8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

_________________

Date of Report
(Date of earliest
event reported):	May 26, 2006

National Research Corporation

(Exact name of registrant as specified in its charter)

Wisconsin	0-29466	47-0634000
(State or other	(Commission File	(IRS Employer
jurisdiction of	Number)	Identification No.)
incorporation)

1245 Q Street, Lincoln, Nebraska 68508

(Address of principal executive offices, including zip code)

(402) 475-2525

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

        As described in more detail under Item 2.01 of this Current Report on Form 8-K, on May 30, 2006, National Research Corporation (the “Company”), entered into an asset purchase agreement (the “Purchase Agreement”) with TGI Group, LLC, a Delaware limited liability company (“TGI”), and two of its members, Housatonic Equity Partners SBIC, L.P. and Gordon Clark (the “Members”), pursuant to which the Company acquired substantially all of the assets and certain of the liabilities of TGI. The description of the material terms of the Purchase Agreement set forth in Item 2.01 of this Current Report on Form 8-K is incorporated herein by reference.

        In connection with, and in order to partially finance, the acquisition, on May 26, 2006, the Company entered into a credit facility (the “Credit Facility”) with U.S. Bank National Association (“U.S. Bank”). The material terms of the Credit Facility are contained in the Revolving Credit Agreement between the Company and U.S. Bank, dated May 26, 2006 (the “Credit Agreement”) and the related Revolving Credit Note (the “Revolving Credit Note”) and Installment or Single Payment Note (the “Term Note”), each issued by the Company to U.S. Bank on May 26, 2006. A more detailed description of the Credit Facility, including the Credit Agreement, Revolving Credit Note and Term Note, are set forth under Item 2.03 of this Current Report on Form 8-K and is incorporated herein by reference.

Item 2.01. Completion of Acquisition or Disposition of Assets.

        On May 30, 2006, the Company completed the acquisition of substantially all of the assets and certain of the liabilities of TGI in accordance with the terms and conditions of the Purchase Agreement. At the closing of the acquisition, the Company paid TGI $19.8 million, subject to certain post-closing adjustments, and assumed approximately $2.5 million of net current liabilities. Of the $19.8 million paid by the Company to TGI at the closing, $1.95 million was deposited in an escrow account, which amount will be released and paid to TGI in twelve months, subject to certain indemnification claims thereto by the Company during that period.

        The Company financed the acquisition by using (1) cash on hand of $7.3 million and (2) borrowings under its Credit Facility, which is discussed in more detail under Item 2.03 of this Current Report on Form 8-K.

        The Purchase Agreement is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. The summary of the material provisions of the Purchase Agreement set forth above is qualified in its entirety by reference to the Purchase Agreement filed as Exhibit 2.1 hereto. A copy of the press release issued by the Company regarding the transaction is filed as Exhibit 99.1 to this Current Report on Form 8-K and is also incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

        In connection with, and in order to partially finance, the acquisition of substantially all of the assets of TGI, the Company entered into the Credit Facility.

        On May 26, 2006, the Company borrowed $9.0 million under the Term Note pursuant to the Credit Agreement. Borrowings under the Term Note are payable in 83 equal monthly installments of $106,000, with the balance of principal and interest payable on May 31, 2013. Borrowings under the Term Note bear interest at a rate of 7.21% per year.

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        The Credit Agreement and Revolving Credit Note provide for a revolving credit facility that matures on July 31, 2007. The maximum aggregate amount available under the revolving credit facility is $3.5 million, subject to a borrowing base equal to 75% of the Company’s eligible accounts receivable. On May 26, 2006, the Company borrowed the entire $3.5 available under the revolving credit facility. The Company may borrow, repay and reborrow amounts under the revolving credit facility from time to time until its maturity on July 31, 2007. Borrowings under the revolving credit facility bear interest at a variable rate equal to (1) U.S. Bank’s prime rate less 0.50% or (2) one-, two-, three-, six- or twelve-month LIBOR.

        The Credit Facility is secured by certain of the Company’s assets, including the Company’s accounts receivable and intangibles.

        The Credit Facility contains various restrictions and covenants applicable to the Company, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions on the ability of the Company to consolidate or merge, create liens, incur additional indebtedness or dispose of assets. An addendum to the Credit Agreement specifically allows the Company to repurchase up to 750,000 shares of its common stock pursuant to its existing board authorization and, provided that the Company complies with all other covenants under the Credit Facility, to pay dividends.

        The Credit Facility also contains customary events of default. If an event of default under the Credit Facility occurs and is continuing, then U.S. Bank may (1) increase the interest rate on all obligations under the Credit Facility to 5.0% above the otherwise applicable rate and (2) declare any outstanding obligations under the Credit Facility to be immediately due and payable.

        The description of the Credit Facility set forth above is qualified in its entirety by reference to the Credit Agreement, the Revolving Credit Note and the Installment or Single Payment Note filed as Exhibits 4.1, 4.2 and 4.3, respectively, and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The Company has not filed the required audited financial statements with this Current Report on Form 8-K, but will file them prior to August 15, 2006.

(b) Pro Forma Financial Information.

The Company has not filed the required pro forma financial information with this Current Report on Form 8-K, but will file it prior to August 15, 2006.

(c) Shell Company Transactions.

Not applicable.

(d) Exhibits. The following exhibits are being filed herewith:

(2.1) Asset Purchase Agreement, dated as of May 30, 2006, by and among TGI Group, LLC, National Research Corporation, Housatonic Equity Partners SBIC, L.P. and Gordon Clark.

(4.1) Revolving Credit Agreement, dated as of May 26, 2006, between National Research Corporation and U.S. Bank National Association.

(4.2) Revolving Credit Note, dated as of May 26, 2006, from National Research Corporation to U.S. Bank National Association.

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(4.3) Installment or Single Payment Note, dated as of May 26, 2006, from National Research Corporation to U.S. Bank National Association.

(99.1) Press Release of National Research Corporation, dated May 30, 2006.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 30, 2006

NATIONAL RESEARCH CORPORATION

By: /s/ Patrick E. Beans

       Patrick E. Beans

       Vice President, Treasurer, Secretary and Chief

       Financial Officer

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NATIONAL RESEARCH CORPORATION

Exhibit Index to Current Report on Form 8-K
Dated May 26, 2006

Exhibit
Number

(2.1) Asset Purchase Agreement, dated as of May 30, 2006, by and among TGI Group, LLC, National Research Corporation, Housatonic Equity Partners SBIC, L.P. and Gordon Clark.

(4.1) Revolving Credit Agreement, dated as of May 26, 2006, between National Research Corporation and U.S. Bank National Association.

(4.2) Revolving Credit Note, dated as of May 26, 2006, from National Research Corporation to U.S. Bank National Association.

(4.3) Installment or Single Payment Note, dated as of May 26, 2006, from National Research Corporation to U.S. Bank National Association.

(99.1) Press Release of National Research Corporation, dated May 30, 2006.

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EX-2.1

Exhibit 2.1

Execution Copy

ASSET PURCHASE AGREEMENT

by and among

NATIONAL RESEARCH CORPORATION,
as Buyer,

and

TGI GROUP, LLC,
as the Company

Certain Members of the Company

May 30, 2006

TABLE OF CONTENTS

		Page
Article I - PURCHASE AND SALE OF ASSETS; CLOSING		1
Section 1.1.	Assets to be Sold	1
Section 1.2.	Excluded Assets	2
Section 1.3.	Liabilities	3
Section 1.4.	Consideration	3
Section 1.5.	Allocation	4
Section 1.6.	Closing	4
Section 1.7.	Adjustment to Purchase Price	4
Section 1.8.	Members’ Representative	6
Article II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY		7
Section 2.1.	Existence; Good Standing; Authority	7
Section 2.2.	Capitalization	8
Section 2.3.	Subsidiaries	8
Section 2.4.	No Conflict	8
Section 2.5.	Financial Statements	9
Section 2.6.	Absence of Certain Changes	9
Section 2.7.	Consents and Approvals	10
Section 2.8.	Litigation	11
Section 2.9.	Taxes	11
Section 2.10.	Employee Benefit Plans	12
Section 2.11.	Real and Personal Property	12
Section 2.12.	Labor and Employment Matters	13
Section 2.13.	Contracts and Commitments	13
Section 2.14.	Intellectual Property	14
Section 2.15.	Environmental Matters	14
Section 2.16.	Insurance	15
Section 2.17.	Brokers	15
Section 2.18.	Compliance with Laws	15
Section 2.19.	Accounts Receivable	16
Section 2.20.	Assets Necessary to Business	16
Section 2.21.	Disclaimer of Other Representations and Warranties; Knowledge; Disclosure	16
Article III - SEVERAL REPRESENTATIONS AND WARRANTIES OF MEMBERS		17
Section 3.1.	Membership Interests	17
Section 3.2.	Authority	17
Section 3.3.	Warranties Limited	18
Article IV - REPRESENTATIONS AND WARRANTIES OF BUYER		18
Section 4.1.	Existence; Good Standing; Authority	18

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Section 4.2.	No Conflict	18
Section 4.3.	Consents and Approvals	19
Section 4.4.	Litigation	19
Section 4.5.	Brokers	19
Section 4.6.	Warranties Limited	19
Article V - CERTAIN COVENANTS OF BUYER, THE COMPANY AND THE MEMBERS		20
Section 5.1.	Confidentiality	20
Section 5.2.	Regulatory and Other Authorizations; Consents	20
Section 5.3.	Further Action	20
Section 5.4.	Press Releases	20
Section 5.5.	Change of Company Name	21
Article VI - EMPLOYEE MATTERS		21
Section 6.1.	Employees; Benefits	21
Section 6.2.	Conveyance Taxes; Costs	22
Section 6.3.	Books and Records; Insurance	22
Article VII - CLOSING DELIVERIES		22
Section 7.1.	Buyer Deliveries	22
Section 7.2.	Deliveries of Company	23
Article VIII - SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION		24
Section 8.1.	Survival	24
Section 8.2.	Several Indemnification by the Members	24
Section 8.3.	Indemnification by Buyer	27
Section 8.4.	Treatment of Indemnity Payments	28
Section 8.5.	Remedies Exclusive	28
Article IX - [RESERVED]		29
Article X - GENERAL PROVISIONS		29
Section 10.1.	Notices	29
Section 10.2.	Fees and Expenses	30
Section 10.3.	Certain Definitions	30
Section 10.4.	Interpretation	30
Section 10.5.	Counterparts	31
Section 10.6.	Amendments	31
Section 10.7.	Entire Agreement; Severability	31
Section 10.8.	Third Party Beneficiaries	31
Section 10.9.	Governing Law	31
Section 10.10.	Assignment	31
Section 10.11.	Consent to Jurisdiction	31
Section 10.12.	Mutual Drafting	32
Section 10.13.	Remedies	32

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EXHIBITS

Exhibit A	Members and Membership Interests
Exhibit B	Form of Indemnification Escrow Agreement
Exhibit C	Form of Bill of Sale
Exhibit D	Form of Assignment and Assumption Agreement
Exhibit E	Form of Assignment of Intellectual Property
Exhibit F	Form of Assignment of Leases

SCHEDULES

Schedule 1.2(h)	Excluded Assets
Schedule 1.3(a)(ii)	Assumed Contractual Liabilities
Schedule 1.4	Wire Transfer Instructions
Schedule 1.5	Allocation of Purchase Price
Schedule 2.1(a)	Organization and Good Standing
Schedule 2.2	Capitalization
Schedule 2.3(a)	Subsidiaries
Schedule 2.4	Conflicts
Schedule 2.5	Financial Statements
Schedule 2.6	Absence of Certain Changes
Schedule 2.7(a)	Government Consents
Schedule 2.7(b)	Third-Party Consents
Schedule 2.8	Litigation
Schedule 2.9	Taxes
Schedule 2.10	Employee Benefit Plans
Schedule 2.11(a)	Real Property; Leases
Schedule 2.11(b)	Personal Property
Schedule 2.12(a)	Employment Matters
Schedule 2.12(b)	Labor Matters
Schedule 2.13	Certain Contracts and Commitments
Schedule 2.14	Intellectual Property
Schedule 2.16	Insurance
Schedule 2.19	Accounts Receivable
Schedule 4.2	Conflicts of Buyer
Schedule 4.3(a)	Buyer Government Consents
Schedule 4.3(b)	Buyer Third-Party Consents
Schedule 6.1	Excluded Employees

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ASSET PURCHASE AGREEMENT

        This ASSET PURCHASE AGREEMENT (this “Agreement”) is dated as of May 30, 2006 by and among TGI Group, LLC, a Delaware limited liability company (the “Company”), NATIONAL RESEARCH CORPORATION, a Wisconsin corporation (“Buyer”), and certain members of the Company listed on the signature pages hereto (each, a “Member” and collectively, the “Members”).

        WHEREAS, the Members own beneficially and of record the issued and outstanding Membership Interests of the Company set forth on Exhibit A attached hereto (collectively, the “Membership Interests”); and

        WHEREAS, the Company desires to sell to Buyer, and Buyer desires to purchase from the Company, all of the assets of the Company on the terms and conditions set forth herein.

        NOW THEREFORE, in consideration of the mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Article I – PURCHASE AND SALE OF ASSETS; CLOSING

        Section 1.1. Assets to be Sold. Upon the terms and subject to the conditions set forth in this Agreement, effective as of the Closing (as defined in Section 1.6), the Company shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from the Company, free and clear of any claim, encumbrance, lien, option, pledge, security interest, mortgage or similar restriction (each, a “Claim” and collectively, “Claims”), all of the Company’s right, title and interest in and to all of the Company’s property and assets, real, personal or mixed, tangible and intangible, of every kind and description, wherever located, including the following (but excluding the Excluded Assets (as defined in Section 1.2)):

            (a)     all the parcels of real property, if any, owned by the Company and all of the Leased Real Property (as defined in Section 2.11) leased by the Company;

            (b)     all machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, vehicles and other items of tangible personal property (other than inventories) of every kind owned or leased by the Company (wherever located and whether or not carried on the Company’s books), together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof and all maintenance records and other documents relating thereto (collectively, “Tangible Personal Property”);

            (c)     all inventories of the Company, wherever located, including all finished goods, work in process, raw materials, spare parts and all other materials and supplies to be used or consumed by the Company in the production of finished goods;

            (d)     all accounts receivable;

            (e)     all agreements, contracts, or leases of the Company (collectively, the “Company Contracts”);

            (f)     all permits and all pending applications therefor or renewals thereof, in each case to the extent transferable to Buyer;

            (g)     all data and records related to the operations of the Company, including client and customer lists and records, referral sources, research and development reports and records, production reports and records, service and warranty records, equipment logs, operating guides and manuals, financial and accounting records, creative materials, advertising materials, promotional materials, studies, reports, correspondence and other similar documents and records and, subject to legal limitations, copies of all personnel records and other records described in Section 1.2(d);

            (h)     all of the intangible rights and property of the Company, including Intellectual Property Rights (as defined in Section 2.14), going concern value, goodwill, telephone, telecopy and e-mail addresses and listings;

            (i)     all insurance benefits, including rights and proceeds, arising from or relating to the Assets or the Assumed Liabilities (as defined in Section 1.3) prior to the Closing, unless expended in accordance with this Agreement;

            (j)     all claims of the Company against third parties relating to the Assets, whether choate or inchoate, known or unknown, contingent or noncontingent;

            (k)     all rights of the Company relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof that are not listed on Schedule 1.2(h); and

            (l)     the name “TGI Group, LLC,” and all rights to use or allow others to use such name.

        All of the property and assets to be transferred to Buyer hereunder are herein referred to collectively as the “Assets.”

        Section 1.2. Excluded Assets. Notwithstanding anything to the contrary contained in Section 1.1 or elsewhere in this Agreement, the following assets of the Company (collectively, the “Excluded Assets”) are not part of the sale and purchase contemplated hereunder, are excluded from the Assets and shall remain the property of the Company after the Closing:

            (a)     all cash, cash equivalents and short-term investments;

            (b)     all minute books, limited liability company records and seals;

            (c)     all insurance policies and rights thereunder (except to the extent specified in Section 1.1(i) and (j));

            (d)     all personnel records and other records that the Company is required by law to retain in its possession;

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            (e)     all claims for refund of Taxes and other governmental charges of whatever nature relating to the operation of the Assets, in each case with respect to the period prior to the Closing;

            (f)     all rights in connection with and assets of the Benefit Plans (as defined in Section 2.10);

            (g)     all rights of the Company under this Agreement, the Bill of Sale (as defined in Section 7.2(e)(i)), the Assignment and Assumption Agreement (as defined in Section 7.2(e)(ii)) and the Escrow Agreement (as defined in Section 1.4);

            (h)     all of the equity interests in the Subsidiaries (as defined in Section 2.3) owned by the Company; and

            (i)     all other assets, if any, set forth on Schedule 1.2(i).

        Section 1.3. Liabilities.

            (a)     Assumed Liabilities. Effective on the Closing Date (as defined in Section 1.6), Buyer shall assume and agree to discharge only the following Liabilities(as defined in Section 1.3(b)) of the Company and the Subsidiaries (the “Assumed Liabilities”):

        (i)     any current liability reflected or reserved against on the Base Balance Sheet (as defined in Section 2.5) (but only in the amounts so reflected or reserved) or incurred by the Company in the ordinary course of business between the date of the Base Balance Sheet and the Closing, except for the current debt payable of the Company reflected on the Base Balance Sheet, which current debt payable shall not be assumed; and

        (ii)     any Liability arising after the Closing under the Company Contracts set forth on Schedule 1.3(a)(ii).

            (b)     Retained Liabilities. The Retained Liabilities shall remain the sole responsibility of and shall be retained, paid, performed and discharged solely by the Company. “Retained Liabilities” shall mean every Liability of the Company (including the current debt payable) other than the Assumed Liabilities. “Liabilities” shall mean and include any direct or indirect indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or unfixed, known or unknown, asserted or unasserted, liquidated or unliquidated, secured or unsecured.

        Section 1.4. Consideration. Subject to the terms and conditions set forth herein, the consideration payable by Buyer hereunder shall consist of the amounts set forth below (collectively, together with the Assumed Liabilities, the “Purchase Price”):

            (a)    Cash Consideration. An amount equal to Nineteen Million Five Hundred Thousand Dollars ($19,500,000) increased or decreased by the Estimated Closing Working Capital Adjustment, as defined in Section 1.7 (such amount, the “Closing Date Cash”), if any, payable to the Company at the Closing and the Escrow Amount (as defined in Section 1.4(c)).

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            (b)    Post Closing Cash Consideration. The amount, if any, payable by Buyer pursuant to Section 1.7(c) below.

            (c)    Escrow Deposit. One Million Nine Hundred Fifty Thousand Dollars ($1,950,000) (the “Escrow Amount”) to be deposited at the Closing with Mellon Trust of New England, N.A. (the “Escrow Agent”) to be held in escrow (the “Escrow Fund”) pursuant to the terms of the Escrow Agreement in substantially the form attached hereto as ExhibitB (the “Indemnification Escrow Agreement”) in order to secure the performance of the Company’s obligations under this Agreement and the other agreements contemplated hereby.

All amounts payable to the Company pursuant to Sections 1.4(a) and (b) and 1.7 shall be paid at the applicable times via wire transfer in immediately available funds pursuant to the wire transfer instructions set forth on Schedule 1.4. All amounts remaining in the Escrow Fund upon its termination shall be distributed to the Members in accordance with their respective pro rata share as set forth in Exhibit A.

