Exhibit 10.1

 

 
 
AGREEMENT AND PLAN OF MERGER
 
 
between
 

 
Cross Country Education, LLC,
 
Cross Country Healthcare, Inc.
 
CC Education, LLC
 

 
and
 

 
PESI, Inc.
 

 
dated as of
 
July 27, 2015
 

 
 

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TABLE OF CONTENTS
 

  Page    
ARTICLE I Definitions
1
 
ARTICLE II The Merger
8
Section 2.01
Effective Time of the Merger
8
Section 2.02
Actions at Closing
9
Section 2.03
Effects of the Merger
9
Section 2.04
Purchase Price Adjustment
10
Section 2.05
Earn-out
13
Section 2.06
Closing
15
Section 2.07
Closing Deliveries
15
Section 2.09
Interest on Escrow
15
Section 2.09
Tax Allocation of Merger Consideration
15
 
ARTICLE III Representations and Warranties of Seller
15
Section 3.01
Organization and Authority of Seller
15
Section 3.02
Organization, Authority and Qualification of the Company
16
Section 3.03
Capitalization
17
Section 3.04
No Subsidiaries
17
Section 3.05
No Conflicts; Consents
17
Section 3.06
Financial Statements
17
Section 3.07
Undisclosed Liabilities
18
Section 3.08
Absence of Certain Changes, Events and Conditions
18
Section 3.09
Material Contracts
20
Section 3.10
Title to Assets; Real Property
21
Section 3.11
Condition And Sufficiency of Assets
22
Section 3.12
Intellectual Property
22
Section 3.13
Intentionally Omitted
23
Section 3.14
Customers and Suppliers
23
Section 3.15
Insurance
24
Section 3.16 Legal Proceedings; Governmental Orders 24
Section 3.17
Compliance With Laws; Permits
24
Section 3.18 Environmental Matters 24
Section 3.19
Employee Benefit Matters
25
Section 3.20
Employment Matters
26
Section 3.21
Taxes
26
Section 3.22
Books and Records
28
Section 3.23
Privacy and Data Security
28
Section 3.24
Brokers
28
 
ARTICLE IV Representations and Warranties of Buyer
28
Section 4.01
Organization and Authority of Buyer and Merger Sub
28
Section 4.02
No Conflicts; Consents
29
Section 4.03
Brokers
29
Section 4.04
Sufficiency of Funds
29

 
 
 

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Section 4.05
Legal Proceedings
29
Section 4.06
Investigation by Purchaser
29
 
ARTICLE V Covenants
30
Section 5.01
Conduct of Business Prior to the Closing
30
Section 5.02
Access to Information
30
Section 5.03
No Solicitation of Other Bids
31
Section 5.04
Intentionally Omitted
31
Section 5.05
Confidentiality
31
Section 5.06
Non-competition; Non-solicitation
32
Section 5.07
Governmental Approvals and Consents
33
Section 5.08
Intentionally Omitted
33
Section 5.09
Closing Conditions
33
Section 5.10
Public Announcements
33
Section 5.11
Further Assurances
33
Section 5.12
Employees; Employees Benefit Plans
34
Section 5.13
Indebtedness; Outstanding Obligations To/From Subsidiaies
34
 
ARTICLE VI Tax Matters
35
Section 6.01
Tax Treatment
35
Section 6.02
Tax Covenants
35
Section 6.03
Tax Indemnification
35
Section 6.04
Cooperation and Exchange of Information
36
Section 6.05
Tax Treatment of Indemnification Payments
36
Section 6.06
Survival
36
Section 6.07
Overlap
36
 
ARTICLE VII Conditions to Closing
36
Section 7.01
Conditions to Obligations of All Parties
36
Section 7.02
Conditions to Obligations of Buyer
36
Section 7.03
Conditions to Obligations of Seller
38
 
ARTICLE VIII Indemnification
39
Section 8.01
Survival
39
Section 8.02
Indemnification by Seller
40
Section 8.03
Indemnification by Buyer
40
Section 8.04
Exclusive Remedies
41
Section 8.05
Indemnification Procedures
41
Section 8.06
Payments
43
 
ARTICLE IX Termination
43
Section 9.01
Termination
43
Section 9.02
Effect of Termination
44
 
ARTICLE X Miscellaneous
44
Section 10.01
Expenses
44
Section 10.02
Notices
44

 
 
 

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Section 10.03
Interpretation
45
Section 10.04
Headings
46
Section 10.05
Severability
46
Section 10.06
Entire Agreement
46
Section 10.07
Successors and Assigns
46
Section 10.08
No Third-Party Beneficiaries
46
Section 10.09
Amendment and Modification; Waiver
46
Section 10.10
Governing Law
47
Section 10.11
Specific Performance
47
Section 10.12
Counterparts
47
Section 10.13
Acknowledgement
47
     

 
 

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AGREEMENT AND PLAN OF MERGER
 
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of July 27, 2015,
is entered into among Cross Country Education, LLC, a Delaware limited liability
company (the “Company”), Cross Country Healthcare, Inc., a Delaware corporation
(“Seller”), CC Education, LLC, a Delaware limited liability company (“Merger
Sub”), and PESI, Inc., a Wisconsin nonstock corporation (“Buyer”).  Capitalized
terms not otherwise defined herein have the meaning attributable to them as
defined in Article I.
 
RECITALS
 
WHEREAS, Buyer desires to acquire the Company on the terms and conditions set
forth in this Agreement, and
 
WHEREAS, the acquisition of the Company shall be effected by the terms of this
Agreement through a transaction (the “Merger”) in which (i) the Company will
merge with and into the Merger Sub, with the Merger Sub being the surviving
limited liability company (the “Surviving Company”) and (ii) the issued and
outstanding membership interests in the Company (the “Membership Interests”)
will be converted into the right to receive the Merger Consideration (as
hereinafter defined).
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
 
ARTICLE I
Definitions
 
The following terms have the meanings specified or referred to in this
Article I:
 
“Action” means any claim, action, cause of action, lawsuit, arbitration, audit,
notice of violation, proceeding, litigation or investigation of any nature,
civil, criminal, administrative, regulatory or otherwise, whether at law or in
equity.
 
“Adjusted EBITDA” means, with respect to the Calculation Period, the aggregate
net income before interest, income taxes, depreciation and amortization of the
Company and the Surviving Company for such period, determined in accordance with
GAAP but applied and calculated in a manner consistent with the EBITDA
calculation derived from the Financial Statements for the most recent fiscal
year end, adjusted to exclude (i) savings on postage costs and printing costs
resulting from discounts for such items previously unavailable to the Company
and made available to the Surviving Company during the Calculation Period by
Buyer, (ii) gains or losses resulting from the sale of assets other than in the
ordinary course of business consistent with past practice, (iii) costs and
expenses incurred in connection with the transactions contemplated by this
Agreement, and (iv) any intercompany charges, costs, expenses or overhead
allocations with respect to Buyer or its Affiliates.
 
“Affiliate” of a Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Person.  The term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
 
 
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“Benefit Liability” means any Loss, Tax, liability, obligation or commitment of
any nature whatsoever, asserted or unasserted, known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured or otherwise that relates
to the sponsorship, administration, legal compliance, or maintenance of a
Benefit Plan, including, but not limited to, an employee’s, former employee’s,
contractor’s, union’s, participant’s or beneficiary’s rights, or claims for
benefits (including claims incurred), or taxes, penalties, fees, or assessments
imposed upon the Benefit Plan, its plan administrator, fiduciaries,
participating employers, or the plan sponsor (and any ERISA Affiliates of the
same).
 
           “Benefit Plan” means any pension, benefit, retirement, compensation,
employment, consulting, profit-sharing, deferred compensation, incentive, bonus,
performance award, phantom equity or other equity, change in control, retention,
severance, vacation, paid time off, welfare, fringe-benefit and other similar
agreement, plan, policy, program or arrangement (and any amendments thereto), in
each case whether or not reduced to writing and whether funded or unfunded,
including each “employee benefit plan” within the meaning of Section 3(3) of
ERISA, whether or not tax-qualified and whether or not subject to ERISA, which
is or has been maintained, sponsored, contributed to, or required to be
contributed to by the Company (or any of its ERISA Affiliates) for the benefit
of any current or former employee, officer, manager, retiree, independent
contractor or consultant of the Company or any spouse or dependent of such
individual, or under which the Company (or any of its ERISA Affiliates) has or
may have any liability.

“Business Day” means any day except Saturday, Sunday or any other day on which
commercial banks located in the State of Wisconsin are authorized or required by
Law to be closed for business.
 
“Buyer’s Accountants” means Wifpli LLP.
 
“Capitalized Lease Obligation” means, as of any date of determination, any
obligation that is required to be classified and accounted for as a capitalized
lease on the face of the balance sheet of the Company as of such date prepared
in accordance with GAAP and the amount of Indebtedness represented by any such
obligation as of such date shall be the capitalized amount of such obligation
that would appear on the face of such balance sheet.
 
“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.
 
“Closing Working Capital” means:  (a) the Current Assets of the Company, less
(b) the Current Liabilities of the Company, determined as of the close of
business on the Closing Date.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
 
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“Company Intellectual Property” means all Intellectual Property that is owned by
the Company.
 
“Company IP Agreements” means all licenses, sublicenses, consent to use
agreements, settlements, coexistence agreements, covenants not to sue,
permissions and other Contracts (including any right to receive or obligation to
pay royalties or any other consideration), whether written or oral, relating to
Intellectual Property to which the Company is a party, beneficiary or otherwise
bound.
 
“Company IP Registrations” means all Company Intellectual Property that has been
registered with any Governmental Authority or authorized private registrar in
any jurisdiction, including registered trademarks, domain names and copyrights,
issued and reissued patents and pending applications for any of the foregoing.
 
“Contracts” means all contracts, leases, deeds, mortgages, licenses,
instruments, notes, commitments, undertakings, indentures, joint ventures and
all other agreements, commitments and legally binding arrangements, whether
written or oral.
 
“Current Assets” means cash and cash equivalents, accounts receivable, inventory
and prepaid expenses, but excluding (a) the portion of any prepaid expense of
which the Surviving Company will not receive the benefit following the Closing,
(b) deferred Tax assets and (c) receivables from any of the Company’s
Affiliates, managers, officers or members and any of their respective
Affiliates, determined in accordance with GAAP applied using the same accounting
methods, practices, principles, policies and procedures, with consistent
classifications, judgments and valuation and estimation methodologies that were
used in the preparation of the Financial Statements for the most recent fiscal
year end as if such accounts were being prepared as of a fiscal year end.
 
“Current Liabilities” means accounts payable and accrued expenses, but excluding
payables to any of the Company’s Affiliates, managers, employees, officers or
members and any of their respective Affiliates, Indebtedness, accruals for
health insurance, workers’ compensation or any other Benefit Plans, deferred Tax
liabilities and the current portion of long-term debt, determined in accordance
with GAAP applied using the same accounting methods, practices, principles,
policies and procedures, with consistent classifications, judgments and
valuation and estimation methodologies that were used in the preparation of the
Financial Statements for the most recent fiscal year end as if such accounts
were being prepared as of a fiscal year end.
 
“Disclosure Schedules” means the Disclosure Schedules delivered by Seller and
Buyer concurrently with the execution and delivery of this Agreement.
 
“Effective Time” has the meaning set forth in Section 2.01.
 
“Encumbrance” means any charge, pledge, equitable interest, lien (statutory or
other), option, security interest, mortgage, easement, encroachment, right of
way, right of first refusal, restriction on use, voting, transfer, receipt of
income or exercise of any other attribute of ownership.
 
 
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“Environmental Claim” means any Action, Governmental Order, lien, fine, penalty,
or, as to each, any settlement or judgment arising therefrom, by or from any
Person alleging liability of whatever kind or nature (including liability or
responsibility for the costs of enforcement proceedings, investigations,
cleanup, governmental response, removal or remediation, natural resources
damages, property damages, personal injuries, medical monitoring, penalties,
contribution, indemnification and injunctive relief) arising out of, based on or
resulting from:  (a) the presence, Release of, or exposure to, any Hazardous
Materials; or (b) any actual or alleged non-compliance with any Environmental
Law or term or condition of any Environmental Permit.
 
“Environmental Law” means any applicable Law, and any Governmental Order or
binding agreement with any Governmental Authority:  (a) relating to pollution
(or the cleanup thereof) or the protection of natural resources, endangered or
threatened species, human health or safety, or the environment (including
ambient air, soil, surface water or groundwater, or subsurface strata); or (b)
concerning the presence of, exposure to, or the management, manufacture, use,
containment, storage, recycling, reclamation, reuse, treatment, generation,
discharge, transportation, processing, production, disposal or remediation of
any Hazardous Materials.  The term “Environmental Law” includes, without
limitation, the following (including their implementing regulations and any
state analogs):  the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976, as
amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901
et seq.; the Federal Water Pollution Control Act of 1972, as amended by the
Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control
Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air
Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. §§
7401 et seq.; and the Occupational Safety and Health Act of 1970, as amended, 29
U.S.C. §§ 651 et seq.
 
“Environmental Notice” means any written directive, notice of violation or
infraction, or notice respecting any Environmental Claim relating to actual or
alleged non-compliance with any Environmental Law or any term or condition of
any Environmental Permit.
 
“Environmental Permit” means any Permit, letter, clearance, consent, waiver,
closure, exemption, decision or other action required under or issued, granted,
given, authorized by or made pursuant to Environmental Law.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.
 
“ERISA Affiliate” means all employers (whether or not incorporated) that would
be treated together with the Company or any of its Affiliates as a “single
employer” within the meaning of Section 414 of the Code.
 
“GAAP” means United States generally accepted accounting principles in effect
from time to time.
 
 
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“Governmental Authority” means any federal, state, local or foreign government
or political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.
 
“Governmental Order” means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
 
“Hazardous Materials” means:  (a) any material, substance, chemical, waste,
product, derivative, compound, mixture, solid, liquid, mineral or gas, in each
case, whether naturally occurring or manmade, that is hazardous, acutely
hazardous, toxic, or words of similar import or regulatory effect under
Environmental Laws; and (b) any petroleum or petroleum-derived products, radon,
radioactive materials or wastes, asbestos in any form, lead or lead-containing
materials, urea formaldehyde foam insulation, and polychlorinated biphenyls.
 
“Indebtedness” means, with respect to any Person, (a) all obligations for
borrowed money, purchase money obligations, Capitalized Lease Obligations,
obligations to pay deferred purchase price of assets, services or securities
and, without limitation, all drafts drawn thereunder and all reimbursement or
other payment obligations with respect to letters of credit, surety bonds and
other similar instruments issued by or on behalf of such person, in each case,
of such Person (provided that the foregoing shall not include trade accounts
payable which are included in Current Liabilities), (b) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses, (c) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property or assets acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property or assets), (d) the principal balance outstanding under any synthetic
lease, off-balance sheet loan or similar off balance sheet financing product,
(e) all obligations, whether or not contingent, to purchase, redeem, retire,
defease or otherwise acquire for value any of its own equity interest or equity
interest equivalents (or any equity interest or equity interest equivalent of a
direct or indirect buyer entity thereof), (f) all indebtedness referred to in
clauses (a) through (e) above secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any lien upon or in property or assets (including accounts and contracts rights)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such indebtedness, (g) all indebtedness of the type described
in clauses (a) through (f) above guaranteed, directly or indirectly, in any
manner by such Person or for which such Person may be liable, (h) all interest
expense accrued but unpaid on or relating to any of such indebtedness, and
(i) all prepayment penalties, premiums, late charges, penalties and collection
fees relating to any of such indebtedness.
 
