurate list of all real
property owned or leased by the Company as of the Balance Sheet Date and
acquired since the Balance Sheet Date, and all other real property, if any, used
by the Company in the conduct of its business. The Company has good and
insurable title to the real property owned by it, subject to no mortgage,
pledge, lien, conditional sales agreement, encumbrance or charge, except as set
forth in Schedule 5.16. The U.K. Stockholder has delivered true, complete and
correct copies of all leases and agreements in respect of real property leased
by the Company. Schedule 5.16 indicates which such properties, if any, are
currently owned, or were formerly owned, by the U.K. Stockholder or business or
personal affiliates of the Company or the U.K. Stockholder. All of such leases
included on Schedule 5.16 are in full force and effect and constitute valid and
binding agreements of the parties (and their successors) thereto in accordance
with their respective terms.
5.17 Insurance. Schedule 5.17 includes
5.17.1 an accurate list as of the Balance Sheet Date of all
insurance policies carried by the Company; and
5.17.2 an accurate list of all insurance loss runs or workers
compensation claims received for the past three (3) policy years.
The U.K. Stockholder has delivered to Healthworld true, complete and correct
copies of all insurance policies currently in effect. Such insurance policies
evidence all of the insurance that the Company is required to carry pursuant to
all of its contracts and other agreements and pursuant to all applicable laws.
All of such insurance policies are currently in full force and effect and shall
remain in full force and effect through the Closing Date. Since January 1, 1995,
no insurance carried by the Company has been canceled by the insurer and the
Company has not been denied any requested coverage.
5.18 Compensation; Employment Agreements; Organized Labor Matters.
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5.18.1 Schedule 5.18 contains an accurate list showing all
officers, directors and Key Employees of the Company, listing all employment
agreements with such officers, directors and Key Employees and the rate of
compensation (and the portions thereof attributable to salary, bonus and other
compensation, respectively) of each of such persons as of the Balance Sheet Date
and the date hereof. The U.K. Stockholder has delivered true, complete and
correct copies of any employment agreements for persons listed on Schedule 5.18.
5.18.2 Except as set forth in Schedule 5.18, since the Balance
Sheet Date, there have been no increases in the compensation payable or any
special bonuses to any officer, director, Key Employee or other employee, except
ordinary salary increases implemented on a basis consistent with past practices.
5.18.3 Except as set forth on Schedule 5.18, the Company is
not bound by or subject to (and none of its respective assets or properties is
bound by or subject to) any arrangement with any labor union, no employees of
the Company are represented by any labor union or covered by any collective
bargaining agreement, no campaign to establish such representation is in
progress and there is no pending or, to the best of the U.K. Stockholder's
knowledge, any threatened labor dispute involving the Company and any group of
its employees nor has the Company experienced any labor interruptions over the
past three years.
5.18.4 The U.K. Stockholder believes that the Company's
relationship with its employees is good.
5.18.5 Except as set forth in Schedule 5.18, all appropriate
notices have been issued under all statutes, regulations and codes of conduct
relevant to the relations between the Company and its employees or any
recognized trade union, except for notices the absence of which would not have a
Material Adverse Effect upon the Company, and the Company has maintained
adequate and suitable records regarding the service of its employees.
5.18.6 Except as set forth in Schedule 5.18, the Company has
not entered into any currently effective collective agreement or arrangement
(whether legally binding or not) with a trade union, works counsel, staff
association or association of trade unions or other body representing any of its
employees nor has it done within the two-year period ending with the date hereof
any act which might reasonably be construed as recognition of such a union or
body.
5.18.7 Schedule 5.18 contains a listing of each written
agreement and a summary of the terms and conditions of each unwritten agreement
pursuant to which any
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officers, directors, Key Employees and Key Consultants of the Company (and their
dependents) are engaged. The summary of unwritten agreements shall include,
without limitation, details of all participation, profit sharing, incentive,
bonus, commission, share option, medical, permanent health insurance, directors
and officers insurance, travel, car, redundancy and other benefit schemes,
arrangements and understandings and whether legally binding upon the Company or
not and of all Key Consultant Agreements with the Company which are in place now
or will be in place at the Closing.
5.18.8 Except as set forth in Schedule 5.18, since January 1,
1997, there have been no increases in the emoluments payable to or changes in
the terms of service of any officer, director or Key Employee of the Company.
5.18.9 Except as set forth in Schedule 5.18, there is not in
existence any contract of employment with officers, directors or employees of
the Company (or any contract for services with any individual) which cannot be
terminated by three months notice or less or (where such a contract has not been
reduced to writing) by reasonable notice without giving rise to a claim for
damages or compensation (other than a statutory redundancy payment or statutory
compensation for unfair dismissal).
5.18.10 Except as set forth in Schedule 5.18, no promise has
been made and the Company is not obliged to increase the emoluments payable to
or to vary the terms of service of any of its directors, other officers and
employees.
5.18.11 Except as set forth in Schedule 5.18, there are not,
nor will there be at Closing, outstanding offers of employment or consultancy
made by the Company and there is no one who has accepted an offer of employment
or consultancy made by the Company but who has not yet taken up that employment
or consultancy.
5.18.12 Except as set forth in Schedule 5.18, neither the
Company nor any of its employees is involved in any industrial or trade dispute
and there are no facts known to the Company which might suggest that there may
be any trade union or industrial dispute involving the Company or that the
disposition of the Company Stock may lead to any trade union or industrial
dispute.
5.18.13 Except as set forth in Schedule 5.18, there are no
amounts owing or promised to any present or former directors, employees or
consultants of the Company other than remuneration accrued due or for
reimbursement of business expenses and no directors, employees or consultants of
the Company have given or been given notice terminating their contracts of
employment or consultancy.
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5.18.14 Except as set forth in Schedule 5.18, no claim has
been made and no liability has been incurred by the Company (a) for breach of
any contract of service or for redundancy payments (including protective awards)
or for compensation for wrongful dismissal or unfair dismissal or for failure to
comply with any order for the reinstatement or re-engagement of any employee or
for the actual or proposed termination or suspension of employment or variation
of any terms of employment of any present or former employee of the Company or
(b) in respect of any payment to be made or benefit to be provided to any
present or former director, employee or consultant of the Company in connection
with the consummation of the transactions contemplated hereby, or (c) for the
breach of or the actual or proposed termination or variation of any contract for
services or consultancy agreement for any present or former consultant to the
Company.
5.18.15 Except as set forth in Schedule 5.18, no gratuitous
payment has been made or promised by the Company in connection with the
disposition of the Company Stock or in connection with the actual or proposed
termination or suspension of employment or variation of any contract of
employment of any present or former director or employee or in connection with
the proposed termination or suspension or variation of any contract for services
or consultancy agreement.
5.18.16 Except as set forth in Schedule 5.18, there are no
material claims pending or, to the knowledge of the U.K. Stockholder, threatened
against the Company:
5.18.16.1 by a present or former employee,
director, consultant or third party,
in respect of an accident or injury
which is not fully covered by
insurance; or
5.18.16.2 by a present or former employee,
director or consultant in relation
to his terms and conditions of
employment or (as the case may be)
consultancy.
5.18.17 Except as set forth in Schedule 5.18, the Company has
in relation to each of its employees (and so far as relevant to each of its
former employees and persons seeking employment) complied with, in all material
respects:
5.18.17.1 all laws and codes of conduct and
practice relevant to the relations
between it and its employees,
prospective employees or any trade
union;
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5.18.17.2 all collective agreements and
customs and practices for the time
being dealing with the terms and
conditions of service of its
employees; and
5.18.17.3 all relevant orders, declarations
and awards made under any relevant
law or code of conduct and practice
affecting the conditions of service
of its employees.
5.18.18 Except as set forth in Schedule 5.18, no Key Employee
has ceased to be employed by the Company (other than through death or retirement
at normal retirement age) during the twelve months prior to the date hereof and
the Company has no reason to believe that such employees intend or are likely to
leave their employment otherwise than through retirement as aforesaid within the
twelve months following the Closing.
5.18.19 Except as set forth in Schedule 5.18, there are no
agreements, arrangements or schemes in operation by or in relation to the
Company pursuant to which any of its employees or officers and/or former
employees or officers and/or their relatives and dependents is entitled to
shares of capital stock or a commission or remuneration of any kind calculated
by reference in whole or in part to turnover, profits or sales.
5.18.20 Except as set forth in Schedule 5.18 or as provided
for in the 1996 Balance Sheet, there is no liability whatsoever to make payment
to or for the benefit of any director or employee or ex-director or ex-employee
or the wife or widow or any other relative of any director, ex-director,
employee or ex-employee of the Company in respect of past service, retirement,
death or disability by way of pension contribution, pension, retirement benefit
lump sum, gratuity or otherwise.
5.18.21 Except as set forth in Schedule 5.18, the Company has
not within a period of one year preceding the date of this Agreement given
notice of any redundancies to the United Kingdom Secretary of State or started
consultations with any independent trade union or association of unions.