        Section 1.5. Allocation. The Purchase Price shall be allocated in accordance with Schedule 1.5. After the Closing, the parties shall make consistent use of the allocation, fair market value and useful lives specified on Schedule 1.5for all Tax purposes and in all filings, declarations and reports with the Internal Revenue Service (“IRS”) in respect thereof, including the reports required to be filed under Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”). Buyer shall prepare and deliver IRS Form 8594 to the Company within forty-five (45) days after the Closing Date to be filed with the IRS. In any proceeding related to the determination of any Tax (as defined in Section 2.9(b)(i)), neither Buyer nor the Company or their respective equity holders shall contend or represent that such allocation is not a correct allocation.

        Section 1.6. Closing. The purchase and sale provided for in this Agreement (the “Closing”) will take place by facsimile and email commencing at 12:00 p.m. (EST) on the date of this Agreement (the “Closing Date”) and shall be effective as of 11:59 p.m. on the date hereof.

        Section 1.7. Adjustment to Purchase Price.

            (a)     Prior to the Closing Date, the Company shall in good faith prepare, with the assistance of Buyer, an estimated balance sheet of the Company as of May 31, 2006 (the “Estimated Closing Date Balance Sheet”). The Estimated Closing Date Balance Sheet shall be prepared in accordance with GAAP consistently applied, and otherwise consistent with the methodology used to prepare the Company’s Base Balance Sheet (as defined in Section 2.5). Not later than three (3) business days prior to the Closing Date, the Company shall deliver to Buyer the Estimated Closing Date Balance Sheet, together with worksheets and data that support the Estimated Closing Date Balance Sheet and any other information that Buyer may reasonably request in order to verify the amounts reflected on the Estimated Closing Date Balance Sheet. As provided in Section 1.4 hereof, the Purchase Price to be paid at the Closing shall be adjusted, dollar for dollar, up or down, as appropriate, to the extent that the Working Capital set forth on the Estimated Closing Date Balance Sheet (the “Estimated Closing Working Capital”) is greater (i.e., less negative) or less (i.e., more negative) than negative Two Million Seven Hundred Eighty-Six Thousand Two Hundred Seven Dollars (-$2,786,207) (the “Base Working Capital”), as applicable (such adjustment, the “Estimated Closing Working Capital Adjustment”).

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            (b)     As soon as practical after the Closing Date, Buyer and, at Buyer’s election, KPMG LLP (“Buyer’s Accountant”) shall review the Company’s books and records and also shall review the Estimated Closing Date Balance Sheet in accordance with GAAP consistently applied and otherwise consistent with the methodology used to prepare the Base Balance Sheet and make any adjustments necessary thereto (the “Post-Closing Balance Sheet”) consistent with the provisions of this Section 1.7. All fees and expenses of the Buyer’s Accountant shall be paid by Buyer. Buyer shall, within thirty (30) days of the Closing Date, deliver the Post-Closing Balance Sheet to the Members’ Representative, together with worksheets which detail any adjustments and the basis thereof. The Post-Closing Balance Sheet, and the Working Capital at the Closing reflected thereon, shall be binding upon the parties upon approval of such Post-Closing Balance Sheet by the Members’ Representative. If the Members’ Representative does not agree with the Post-Closing Balance Sheet and the calculation of Working Capital at the Closing stated thereon, and Buyer and Members’ Representative cannot mutually agree on the same, then within the later of (i) forty-five (45) days after the Closing Date and (ii) fifteen (15) days following receipt by the Members’ Representative of the Post-Closing Balance Sheet, Buyer and the Members’ Representative shall select a nationally recognized independent accounting firm mutually satisfactory to Buyer and the Members’ Representative to resolve such dispute (the “Neutral Auditor”). The Neutral Auditor shall review the Post-Closing Balance Sheet and, within ten (10) days of its appointment, shall make any adjustments necessary thereto, and, upon completion of such review, such Post-Closing Balance Sheet and the Net Working Capital at May 31, 2006 (the “ClosingWorkingCapital”) as determined by the Neutral Auditor shall be binding upon the parties. All fees and expenses of the Neutral Auditor shall be shared equally by Buyer, on the one hand, and Members, on the other hand.

            (c)     Within three (3) business days following determination of the Closing Working Capital in accordance with Section 1.7(b), (i) in the event the Closing Working Capital is less (i.e., more negative) than the Estimated Closing Working Capital, Member’s Representative, on behalf of the Members, shall pay to Buyer an amount equal to the difference between such amounts and, (ii) in the event the Closing Working Capital is greater (i.e., less negative) than the Estimated Closing Working Capital, Buyer shall pay to the Members’ Representative, on behalf of the Members, the difference between such amounts, in each case by wire transfer of immediately available funds or check. If and to the extent that Members’ Representative does not pay to Buyer the full amount, if any, to be paid pursuant to clause (i) of the first sentence of this Section 1.7(c) within three business days after it becomes due, the Company and Members shall be jointly and severally obligated, without further demand or notice, to pay to Buyer such amount as is necessary to cause the aggregate payments to Buyer under this Section 1.7(c) to equal the amount specified in clause (i) of the first sentence of this Section 1.7(c).

            (d)     As used in this Section 1.7 “Working Capital” means Current Assets minus Current Liabilities; “Current Assets” means and includes all accounts receivable, prepaid expenses and all other current assets of the Company (but excluding cash and cash equivalents), in each case as determined in accordance with GAAP, consistently applied; and “CurrentLiabilities” means and includes all accounts payable, accrued expenses, accrued but unpaid taxes and all other current liabilities of the Company (including deferred revenue but excluding current debt payables) in each case as determined in accordance with GAAP, consistently applied.

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        Section 1.8. Members’ Representative.

            (a)     By the execution and delivery of this Agreement, each Member hereby irrevocably constitutes and appoints Housatonic Equity Investors SBIC, L.P., as his, her or its true and lawful agent and attorney-in-fact (together, the “Members’Representative”), with full power of substitution to act in such Member’s name, place and stead with respect to all transactions contemplated by and all terms and provisions of this Agreement, and to act on such Member’s behalf in any dispute, litigation or arbitration involving this Agreement, and to do or refrain from doing all such further acts and things, and execute all such documents as the Members’ Representative shall deem necessary or appropriate in connection with the transactions contemplated by this Agreement, including, without limitation, the power:

        (i)     to waive any condition to the obligations of such Member to consummate the transactions contemplated by this Agreement;

        (ii)     to execute and deliver all ancillary agreements, certificates and documents, and to make representations and warranties therein, on behalf of such Member which the Members’ Representative deems necessary or appropriate in connection with the consummation of the transactions contemplated by this Agreement;

        (iii)     to receive on behalf of, hold in trust and distribute (after payment of (A) any unpaid expenses chargeable to the Members or the Company prior to the Closing in connection with the transactions contemplated by this Agreement, and (B) amounts payable by the Members pursuant to Section 1.7), all amounts payable to such Member under the terms of this Agreement;

        (iv)     to settle any claim for indemnification hereunder; and

        (v)     to do or refrain from doing any further act or deed on behalf of such Member which the Members’ Representative deems necessary or appropriate in its sole discretion relating to the subject matter of this Agreement, as fully and completely as such Member could do if personally present.

            (b)     The appointment of the Members’ Representative shall be deemed coupled with an interest and shall be irrevocable, and Buyer, its affiliates and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Members’ Representative on behalf of the Members in all matters referred to herein. All notices delivered by Buyer or the Company (following the Closing) to the Members’ Representative (whether pursuant hereto or otherwise) for the benefit of the Members shall constitute notice to the Members. The Members’ Representative shall act for the Members on all of the matters set forth in this Agreement in the manner the Members’ Representative believes to be in the best interest of the Members and consistent with its obligations under this Agreement, but the Members’ Representative shall not be responsible to the Members for any loss or damages it or they may suffer by reason of the performance by the Members’ Representative of its duties under this Agreement, other than loss or damage arising from willful violation of the law.

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            (c)     Each Member agrees to indemnify and hold harmless the Members’ Representative from any loss, damage or expense arising from the performance of its duties as the Members’ Representative hereunder, including, without limitation, the cost of legal counsel retained by the Members’ Representative on behalf of the Members, but excluding any loss or damage arising from willful violation of the law.

            (d)     All actions, decisions and instructions of the Members’ Representative taken, made or given pursuant to the authority granted to the Members’ Representative pursuant to this Section 1.8 shall be conclusive and binding upon each Member, and no Member shall have the right to object, dissent, protest or otherwise contest the same.

            (e)     The provisions of this Section 1.8 are independent and severable, shall constitute an irrevocable power of attorney, coupled with an interest and surviving death or dissolutions, granted by the Members to the Members’ Representative and shall be binding upon the executors, heirs, legal representatives, successors and assigns of each such Member.

Article II – REPRESENTATIONS AND WARRANTIES OF THE COMPANY

        The Company hereby makes to Buyer the representations and warranties contained in this Article II.

        Section 2.1. Existence; Good Standing; Authority.

            (a)     The Company is a limited liability company duly incorporated, validly existing and in good standing under the laws of Delaware. The Company has all requisite power and authority to own, operate, lease and encumber its properties and carry on its business as currently conducted. Except as set forth on Schedule 2.1(a), the Company is duly licensed or qualified to do business as a foreign limited liability company under the laws of each other jurisdiction in which the character of its properties or in which the transaction of its business makes such qualification necessary, except where the failure to be so licensed or qualified would not, individually or in the aggregate, have a Material Adverse Effect (as defined in Section 10.3(d)). The copies of the Company’s certificate of formation and limited liability company agreement, each as amended to date and made available to Buyer’s counsel, are complete and correct, and no amendments thereto are pending.

            (b)     The Company has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement, the performance by the Company of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Company and its members. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by Buyer, this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles.

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        Section 2.2. Capitalization. As of the date of this Agreement, the authorized, issued and outstanding membership interests of the Company are set forth on Schedule 2.2. All of the issued and outstanding membership interests of the Company are duly authorized and validly issued. As of the date of this Agreement, except as set forth on Schedule 2.2, there are no outstanding options, warrants or other rights of any kind to acquire any additional membership interests of the Company or securities convertible into or exchangeable for, or which otherwise confer on the holder thereof any right to acquire, any such additional membership interests, nor is the Company committed to issue any such option, warrant, right or security. Except as set forth on Schedule 2.2, there are no agreements or understandings to which the Company is a party with respect to the voting of any membership interests of the Company or which restrict the transfer of any such membership interests. Except as set forth on Schedule 2.2, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any membership interests, other equity interests or any other securities of the Company. Except as set forth on Schedule 2.2, the Company is not under any obligation by reason of any agreement to register the offer and sale or resale of any of its securities under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”).

        Section 2.3. Subsidiaries.

            (a)     The Company’s subsidiaries and investments in other Persons are listed on Schedule 2.3(a) (collectively, the “Subsidiaries” and each a “Subsidiary”). Except as set forth on Schedule 2.3(a), the Company owns directly or indirectly each of the outstanding shares of capital stock or other equity interest of each of the Subsidiaries. Except as set forth on Schedule 2.3(a), neither the Company nor any Subsidiary owns directly or indirectly any interest or investment (whether equity or debt) in any Person (other than investments in short-term investment securities).

            (b)     Each of the Subsidiaries is a corporation, partnership or limited liability company duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite corporate power and authority to own, operate, lease and encumber its properties and carry on its business as currently conducted, except as would not, individually or in the aggregate, have a Material Adverse Effect. Each such Subsidiary is duly licensed or qualified to do business as a foreign corporation, partnership or limited liability company, as applicable, in each other jurisdiction in which the character of its properties or in which the transaction of its business makes such qualification necessary, except where the failure to be so licensed or qualified would not, individually or in the aggregate, have a Material Adverse Effect. The copies of the organizational documents of each such Subsidiary, in each case as amended to date and made available to Buyer’s counsel, are complete and correct, and no amendments thereto are pending.

        Section 2.4. No Conflict. Neither the execution and delivery by the Company of this Agreement and the other agreements, documents and instruments contemplated hereby, nor the consummation by the Company of the transactions in accordance with the terms hereof and thereof, conflicts with or results in a breach of any provisions of the organizational documents of the Company or any Subsidiary. Except as set forth on Schedule 2.4, and assuming the consents, approvals and authorizations contemplated by Section 2.7 are obtained, the execution and delivery by the Company of this Agreement and the other agreements, documents and instruments contemplated hereby and the consummation by the Company or the Members of the transactions in accordance with the terms hereof and thereof will not violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under any of the terms, conditions or provisions of any material note, bond, mortgage, indenture, deed of trust, lease, contract or other agreement to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties is bound, except, in each case, as would not, individually or in the aggregate, have a Material Adverse Effect.

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        Section 2.5. Financial Statements.

            (a)     The Company has delivered to Buyer the following financial statements, copies of which are attached hereto as Schedule 2.5 (collectively, the “Financial Statements”):

        (i)     Audited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2004 and 2005, and statements of income and retained earnings and statements of cash flows for each of the years then ended;

        (ii)     Unaudited adjusted consolidated balance sheet of the Company and its Subsidiaries as of March 31, 2006 (the “Base Balance Sheet”); and

        (iii)     Unaudited adjusted consolidated statements of income of the Company and its Subsidiaries for the three-month period ended March 31, 2006.

        Subject to the absence of footnotes and year-end audit adjustments with respect to any unaudited Financial Statements, the Financial Statements have been prepared using the Company’s past practices and procedures in accordance with GAAP consistently applied, and present fairly in all material respects the consolidated financial condition of the Company.

            (b)     As of the date hereof, all liabilities of the Company and its Subsidiaries of a type that would be required to be shown on the Financial Statements in accordance with GAAP have been (i) stated or adequately reserved against on the Base Balance Sheet or the notes thereto, (ii) reflected on Schedule 2.5 or the other Schedules furnished to Buyer hereunder, or (iii) incurred after the date of the Base Balance Sheet in the ordinary course of business consistent with past practices, except for liabilities which are not reasonably likely to have, individually or in the aggregate, a Material Adverse Effect.

        Section 2.6. Absence of Certain Changes. Except as set forth on Schedule 2.6, from the date of the Base Balance Sheet to the date of this Agreement, the Company and its Subsidiaries have operated only in the ordinary course of business consistent with past practices and there has not been any:

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            (a)     change in the Company’s authorized or issued membership interests; grant of any option, right to purchase or similar right regarding the membership interests of the Company; purchase, redemption, retirement, or other acquisition by the Company of any such membership interests; or declaration or payment of any dividend or other distribution or payment in respect of the membership interests of the Company;

            (b)     amendment to the organizational documents of the Company or any Subsidiary;

            (c)     payment of any bonuses, or increase in salaries or other compensation, by the Company or any of its Subsidiaries to any of their respective directors, officers, or employees;

            (d)     damage to or destruction or loss of any asset or property of the Company or any of its Subsidiaries, whether or not covered by insurance, which has had a Material Adverse Effect;

            (e)     incurrence of indebtedness or guarantee of debt or other liability of any third party by the Company or any Subsidiary;

            (f)     material change in the accounting methods or principles used by the Company and its Subsidiaries, other than such adjustments as may be required by GAAP as a result of the transactions contemplated by this Agreement;

            (g)     any sale, lease or other transfer or disposition of any properties or assets of the Company;

            (h)     entering into any written agreement to do any of the actions described in clauses (a) through (g); or

            (i)     the occurrence of any event having a Material Adverse Effect.

        Section 2.7. Consents and Approvals.

            (a)     Except as set forth on Schedule 2.7(a), the execution, delivery and performance of this Agreement by the Company and the Members will not, as of the Closing Date, require any consent, approval, authorization or other action by, or filing with or notification to, any federal, state, local, or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body (a “Governmental Authority”), except (i) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not, individually or in the aggregate, have (A) a Material Adverse Effect or (B) a material adverse effect on the ability of the Company to perform its obligations under this Agreement, and (ii) as may be necessary as a result of any facts or circumstances relating solely to Buyer (including, without limitation, its sources of financing).

            (b)     Except as set forth on Schedule 2.7(b), the execution, delivery and performance of this Agreement by the Company will not, as of the Closing Date, require any third-party consents, approvals, authorizations or actions, except where failure to obtain such consents, approvals, authorizations or actions would not, individually or in the aggregate, have (i) a Material Adverse Effect or (ii) a material adverse effect on the ability of the Company to perform its obligations under this Agreement.

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        Section 2.8. Litigation. Except as set forth on Schedule 2.8, as of the date of this Agreement there is no litigation, action, suit, proceeding, claim, arbitration or investigation pending or, to the Company’s knowledge, threatened in writing against the Company or any of its Subsidiaries, as to which there is a reasonable likelihood of an adverse determination and which, if adversely determined, individually or in the aggregate, with all such other litigation, actions, suits, proceedings, claims, arbitrations or investigations, would have a Material Adverse Effect.

        Section 2.9. Taxes.

            (a)     Except as set forth on Schedule 2.9:

        (i)     The Company and its Subsidiaries have timely filed or been included in, or will timely file or be included in, all material Tax Returns required to be filed by them or in which they are to be included with respect to Taxes for any period ending on or before the date of this Agreement, taking into account any extension of time to file granted to or obtained on behalf of the Company or any of its Subsidiaries;

        (ii)     The Company and its Subsidiaries have paid or caused to be paid all Taxes shown on such Tax Returns prior to the date of this Agreement and have made provision, in accordance with GAAP, for all Taxes owed or accrued through the date of this Agreement;

        (iii)     Neither the IRS nor any other Governmental Authority is asserting as of the date of this Agreement by written notice to the Company or any of its Subsidiaries or, to the Company’s knowledge, threatening as of the date of this Agreement to assert against the Company or its Subsidiaries, any deficiency or claim for any material amount of additional Taxes;

        (iv)     To the Company’s knowledge, no federal, state, local or foreign audits or other administrative proceedings or court proceedings are pending as of the date of this Agreement with regard to any Taxes or Tax Returns of the Company or any of its Subsidiaries and neither the Company nor any of its Subsidiaries has received a written notice prior to the date of this Agreement of any actual or threatened audits or proceedings or is otherwise aware of any such audits or proceedings; and

        (v)     The Company has made a valid election to be taxed as a partnership for federal and state income tax purposes.

            (b)     For the purposes of this Agreement:

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        (i)     “Taxes” shall mean any and all taxes, charges, fees, levies or other assessments, imposed by the IRS or any taxing authority, and such term shall include any interest whether paid or received, fines, penalties or additional amounts attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other assessments; and

        (ii)     “Tax Returns” shall mean any report, return, document or other filing required to be supplied to any taxing authority or jurisdiction (foreign or domestic) with respect to Taxes.

            (c)     The representatives and warranties set forth in this Section 2.9 shall constitute the only representations and warranties by the Company with respect to Taxes.

        Section 2.10. Employee Benefit Plans. With respect to all the employee benefit plans, programs and arrangements currently maintained for the benefit of any current or former employee, officer or director of the Company and its Subsidiaries (the “Benefit Plans”), except for such matters as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect or as set forth on Schedule 2.10, (a) each Benefit Plan and any related trust intended to be qualified under Sections 401(a) and 501(a) of the Code, has received a favorable determination letter from the IRS that it is so qualified, (b) each Benefit Plan has been operated in accordance with the terms and requirements of applicable law, (c) no Benefit Plan is subject to Title IV of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or is a multiemployer plan within the meaning of Section 3(37) of ERISA. The representations and warranties set forth in this Section 2.10 shall constitute the only representations and warranties by the Company with respect to Benefit Plans.