 
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“Intellectual Property” means all intellectual property and intellectual
property rights and assets, and all rights, interests and protections that are
associated with, similar to, or required for the exercise of, any of the
foregoing, however arising, pursuant to the Laws of any jurisdiction throughout
the world, whether registered or unregistered, including any and all:  (a)
trademarks, service marks, trade names, brand names, logos, trade dress, design
rights and other similar designations of source, sponsorship, association or
origin, together with the goodwill connected with the use of and symbolized by,
and all registrations, applications and renewals for, any of the foregoing; (b)
internet domain names, whether or not trademarks, registered in any top-level
domain by any authorized private registrar or Governmental Authority, web
addresses, web pages, websites and related content, accounts with Twitter,
Facebook and other social media companies and the content found thereon and
related thereto, and URLs; (c) works of authorship, expressions, designs and
design registrations, whether or not copyrightable, including copyrights,
author, performer, moral and neighboring rights, and all registrations,
applications for registration and renewals of such copyrights; (d) inventions,
discoveries, trade secrets, business and technical information and know-how,
databases, data collections and other confidential and proprietary information
and all rights therein; (e) patents (including all reissues, divisionals,
provisionals, continuations and continuations-in-part, re-examinations,
renewals, substitutions and extensions thereof), patent applications, and other
patent rights and any other Governmental Authority-issued indicia of invention
ownership (including inventor’s certificates, petty patents and patent utility
models); and (f) software and firmware, including data files, source code,
object code, application programming interfaces, architecture, files, records,
schematics, computerized databases and other related specifications and
documentation.
 
“Knowledge of Seller” or “Seller’s Knowledge” or any other similar knowledge
qualification, means the actual knowledge of any director, managing member,
manager or officer of Seller or the Company, after reasonable inquiry.
 
“Law” means any statute, law, ordinance, regulation, rule, code, order,
constitution, treaty, common law, judgment, decree, other requirement or rule of
law of any Governmental Authority.
 
“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments,
interest, awards, penalties, fines, costs or expenses of whatever kind,
including reasonable attorneys’ fees; provided, however, that “Losses” shall not
include the use of any multiplier or punitive damages, except in the case of
fraud or to the extent punitive damages are actually awarded to a Governmental
Authority or other third party.
 
“Material Adverse Effect” means any event, occurrence, fact, condition or change
that is, or could reasonably be expected to become, individually or in the
aggregate, materially adverse to (a) the business, results of operations,
condition (financial or otherwise) or assets of the Company, or (b) the ability
of Seller to consummate the transactions contemplated hereby on a timely basis;
provided, however, that “Material Adverse Effect” shall not include any event,
occurrence, fact, condition or change, directly or indirectly, arising out of or
attributable to:  (i) general economic or political conditions; (ii) conditions
generally affecting the industries in which the Company operates; (iii) any
changes in financial or securities markets in general; (iv) act of war (whether
or not declared), armed hostilities or terrorism, or the escalation or worsening
thereof; (v) any action required or permitted by this Agreement; (vi) any
changes in applicable Laws or accounting rules, including GAAP; or (vii) the
public announcement, pendency or completion of the transactions contemplated by
this Agreement; provided further, however, that any event, occurrence, fact,
condition or change referred to in clauses (i) through (iv) immediately above
shall be taken into account in determining whether a Material Adverse Effect has
occurred or could reasonably be expected to occur to the extent that such event,
occurrence, fact, condition or change has a disproportionate effect on the
Company compared to other participants in the industries in which the Company
conducts its businesses.
 
 
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“Merger Consideration” means Eight Million Dollars ($8,000,000) subject to
adjustment pursuant to Section 2.04 hereof, plus the potential Earn-out Payment
described in Section 2.05.
 
“Organizational Documents” means (a) in the case of a Person that is a
corporation, its articles or certificate of incorporation and its by-laws,
regulations or similar governing instruments required by the laws of its
jurisdiction of formation or organization; (b) in the case of a Person that is a
partnership, its articles or certificate of partnership, formation or
association, and its partnership agreement (in each case, limited, limited
liability, general or otherwise); (c) in the case of a Person that is a limited
liability company, its articles or certificate of formation or organization, and
its limited liability company agreement or operating agreement; and (d) in the
case of a Person that is none of a corporation, partnership (limited, limited
liability, general or otherwise), limited liability company or natural person,
its governing instruments as required or contemplated by the laws of its
jurisdiction of organization.
 
“Permits” means all permits, licenses, franchises, approvals, authorizations,
registrations, certificates, variances and similar rights obtained, or required
to be obtained, from Governmental Authorities.
 
“Person” means an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity.
 
“Personal Information” means personally identifiable information from any
individual or individuals, including, without limitation, any customers,
prospective customers, employees and/or third parties.
 
“Post-Closing Tax Period” means any taxable period beginning after the Closing
Date and, with respect to any taxable period beginning before and ending after
the Closing Date, the portion of such taxable period beginning after the Closing
Date.
 
 “Pre-Closing Tax Period” means any Taxable Period ending on or before the
Closing Date.
 
“Pre-Closing Taxes” means Taxes of the Company for any Pre-Closing Tax Period.
 
“Real Property” means the real property owned, leased or subleased by the
Company, together with all buildings, structures and facilities located thereon.
 
“Release” means any actual or threatened release, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, abandonment, disposing or allowing to escape or migrate into or through
the environment (including, without limitation, ambient air (indoor or outdoor),
surface water, groundwater, land surface or subsurface strata or within any
building, structure, facility or fixture).
 
 
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“Representative” means, with respect to any Person, any and all directors,
managing members, managers, officers, employees, consultants, financial
advisors, counsel, accountants and other agents of such Person.
 
“Restricted Business” means the business of producing and providing education
products; including, without limitation, seminars, webinars, conferences,
symposiums, digital products (including, without limitation, on-line
downloadable material or streaming video (live or archived), and tangible
products (including, without limitation, publications, CDs and DVDs for
professionals), among others, as and where presently conducted by the Company.
 
“Seller’s Accountants” means Deloitte & Touche LLP.
 
“Taxable Period” means any period prescribed by any Governmental Authority for
which a Tax Return is required to be filed or a Tax is required to be paid.
 
“Taxes” means all federal, state, local, foreign and other income, gross
receipts, sales, use, production, ad valorem, transfer, franchise, registration,
profits, license, lease, service, service use, withholding, payroll, employment,
unemployment, estimated, excise, severance, environmental, stamp, occupation,
premium, property (real or personal), real property gains, windfall profits,
customs, duties or other taxes, fees, assessments or charges of any kind
whatsoever, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.
 
“Tax Return” means any return, declaration, report, claim for refund,
information return or statement or other document relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
 
“Tax Sharing Agreement” means any Tax allocation or sharing agreement or similar
contract or arrangement or any agreement that obligates the Company to make any
payment computed by reference to the Taxes, taxable income or taxable losses of
any other Person that is entered into prior the Closing Date, other than (i)
this Agreement, (ii) credit and lease agreements and (iii) other agreements not
primarily related to Taxes that are entered into in the ordinary course of
business.
 
“Territory” means the United States of America.
 
“Transaction Documents” means this Agreement, the Trademark License Agreement,
the Assignment, the Escrow Agreement and the Earn-out Escrow Agreement.
 
ARTICLE II
The Merger
 
Section 2.01   Effective Time of the Merger.
 
(a)           Upon the terms and subject to the conditions set forth in this
Agreement, a certificate of merger (the “Certificate of Merger”) meeting the
requirements of Section 18-209 of the Delaware Limited Liability Company Act
(“DLLCA”) shall be duly executed and delivered by the parties hereto and
thereafter delivered to the Secretary of State of the State of Delaware for
filing on the Closing Date.
 
 
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(b)           The Merger shall become effective at the time of the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware or at
such time thereafter which the parties hereto shall have agreed upon as is
provided in the Certificate of Merger (the “Effective Time”).
 
Section 2.02   Actions at Closing.  Subject to the terms and conditions of this
Agreement, the parties hereto shall consummate the Merger on the Closing Date by
taking the following actions:
 
(a)           Buyer shall deliver to the Seller Seven Million Five Hundred
Thousand Dollars ($7,500,000), by wire transfer of immediately available funds
to the account(s) designated by the Seller prior to the Closing.
 
(b)           Buyer shall deposit by wire transfer of immediately available
funds into an account designated by J.P. Morgan Chase Bank, N.A., as escrow
agent (the “Escrow Agent”), the amount of $500,000 (the “Escrow Amount”) for the
purpose of securing the indemnification obligations of the Seller, if any,
hereunder, which shall be held and distributed in accordance with the terms and
conditions of the Escrow Agreement in the form attached hereto as Exhibit A (the
“Escrow Agreement”).
 
(c)           Buyer shall deposit with the Escrow Agent, by wire transfer of
immediately available funds into an account designated by the Escrow Agent, the
amount of $500,000 (the “Earn-out Escrow Amount” to satisfy the obligations, if
any, of Buyer to pay the Earn-out Payment to Seller pursuant to Section 2.05,
which shall be held and distributed in accordance with the terms and conditions
of the Earn-out Escrow Agreement in the form attached hereto as Exhibit B (the
“Earn-out Escrow Agreement”).
 
Section 2.03   Effects of the Merger.
 
(a)           Upon the terms and subject to the conditions of this Agreement, at
the Effective Time (i) the Company shall be merged with and into the Merger Sub
and the separate existence of the Company shall cease (the Merger Sub and the
Company are sometimes referred to herein as the “Constituent Companies,” and the
Merger Sub following consummation of the Merger is sometimes referred to herein
as the “Surviving Company”), (ii) the Certificate of Formation of Merger Sub, as
in effect immediately prior to the Effective Time, shall be amended at the
Effective Time to change the company name set forth therein to “Cross Country
Education, LLC” and, as so amended, shall be the certificate of formation of the
Surviving Company until thereafter changed or amended in accordance with the
provisions thereof and applicable law, and (iii) the operating agreement of
Merger Sub shall be the operating agreement of the Surviving Company until
thereafter changed or amended in accordance with the provisions thereof and
applicable law
 
(b)           At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of the DLLCA.  Without limiting the
generality of the foregoing, at and after the Effective Time:
 
 
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(i)           The Surviving Company shall possess all of the rights, privileges,
powers and franchises, and be subject to all the restrictions, disabilities and
duties of each of the Constituent  Companies;
 
(ii)           All the rights, privileges, immunities, powers and franchises, of
a public as well as of a private nature, and all property, real, personal and
mixed, and all debts due on whatever account, including, without limitation, all
choses in action, and all and every other interest of or belonging to or due to
either Constituent Company shall be taken and deemed to be transferred to, and
vested in, the Surviving Company without further act or deed; and all property,
rights and privileges, immunities, powers and franchises and all and every other
interest shall be thereafter as effectually the property of the Surviving
Company as they were of either Constituent Company prior to the Effective Time;
and
 
(iii)           All debts, liabilities, duties and obligations of the Company
shall become the debts, liabilities, duties and obligations of the Surviving
Company, and the Surviving Company shall thenceforth be responsible and liable
for all the debts, liabilities, duties and obligations of the Company, and the
rights of creditors of the Company shall not be impaired by the Merger, and may
be enforced against the Surviving Company.
 
(c)           At the Effective Time, by virtue of the Merger and without any
action on the part of the holder of the Membership Interests, or the holder of
the membership interests of Merger Sub, said membership interests shall be
converted as follows:
 
(i)           Each issued and outstanding membership interest of Merger Sub
shall be converted into and become one membership interest of the Surviving
Company so that after the effective Time, Buyer shall be the holder of all of
the issued and outstanding membership interests of the Surviving Company;
 
(ii)           The issued and outstanding Membership Interests shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into the right to receive, in cash, the Merger Consideration.  All
such Membership Interests when so converted, shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and the
holder of the certificates representing the Membership Interests shall cease to
have any rights with respect thereto, except the right to receive the Merger
Consideration upon the surrender of such certificates as provided below;
 
(iii)           At the Closing, Seller shall surrender the certificates
representing the Membership Interests to Buyer in exchange for the Merger
Consideration.
 
Section 2.04   Purchase Price Adjustment.
 
(a)           Closing Adjustment.
 
(i)           At least three (3) Business Days before the Closing, Seller shall
prepare and deliver to Buyer a statement setting forth its good faith estimate
of Closing Working Capital (the “Estimated Closing Working Capital”), which
statement shall contain an estimated balance sheet of the Company as of the
close of business on the Closing Date (without giving effect to the transactions
contemplated herein), a calculation of Estimated Closing Working Capital (the
“Estimated Closing Working Capital Statement”), and a certificate of the Chief
Financial Officer of Seller that the Estimated Closing Working Capital Statement
was prepared in accordance with GAAP applied using the same accounting methods,
practices, principles, policies and procedures, with consistent classifications,
judgments and valuation and estimation methodologies that were used in the
preparation of the Financial Statements for the most recent fiscal year end as
if such Estimated Closing Working Capital Statement was being prepared as of a
fiscal year end.
 
 
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(ii)           The payment to be made at Closing pursuant to Section 2.02(a)
above shall be (i) increased dollar for dollar by the amount the Estimated
Working Capital exceeds negative Two Hundred Thousand Dollars ($200,000) (the
“Target Working Capital”) or (ii) decreased dollar for dollar by the amount the
Estimated Working Capital is less than the Target Working Capital; provided,
however, that (x) the adjustments provided in Clause (i) of this sentence shall
not be made if the required adjustment is less than $300,000 and (y) the
adjustment provided in clause (ii) of this sentence shall not be made if the
required adjustment is less than $150,000.
 
(b)           Post-Closing Adjustment.
 
(i)           Within sixty (60) days after the Closing Date, Buyer shall prepare
and deliver to Seller a statement setting forth its calculation of Closing
Working Capital, which statement shall contain a balance sheet of the Company as
of the close of business on the Closing Date (without giving effect to the
transactions contemplated herein), a calculation of Closing Working Capital (the
“Closing Working Capital Statement”) and a certificate of the Chief Financial
Officer of Buyer that the Closing Working Capital Statement was prepared in
accordance with GAAP applied using the same accounting methods, practices,
principles, policies and procedures, with consistent classifications, judgments
and valuation and estimation methodologies that were used in the preparation of
the Financial Statements for the most recent fiscal year end as if such Closing
Working Capital Statement was being prepared and audited as of a fiscal year
end.
 
(ii)           The post-closing adjustment shall be an amount equal to the
Closing Working Capital (as finally determined pursuant to Section 2.04(c)
below) minus the Estimated Closing Working Capital (the “Post-Closing
Adjustment”).  If the Post-Closing Adjustment is a positive number, Buyer shall
pay to Seller an amount equal to the Post-Closing Adjustment.  If the
Post-Closing Adjustment is a negative number, Seller shall pay to Buyer an
amount equal to the Post-Closing Adjustment.  The adjustment provided in this
Section 2.04(b)(ii) shall not be made if the Closing Working Capital is between
negative $350,000 and positive $100,000.  In such event, any adjustment
previously made pursuant to Section 2.04(a)(ii) shall be deemed not to have
occurred and any amounts paid pursuant to Section 2.04(a)(ii) shall be returned
to the party that made such payment.
 
(c)           Examination and Review.
 
(i)           Examination.  After receipt of the Closing Working Capital
Statement, Seller shall have forty-five (45) days (the “Review Period”) to
review the Closing Working Capital Statement.  During the Review Period, Seller
and Seller’s Accountants shall have full access to the books and records of the
Company, the personnel of, and work papers prepared by, Buyer and/or Buyer’s
Accountants to the extent that they relate to the Closing Working Capital
Statement and to such historical financial information (to the extent in Buyer’s
possession) relating to the Closing Working Capital Statement as Seller may
reasonably request for the purpose of reviewing the Closing Working Capital
Statement and to prepare a Statement of Objections (defined below), provided,
that such access shall be in a manner that is calculated to minimally interfere
with the normal business operations of Buyer or the Company.
 
 
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(ii)           Objection.  On or prior to the last day of the Review Period,
Seller may object to the Closing Working Capital Statement by delivering to
Buyer a written statement setting forth Seller’s objections in reasonable
detail, indicating each disputed item or amount and the basis for Seller’s
disagreement therewith (the “Statement of Objections”).  If Seller fails to
deliver the Statement of Objections before the expiration of the Review Period,
the Closing Working Capital Statement and the Post-Closing Adjustment, as the
case may be, reflected in the Closing Working Capital Statement shall be deemed
to have been accepted by Seller.  If Seller delivers the Statement of Objections
before the expiration of the Review Period, Buyer and Seller shall negotiate in
good faith to resolve such objections within thirty (30) days after the delivery
of the Statement of Objections (the “Resolution Period”), and, if the same are
so resolved within the Resolution Period, the Post-Closing Adjustment and the
Closing Working Capital Statement with such changes as may have been previously
agreed in writing by Buyer and Seller shall be final and binding.
 