5.19 Employee Benefits. Except as set forth in Schedule 5.19, the
Company has no superannuation fund, retirement benefit or other pension schemes
or arrangements. In respect of any such funds, schemes or arrangements which are
disclosed in Schedule 5.19 ("Disclosed Schemes") the Company has no unfunded
contingent obligations and any such funds, schemes or arrangements which are
funded are solvent and are so funded at a level which a prudent employer acting
on actuarial advice would consider as being
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adequate to secure the benefits which may be payable in respect of service prior
to the Closing and (insofar as the provision of any pension is concerned) having
regard to probable future salary increases, or in connection with which the
Company is to become or may become liable to make any payment and no
undertakings or assurances have been given to the employees of the Company as to
the continuance or introduction or increase or improvement of any pension rights
or entitlement which the Company and/or Healthworld would be required to
implement in accordance with good industrial relations practice and whether or
not there is any legal obligation so to do.
5.20 Conformity with Law; Litigation. Except to the extent set forth on
Schedule 5.10 or 5.13, the Company is not in violation or contravention of any
law or regulation or any order of any court or national, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over any of them which would have a Material
Adverse Effect; and except to the extent set forth on Schedule 5.10 or 5.13,
there are no material claims, actions, suits or proceedings, commenced or, to
the knowledge of the Company, threatened, against or affecting the Company, at
law or in equity, or before or by any national, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over any of them and no notice of any such claim, action,
suit or proceeding, whether pending or threatened, has been received. The
Company has conducted and is conducting its business in compliance, in all
material respects, with the requirements, standards, criteria and conditions set
forth in applicable national, state and local statutes, ordinances, permits,
licenses, orders, approvals, variances, rules and regulations, including all
such permits, licenses, orders and other governmental approvals set forth on
Schedules 5.12 and 5.13, and is not in violation of any of the foregoing which
might have a Material Adverse Effect.
5.21 Taxes. Except as set forth in Schedule 5.21:
5.21.1 The provisions for Taxation, including provisions for
deferred tax included in the Financial Statements, have been made in accordance
with generally accepted accounting principles and will be sufficient (on the
basis of the rates of tax current at the date of this Agreement) to cover all
Taxation for which the Company was at the Balance Sheet Date liable or may after
that date become or have become liable for any period ended on or before the
Balance Sheet Date and in particular (but without prejudice to the generality of
the foregoing) will be sufficient to cover such Taxation on or in respect of or
by reference to any profit, gains or income (including deemed profits gains or
income) for any period ended on or before the Balance Sheet Date.
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5.21.2 The Company has duly and punctually paid all Taxation
to the extent that the same ought to have been paid and is under no liability to
pay any fine, penalty or interest or to give any security in connection
therewith.
5.21.3 the Company has made under deduction of Taxation all
payments to any person which ought to have been made under deduction of Taxation
(with particular reference to Sections 134, 347 to 350 and 524 of the Taxes Act)
and has (if required by law to do so) accounted to the Inland Revenue for the
Taxation so deducted;
5.21.4 the Company has in all material respects properly
operated the P.A.Y.E. system, and all National Insurance Contributions and sums
payable to the Inland Revenue and the Department of Social Security under the
P.A.Y.E. system (including ex gratia payments and compensation for loss of
office) (Section 148 of the Taxes Act) (Sections 153 to 168G of the Taxes Act)
due and payable by the Company up to the date hereof have been paid;
5.21.5 the Company has duly paid all Taxation shown to be due
to the Inland Revenue by all Returns required to be made under Schedule 13 to
the Taxes Act (advance corporation tax);
5.21.6 the Company has correctly operated a statutory sick pay
scheme in accordance with the provisions of the United Kingdom Social Security
Contributions and Benefits ▇▇▇ ▇▇▇▇;
5.21.7 prior to the Closing all documents to which the Company
is a party and all documents in the enforcement of which the Company may be
interested or to the production of which the Company is entitled which are
necessary to establish the title of the Company to any asset and which attract
stamp duty in the United Kingdom or elsewhere have been properly stamped and the
appropriate stamp duty has been paid and all duty payable in respect of the
capital of the Company has been paid and the Company has duly paid any stamp
duty reserve tax for which it has at any time been liable.
5.21.8 The Company has and at Closing will have duly and
punctually made all Returns, given all notices and accounts and supplied all
other information which ought to have been made given or supplied for the
purpose of and in respect of Taxation in the United Kingdom and so far as the
U.K. Stockholder is aware, elsewhere, to the Inland Revenue, H.M. Commissioners
of Customs and Excise or to any other governmental authority (including any
governmental authority of a foreign jurisdiction) and has and at Closing will
have kept and maintained all records, invoices and other documents which ought
to have been kept or maintained for such purposes and:
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5.21.8.1 all such information, Returns,
accounts, notices, records, invoices
and other documents were, are, and
at the Closing will be, in all
material respects, up-to-date,
accurate, and made on the proper
basis and are not, nor, is likely to
be, the subject of any dispute with
the Inland Revenue, H.M.
Commissioners of Customs and Excise
or other appropriate authorities
concerned;
5.21.8.2 the Company has not within the
preceding seven years been the
subject of a back duty, PAYE or
other audit or investigation by the
Inland Revenue or H.M. Commissioners
of Customs and Excise (or other
similar authority outside the United
Kingdom);
5.21.8.3 all clearances and consents obtained
from H.M. Treasury, the Inland
Revenue, H.M. Commissioners of
Customs and Excise or other
authority whether in the United
Kingdom or elsewhere have been
obtained after full, complete and
accurate disclosure of all material
facts and considerations and no such
clearances or consent is, to the
knowledge of the U.K. Stockholder,
liable to be withdrawn, modified or
rendered void and all such
clearances and consents have been
disclosed to Healthworld.
5.22 No Violations. Neither the Company nor, to the knowledge of the
Company, any other party thereto, is in default in any material respect under
any lease, instrument, agreement, license, or permit set forth on Schedule 5.12,
5.13, 5.14, 5.15 or 5.16, or any other material agreement to which it is a party
or by which its properties are bound (the "Material Documents"). Except as set
forth in Schedule 5.22,
5.22.1 the rights and benefits of the Company under the
Material Documents will not be materially adversely affected by the transactions
contemplated hereby;
5.22.2 the execution of this Agreement and the performance of
the obligations hereunder and the consummation of the transactions contemplated
hereby will not result in any material violation or breach or constitute a
material default under, any of the terms or provisions of the Material Documents
or the Company's Memorandum and Articles of Association.
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5.22.3 none of the Material Documents requires notice to or
the consent or approval of, any governmental agency or other third party with
respect to any of the transactions contemplated hereby in order to remain in
full force and effect; and
5.22.4 consummation of the transactions contemplated hereby
will not give rise to any right to termination, cancellation or acceleration or
loss of any material right or benefit.
Except as set forth on Schedule 5.22, none of the Material Documents prohibits
the use or publication by Healthworld or any of its Subsidiaries of the name of
any other party to such Material Document, and none of the Material Documents
prohibits or restricts the Company from freely providing services to any other
customer or potential customer of the Company, Healthworld, or any of their
respective Subsidiaries.
5.23 Government Contracts. Except as set forth on Schedule 5.23, the
Company is not now a party to any governmental contract subject to price
redetermination or renegotiation.
5.24 Absence of Changes. Since the Balance Sheet Date, except as set
forth on Schedule 5.24, there has not been:
5.24.1 any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or business of the
Company;
5.24.2 any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting the properties or business of the
Company;
5.24.3 any change in the authorized capital of the Company or
its outstanding securities or any change in its ownership interests or any grant
of any options, warrants, calls, conversion rights or commitments;
5.24.4 any declaration or payment of any dividend or
distribution in respect of the shares in the capital of the Company or any
direct or indirect redemption, purchase or other acquisition of any of the
shares in the capital of the Company;
5.24.5 any increase in the compensation, bonus, sales
commissions or fee arrangement payable or to become payable by the Company to
any of its officers, directors, stockholders, employees, consultants or agents,
except for ordinary and customary bonuses and salary increases for employees in
accordance with past practice;
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5.24.6 any work interruptions, labor grievances or claims
filed, or any other event or condition of any character materially adversely
affecting the business of the Company;
5.24.7 any sale or transfer, or any agreement to sell or
transfer, any material assets, property or rights of the Company to any person,
including, without limitation, the U.K. Stockholder and his affiliates;
5.24.8 any cancellation, or agreement to cancel, any material
indebtedness or other obligation owing to the Company, including without
limitation any material indebtedness or obligation of the U.K. Stockholder or
any affiliate thereof;
5.24.9 any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the assets,
property or rights of the Company or requiring consent of any party to the
transfer and assignment of any such assets, property or rights;
5.24.10 any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets outside of
the ordinary course of the Company's business;
5.24.11 any waiver of any material rights or claims of the
Company;
5.24.12 any material breach, amendment or termination of any
material contract, agreement, license, permit or other right to which the
Company is a party;
5.24.13 any transaction by the Company outside the ordinary
course of its respective businesses;
5.24.14 any cancellation or termination of a material contract
with a customer or client prior to the scheduled termination date; or
5.24.15 any other distribution to or for the benefit of the
U.K. Stockholder of property or assets by the Company.