        Section 2.11. Real and Personal Property.

            (a)     Schedule 2.11(a) sets forth a list and description of all real properties leased by the Company or any of its Subsidiaries (the “Leased Real Property”). Neither the Company nor any Subsidiary owns any real property. All leases relating to Leased Real Property are identified on Schedule 2.11(a) (the “Leases”) and true and complete copies thereof have been delivered to Buyer. With respect to each Lease listed on Schedule 2.11(a):

        (i)     the Company or a Subsidiary, as applicable, have good, valid and enforceable leasehold interests to the leasehold estate in the Leased Real Property granted to the Company or such Subsidiary, as applicable, pursuant to each pertinent Lease, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity;

        (ii)     each of said Leases has been duly authorized and executed by the Company or such Subsidiary, as applicable, and is in full force and effect; and

        (iii)     neither the Company nor such Subsidiary is in default under any of said Leases, nor has any event occurred which, with notice or the passage of time, or both, would give rise to such a default by the Company or such Subsidiary, as applicable.

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            (b)     Except as set forth on Schedule 2.11(b) or as specifically disclosed in the Base Balance Sheet, and except with respect to leased personal property, the Company and each of its Subsidiaries has good title to all of their respective Tangible Personal Property and assets shown on the Base Balance Sheet or acquired after the date of the Base Balance Sheet, free and clear of any Claims, except for (i) assets which have been disposed of to nonaffiliated third parties since December 31, 2005 in the ordinary course of business, (ii) Claims reflected in the Base Balance Sheet, (iii) Claims of record or imperfections of title which are not, individually or in the aggregate, material in character, amount or extent and which do not materially detract from the value or materially interfere with the present or presently contemplated use of the assets subject thereto or affected thereby or which would not otherwise, individually or in the aggregate, have a Material Adverse Effect, and (iv) Claims for current Taxes not yet due and payable (collectively (ii)-(iv) are referred to herein as “Permitted Claims”).

            (c)     The representations and warranties set forth in this Section 2.11 shall constitute the only representations and warranties by the Company with respect to Real Property.

        Section 2.12. Labor and Employment Matters.

            (a)     Except as set forth on Schedule 2.12(a) and as otherwise would not, individually or in the aggregate, have a Material Adverse Effect, the Company and each of its Subsidiaries is, as of the date hereof, in compliance with all federal and state laws respecting employment and employment practices, terms and conditions of employment, and wages and hours, including but not limited to ERISA, the Code, Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act of 1967, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Americans with Disabilities Act, as amended, and the related rules and regulations adopted by those federal agencies responsible for the administration of such laws, and there are no arrearages in the payment of wages, social security tax or any other employment related levy or tax.

            (b)     Neither the Company nor any Subsidiary is a party to or otherwise bound by any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization. Except as would not, individually or in the aggregate, have a Material Adverse Effect, as of the date of this Agreement, neither the Company nor any Subsidiary is subject to any charge, demand, petition or representation proceeding seeking to compel, require or demand it to bargain with any labor union or labor organization nor, as of the date of this Agreement, is there pending or, to the Company’s knowledge, threatened, any material labor strike, dispute, walkout, work stoppage, slow-down or lockout involving the Company or any Subsidiary.

            (c)     The representations and warranties set forth in this Section 2.12 shall constitute the only representations and warranties of the Company with respect to employment and labor matters.

        Section 2.13. Contracts and Commitments.

            (a)     Except as set forth on Schedule 2.13, neither the Company nor any Subsidiary is a party to:

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        (i)      any partnership agreements or joint venture agreements which requires a payment, or delivery of assets or services;

        (ii)     any employment, severance or consulting agreements with any director, officer or employee;

        (iii)     any agreements with another Person materially limiting or restricting the ability of the Company or any Subsidiary to enter into or engage in any market or line of business;

        (iv)     any other agreement (or group of related agreements) or commitment, the performance of which involves consideration in excess of $50,000; or

        (v)     any loan agreement, promissory note, letter of credit or other evidence of indebtedness as a signatory, guarantor or otherwise.

            (b)     The Company is not in default under any such contract or commitment set forth on Schedule 2.13, nor has any event or omission occurred which through the passage of time or the giving of notice, or both, would constitute a default thereunder or cause the acceleration of any of the Company’s obligations or result in the creation of any Claim on any of the assets owned, used or occupied by the Company. No third party is in default under any such contract or commitment set forth in Schedule 2.13 to which the Company is party, nor has any event or omission occurred which, through the passage of time or the giving of notice, or both, would constitute a default thereunder or give rise to an automatic termination, or the right of discretionary termination, thereof.

        Section 2.14. Intellectual Property. Except as set forth on Schedule 2.14, the Company or a Subsidiary is the owner of, or has the right to use, all items of intangible property, including, without limitation, patents, registered trademarks and service marks, trade names, unregistered trademarks and service marks, copyrights and other intellectual property rights (collectively, “Intellectual Property Rights”), as are necessary in connection with the business of the Company and its Subsidiaries as currently conducted taken as a whole, except where the failure to own or have the right to use such Intellectual Property Rights would not, individually or in the aggregate, have a Material Adverse Effect. The Company is not infringing and has not infringed any Intellectual Property Rights of another person in the operation of the business of the Company, nor, to the Company’s knowledge, is any other person infringing the Intellectual Property Rights of the Company. The representations and warranties set forth in this Section 2.14 shall constitute the only representations and warranties by the Company with respect to Intellectual Property Rights.

        Section 2.15. Environmental Matters.

            (a)     The Company and its Subsidiaries are in material compliance with Environmental Laws, except for such noncompliance as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has received any written notice, report or other information regarding any actual or alleged material violation of Environmental Laws, or any material liabilities or potential material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations, relating to the Company or its Subsidiaries or their facilities arising under Environmental Laws, the subject of which would have a Material Adverse Effect.

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            (b)     “Environmental Laws” means all applicable federal, state and local statutes or laws, judgments, orders, regulations, licenses, permits, rules and ordinances relating to pollution or protection of health, safety or the environment, including Laws relating to emissions, discharges, generation, storage, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic, hazardous or petroleum or petroleum-based substances or wastes (“Waste”) into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Waste, including, but not limited to the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq.), Resources Conservation and Recovery Act (42 U.S.C. §6901 et. seq.), Safe Drinking Water Act (42 U.S.C. §3000(f) et. seq.), Toxic Substances Control Act (15 U.S.C. §2601 et seq.), Clean Air Act (42 U.S.C. §7401 et. seq.), Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §9601 et seq.), and other similar state and local statutes.

            (c)     The representations and warranties set forth in this Section 2.15 shall constitute the only representations and warranties by the Company with respect to environmental matters.

        Section 2.16. Insurance. Schedule 2.16 sets forth a true and correct summary of the insurance policies held by, or for the benefit of, the Company and its Subsidiaries including the underwriter of such policies, retention or deductible amounts, date of expiration, any pending claims and the amount of coverage thereunder. All such policies are valid, outstanding and enforceable policies and provide insurance coverage for the properties, assets and operations of the Company, of the kinds, in the amounts and against the risks customarily maintained by persons similarly situated.

        Section 2.17. Brokers. Except for the fees payable to The Jordan Edmiston Group, which fees shall be paid by the Company, neither the Company nor any Subsidiary has incurred or become liable for any broker’s commission or finder’s fee relating to or in connection with the transactions contemplated by this Agreement.

        Section 2.18. Compliance with Laws. Neither the Company nor any Subsidiary is in default or violation of any law, statute, ordinance, regulation, rule, order, judgment or decree applicable to the Company or such Subsidiary or by which any property or asset of the Company or its Subsidiaries is bound, except for any such conflicts, defaults or violations that would not, individually or in the aggregate, have a Material Adverse Effect. Notwithstanding the foregoing, the representations and warranties in this Section 2.18 do not apply to matters covered by Sections 2.9 (“Taxes”), 2.10 (“Employee Benefit Plans”), 2.12 (“Employment and Labor Matters”), 2.14 (“Intellectual Property”), and 2.15 (“Environmental Matters”), which matters are covered exclusively in such Sections.

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        Section 2.19. Accounts Receivable. All accounts receivable of Company or any Subsidiary reflected on the Base Balance Sheet, and as incurred in the normal course of business since the date thereof, represent arm’s length sales actually made in the ordinary course of business; are collectible (net of the reserves shown on the Base Balance Sheet for doubtful accounts) in the ordinary course of business; are subject to no counterclaim or setoff; and are not in dispute. Schedule 2.19 contains an aged schedule of accounts receivable included in the Base Balance Sheet. All accounts receivable of Company or any Subsidiary reflected on the Post-Closing Balance Sheet will represent arm’s length sales actually made in the ordinary course of business and will be collectible (net of the reserve shown on the Post-Closing Balance Sheet for doubtful accounts) in the ordinary course of business and will be subject to no counterclaim or set off.

        Section 2.20. Assets Necessary to Business. The Assets include all property and assets (except for the Excluded Assets), tangible and intangible, and all leases, licenses and other agreements, which are necessary to permit Buyer to carry on, or currently used or held for use in, the business of Company as presently conducted.

        Section 2.21. Disclaimer of Other Representations and Warranties; Knowledge; Disclosure.

            (a)    NONE OF THE COMPANY, ITS REPRESENTATIVES OR THE MEMBERS HAVE MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO THE COMPANY OR THE BUSINESS OF THE COMPANY OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE II AND ARTICLE III HEREOF.

            (b)     Without limiting the generality of the foregoing, none of the Company, such representatives of the Company or the Members has made, and shall not be deemed to have made, any representations or warranties in the materials relating to the business of the Company and its Subsidiaries made available to Buyer or in any presentation of the business of the Company and its Subsidiaries in connection with the transactions contemplated hereby. No statement contained in any of such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise. It is understood that any cost estimates, projections or other predictions, any data, any financial information or any memoranda or offering materials or presentations, including but not limited to, The Governance Institute Confidential Information Memorandum of February 2006 made available by the Company and its representatives are not and shall not be deemed to be or to include representations or warranties of the Company.

            (c)     Whenever a representation or warranty made by the Company herein refers to the knowledge of the Company, such knowledge shall be deemed to consist only of the actual knowledge, awareness or understanding on the date hereof of each member of the senior management of the Company after due inquiry.

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            (d)     Notwithstanding anything to the contrary contained in this Agreement or in any of the Schedules, any information disclosed in one Schedule shall be deemed to be disclosed in any other Schedule to which such information may reasonably apply, so long as such disclosure is in sufficient detail such that it is readily apparent to a reasonable person the other Schedules to which such information is responsive. Certain information set forth in the Schedules is included solely for informational purposes and may not be required to be disclosed pursuant to this Agreement. The disclosure of any information shall not be deemed to constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties made by the Company in this Agreement or that such information is material, nor shall such information be deemed to establish a standard of materiality, nor shall it be deemed an admission of any liability of, or concession as to any defense available to, the Company.

Article III – SEVERAL REPRESENTATIONS AND WARRANTIES OF MEMBERS

        Each Member hereby severally, and not jointly, makes to Buyer each of the representations and warranties set forth in this Article III with respect to such Member.

        Section 3.1. Membership Interests. Such Member owns of record and beneficially the number and class or series of the Membership Interests set forth opposite such Member’s name in Exhibit A attached hereto.

        Section 3.2. Authority.

            (a)     Such Member has full right, power and authority under its governing documents to execute and deliver this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of such Member pursuant to this Agreement and to carry out the transactions contemplated hereby and thereby. This Agreement and each agreement, document and instrument executed and delivered by such Member pursuant to this Agreement constitutes a valid and binding obligation of such Member, enforceable in accordance with their respective terms (except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles), and has been duly authorized by all necessary corporate action of each Member which is a limited partnership.

            (b)     Neither the execution and delivery by such Member of this Agreement and the other agreements, documents and instruments contemplated hereby, nor the consummation by such Member of the transactions in accordance with the terms hereof and thereof, conflicts with or results in a breach of any provisions of such Member’s organizational documents. The execution and delivery by such Member of this Agreement and the other agreements, documents and instruments contemplated hereby, and the consummation by such Member of the transactions in accordance with the terms hereof and thereof, will not violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, lease, contract or other agreement to which such Member is a party, or by which such Member or any of its properties is bound, except, in each case, as would not have a material adverse effect on the ability of such Member to perform its obligations under this Agreement.

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        Section 3.3. Warranties Limited. SUCH MEMBER HAS NOT MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO THE COMPANY, THE ASSETS OR OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE III.

Article IV – REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby makes to the Company and the Members the representations and warranties in this Article IV.

        Section 4.1. Existence; Good Standing; Authority.

            (a)     Buyer is a Wisconsin corporation, validly existing and in good standing or its equivalent under the laws of Wisconsin. Buyer is duly licensed or qualified to do business as a foreign corporation under the laws of any other jurisdiction in which the character of its properties or in which the transaction of its business makes such qualification necessary, except where the failure to be so licensed or qualified would not, individually or in the aggregate, have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement. Buyer has all requisite corporate power and authority to own, operate, lease and encumber its properties and carry on its business as currently conducted.

            (b)     Buyer has the corporate power and authority to execute and deliver this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of Buyer pursuant to this Agreement and to carry out the transactions contemplated hereby and thereby. The execution and delivery of this Agreement, the performance by Buyer of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer and, assuming the due authorization, execution and delivery of this Agreement by the Members and the Company, this Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles.

        Section 4.2. No Conflict. Neither the execution and delivery by Buyer of this Agreement and the other agreements, documents and instruments contemplated hereby, nor the consummation by Buyer of the transactions in accordance with the terms hereof and thereof, conflicts with or results in a breach of any provisions of Buyer’s articles of incorporation or by-laws. Except as set forth on Schedule 4.2, the execution and delivery by Buyer of this Agreement and the other agreements, documents and instruments contemplated hereby, and the consummation by Buyer of the transactions in accordance with the terms hereof and thereof, will not violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, lease, contract or other agreement to which Buyer is a party, or by which Buyer or any of its properties is bound, except, in each case, as would not have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement.

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        Section 4.3. Consents and Approvals.

            (a)     Except as set forth on Schedule 4.3(a), the execution, delivery and performance of this Agreement by Buyer will not, as of the Closing Date, require any consent, approval, authorization or other action by, or filing with or notification to, any Governmental Authority, except (i) where failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement, and (ii) as may be necessary as a result of any facts or circumstances relating solely to the Company or the Members.

            (b)     To Buyer’s knowledge, except as set forth on Schedule 4.3(b), the execution, delivery and performance of this Agreement by Buyer will not, as of the Closing Date, require any third-party consents, approvals, authorizations or actions, except where failure to obtain such consents, approvals, authorizations or actions would not have a material adverse effect on the ability of Buyer to perform its obligations under this Agreement.

        Section 4.4. Litigation. As of the date of this Agreement, there is no litigation, action, suit, proceeding, claim, arbitration or investigation pending or, to Buyer’s knowledge, threatened in writing, against Buyer, as to which there is a reasonable likelihood of an adverse determination and which, if adversely determined (a) would delay, hinder or prevent the consummation of the transactions contemplated by this Agreement by Buyer, or (b) would not have in the aggregate a material adverse effect on the ability of Buyer to perform its obligations under this Agreement.

        Section 4.5. Brokers. Except for the fees payable to Coady Diemar Partners, which fees shall be paid by Buyer, Buyer has not incurred or become liable for any broker’s commission or finder’s fee relating to or in connection with this Agreement or the transactions contemplated hereby.

        Section 4.6. Warranties Limited. BUYER HAS NOT MADE ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV.

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Article V – CERTAIN COVENANTS OF BUYER, THE COMPANY AND THE MEMBERS

        Section 5.1. Confidentiality. The parties shall adhere to the terms and conditions of that certain Confidentiality Agreement dated February 17, 2006 by and between the Company and Buyer (the “Confidentiality Agreement”).

        Section 5.2. Regulatory and Other Authorizations; Consents.

            (a)     The Company and Buyer shall use their commercially reasonable efforts to obtain the authorizations, consents, orders and approvals necessary for their execution and delivery of, and the performance of their obligations pursuant to, this Agreement. The parties hereto will not take any action that will have the effect of delaying, impairing or impeding the receipt of any required approvals and shall promptly respond to any requests for additional information from any Governmental Authority or filings in respect thereof.

            (b)     Buyer and the Company shall use their respective commercially reasonable efforts to obtain the consents of third parties listed in Schedule 2.6(b), including (i) providing to such third parties such financial statements and other financial information as such third parties may reasonably request, (ii) agreeing to commercially reasonable adjustments to the terms of the agreementswith such third parties (provided that neither party hereto shall be required to agree to any increase in the amount payable with respect thereto) and (iii) executing agreements to effect the assumption of such agreements.

            (c)     The Company and Buyer agree to use their respective commercially reasonable efforts to obtain the consent of Mayer Hoffman McCann P.C. (“Company Auditors”) to the inclusion of Company Auditors’ reports on the Company’s financial statements in Buyer’s reports and statements filed with the Securities and Exchange Commission, including providing such information as Company Auditors may reasonably request and executing customary management representation letters to Company Auditors. Buyer agrees to pay the reasonable fees and expenses of Company Auditors incurred in connection with its provision of any such consent.

        Section 5.3. Further Action. Each of the parties hereto shall use its respective commercially reasonable efforts to take or cause to be taken all appropriate action, do or cause to be done all things necessary, proper or advisable, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement.

        Section 5.4. Press Releases. The parties hereto will, and will cause each of their Affiliates and representatives to, maintain the confidentiality of this Agreement and will not, and will cause each of their Affiliates not to, issue or cause the publication of any press release or other public announcement with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other parties hereto which consent shall not be unreasonably withheld; provided, however, that a party may, without the prior consent of the other parties hereto, issue or cause publication of any such press release or public announcement to the extent that such party reasonably determines, after consultation with outside legal counsel, such action to be required by law or by the rules of any applicable self-regulatory organization, in which event such party will use its commercially reasonable efforts to allow the other parties hereto reasonable time to comment on such press release or public announcement in advance of its issuance.

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        Section 5.5. Change of Company Name. Concurrently with the Closing, Company shall change its company name to a new name bearing no resemblance to its present name so as to permit the use of its present name by Buyer.

Article VI – EMPLOYEE MATTERS

        Section 6.1. Employees; Benefits.

            (a)     Buyer shall offer employment to all persons who were employed by the Company and its Subsidiaries immediately preceding the Closing Date, including those on vacation, leave of absence or disability, but excluding those persons listed on Schedule 6.1 (the “Company Employees”), in a comparable position at not less than the same base rate of pay. Buyer shall not, at any time prior to one hundred eighty (180) days after the Closing Date, effectuate a “mass layoff” as that term is defined in the Worker Adjustment and Retraining Notification Act of 1988, as amended (“WARN”), or comparable conduct under any applicable state law, affecting in whole or in part any facility, site of employment, operating unit or employee of the Company or its Subsidiaries without complying fully with the requirements of WARN or such applicable state law.