(iii)           Resolution of Disputes.  If Seller and Buyer fail to reach an
agreement with respect to all of the matters set forth in the Statement of
Objections before expiration of the Resolution Period, then any amounts
remaining in dispute (“Disputed Amounts” and any amounts not so disputed, the
“Undisputed Amounts”) shall be submitted for resolution to the office of
PriceWaterhouseCoopers, LLP or, if PriceWaterhouseCoopers, LLP is unable to
serve, Buyer and Seller shall appoint by mutual agreement the office of an
impartial nationally recognized firm of independent certified public accountants
other than Seller’s Accountants or Buyer’s Accountants (the “Independent
Accountant”) who, acting as experts and not arbitrators, shall resolve the
Disputed Amounts only and make any adjustments to the Post-Closing Adjustment
and the Closing Working Capital Statement.  The Independent Accountant shall
only decide the specific items under dispute by the parties and their decision
for each Disputed Amount must be within the range of values assigned to each
such item in the Closing Working Capital Statement and the Statement of
Objections, respectively.
 
(iv)           Fees of the Independent Accountant.  The fees and expenses of the
Independent Accountant shall be paid by Seller, on the one hand, and by Buyer,
on the other hand, based upon the percentage that the amount actually contested
but not awarded to Seller or Buyer, respectively, bears to the aggregate amount
actually contested by Seller and Buyer.
 
(v)           Determination by Independent Accountant.  The Independent
Accountant shall make a determination as soon as practicable within thirty (30)
days (or such other time as the parties hereto shall agree in writing) after
their engagement, and their resolution of the Disputed Amounts and their
adjustments to the Closing Working Capital Statement and/or the Post-Closing
Adjustment shall be conclusive and binding upon the parties hereto.
 
 
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(vi)           Payments of Post-Closing Adjustment.  Except as otherwise
provided herein, any payment of the Post-Closing Adjustment, together with
interest calculated as set forth below, shall (A) be due (x) within five (5)
Business Days of acceptance of the Closing Working Capital Statement or (y) if
there are Disputed Amounts, then within five (5) Business Days of the resolution
described in clause (v) above; and (B) be paid by wire transfer of immediately
available funds to such account as is directed by Buyer or Seller, as the case
may be.  The amount of any Post-Closing Adjustment shall bear interest from and
including the Closing Date to but excluding the date of payment at a rate per
annum equal to 0.43%.  Such interest shall be calculated daily on the basis of a
365-day year and the actual number of days elapsed, without compounding.
 
(d)           Adjustments for Tax Purposes.  Any payments made pursuant to
Section 2.04 shall be treated as an adjustment to Merger Consideration by the
parties for Tax purposes, unless otherwise required by Law.
 
Section 2.05   Earn-out.
 
(a)           Earn-out Payment.  As potential additional Merger Consideration,
at such time as provided in Section 2.05(c), Buyer shall pay to Seller, with
respect to the period beginning on January 1, 2015 and ending December 31, 2015
(the “Calculation Period”), an amount (the “Earn-out Payment”) equal to Five
Hundred Thousand Dollars ($500,000) if and only if the Adjusted EBITDA for the
Calculation Period is equal to or greater than Five Hundred Thousand Dollars
($500,000) (the “EBITDA Threshold”); provided, that in no event shall Buyer be
obligated to pay Seller more than $500,000 in the aggregate pursuant to this
Section 2.05.  The Earn-out Payment shall in no event exceed Five Hundred
Thousand Dollars ($500,000).  If the Adjusted EBITDA for the Calculation Period
does not meet or exceed the applicable EBITDA Threshold, no Earn-out Payment
shall be due for the Calculation Period.  For purposes of clarity, if the
Adjusted EBITDA for the Calculation Period is Four Hundred and Ninety-Nine
Thousand Nine Hundred and Ninety Nine Dollars ($499,999), then no Earn-out
Payment shall be owed.
 
(b)           Procedures Applicable to Determination of the Earn-out Payment.
 
(i)           On or before the date which is sixty (60) days after December 31,
2015 (the “Earn-out Calculation Delivery Date”), Buyer shall prepare and deliver
to Seller a written statement (the “Earn-out Calculation Statement”) setting
forth in reasonable detail its determination of Adjusted EBITDA for the
Calculation Period and its determination whether the Earn-out Payment shall be
paid to Seller (the “Earn-out Determination”).
 
 
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(ii)           Seller shall have forty-five (45) days after receipt of the
Earn-out Calculation Statement (the “Review Period”) to review the Earn-out
Calculation Statement and the Earn-out Determination set forth therein.  During
the Review Period, Seller and its representatives shall have the right to
inspect the books and records of the Company and the Surviving Company during
normal business hours at the Surviving Company’s offices, upon reasonable prior
notice and solely for purposes reasonably related to the determinations of
Adjusted EBITDA and the resulting Earn-out Payment.  Prior to the expiration of
the Review Period, Seller may object to the Earn-out Calculation set forth in
the Earn-out Calculation Statement for the Calculation Period by delivering a
written notice of objection (an “Earn-out Calculation Objection Notice”) to
Buyer.  Any Earn-out Calculation Objection Notice shall specify the items in the
Earn-out Calculation disputed by Seller and shall describe in reasonable detail
the basis for such objection, as well as the amount in dispute.  If Seller fails
to deliver an Earn-out Calculation Objection Notice to Buyer prior to the
expiration of the Review Period, then the Earn-out Determination set forth in
the Earn-out Calculation Statement shall be final and binding on the parties
hereto.  If Seller timely delivers an Earn-out Calculation Objection Notice,
Buyer and Seller shall negotiate in good faith to resolve the disputed items and
agree upon the resulting amount of the Adjusted EBITDA and the Earn-out Payment,
if any, for the Calculation Period.  If Buyer and Seller are unable to reach
agreement within fifteen (15) days after such an Earn-out Calculation Objection
Notice has been given, all unresolved disputed items shall be promptly referred
to the Independent Accountant.  The Independent Accountant shall be directed to
render a written report on the unresolved disputed items with respect to the
Earn-out Determination as promptly as practicable, but in no event greater than
thirty (30) days after such submission to the Independent Accountant, and to
resolve only those unresolved disputed items set forth in the Earn-out
Calculation Objection Notice.  If unresolved disputed items are submitted to the
Independent Accountant, Buyer and Seller shall each furnish to the Independent
Accountant such work papers, schedules and other documents and information
relating to the unresolved disputed items as the Independent Accountant may
reasonably request.  The Independent Accountant shall resolve the disputed items
based solely on the applicable definitions and other terms in this Agreement and
the presentations by Buyer and Seller, and not by independent review.  The
resolution of the dispute and the calculation of Adjusted EBITDA that is the
subject of the applicable Earn-out Calculation Objection Notice by the
Independent Accountant shall be final and binding on the parties hereto.  The
fees and expenses of the Independent Accountant shall be borne by Seller and
Buyer in proportion to the amounts by which their respective calculations of
Adjusted EBITDA differ from Adjusted EBITDA as finally determined by the
Independent Accountant.
 
(c)           Timing of Payment of Earn-out Payment.  The Earn-out Payment, if
any, that Buyer is required to pay pursuant to Section 2.05(a) hereof shall be
paid in full no later than seven (7) Business Days following the date upon which
the determination of Adjusted EBITDA for the Calculation Period becomes final
and binding upon the parties as provided in Section 2.05(b)(ii) (including any
final resolution of any dispute raised by Seller in an Earn-out Calculation
Objection Notice).  Buyer shall pay to Seller the Earn-out Payment, if any, in
cash by wire transfer of immediately available funds to the bank account for
Seller previously provided to Buyer.
 
(d)           Acceleration upon Buyer’s Election.  At any time after the Closing
Date, Buyer may, in its sole discretion, elect to make the Earn-out Payment (the
“Acceleration Payment”) to Seller which, upon payment thereof, shall fully
release and discharge Buyer, its successors and assigns from any further
liability or obligation pursuant to this Section 2.05.
 
(e)           Post-closing Operation of the Surviving Company.  Subject to the
terms of this Agreement and the other Transaction Documents, subsequent to the
Closing, Buyer shall operate the Surviving Company in the ordinary course
consistent with the past practice of the Company; provided, that Buyer shall
not, directly or indirectly, take any actions in bad faith that would have the
purpose of avoiding the Earn-out Payment hereunder.
 
(f)           No Security.  The parties hereto understand and agree that (i) the
contingent right to receive the Earn-out Payment does not constitute an equity
or ownership interest in Buyer or the Company, (ii) Seller shall not have any
rights as a securityholder of Buyer or the Surviving Company as a result of
Seller’s contingent right to receive the Earn-out Payment hereunder, and (iii)
no interest is payable with respect to the Earn-out Payment.
 
 
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(g)           Adjustments for Tax Purposes.  Any payments made pursuant to
Section 2.05 shall be treated as an adjustment to the Merger Consideration by
the parties for Tax purposes, unless otherwise required by Law.
 
Section 2.06   Closing.  Subject to the terms and conditions of this Agreement,
the transactions contemplated by this Agreement shall take place at a closing
(the “Closing”) to be held at 8:00 a.m. central standard time, no later than two
(2) Business Days after the last of the conditions to Closing set forth in
Article VII have been satisfied or waived (other than conditions which, by their
nature, are to be satisfied on the Closing Date), via email, PDF or facsimile,
except as Seller and Buyer may otherwise mutually agree upon in writing (the day
on which the Closing takes place being the “Closing Date”).
 
Section 2.07   Closing Deliveries.
 
(a)           At the Closing, Buyer shall deliver to the appropriate party:
 
(i)           the payments required by Section 2.03, subject to any Closing
Adjustment set forth in Section 2.04; and
 
(ii)           the Transaction Documents and all other agreements, documents,
instruments or certificates required to be delivered by Buyer at or prior to the
Closing pursuant to Section 7.03 of this Agreement.
 
(b)           At the Closing, Seller shall deliver to Buyer:
 
(i)           the certificates representing the Membership Interests; and
 
(ii)           the other Transaction Documents and all other agreements,
documents, instruments or certificates required to be delivered by Seller at or
prior to the Closing pursuant to Section 7.02 of this Agreement.
 
Section 2.08   Interest on Escrow.  The Seller will be entitled to retain any
and all interest earned on the Indemnification Escrow Amount and the Buyer will
be entitled to retain any and all interest earned on the Earn-out Escrow Amount.
 
Section 2.09    Tax Allocation of Merger Consideration.  For all tax purposes,
Buyer and Seller agree to, and to cause their Affiliates to, act in accordance
with (including filing Tax Returns consistently with) the merger consideration
allocation set forth at Schedule 2.09.
 
ARTICLE III
Representations and Warranties of Seller
 
Except as set forth in the Disclosure Schedules, Seller represents and warrants
to Buyer as follows:
 
 
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Section 3.01     Organization and Authority of Seller.  Seller is a corporation
duly organized, validly existing and in good standing under the Laws of the
state of Delaware.  Seller has full corporate power and authority to enter into
this Agreement and the other Transaction Documents to which Seller is a party,
to carry out its obligations and to consummate the transactions contemplated
hereby and thereby.  The execution and delivery by Seller of this Agreement and
any other Transaction Document to which Seller is a party, the performance by
Seller of its obligations and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of Seller.  This Agreement has been duly executed
and delivered by Seller, and (assuming due authorization, execution and delivery
by Buyer) this Agreement constitutes a legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its terms except to the
extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other Laws affecting the enforcement
of creditors’ rights generally and by general principles of equity, regardless
of whether such enforceability is considered in a proceeding at law or in
equity.  When each other Transaction Document to which Seller is or will be a
party has been duly executed and delivered by Seller (assuming due
authorization, execution and delivery by each other party thereto), such
Transaction Document will constitute a legal and binding obligation of Seller
enforceable against it in accordance with its terms except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other Laws affecting the enforcement of creditors’
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding at law or in equity.
 
Section 3.02   Organization, Authority and Qualification of the Company.  The
Company is a limited liability company duly organized, validly existing and in
good standing under the Laws of the state of Delaware and has full limited
liability company power and authority to enter into this Agreement, to carry out
its obligations and to consummate the transactions contemplated hereby, to own,
operate or lease the properties and assets now owned, operated or leased by it
and to carry on its business as it has been and is currently conducted.  The
execution and delivery by the Company of this Agreement, the performance by the
Company of its obligations and the consummation by the Company of the
Transactions contemplated hereby have been duly authorized by all requisite
limited liability company action on the part of the Company.  This Agreement has
been duly executed and delivered by the Company, and (assuming due
authorization, execution and delivery by Buyer and Merger Sub) this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other Laws affecting the enforcement of creditors’
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding at law or in equity.  Section 3.02
of the Disclosure Schedules sets forth each jurisdiction in which the Company is
licensed or qualified to do business, and the Company is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the operation of its business as
currently conducted makes such licensing or qualification necessary except where
the failure to be so qualified or licensed would not result in a Material
Adverse Effect.  Section 3.02 of the Disclosure Schedules sets forth the
Company’s most recent Certificate of Formation filed with the Secretary of State
of the State of Delaware and the Company’s current limited liability company
agreement and/or operating agreement.
 
 
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Section 3.03   Capitalization.
 
(a)           Seller is the sole record owner of and except as set forth in
Section 3.03 of the Disclosure Schedules, has good and valid title to the
Membership Interests, free and clear of all Encumbrances.  The Membership
Interests constitute 100% of the total issued and outstanding membership
interests in the Company.  The Membership Interests have been duly authorized
and are validly issued, fully paid and non-assessable.
 
(b)           The Membership Interests were issued in compliance with applicable
Laws.  The Membership Interests were not issued in violation of the
Organizational Documents of the Company or any other agreement, arrangement or
commitment to which Seller or the Company is a party and are not subject to or
in violation of any preemptive or similar rights of any Person.
 
(c)           There are no outstanding or authorized options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to any membership interests in the Company or
obligating Seller or the Company to issue or sell any membership interests
(including the Membership Interests), or any other interest, in the
Company.  Other than the Organizational Documents, there are no voting trusts,
proxies or other agreements or understandings in effect with respect to the
voting or transfer of any of the Membership Interests.
 
Section 3.04   No Subsidiaries.  Except as set forth in Section 3.04 of the
Disclosure Schedules, the Company does not own, or have any interest in any
shares or have an ownership interest in any other Person.
 
Section 3.05   No Conflicts; Consents.  The execution, delivery and performance
by Seller and the Company of this Agreement and the other Transaction Documents
to which Seller or the Company is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not:  (a) conflict
with or result in a violation or breach of, or default under, any provision of
the Organizational Documents of Seller or the Company; (b) conflict with or
result in a violation or breach of any provision of any Law or Governmental
Order applicable to Seller or the Company; (c) except as set forth in Section
3.05(c) of the Disclosure Schedules, require the consent, notice or other action
by any Person under, conflict with, result in a violation or breach of,
constitute a default or an event that, with or without notice or lapse of time
or both, would constitute a default under, result in the acceleration of or
create in any party the right to accelerate, terminate, modify or cancel any
Contract to which the Company is a party or by which the Company is bound or to
which any of its properties and assets are subject (including any Material
Contract) or any Permit affecting the properties, assets or business of the
Company; or (d) result in the creation or imposition of any Encumbrance other
than Permitted Liens on any properties or assets of the Company.  Other than the
filing of the Certificate of Merger, no consent, approval, Permit, Governmental
Order, declaration or filing with, or notice to, any Governmental Authority is
required by or with respect to Seller or the Company in connection with the
execution and delivery of this Agreement and the other Transaction Documents and
the consummation of the transactions contemplated hereby and thereby.
 