5.25 Deposit Accounts; Powers of Attorney. Schedule 5.25 contains an
accurate schedule as of the date of the Agreement of:
5.25.1 the name of each financial institution in which the
Company has accounts or safe deposit boxes;
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5.25.2 the names in which the accounts or boxes are held;
5.25.3 the type of account and account number; and
5.25.4 the name of each person authorized to draw thereon or
have access thereto.
Schedule 5.25 also sets forth the name of each person, corporation, firm or
other entity holding a general or special power of attorney from the Company and
a description of the terms of such power.
5.26 Brokers and Agents. Except as disclosed on Schedule 5.26, the U.K.
Stockholder did not employ any broker or agent in connection with this
transaction.
5.27 Relations with Governments. Except for political contributions
made in a lawful manner which, in the aggregate, do not exceed (pound)6,250 per
year for each year in which the U.K. Stockholder has been a stockholder of the
Company, the Company has not made, offered or agreed to offer anything of value
to any governmental official, political party or candidate for government
office. If political contributions made by the Company have exceeded
(pound)6,250 per year for each year in which the U.K. Stockholder has been a
stockholder of the Company, each contribution in the amount of (pound)3,125 or
more shall be described on Schedule 5.27.
5.28 Disclosure.
5.28.1 If, prior to the 25th day after the date of the final
prospectus of Healthworld utilized in connection with the IPO, the U.K.
Stockholder becomes aware of any fact or circumstance which would change (or, if
after the Closing Date, would have changed) a representation or warranty of the
U.K. Stockholder in this Agreement or would affect any document delivered
pursuant hereto in any material respect, the U.K. Stockholder shall immediately
give notice of such fact or circumstance to Healthworld. However, subject to the
provisions of Section 7.8, such notification shall not relieve the U.K.
Stockholder of his obligations under this Agreement.
5.28.2 The U.K. Stockholder acknowledges and agrees:
5.28.2.1 that there exists no firm
commitment, binding agreement, or
promise or other assurance of any
kind, whether express or implied,
oral or written, that a Registration
Statement will become effective or
that the IPO pursuant thereto will
occur at a particular
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price or within a particular range
of prices or occur at all;
5.28.2.2 that neither Healthworld nor any of
its officers, directors, agents or
representatives nor any Underwriter
shall have any liability to the
Company, the U.K. Stockholder or any
other person affiliated or
associated with the Company for any
failure of the Registration
Statement to become effective, the
IPO to occur at a particular price
or within a particular range of
prices or to occur at all; and
5.28.2.3 that the decision of U.K.
Stockholder to enter into this
Agreement, has been or will be made
independent of, and without reliance
upon, any statements, opinions or
other communications, or due
diligence investigations which have
been or will be made or performed by
any prospective underwriters,
relative to Healthworld or the
prospective IPO.
5.29 Authority; Ownership. The U.K. Stockholder has the full legal
right, power and authority to enter into this Agreement. The U.K. Stockholder is
the registered and beneficial owner with full title guarantee of the shares of
the Company Stock identified in Schedule 5.3 as being owned by the U.K.
Stockholder and neither owns nor has any right, title or interest in or to any
other Company Stock, and, except as set forth on Schedule 5.29, such Company
Stock is owned free and clear of all Encumbrances and claims of every kind.
5.30 Preemptive Rights. The U.K. Stockholder does not have, or hereby
waives, any preemptive or other right to acquire shares of Company Stock or
Healthworld Stock that the U.K. Stockholder has or may have had other than
rights of the U.K. Stockholder to acquire Healthworld Stock pursuant to this
Agreement or any option granted by Healthworld.
5.31 No Intention to Dispose of Healthworld Stock. The U.K. Stockholder
is not under any binding commitment or contract to sell, exchange or otherwise
dispose of shares of Healthworld Stock received in connection with the
Organization.
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6 Representations of Healthworld.
Healthworld represents and warrants that all of the following
representations and warranties in this Section 6 are true at the date of this
Agreement and, subject to Section 7.8 hereof, shall be true on the Closing Date.
All such representations and warranties shall survive the Closing Date for a
period of twelve (12) months (the last day of such period being the "Expiration
Date"), except that, solely for purposes of determining whether a claim for
indemnification under Section 11.2.4 hereof has been made on a timely basis and
solely to the extent that in connection with the IPO any person claiming
indemnification from Healthworld hereunder actually incurs liability under the
1933 Act, the 1934 Act, or any other Federal or state securities laws, the
representations and warranties set forth herein shall survive until the
expiration of any applicable limitations period, which shall be deemed to be the
Expiration Date for such purposes.
6.1 Due Organization. Healthworld is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware,
and is duly authorized and qualified to do business under all applicable laws,
regulations, ordinances and orders of public authorities to carry on its
business in the places and in the manner as contemplated.
6.2 Authorization. The representatives of Healthworld executing this
Agreement have the authority to enter into and bind Healthworld to the terms of
this Agreement. Healthworld has the full legal right, power and authority to
enter into this Agreement.
6.3 Capital Stock of Healthworld. The authorized capital stock of
Healthworld is as set forth in Schedule 6.3. All of the issued and outstanding
shares of the capital stock of Healthworld are owned by ▇▇▇▇▇▇▇▇ in the amount
set forth in Schedule 6.3. All of such shares are owned free and clear of all
liens, security interests, pledges, charges, voting trusts, restrictions,
encumbrances and claims of every kind. All of the issued and outstanding shares
of the capital stock of Healthworld have been duly authorized and validly
issued, are fully paid and nonassessable, and are owned of record and
beneficially by ▇▇▇▇▇▇▇▇. Such shares were offered, issued, sold and delivered
by Healthworld in compliance with all applicable state and Federal laws
concerning the issuance of securities. None of such shares were issued in
violation of the preemptive rights of any past or present stockholder of
Healthworld.
6.4 Transactions in Capital Stock. Except for the obligations under the
agreements which form a part of the Healthworld Plan of Organization, no option,
warrant, call, conversion right or commitment of any kind exists which obligates
Healthworld to issue any of its authorized but unissued capital stock, and
Healthworld
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has no obligation (contingent or otherwise) to purchase, redeem or otherwise
acquire any of its equity securities or any interests therein or to pay any
dividend or make any distribution in respect thereof. At the time of issuance
thereof, the Healthworld Stock to be delivered to the U.K. Stockholder pursuant
to this Agreement will constitute valid and legally issued shares of
Healthworld, fully paid and nonassessable. The shares of Healthworld Stock to be
issued to the U.K. Stockholder pursuant to this Agreement will not be registered
under the 1933 Act, except as provided in Section hereof.
6.5 Liabilities and Obligations. Healthworld does not have any
liabilities, contingent or otherwise, except as set forth in or contemplated by
this Agreement and the other agreements forming a part of the Healthworld Plan
of Organization, including without limitation the underwriting agreement to be
entered into between Healthworld and the Underwriters, for fees incurred in
connection with the transactions contemplated hereby and thereby, and any
liabilities and obligations which may exist under the Healthworld License
Agreement, a copy of which is annexed to Schedule 6.5.
6.6 Conformity with Law; Litigation. Healthworld is not in violation of
any law or regulation or any order of any court or Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over it which would have a Material Adverse
Effect; and there are no material claims, actions, suits or proceedings pending
or, to the knowledge of Healthworld, threatened against or affecting
Healthworld, at law or in equity, or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality having jurisdiction over it and no notice of any claim, action,
suit or proceeding, whether pending or threatened, has been received.
Healthworld is not in violation of its certificate of incorporation, its by-laws
or any other corporate governing instrument.
6.7 Validity of Obligations. The execution and delivery of this
Agreement by Healthworld and the performance of the transactions contemplated
herein have been duly and validly authorized by the Board of Directors of
Healthworld. This Agreement has been duly and validly authorized by all
necessary corporate action and is a legal, valid and binding obligation of
Healthworld.
6.8 Limited Business Conducted. Healthworld was formed on September 12,
1996 solely for the purpose of entering into and consummating the Healthworld
Plan of Organization. Healthworld has not filed any Returns or extension
requests in respect of Tax. Healthworld has not since its formation conducted
any business, acquired any assets, incurred any liabilities or entered into any
agreements, except Healthworld has entered into the Healthworld License
Agreement and has engaged in other limited startup activities. It is anticipated
that prior to the Closing, Healthworld will institute an
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Incentive Stock Option Plan; however, Healthworld covenants that no options will
be granted before the Closing.
7 Covenants Prior to Closing.
For purposes of this Section 7, the term Company shall mean and refer
to the U.K. Company and each of the Subsidiaries of the U.K. Company.
7.1 Access and Cooperation; Due Diligence. Between the date of this
Agreement and the Closing Date, the U.K. Stockholder will cause the Company to
afford to the U.S. Stockholder reasonable access to all of the Company's sites,
properties, books and records during normal business hours and will furnish such
additional financial and operating data and other information as to the business
and properties of the Company as may from time to time be reasonably requested.