            (b)     To the extent that service is relevant for purposes of eligibility, vesting, calculation of any benefit, or benefit accrual under any employee benefit plan, program or arrangement established or maintained by Buyer (other than any defined benefit pension plan) following the Closing Date for the benefit of Company Employees, such plan, program or arrangement shall credit such Company Employees for service on or prior to the Closing Date that was recognized by the Company or its Subsidiaries, as the case may be,for purposes of employee benefit plans, programs or arrangements maintained by the Company, to the extent permitted by such plans, programs or arrangements and applicable Law. In addition, with respect to any welfare benefit plan (as defined in Section 3(1) of ERISA) established or maintained by Buyer following the Closing Date for the benefit of Company Employees, such plan shall waive any pre-existing condition exclusions and provide that any covered expenses incurred on or before the Closing Date by any Company Employee or by a covered dependent shall be taken into account for purposes of satisfying applicable deductible coinsurance and maximum out-of-pocket provisions after the Closing Date, to the extent permitted by such plan and applicable Law. To the extent that any Company Employee elects to roll over his or her accrued vacation in lieu of receiving cash from the Company on termination of his or her employment with the Company on the date hereof, Buyer agrees to provide each such Company Employee with the same number of vacation days during calendar year 2006 following the Closing Date. Buyer agrees to assume the incentive compensation arrangements that the Company has with each Company Employee reflected on the Estimated Closing Balance Sheet and agrees to indemnify the Company for any payments that the Company is required to make to any such Company Employee as a result of such arrangements.

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            (c)     Buyer shall be solely responsible for, and shall pay or cause to be paid, severance payments and other termination benefits, if any, to Company Employees who may become entitled to such benefits by reason of any events occurring after Closing. If any action on the part of the Company prior to the Closing, or if the sale to Buyer of the business and assets of the Company pursuant to this Agreement or the transactions contemplated hereby, shall directly or indirectly result in any Liability for severance payments, termination benefits or benefits upon a “change of control” of the Company, such Liability shall be the sole responsibility of the Company.

            (d)     Nothing in this Agreement, express or implied, is intended to confer upon any of the Company’s employees, former employees, collective bargaining representatives, job applicants, any association or group of such persons or any Company Employees any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement, including, without limitation, any rights of employment.

        Section 6.2. Conveyance Taxes; Costs. Company shall be liable for and shall hold Buyer harmless against any transfer, value added, excise, stock transfer, stamp, recording, registration and any similar taxes that become payable in connection with the acquisition by Buyer of the Assets and other transactions contemplated hereby, and the applicable parties shall file such applications and documents as shall permit any such tax to be assessed and paid on the Closing Date in accordance with any available pre-sale filing procedure.

        Section 6.3. Books and Records; Insurance. Buyer shall, and shall cause the Company and each Subsidiary to, retain each book, record and other document pertaining to the business of the Company and its Subsidiaries in existence on the Closing Date (each, a “Record”) and to make the same available for inspection and copying by the Members or any representative of the Members at the expense of the Members during the normal business hours of Buyer, the Company or such Subsidiary, as applicable, upon reasonable request and upon reasonable notice, in each case until the later of (a) the date of the settlement of, and distribution of the balance under, the Indemnification Escrow Agreement or (b) the date on which such Record is at least seven years old (such later date, the “Cutoff Date”). No such Record shall be destroyed after the Cutoff Date by Buyer or the Company, without first advising the Members’Representative in writing and giving the Members’ Representative, on behalf of the Members, a reasonable opportunity to obtain possession thereof. Furthermore, Buyer agrees to make the relevant former Company Employees reasonably available to the Company and the Members’ Representative for purposes of preparing tax returns of the Company and dissolving the Company following the Closing Date.

Article VII –CLOSING DELIVERIES

        Section 7.1. Buyer Deliveries. Buyer shall take the following actions and/or cause the following documents to be delivered (or tendered subject only to Closing) to the Company at the Closing:

            (a)     delivery of the Closing Date Cash, less the Escrow Amount, in accordance with the wire transfer instructions set forth on Schedule 1.4 hereto;

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            (b)     the Escrow Agreement executed by Buyer and the Escrow Agent, together with the delivery of the Escrow Amount to the Escrow Agent by wire transfer to the Escrow Fund;

            (c)     the Assignment and Assumption Agreement executed by Buyer; and

            (d)     a certificate of the Secretary of Buyer certifying, as complete and accurate as of the Closing, attached copies of the organizational documents of Buyer and certifying and attaching all requisite resolutions or actions of Buyer’s board of directors approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and certifying to the incumbency and signatures of the officers of Buyer executing this Agreement and any other document relating to the transactions contemplated hereby.

        Section 7.2. Deliveries of Company. The Company shall cause the following documents to be delivered (or tendered subject only to Closing) to Buyer at the Closing:

            (a)     a bill of sale for all of the Assets that are Tangible Personal Property in the form of Exhibit C (the “Bill of Sale”) executed by the Company;

            (b)     an assignment of all of the Assets that are intangible personal property in the form of Exhibit D, which assignment shall also contain Buyer’s undertaking and assumption of the Assumed Liabilities (the “Assignment and Assumption Agreement”) executed by the Company;

            (c)     assignments of all Intellectual Property Assets and separate assignments of all registered Marks, Patents and Copyrights in the form of Exhibit E executed by the Company;

            (d)     assignments of all Real Property Leases and in the form of Exhibit F executed by the Company and any landlord consents that may be required;

            (e)     such other deeds, bills of sale, assignments, certificates of title, documents and other instruments of transfer and conveyance as may reasonably be requested by Buyer, each in form and substance satisfactory to Buyer and its legal counsel and executed by the Company;

            (f)     the Indemnification Escrow Agreement executed by Members’ Representative;

            (g)     a certificate of the manager of the Company certifying, as complete and accurate as of the Closing, attached copies of the organizational documents of the Company, certifying and attaching all requisite resolutions or actions of the Company’s governing body and equity holders approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and certifying to the incumbency and signatures of the officers of the Company executing this Agreement and any other document relating to the transactions contemplated hereby;

            (h)     if requested by Buyer, any consents, waivers or other instruments that may be required to permit Buyer’s qualification in each jurisdiction in which the Company is licensed or qualified to do business as a foreign corporation under the name “The Governance Institute” or “TGI” or any derivative thereof;

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            (i)     releases of all Claims on the Assets, other than Permitted Claims, including releases of each mortgage of record and reconveyances of each deed of trust with respect to each parcel of real property included in the Assets; and

            (j)     such other documents as Buyer may reasonably request for the purpose of facilitating the consummation or performance of any of the transactions contemplated hereby.

Article VIII – SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

        Section 8.1. Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties of the parties hereto contained herein, as the case may be, shall survive the Closing and shall remain in full force and effect for a period of 12 months after the Closing Date. Neither party shall have any obligation under this Article VIII following such termination; provided, however, that any such written claim with respect to a breach of the representations and warranties may (i) with respect to fraud, intentional misrepresentation or a deliberate or willful misconduct by the Company, Members or Buyer, be given at any time before the end of the applicable statute of limitations and (ii) with respect to a breach of the representations or warranties contained in Section 2.1 (Existence; Good Standing; Authorization — Company), Section 2.9 (Tax Matters), Section 2.11(b) (Real and Personal Property), Section 2.17 (Brokers), Section 3.2 (Authority — Members), Section 4.1 (Existence; Good Standing; Authorization — Buyer) and Section 4.5 (Brokers — Buyer) of this Agreement may be given at any time prior to the expiration of the applicable statute of limitations.

        Section 8.2. Several Indemnification by the Members.

            (a)     The Members agree, subject to the other terms and conditions of this Agreement, to severally, in accordance with their pro rata participation set forth on Exhibit A hereto, indemnify Buyer and its officers and directors (each a “Buyer Indemnified Party”) against and hold them harmless to the extent of any Losses resulting from (i) the breach of any representation or warranty of the Company or the Members contained herein, (ii) any breach of any covenant or agreement of the Company or the Members contained herein, and (iii) any Claim of or against the Company, the Assets or the business of the Company not assumed by Buyer pursuant hereto.

            (b)     The indemnification obligations of the Members pursuant to Section 8.2(a)(i) shall be limited as follows:

        (i)     The Members shall have no obligation to provide any indemnification until the aggregate dollar amount of all Losses that would otherwise be indemnifiable pursuant to Section 8.2(a) exceeds $200,000 (the “Threshold Amount”), and then shall be obligated to indemnify back to the first dollar of such Losses.

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        (ii)     The Members shall not be obligated to indemnify any Buyer Indemnified Party pursuant to Section 8.2(a) for any amount of indemnifiable Losses in excess of One Million Nine Hundred Fifty Thousand Dollars ($1,950,000) in the aggregate (the “Maximum Amount”).

        (iii)     Any indemnification claims made by the Buyer Indemnified Parties under Section 8.2(a)(i) shall be satisfied solely by claims against the Escrow Fund.

        (iv)     In no event shall any Member be obligated to indemnify a Buyer Indemnified Party for any Losses pursuant to Section 8.2(a)(i) in excess of such Member’s pro rata portion of such Loss, which pro rata portion shall be determined in accordance with such Member’s pro rata portion of the Purchase Price as allocated pursuant to Exhibit A, nor shall any Member be obligated to indemnify a Buyer Indemnified Party for any Losses attributable to a breach of this Agreement by any other Member.

        (v)     No indemnification shall be payable to a Buyer Indemnified Party with respect to claims asserted by such Buyer Indemnified Party pursuant to Section 8.2(a)(i) after the date that is 12 months after the Closing Date (the “Indemnification Cut-Off Date”).

Notwithstanding the foregoing, the Buyer Indemnified Parties shall not be subject to any limitation pursuant to this Section 8.2(b) (except for the limitations in clause (iv)), and shall be entitled to dollar-for-dollar recovery from each Member, without duplication, in respect of claims for indemnification from the Members for Losses in connection with (x) fraud, intentional misrepresentation or a deliberate or willful breach by the Company of any of its representations, warranties or covenants under this Agreement or (y) with respect to Losses as a result of a breach of the representations or warranties contained in Section 2.1 (Existence; Good Standing; Authorization — Company), Section 2.9 (Tax Matters), Section 2.11(b) (Real and Personal Property) and Section 2.17 (Brokers) of this Agreement.

            (c)     The amount of Losses otherwise recoverable under this Section 8.2 shall be adjusted to the extent to which any Federal, state, local or foreign tax liabilities or benefits are realized by the Buyer Indemnified Parties by reason of any Loss or indemnity payment hereunder.

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            (d)     A Buyer Indemnified Party shall give the Members’ Representative written notice of any claim, assertion, event or proceeding by or in respect of a third party as to which such Buyer Indemnified Party may request indemnification hereunder or as to which the Threshold Amount may be applied as soon as is practicable and in any event within thirty (30) days of the time that such Buyer Indemnified Party learns of such claim, assertion, event or proceeding; provided, however, that the failure to so notify the Members’ Representative shall not affect rights to indemnification hereunder except to the extent that the Members’ are prejudiced by such failure. The Members’ Representative shall have the right to direct, through counsel of its own choosing, the defense or settlement of any such claim or proceeding at its own expense. If the Members’ Representative elects to assume the defense of any such claim or proceeding, the Members’ Representative shall consult with the Buyer Indemnified Party for the purpose of allowing the Buyer Indemnified Party to participate in such defense, but in such case the expenses of the Buyer Indemnified Party shall be paid by the Buyer Indemnified Party. A Buyer Indemnified Party shall provide and shall cause the Company to provide, as applicable, the Members’ Representative and counsel with access to its records and personnel relating to any such claim, assertion, event or proceeding during normal business hours and shall otherwise cooperate with the Members’ Representative in the defense or settlement thereof, and the Members shall reimburse Buyer Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith. If the Members’ Representative elects to direct the defense of any such claim or proceeding, Buyer Indemnified Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability unless the Members’ Representative consents in writing to such payment (which consent shall not be unreasonably withheld) or unless the Members’ Representative, subject to the last sentence of this Section 8.2(d), withdraws from the defense of such asserted liability or unless a final judgment from which no appeal may be taken by or on behalf of the Members is entered against Buyer Indemnified Party for such liability. If the Members’ Representative fails to defend or if, after commencing or undertaking any such defense, the Members’ Representative fails to prosecute or withdraws from such defense, Buyer Indemnified Party shall have the right to undertake the defense or settlement thereof, at the Members’ expense. If the Buyer Indemnified Party assumes the defense of any such claim or proceeding pursuant to this Section 8.2(d) and proposes to settle such claim or proceeding prior to a final judgment thereon or to forego any appeal with respect thereto, then the Buyer Indemnified Party shall give the Members’ Representative prompt written notice thereof, and the Members’ Representative shall have the right to participate in the settlement or assume or reassume the defense of such claim or proceeding.

            (e)     No Buyer Indemnified Party shall be entitled to indemnification hereunder for any Loss arising from a breach of any representation, warranty or covenant set forth herein (and the amount of any Loss incurred in respect of such breach shall not be included in the calculation of any limitations on indemnification set forth herein) to the extent that such liability is disclosed as a Current Liability on the Base or Post-Closing Balance Sheet.

            (f)     Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Buyer or a Buyer Indemnified Party, after the consummation of the transactions contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby.

            (g)     Neither the Company nor the Members shall have any liability under any provision of this Agreement for any consequential, exemplary or punitive damages or any multiple of damages or diminution in value. Buyer and each Buyer Indemnified Party shall take all reasonable steps to mitigate Losses for which indemnification may be claimed by them pursuant to this Agreement upon and after becoming aware of any event that could reasonably be expected to give rise to any such Losses.

Any liability for indemnification under this Section 8.2 shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement.

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        Section 8.3. Indemnification by Buyer.

            (a)     Buyer agrees, subject to the other terms and conditions of this Agreement, to indemnify the Members and their respective Affiliates, officers, directors and employees (each a “Member Indemnified Party”) against and hold them harmless from all Losses resulting from (i) the breach of any representation or warranty of Buyer contained herein, and (ii) any breach of any covenant or agreement of Buyer contained herein.

            (b)     The Buyer shall have no obligation to provide any indemnification pursuant to Section 8.3(a)(i) until the aggregate dollar amount of all Losses that would otherwise be indemnifiable pursuant to this Section 8.3(a)(i) exceeds the Threshold Amount, and then shall be obligated to indemnify back to the first dollar of such Losses. Buyer shall not be obligated to indemnify any Member Indemnified Party pursuant to Section 8.3(a)(i) for any amount of indemnifiable Losses in excess of the Maximum Amount. No indemnification shall be payable to a Member Indemnified Party with respect to claims asserted by such Member Indemnified Party pursuant to Section 8.3(a)(i) after the Indemnification Cut-Off Date. Notwithstanding the foregoing, the Member Indemnified Parties shall not be subject to any limitation pursuant to this Section 8.3(b), and shall be entitled to dollar-for-dollar recovery from Buyer, without duplication, in respect of claims for indemnification from the Member Indemnified Parties for Losses in connection with (x) fraud, intentional misrepresentation or a deliberate or willful breach by Buyer of its representations, warranties or covenants under this Agreement or (y) with respect to Losses as a result of a breach of the representations or warranties contained in Section 4.1 (Existence; Good Standing; Authorization — Buyer) and Section 4.5 (Brokers — Buyer) of this Agreement.

            (c)     The amount of Losses otherwise recoverable under this Section 8.3 shall be reduced to the extent to which any Federal, state, local or foreign tax liabilities of the Member Indemnified Parties, or any of its respective affiliates is decreased by reason of any Loss in respect of which such Member Indemnified Party shall be entitled to indemnity under this Agreement.

            (d)     A Member Indemnified Party shall give Buyer written notice of any claim, assertion, event or proceeding by or in respect of a third party as to which such Member Indemnified Party may request indemnification hereunder or as to which the Threshold Amount may be applied as soon as is practicable and in any event within thirty (30) days of the time that such Member Indemnified Party learns of such claim, assertion, event or proceeding; provided, however, that the failure to so notify Buyer shall not affect rights to indemnification hereunder except to the extent that Buyer is actually prejudiced by such failure. Buyer shall have the right to direct, through counsel of its own choosing, the defense or settlement of any such claim or proceeding at its own expense. If Buyer elects to assume the defense of any such claim or proceeding, Buyer shall consult with the Member Indemnified Party; the Member Indemnified Party may participate in such defense, but in such case the expenses of the Member Indemnified Party shall be paid by the Member Indemnified Party. The Member Indemnified Party shall provide Buyer with access to its records and personnel relating to any such claim, assertion, event or proceeding during normal business hours and shall otherwise cooperate with Buyer in the defense or settlement thereof, and Buyer shall reimburse the Member Indemnified Party for all the reasonable out-of-pocket expenses of such Member Indemnified Party in connection therewith. If Buyer elects to direct the defense of any such claim or proceeding, the Member Indemnified Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability, unless Buyer consents in writing to such payment (which consent shall not be unreasonably withheld) or unless Buyer, subject to the last sentence of this Section 8.3(d), withdraws from the defense of such asserted liability, or unless a final judgment from which no appeal may be taken by or on behalf of Buyer is entered against the Member Indemnified Party for such liability. If Buyer fails to defend or if, after commencing or undertaking any such defense, Buyer fails to prosecute or withdraws from such defense, the Member Indemnified Party shall have the right to undertake the defense or settlement thereof, at Buyer’s expense. If the Member Indemnified Party assumes the defense of any such claim or proceeding pursuant to this Section 8.3(d) and proposes to settle such claim or proceeding prior to a final judgment thereon or to forego appeal with respect thereto, then such Member Indemnified Party shall give Buyer prompt written notice thereof and Buyer shall have the right to participate in the settlement or assume or reassume the defense of such claim or proceeding.

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            (e)     Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of the Members, after the consummation of the transactions contemplated by this Agreement, to rescind this Agreement or any of the transactions contemplated hereby.

            (f)     Buyer shall not have any liability under any provision of this Agreement for any consequential, exemplary or punitive damages or any multiple of damages or diminution of value. The Members and Member Indemnified Parties shall take all reasonable steps to mitigate Losses for which indemnification may be claimed by them pursuant to this Agreement upon and after becoming aware of any event that could reasonably be expected to give rise to any such Losses.

Any liability for indemnification under this Section 8.3 shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement.

        Section 8.4. Treatment of Indemnity Payments. All payments made by the Members or Buyer, as the case may be, to or for the benefit of the other parties pursuant to this Article VIII shall be treated as adjustments to the Purchase Price for tax purposes, and such agreed treatment shall govern for purposes of this Agreement.

        Section 8.5. Remedies Exclusive. From and after the Closing, the rights of the parties to indemnification relating to this Agreement or the transactions contemplated hereby shall be strictly limited to those contained in this Article VIII, and such indemnification rights shall be the exclusive remedies of the parties subsequent to the Closing Date with respect to any matter in any way relating to this Agreement or arising in connection herewith. To the maximum extent permitted by law, the parties hereby waive all other rights and remedies with respect to any matter in any way relating to this Agreement or arising in connection herewith, whether under any laws (including any right or remedy under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 etseq., the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. Section 9602 etseq., or any other Environmental Law), at common law or otherwise. Except as provided in this Article VIII, no claim, action or remedy shall be brought or maintained by any party against any other party, and no recourse shall be brought or granted against any of them, by virtue of or based upon any alleged misstatement or omission respecting an inaccuracy in or breach of any of the representations, warranties or covenants of any of the parties hereto set forth or contained in this Agreement, except to the extent that the same shall have been the result of fraud in the inducement by any party hereto, in which case the other parties hereto shall have, in addition to the remedies set forth in this Article VIII (which remedies therein shall be the sole legal remedies of such other parties in respect of such fraud in the inducement), such equitable remedies to which such other parties may be otherwise entitled, including, without limitation, the ability to apply to any court of competent jurisdiction for specific performance or injunctive relief.