 
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Section 3.06   Financial Statements.  Complete copies of the Company’s unaudited
financial statements consisting of the balance sheet of the Company as of
December 31 in each of the years 2013 and 2014 and the related statement of
income for the years then ended (the “Full-Year Financial Statements”), and
unaudited financial statements consisting of the balance sheet of the Company as
at June 30, 2015 and the related statement of income for the six-month period
then ended (the “Interim Financial Statements” and together with the Full-Year
Financial Statements, the “Financial Statements”) have been delivered to Buyer
and are set forth on Section 3.06 of the Disclosure Schedules.  The Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis throughout the period involved, subject, in the case of the Interim
Financial Statements, to normal year-end adjustments and the absence of
notes.  The Financial Statements are based on the books and records of the
Company, and fairly present in all material respects the financial condition of
the Company as of the respective dates they were prepared and the results of the
operations of the Company for the periods indicated.  The balance sheet of the
Company as of December 31, 2014 is referred to herein as the “Balance Sheet” and
the date thereof as the “Balance Sheet Date” and the balance sheet of the
Company as of June 30, 2015 is referred to herein as the “Interim Balance Sheet”
and the date thereof as the “Interim Balance Sheet Date.”  The Company maintains
a standard system of accounting established and administered in accordance with
GAAP.
 
Section 3.07   Undisclosed Liabilities.  The Company has no liabilities,
obligations or commitments of any nature whatsoever, asserted or unasserted,
known or unknown, absolute or contingent, accrued or unaccrued, matured or
unmatured or otherwise that would, in accordance with GAAP, be required to be
included on a Balance Sheet (“Liabilities”), except (a) those which are
adequately reflected or reserved against in the Balance Sheet as of the Balance
Sheet Date, and (b) those which have been incurred in the ordinary course of
business consistent with past practice since the Balance Sheet Date.
 
Section 3.08     Absence of Certain Changes, Events and Conditions.  Except as
set forth on Section 3.08 of the Disclosure Schedules, since the Balance Sheet
Date, and other than in the ordinary course of business consistent with past
practice, there has not been, with respect to the Company, any
 
(a)           event, occurrence or development that has had, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect;
 
(b)           amendment of the Organizational Documents of the Company;
 
(c)           split, combination or reclassification of any membership interests
in the Company;
 
(d)           issuance, sale or other disposition of, or creation of any
Encumbrance on, any membership interests in the Company, or grant of any
options, warrants or other rights to purchase or obtain (including upon
conversion, exchange or exercise) any membership interests in the Company;
 
(e)           declaration or payment of any distributions on or in respect of
any membership interests in the Company or redemption, purchase or acquisition
of any of the Company’s outstanding membership interests;
 
(f)           material change in any method of accounting or accounting practice
of the Company, except as required by GAAP or as disclosed in the notes to the
Financial Statements;
 
 
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(g)           material change in the Company’s cash management practices and its
policies, practices and procedures with respect to collection of accounts
receivable, establishment of reserves for uncollectible accounts, accrual of
accounts receivable, inventory control, prepayment of expenses, payment of trade
accounts payable, accrual of other expenses, deferral of revenue and acceptance
of customer deposits;
 
(h)           [Intentionally omitted]
 
(i)           incurrence, assumption or guarantee of any indebtedness for
borrowed money except unsecured current obligations and Liabilities incurred in
the ordinary course of business consistent with past practice;
 
(j)           transfer, assignment, sale or other disposition of any of the
assets shown or reflected in the Balance Sheet or cancellation of any debts or
entitlements;
 
(k)           transfer, assignment or grant of any license or sublicense of any
material rights under or with respect to any Company Intellectual Property or
Company IP Agreements;
 
(l)           material damage, destruction or loss (whether or not covered by
insurance) to its property;
 
(m)           any capital investment in, or any loan to, any other Person;
 
(n)           acceleration, termination, material modification to or
cancellation of any material Contract (including, but not limited to, any
Material Contract) to which the Company is a party or by which it is bound;
 
(o)           any material capital expenditures;
 
(p)           imposition of any Encumbrance upon any of the Company’s properties
or assets, tangible or intangible;
 
(q)           (i) grant of any bonuses, whether monetary or otherwise, or
increase in any wages, salary, severance, pension or other compensation or
benefits in respect of its current or former officers, managers, independent
contractors, consultants or employees (excluding speakers or seminar
coordinators retained in the ordinary course of the Company’s business) other
than as provided for in any written agreements or required by applicable Law, or
(ii) any action to accelerate the vesting or payment of any compensation or
benefit for any current or former officer, manager, independent contractor,
consultant or employee;
 
(r)           any loan to (or forgiveness of any loan to), or entry into any
other transaction with, any of its members or current or former managers,
officers and employees;
 
(s)           entry into a new line of business or abandonment or discontinuance
of existing lines of business;
 
 
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(t)           adoption of any plan of merger, consolidation, reorganization,
liquidation or dissolution or filing of a petition in bankruptcy under any
provisions of federal or state bankruptcy Law or consent to the filing of any
bankruptcy petition against it under any similar Law;
 
(u)           purchase, lease or other acquisition of the right to own, use or
lease any property or assets for an amount in excess of $25,000 (in the case of
a lease, per annum), except for purchases of inventory or supplies in the
ordinary course of business consistent with past practice;
 
(v)           acquisition by merger or consolidation with, or by purchase of a
substantial portion of the assets, stock or other equity of, or by any other
manner, any business or any Person or any division thereof; or
 
(w)           any Contract to do any of the foregoing.
 
Section 3.09   Material Contracts.
 
(a)           Section 3.09 of the Disclosure Schedules lists each Contract that
is material to the Business of the Company (such Contracts, together with all
material Contracts concerning the occupancy, management or operation of any Real
Property (including without limitation, brokerage contracts) listed or otherwise
disclosed in Section 3.10(b) of the Disclosure Schedules and all Company IP
Agreements set forth in Section 3.12(b) of the Disclosure Schedules, being
“Material Contracts”):
 
(i)           each Contract of the Company involving aggregate consideration
paid by the Company in excess of $50,000 per year, or $200,000 in the aggregate;
 
(ii)           all Contracts that provide for the indemnification by the Company
of any Person or the assumption of any Tax, environmental or other Liability of
any Person;
 
(iii)           all Contracts that relate to the acquisition or disposition of
any business, a material amount of equity or assets of any other Person or any
real property (whether by merger, sale of stock or other equity interests, sale
of assets or otherwise);
 
(iv)           all broker, distributor, dealer, manufacturer’s representative,
franchise, agency, sales promotion, market research, marketing consulting and
advertising Contracts to which the Company is a party for which the annual costs
exceed $25,000;
 
(v)           all employment agreements and Contracts with independent
contractors or consultants (or similar arrangements) to which the Company is a
party for which the annual costs exceed $25,000;
 
(vi)           except for Contracts relating to trade receivables, all Contracts
relating to Indebtedness (including, without limitation, guarantees) of the
Company;
 
(vii)           all Contracts that limit or purport to limit the ability of the
Company to compete in any line of business or with any Person or in any
geographic area or during any period of time;
 
 
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(viii)           any Contracts to which the Company is a party that provide for
any joint venture, partnership or similar arrangement by the Company;
 
(ix)           all Contracts between or among the Company on the one hand and
Seller or any Affiliate of Seller (other than the Company) on the other hand;
and
 
(x)           any other Contract that is material to the Company and not
previously disclosed pursuant to this Section 3.09.
 
(b)           Each Material Contract is valid and binding on the Company in
accordance with its terms and is in full force and effect.  None of the Company
or, to Seller’s Knowledge, any other party thereto is in breach of or default
under (or to Seller’s Knowledge, is alleged to be in breach of or default
under), or has provided or received any written notice of any intention to
terminate, any Material Contract.  To Seller’s Knowledge, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute an event of default under any Material Contract or result in a
termination thereof or would cause or permit the acceleration or other changes
of any right or obligation or the loss of any benefit thereunder.  Complete and
correct copies of each Material Contract (including all modifications,
amendments and supplements thereto and waivers thereunder) have been provided to
Buyer.
 
Section 3.10   Title to Assets; Real Property.
 
(a)           The Company operates from one (1) office located at 9020 Overlook
Boulevard, #140, Brentwood, Tennessee 37067.  The Company has good and valid
title to, or a valid leasehold interest in, all Real Property, personal property
and other assets reflected in the Year End Financial Statements or acquired
after the Balance Sheet Date, other than properties and assets sold or otherwise
disposed of since the Balance Sheet Date.  Except as set forth in Section
3.10(a) of the Disclosure Schedules, all such properties and assets (including
leasehold interests) are free and clear of Encumbrances except for (i) liens for
Taxes not yet due and payable; (ii) statutory liens for amounts not yet
delinquent or which are being contested in good faith as set forth on Section
3.10(a)(ii) of the Disclosure Schedules; (iii) statutory liens securing the
claims or demands of materialmen, mechanics, carriers, warehousemen, landlords,
and other like persons for labor, materials, supplies, or rentals, if any, which
claims or demands are included in Current Liabilities; (iv) liens resulting from
deposits made in connection with workers’ compensation, unemployment Taxes or
insurance, social security and like laws; (v) liens of banks and financial
institutions with respect to funds on deposit therewith (collectively,
“Permitted Liens”).
 
(b)           Seller has no owned Real Property and is not a party to any
contract to sell or acquire any Real Property.  With respect to leased Real
Property, Seller has delivered or made available to Buyer true, complete and
correct copies of any leases affecting the Real Property.  The Company is not a
sublessor or grantor under any sublease or other instrument granting to any
other Person any right to the possession, lease, occupancy or enjoyment of any
leased Real Property.  The use and operation of the Real Property in the conduct
of the Company’s business do not violate in any material respect any Law,
covenant, condition, restriction, easement, license, permit or agreement.  To
the Seller’s Knowledge, no material improvements constituting a part of the Real
Property encroach on real property owned or leased by a Person other than the
Company.  To the Seller’s Knowledge, there are no Actions pending nor threatened
against or affecting the Real Property or any portion thereof or interest
therein in the nature or in lieu of condemnation or eminent domain proceedings.
 
 
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Section 3.11   Condition And Sufficiency of Assets.  To the Seller’s Knowledge,
the buildings, structures, furniture, fixtures, vehicles and other assets of the
Company are structurally sound, are in good operating condition and repair
(normal wear and tear excepted), and are adequate for the uses to which they are
being put, and none of such assets is in need of maintenance or repairs except
for ordinary, routine maintenance and repairs that are not material in nature or
cost.  The buildings, structures, furniture, fixtures, equipment, vehicles and
other items of tangible personal property currently owned or leased by the
Company, together with all other properties and assets of the Company, are
sufficient for the continued conduct of the Company’s business after the Closing
in substantially the same manner as conducted prior to the Closing and
constitute all of the rights, property and assets necessary to conduct the
business of the Company as currently conducted.
 
Section 3.12   Intellectual Property.
 
(a)           Section 3.12(a) of the Disclosure Schedules lists all (i) Company
IP Registrations and (ii) Company Intellectual Property that is not registered
but that is material to the Company’s business or operations.  All required
filings and fees related to the Company IP Registrations have been timely filed
with and paid to the relevant Governmental Authorities and authorized registrars
and all Company IP Registrations are otherwise in good standing.  Seller has
made available to Buyer true and complete copies of all available file
histories, documents, certificates, office actions, and material correspondence
related to all Company IP Registrations.
 
(b)           Section 3.12(b) of the Disclosure Schedules lists all Company IP
Agreements.  Seller has provided Buyer with true and complete copies of all
Company IP Agreements, including all modifications, amendments and supplements
thereto and waivers thereunder.  Each Company IP Agreement is valid and binding
on the Company in accordance with its terms and is in full force and
effect.  Neither the Company nor, to the Seller’s Knowledge, any other party
thereto is in breach of or default under (or is alleged to be in breach of or
default under), or has provided or received any written notice of breach or
default of or any intention to terminate, any Company IP Agreement.
 
(c)           Except as set forth in Section 3.12(c)-1 of the Disclosure
Schedules, the Company is the sole and exclusive legal and beneficial, and with
respect to the Company IP Registrations, record, owner of all right, title and
interest in and to the Company Intellectual Property, and has the valid right to
use all other Intellectual Property used in or necessary for the conduct of the
Company’s current business or operations, in each case, free and clear of
Encumbrances other than Permitted Liens.  Except as set forth in Section
3.12(c)-2 of the Disclosure Schedules, Seller has entered into binding, written
agreements with every current employee of the Company, and with every current
independent contractor, whereby such employees and independent contractors (i)
assign to the Company any ownership interest and right they may have in the
Company Intellectual Property; and (ii) acknowledge the Company’s exclusive
ownership of all Company Intellectual Property.  Seller has provided Buyer with
true and complete copies of all such agreements.
 
 
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(d)           The consummation of the transactions contemplated hereunder will
not result in the loss or impairment of or payment of any additional amounts
with respect to, nor require the consent of any other Person in respect of, the
Company’s right to own, use or hold for use any Intellectual Property as owned,
used or held for use in the conduct of the Company’s business or operations as
currently conducted.
 
(e)           The Company’s rights in the Company Intellectual Property are
valid, subsisting and enforceable.  The Company has taken all commercially
reasonable steps to maintain the Company Intellectual Property and to protect
and preserve the confidentiality of all trade secrets included in the Company
Intellectual Property.
 
(f)           The conduct of the Company’s business as currently and formerly
conducted, and the products, processes and services of the Company, have not
infringed, misappropriated, diluted or otherwise violated, and do not and will
not infringe, misappropriate, dilute or otherwise violate in any material
respect the Intellectual Property or other rights of any Person.  To the
Knowledge of the Sellers, no Person is currently infringing, misappropriating,
diluting or otherwise violating, any Company Intellectual Property.
 
(g)           There are no Actions (including any oppositions, interferences or
re-examinations), pending or to the Knowledge of the Sellers, threatened
(including in the form of offers to obtain a license):  (i) alleging any
infringement, misappropriation, dilution or violation of Intellectual Property
of any Person by the Company; (ii) challenging the validity, enforceability,
registrability or ownership of any Company Intellectual Property or the
Company’s rights with respect to any Company Intellectual Property; or (iii) by
or on behalf of the Company or any other Person alleging any infringement,
misappropriation, dilution or violation by any Person of the Company
Intellectual Property.  The Company is not subject to any outstanding
Governmental Order (including any motion or petition therefor) that does or
would restrict or impair the use of any Company Intellectual Property.
 
Section 3.13   Intentionally Omitted.
 
Section 3.14   Customers and Suppliers.
 
(a)           The Company has provided Buyer, and Section 3.14(a) of the
Disclosure Schedules sets forth, a list of each customer that made aggregate
payments to the Company of at least $15,000 during the year ended December 31,
2014 (“Material Customers”).  The Company has not received any written notice,
and has no reason to believe, that any of its Material Customers has ceased, or
intends to cease after the Closing, to use its goods or services or to otherwise
terminate or materially reduce its relationship with the Company.
 
(b)           Section 3.14(b) of the Disclosure Schedules sets forth (i) each
supplier to whom the Company has paid consideration for goods or services
rendered in an amount greater than or equal to $25,000 for each of the two (2)
most recent fiscal years (collectively, the “Material Suppliers”); and (ii) the
amount of purchases from each Material Supplier during such periods.  The
Company has not received any written notice, and has no reason to believe, that
any of its Material Suppliers has ceased, or intends to cease, to supply goods
or services to the Company or to otherwise terminate or materially reduce its
relationship with the Company.
 