The U.K. Stockholder will cooperate, and will cause the Company to cooperate, in
the preparation of any documents or other material which may be reasonably
required in connection with any documents or materials required by this
Agreement. The U.K. Stockholder and the Company will treat all information
obtained in connection with the negotiation and performance of this Agreement or
the due diligence investigations conducted as confidential in accordance with
the provisions of Section hereof.
7.2 Conduct of Business Pending Closing. Between the date of this
Agreement and the Closing Date, the U.K. Stockholder shall cause the Company to,
except as set forth on Schedule 7.2 of its respective Disclosure Schedule:
7.2.1 carry on its respective businesses in substantially the
same manner as it has heretofore been conducted and not introduce any material
new method of management, operation or accounting;
7.2.2 maintain, in all material respects, its respective
properties and facilities, including those held under leases, in as good working
order and condition as at present, ordinary wear and tear excepted;
7.2.3 perform in all material respects all of its respective
obligations under agreements relating to or affecting its respective assets,
properties or rights;
7.2.4 keep in full force and effect present insurance policies
or other comparable insurance coverage;
7.2.5 use its reasonable best efforts to maintain and preserve
its business organization intact, retain its respective present key employees
and maintain its
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respective relationships with suppliers, customers and others having business
relations with the Company;
7.2.6 maintain compliance with all material permits, laws,
rules and regulations, consent orders, and all other orders of applicable
courts, regulatory agencies and similar governmental authorities;
7.2.7 maintain present debt and lease instruments and not
enter into new or amended debt or lease instruments, except in the ordinary
course of business; and
7.2.8 maintain or reduce present salaries and commission
levels for all officers, directors, employees and agents except for ordinary and
customary bonus and salary increases for employees in accordance with past
practices.
7.3 Prohibited Activities. Except as disclosed on Schedule 7.3, between
the date hereof and the Closing Date, the U.K. Stockholder will not permit the
Company to:
7.3.1 make any change in its Memorandum and Articles of
Association;
7.3.2 issue any securities, options, warrants, calls,
conversion rights or commitments relating to its securities of any kind other
than in connection with the exercise of options or warrants listed in Schedule
5.4;
7.3.3 declare or pay any dividend, or make any distribution in
respect of its shares whether now or hereafter outstanding, or purchase, redeem
or otherwise acquire or retire for value any shares;
7.3.4 enter into any contract or commitment or incur or agree
to incur any liability or make any capital expenditures, except if it involves
an amount not in excess of (pound)6,250;
7.3.5 create, assume or permit to exist any mortgage, pledge
or other lien or encumbrance upon any assets or properties whether now owned or
hereafter acquired, except:
7.3.5.1 with respect to purchase money liens
incurred in connection with the acquisition
of equipment with an aggregate cost not in
excess of (pound)6,250 necessary or
desirable for the conduct of the businesses
of the Company,
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7.3.5.2 liens for taxes either not yet due or being
contested in good faith and by appropriate
proceedings (and for which contested taxes
adequate reserves have been established and
are being maintained) or
7.3.5.3 materialmen's, mechanics', workers',
repairmen's, employees' or other like liens
arising in the ordinary course of business,
or
7.3.5.4 liens set forth on Schedule 5.10 hereto;
7.3.6 sell, assign, lease or otherwise transfer or dispose of
any property or equipment except in the ordinary course of business;
7.3.7 negotiate for the acquisition of any business or the
start-up of any new business;
7.3.8 merge or consolidate or agree to merge or consolidate
with or into any other corporation;
7.3.9 waive any material rights or claims of the Company;
provided that the Company may negotiate and adjust bills in the course of good
faith disputes with customers in a manner consistent with past practice,
provided, further, that such adjustments shall not be deemed to be included in
Schedule 5.11 unless specifically listed thereon;
7.3.10 commit a material breach or amend or terminate any
material agreement, permit, license or other right of the Company; or
7.3.11 enter into any other transaction outside the ordinary
course of its business or prohibited hereunder.
7.4 No Shop. The U.K. Stockholder shall not, and he shall not permit
the U.K. Company, nor any agent, officer, director, trustee or any
representative of any of the foregoing, during the period commencing on the date
of this Agreement and ending with the earlier to occur of the Closing Date or
the termination of this Agreement in accordance with its terms, directly or
indirectly, to:
7.4.1 solicit or initiate the submission of proposals or
offers from any person for,
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7.4.2 participate in any discussions pertaining to, or
7.4.3 furnish any information to any person other than
Healthworld or its authorized agents relating to, any acquisition or purchase of
all or a material amount of the assets of, or any equity interest in, the
Company, or a consolidation or business combination of the Company.
7.5 Further Assurances. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents or take such other action as may be reasonably necessary or convenient
to carry out the transactions contemplated hereby.
7.6 Agreements. The U.K. Stockholder shall and he shall cause the
Company to terminate any stockholders agreements, voting agreements, voting
trusts, options, warrants and employment agreements between the Company and any
employee listed on Schedule 9.10 hereto on or prior to the Closing Date.
7.7 Notification of Certain Matters. The U.K. Stockholder shall give
prompt notice to Healthworld and the U.S. Stockholders of:
7.7.1 the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty of the U.K. Stockholder contained herein to be untrue
or inaccurate in any material respect at or prior to the Closing; and
7.7.2 any material failure of the U.K. Stockholder, the
Company or any of its Subsidiaries to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder.
The delivery of any notice pursuant to this Section 7.7 shall not be deemed to
7.7.3 modify the representations or warranties hereunder of
the party delivering such notice, which modification may only be made pursuant
to Section 7.8,
7.7.4 modify the conditions set forth in Sections 8 and 9, or
7.7.5 limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
7.8 Amendment of Schedules. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this Agreement,
such party
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shall have the continuing obligation until 24 hours prior to the anticipated
effectiveness of the Registration Statement to supplement or amend promptly the
Schedules hereto with respect to any matter hereafter arising or discovered
which, if existing or known at the date of this Agreement, would have been
required to be set forth or described in the Schedules, provided however, that
supplements and amendments to Schedules 5.10, 5.11, 5.14 and 5.15 shall only
have to be delivered at the Closing Date, unless such Schedule is to be amended
to reflect an event occurring other than in the ordinary course of business.
7.9 Cooperation in Preparation of Registration Statement. The U.K.
Stockholder shall furnish or cause to be furnished to Healthworld and the
Underwriters all of the information concerning the Company and the U.K.
Stockholder required for inclusion in, and will cooperate with Healthworld and
the Underwriters in the preparation of, the Registration Statement and the
prospectus included therein (including audited and unaudited financial
statements, prepared in accordance with generally accepted accounting
principles, in form suitable for inclusion in the Registration Statement). The
U.K. Stockholder agrees promptly to advise Healthworld if at any time during the
period in which a prospectus relating to the IPO is required to be delivered
under the 1933 Act, any information contained in the prospectus concerning the
Company or the U.K. Stockholder becomes incorrect or incomplete in any material
respect, and to provide the information needed to correct such inaccuracy. The
U.K. Stockholder represents and warrants that the Registration Statement will
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading; provided,
however, that the U.K. Stockholder shall not have responsibility for any such
inclusions or omissions to the extent they relate to the U.S. Companies and do
not relate to the Company.
8 Conditions Precedent to Obligations of the U.K. Stockholder.
The obligations of the U.K. Stockholder with respect to actions to be
taken on the Closing Date are subject to the satisfaction or waiver on or prior
to the Closing Date of all of the following conditions.
8.1 Representations and Warranties; Performance of Obligations by U.S.
Stockholders and ▇▇▇▇▇▇. All representations and warranties of the U.S.
Stockholders and ▇▇▇▇▇▇ contained in their respective Organization Agreements
shall, if qualified as to materiality, be true and correct in all material
respects, and if not so qualified, be true and correct, as of the Closing Date
as though such representations and warranties had been made as of that time. All
of the terms, covenants and conditions of the U.S. Stockholders and ▇▇▇▇▇▇
contained in their respective Organization Agreements shall
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have been duly complied with and performed in all material respects.
Certificates to the foregoing effect dated the Closing Date, signed by each of
the U.S. Stockholders and ▇▇▇▇▇▇, shall have been delivered to the U.K.
Stockholder.
8.2 Satisfaction. All actions, proceedings, instruments and documents
required to carry out this Agreement and the respective Organization Agreements
of the U.S. Stockholders and ▇▇▇▇▇▇ and any other agreement incidental hereto or
thereto and all other related legal matters shall be satisfactory to the U.K.
Stockholder and his counsel. The U.K. Stockholder shall be satisfied that the
Registration Statement and the prospectus forming a part thereof, including any
amendments thereof or supplements thereto, shall not contain any untrue
statement of a material fact, or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
provided that the condition contained in this sentence shall be deemed satisfied
if the U.K. Stockholder shall have failed to inform Healthworld in writing prior
to the effectiveness of the Registration Statement of the existence of an untrue
statement of a material fact or the omission of such a statement of a material
fact.