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Article IX – [RESERVED]

Article X – GENERAL PROVISIONS

        Section 10.1. Notices. All notices, requests, claims, demands and other communications under this Agreement will be in writing and will be deemed given if delivered personally, sent by overnight courier (providing proof of delivery), or via facsimile to the parties at the following addresses (or at such other address for a party as specified by like notice):

            (a)     if to the Company or the Members’ Representative, to:

c/o Housatonic Partners
111 Huntington Avenue
Suite 2850
Boston, MA 02199-5160
Attn: James L. Wilder
Facsimile: 617-267-5565

with copy to:

Proskauer Rose LLP
One International Place
Boston, MA 02110-2600
Attn: Alexander B. Temel, Esq.
Facsimile: (617) 526-9899

            (b)     If to Buyer, to:

National Research Corporation
1245 Q Street
Lincoln, NE 68508
Attn: Patrick E. Beans
Facsimile: (402) 475-9061

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with a copy to:

Foley & Lardner LLP
777 East Wisconsin Avenue
Milwaukee, WI 53202-5306
Attn:
Benjamin F. Garmer, III
Russell E. Ryba
Facsimile: (414) 297-4900

        Section 10.2. Fees and Expenses. Except as provided otherwise herein, each of Buyer, on the one hand, and the Company (on behalf of the Company and the Members) on the other hand, shall bear its own expenses in connection with the negotiation and the consummation of the transactions contemplated by this Agreement.

        Section 10.3. Certain Definitions. For purposes of this Agreement:

            (a)     An “Affiliate” of any Person means another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person;

            (b)     “GAAP” means U.S. generally accepted accounting principles, consistently applied;

            (c)     “Losses” of a Person means any and all losses, liabilities, damages, claims, awards, judgments, costs and expenses (including, without limitation, reasonable attorneys’ fees) actually suffered or incurred by such Person;

            (d)     “Material Adverse Effect” means a material adverse effect on the Assets or the financial condition or business of the Company and its Subsidiaries, taken as a whole, except for any such effects resulting from changes in general economic or political conditions or the securities markets in general; and

            (e)     “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

        Section 10.4. Interpretation. When a reference is made in this Agreement to an Article, Section, Schedule or Exhibit, such reference will be to an Article or Section of, or a Schedule or Exhibit to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” The words “hereof,” “herein”and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms used herein with initial capital letters have the meanings ascribed to them herein and all terms defined in this Agreement will have such defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.

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        Section 10.5. Counterparts. This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

        Section 10.6. Amendments. This Agreement may not be amended or modified, nor may compliance with any condition or covenant set forth herein be waived, except by a writing duly and validly executed by Buyer, the Company and the Members’Representative, or in the case of a waiver, the party waiving compliance.

        Section 10.7. Entire Agreement; Severability. This Agreement (including the exhibits, schedules, documents and instruments referred to herein) and the Confidentiality Agreement constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter of this Agreement. If any term, condition or other provision of this Agreement is found to be invalid, illegal or incapable of being enforced by virtue of any rule of law, public policy or court determination, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect.

        Section 10.8. Third Party Beneficiaries. Except as expressly provided in this Agreement, each party hereto intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the parties hereto.

        Section 10.9. Governing Law. This Agreement will be governed by, and construed in accordance with, the internal laws of the State of Delaware regardless of the laws that might otherwise govern under applicable principles of conflict of laws.

        Section 10.10. Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned, in whole or in part, by operation of law or otherwise by the parties hereto without the prior written consent of the Company, the Members’ Representative and the Buyer. Any assignment in violation of the preceding sentence will be void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

        Section 10.11. Consent to Jurisdiction. Each of the parties hereby consents to personal jurisdiction, service of process and venue in the federal or state courts of the State of California for any claim, suit or proceeding arising under this Agreement, or in the case of a third party claim subject to indemnification hereunder, in the court where such claim is brought.

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        Section 10.12. Mutual Drafting. The parties hereto are sophisticated and have been represented by attorneys throughout the transactions contemplated hereby who have carefully negotiated the provisions hereof. As a consequence, the parties do not intend that the presumptions of laws or rules relating to the interpretation of contracts against the drafter of any particular clause should be applied to this Agreement or any agreement or instrument executed in connection herewith, and therefore waive their effects.

        Section 10.13. Remedies. It is specifically understood and agreed that any breach of the provisions of this Agreement or any other agreement executed and delivered pursuant to this Agreement by any party hereto will result in irreparable injury to the other parties hereto, that the remedy at law alone will be an inadequate remedy for such breach, and that, in addition to any other remedies which they may have, such other parties may enforce their respective rights by actions for specific performance (to the extent permitted by law).

[Remainder of page intentionally left blank]

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

COMPANY:

TGI GROUP, LLC

By:/s/ Gordon R. Clark                                        

      Name: Gordon R. Clark

      Title: President & CEO

MEMBERS:

/s/ Gordon R. Clark                                            

Gordon Clark

HOUSATONIC EQUITY INVESTORS SBIC, L.P.

By:  Housatonic Equity Partners SBIC,

        LLC, its General Partner

By:/s/ William N. Thorndike, Jr.                        

       Name: William N. Thorndike, Jr.

       Title: Managing Director

BUYER:

NATIONAL RESEARCH CORPORATION

By:/s/ Patrick E. Beans                                          

      Name: Patrick E. Beans

      Title: CFO

EX-4.1

Exhibit 4.1

[GRAPHIC OMITTED]

REVOLVING CREDIT AGREEMENT

This Revolving Credit Agreement (the “Agreement”) is made and entered into by and between the undersigned borrower (the “Borrower)’ and the undersigned bank (the “Bank”) as of the date set forth on the last page of this Agreement.

ARTICLE I. LOANS

1.1 Revolving Credit Loans. From time to time prior to   JULY 31, 2007   (the “Maturity Date”) or the earlier termination hereof, the Borrower may borrow from the Bank for working capital purposes up to the aggregate principal amount outstanding at any one time of the lesser of (i) $ 3, 500, 000. 00 (the “Loan Amount”), less letters of credit issued by the Bank, or (ii) if applicable, the Borrowing Base (defined below). All revolving loans hereunder will be evidenced by a single promissory note of the Borrower payable to the order of the Bank in the principal amount of the Loan Amount (the “Note”). Although the Note will be expressed to be payable in the full Loan Amount, the Borrower will be obligated to pay only the amounts actually disbursed hereunder, together with accrued interest on the outstanding balance at the rates and on the dates specified therein and such other charges provided for herein. In the event that the principal amount outstanding under the Note exceeds the Borrowing Base at any time, the Borrower will immediately, without request, prepay an amount sufficient to eliminate such excess.

1.2 Borrowing Base. The Borrowing Base, if any, will be as set forth in an addendum to this Agreement.

1.3 Advances After Maturity or In Excess of Maximum Loan Amount. The Bank shall have no obligation whatsoever, and the Bank has no present intention, to make any advance after the Maturity Date or which would cause the principal amount outstanding under this Agreement to exceed the maximum loan amount or any other limitations on advances stated in this Agreement. Notwithstanding the foregoing, the Bank may from time to time, in its sole and absolute discretion, agree to make an advance after the Maturity Date or which would cause the principal amount of advances outstanding under this Agreement to exceed the maximum loan amount or any of the other limitations on advances. The Borrower is and shall be and remain unconditionally liable to the Bank for the amount of all advances, including, without limitation, advances in excess of the maximum loan amount or any other limitation on advances and advances made after the Maturity Date. Immediately upon the Bank’s demand, the Borrower shall pay to the Bank the amount of any advances made after the Maturity Date or in excess of the maximum loan amount or any other limitation on advances contained in this Agreement, together with interest on the principal amount of such excess advances, for so long as such advances are outstanding, at the highest interest rate from time to time in effect for such advances. Any such advances shall not be deemed an extension of this Agreement nor an increase in the maximum loan amount available for borrowing under this Agreement.

1.4 Advances and Paying Procedure. The Bank is authorized and directed to credit any of the Borrower’s accounts with the Bank (or to the account the Borrower designates in writing) for all loans made hereunder, and the Bank is authorized to debit such account or any other account of the Borrower with the Bank for the amount of any principal, interest or expenses due under the Note or other amount due hereunder on the due date with respect thereto. If, upon any request by the Borrower to the Bank to issue a wire transfer, there is an inconsistency between the name of the recipient of the wire and its identification number as specified by the Borrower, the Bank may, without liability, transmit the payment via wire based solely upon the identification number.

1.5 Closing Fee. The Borrower will pay the Bank a one-time closing fee of $  n/a   contemporaneously with execution of this Agreement. This fee is in addition to all other fees, expenses and other amounts due hereunder.

1.6 Loan Facility Fee. The Borrower will pay a loan facility fee equal to:

$    n/a     per annum, payable annually in advance; (or)

    n/a    % per annum of the Loan Amount, payable annually in advance; (or)

    n/a    % per annum of the difference between the Loan Amount and the actual daily unpaid principal amount of the Note outstanding from time to time, payable quarterly, in arrears, on the last business day of each third calendar month, and at maturity; (or)

    n/a     % per annum of the actual daily unpaid principal amount of the Note outstanding from time to time, payable quarterly, in arrears, on the last business day of each third calendar month, and at maturity.

The loan facility fee is payable for the entire period that this Agreement is in effect, regardless of whether any amounts are outstanding hereunder at any given time.

1.7 Expenses and Attorneys’ Fees. Upon demand, the Borrower will immediately reimburse the Bank and any participant in the Obligations (defined below) (“Participant”) for all attorneys’ fees and all other costs, fees and out-of-pocket disbursements incurred by the Bank or any Participant in connection with the preparation, execution, delivery, administration, defense and enforcement of this Agreement or any of the other Loan Documents (defined below), including attorneys’ fees and all other costs and fees (a) incurred before or after commencement of litigation or at trial, on appeal or in any other proceeding, (b) incurred in any bankruptcy proceeding and (c) related to any waivers or amendments with respect thereto (examples of costs and fees include but are not limited to fees and costs for: filing, perfecting or confirming the priority of the Bank’s lien, title searches or insurance, appraisals, environmental audits and other reviews related to the Borrower, any collateral or the loans, if requested by the Bank). The Borrower will also reimburse the Bank and any Participant for all costs of collection, including all attorneys’ fees, before and after judgment, and the costs of preservation and/or liquidation of any collateral.

1.8 Compensating Balances. The Borrower will maintain on deposit with the Bank in non-interest bearing accounts average daily collected balances, in excess of that required to support account activity and other credit facilities extended to the Borrower by the Bank, an amount at least equal to the sum of (i) $  n/a   and (ii)   n/a  % of the Loan Amount as computed on a monthly basis. If the Borrower fails to keep and maintain such balances, it will pay a deficiency fee, payable within five days after receipt of a statement therefore calculated on the amount by which the Borrower’s average daily balances are less than the requirements set forth above, computed at a rate equal to the rate set forth in the Note.

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1.9 Conditions to Borrowing. The Bank will not be obligated to make (or continue to make) advances hereunder unless (i) the Bank has received executed originals of the Note and all other documents or agreements applicable to the loans described herein, including but not limited to the documents specified in Article III (collectively with this Agreement the “Loan Documents”), in form and content satisfactory to the Bank; (ii) if the loan is secured, the Bank has received confirmation satisfactory to it that the Bank has a properly perfected security interest, mortgage or lien, with the proper priority; (iii) the Bank has received certified copies of the Borrower’s governance documents and certification of entity status satisfactory to the Bank and all other relevant documents; (iv) the Bank has received a certified copy of a resolution or authorization in form and content satisfactory to the Bank authorizing the loan and all acts contemplated by this Agreement and all related documents, and confirmation of proper authorization of all guaranties and other acts of third parties contemplated hereunder; (v) if required by the Bank, the Bank has been provided with an Opinion of the Borrower’s counsel in form and content satisfactory to the Bank confirming the matters outlined in Section 2.2 and such other matters as the Bank requests; (vi) no default exists under this Agreement or under any other Loan Documents, or under any other agreements by and between the Borrower and the Bank; and (vii) all proceedings taken in connection with the transactions contemplated by this Agreement (including any required environmental assessments), and all instruments, authorizations and other documents applicable thereto, are satisfactory to the Bank and its counsel.

ARTICLE II. WARRANTIES AND COVENANTS

While any part of the credit granted to the Borrower under this Agreement or the other Loan Documents is available or any obligations under any of the Loan Documents are unpaid or outstanding, the Borrower continuously warrants and agrees as follows:

2.1 Accuracy of Information. To Borrower’s knowledge, all information, certificates or statements given to the Bank pursuant to this Agreement and the other Loan Documents will be true and complete in all material respects when given.

2.2 Organization and Authority; Litigation. This Agreement and the other Loan Documents are the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms. The execution, delivery and performance of this Agreement and all other Loan Documents to which the Borrower is a party (i) are within the borrower’s power; (ii) have been duly authorized by all appropriate entity action; (III) do not require the approval of any applicable governmental agency; and (iv) will not violate any law, agreement or restriction by which the Borrower is bound in any material respect. If the Borrower is not an individual, the Borrower is validly existing and in good standing under the laws of its state of organization, has all requisite power and authority and possesses all licenses necessary to conduct its business and own its properties. To Borrower’s knowledge, there is no litigation or administrative proceeding threatened or pending against the Borrower which would, if adversely determined, have a material adverse effect on the Borrower’s financial condition or its property.

2.3 Existence; Business Activities; Assets; Change of Control. The Borrower will (i) preserve its existence, rights and franchises; (ii) not make any material change in the nature or manner of its business activities; (III) not liquidate, dissolve, acquire another entity or merge or consolidate with or into another entity or change its form of organization; (iv) not amend its organizational documents in any manner that may materially conflict with any term or condition of the Loan Documents; and (v) not sell, lease, transfer or otherwise dispose of all or substantially all of its assets. Other than the transfer to a trust beneficially controlled by the transferor, no event shall occur which causes or results in a transfer of majority ownership of the Borrower while any Obligations are outstanding or while the Bank has any obligation to provide funding to the Borrower.

2.4 Use of Proceeds; Margin Stock; Speculation. Advances by the Bank hereunder will be used exclusively by the Borrower for working capital and other regular and valid purposes. Subject to the Bank’s concessions set forth in a letter from Bank to Borrower dated May 26,2006, a true and correct copy of which is attached hereto, the Borrower will not, without the prior written consent of the Bank, redeem, purchase, or retire any of the capital stock or declare or pay any dividends, or make any other payments or distributions of a similar type or nature including withdrawal distributions. The Borrower will not use any of the loan proceeds to purchase or carry “margin” stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System). No part of any of the proceeds will be used for speculative investment purposes, including, without limitation, speculating or hedging in the commodities and/or futures market.

2.5 Environmental Matters. Except as disclosed in a written schedule attached to this Agreement (if no schedule is attached, there are no exceptions), to Borrower’s knowledge there exists no uncorrected violation by the Borrower of any applicable federal, state or local laws (including statutes, regulations, ordinances or other governmental restrictions and requirements) relating to the discharge of air pollutants, water pollutants or process wastewater or otherwise relating to the environment or Hazardous Substances as hereinafter defined, whether such laws currently exist or are enacted in the future (collectively “Environmental Laws”). The term “Hazardous Substances” will mean any hazardous or toxic wastes, chemicals or other substances, the generation, possession or existence of which is prohibited or governed by any Environmental Laws. The Borrower is not subject to any judgment, decree, order or citation, or a party to (or to its knowledge threatened with) any litigation or administrative proceeding, which asserts that the Borrower (i) has violated any Environmental Laws; (ii) is required to clean up, remove or take remedial or other action with respect to any Hazardous Substances (collectively “Remedial Action “);or (III) is required to pay all or a portion of the cost of any Remedial Action, as a potentially responsible party. Except as disclosed on the Borrower’s environmental questionnaire provided to the Bank, there are not now, nor to the Borrower’s knowledge after reasonable investigation have there ever been, any Hazardous Substances (or tanks or other facilities for the storage of Hazardous Substances) stored, deposited, recycled or disposed of on, under or at any real estate owned or occupied by the Borrower during the periods that the Borrower owned or occupied such real estate, which if present on the real estate or in soils or ground water, could require Remedial Action. To the Borrower’s knowledge, there are no proposed or pending changes in Environmental Laws which would adversely affect the Borrower or its business, and there are no conditions existing currently or likely to exist while the Loan Documents are in effect which would subject the Borrower to Remedial Action or other liability. The Borrower currently complies with and will continue to timely comply with all applicable Environmental Laws in all material respects; and will provide the Bank, immediately upon receipt, copies of any correspondence, notice, complaint, order or other document from any source asserting or alleging any circumstance or condition which requires or may require a financial contribution by the Borrower or Remedial Action or other response by or on the part of the Borrower under Environmental Laws, or which seeks damages or civil, criminal or punitive penalties from the Borrower for an alleged violation of Environmental Laws.

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2.6 Compliance with Laws. To Borrower’s knowledge, the Borrower has complied with all laws applicable to its business and its properties, and has all permits, licenses and approvals required by such laws, copies of which will be provided to the Bank upon request.

2.7 Restriction on Indebtedness. The Borrower will not create, incur, assume or have outstanding any indebtedness for borrowed money (including capitalized leases) except (i) any indebtedness owing to the Bank and its affiliates, and (ii) any other indebtedness outstanding on the date hereof, and shown on the Borrower’s financial statements delivered to the Bank prior to the date hereof, provided that such other indebtedness will not be increased.

2.8 Restriction on Liens. The Borrower will not create, incur, assume or permit to exist any mortgage, pledge, encumbrance or other lien or levy upon or security interest in any of the Borrower’s property now owned or hereafter acquired, except (i) taxes and assessments which are either not delinquent or which are being contested in good faith with adequate reserves provided; (ii) easements, restrictions and minor title irregularities which do not, as a practical matter, have an adverse effect upon the ownership and use of the affected property; (iii) liens in favor of the Bank and its affiliates; and (iv) other liens disclosed in writing to the Bank prior to the date hereof.

2.9 Restriction on Contingent Liabilities. The Borrower will not guarantee or become a surety or otherwise contingently liable for any obligations of others, except pursuant to the deposit and collection of checks and similar matters in the ordinary course of business.

2.10 Insurance. The Borrower will maintain insurance to such extent, covering such risks and with such insurers as is usual and customary for businesses operating similar properties, and as is satisfactory to the Bank, including insurance for fire and other risks insured against by extended coverage, public liability insurance and workers’ compensation insurance; and will designate the Bank as loss payee with a “Lender’s Loss Payable” endorsement on any casualty policies and take such other action as the Bank may reasonably request to ensure that the Bank will receive (subject to no other interests) the insurance proceeds on the Bank’s collateral.

2.11 Taxes and Other Liabilities. The Borrower will pay and discharge, when due, all of its taxes, assessments and other material liabilities, except when the payment thereof is being contested in good faith by appropriate procedures which will avoid foreclosure of liens securing such items, and with adequate reserves provided therefor.