 
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Section 3.15   Insurance.  Section 3.15 of the Disclosure Schedules sets forth a
true and complete list of all current policies or binders of insurance
maintained by Seller or its Affiliates (including the Company) relating to the
assets, business, operations, employees, officers and managers of the Company
(collectively, the “Insurance Policies”) and true and complete copies of such
Insurance Policies have been made available to Buyer.  Such Insurance Policies
will remain in full force and effect until the Closing.  Since January 1, 2014,
neither the Seller nor any of its Affiliates (including the Company) has
received any written notice of cancellation of, or material alteration of
coverage under, any of such Insurance Policies.  All premiums due on such
Insurance Policies have been paid.  All such Insurance Policies (a) are valid
and binding in accordance with their terms; (b) are provided by carriers who, to
Seller’s Knowledge, are financially solvent; and (c) have not been subject to
any lapse in coverage.  There are no claims related to the business of the
Company pending under any such Insurance Policies as to which coverage has been
questioned, denied or disputed or in respect of which there is an outstanding
reservation of rights.  None of Seller or any of its Affiliates (including the
Company) is in default under, or has otherwise failed to comply with, in any
material respect, any provision contained in any such Insurance Policy.  The
Insurance Policies are of the type and in the amounts customarily carried by
Persons conducting a business similar to the Company and are sufficient for
compliance with all applicable Laws and Contracts to which the Company is a
party or by which it is bound.
 
Section 3.16   Legal Proceedings; Governmental Orders.  Except as set forth on
Section 3.16 of the Disclosure Schedules, there are no Actions pending or, to
Seller’s Knowledge, threatened (a) against or by the Company affecting any of
its properties or assets (or by or against Seller or any Affiliate thereof and
relating to the Company); or (b) against or by the Company, Seller or any
Affiliate of Seller that challenges or seeks to prevent, enjoin or otherwise
delay the transactions contemplated by this Agreement. To Seller’s Knowledge, no
event has occurred or circumstances exist that may give rise to, or serve as a
basis for, any such Action.  There are no outstanding Governmental Orders and no
unsatisfied judgments, penalties or awards against or affecting the Company or
any of its properties or assets.
 
Section 3.17   Compliance With Laws; Permits.  Except as set forth in
Section 3.17 of the Disclosure Schedule, the Company has complied, and is now
complying, in all material respects, with all Laws applicable to it or its
business, properties or assets.  All material Permits required for the Company
to conduct its business have been obtained by it and are valid and in full force
and effect.  All fees and charges due with respect to such Permits as of the
date hereof have been paid in full.  Section 3.17 of the Disclosure Schedules
lists all current Permits issued to the Company, including the names of the
Permits and their respective dates of issuance and expiration.  To  Seller’s
Knowledge, no event has occurred that, with or without notice or lapse of time
or both, would reasonably be expected to result in the revocation, suspension,
lapse or limitation of any Permit set forth in Section 3.17 of the Disclosure
Schedules.
 
Section 3.18   Environmental Matters.
 
(a)           The Company is currently and has been in compliance with all
Environmental Laws and has not, and the Seller has not, received from any Person
any written:  (i) Environmental Notice or Environmental Claim; or (ii) written
request for information pursuant to Environmental Law, which, in each case,
either remains pending or unresolved, or is the source of ongoing obligations or
requirements as of the Closing Date.  The Seller has no Environmental Permits
with respect to the business of the Company and is not required to have any
Environmental Permits with respect to the business of the Company.
 
 
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(b)           To the Knowledge of the Seller, no real property currently or
formerly owned, operated or leased by the Company is listed on, or has been
proposed for listing on, the National Priorities List (or CERCLIS) under CERCLA,
or any similar state list.
 
(c)           The Company has not retained or assumed, by contract or operation
of Law, any liabilities or obligations of third parties under Environmental Law.
 
(d)           Seller has provided or otherwise made available to Buyer and
listed in Section 3.18(d) of the Disclosure Schedules:  (i) any and all
environmental reports, studies, audits, records, sampling data, site
assessments, risk assessments, economic models and other similar documents with
respect to the business or assets of the Company or any currently or formerly
owned, operated or leased real property which are in the possession or control
of the Seller or Company related to compliance with Environmental Laws,
Environmental Claims or an Environmental Notice or the Release of Hazardous
Materials; and (ii) any and all material documents concerning planned or
anticipated capital expenditures required to reduce, offset, limit or otherwise
control pollution and/or emissions, manage waste or otherwise ensure compliance
with current or future Environmental Laws applicable to the Company (including,
without limitation, costs of remediation, pollution control equipment and
operational changes).
 
Section 3.19   Employee Benefit Matters.
 
(a)           Each Benefit Plan that is subject to Section 409A of the Code has
been administered in material compliance with its terms and the operational and
documentary requirements of Section 409A of the Code and all applicable
regulatory guidance (including notices, rulings and proposed and final
regulations) thereunder.  The Company does not have any obligation to gross up,
indemnify or otherwise reimburse any individual for any excise taxes, interest
or penalties incurred pursuant to Section 409A of the Code.
 
(b)           Each individual who is classified by the Company as an independent
contractor has been properly classified for purposes of participation and
benefit accrual under each Benefit Plan.
 
(c)           Neither the execution of this Agreement nor any of the
transactions contemplated by this Agreement will (either alone or upon the
occurrence of any additional or subsequent events): (i) entitle any current or
former manager, officer, employee, independent contractor or consultant of the
Company to severance pay or any other payment from the Company or the Surviving
Company; (ii) accelerate the time of payment, funding or vesting, or increase
the amount of compensation due to any such individual from the Company or the
Surviving Company; (iii) limit or restrict the right of the Company to merge,
amend or terminate any Benefit Plan; (iv) increase the amount payable under or
result in any other material obligation pursuant to any Benefit Plan; (v) result
in “excess parachute payments” within the meaning of Section 280G(b) of the
Code; or (vi) require a “gross-up” or other payment to any “disqualified
individual” within the meaning of Section 280G(c) of the Code.
 
 
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Section 3.20   Employment Matters.
 
(a)           Section 3.20(a) of the Disclosure Schedules contains a list of all
persons and professionals who are officers, directors, managers, employees,
independent contractors or consultants (excluding speakers or seminar
coordinators) of the Company as of the date hereof, including any employee who
is on a leave of absence of any nature, paid or unpaid, authorized or
unauthorized, and sets forth for each such individual the following: (i) name;
(ii) title or position (including whether full or part time); (iii) hire date;
(iv) current annual base compensation rate; (v) commission, bonus or other
incentive-based compensation; and (vi) a description of the fringe benefits
provided to each such individual as of the date hereof (to the extent such
fringe benefits are different from those provided in general by the Company to
persons in such capacity).  As of the date hereof, all compensation, including
wages, commissions and bonuses, payable to all employees, independent
contractors or consultants of the Company for services performed on or prior to
the date hereof have been paid in full (or accrued in full on the audited
balance sheet contained in the Closing Working Capital Statement).
 
(b)           Except as set forth on Section 3.20(b) of the Disclosure
Schedules, the Company is not, and has not been a party to, bound by, or
negotiating any collective bargaining agreement or other Contract with a union,
works council or labor organization (collectively, “Union”), and there is not,
and has not been, any Union representing or purporting to represent any employee
of the Company, and no Union or group of employees is seeking or has sought to
organize employees for the purpose of collective bargaining.  Except as set
forth on Section 3.20(b) of the Disclosure Schedules, the Company has no duty to
bargain with any Union.
 
(c)           The Company is and has been in compliance with all applicable Laws
pertaining to employment and employment practices, including all Laws relating
to labor relations, equal employment opportunities, fair employment practices,
employment discrimination, harassment, retaliation, reasonable accommodation,
disability rights or benefits, immigration, wages, hours, overtime compensation,
child labor, hiring, promotion and termination of employees, working conditions,
meal and break periods, privacy, health and safety, workers’ compensation,
leaves of absence and unemployment insurance.  All individuals characterized and
treated by the Company as independent contractors or consultants are properly
treated as independent contractors under all applicable Laws. All employees of
the Company classified as exempt under the Fair Labor Standards Act and state
and local wage and hour laws are properly classified.  There are no Actions
against the Company pending, or to the Seller’s Knowledge, threatened to be
brought or filed, by or with any Governmental Authority or arbitrator in
connection with the employment of any current or former applicant, employee,
consultant or independent contractor of the Company, including, without
limitation, any claim relating to unfair labor practices, employment
discrimination, harassment, retaliation, equal pay, wage and hours or any other
employment related matter arising under applicable Laws.
 
Section 3.21   Taxes.
 
(a)           The Company is treated as a corporation for U.S. federal income
tax purposes.  Seller is the parent of an affiliated group, including the
Company, that files a consolidated tax return for U.S. federal income tax
purposes.
 
 
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(b)           Each of Seller and the Company have timely filed all income Tax
Returns and all other material Tax Returns required to be filed by them (taking
into account all applicable extensions to file any such Tax Returns).  All such
Tax Returns are true and complete in all material respects and disclose all
Taxes required to be paid by or with respect to the Seller, to the extent the
Company is or may become liable therefor, and the Company for the periods
covered thereby.  All Taxes due and owing by Seller or the Company (to the
extent the Company is or may become liable therefor), whether or not shown on
any Tax Return, have been paid.  Neither the Company nor the Seller, to the
extent Company is or may become liable therefor, is currently the beneficiary of
any extension of time within which to file any material Tax Return.  The Company
has not, since January 1, 2012, received written notice by a Governmental
Authority in a jurisdiction the Company has never filed Tax Returns asserting
that the Company is or may be subject to taxation by that jurisdiction.  There
are no Tax rulings, requests for rulings, or closing agreements entered into by
the Company that are solely related to Taxes of the Company and that reasonably
could be expected to affect the Company's liability for Taxes for any taxable
period ending after the Closing Date.
 
(c)           Each of the Company and the Seller (to the extent the Company is
or may become liable therefor) has withheld and paid to the appropriate
Governmental Authority all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent
contractor, creditor, member, or other Third Party.
 
(d)           No Tax audits or administrative or judicial Tax proceedings are
pending or, to Seller’s Knowledge, threatened in writing with respect to the
Company or Seller (to the extent that the Company is or may become liable
therefor).  Neither the Company nor Seller has received in writing from any
Governmental Authority any (i) notice or request for information indicating an
intent to open an audit or other review with respect to Taxes for which Company
is or may become liable, or (ii) notice of deficiency or proposed adjustment for
any amount of Tax proposed, asserted, or assessed by such Governmental Authority
with respect to which Company is or may become liable.   There are no liens for
Taxes upon the assets of the Company except liens relating to current Taxes not
yet due.
 
(e)           No material Tax Returns required to be filed by or with respect to
the Company or Seller (to the extent the Company is or may become liable
therefor) for Tax periods beginning after the year ended December 31, 2010 have
been examined.  None of Company or Seller has waived any statute of limitations
in respect of material Taxes for which Company is or may become liable or agreed
to any extension of time with respect to a Tax assessment or deficiency with
respect to which the Company is or may become liable, which waiver or extension
is currently in effect, and no request for such a waiver or extension is
outstanding.
 
(f)           On or after the Closing Date, Company will not have any Liability
under any Tax Sharing Agreement entered into prior to the Closing Date.
 
(g)           The representations and warranties made in this Section 3.21 (i)
refer only to the past activities of the Company and are not intended to serve
as representations and warranties regarding, or a guarantee of, nor can they be
relied upon with respect to, Taxes attributable to any Post-Closing Tax Period
or any Tax position taken after the Closing, or any tax attributes of the
Company and (ii) together with the representations and warranties made in
Section 3.19, are the sole representations and warranties made by Seller under
this Agreement with respect to Taxes.
 
 
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Section 3.22   Books and Records.  The minute books of the Company have been
made available to Buyer, are complete and correct in all material respects and
have been maintained in accordance with sound business practices for
wholly-owned subsidiaries.  The minute books of the Company contain records of
all material actions taken at meetings, and material actions taken by written
consent of, the members and the managers, and no meeting, or action taken by
written consent, of any such members or managers has been held at which material
actions were taken for which minutes have not been prepared and are not
contained in such minute books.  At the Closing, all of those books and records
will be in the possession of the Company.
 
Section 3.23   Privacy and Data Security.  The Company has (a) operated its
businesses at all times in compliance with all applicable privacy and data
security laws (including, without limitation, the Payment Card Industry Data
Security Standard), (b) complied with its company policies applicable to data
privacy, data security and Personal Information at all times, and (c) not
experienced any incident in which Personal Information or other sensitive data
was stolen or improperly accessed.
 
Section 3.24   Brokers.  No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement or based upon arrangements made by
or on behalf of Seller.
 
ARTICLE IV
Representations and Warranties of Buyer
 
Buyer represents and warrants to Seller as follows:
 
Section 4.01    Organization and Authority of Buyer and Merger Sub.  Buyer is a
nonstock corporation duly organized and validly existing under the Laws of the
State of Wisconsin.  Merger Sub is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware.  Buyer and Merger Sub have full corporate and limited liability
company power and authority (as applicable) to enter into this Agreement and the
other Transaction Documents to which each of Buyer and Merger Sub is a party, to
carry out its obligations and to consummate the transactions contemplated hereby
and thereby.  The execution and delivery by Buyer and Merger Sub of this
Agreement and any other Transaction Documents to which Buyer is a party, the
performance by each of Buyer and Merger Sub of its obligations and the
consummation by Buyer and Merger Sub of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate and limited
liability action (as applicable) on the part of Buyer and Merger Sub.  This
Agreement has been duly executed and delivered by Buyer and Merger Sub, and
(assuming due authorization, execution and delivery by Seller and the Company)
this Agreement constitutes a legal, valid and binding obligation of Buyer and
Merger Sub enforceable against Buyer and Merger Sub in accordance with its terms
except to the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other Laws affecting the
enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding at law
or in equity.  When each other Transaction Document to which Buyer and Merger
Sub are or will be parties has been duly executed and delivered by Buyer and
Merger Sub (assuming due authorization, execution and delivery by each other
party thereto), such Transaction Document will constitute a legal and binding
obligation of Buyer and Merger Sub enforceable against them in accordance with
its terms except to the extent that enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other Laws affecting the
enforcement of creditors’ rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
 
 
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Section 4.02   No Conflicts; Consents.  The execution, delivery and performance
by Buyer and Merger Sub of this Agreement and the other Transaction Documents to
which they are parties, and the consummation of the transactions contemplated
hereby and thereby, do not and will not:  (a) conflict with or result in a
violation or breach of, or default under, any provision of the Organizational
Documents of Buyer or Merger Sub; (b) conflict with or result in a violation or
breach of any provision of any Law or Governmental Order applicable to Buyer or
Merger Sub; or (c) require the consent, notice or other action by any Person
under any Contract to which Buyer or Merger Sub is a party.  No consent,
approval, Permit, Governmental Order, declaration or filing with, or notice to,
any Governmental Authority is required by or with respect to Buyer or Merger Sub
in connection with the execution and delivery of this Agreement and the other
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby.
 
Section 4.03   Brokers.  No broker, finder or investment banker is entitled to
any brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement or any other Transaction Document
based upon arrangements made by or on behalf of Buyer.
 
Section 4.04   Sufficiency of Funds.  Buyer has sufficient cash on hand or other
sources of immediately available funds to enable it to make payment of the
Merger Consideration and consummate the transactions contemplated by this
Agreement.
 
Section 4.05   Legal Proceedings.  There are no Actions pending or, to Buyer’s
knowledge, threatened against or by Buyer or Merger Sub or any Affiliate of
Buyer that challenge or seek to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement.  No event has occurred or
circumstances exist that may give rise or serve as a basis for any such Action.
 
Section 4.06   Investigation by Purchaser.  Buyer and Merger Sub each has
conducted its own independent review and analysis of the Company and its
business and assets.  In entering into this Agreement, Buyer and Merger Sub each
has relied solely upon the express representations and warranties of Seller set
forth in Article III and its own investigation and analysis.  Buyer and Merger
Sub each acknowledges that, except as expressly set forth in the representations
and warranties in Article III, there are no representations or warranties by
Seller or the Company of any kind, express or implied, with respect to Seller,
the Company or its business or assets.
 