8.3 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Organization or the IPO and no governmental agency or body shall
have taken any other action or made any request of the Company or the U.K.
Stockholder as a result of which the U.K. Stockholder deems it inadvisable to
proceed with the transactions hereunder.
8.4 Opinions of Counsel. The U.K. Stockholder shall have received an
opinion from counsel for the U.S. Stockholders and counsel for ▇▇▇▇▇▇, dated the
Closing Date.
8.5 Consents and Approvals. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transaction contemplated herein shall have been obtained and made.
8.6 No Material Adverse Change. No event or circumstance shall have
occurred with respect to any of the U.S. Companies which would constitute a
Material Adverse Effect.
8.7 Secretary's Certificates; Good Standing. The U.K. Stockholder shall
have received (a) certificates, dated the Closing Date and signed by the
secretary of the U.S. Companies certifying the truth and correctness of attached
copies of the U.S. Companies' respective Certificates of Incorporation
(including amendments thereto) and By-Laws (including amendments thereto) and
such other matters as may reasonably be requested by the U.K. Stockholder, (b) a
certificate, dated the Closing Date and signed
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by the secretary of Healthworld, certifying the truth and correctness of
attached copies of Healthworld's certificate of incorporation (including
amendments thereto) and by-laws (including amendments thereto) and such other
matters as may reasonably be requested by the U.K. Stockholder, and (c) a
certificate of good standing for Healthworld in the State of Delaware.
8.8 Employment Agreements. Each of the persons listed on Schedule shall
have entered into an employment agreement substantially in the form of Exhibit
hereto, for the annual compensation set forth on Schedule 8.8.
8.9 Conformity With ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter of Intent and Underwriters'
Engagement Letter.
8.9.1 Corporate governance shall be in accord with section 1.3
of the ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter of Intent; and
8.9.2 An agreement shall have been executed by and among the
U.K. Stockholder, Milton, Bourne, Moreton and the U.S. Stockholders providing
for the rights of refusal upon private sale, as contemplated by Section 1.5.1 of
the ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ Letter of Intent; and
8.9.3 The Pricing shall have occurred.
8.10 Simultaneous Closings. The Closings pursuant to the Organization
Agreements with respect to the U.S. Stockholders and ▇▇▇▇▇▇ shall have occurred
simultaneously with the Closing hereunder.
9 Conditions Precedent to Obligations of Healthworld.
The obligations of Healthworld with respect to actions to be taken on
the Closing Date are subject to the satisfaction or waiver on or prior to the
Closing Date of all of the following conditions.
9.1 Representations and Warranties; Performance of Obligations. All the
representations and warranties of the U.K. Stockholder contained in this
Agreement shall, if qualified as to materiality, be true and correct in all
material respects, and if not so qualified, be true and correct, as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date; all of the terms, covenants and conditions
of this Agreement to be complied with or performed by the U.K. Stockholder and
the U.K. Company on or before the Closing Date shall have been duly performed or
complied with in all material respects; and the U.K. Stockholder
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shall have delivered to Healthworld certificates dated the Closing Date and
signed by him to such effect.
9.2 Satisfaction. All actions, proceedings, instruments and documents
required to carry out this Agreement and the respective Organization Agreements
of the U.S. Stockholders and the Minority Stockholders and any other agreement
incidental hereto or thereto and all other related legal matters shall be
satisfactory to Healthworld and its counsel. Healthworld shall be satisfied that
the Registration Statement and the prospectus forming a part thereof, including
any amendments thereof or supplements thereto, shall not contain any untrue
statement of a material fact, or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading.
9.3 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to restrain
or prohibit the Organization or the IPO and no governmental agency or body shall
have taken any other action or made any request of Healthworld or any Company as
a result of which the management of Healthworld deems it inadvisable to proceed
with the transactions hereunder.
9.4 Opinions of Counsel. Healthworld shall have received an opinion
from counsel to the U.K. Stockholder, dated the Closing Date, in form and
substance acceptable to counsel for Healthworld.
9.5 Consents and Approvals. All necessary consents of and filings with
any governmental authority or agency relating to the consummation of the
transaction contemplated herein shall have been obtained and made.
9.6 No Material Adverse Change. No event or circumstance shall have
occurred with respect to any of the Companies which would constitute a Material
Adverse Effect, and none of the Companies shall have suffered any material loss
or damages to any of its respective properties or assets, whether or not covered
by insurance, which change, loss or damage materially affects or impairs the
ability of any of the Companies to conduct their respective businesses.
9.7 Secretary's Certificates. Healthworld shall have received
certificates, dated the Closing Date and signed by the secretary of the Company,
certifying the truth and correctness of attached copies of the Company's
Certificate of Incorporation (including amendments thereto), and Memorandum and
Articles of Association (including amendments thereto).
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9.8 Employment Agreements. Each of the persons listed on Schedule 8.8
shall have entered into an employment agreement substantially in the form of
Exhibit 8.8 hereto, for the annual compensation set forth on Schedule 8.8.
9.9 Stockholder's Release. The U.K. Stockholder shall have delivered to
Healthworld an instrument dated the Closing Date releasing the Company from any
and all claims of the U.K. Stockholder against the Company and Healthworld and
obligations of the Company and Healthworld to the U.K. Stockholder, except for
(x) items specifically identified on Schedules 5.10 and 5.15 as being claims of
or obligations to the U.K. Stockholder, (y) continuing obligations to the U.K.
Stockholder relating to his employment by Healthworld and (z) obligations
arising under this Agreement or the transactions contemplated hereby.
9.10 Termination of Related Party Agreements. Except as set forth on
Schedule , all existing agreements between any of the Companies, the U.K.
Stockholder, Milton, Bourne, Moreton and Cater shall have been canceled
effective as of the Closing Date.
9.11 Simultaneous Closings. The Closings pursuant to the Organization
Agreements with respect to the U.S. Stockholders, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and Moreton
shall occur simultaneously with the Closing hereunder.
10 Covenants of Healthworld and the U.K. Stockholder after Closing.
10.1 Release From Guarantees; Repayment of Certain Obligations.
Healthworld shall use commercially reasonable efforts to have the U.K.
Stockholder released from any and all guarantees on any indebtedness that he
personally guaranteed and from any and all pledges of assets that he pledged to
secure such indebtedness for the benefit of the Company, with all such
guarantees on indebtedness being assumed by Healthworld. In the event that
Healthworld cannot obtain such releases from the lenders of any such guaranteed
indebtedness on or prior to 120 days subsequent to the Closing Date, Healthworld
shall pay off or otherwise refinance or retire such indebtedness. From and after
the Closing Date and until such time as all of such indebtedness is paid off,
refinanced or retired, Healthworld shall maintain unencumbered funds in amounts
sufficient to provide for such pay off, refinancing or retirement, provided that
Healthworld may use such funds for other purposes, in its sole discretion, with
the prior written consent of the U.K. Stockholder.
10.2 Preservation of Tax and Accounting Treatment. Except as
contemplated by this Agreement or the Registration Statement, after the Closing
Date, Healthworld
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shall not and shall not permit any of its Subsidiaries to undertake any act that
would jeopardize the tax-free status of the Organization.
10.3 Preparation and Filing of Tax Returns.
10.3.1 The U.K Stockholder shall cause the Companies to file
or cause to be filed all required separate Returns of any Acquired Party for all
taxable periods that end on or before the Closing Date.
10.3.2 Healthworld shall file or cause to be filed all
required separate Returns of, or that include, any Acquired Party for all
taxable periods ending after the Closing Date.
10.3.3 Each party hereto shall, and shall cause its
Subsidiaries and affiliates to, provide to each of the other parties hereto such
cooperation and information as any of them reasonably may request in filing any
Return, amended Return or claim for refund, determining a liability for Taxes or
a right to refund of Taxes or in conducting any audit or other proceedings in
respect of Taxes. Such cooperation and information shall include providing
copies of all relevant portions of relevant Returns, together with relevant
accompanying schedules and relevant work papers, relevant documents relating to
rulings or other determinations by taxing authorities and relevant records
concerning the ownership and tax basis of property, which such party may
possess. Each party shall make its employees reasonably available on a mutually
convenient basis at its cost to provide explanation of any documents or
information so provided. Subject to the preceding sentence, each party required
to file Returns pursuant to this Agreement shall bear all costs of filing such
Returns.
10.3.4 Healthworld and the U.K. Stockholder shall comply with,
and the U.K. Stockholder shall cause the Company to comply with, the Tax
reporting requirements of Section 1.351-3 of the Treasury Regulations
promulgated under the Code, and treat the transaction as a tax-free contribution
under Section 351(a) of the Code.