2.12 Financial Statements and Reporting. The financial statements and other information previously provided to the Bank or provided to the Bank in the future are or will be complete and accurate and prepared in accordance with generally accepted accounting principles. There has been no material adverse change in the Borrower’s financial condition since such information was provided to the Bank. The Borrower will (i) maintain accounting records in accordance with generally recognized and accepted principles of accounting consistently applied throughout the accounting periods involved; (ii) provide the Bank with such information concerning its business affairs and financial condition (including insurance coverage) as the Bank may request; and (iii) without request, provide the Bank with such specific financial statements, certifications and/or information as may be set forth in an addendum to this Agreement.

2.13 Inspection of Properties and Records; Fiscal Year. The Borrower will permit representatives of the Bank to visit and inspect any of the properties and examine any of the books and records of the Borrower at any reasonable time and as often as the Bank may reasonably desire. The Borrower will not change its fiscal year.

2.14 Financial Status. Financial Covenants, if any, will be as set forth in an addendum to this Agreement.

2.15 Paid-In-Full Period. If checked here, all revolving loans under this Agreement and the Note must be paid in full for a period of at least n/a consecutive days during each fiscal year.

ARTICLE III. COLLATERAL AND GUARANTIES

3.1 Collateral. This Agreement and the Note are secured by any and all security interests, pledges, mortgages/deeds of trust (except any mortgage/deed of trust expressly limited by its terms to a specific obligation of Borrower to Bank) or liens now or hereafter in existence granted to the Bank to secure indebtedness of the Borrower to the Bank, including without limitation as described in the following documents:

Real Estate Mortgage(s)/Deed(s) of Trust dated   05/26/06                                                                                     
covering real estate located at       1245 0 St       Lincoln    Lancaster County    NE 68508                                                        
                                                                                                                                                                                            

Security Agreement(s) dated       05/26/06                                                                                                                   

Possessory Collateral Pledge Agreement(s) dated ____________________________________________________

Other _____________________________________________________________________________________
           _____________________________________________________________________________________

3.2 Guaranties. This Agreement and the Note are guarantied by each and every guaranty now or hereafter in existence guarantying the indebtedness of the Borrower to the Bank (except for any guaranty expressly limited by its terms to a specific separate obligation of Borrower to the Bank) including, without limitation, the following: ______________________________________________________

N/A

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        3.3 Credit Balances; Setoff. As additional security for the payment of the obligations described in this Note or any document securing or related to the loan evidenced by this Note (collectively the “Loan Documents’) and any other obligations of the Borrower to the Bank of any nature whatsoever (collectively the “Obligations)', the Borrower hereby grants to the Bank a security interest in, a lien on and an express contractual right to set off against all depository account balances, cash and any other property of the Borrower now or hereafter in the possession of the Bank and the right to refuse to allow withdrawals from any account (collectively “Setoff”). The Bank may, at any time upon the occurrence of a default hereunder and after expiration of any applicable cure period, Setoff against the Obligations whether or not the Obligations (including future installments) are then due or have been accelerated, all without any advance or contemporaneous notice or demand of any kind to the Borrower, such notice and demand being expressly waived.

The omission of any reference to an agreement in Sections 3.1 and 3.2 above will not affect the validity or enforceability thereof. The rights and remedies of the Bank outlined in this Agreement and the documents identified above are intended to be cumulative.

ARTICLE IV. DEFAULTS

        4.1 Defaults. Notwithstanding any cure periods described below, the Borrower will immediately notify the Bank in writing when the Borrower obtains knowledge of the occurrence of any default specified below. Regardless of whether the Borrower has given the required notice, the occurrence of one or more of the following will constitute a default:

      (a) Nonpayment. The Borrower shall fail to pay (i) any interest due on this Note or any fees, charges, costs or expenses under the Loan Documents when due; or (ii) any principal amount of this Note when due, except principal amount due at maturity, and such nonpayment shall remain unremedied for a period of ten (10) days.

      (b) Nonperformance. The Borrower or any guarantor of Borrower’s Obligations to the Bank (“Guarantor”) shall fail to perform or observe any agreement, term, provision, condition, or covenant (other than a default occurring under (a), (c), (d), (e), (f) or (g) of this Section 4.1) required to be performed or observed by the Borrower or any Guarantor hereunder or under any other Loan Document or other agreement with or in favor of the Bank.

      (c) Misrepresentation. Any financial information, statement, certificate, representation or warranty given to the Bank by the Borrower or any Guarantor (or any of their representatives) in connection with entering into this Agreement or the other Loan Documents and/or any borrowing thereunder, or required to be furnished under the terms thereof, shall prove untrue or misleading in any material respect (as determined by the Bank in the exercise of its judgment) as of the time when given.

      (d) Default on Other Obligations. The Borrower or any Guarantor shall be in default under the terms of any loan agreement, promissory note, lease, conditional sale contract or other agreement, document or instrument evidencing, governing or securing any indebtedness owing by the Borrower or any Guarantor to the Bank or any indebtedness in excess of $100,000 owing by the Borrower to any third party, and the period of grace, if any, to cure said default shall have passed.

      (e) Judgments. Any judgment shall be obtained against the Borrower or any Guarantor which, together with all other outstanding unsatisfied judgments against the Borrower (or such Guarantor), shall exceed the sum of $100,000 and shall remain unvacated, unbonded or unstayed for a period of 30 days following the date of entry thereof.

      (f) Inability to Perform; Bankruptcy/Insolvency. (i) The Borrower or any Guarantor shall die or cease to exist; or (ii) any Guarantor shall attempt to revoke any guaranty of the Obligations described herein, or any guaranty becomes unenforceable in whole or in part for any reason; or (iii) any bankruptcy, insolvency or receivership proceedings, or an assignment for the benefit of creditors, shall be commenced under any Federal or state law by or against the Borrower or any Guarantor; or (iv) the Borrower or any Guarantor shall become the subject of any out-of-court settlement with its creditors; or (v) the Borrower or any Guarantor is unable or admits in writing its inability to pay its debts as they mature; or (vi) if the Borrower is a limited liability company, any member thereof shall withdraw or otherwise become disassociated from the Borrower.

      (g) Adverse Change; Insecurity. (i) There is a material adverse change in the business, properties, financial condition or affairs of the Borrower or any Guarantor, or in any collateral securing the Obligations; or (ii) the Bank in good faith deems itself insecure.

4.2 Termination of Loans; Additional Bank Rights. Upon the Maturity Date or the occurrence of any of the events identified in Section 4.1, the Bank may at any time (subject to any notice requirements or grace/cure periods and the Bank’s right to cease making additional advances to Borrower, all pursuant to section 5.2 below) (i) immediately terminate its obligation, if any, to make additional loans to the Borrower; (ii) Setoff; and/or (iii) take such other steps to protect or preserve the Bank’s interest in any collateral, including without limitation, notifying account debtors to make payments directly to the Bank, advancing funds to protect any collateral and insuring collateral at the Borrower’s expense; all without demand or notice of any kind, all of which are hereby waived.

4.3 Acceleration of Obligations. Upon the Maturity Date or the occurrence of any of the events identified in Sections 4.1(a) through 4.1(e) and 4.1(g), and the passage of any applicable cure periods, the Bank may at any time thereafter, by written notice to the Borrower, declare the unpaid principal balance of any Obligations, together with the interest accrued thereon and other amounts accrued hereunder and under the other Loan Documents, to be immediately due and payable; and the unpaid balance will thereupon be due and payable, all without presentation, demand, protest or further notice of any kind, all of which are hereby waived, and notwithstanding anything to the contrary contained herein or in any of the other Loan Documents. Upon the occurrence of any event under Section 4.1(f), the unpaid principal balance of any Obligations, together with all interest accrued thereon and other amounts accrued hereunder and under the other Loan Documents, will thereupon be immediately due and payable, all without presentation, demand, protest or notice of any kind, all of which are hereby waived, and notwithstanding anything to the contrary contained herein or in any of the other Loan Documents. Nothing contained in Section 4.1, Section 4.2 or this section will limit the Bank’s right to Setoff as provided in Section 3.3 or otherwise in this Agreement.

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4.4 Other Remedies. Nothing in this Article IV is intended to restrict the Bank’s rights under any of the Loan Documents or at law, and the Bank may exercise all such rights and remedies as and when they are available.

ARTICLE V. OTHER TERMS

5.1 Additional Terms; Addendum/Supplements. The warranties, covenants, conditions and other terms described in this Section and/or in the Addendum and/or other attached document(s) referenced in this Section are incorporated into this Agreement:

            ADDENDUM TO AGREEMENT

5.2 Notice/Cure Period. In the event default shall be made by the Borrower in the due observance or performance of any covenant, condition or agreement contained herein (other than those specified in section 2.10, 2.11, 4.1(a), 4.1(c) and 4.1(f) above), the Borrower shall have a period of thirty (30) days following the earlier to occur of (i) Borrower’s actual knowledge of such default or (ii) written notice provided by the Bank to Borrower which shall specify the claimed default and shall be provided in accordance with section 6.7 below in which to cure such default. During such cure period, the Bank shall have the right to cease making additional advances to Borrower pursuant to the Note.

ARTICLE VI. MISCELLANEOUS

6.1 Delay; Cumulative Remedies. No delay on the part of the Bank in exercising any right, power or privilege hereunder or under any of the other Loan Documents will operate as a waiver thereof, nor will any single or partial exercise of any right, power or privilege hereunder preclude other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein specified are cumulative and are not exclusive of any rights or remedies which the Bank would otherwise have.

6.2 Relationship to Other Documents. The warranties, covenants and other obligations of the Borrower (and the rights and remedies of the Bank) that are outlined in this Agreement and the other Loan Documents are intended to supplement each other. In the event of any inconsistencies in any of the terms in the Loan Documents, all terms will be cumulative so as to give the Bank the most favorable rights set forth in the conflicting documents, except that if there is a direct conflict between any preprinted terms and specifically negotiated terms (whether included in an addendum or otherwise), the specifically negotiated terms will control.

6.3 Successors. The rights, options, powers and remedies granted in this Agreement and the other Loan Documents shall be binding upon the Borrower and the Bank and their respective successors and assigns, and shall inure to the benefit of the Borrower and the Bank and the successors and assigns of the Bank, including without limitation any purchaser of any or all of the rights and obligations of the Bank under the Note and the other Loan Documents. The Borrower may not assign its rights or obligations under this Agreement or any other Loan Documents without the prior written consent of the Bank.

6.4 Disclosure. The Bank may, in connection with any sale or potential sale of all or any interest in the Note and other Loan Documents, disclose any financial information the Bank may have concerning the Borrower to any purchaser or potential purchaser. From time to time, the Bank may, in its discretion and without obligation to the Borrower, any Guarantor or any other third party, disclose information about the Borrower and this loan to any Guarantor, surety or other accommodation party. This provision does not obligate the Bank to supply any information or release the Borrower from its obligation to provide such information, and the Borrower agrees to keep all Guarantors, sureties or other accommodation parties advised of its financial condition and other matters which may be relevant to their obligations to the Bank.

6.5 Indemnification. Except for harm arising from the Bank’s willful misconduct, the Borrower hereby indemnifies and agrees to defend and hold the Bank harmless from any and all losses, costs, damages, claims and expenses of any kind suffered by or asserted against the Bank relating to claims by third parties arising out of the financing provided under the Loan Documents or related to any collateral (including, without limitation, the Borrower’s failure to perform its obligations relating to Environmental Matters described in Section 2.5 above). This indemnification and hold harmless provision will survive the termination of the Loan Documents and the satisfaction of the Obligations due the Bank.

6.6 Notice of Claims Against Bank; Limitation of Certain Damages. In order to allow the Bank to mitigate any damages to the Borrower from the Bank’s alleged breach of its duties under the Loan Documents or any other duty, if any, to the Borrower, the Borrower agrees to give the Bank immediate written notice of any claim or defense it has against the Bank, whether in tort or contract, relating to any action or inaction by the Bank under the Loan Documents, or the transactions related thereto, or of any defense to payment of the Obligations for any reason. The requirement of providing timely notice to the Bank represents the parties’ agreed-to standard of performance regarding claims against the Bank. Notwithstanding any claim that the Borrower may have against the Bank, and regardless of any notice the Borrower may have given the Bank, the Bank will not be liable to the Borrower for consequential and/or special damages arising therefrom, except those damages arising from the Bank’s willful misconduct.

6.7 Notices. Notice of any record shall be deemed delivered when the record has been (a) deposited in the United States Mail, postage pre-paid, (b) received by overnight delivery service, (c) received by telex, (d) received by telecopy, (e) received through the internet, or (f) when personally delivered.

6.8 Payments. Payments due under the Note and other Loan Documents will be made in lawful money of the United States. All payments may be applied by the Bank to principal, interest and other amounts due under the Loan Documents in any order which the Bank elects.

1125A Page 5 of 6

6.9 Applicable Law and Jurisdiction; Interpretation; Joint Liability; Severability This Agreement and all other Loan Documents will be governed by and interpreted in accordance with the internal laws of the State of Nebraska, except to the extent superseded by Federal law. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL JURISDICTION OF THE BANK’S BRANCH WHERE THE LOAN WAS ORIGINATED, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein will affect the Bank’s rights to serve process in any manner permitted by law, or limit the Bank’s right to bring proceedings against the Borrower in the competent courts of any other jurisdiction or jurisdictions. This Agreement, the other Loan Documents and any amendments hereto (regardless of when executed) will be deemed effective and accepted only upon the Bank’s receipt of the executed originals thereof. If there is more than one Borrower, the liability of the Borrowers will be joint and several, and the reference to “Borrower” will be deemed to refer to all Borrowers. Invalidity of any provision of this Agreement shall not affect the validity of any other provision.

6.10 Copies; Entire Agreement; Modification. The Borrower hereby acknowledges the receipt of a copy of this Agreement and all other Loan Documents. This Agreement is a “transferable record” as defined in applicable law relating to electronic transactions. Therefore, the holder of this Agreement may, on behalf of Borrower, create a microfilm or optical disk or other electronic image of this Agreement that is an authoritative copy as defined in such law. The holder of this Agreement may store the authoritative copy of such Agreement in its electronic form and then destroy the paper original as part of the holder’s normal business practices. The holder, on its own behalf, may control and transfer such authoritative copy as permitted by such law.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS AGREEMENT MAY ONLY BE CHANGED 8Y ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.

6.11 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

6.12 Attachments. All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Agreement, are hereby expressly incorporated by reference.

IN WITNESS WHEREOF, the undersigned have executed this REVOLVING CREDIT AGREEMENT as of     MAY 26. 2006    .

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	A   Wisconsin Corporation
Borrower Name           N/A	By /s/ Patrick E. Beans
	Name and Title Patrick E. Beans, CFO
________________________________________	By ________________________________________
Borrower Name           N/A	Name and Title _______________________________
	U.S. Bank N.A.                                                              (Bank)
	By /s/ Beth Morgan
	Name and Title   Elizabeth A. Morgan, Vice President

Borrower Address: 1245 Q Street     Lincoln, NE 68508      

Borrower Telephone No.: _______________________

1125A Page 6 of 6

[GRAPHIC OMITTED]

U.S. Bank National Association
Main Office
233 South 13^th Street
Lincoln, NE 68508

May 26, 2006

Patrick E. Beans
Chief Financial Officer
National Research Corporation
1245 Q Street
Lincoln, NE 68508

Dear Pat:

In regard to Section 2.4 of the Revolving Credit Agreement dated May 26, 2006, we acknowledge that you are currently authorized by your Board of Directors to purchase up to and including 750,000 shares of National Research Corporation stock. Only action on additional authorizations will require prior Bank approval.

We also acknowledge and have included in our credit process the payment of dividends to which we acquiesce as long as the covenants remain in compliance.

In regard to the third page of the Addendum to Revolving Credit Agreement and Note, KPMG LLP is a certified public accounting firm acceptable to the Bank.

Thank you again for the opportunity to assist you with this acquisition.

Best regards,

/s/ Beth Morgan

Beth Morgan
Vice President

ADDENDUM TO REVOLVING CREDIT AGREEMENT AND NOTE

This Addendum is made part of the Revolving Credit Agreement and Note (the “Agreement”) made and entered into by and between the undersigned borrower (the “Borrower”) and the undersigned bank (the “Bank”) as of the date identified below. The warranties, covenants and other terms described below are hereby added to the Agreement.

Borrowing Base Provision and Definitions. This provision replaces in its entirety the section of the Agreement titled “Borrowing Base”. The Borrowing Base will be an amount equal to (A) the sum of (i) 75% of the face amount of Eligible Accounts, and (ii) the lesser of $N/A or N/A% of Borrower’s cost (determined on a lower of cost or market basis or on such other basis as may be designated by Bank from time to time) of Eligible Inventory, as such cost may be diminished as a result of any event causing loss or depreciation in value of Eligible Inventory, but in no event shall this component exceed 75% of the Borrowing Base, less (B) the sum of (i) the then-current outstanding loan balance on note(s) in the original amount(s) of $3,500,000.00, and (ii) undrawn amounts of outstanding letters of credit issued by Bank or any affiliate thereof. Borrower will provide Bank with information regarding the Borrowing Base in such form and at such times as Bank may request but not less than 30 days after each month end. Capitalized terms used in this provision will have the meanings set forth below. Financial terms used herein which are not specifically defined herein shall have the meanings ascribed to them under generally accepted accounting principles.

“Eligible Account” shall mean an account owing to Borrower which meets all of the following requirements at the time it comes into existence and continues to meet the same until it is collected in full:

(i) Sale of Goods or Services Rendered. It arose from the performance of services by Borrower, or from a bona fide sale or lease of goods on terms in effect as of the date of the Agreement as disclosed by Borrower to Bank; which services have been fully performed for or which goods have been delivered or shipped to an account debtor residing in the United States or a foreign account debtor acceptable to Bank and supported by a letter of credit acceptable to Bank; and for which Borrower has genuine and complete invoices, shipping documents or receipts.

(ii) Age and Due Date. It is payable within 60 days of the date of invoice, and in each instance is not more than 90 days past due.

(iii) Ownership. It is owned and assignable by Borrower free of all claims, encumbrances and security interests (except Bank’s paramount security interest).

(iv) No Defenses; Exclusions. It is enforceable by Borrower and Bank against the account debtor for the amount shown as owing in the statements furnished by Borrower to Bank; it and the transaction out of which it arose comply with all applicable laws and regulations; it is not subject to any setoff, retainage, contra, counterclaim, credit allowance or adjustment except discount for prompt payment, nor has the account debtor returned the goods or disputed liability; it does not include any service charges; and it did not arise from a conditional sale, guaranteed sale, sale on approval, cash sale, cash on delivery (“COD”) sale, sale or return or sale on consignment; and it is otherwise deemed satisfactory to Bank in its sole discretion.

(v) Financial Condition of Account Debtor. Neither Borrower nor Bank has any notice or knowledge or anything which might impair the credit standing of the account debtor or the prospect of payment of the account, and the account debtor is otherwise deemed satisfactory to Bank in its sole discretion.

(vi) Affiliates. It is not due from an affiliate of Borrower, including, without limitation, (a) a parent entity; (b) a subsidiary entity; (c) an entity controlled by any controlling owner of Borrower ((a), (b) and (c) collectively “Affiliates”); or (d) any officer, director, shareholder, employee, agent, partner, manager, member or owner of Borrower or of any Affiliate.

(vii) Government Receivables. If the account debtor is the United States or any agency or department thereof, the accounts of such account debtor will have been assigned to Bank under the Federal Assignment of Claims Act only if and to the extent that Bank has specifically requested such assignment.