 
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ARTICLE V
Covenants
 
Section 5.01   Conduct of Business Prior to the Closing.  From the date hereof
until the earlier of the Closing and the termination of this Agreement in
accordance with its terms, except as set forth in Section 5.01 of the Disclosure
Schedules or as otherwise provided in this Agreement or consented to in writing
by Buyer (which consent shall not be unreasonably withheld or delayed), Seller
shall, and shall cause the Company to, (x) conduct the business of the Company
in the ordinary course of business consistent with past practice; and (y) use
commercially reasonable efforts to maintain and preserve intact the current
organization, business and franchise of the Company and to preserve the rights,
franchises, goodwill and relationships of its employees, customers, suppliers,
regulators and others having business relationships with the Company.  Without
limiting the foregoing, from the date hereof until the earlier of the Closing
Date and the termination of this Agreement in accordance with its terms, Seller
shall use commercially reasonable efforts to, except with the prior written
consent of Buyer:
 
(a)           cause the Company to preserve and maintain all of its Permits;
 
(b)           cause the Company to pay its debts, Taxes and other obligations
when due;
 
(c)           cause the Company to maintain the properties and assets owned,
operated or used by the Company in the same condition as they were on the date
of this Agreement, subject to reasonable wear and tear;
 
(d)           cause the Company to continue in full force and effect without
modification all Insurance Policies, except as required by applicable Law;
 
(e)           cause the Company to defend and protect its properties and assets
from infringement or usurpation;
 
(f)           cause the Company to perform all of its obligations under all
Contracts relating to or affecting its properties, assets or business;
 
(g)           cause the Company to maintain its books and records in accordance
with past practice;
 
(h)           cause the Company to comply in all material respects with all
applicable Laws; and
 
(i)           subject to the exclusions set forth in Section 3.08 of the
Disclosure Schedules, cause the Company not to take or permit any action that
would cause any of the changes, events or conditions described in Section 3.08
to occur.
 
Section 5.02   Access to Information.  From the date hereof until the earlier of
the Closing and the termination of this Agreement in accordance with its terms,
Seller shall, and shall cause the Company to, (a) afford Buyer and its
Representatives reasonable access to all of the Real Property, properties,
assets, premises, books and records, Contracts and other documents and data
related to the Company; and (b) furnish Buyer and its Representatives with such
reasonably available financial, operating and other data and information related
to the Company as Buyer or any of its Representatives may reasonably
request.  Any investigation pursuant to this Section 5.02 shall be conducted in
such manner as not to interfere unreasonably with the conduct of the business of
Seller or the Company.
 
 
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Section 5.03   No Solicitation of Other Bids.
 
(a)           Until the earlier of the Closing and the termination of this
Agreement in accordance with its terms, Seller shall not, and shall not
authorize or permit any of its Affiliates (including the Company) or any of its
or their Representatives to, directly or indirectly, (i) encourage, solicit,
initiate, facilitate or continue inquiries regarding an Acquisition Proposal;
(ii) enter into discussions or negotiations with, or provide any information to,
any Person concerning a possible Acquisition Proposal; or (iii) enter into any
agreements or other instruments regarding an Acquisition Proposal.  Seller shall
immediately cease and cause to be terminated, and shall cause its Affiliates
(including the Company) and all of its and their Representatives to immediately
cease and cause to be terminated, all existing discussions or negotiations with
any Persons conducted heretofore with respect to, or that could reasonably be
expected to lead to, an Acquisition Proposal.  For purposes hereof, “Acquisition
Proposal” shall mean any inquiry, proposal or offer from any Person (other than
Buyer or any of its Affiliates) concerning (i) a merger, consolidation,
liquidation, recapitalization or other business combination transaction
involving the Company; (ii) the issuance or acquisition of membership interests
in the Company; or (iii) the sale, lease, exchange or other disposition of any
significant portion of the Company’s properties or assets.
 
(b)           Seller agrees that the rights and remedies for noncompliance with
this Section 5.03 shall include having such provision specifically enforced by
any court having equity jurisdiction, it being acknowledged and agreed that any
such breach or threatened breach shall cause irreparable injury to Buyer and
that money damages would not provide an adequate remedy to Buyer.
 
Section 5.04   Intentionally Omitted.
 
Section 5.05   Confidentiality.  From and after the Closing, Seller shall, and
shall cause its controlled Affiliates to, hold, and shall use commercially
reasonable efforts to cause its or their respective Representatives to hold, in
confidence any and all confidential information, whether written or oral,
concerning the Company, except to the extent that Seller can show that such
information (a) is generally available to and known by the public through no
fault of Seller, any of its Affiliates or their respective Representatives; or
(b) is lawfully acquired by Seller, any of its Affiliates or their respective
Representatives from and after the Closing from sources which are not prohibited
from disclosing such information by a legal, contractual or fiduciary
obligation.  If Seller or any of its Affiliates or their respective
Representatives are compelled to disclose any information by judicial or
administrative process or by other requirements of Law, Seller shall promptly
notify Buyer in writing and shall disclose only that portion of such information
which Seller is advised by its counsel is legally required to be disclosed,
provided that Seller shall use reasonable efforts to cooperate with Buyer to
obtain an appropriate protective order or other reasonable assurance that
confidential treatment will be accorded such information provided that all costs
incurred in connection therewith are borne by Buyer.
 
 
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Section 5.06   Non-competition; Non-solicitation.
 
(a)           For a period of five (5) years commencing on the Closing Date (the
“Restricted Period”), Seller shall not, and shall not permit any of its
controlled Affiliates to, directly or indirectly, (i) engage in or assist others
in engaging in the Restricted Business in the Territory; (ii) have an economic
interest in any Person that engages directly or indirectly in the Restricted
Business in the Territory in any capacity, including as a partner, shareholder,
member, principal, agent, trustee or consultant; (iii) intentionally interfere
in any material respect with the business relationships (whether formed prior to
or after the date of this Agreement) between the Company and its customers or
suppliers of the Company; or (iv) disparage the Company, its business, products
or services, or any of its officers, directors or employees.  Notwithstanding
the foregoing, Seller or its controlled Affiliates may own, directly or
indirectly, solely as an investment, securities of any Person traded on any
national securities exchange if Seller is not a controlling Person of, or a
member of a group which controls, such Person and does not, directly or
indirectly, own 2% or more of any class of securities of such Person.
 
(b)           For a period of two (2) years commencing on the Closing Date,
Seller shall not, and shall not permit any of its controlled Affiliates to,
directly or indirectly, hire or solicit any key employee of the Company or
encourage any such key employee to leave such employment or hire any such key
employee who has left such employment, except pursuant to a general solicitation
which is not directed specifically to any such employees; provided, that nothing
in this Section 5.06(b) shall prevent Seller or any of its controlled Affiliates
from hiring (i) any employee whose employment has been terminated by the Company
or Buyer or (ii) after 180 days from the date of termination of employment, any
employee whose employment has been terminated by the employee.
 
(c)           During the Restricted Period, Seller shall not, and shall not
permit any of its Affiliates to, directly or indirectly, solicit or entice or
attempt to solicit or entice, any clients or customers of the Company or
potential clients or customers of the Company for purposes of diverting their
business or services from the Company.
 
(d)           Notwithstanding anything contained herein to the contrary, the
covenants contained in Section 5.06 shall not (i) apply to Seller or its
Affiliates upon the occurrence of a change of control of Seller or (ii) prevent
Seller or its Affiliates from, directly or indirectly, acquiring one or more
entities that compete with the Restricted Business so long as the amount of
revenue such acquired entity derives from the portion of its business which is
in competition with the Restricted Business or the assets of such portion of its
business comprise less than 20% of the total assets or revenue of the acquired
entity.
 
(e)           Seller acknowledges that a breach or threatened breach of Section
5.05 or this Section 5.06 may give rise to irreparable harm to Buyer, for which
monetary damages would not be an adequate remedy, and hereby agrees that in the
event of a breach or a threatened breach by Seller of any such obligations,
Buyer shall, in addition to any and all other rights and remedies that may be
available to it in respect of such breach, be entitled to equitable relief,
including a temporary restraining order, an injunction, specific performance and
any other relief that may be available from a court of competent jurisdiction.
 
 
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(f)           Seller acknowledges that the restrictions contained in Section
5.05 and this Section 5.06 are reasonable and necessary to protect the
legitimate interests of Buyer and constitute a material inducement to Buyer to
enter into this Agreement and consummate the transactions contemplated by this
Agreement.  In the event that any covenant contained in Section 5.05 or this
Section 5.06 should ever be adjudicated to exceed the time, geographic, product
or service, or other limitations permitted by applicable Law in any
jurisdiction, then any court is expressly empowered to reform such covenant, and
such covenant shall be deemed reformed, in such jurisdiction to the maximum
time, geographic, product or service, or other limitations permitted by
applicable Law.  The covenants contained in Section 5.05 and this Section 5.06
and each provision hereof are severable and distinct covenants and
provisions.  The invalidity or unenforceability of any such covenant or
provision as written shall not invalidate or render unenforceable the remaining
covenants or provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such covenant or
provision in any other jurisdiction.
 
Section 5.07   Governmental Approvals and Consents.
 
(a)           Each party hereto shall, as promptly as possible, (i) make, or
cause or be made, all filings and submissions required under any Law applicable
to such party or any of its Affiliates; and (ii) use commercially reasonable
efforts to obtain, or cause to be obtained, all consents, authorizations, orders
and approvals from all Governmental Authorities that may be or become necessary
for its execution and delivery of this Agreement and the performance of its
obligations pursuant to this Agreement and the other Transaction
Documents.  Each party shall cooperate fully with the other party and its
Affiliates in promptly seeking to obtain all such consents, authorizations,
orders and approvals.
 
(b)           Seller and Buyer shall use commercially reasonable efforts to give
all notices to, and obtain all consents from, all third parties that are set
forth on in Schedule 7.02(d).
 
Section 5.08   Intentionally Omitted.
 
Section 5.09   Closing Conditions.  From the date hereof until the Closing, each
party hereto shall use commercially reasonable efforts to take such actions as
are necessary to expeditiously satisfy the closing conditions set forth in
Article VII hereof.
 
Section 5.10   Public Announcements.  Unless otherwise required by applicable
Law or stock exchange requirements (based upon the reasonable advice of
counsel), no party to this Agreement shall make any initial public announcements
in respect of this Agreement or the transactions contemplated hereby or
otherwise communicate with any news media without the prior written consent of
the other party (which consent shall not be unreasonably withheld or delayed),
and the parties shall cooperate as to the timing and contents of any such
announcement.  Notwithstanding the foregoing, after the Closing Date, either
party may make any public announcement in respect of this Agreement or the
transactions contemplated hereby or otherwise communicate with any news media
without the prior written consent of the other party.
 
Section 5.11   Further Assurances.  Following the Closing, each of the parties
hereto shall, and shall use their commercially reasonable efforts to cause their
respective Affiliates to, execute and deliver such additional documents,
instruments, conveyances and assurances and take such further actions as may be
reasonably required to carry out the provisions hereof and give effect to the
transactions contemplated by this Agreement, and assist Buyer with other
transitional matters that were not accomplished prior to Closing.
 
 
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Section 5.12   Employees; Employees Benefit Plans.
 
(a)           Seller shall amend all Benefit Plans prior to the Closing (i) to
remove the Company (and any employees, directors, or officers of the Company, as
applicable) as a participating employer, plan administrator, fiduciary, trustee
or plan sponsor as of and after the Closing, (ii) to cease providing coverage to
employees of the Surviving Company after the Closing, (iii) to ensure that such
Employee Benefit Plans are not considered “multiple employer plan” within the
meaning of Section 413(c) of the Code (with respect to the Company) as of and
after the Closing, (iv) to ensure that the Surviving Company is not the plan
sponsor or fiduciary of all Benefit Plans as of and after the Closing.
 
(b)           With respect to each Benefit Plan applicable to the Company,
Seller covenants that it shall have sole and complete responsibility for, and
shall be obligated to pay, any Benefit Liability, including but not limited to
the maintenance of tax qualification, obligations for the payment of benefits,
and the administration of claims, with respect to all amounts, claims incurred,
or benefits owed under such Benefit Plan.  Buyer, the Company, and the Merger
Sub shall have no Benefit Liability, regardless of whether such Benefit
Liability arises before, as of, or after the Closing.
 
(c)           Seller shall allow and provide for the rollover of any notes with
respect to any loans under the Seller’s Code section 401(k) retirement plan to
the Buyer’s Code section 401(k) plan, that become due (or would be treated as
deemed distributions absent the rollover opportunity provided for hereunder) as
a result of the transactions contemplated in this Agreement.
 
(d)           Seller, Company and Buyer agree to utilize, or cause their
respective Affiliates to utilize, the alternate procedure set forth in Rev.
Proc. 2004-53 with respect to wage reporting, if applicable.  If the alternate
procedure set forth in Rev. Proc. 2004-53 is not applicable, Seller shall
provide to Buyer and Company all information and systems access reasonably
necessary to ensure compliance with Surviving Company’s (and Buyer’s) federal
and state income and employment tax withholding and reporting obligations.
 
Section 5.13   Indebtedness; Outstanding Obligations To/From Subsidiaries. 
Seller shall ensure that (i) all Indebtedness of the Company not part of the
adjustment at Section 2.04 shall be paid off at Closing; and (ii) all amounts
outstanding as of the Closing owed by the Company to Seller or to any Affiliate
of Company or Seller, which is currently described on the Financial Statements
of the Company as “Total Due to/from Subsidiaries”, shall be paid off as of the
Closing and that the Company shall have no liabilities or obligations with
respect thereto.  At Closing, Seller shall deliver to the Company a pay-off
letter or letters regarding any such amounts evidencing such amounts being paid
off (such letters shall be an “Affiliate Payoff Letter”).
 
 
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ARTICLE VI
Tax Matters
 
Section 6.01   Tax Treatment.  In accordance with Rev. Rul. 69-6, 1969-1 C.B.
104, the Merger shall be treated as a taxable sale by the Company and purchase
by Buyer of the assets of the Company, followed by a complete liquidation of the
Company and distribution of the Merger Consideration to Seller.  Seller shall
include the income of the Company (and its subsidiaries) through the Closing
Date, including income resulting from the Merger, any deferred intercompany
items triggered into income by Reg. § 1.1502-13, and excess loss account taken
into account under Reg. § 1.1502-19, on Seller’s consolidated U.S. federal
income tax return for the Seller’s Tax Period that includes the Closing Date and
pay any federal income tax attributable to such income.  For all taxable periods
ending on or before the Closing Date, Seller shall cause Company (and its
subsidiary) to join in Seller’s consolidated federal income tax return and, in
jurisdictions requiring separate reporting from Seller, to file separate company
state and local income tax returns.  All such Tax Returns shall be prepared and
filed in a manner consistent with prior practice, except as required by a change
in applicable Law.
 
Section 6.02   Tax Covenants.
 
(a)           All transfer, documentary, sales, use, stamp, registration, value
added and other such Taxes and fees incurred in connection with this Agreement
and the other Transaction Documents, and all reasonable preparation and filing
costs associated therewith (such amounts "Transfer Taxes") shall be borne
one-half by Seller and one-half by Buyer.  Each Transfer Tax Return will be
prepared by the party that customarily has primary responsibility for filing
such Tax Return pursuant to applicable Law.  Buyer and Seller shall reasonably
cooperate with one another to lawfully minimize Transfer Taxes and, if the
non-filing party of a particular Transfer Tax Return, pay the associated
Transfer Taxes (and costs) to the filing party within three (3) Business Days of
payment.
 
(b)           All Tax Returns required to be filed by or with respect to the
Company with respect to Pre-Closing Tax Periods shall be within the exclusive
control of Seller.
 