11 Indemnification.
The U.K. Stockholder and Healthworld each make the following covenants
that are applicable to them, respectively:
11.1 General Indemnification by the U.K. Stockholder. The U.K.
Stockholder covenants and agrees he will indemnify, defend, protect and hold
harmless Healthworld at all times, from and after the date of this Agreement
until the Expiration
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Date, from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys' fees and expenses of
investigation) incurred by Healthworld as a result of or arising from:
11.1.1 any breach of the representations or warranties of the
U.K. Stockholder set forth herein or on the Disclosure Schedules or certificates
delivered by him in connection herewith,
11.1.2 any breach of any covenant or agreement on the part of
the U.K. Stockholder under this Agreement,
11.1.3 any liability under the 1933 Act, the 1934 Act or other
Federal or state law or regulation, at common law or otherwise, arising out of
or based upon any untrue written statement or alleged untrue written statement
of a material fact relating to any of the Companies or the U.K. Stockholder, and
provided to Healthworld or its counsel by the U.K. Stockholder in the
Registration Statement or any prospectus forming a part thereof, or any
amendment thereof or supplement thereto, or arising out of or based upon any
omission or alleged omission to state therein a material fact relating to any of
the Companies or the U.K. Stockholder required to be stated therein or necessary
to make the statements therein not misleading or
11.1.4 the matters described on Schedule 11.1.4,
11.2 Indemnification by Healthworld. Healthworld covenants and agrees
that it will indemnify, defend, protect and hold harmless the U.K. Stockholder
at all times from and after the date of this Agreement until the Expiration
Date, from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys, fees and expenses of
investigation) incurred by the U.K. Stockholder as a result of or arising from:
11.2.1 any breach by Healthworld of its representations and
warranties set forth herein or on the Disclosure Schedules or certificates
delivered by it in connection herewith;
11.2.2 any breach of any covenant or agreement on the part of
Healthworld under this Agreement,
11.2.3 any liability under the 1933 Act, the 1934 Act or other
Federal or state law or regulation, at common law or otherwise, arising out of
or based upon any
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untrue statement or alleged untrue statement of a material fact relating to
Healthworld or any of the other company forming a part of the Healthworld Plan
of Organization contained in any preliminary prospectus, the Registration
Statement or any prospectus forming a part thereof, or any amendment thereof or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact relating to Healthworld or any other
company forming a part of the Healthworld Plan of Organization required to be
stated therein or necessary to make the statements therein not misleading, or
11.2.4 the matters described on Schedule 11.2.4.
11.3 Third Person Claims. Promptly after any party hereto (hereinafter
the "Indemnified Party") has received notice of or has knowledge of any claim by
a person not a party to this Agreement ("Third Person"), or the commencement of
any action or proceeding by a Third Person, the Indemnified Party shall, as a
condition precedent to a claim with respect thereto being made against any party
obligated to provide indemnification pursuant to Section 11.1 or 11.2 hereof
(hereinafter the "Indemnifying Party"), give the Indemnifying Party written
notice of such claim or the commencement of such action or proceeding. Such
notice shall state the nature and the basis of such claim and a reasonable
estimate of the amount thereof. The Indemnifying Party shall have the right to
defend and settle, at its own expense and by its own counsel, any such matter so
long as the Indemnifying Party pursues the same in good faith and diligently,
provided that the Indemnifying Party shall not settle any criminal proceeding or
any other proceeding to the extent that relief other than the payment of money
is sought, without the written consent of the Indemnified Party. If the
Indemnifying Party undertakes to defend or settle, it shall promptly notify the
Indemnified Party of its intention to do so, and the Indemnified Party shall
cooperate with the Indemnifying Party and its counsel in the defense thereof and
in any settlement thereof. Such cooperation shall include, but shall not be
limited to, furnishing the Indemnifying Party with any books, records or
information reasonably requested by the Indemnifying Party that are in the
Indemnified Party's possession or control. All Indemnified Parties shall use the
same counsel, which shall be the counsel selected by Indemnifying Party,
provided that if counsel to the Indemnifying Party shall have a conflict of
interest that prevents counsel for the Indemnifying Party from representing
Indemnified Party, Indemnified Party shall have the right to participate in such
matter through counsel of its own choosing and Indemnifying Party shall
reimburse the Indemnified Party for the reasonable expenses of its counsel.
After the Indemnifying Party has notified the Indemnified Party of its intention
to undertake to defend or settle any such asserted liability, and for so long as
the Indemnifying Party diligently pursues such defense, the Indemnifying Party
shall not be liable for any additional legal expenses incurred by the
Indemnified Party in connection with any defense or settlement of such asserted
liability,
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except as set forth in the preceding sentence and to the extent such
participation is requested by the Indemnifying Party, in which event the
Indemnified Party shall be reimbursed by the Indemnifying Party for reasonable
additional legal expenses and out-of-pocket expenses. If the Indemnifying Party
desires to accept a final and complete settlement of any such Third Person claim
and the Indemnified Party refuses to consent to such settlement, then the
Indemnifying Party's liability under this Section with respect to such Third
Person claim shall be limited to the amount so offered in settlement by said
Third Person. Upon agreement as to such settlement between said Third Person and
the Indemnifying Party, the Indemnifying Party shall, in exchange for a complete
release from the Indemnified Party, promptly pay to the Indemnified Party the
amount agreed to in such settlement and the Indemnified Party shall, from that
moment on, bear full responsibility for any additional costs of defense which it
subsequently incurs with respect to such claim and all additional costs of
settlement or judgment. If the Indemnifying Party does not undertake to defend
such matter to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the Indemnified Party may
undertake such defense through counsel of its choice, at the cost and expense of
the Indemnifying Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party for the amount paid
in such settlement and any other liabilities or expenses incurred by the
Indemnified Party in connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third Person claim without
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. All settlements hereunder shall effect a
complete release of the Indemnified Party, unless the Indemnified Party
otherwise agrees in writing. The parties hereto will make appropriate
adjustments for insurance proceeds in determining the amount of any
indemnification obligation under this Section.
11.4 Exclusive Remedy. The indemnification provided for in this Section
11 shall be the exclusive remedy in any action seeking damages or any other form
of monetary relief brought by any party to this Agreement against another party,
provided that, nothing herein shall be construed to limit the right of a party,
in a proper case, to seek injunctive relief for a breach of this Agreement.
11.5 Limitations on Indemnification.
11.5.1 Healthworld shall not assert any claim for
indemnification hereunder against the U.K. Stockholder until such time as, and
solely to the extent that, the aggregate of all claims which Healthworld may
have against the U.K. Stockholder shall exceed one-half (0.5%) percent of the
value of the Healthworld Stock delivered to the U.K. Stockholder, calculated at
the IPO price (the "Indemnification Threshold"), provided, however, that
Healthworld may assert and shall be indemnified for any claim
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under Section 11.1.4 at any time, regardless of whether the aggregate of all
claims which such persons may have against the U.K. Stockholder exceeds the
Indemnification Threshold, it being understood that the amount of any such claim
under Section shall not be counted towards the Indemnification Threshold.
11.5.2 The U.K. Stockholder shall not assert any claim for
indemnification hereunder against Healthworld until such time as, and solely to
the extent that, the aggregate of all claims which the U.K. Stockholder may have
against Healthworld shall exceed (pound)31,250, provided, however that the U.K.
Stockholder may assert and shall be indemnified for any claim under Section at
any time, regardless of whether the aggregate of all claims which the U.K.
Stockholder may have against Healthworld exceeds (pound)31,250, it being
understood that the amount of any such claim under Section 11.2.4 shall not be
counted towards such (pound)31,250 amount.
11.5.3 No person shall be entitled to indemnification under
this Section 11 if and to the extent that such person's claim for
indemnification is directly or indirectly related to a breach by such person of
any representation, warranty, covenant or other agreement set forth in this
Agreement. Notwithstanding any other term of this Agreement (except the proviso
to this sentence), the U.K. Stockholder shall not be liable under this Section
11 for an amount which exceeds the value of the Healthworld Stock received by
the U.K. Stockholder in connection with the Organization, provided that the U.K.
Stockholder's indemnification obligations pursuant to Section 11.1.4 shall not
be limited. For purposes of calculating the value of the Healthworld Stock
received by the U.K. Stockholder, Healthworld Stock shall be valued at its
initial public offering price as set forth in the Registration Statement. It is
hereby understood and agreed that the U.K. Stockholder may satisfy an
indemnification obligation through payment of Healthworld Stock, such
satisfaction to be to the extent of the then fair market value of Healthworld
Stock conveyed by the Indemnifying Party pursuant to such indemnification.
12 Termination of Agreement.
12.1 Termination. This Agreement may be terminated at anytime prior to
the Closing Date solely:
12.1.1 by request of the U.K. Stockholder, with the consent of
▇▇▇▇▇▇ and the U.S. Stockholders;
12.1.2 by the U.K. Stockholder if the transactions
contemplated by this Agreement to take place at the Closing shall not have been
consummated by _______, 1997, unless the failure of such transactions to be
consummated is due to the willful
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failure of the U.K. Stockholder to perform any of his obligations under this
Agreement to the extent required to be performed by him prior to or on the
Closing Date;
12.1.3 by the U.K. Stockholder, on the one hand, or by
Healthworld, on the other hand, if a material breach or default shall be made by
the other party in the observance or in the due and timely performance of any of
the covenants, agreements or conditions contained herein, and the curing of such
default shall not have been made on or before the Closing Date; or
12.1.4 by the U.K. Stockholder or by Healthworld, if a
material breach or default shall be made by any U.S. Stockholder or ▇▇▇▇▇▇ in
the observance or in the due and timely performance of any of the covenants,
agreements or conditions contained in their respective agreements, and the
curing of such default shall not have been made on or before the Closing Date.