(viii) Receivables Concentration. “Eligible Accounts” shall not include that portion of the account(s) due from any single account debtor which exceeds 30% of Borrower’s aggregate accounts.

(ix) Cross-Age. If the dollar amount of accounts of an account debtor which are not Eligible Accounts under subparagraph (ii) above exceeds _20%_ of the total dollar amount due from such account debtor (which percentage limitation may change from time to time at Bank’s discretion), all of such account debtor’s accounts shall be excluded from Eligible Accounts.

“Eligible Inventory” shall mean inventory (as defined under the Uniform Commercial Code in the state where Bank’s main office is located) of Borrower which meets all of the following requirements and continues to meet the same until it is sold or otherwise disposed of:

(i) Ownership. It is owned and assignable by Borrower free of all claims, liens, encumbrances and security interests (except Bank’s paramount security interest); it is located in the United States; it is not held by Borrower nor put in the field by Borrower as a conditional sale, guaranteed sale, sale on approval, cash on delivery (“COD”) sale, sale or return or sale on consignment.

(ii) Condition. It is undamaged, free of defects and in good condition; it has not materially declined in value; it is not obsolete; its production has not been discontinued; it is not work-in-process; it is of an age, type and quantity acceptable to Bank; and, in the case of goods held for sale, it is new and unused (except as Bank may otherwise consent in writing); and it is otherwise deemed satisfactory to Bank in its sole discretion.

Financial Covenants. Financial terms used herein which are not specifically defined herein shall have the meanings ascribed to them under generally accepted accounting principles. For any Borrower who does not have a separate fiscal year end for tax reporting purposes, the fiscal year will be deemed to be the calendar year. Borrower (herein referred to as the “Subject Party”) will maintain the following:

Fixed Charge Coverage Ratio as of the end of each quarter for the four (4) fiscal quarters then ended of at least 1.30 to 1.

“Fixed Charge Coverage Ratio” shall mean (a) EBITDAR minus cash taxes, cash dividends and Maintenance Capital Expenditures divided by (b) the sum of all required principal payments (on short and long term debt and capital leases), interest and rental or lease expense.

“EBITDAR” shall mean net income, plus interest expense, plus income tax expense, plus depreciation expense plus amortization expense plus rent or lease expense.

“Maintenance Capital Expenditures” shall mean the dollar amount of Capital Expenditures that are necessary to maintain the current level of revenues. For the purposes of the covenant calculation, at no time shall the amount of the Capital Expenditures used be less than $2,000,000.00 per fiscal year, prorated evenly for the measurement periods required above.

“Capital Expenditures” shall mean the aggregate amount of all purchases or acquisitions of fixed assets, including real estate, motor vehicles, equipment, fixtures, leases and any other items that would be capitalized on the books of the Subject Party under generally accepted accounting principles. The term “Capital Expenditures” will not include expenditures or charges for the usual and customary maintenance, repair and retooling of any fixed asset or the acquisition of new tooling in the ordinary course of business.

Senior Funded Debt to EBITDA Ratio as of the end of each quarter for the four (4) fiscal quarters then ended of not more than 2.50 to 1.

“Senior Funded Debt to EDITDA Ratio” shall mean the ratio of Senior Funded Debt to EBITDA.

“Senior Funded Debt” shall mean indebtedness for borrowed money, for the deferred purchase price of property not purchased on ordinary trade terms, for capitalized leases and for other liabilities evidenced by promissory notes or other instruments, but not including any indebtedness that has been subordinated to the indebtedness evidenced by the Note pursuant to a writing that has been accepted by Bank.

“EBITDA” shall mean net income, plus interest expense, plus income tax expense, plus depreciation expense plus amortization expense.

Financial Information and Reporting. This provision replaces in its entirety the provision of the Agreement titled “Financial Information and Reporting”. Financial terms used herein which are not specifically defined herein shall have the meanings ascribed to them under generally accepted accounting principles. For any Borrower who does not have a separate fiscal year end for tax reporting purposes, the fiscal year will be deemed to be the calendar year. The financial statements and other information previously provided to Bank or provided to Bank in the future are or will be complete and accurate and prepared in accordance with generally accepted accounting principles. There has been no material adverse change in Borrower’s financial condition since such information was provided to Bank. Borrower will (i) maintain accounting records in accordance with generally recognized and accepted principles of accounting consistently applied throughout the accounting periods involved; (ii) provide Bank with such information concerning its business affairs and financial condition (including insurance coverage) as Bank may request; and (iii) without request, provide to Bank the following financial information, in form and content acceptable to Bank, pertaining to Borrower:

Annual Financial Statements: Not later than 120 days after the end of each fiscal year, annual financial statements, audited by a certified public accounting firm acceptable to Bank, as identified in Beth Morgan’s letter to Patrick E. Beans dated May 26, 2006.

Interim Financial Statements: Not later than 60 days after the end of each fiscal quarter, interim financial statements, reviewed by a certified public accounting firm acceptable to Bank, as identified in Beth Morgan’s letter to Patrick E. Beans dated May 26, 2006.

Dated as of May 26, 2006

(Individual)	(Non-Individual)
_____________________________________	National Research Corporation
Borrower Name N/A	a/an Wisconsin Corporation
_____________________________________	By:/s/ Patrick E. Beans
Borrower Name N/A	Name and Title Patrick E. Beans, CFO
	By:______________________________________
	Name and Title
	Agreed to:
	U.S. BANK N.A.
	By:/s/ Beth Morgan
	Name and Title Elizabeth A. Morgan, Vice President

EX-4.2

Exhibit 4.2

  For Bank Use Only          Reviewed by

  Due      JULY 31, 2007

  Customer # __________                         Loan #_____________

REVOLVING CREDIT NOTE

$  3,500,000.00 MAY 26, 2006

        FOR VALUE RECEIVED, the undersigned borrower (the “Borrower”), promises to pay to the order of U.S. BANK N.A. (the “Bank”), the principal sum of THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 Dollars ($ 3,500,000.00 ), payable JULY 31, 2007 (the “Maturity Date”).

        Interest.

The unpaid principal balance will bear interest at an annual rate described in the Interest Rate Rider attached to this Note.

        Payment Schedule.

Interest is payable beginning JUNE 30, 2006, and on the same date of each consecutive month thereafter (except that if a given month does not have such a date, the last day of such month), plus a final interest payment with the final payment of principal.

        Interest will be computed for the actual number of days principal is unpaid, using a daily factor obtained by dividing the stated interest rate by 360.

        Notwithstanding any provision of this Note to the contrary, upon any default or at any time during the continuation thereof (including failure to pay upon maturity), the Bank may, at its option and subject to applicable law, increase the interest rate on this Note to a rate of 5% per annum plus the interest rate otherwise payable hereunder. Notwithstanding the foregoing and subject to applicable law, upon the occurrence of a default by the Borrower or any guarantor involving bankruptcy, insolvency, receivership proceedings or an assignment for the benefit of creditors, the interest rate on this Note shall automatically increase to a rate of 5% per annum plus the rate otherwise payable hereunder.

        In no event will the interest rate hereunder exceed that permitted by applicable law. If any interest or other charge is finally determined by a court of competent jurisdiction to exceed the maximum amount permitted by law, the interest or charge shall be reduced to the maximum permitted by law, and the Bank may credit any excess amount previously collected against the balance due or refund the amount to the Borrower.

        Subject to applicable law, if any payment is not made on or before its due date, the Bank may collect a delinquency charge of 0.00%, of the unpaid amount. Collection of the late payment fee shall not be deemed to be a waiver of the Bank's right to declare a default hereunder.

        Without affecting the liability of any Borrower, endorser, surety or guarantor, the Bank may, without notice, renew or extend the time for payment, accept partial payments, release or impair any collateral security for the payment of this Note, or agree not to sue any party liable on it.

        This Revolving Credit Note constitutes the Note issued under a Revolving Credit Agreement dated as of the date hereof between the Borrower and the Bank, to which Agreement reference is hereby made for a statement of the terms and conditions under which loans evidenced hereby were or may be made and a description of the terms and conditions upon which the maturity of this Note may be accelerated, and for a description of the collateral securing this Note.

        This Note is a "transferablerecord" as defined in applicable law relating to electronic transactions. Therefore, the holder of this Note may, on behalf of Borrower, create a microfilm or optical disk or other electronic image of this Note that is an authoritative copy as defined in such law. The holder of this Note may store the authoritative copy of such Note in its electronic form and then destroy the paper original as part of the holder's normal business practices. The holder, on its own behalf, may control and transfer such authoritative copy as permitted by such law.

        All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Revolving Credit Note, are hereby expressly incorporated by reference.

The Borrower hereby acknowledges the receipt of a copy of this Note.

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	a   Wisconsin Corporation
Borrower Name           N/A	By /s/ Patrick E. Beans
________________________________________	Name and Title   Patrick E. Beans, CFO
	By ________________________________________
Borrower Name           N/A	Name and Title _______________________________

LOGO

INTEREST RATE RIDER

        This Rider is made part of the Revolving Credit Note (the “Note”) in the original amount of $ 3,500,000.00 by the undersigned borrower (the “Borrower”) in favor of U.S. BANK N.A. (the “Bank”) as of the date identified below. The following interest rate description is hereby added to the Note:

Interest Rate Options. Interest on each advance hereunder shall accrue at one of the following per annum rates selected by the Borrower (“n/a” indicates rate option is not available, but Prime Rate Loan option must always be selected) (i) upon notice to the Bank, -0.500% plus the prime rate announced by the Bank from time to time, as and when such rate changes (a “Prime Rate Loan”); (ii) upon a minimum of two New York Banking Days prior notice, 2.200% plus the 1, 2, 3, 6 or 12 month LIBOR rate quoted by the Bank from Telerate Page 3750 or any successor thereto (which shall be the LIBOR rate in effect two New York Banking Days prior to commencement of the advance), adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation (a “LIBOR Rate Loan”); or (iii) upon notice to the Bank, n/a % plus the rate, determined solely by the Bank, at which the Bank would be able to borrow funds of comparable amounts in the Money Markets for a 1, 2, 3, 6 or 12 month period, adjusted for any reserve requirement and any subsequent costs arising from a change in government regulation (a “Money Market Rate Loan”). The term “New York Banking Day” means any day (other than a Saturday or Sunday) on which commercial banks are open for business in New York, New York. The term “Money Markets” refers to one or more wholesale funding markets available to the Bank, including negotiable certificates of deposit, commercial paper, eurodollar deposits, bank notes, federal funds, interest rate swaps or others. No LIBOR Rate Loan or Money Market Rate Loan may extend beyond the maturity of this Note. In any event, if the Loan Period for a LIBOR Rate Loan or Money Market Rate Loan should happen to extend beyond the maturity of this Note, such loan must be prepaid at the time this Note matures. If a LIBOR Rate Loan or Money Market Rate Loan is prepaid prior to the end of the Loan Period for such loan, whether voluntarily or because prepayment is required due to the Note maturing or due to acceleration of this Note upon default or otherwise, the Borrower agrees to pay all of the Bank’s costs, expenses and Interest Differential (as determined by the Bank) incurred as a result of such prepayment. The term “Loan Period” means the period commencing on the advance date or the applicable LIBOR Rate Loan or Money Market Rate Loan and ending on the numerically corresponding day 1, 2, 3, 6 or 12 months thereafter matching the interest rate term selected by the Borrower; provided, however, (a) if any Loan Period would otherwise end on a day which is not a New York Banking Day, then the Loan Period shall end on the next succeeding New York Banking Day unless the next succeeding New York Banking Day falls in another calendar month, in which case the Loan Period shall end on the immediately preceding New York Banking Day; or (b) if any Loan Period begins on the last New York Banking Day of a calendar month (or on a day for which there is no numerically corresponding day In the calendar month at the end of the Loan Period), then the Loan Period shall end on the last New York Banking Day of the calendar month at the end of such Loan Period. The term “Interest Differential” shall mean that sum equal to the greater of zero or the financial loss incurred by the Bank resulting from prepayment, calculated as of the difference between the amount of interest the Bank would have earned (from like investments in the Money Markets as of the first day of the LIBOR Rate Loan or Money Market Rate Loan) had prepayment not occurred and the interest the Bank will actually earn (from like investments in the Money Markets as of the date of prepayment) as a result of the redeployment of funds from the prepayment. Because of the short-term nature of this facility, the Borrower agrees that the Interest Differential shall not be discounted to its present value. Any prepayment of a LIBOR Rate Loan or Money Market Rate Loan shall be in an amount equal to the remaining entire principal balance of such loan.

In the event the Borrower does not timely select another interest rate option at least two New York Banking Days before the end of the Loan Period for a LIBOR Rate Loan or Money Market Rate Loan, the Bank may at any time after the end of the Loan Period convert the LIBOR Rate Loan or Money Market Rate Loan to a Prime Rate Loan, but until such conversion, the funds advanced under the LIBOR Rate Loan or Money Market Rate Loan shall continue to accrue interest at the same rate as the interest rate in effect for such LIBOR Rate Loan or Money Market Rate Loan prior to the end of the Loan Period.

The Bank’s internal records of applicable interest rates shall be determinative in the absence of manifest error. Each LIBOR Rate Loan and each Money Market Rate Loan shall be in a minimum principal amount or $100,000.

Dated as of:     MAY 26, 2006    

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	a   Wisconsin Corporation
Borrower Name           N/A	By /s/ Patrick E. Beans
________________________________________	Name and Title   Patrick E. Beans, CFO
	By ________________________________________
Borrower Name           N/A	Name and Title _______________________________

[GRAPHIC OMITTED]

ADDENDUM TO AGREEMENT

NOTICE PURSUANT TO NEBRASKA REVISED STATUTES 45-1, 112 et. seq.

This Notice is Provided Pursuant to Nebraska Revised Statutes 45-1, 112 et. seq.

NOTICE – WRITTEN AGREEMENTS. A credit agreement must be in writing to be enforceable under Nebraska law. To protect you and us from any misunderstandings or disappointments, any contract, promise, undertaking, or offer to forebear repayment of money or to make any other financial accommodation in connection with this loan of money or grant or extension of credit, or any amendment of, cancellation of, waiver of, or substitution for any or all of the terms or provisions of any instrument or document executed in connection with this loan of money or grant or extension of credit, must be in writing to be effective.

IN WITNESS WHEREOF, the undersigned have executed and acknowledged this NOTICE PURSUANT TO NEBRASKA REVISED STATUTES 45-1, 112 et. seq. as of May 26, 2006.

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	a Wisconsin Corporation
Borrower Name           N/A	By /s/ Patrick E. Beans
	Name and Title: Patrick E. Beans, CFO
________________________________________	By ________________________________________
	Name and Title:
Borrower Name           N/A
	U.S. Bank N.A.
	(Bank)
	By /s/ Beth Morgan
	Name and Title: Elizabeth A. Morgan, Vice President

Borrower Address:1245 Q Street, Lincoln, NE 68508

Borrower Telephone No.:______________________

EX-4.3

Exhibit 4.3

[GRAPHIC OMITTED]

  For Bank Use Only          Reviewed by _________________

  Due MAY 31, 2013

  Customer # ____________                Loan #_____________

INSTALLMENT OR SINGLE PAYMENT NOTE

$  9,000,000.00 MAY 26,2006

        FOR VALUE RECEIVED, the undersigned borrower (the “Borrower”), promises to pay to the order of U.S. BANK N. A. (the “Bank”), the principal sum of NINE MILLION AND NO/100 Dollars ($9,000,000.00) (the “Loan Amount).

    1.   Terms for Advance(s). [Choose One:]

                Single Advance

                Multiple Advances. Prior to   n/a   or the earlier termination hereof, the Borrower may obtain advances from the Bank under this Installment or Single Payment Note (the “Note”) in an aggregate amount not exceeding the Loan Amount. Although this Note is expressed as payable in the full Loan Amount, the Borrower will be obligated to pay only the amounts actually disbursed hereunder, together with accrued interest on the outstanding balance at the rates and on the dates specified therein and such other charges provided for herein.

    2.        Interest.

  The unpaid principal balance will bear interest at an annual rate of 7.210%.

    3.        Payment Schedule.

  See Attached Payment Schedule Rider

    4.  Closing Fee.  If checked here, the Borrower will pay the Bank a one-time closing fee of $        n/a       contemporaneously with execution of this Note. This fee is in addition to all other fees, expenses and other amounts due hereunder.

    5.  Late Payment Fee. Subject to applicable law, if any payment is not made on or before its due date, the Bank may collect a delinquency charge of 0.00% of the unpaid amount. Collection of the late payment fee shall not be deemed to be a waiver of the Bank’s right to declare a default hereunder.

    6.  Calculation of Interest. Interest will be computed for the actual number of days principal is unpaid, using a daily factor obtained by dividing the stated interest rate by 360.

    7.  Default Interest Rate. Notwithstanding any provision of this Note to the contrary, upon any default or at any time during the continuation thereof (including failure to pay upon maturity), the Bank may, at its option and subject to applicable law, increase the interest rate on this Note to a rate of 5% per annum plus the interest rate otherwise payable hereunder. Notwithstanding the foregoing and subject to applicable law, upon the occurrence of a default by the Borrower or any guarantor involving bankruptcy, insolvency, receivership proceedings or an assignment for the benefit of creditors, the interest rate on this Note shall automatically increase to a rate of 5% per annum plus the rate otherwise payable hereunder.

    8.  Maximum Rate. In no event will the interest rate hereunder exceed that permitted by applicable law. If any interest or other charge is finally determined by a court of competent jurisdiction to exceed the maximum amount permitted by law, the interest or charge shall be reduced to the maximum permitted by law, and the Bank may credit any excess amount previously collected against the balance due or refund the amount to the Borrower.

2451A    us bancopr 2001 Page 1 of 4 8/04

    9.   Additional Terms. This note may be prepaid in full or in part at any time without prepayment penalty or fee. Prepayments of less than all the outstanding principal amount of this Note shall be applied upon principal payments in the inverse order of their maturities.

    Notice/Cure Period. In the event default shall be made by the Borrower in the due observance or performance of any covenant, condition or agreement contained herein (other than those specified in sections 13(a), 13(c) and 13(f) below), the Borrower shall have a period of thirty (30) days following the earlier to occur of (i) Borrower’s actual knowledge of such default or (ii) written notice provided by the Bank to Borrower which shall specify the claimed default and shall be provided in accordance with section 6.7of the Revolving Credit Agreement in which to cure such default. During such cure period, the Bank shall have the right to cease making additional advances to Borrower pursuant to the Note.

    10.   Financial Information. The Borrower will (i) maintain accounting records in accordance with generally recognized and accepted principles of accounting consistently applied throughout the accounting periods involved; (ii) provide the Bank with such information concerning its business affairs and financial condition (including insurance coverage) as the Bank may reasonably request; and (iii) without request, provide the Bank with annual financial statements prepared by an accounting firm acceptable to the Bank within 120 days of the end of each fiscal year.

    11.   Credit Balances; Setoff. As additional security for the payment of the obligations described in this Note or any document securing or related to the loan evidenced by this Note (collectively the “Loan Documents’) and any other obligations of the Borrower to the Bank of any nature whatsoever (collectively the “Obligations)', the Borrower hereby grants to the Bank a security interest in, a lien on and an express contractual right to set off against all depository account balances, cash and any other property of the Borrower now or hereafter in the possession of the Bank and the right to refuse to allow withdrawals from any account (collectively “Setoff”). The Bank may, at any time upon the occurrence of a default hereunder and after expiration of any applicable cure period, Setoff against the Obligations whether or not the Obligations (including future installments) are then due or have been accelerated, all without any advance or contemporaneous notice or demand of any kind to the Borrower, such notice and demand being expressly waived.