Section 6.03    Tax Indemnification.  Except to the extent treated as a
liability in the calculation of Closing Working Capital (but without duplication
for amounts paid pursuant to any other provision of this Agreement), Seller
shall indemnify the Company, Buyer, and each Buyer Indemnitee and hold them
harmless from and against (a) all Pre-Closing Taxes; (b) all Taxes imposed on
the Company under Treasury Regulation Section 1.1502-6 or any comparable
provisions of foreign, state or local Law, as a result of having been a member
of any consolidated, affiliated combined or similar group prior to the Closing;
and (c) any and all Taxes of any person imposed on the Company arising under the
principles of transferee or successor liability or under a Tax Sharing
Agreement, where such liability relates to an event or transaction occurring
before the Closing Date; provided that in the case of real property, personal
property and other similar Taxes with respect to a Taxable Period that includes
(but does not end on) the Closing Date, the portion of any such Taxes that are
treated as Pre-Closing Taxes for purposes of this Agreement shall be deemed to
be the amount of such Taxes for the entire Taxable Period multiplied by a
fraction the numerator of which is the number of days in the Taxable Period
ending on the Closing Date and the denominator of which is the number of days in
the entire Taxable Period (and the remaining portion of such Taxes will be borne
by the Buyer).
 
 
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Section 6.04    Cooperation and Exchange of Information.  Seller and Buyer shall
provide each other with such cooperation and information as either of them
reasonably may request of the other in filing any Tax Return pursuant to this
Article VI or in connection with any audit or other proceeding in respect of
Taxes of the Company.  Such cooperation and information shall include providing
copies of relevant Tax Returns or portions thereof, together with accompanying
schedules, related work papers and documents relating to rulings or other
determinations by tax authorities.  Each of Seller and Buyer shall retain all
Tax Returns, schedules and work papers, records and other documents in its
possession relating to Tax matters of the Company for any taxable period
beginning before the Closing Date until the earlier of (a) five years from the
Closing Date and (b) the expiration of the statute of limitations of the taxable
periods to which such Tax Returns and other documents relate, without regard to
extensions except to the extent notified by the other party in writing of such
extensions for the respective Tax periods.
 
Section 6.05    Tax Treatment of Indemnification Payments.  Any indemnification
payments pursuant to this Article VI shall be treated as an adjustment to the
Purchase Price by the parties for Tax purposes, unless otherwise required by
Law.
 
Section 6.06    Survival.  Notwithstanding anything in this Agreement to the
contrary, the provisions of Section 3.21 and this Article VI shall survive for
the full period of all applicable statutes of limitations (giving effect to any
waiver, mitigation or extension thereof) plus 60 days.
 
Section 6.07   Overlap.  To the extent that any obligation or responsibility
pursuant to Article VIII conflicts with an obligation or responsibility pursuant
to this Article VI, the provisions of this Article VI shall govern.
 
ARTICLE VII
Conditions to Closing
 
Section 7.01   Conditions to Obligations of All Parties.  The obligations of
each party to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to the Closing, that no Governmental
Authority shall have enacted, issued, promulgated, enforced or entered any
Governmental Order which is in effect and has the effect of making the
transactions contemplated by this Agreement illegal, otherwise restraining or
prohibiting consummation of such transactions or causing any of the transactions
contemplated hereunder to be rescinded following completion thereof.
 
Section 7.02   Conditions to Obligations of Buyer.  The obligations of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or Buyer’s waiver in writing, at or prior to the Closing, of
each of the following conditions:
 
 
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(a)           Other than the representations and warranties of Seller contained
in Section 3.01, the first sentence of Section 3.02, Section 3.03, clauses (a),
(b) and (d) of the first sentence of Section 3.05, Section 3.06, Section 3.08
and Section 3.21, the representations and warranties of Seller contained in this
Agreement, the other Transaction Documents and any certificate or other writing
delivered pursuant hereto shall be true and correct in all respects (in the case
of any representation or warranty qualified by materiality or Material Adverse
Effect) or in all material respects (in the case of any representation or
warranty not qualified by materiality or Material Adverse Effect) on and as of
the date hereof and on and as of the Closing Date with the same effect as though
made at and as of such date (except those representations and warranties that
address matters only as of a specific date, the accuracy of which shall be
determined as of that specific date in all respects).  The representations and
warranties of Seller contained in Section 3.01, the first sentence of
Section 3.02, Section 3.03, clauses (a), (b) and (d) of the first sentence of
Section 3.05, Section 3.06, Section 3.08 and Section 3.21 shall be true and
correct in all respects on and as of the date hereof and on and as of the
Closing Date with the same effect as though made at and as of such date (except
those representations and warranties that address matters only as of a specified
date, the accuracy of which shall be determined as of that specified date in all
respects).
 
(b)           Seller shall have duly performed and complied in all material
respects with all agreements, covenants and conditions required by this
Agreement and each of the other Transaction Documents to be performed or
complied with by it prior to or on the Closing Date.
 
(c)           No Action shall have been commenced against Buyer, Merger Sub,
Seller or the Company, which would prevent the Closing.  No injunction or
restraining order shall have been issued by any Governmental Authority, and be
in effect, which restrains or prohibits any transaction contemplated hereby.
 
(d)           All approvals, consents and waivers that are listed on Section
7.02(d) of the Disclosure Schedules shall have been received, and executed
counterparts thereof shall have been delivered to Buyer at or prior to the
Closing.
 
(e)           From the date of this Agreement, there shall not have occurred any
Material Adverse Effect.
 
(f)           Intentionally Omitted.
 
(g)           The other Transaction Documents shall have been executed and
delivered by the parties thereto and true and complete copies thereof shall have
been delivered to Buyer.
 
(h)           Buyer shall have received a certificate, dated the Closing Date
and signed by a duly authorized officer of Seller, that each of the conditions
set forth in Section 7.02(a) and Section 7.02(b) have been satisfied.
 
(i)           Buyer shall have received a certificate of the Secretary (or
equivalent officer) of Seller certifying that attached thereto are true and
complete copies of all resolutions adopted by the board of directors of Seller
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated hereby and thereby.
 
(j)           Buyer shall have received a certificate of the Secretary (or
equivalent officer) of Seller certifying the names and signatures of the
officers of Seller authorized to sign this Agreement, the Transaction Documents
and the other documents to be delivered hereunder and thereunder.
 
 
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(k)           Buyer shall have received a certificate of the Secretary (or
equivalent officer) of the Company certifying that attached thereto are true and
complete copies of all resolutions adopted by the managing member of the Company
authorizing the execution, delivery and performance of this Agreement and the
Transaction Documents to which the Company is a party and the consummation of
the transactions contemplated hereby and thereby, and that all such resolutions
are in full force and effect and are all the resolutions adopted in connection
with the transactions contemplated hereby and thereby
 
(l)            Buyer shall have received resignations of the directors, officers
and managers of the Company.
 
(m)          Seller shall have delivered to Buyer a good standing certificate
(or its equivalent) for the Company from the secretary of state or similar
Governmental Authority of the jurisdiction under the Laws in which the Company
is organized.
 
(n)           Seller shall have delivered to Buyer a certificate pursuant to
Treasury Regulations Section 1.1445-2(b) that Seller is not a foreign person
within the meaning of Section 1445 of the Code.
 
(o)           The Company shall be free of Indebtedness and any liens on the
Company’s assets securing Indebtedness of the Seller shall have been released,
and Seller shall have delivered to Buyer an executed Affiliate Payoff
Letter  and executed lien releases executed by all creditors of the Company to
whom any asset of the Company or any of the Membership Interests are pledged or
secured, including all documents to release all liens on the Company’s assets
and Membership Interests.
 
(p)           The Seller shall have executed and delivered to Buyer the
Trademark Use License in substantially the form attached hereto as Schedule
7.02(p) (the “Trademark License Agreement”).
 
(q)           Seller shall have delivered to Buyer such other documents or
instruments as Buyer reasonably requests and are reasonably necessary to
consummate the transactions contemplated by this Agreement.
 
(r)           The Company shall have merged the Company’s subsidiary listed in
Section 3.04 of the Disclosure Schedules into another Affiliate of Seller.
 
(s)           Buyer shall have received a landlord estoppel agreement, in the
form reasonably acceptable to Buyer, executed by the landlord of the Company’s
leased Real Property.
 
(t)           Seller shall have executed and delivered to the Company an
instrument of assignment of certain information technology assets, in the form
mutually acceptable to the parties hereto (the “Assignment”).
 
Section 7.03     Conditions to Obligations of Seller.  The obligations of Seller
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment or Seller’s waiver in writing, at or prior to the Closing, of
each of the following conditions:
 
 
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(a)           Other than the representations and warranties of Buyer contained
in Section 4.01 and Section 4.03, the representations and warranties of Buyer
contained in this Agreement, the other Transaction Documents and any certificate
or other writing delivered pursuant hereto shall be true and correct in all
respects (in the case of any representation or warranty qualified by materiality
or Material Adverse Effect) or in all material respects (in the case of any
representation or warranty not qualified by materiality or Material Adverse
Effect) on and as of the date hereof and on and as of the Closing Date with the
same effect as though made at and as of such date (except those representations
and warranties that address matters only as of a specified date, the accuracy of
which shall be determined as of that specified date in all respects).  The
representations and warranties of Buyer contained in Section 4.01 and Section
4.03 shall be true and correct in all respects on and as of the date hereof and
on and as of the Closing Date with the same effect as though made at and as of
such date.
 
(b)           Buyer shall have duly performed and complied in all material
respects with all agreements, covenants and conditions required by this
Agreement and each of the other Transaction Documents to be performed or
complied with by it prior to or on the Closing Date.
 
(c)           No Action shall have been commenced against Buyer, Seller or the
Company which would prevent the Closing.  No injunction or restraining order
shall have been issued by any Governmental Authority, and be in effect, which
restrains or prohibits any material transaction contemplated hereby.
 
(d)           The other Transaction Documents shall have been executed and
delivered by the parties thereto and true and complete copies thereof shall have
been delivered to Seller.
 
(e)           Seller shall have received a certificate of the Secretary (or
equivalent officer) of Buyer certifying that attached thereto are true and
complete copies of all resolutions adopted by the board of directors of Buyer
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby, and that all such resolutions are in full force
and effect and are all the resolutions adopted in connection with the
transactions contemplated hereby and thereby.
 
(f)           Buyer shall have delivered to Seller and the Escrow Agent, cash in
the amounts and as set forth in Section 2.02.
 
(g)           Buyer shall have executed and delivered to Seller the Trademark
License Agreement.
 
(h)           Buyer shall have delivered to Seller such other documents or
instruments as Seller reasonably requests and are reasonably necessary to
consummate the transactions contemplated by this Agreement.
 
 
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ARTICLE VIII
Indemnification
 
Section 8.01   Survival.  Subject to the limitations and other provisions of
this Agreement, the representations and warranties contained herein shall
survive the Closing and shall remain in full force and effect until the first
anniversary of the Closing Date; provided, that (i) (A) the representations and
warranties in Section 3.01, the first sentence of Section 3.02, Section 3.03,
clauses (a), (b) and (d) of the first sentence of Section 3.05, Section 3.10(a),
Section 3.21 and Section 3.24 (collectively, the “Fundamental Representations”),
Section 4.02 and Section 4.03; and (B) any and all claims arising from fraud
shall survive indefinitely; and (ii) the representations and warranties in
Section 3.19 shall survive for a period of three (3) years from the Closing
Date.  All covenants and agreements of the parties contained herein shall
survive the Closing indefinitely or for the period explicitly specified
therein.  Notwithstanding the foregoing, any claims asserted in good faith with
reasonable specificity (to the extent known at such time) and in writing by
notice from the non-breaching party to the breaching party prior to the
expiration date of the applicable survival period shall not thereafter be barred
by the expiration of the relevant representation or warranty and such claims
shall survive until finally resolved.
 
Section 8.02   Indemnification by Seller.  Subject to the other terms and
conditions of this Article VIII, from and after the Closing Seller shall
indemnify and defend each of Buyer and its Affiliates (including the Surviving
Company) and their respective Representatives (collectively, the “Buyer
Indemnitees”) against, and shall hold each of them harmless from and against,
and shall pay and reimburse each of them for, any and all Losses incurred or
sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of,
with respect to or by reason of (a) any inaccuracy in or breach of any of the
representations or warranties of Seller contained in this Agreement; or (b) any
breach or non-fulfillment of any covenant, agreement or obligation to be
performed by Seller pursuant to this Agreement.  All such calculations of Losses
shall take into account any insurance proceeds received by the Buyer Indemnitees
in connection with the matter out of which such Damages shall arise, net of
directly related increases of premiums on such insurance policies.  The Buyer
Indemnitees agree to use commercially reasonable efforts to obtain such
insurance proceeds.  If an indemnification payment is received by any Buyer
Indemnitee, and such Buyer Indemnitee later receives insurance proceeds or other
third party recoveries, such Buyer Indemnitee shall promptly pay to Seller such
amount.  Notwithstanding anything herein to the contrary, (a) the Buyer
Indemnitees shall not be entitled to seek indemnification under clause (a) of
the first sentence of Section 8.02 with respect to any Losses unless and until
the aggregate amount of all Losses suffered by the Buyer Indemnitees under
clause (a) of the first sentence of Section 8.02 exceeds, in the aggregate,
$250,000 (the “Deductible”), and then the Buyer Indemnitees shall only be
entitled to indemnification for such aggregate amount of Losses that exceeds the
Deductible; (b) the aggregate amount of all payments to which the Buyer
Indemnitees shall be entitled to receive under clause (a) of the first sentence
of Section 8.02 shall in no event exceed $1,200,000 (the “Cap”); and (c) the
Buyer Indemnitees shall not be entitled to seek indemnification for Losses to
the extent that the items giving rise to such Losses had been accounted for in
the calculation of Closing Working Capital pursuant to Section 2.04.  The
limitations set forth in clause (a) and clause (b) of the preceding sentence
shall not apply to Losses relating to breaches of the Fundamental
Representations, claims for indemnification under Section 6.03 or fraud.
 
 
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Section 8.03   Indemnification by Buyer.  Subject to the other terms and
conditions of this Article VIII, from and after the Closing Buyer shall
indemnify and defend each of Seller and its Affiliates and their respective
Representatives (collectively, the “Seller Indemnitees”) against, and shall hold
each of them harmless from and against, and shall pay and reimburse each of them
for, any and all Losses incurred or sustained by, or imposed upon, the Seller
Indemnitees based upon, arising out of, with respect to or by reason of (a) any
inaccuracy in or breach of any of the representations or warranties of Buyer
contained in this Agreement; or (b) any breach or non-fulfillment of any
covenant, agreement or obligation to be performed by Buyer pursuant to this
Agreement.  All such calculations of Losses shall take into account any
insurance proceeds received by the Seller Indemnitees in connection with the
matter out of which such Damages shall arise, net of directly related increases
of premiums on such insurance policies.  The Seller Indemnitees agree to use
commercially reasonable efforts to obtain such insurance proceeds.  If an
indemnification payment is received by any Seller Indemnitee, and such Seller
Indemnitee later receives insurance proceeds or other third party recoveries,
such Seller Indemnitee shall promptly pay to Buyer such amount.  Notwithstanding
anything herein to the contrary, (a) the Seller Indemnitees shall not be
entitled to seek indemnification under clause (a) of the first sentence of
Section 8.03 with respect to any Losses unless and until the aggregate amount of
all Losses suffered by the Seller Indemnitees under clause (a) of the first
sentence of Section 8.03 exceeds, in the aggregate, $250,000, and then the
Seller Indemnitees shall only be entitled to indemnification for such aggregate
amount of Losses that exceeds such amount; and (b) the aggregate amount of all
payments to which the Seller Indemnitees shall be entitled to receive under
clause (a) of the first sentence of Section 8.03 shall in no event exceed
$1,200,000).  The limitations set forth in clause (a) and clause (b) of the
preceding sentence shall not apply to Losses relating to breaches of Section
4.01, Section 4.03, or fraud.
 