12.2 Liabilities in Event of Termination.
12.2.1 The termination of this Agreement will in no way limit
any obligation or liability of any party based on or arising from a breach or
default by such party with respect to any of its representations, warranties,
covenants or agreements contained in this Agreement including, but not limited
to, legal and audit costs and out of pocket expenses.
12.2.2 Upon termination of this Agreement, except as otherwise
provided for herein, any and all payments required to be made by the U.S.
Companies or the U.K. Companies as provided for in the Underwriters' Engagement
Letter shall be paid 69% by the U.S. Companies and 31% by the U.K. Company. The
U.S. Companies and the U.K. Company shall contribute to (and, if necessary,
reimburse each other for) any such required payments in such proportions.
Notwithstanding the foregoing, in the event any indemnity obligation arises to
the Underwriters pursuant to any agreement between the Underwriters and
Healthworld, the U.K. Stockholder, the U.S. Stockholders, the U.K. Company
and/or the U.S. Companies with respect to the Underwriters' services in
contemplation of the IPO, then the breaching party shall be solely responsible
for such indemnification obligations and the non-breaching party shall be
entitled to reimbursement from the breaching party for any payment made by the
non-breaching party in respect thereof.
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13 Non-Competition; Non-Disclosure.
13.1 Non-Competition. The U.K. Stockholder will not, for a period (the
"Restrictive Period") commencing with the date hereof and concluding five (5)
years following the Closing Date, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other person,
persons, company, partnership, corporation or business of whatever nature:
13.1.1 as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, or as a sales representative (except that the
U.K. Stockholder may be employed by an entity engaged in the advertising
business so long as the U.K. Stockholder does not have contact with or provide
services to or for the benefit of any such client):
13.1.1.1 anywhere in the world, engage in any
advertising business having as a
client any corporation or any other
entity which was a client of
Healthworld or any of its
Subsidiaries at any time within the
Restrictive Period; or
13.1.1.2 anywhere in the world, engage in any
mass media communication of
health-related information, whether
by means of publishing, television,
radio, the internet or otherwise; or
13.1.1.3 within 200 miles (the "Territory")
of where Healthworld or any of its
subsidiaries conducted any other
business during the Restrictive
Period, engage in any such other
business;
13.1.2 call upon any person who is, at that time, an employee
of Healthworld (including the subsidiaries thereof) in a sales representative or
managerial capacity for the purpose or with the intent of enticing such employee
away from or out of the employ of Healthworld (including the subsidiaries
thereof), provided that the U.K. Stockholder shall be permitted to call upon and
hire any member of his or her immediate family;
13.1.3 call upon any person or entity which is, at that time,
or which has been, at any time within the Restrictive Period, a customer of
Healthworld (including the subsidiaries thereof) for the purpose of soliciting
or selling products or services in direct competition with Healthworld within
the Territory;
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13.1.4 call upon any prospective acquisition candidate, on the
U.K. Stockholder's own behalf or on behalf of any competitor in the advertising
business or in the business of communicating health information through mass
media, which candidate, to the actual knowledge of the U.K. Stockholder after
due inquiry, was called upon by Healthworld (including the subsidiaries thereof)
or for which, to the actual knowledge of the U.K. Stockholder after due inquiry,
Healthworld (or any subsidiary thereof) made an acquisition analysis, for the
purpose of acquiring such entity; or
13.1.5 disclose customers, whether in existence or proposed,
of Healthworld (or any subsidiary thereof) to any person, firm, partnership,
corporation or business for any reason or purpose whatsoever except to the
extent that Healthworld (or any subsidiary thereof) has in the past disclosed
such information to the public for valid business reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit the U.K. Stockholder from acquiring as an investment not more than one
percent (1%) of the capital stock of a competing business whose stock is traded
on a national securities exchange or over-the-counter.
13.2 Nondisclosure.
13.2.1 Definitions. The U.K. Stockholder recognizes and
acknowledges that he has had in the past, currently has, and in the future may
possibly have, access to certain confidential information of Healthworld or any
of its Subsidiaries, such as operational policies, and pricing and cost policies
that are valuable, special and unique assets of Healthworld and its
Subsidiaries, and/or their respective businesses (the "Confidential
Information"). Confidential Information shall not include any information:
13.2.1.1 which becomes known to the public
generally through no fault of the
U.K. Stockholder,
13.2.1.2 as to which disclosure is required
by law or the order of any
governmental authority under color
of law; provided, that prior to
disclosing any information pursuant
to this clause (b), the U.K.
Stockholder shall give prior written
notice thereof to Healthworld and
provide Healthworld with the
opportunity to contest such
disclosure, or
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13.2.1.3 as to which the disclosing party
reasonably believes that such
disclosure is required in connection
with the defense of a lawsuit
against the disclosing party.
13.2.2 Covenant to Maintain Confidentiality. The U.K.
Stockholder agrees that until the later to occur of (i) five (5) years following
the Closing Date or (ii) with respect to any portion of the Confidential
Information the date upon which such portion no longer meets the definition of
"Confidential Information", he will not disclose Confidential Information to any
person, firm, corporation, association or other entity for any purpose or reason
whatsoever, except
13.2.2.1 to authorized representatives of
Healthworld,
13.2.2.2 during the course of the U.K.
Stockholder's employment by
Healthworld or any of its
Subsidiaries, such information may
be disclosed by the U.K. Stockholder
as is required in the course of
performing his duties and
13.2.2.3 to counsel and other advisers,
provided that such advisers (other
than counsel) agree to the
confidentiality provisions of this
Section 13.2.
13.3 Injunctive Relief; Damages. Because of the difficulty of measuring
economic losses to Healthworld as a result of a breach of the foregoing
covenants in this Section 13, and because of the immediate and irreparable
damage that could be caused to Healthworld for which it would have no other
adequate remedy, the U.K. Stockholder agrees that the foregoing covenants may be
enforced by Healthworld in the event of breach by the U.K. Stockholder, by
injunctions and restraining orders. Nothing herein shall be construed as
prohibiting Healthworld from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages.
13.4 Reasonable Restraint. It is agreed by the parties hereto that the
foregoing covenants in this Section 13 impose a reasonable restraint on the U.K.
Stockholder in light of the activities and business of Healthworld (including
the Subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of Healthworld contained in the Registration Statement.
13.5 Severability; Reformation. The covenants in this Section 13 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent
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jurisdiction shall determine that the scope, time or territorial restrictions
set forth are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems reasonable,
and the Agreement shall thereby be reformed.
13.6 Independent Covenant. All of the covenants in this Section 13
shall be construed as an agreement independent of any other provision in this
Agreement, and the existence of any claim or cause of action by the U.K.
Stockholder against Healthworld (including the subsidiaries thereof), whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Healthworld of such covenants. It is specifically agreed that the
Restrictive Period stated at the beginning of Section 13, during which the
agreements and covenants of the U.K. Stockholder made in Section 13 shall be
effective, shall be computed by extending the Restrictive Period by the amount
of time during which the U.K. Stockholder is in violation of any provision of
Section 13. The covenants contained in this Section 13 shall not be affected by
any breach of any other provision hereof by any party hereto.
13.7 Survival. The obligations of the parties under this Section 13
shall survive the termination of this Agreement.
14 Federal Securities Act Representations.
The U.K. Stockholder acknowledges that the shares of Healthworld Stock
to be delivered to him pursuant to this Agreement have not been and will not be
registered under the 1933 Act and therefore may not be resold without compliance
with the 1933 Act. The Healthworld Stock to be acquired by the U.K. Stockholder
pursuant to this Agreement is being acquired solely for his own account, for
investment purposes only, and with no present intention of distributing, selling
or otherwise disposing of it in connection with a distribution.
14.1 Compliance with Law. The U.K. Stockholder covenants, warrants and
represents that none of the shares of Healthworld Stock issued to him will be
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all of the applicable provisions
of the Act and the rules and regulations of the SEC. All the Healthworld Stock
issued pursuant to the transactions contemplated hereby shall bear the following
legend: THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED
IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE SECURITIES LAW.