    12.   Advances and Paying Procedure. The Bank is authorized and directed to credit any of the Borrower’s accounts with the Bank (or to the account the Borrower designates in writing) for all loans made hereunder, and the Bank is authorized to debit such account or any other account of the Borrower with the Bank for the amount of any principal, interest or expenses due under the Note or other amount due hereunder on the due date with respect thereto. Payments due under the Note and other Loan Documents will be made in lawful money of the United States. All payments may be applied by the Bank to principal, interest and other amounts due under the Loan Documents in any order which the Bank elects. If, upon any request by the Borrower to the Bank to issue a wire transfer, there is an inconsistency between the name of the recipient of the wire and its identification number as specified by the Borrower, the Bank may, without liability, transmit the payment via wire based solely upon the identification number.

    13.   Defaults. Notwithstanding any cure periods described below, the Borrower shall immediately notify the Bank in writing when the Borrower obtains knowledge of the occurrence of any default specified below. Regardless of whether the Borrower has given the required notice, the occurrence of one or more of the following shall constitute a default:

    (a) Nonpayment. The Borrower shall fail to pay (i) any interest due on this Note or any fees, charges, costs or expenses under the Loan Documents when due; or (ii) any principal amount of this Note when due, except principal amount due at maturity, and such nonpayment shall remain unremedied for a period of ten (10) days.

    (b) Nonperformance. The Borrower or any guarantor of the Borrower’s Obligations to the Bank (“Guarantor”) shall fail to perform or observe any agreement, term, provision, condition, or covenant (other than a default occurring under (a), (c), (d), (e), (f) or (g) of this paragraph 13) required to be performed or observed by the Borrower or any Guarantor hereunder or under any other Loan Document or other agreement with or in favor of the Bank.

    (c) Misrepresentation. Any financial information, statement, certificate, representation or warranty given to the Bank by the Borrower or any Guarantor (or any of their representatives) in connection with entering into this Note or the other Loan Documents and/or any borrowing thereunder, or required to be furnished under the terms thereof, shall prove untrue or misleading in any material respect (as determined by the Bank in the exercise of its judgment) as of the time when given.

    (d) Default on Other Obligations. The Borrower or any Guarantor shall be in default under the terms of any loan agreement, promissory note, lease, conditional sale contract or other agreement, document or instrument evidencing, governing or securing any indebtedness owing by the Borrower or any Guarantor to the Bank or any indebtedness in excess of $100,000 owing by the Borrower to any third party, and the period of grace, if any, to cure said default shall have passed,

    (e) Judgments. Any judgment shall be obtained against the Borrower or any Guarantor which, together with all other outstanding unsatisfied judgments against the Borrower (or such Guarantor), shall exceed the sum of $100,000 and shall remain unvacated, unbonded or unstayed for a period of 30 days following the date of entry thereof.

    (f) Inability to Perform; Bankruptcy/insolvency. (i) The Borrower or any Guarantor shall die or cease to exist; or (ii) any Guarantor shall attempt to revoke any guaranty of the Obligations described herein, or any guaranty becomes unenforceable in whole or in part for any reason; or (iii) any bankruptcy, insolvency or receivership proceedings, or an assignment for the benefit of creditors, shall be commenced under any Federal or state law by or against the Borrower or any Guarantor; or (iv) the Borrower or any Guarantor shall become the subject of any out-of-court settlement with its creditors; or (v) the Borrower or any Guarantor is unable or admits in writing its inability to pay its debts as they mature; or (vi) if the Borrower is a limited liability company, any member thereof shall withdraw or otherwise become disassociated from the Borrower.

    (g) Adverse Change; Insecurity. (i) There is a material adverse change in the business, properties, financial condition or affairs of the Borrower or any Guarantor, or in any collateral securing the Obligations; or (ii) the Bank in good faith deems itself insecure.

    14.   Termination of Loans; Additional Bank Rights. Upon the occurrence of any of the events identified in paragraph 13, the Bank may at any time (subject to any notice requirements or grace/cure periods and the Bank’s right to cease making additional advances to Borrower, all pursuant to section 9 above) (i) immediately terminate its obligation, if any, to make additional loans to the Borrower; (ii) Setoff; and/or (iii) take such other steps to protect or preserve the Bank’s interest in any collateral, including without limitation, notifying account debtors to make payments directly to the Bank, advancing funds to protect any collateral and insuring collateral at the Borrower’s expense; all without demand or notice of any kind, all of which are hereby waived.

2451A Page 2 of 4

    15.   Acceleration of Obligations. Upon the occurrence of any of the events identified in paragraph 13(a) through 13(e) and 13(g), and the passage of any applicable cure periods, the Bank may at any time thereafter, by written notice to the Borrower, declare the unpaid principal balance of any Obligations, together with the interest accrued thereon and other amounts accrued hereunder and under the other Loan Documents, to be immediately due and payable; and the unpaid balance shall thereupon be due and payable, all without presentation, demand, protest or further notice of any kind, all of which are hereby waived, and notwithstanding anything to the contrary contained herein or in any of the other Loan Documents. Upon the occurrence of any event under paragraph 13(f), the unpaid principal balance of any Obligations, together with all interest accrued thereon and other amounts accrued hereunder and under the other Loan Documents, shall thereupon be immediately due and payable, all without presentation, demand, protest or notice of any kind, all of which are hereby waived, and notwithstanding anything to the contrary contained herein or in any of the other Loan Documents. Nothing contained in paragraph 13 or 14 or this paragraph shall limit the Bank’s right to Setoff as provided in this Note.

    16.   Collateral. This Note is secured by any and all security interests, pledges, mortgages/deeds of trust (except any mortgage/deed of trust expressly limited by its terms to a specific obligation of Borrower to Bank) or liens now or hereafter in existence granted to the Bank to secure indebtedness of the Borrower to the Bank (unless prohibited by law), including, without limitation, as described in the following documents: Mortgage/Deed of Trust dated 05/26/06; Security Agreement dated 05/26/06                                                                                                      
                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                             .

    17.   Guaranties. This Note is guarantied by each and every guaranty now or hereafter in existence guarantying the indebtedness of the Borrower to the Bank (except for any guaranty expressly limited by its terms to a specific separate obligation of Borrower to the Bank) including, without limitation, the following:                                                                                                                                                                     
                                                                                                                                                                                                                                                 
                                                                            N/A                                                                                                                                                             
                                                                                                                                                                                                                                                 

    18.   Additional Bank Rights. Without affecting the liability of any Borrower, endorser, surety or guarantor, the Bank may, without notice, renew or extend the time for payment, accept partial payments, release or impair any collateral security for the payment of this Note, or agree not to sue any party liable on it.

    19.   Warranties. The Borrower makes the following warranties: (A) This Note and the other Loan Documents are the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms. (B) The execution, delivery and performance of this Note and all other Loan Documents to which the Borrower is a party (i) are within the borrower’s power; (ii) have been duly authorized by all appropriate entity action; (iii) do not require the approval of any governmental agency; and (iv) will not violate in any material respect any law, agreement or restriction by which the Borrower is bound. (C) If the Borrower is not an individual, the Borrower is validly existing and in good standing under the laws of its state of organization, has all requisite power and authority and possesses all licenses necessary to conduct its business and own its properties.

    20.   Waivers; Relationship to Other Documents. All Borrowers, endorsers, sureties and guarantors waive presentment, protest, demand, and notice of dishonor. No delay on the part of the Bank in exercising any right, power or privilege hereunder or under any of the other Loan Documents will operate as a waiver thereof, nor will any single or partial exercise of any right, power or privilege hereunder preclude other or further exercise thereof or the exercise of any other right, power or privilege. The warranties, covenants and other obligations of the Borrower (and rights and remedies of the Bank) in this Note and all related documents are intended to be cumulative and to supplement each other.

    21.   Expenses and Attorneys’Fees. Upon demand, the Borrower will immediately reimburse the Bank and any participant in the Obligations (“Participant”) all attorneys’ fees and all other costs, fees and out-of-pocket disbursements incurred by the Bank or any Participant in connection with the preparation, execution, delivery, administration, defense and enforcement of this Note or any of the other Loan Documents, including attorneys’ fees and all other costs and fees (a) incurred before or after commencement of litigation or at trial, on appeal or in any other proceeding, (b) incurred in any bankruptcy proceeding and (c) related to any waivers or amendments with respect thereto (examples of costs and fees include but are not limited to fees and costs for: filing, perfecting or confirming the priority of the Bank’s lien, title searches or insurance, appraisals, environmental audits and other reviews related to the Borrower, any collateral or the loans, if requested by the Bank). The Borrower will also reimburse the Bank and any Participant for all costs of collection before and after judgment, and the costs of preservation and/or liquidation of any collateral.

    22.   Applicable Law and Jurisdiction; Interpretation; Joint Liability; Severability. This Note and all other Loan Documents shall be governed by and interpreted in accordance with the internal laws of the State of Nebraska except to the extent superseded by Federal law. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL JURISDICTION OF THE BANK’S BRANCH WHERE THE LOAN WAS ORIGINATED, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONSARISINGTHEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein shall affect the Bank’s rights to serve process in any manner permitted by law, or limit the Bank’s right to bring proceedings against the Borrower in the competent courts of any other jurisdiction or jurisdictions. This Note, the other Loan Documents and any amendments hereto (regardless of when executed) will be deemed effective and accepted only upon the Bank’s receipt of the executed originals thereof. If there is more than one Borrower, the liability of the Borrowers shall be joint and several, and the reference to “Borrower” shall be deemed to refer to all Borrowers. Invalidity of any provision of this Note shall not affect the validity of any other provision.

2451A Page 3 of 4

    23.   Successors. The rights, options, powers and remedies granted in this Note and the other Loan Documents shall be binding upon the Borrower and the Bank and their respective successors and assigns, and shall inure to the benefit of the Borrower and the Bank and the successors and assigns of the Bank, including without limitation any purchaser of any or all of the rights and obligations of the Bank under the Note and the other Loan Documents. The Borrower may not assign its rights or obligations under this Note or any other Loan Documents without the prior written consent of the Bank.

    24.   Disclosure. The Bank may, in connection with any sale or potential sale of all or any interest in the Note and other Loan Documents, disclose any financial information the Bank may have concerning the Borrower to any purchaser or potential purchaser. From time to time, the Bank may, in its discretion and without obligation to the Borrower, any Guarantor or any other third party, disclose information about the Borrower and this loan to any Guarantor, surety or other accommodation party. This provision does not obligate the Bank to supply any information or release the Borrower from its obligation to provide such information, and the Borrower agrees to keep all Guarantors, sureties or other accommodation parties advised of its financial condition and other matters which may be relevant to their obligations to the Bank.

    25.   Copies; Entire Agreement; Modification. The Borrower hereby acknowledges the receipt of a copy of this Note and all other Loan Documents. This Note is a “transferable record” as defined in applicable law relating to electronic transactions. Therefore, the holder of this Note may, on behalf of Borrower, create a microfilm or optical disk or other electronic image of this Note that is an authoritative copy as defined in such law. The holder of this Note may store the authoritative copy of such Note in its electronic form and then destroy the paper original as part of the holder’s normal business practices. The holder, on its own behalf, may control and transfer such authoritative copy as permitted by such law.

    IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE RELIED UPON.

    26.   Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE BORROWER AND THE BANK HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

    27.   Attachments. All documents attached hereto, including any appendices, schedules, riders, and exhibits to this Installment or Single Payment Note, are hereby expressly incorporated by reference.

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	a Wisconsin Corporation
Borrower Name N/A	By /s/ Patrick E. Beans
________________________________________	Name and Title Patrick E. Beans, CFO
Borrower Name N/A	By ________________________________________
	Name and Title _______________________________

Borrower Address:   1245 Q Street, Lincoln, NE 68508      

Borrower Telephone Number: ____________________

2451A Page 4 of 4

[GRAPHIC OMITTED]

ADDENDUM TO AGREEMENT

NOTICE PURSUANT TO NEBRASKA REVISED STATUTES 45-1, 112 et. seq.

This Notice is Provided Pursuant to Nebraska Revised Statutes 45-1, 112 et. seq.

NOTICE – WRITTEN AGREEMENTS. A credit agreement must be in writing to be enforceable under Nebraska law. To protect you and us from any misunderstandings or disappointments, any contract, promise, undertaking, or offer to forebear repayment of money or to make any other financial accommodation in connection with this loan of money or grant or extension of credit, or any amendment of, cancellation of, waiver of, or substitution for any or all of the terms or provisions of any instrument or document executed in connection with this loan of money or grant or extension of credit, must be in writing to be effective.

IN WITNESS WHEREOF, the undersigned have executed and acknowledged this NOTICE PURSUANT TO NEBRASKA REVISED STATUTES 45-1, 112 et. seq. as of May 26, 2006.

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	a Wisconsin Corporation
Borrower Name           N/A	By /s/ Patrick E. Beans
	Name and Title: Patrick E. Beans, CFO
________________________________________	By ________________________________________
	Name and Title:
Borrower Name           N/A
	U.S. Bank N.A.
	(Bank)
	By /s/ Beth Morgan
	Name and Title: Elizabeth A. Morgan, Vice President

Borrower Address: 1245 Q Street, Lincoln, NE 68508

Borrower Telephone No.: ____________________

[GRAPHIC OMITTED]

PAYMENT SCHEDULE RIDER

        This Rider is made part of the Installment or Single Payment Note   (the “Note”) in the original amount of $ 9,000, 000.00 by the undersigned borrower (the “Borrower”) in favor of U.S. BANK N.A. (the “Bank”) as of the date identified below. The following payment schedule is hereby added to the Note:

Principal and interest are payable in 83 installments of $106,077.71 each, beginning JUNE 30, 2006, and on the last date of each consecutive month thereafter, plus a balloon payment equal to all unpaid principal and accrued interest on MAY 31, 2013, the maturity date.

Dated as of   MAY 26, 2006         .

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	A   Wisconsin Corporation
Borrower Name           N/A	By /s/ Patrick E. Beans
	Name and Title   Patrick E. Beans, CFO
________________________________________	By ________________________________________
	Name and Title _______________________________
Borrower Name           N/A

[GRAPHIC OMITTED]

ADDENDUM TO NOTE

        This Addendum is made part of the Installment or Single Payment Note dated as of the date of this Addendum (the “Note”) by the undersigned borrower (the “Borrower”) in favor of U.S. BANK N.A. (the “Bank”) in the original principal amount of $9,000,000.00 . The warranties, covenants and other terms described below are hereby added to the Note.

Incorporation of Loan Agreement. Borrower and Bank entered into a loan agreement dated MAY 26, 2006 (as amended, extended, or restated from time to time, the “Loan Agreement”)which Loan Agreement remains in full force and effect and is incorporated in its entirety herein by reference as though fully set forth herein. The warranties, covenants and other obligations of Borrower (and the rights and remedies of Bank) that are outlined in the Note and the Loan Agreement are intended to supplement each other. In the event of any inconsistencies in any of the terms of the Note and the Loan Agreement, all terms will be cumulative so as to give Bank the most favorable rights set forth in the conflicting documents, except that if there is a direct conflict between the Note and the Loan Agreement, the terms of the Note shall control as to the loan covered by the Note and the terms of the Loan Agreement shall control as to the loans specifically covered by the Loan Agreement. The provisions of the Loan Agreement shall continue in full force and effect with respect to the Note notwithstanding termination of the Loan Agreement subsequent to the date hereof unless the documentation terminating the Loan Agreement expressly states that the representations, warranties and covenants of the Borrower as set forth in the Loan Agreement no longer apply to the Note. The Note is in addition to any notes referred to in the Loan Agreement.

Every instance on this page that references “Loan Agreement” will instead read “Revolving Credit Agreement as Amended.”

Dated as of:   May 26, 2006    .

(Individual Borrower)	National Research Corporation
	Borrower Name (Organization)
________________________________________	a Wisconsin Corporation
Borrower Name N/A	By /s/ Patrick E. Beans
________________________________________	Name and Title Patrick E. Beans, CFO
Borrower Name N/A	By ________________________________________
	Name and Title _______________________________

EX-99.1

Exhibit 99.1

1245 "Q" Street
Lincoln, NE 68508
Phone: 402-475-2525
Fax: 402-475-9061

Contact: Patrick E. Beans
Chief Financial Officer
402-475-2525

NATIONAL RESEARCH CORPORATION
ACQUIRES ASSETS OF THE GOVERNANCE INSTITUTE

LINCOLN, Nebraska (May 30, 2006) — National Research Corporation (NASDAQ/NM:NRCI), a leader in healthcare performance measurement and improvement, today announced the purchase of substantially all of the assets of The Governance Institute (TGI), a portfolio company of Housatonic Partners. TGI provides the essential knowledge and solutions necessary for Board members, executive management and physician leaders of hospitals and health systems to achieve excellence across a wide array of strategic issues that confront hospitals and their Boards.

        Serving as financial advisors in connection with the transaction were Coady Diemar Partners for NRC and The Jordan, Edmiston Group for TGI.

        TGI’s best practice research, proprietary benchmarking information, world class conferences and group of leading experts have won the company a trusted seat at the senior leadership table of over 450 member hospitals and health systems across the country.

        Commenting on the acquisition, Michael D. Hays, chief executive officer of National Research Corporation, said, “TGI’s attractive subscription-based business model, high renewal rates and low capital requirements, combined with its highly recognized and trusted brand built over the past 20 years, has all the aspects one looks for in great companies with great talent.”

        Jim Rice, PhD, vice chairman of The Governance Institute, said “NRC’s depth in performance measurement and improvement content, blended with its expertise, will allow TGI to add material value to our member organizations on the very topics of the highest priority. This combination will not only enhance services for our current members, it will also provide expansion of TGI member services to NRC clients and, of course, opens up Board and executive leadership access to NRC products and services.”

        Pat Beans, chief financial officer of National Research Corporation, added, “Given TGI’s historical track record for profitability, we expect this acquisition to be accretive to NRC’s 2006 earnings. As a result, we can focus our energies on growing the business and adding client value for both TGI members and NRC clients.”

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NRC Acquires Assets of The Governance Institute
Page 2
May 30, 2006

        Founded in 1986, The Governance Institute will remain a San Diego-based organization with substantially all of its current associates joining the NRC family. NRC’s chief operations officer, Jona Raasch, has today been named President of TGI and will immediately assume the day-to-day leadership.

        Selected highlights of The Governance Institute transaction include:

December 31, 2005, Year-End Performance
Membership Count	436
Membership Retention	88%
Conference Attendance	1,386
Revenues	$6.2 million
Purchase Consideration
Cash at Closing	$19.8 million
Assumed Liabilities	$2.5 million

        National Research Corporation, headquartered in Lincoln, Nebraska, is a leading provider of performance measurement and improvement services to the healthcare industry in the United States and Canada.

        This press release includes “forward-looking” statements related to the Company that can generally be identified as describing the Company’s future plans, objectives or goals. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those currently anticipated. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For further information about the factors that could affect the Company’s future results, please see the Company’s filings with the Securities and Exchange Commission.

-END-