Section 8.04     Exclusive Remedies.  The Parties agree that notwithstanding
anything to the contrary set forth in this Agreement or otherwise, following the
Closing, except with respect to (i) the adjustments provided in Article II, (ii)
claims based on fraud, (iii) claims based on any breach of Section 5.05 or 5.06,
and (iv) the indemnification provisions of Section 6.3, the indemnification
provisions of this Article VIII are the sole and exclusive remedies of the
Parties pursuant to this Agreement.  From and after the Closing, to the maximum
extent permitted by Law, except with respect to (i) the adjustments provided in
Article II, (ii) claims based on fraud or claims for equitable relief, (iii)
claims based on any breach of Section 5.05 or Section 5.06, (iv) the
indemnification provisions of Section 6.3, and (v) the indemnification
provisions of this Article VIII, the Parties hereby waive all other rights,
claims, remedies or actions with respect to any matter in any way relating to
this Agreement or arising in connection herewith, whether under any foreign,
federal, state, provincial or local Laws, requirements or Orders at common law
or otherwise.
 
Section 8.05   Indemnification Procedures.  The party making a claim under this
Article VIII is referred to as the “Indemnified Party”, and the party against
whom such claims are asserted under this Article VIII is referred to as the
“Indemnifying Party.”
 
 
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(a)           Third-Party Claims.  If any Indemnified Party receives notice of
the assertion or commencement of any Action made or brought by any Person who is
not a party to this Agreement or an Affiliate of a party to this Agreement or a
Representative of the foregoing (a “Third-Party Claim”) against such Indemnified
Party with respect to which the Indemnifying Party is obligated to provide
indemnification under this Agreement, the Indemnified Party shall give the
Indemnifying Party reasonably prompt written notice thereof, but in any event
not later than twenty (20) calendar days after receipt of such notice of such
Third-Party Claim.  The failure to give such prompt written notice shall not,
however, relieve the Indemnifying Party of its indemnification obligations,
except and only to the extent that the Indemnifying Party forfeits rights or
defenses by reason of such failure.  Such notice by the Indemnified Party shall
describe the Third-Party Claim in reasonable detail, shall include copies of all
material written evidence thereof and shall indicate the estimated amount, if
reasonably practicable, of the Loss that has been or may be sustained by the
Indemnified Party.  The Indemnifying Party shall have the right to assume the
defense of any Third-Party Claim at the Indemnifying Party’s expense and by the
Indemnifying Party’s own counsel, and the Indemnified Party shall cooperate in
good faith in such defense; provided, that if the Indemnifying Party is Seller,
such Indemnifying Party shall not have the right to defend or direct the defense
of any such Third-Party Claim that seeks an injunction or other equitable relief
against the Indemnified Party.  In the event that the Indemnifying Party assumes
the defense of any Third-Party Claim, subject to Section 8.05(b), it shall have
the right to take such action as it deems necessary to avoid, dispute, defend,
appeal or make counterclaims pertaining to any such Third-Party Claim in the
name and on behalf of the Indemnified Party.  The Indemnified Party shall have
the right to participate in the defense of any Third-Party Claim with counsel
selected by it subject to the Indemnifying Party’s right to control the defense
thereof.  The fees and disbursements of such counsel shall be at the expense of
the Indemnified Party; provided, that if in the reasonable opinion of counsel to
the Indemnifying Party, there exists a conflict of interest between the
Indemnifying Party and the Indemnified Party that cannot be waived, the
Indemnifying Party shall be liable for the reasonable fees and expenses of
counsel to the Indemnified Party in each jurisdiction for which the Indemnifying
Party determines counsel is required.  If the Indemnifying Party elects not to
compromise or defend such Third-Party Claim, fails to promptly notify the
Indemnified Party in writing of its election to defend as provided in this
Agreement, or fails to diligently prosecute the defense of such Third-Party
Claim, the Indemnified Party may, subject to Section 8.05(b), pay, compromise,
defend such Third-Party Claim and seek indemnification for any and all Losses
based upon, arising from or relating to such Third-Party Claim.  Seller and
Buyer shall cooperate with each other in all reasonable respects in connection
with the defense of any Third-Party Claim, including making available (subject
to the provisions of Section 5.05) records relating to such Third-Party Claim
and furnishing, without expense (other than reimbursement of actual
out-of-pocket expenses) to the defending party, management employees of the
non-defending party as may be reasonably necessary for the preparation of the
defense of such Third-Party Claim.
 
(b)           Settlement of Third-Party Claims.  Notwithstanding any other
provision of this Agreement, the Indemnifying Party shall not enter into
settlement of any Third-Party Claim without the prior written consent of the
Indemnified Party, except as provided in this Section 8.05(b).  If a firm offer
is made to settle a Third-Party Claim without leading to liability or the
creation of a financial or other obligation on the part of the Indemnified Party
and provides, in customary form, for the unconditional release of each
Indemnified Party from all liabilities and obligations in connection with such
Third-Party Claim and the Indemnifying Party desires to accept and agree to such
offer, the Indemnifying Party shall give written notice to that effect to the
Indemnified Party.  If the Indemnified Party fails to consent to such firm offer
within ten (10) days after its receipt of such notice, the Indemnified Party may
continue to contest or defend such Third-Party Claim and in such event, the
maximum liability of the Indemnifying Party as to such Third-Party Claim shall
not exceed the amount of such settlement offer.  If the Indemnified Party fails
to consent to such firm offer and also fails to assume defense of such
Third-Party Claim, the Indemnifying Party may settle the Third-Party Claim upon
the terms set forth in such firm offer to settle such Third-Party Claim.  If the
Indemnified Party has assumed the defense, it shall not agree to any settlement
without the written consent of the Indemnifying Party (which consent shall not
be unreasonably withheld or delayed).
 
 
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(c)           Direct Claims.  Any Action by an Indemnified Party on account of a
Loss which does not result from a Third-Party Claim (a “Direct Claim”) shall be
asserted by the Indemnified Party giving the Indemnifying Party reasonably
prompt written notice thereof, but in any event not later than thirty (30) days
after the Indemnified Party becomes aware of such Direct Claim.  The failure to
give such prompt written notice shall not, however, relieve the Indemnifying
Party of its indemnification obligations, except and only to the extent that the
Indemnifying Party forfeits rights or defenses by reason of such failure.  Such
notice by the Indemnified Party shall describe the Direct Claim in reasonable
detail, shall include copies of all material written evidence thereof and shall
indicate the estimated amount, if reasonably practicable, of the Loss that has
been or may be sustained by the Indemnified Party.  The Indemnifying Party shall
have thirty (30) days after its receipt of such notice to respond in writing to
such Direct Claim.  The Indemnified Party shall allow the Indemnifying Party and
its professional advisors to investigate the matter or circumstance alleged to
give rise to the Direct Claim, and whether and to what extent any amount is
payable in respect of the Direct Claim and the Indemnified Party shall assist
the Indemnifying Party’s investigation by giving such information and assistance
(including access to the Company’s premises and personnel and the right to
examine and copy any accounts, documents or records) as the Indemnifying Party
or any of its professional advisors may reasonably request.  If the Indemnifying
Party does not so respond within such thirty (30) day period, the Indemnifying
Party shall be deemed to have rejected such claim, in which case the Indemnified
Party shall be free to pursue such remedies as may be available to the
Indemnified Party on the terms and subject to the provisions of this Agreement.
 
Section 8.06   Payments.  Once a Loss is agreed to by the Indemnifying Party or
finally adjudicated to be payable pursuant to this Article VIII, the
Indemnifying Party shall satisfy its obligations within fifteen (15) Business
Days of such final, non-appealable adjudication by wire transfer of immediately
available funds or through disbursement of funds from the Escrow Agreement.
 
ARTICLE IX
Termination
 
Section 9.01   Termination.  This Agreement may be terminated at any time prior
to the Closing:
 
(a)           by the mutual written consent of Seller and Buyer;
 
(b)           by Buyer by written notice to Seller if Buyer is not then in
material breach of any provision of this Agreement and there has been a breach,
inaccuracy in or failure to perform any representation, warranty, covenant or
agreement made by Seller pursuant to this Agreement that would give rise to the
failure of any of the conditions specified in Article VII and such breach,
inaccuracy or failure has not been cured by Seller within thirty (30) days of
Seller’s receipt of written notice of such breach from Buyer;
 
(c)           by Seller by written notice to Buyer if Seller is not then in
material breach of any provision of this Agreement and there has been a breach,
inaccuracy in or failure to perform any representation, warranty, covenant or
agreement made by Buyer pursuant to this Agreement that would give rise to the
failure of any of the conditions specified in Article VII and such breach,
inaccuracy or failure has not been cured by Buyer within thirty (30) days of
Buyer’s receipt of written notice of such breach from Seller;
 
 
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(d)           by Buyer or Seller in the event that (i) there shall be any Law
that makes consummation of the transactions contemplated by this Agreement
illegal or otherwise prohibited or (ii) any Governmental Authority shall have
issued a Governmental Order restraining or enjoining the transactions
contemplated by this Agreement, and such Governmental Order shall have become
final and non-appealable;
 
(e)           by Buyer, by giving written notice to Seller, if the Closing shall
not have occurred on or before August 31, 2015 (or such later date as Seller and
Buyer may mutually agree) by reason of the failure of any condition precedent
under Section 7.01 or 7.02 (unless the failure results primarily from a breach
by Buyer of any representation, warranty, or covenant of Buyer contained in this
Agreement or Buyer’s failure to fulfill a condition precedent to the Closing or
other default or acts or omissions to act by Buyer that has the effect of
delaying the Closing Date); or
 
(f)           by Seller, by giving written notice to Buyer, if the Closing shall
not have occurred on or before August 31, 2015 (or such later date as Seller and
Buyer may mutually agree in writing) by reason of the failure of any condition
precedent under Section 7.01 or 7.03 (unless the failure results primarily from
a breach by Seller of any representation, warranty, or covenant of Seller
contained in this Agreement or Seller’s failure to fulfill a condition precedent
to the Closing or other default or acts or omissions to act by Seller that has
the effect of delaying the Closing Date).
 
Section 9.02   Effect of Termination.  In the event of the termination of this
Agreement in accordance with this Article IX, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto
except:
 
(a)           as set forth in this Article IX and Article X hereof; and
 
(b)           that nothing herein shall relieve any party hereto from liability
for any willful breach of any provision hereof.
 
ARTICLE X
Miscellaneous
 
Section 10.01   Expenses.  Except as otherwise expressly provided herein, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
 
 
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Section 10.02   Notices.  All notices, requests, consents, claims, demands,
waivers and other communications hereunder shall be in writing and shall be
deemed to have been given (a) when delivered by hand (with written confirmation
of receipt); (b) when received by the addressee if sent by a nationally
recognized overnight courier (receipt requested); (c) on the date sent by
facsimile or e-mail of a PDF document (with confirmation of transmission) if
sent during normal business hours of the recipient, and on the next Business Day
if sent after normal business hours of the recipient or (d) on the third day
after the date mailed, by certified or registered mail, return receipt
requested, postage prepaid.  Such communications must be sent to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.02):
 
If to Seller or the Company:
Cross Country Healthcare, Inc.
6551 Park of Commerce Blvd.
Boca Raton, FL  33487
Facsimile:  (800) 565-9774
E-mail:  sball@crosscountry.com
Attention:  Susan E. Ball, Esq.,
      General Counsel and Secretary
 
         with a copy to:
Proskauer Rose LLP
11 Times Square
New York, NY  10036
Facsimile:  (212) 969-2900
E-mail:  srubin@proskauer.com
Attention:  Stephen W. Rubin, Esq.
 
If to Buyer or Merger Sub or the Surviving Company:
PESI, Inc.
3839 White Avenue
Eau Claire, WI  54703
Facsimile:  (715) 855-5255
E-mail:  mconner@pesi.com
Attention:  Michael Conner, Executive Director
 
with a copy to:
Michael Best & Friedrich LLP
One South Pinckney Street, Suite 700
Madison, WI  53703
Facsimile:  (608) 283-2275
E-mail:  pjmartin@michaelbest.com
Attention:  Porter J. Martin, Esq.
 

 
Section 10.03   Interpretation.  For purposes of this Agreement, (a) the words
“include,” “includes” and “including” shall be deemed to be followed by the
words “without limitation”; (b) the word “or” is not exclusive; and (c) the
words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this
Agreement as a whole.  Unless the context otherwise requires, references
herein:  (x) to Articles, Sections, Disclosure Schedules and Exhibits mean the
Articles and Sections of, and Disclosure Schedules and Exhibits attached to,
this Agreement; (y) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and (z) to a
statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder.  This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting an instrument or
causing any instrument to be drafted.  The Disclosure Schedules and Exhibits
referred to herein shall be construed with, and as an integral part of, this
Agreement to the same extent as if they were set forth verbatim herein.  The
Recitals hereto are an integral part of this Agreement and are hereby
incorporated by reference.
 
 
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Section 10.04   Headings.  The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
 
Section 10.05   Severability.  If any term or provision of this Agreement is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Agreement or invalidate or render unenforceable such term or provision in
any other jurisdiction.  Except as provided in Section 5.06(e), upon such
determination that any term or other provision is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.
 
Section 10.06   Entire Agreement.  This Agreement and the other Transaction
Documents constitute the sole and entire agreement of the parties to this
Agreement with respect to the subject matter contained herein and therein, and
supersede all prior and contemporaneous understandings and agreements, both
written and oral, with respect to such subject matter.  In the event of any
inconsistency between the statements in the body of this Agreement and those in
the other Transaction Documents, the Exhibits and Disclosure Schedules (other
than an exception expressly set forth as such in the Disclosure Schedules), the
statements in the body of this Agreement will control.
 
Section 10.07        Successors and Assigns.This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  Neither party may assign its rights or
obligations hereunder without the prior written consent of the other party,
which consent shall not be unreasonably withheld or delayed.  No assignment
shall relieve the assigning party of any of its obligations hereunder.
 
Section 10.08        No Third-Party Beneficiaries.  Except as provided in
Article VIII, this Agreement is for the sole benefit of the parties hereto and
their respective successors and permitted assigns and nothing herein, express or
implied, is intended to or shall confer upon any other Person or entity any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
 
Section 10.09   Amendment and Modification; Waiver.  This Agreement may only be
amended, modified or supplemented by an agreement in writing signed by each
party hereto.  No waiver by any party of any of the provisions hereof shall be
effective unless explicitly set forth in writing and signed by the party so
waiving.  No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified by such
written waiver, whether of a similar or different character, and whether
occurring before or after that waiver.  No failure to exercise, or delay in
exercising, any right, remedy, power or privilege arising from this Agreement
shall operate or be construed as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
 
 
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Section 10.10   Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction).
 
Section 10.11   Specific Performance.  The parties agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance
with the terms hereof and that the parties shall be entitled to specific
performance of the terms hereof, in addition to any other remedy to which they
are entitled at law or in equity.
 
Section 10.12   Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall be
deemed to be one and the same agreement.  A signed copy of this Agreement
delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.
 
Section 10.13    Acknowledgement.  Buyer, Merger Sub and the Company acknowledge
and agree that Proskauer Rose LLP is representing the Company and the Seller in
connection with the transactions contemplated by this Agreement and that
following the Closing it may continue to represent Seller in connection with the
transactions contemplated by this Agreement, including, but not limited to, in
connection with any disputes that may arise under the Transaction
Documents.  Proskauer Rose LLP shall not be precluded from or restricted from
representing Seller or otherwise acting as attorneys for Seller in any matter,
including, but not limited to, any court proceeding or other matter related to
the Transaction Documents or the transactions contemplated by this
Agreement.  Buyer, the Company and Merger Sub irrevocably consent to any such
representation and waive any conflict or appearance of conflict with respect to
any such representation.
 

[Signature Page Follows]
 
 
47

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.

 
 

 
CROSS COUNTRY HEALTHCARE, INC.
                 
By:
/s/ William J. Grubbs
   
Name:
William J. Grubbs
   
Title:
President and Chief Executive Officer
                         
CROSS COUNTRY EDUCATION, LLC.
                 
By:
/s/ William J. Grubbs
   
Name:
William J. Grubbs
   
Title:
Executive Vice President
                           
PESI, INC.
                   
By:
/s/ Michael Conner
   
Name:
Michael Conner
   
Title:
Executive Director
                           
CC EDUCATION, LLC.
           
By:
PESI, Inc.
   
Title:
Manager
                   
By:
/s/ Michael Conner
   
Name:
MichaelConner
   
Title:
Executive Director