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14.2 Economic Risk; Sophistication. The U.K. Stockholder is able to
bear the economic risk of an investment in the Healthworld Stock acquired
pursuant to this Agreement and can afford to sustain a total loss of such
investment and has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the proposed
investment in the Healthworld Stock. The U.K. Stockholder has had an adequate
opportunity to ask questions and receive answers from the officers of
Healthworld concerning any and all matters relating to the transactions
described herein including, without limitation, the background and experience of
the current and proposed officers and directors of Healthworld, the plans for
the operations of the business of Healthworld, the business, operations and
financial condition of the companies which are entering into the Organization
but are not owned by the U.K. Stockholder, and any plans for additional
acquisitions and the like. The U.K. Stockholder has asked any and all questions
in the nature described in the preceding sentence and all questions have been
answered to his satisfaction.
15 Registration Rights.
15.1 Piggyback Registration Rights. At any time commencing one
(1) year following the Closing, whenever Healthworld proposes to register any
Healthworld Stock for its own or others account under the 1933 Act for a public
offering (other than a registration statement on Form ▇-▇, ▇▇▇▇ ▇-▇, or any
successor form), Healthworld shall give the U.K. Stockholder prompt written
notice of its intent to do so. Upon the written request of the U.K. Stockholder
given within 30 days after receipt of such notice, Healthworld shall cause to be
included in such registration all of the Healthworld Stock issued to the U.K.
Stockholder pursuant to this Agreement (including any stock issued as (or
issuable upon the conversion or exchange of any convertible security, warrant,
right or other security which is issued by Healthworld as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of such
Healthworld Stock) which the U.K. Stockholder requests, provided that
Healthworld shall have the right to reduce the number of shares included in such
registration to the extent that inclusion of such shares could, in the opinion
of tax counsel to Healthworld or its independent auditors, jeopardize the status
of the transactions contemplated hereby and by the Registration Statement as a
tax-free organization or jeopardize the ability of Healthworld to utilize
pooling-of-interest accounting. In addition, Healthworld shall have the right to
reduce the number of shares included in such registration if and to the extent
Healthworld is advised by the Underwriters of an underwritten offering of the
securities being offered pursuant to any registration statement under this
Section 15.1 that the number of shares to be sold by persons other than
Healthworld is greater than the number of such shares which can be offered
without adversely affecting the offering. Any such reduction shall be made pro
rata based on the number of shares offered for the accounts of such persons
(based upon the number of shares held by such person).
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15.2 Registration Procedures. All expenses incurred in
connection with the registrations under this Article 15 (including all
registration, filing, qualification, legal, printer and accounting fees, but
excluding underwriting commissions and discounts), shall be borne by
Healthworld. In connection with registrations under Section 15.1, Healthworld
shall use commercially reasonable efforts to prepare and file with the SEC as
soon as reasonably practicable, a registration statement with respect to the
Healthworld Stock and use its best efforts to cause such registration to
promptly become and remain effective for a period of at least 90 days (or such
shorter period during which holders shall have sold all Healthworld Stock which
they requested to be registered); use its best efforts to register and qualify
the Healthworld Stock covered by such registration statement under applicable
state securities laws as the holders shall reasonably request for the
distribution for the Healthworld Stock; and take such other actions as are
reasonable and necessary to comply with the requirements of the 1933 Act and the
regulations thereunder.
15.3 Underwriting Agreement. In connection with each
registration pursuant to Section 15.1 covering an underwritten registration
public offering, Healthworld and each participating holder agree to enter into a
written agreement with the underwriters in such form and containing such
provisions as are customary in the securities business for such an arrangement
between the underwriters and companies of Healthworld's size and investment
stature, including indemnification.
15.4 Availability of Rule 144. Healthworld shall not be
obligated to register shares of Healthworld Stock held by the U.K. Stockholder
at any time when the resale provisions of Rule 144(k) (or any similar or
successor provision) promulgated under the 1933 Act are available to the U.K.
Stockholder.
16 General.
16.1 Cooperation. The U.K. Stockholder and Healthworld shall
each deliver or cause to be delivered, and the U.K. Stockholder shall cause the
Company to deliver, to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such additional instruments as the
other may reasonably request for the purpose of carrying out this Agreement .
The U.K. Stockholder shall cause the Company to cooperate and use its reasonable
efforts to have their respective present officers, directors and employees
cooperate with Healthworld on and after the Closing Date in furnishing
information, evidence, testimony and other assistance in connection with any
Return filing obligations, actions, proceedings, arrangements or disputes of any
nature with respect to matters pertaining to all periods prior to the Closing
Date.
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16.2 Successors and Assigns. This Agreement and the rights of
the parties hereunder may not be assigned (except by operation of law) and shall
be binding upon and shall inure to the benefit of the parties hereto, the
successors of Healthworld, and the heirs and legal representatives of the U.K.
Stockholder.
16.3 Entire Agreement. Except as otherwise provided herein,
this Agreement (including the schedules, exhibits and annexes attached hereto)
and the documents delivered pursuant hereto constitute the entire agreement and
understanding among the U.K. Stockholder and Healthworld and supersede any prior
agreement and understanding relating to the subject matter of this Agreement.
This Agreement, upon execution, constitutes a valid and binding agreement of the
parties hereto enforceable in accordance with its terms and may be modified or
amended only by a written instrument executed by the U.K. Stockholder and
Healthworld (acting through its officers, duly authorized by its Board of
Directors).
16.4 Counterparts. This Agreement may be executed
simultaneously in two (2) or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and the
same-instrument.
16.5 Expenses. If the transactions herein contemplated shall
be consummated, Healthworld will pay the fees, expenses and disbursements of
Healthworld and its agents, representatives, accountants and counsel incurred in
connection with the subject matter of this Agreement and any amendments thereto,
including all costs and expenses incurred in the performance and compliance with
all conditions to be performed by Healthworld under this Agreement, including
the fees and expenses of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇,
Young, Nachamie, ▇▇▇▇▇▇▇ & Spizz, P.C., or any other person or entity retained
by Healthworld, and the costs of preparing the Registration Statement. If the
transactions herein contemplated shall not be consummated, then such costs and
expenses shall be paid 69% by the U.S. Companies and 31% by the U.K. Company.
The U.K. Stockholder shall pay his own costs and expenses. The U.K.
Stockholder shall pay all sales, use, transfer, real property transfer,
recording, gains, stock transfer and other similar taxes and fees ("Transfer
Taxes") imposed in connection with the Organization, other than Transfer Taxes,
if any, imposed by the State of Delaware. The U.K. Stockholder shall file all
necessary documentation and Returns with respect to such Transfer Taxes. In
addition, the U.K. Stockholder acknowledges that he, and not Healthworld, will
pay all Taxes due upon receipt of the consideration payable pursuant to Section
2 hereof, and will assume all Tax risks and liabilities of the U.K. Stockholder
in connection with the transactions contemplated hereby.
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16.6 Notices. All notices of communication required or
permitted hereunder shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, or by delivering the
same in person to an officer or agent of such party.
16.6.1 If to Healthworld,
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Chairman of the Board and
Chief Executive Officer
With copies to:
Rosenman & Colin LLP Todtman, Young, Nachamie,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Spizz, P.C.
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
16.6.2 If to the U.K. Stockholder, addressed to him at his
address first set forth hereinabove, together with copies to
▇▇▇▇ & Priest, LLP Rakisons
▇▇ ▇. ▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ INF
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address or counsel as any party hereto shall specify pursuant
to this Section 16.6 from time to time.
16.7 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without giving effect to any
requirements thereof which might otherwise cause the application of the law of
another jurisdiction, and the parties consent to New York as the exclusive venue
for resolving any and all disputes that may arise concerning this Agreement.
16.8 Survival of Representations and Warranties. Except as
otherwise specifically provided in this Agreement, the representations,
warranties, covenants and agreements of the parties made herein and at the
Closing Date or in writing delivered
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pursuant to the provisions of this Agreement shall survive the consummation of
the transactions contemplated hereby and any examination on behalf of the
parties until the Expiration Date.
16.9 Exercise of Rights and Remedies. Except as otherwise
provided herein, no delay of or omission in the exercise of any right, power or
remedy accruing to any party as a result of any breach or default by any other
party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed as a waiver of or acquiescence in any such breach or
default, or of any similar breach or default occurring later; nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or
default occurring before or after that waiver.
16.10 Time. Time is of the essence with respect to this
Agreement.
16.11 Reformation and Severability. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties, and if
such modification is not possible, such provision shall be severed from this
Agreement, and in either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
16.12 Remedies Cumulative. No right, remedy or election given
by any term of this Agreement shall be deemed exclusive but each shall be
cumulative with all other rights, remedies an elections available at law or in
equity.
16.13 Captions. The headings of this Agreement are inserted
for convenience only, shall not constitute a part of this Agreement or be used
to construe or interpret any provision hereof.
16.14 Amendments and Waivers. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived only
by consent of Healthworld and persons to whom is allocated pursuant to Section
2.3 an aggregate of a majority of the shares of Healthworld Stock which are
allocated pursuant to such Section. Any amendment or waiver effected in
accordance with this Section 16.14 shall be binding upon each of the parties
hereto, any other person receiving Healthworld Stock in connection with the
Organization and each future holder of such Healthworld Stock.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
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HEALTHWORLD CORPORATION
By:
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman and CEO
And By:
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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