Exhibit 10.9
AGREEMENT
AND
PLAN OF ORGANIZATION
AGREEMENT, dated as of August 28, 1995 among RESEARCH DATA WORLDWIDE,
LTD., a Delaware corporation ("RDW"), PREMIER HEALTH ALLIANCE, INC., a Delaware
corporation ("Premier"), and CONTRACT RESEARCH WORLDWIDE, L.L.C., a newly-formed
limited liability company formed under the laws of Delaware (the a "Company").
Preliminary Statement
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RDW and Premier are each engaged in various aspects of performing
services on behalf of pharmaceutical companies in connection with new drug
applications. RDW and Premier desire to form and organize the Company, which
will act as a contract research organization and, in connection therewith, RDW
and Premier have agreed to take various steps in connection therewith,
including, in the case of Premier, the contribution of certain of the assets and
the business of Premier's contract research organization division (the
"Division").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Plan Of Organization
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1.1 Formation. RDW has formed the Company by filing the Certificate of
Formation in the form attached hereto as Annex I. The membership interests in
the Company are to be held 65% by RDW and 35% by Premier.
1.2 Actions to be Taken at Closing. In reliance on the representations,
warranties and agreements contained herein and subject to the terms and
conditions hereof, at the Closing hereinafter referred to, the parties hereto
shall take the following steps:
(a) RDW and Premier will execute and deliver the operating
agreement for the Company in the form attached hereto as Annex II (the
"Operating Agreement"), pursuant to which the Company shall thereafter operate.
(b) Premier, as a capital contribution to the Company, shall
convey, transfer and deliver to the Company, the following assets and business
of the Division (the "Assets"):
(i) Cash in a minimum amount of $300,000.
(ii) The Division's fixed assets, including its machinery,
equipment, computers and furniture, as described on Schedule 1.2(b) (ii) hereto.
(iii) The Division's CTTS software and other privately
developed proprietary software of the Division, including all current program
listings, source code, object code, computer-coded instructions, flow charts,
and all related specifications, program documentation and technical information
relating thereto, as more fully described on Schedule 1.2(b) (iii) hereto.
(iv) All software not described on Schedule 1.2(b) (iii) which
is used on the computers described on Schedule 1.2(b) (ii) to conduct the
Division's business as presently conducted.
(v) All of the Division's inventories of supplies, as of the
Closing.
(vi) The Division's contracts for research studies, as listed
on Schedule 1.2(b) (vi) hereto, including all prepayments thereunder to the
extent pertaining to unperformed portions of the contract.
(vii) Such of the Division's other leases, licenses and
agreements, listed on Schedule 1.2(b) (vii) hereto, as may be accepted by RDW in
its discretion.
(viii) All prepaid expenses of the Division, as of the Closing.
(ix) All of the Division's books, records, documents, books of
accounts, files and correspondence, except for tax returns and filings.
(x) All of the Division's business, goodwill and other
intangible assets, including without limitation its customer lists, clinical
research associates network and investigator network, and all right, title and
interest in the name "Premier Research" for use as a contract research
organization operating in the pharmaceutical and medical device fields.
The Assets specifically exclude the Division's accounts receivable. In
addition, RDW shall have the right to specifically exclude any of the assets
listed above, which specifically excluded assets shall not be included within
the term "Assets" hereunder.
(c) The Company shall accept the transfer and conveyance of the
Assets and further shall execute and deliver an Assignment and Assumption
Agreement substantially in the form of Annex III hereto (the "Assumption
Agreement"), pursuant to which the Company will assume prospective performance
from and after the Closing Date, in accordance with the terms thereof, of (i)
the contracts for research studies listed on Schedule 1.2 (b) (vi) and (ii) such
of the leases, licenses and agreements listed on Schedule 1.2 (b) (vii) as RDW
accepts (collectively, the "Assumed Agreements"). The parties acknowledge that
certain of the Assumed Agreements may require the consent of the other party
thereto for the assignment thereof hereunder. In the event that such consent is
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not obtained and the Company nevertheless chooses to accept such Assumed
Agreement, Premier shall have no liability to the Company with respect to the
failure to obtain such consent, nor shall Premier have any liability to the
Company in the event that any such Assumed Agreement is terminated, after the
Closing, due to the assignment thereof to the Company hereunder. Except as
specifically provided in the Assumption Agreement, the Company is assuming no
liability or obligation of the Division or of Premier or RDW of any nature
whatsoever (including without limitation any claim(s) against the Division or
Premier by Medco, which claim(s) shall be the responsibility of Premier).
ARTICLE II
The Closing
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The closing of the transactions contemplated by paragraph 1.2 above,
including the transfer of the Assets (the "Closing"), shall be effective as
September 5, 1995. The date of the Closing is referred to in this Agreement as
the Closing Date. This Agreement may be terminated by Premier or RDW (provided
the terminating party is not in default) if the Closing has not occurred by
September 29, 1995.
ARTICLE III
Representation and Warranties of Premier
----------------------------------------
Premier hereby represents, warrants and covenants to RDW and the
Company as of the date hereof and the time of the Closing as follows:
3.1 Seller's Organization, Etc. Premier is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, is duly qualified as a foreign corporation in all jurisdictions
wherein the character of the property owned or leased or the nature of the
business transacted by it makes qualification as a foreign corporation
necessary, and has the corporate power to own its properties and carry on its
business.
3.2 Corporate Authority; Etc. The execution, delivery and performance
by Premier of this Agreement and the Operating Agreement, the Assumption
Agreement, and the instruments described in paragraphs 6.3 below (collectively
with this Agreement, the "Acquisition Documents") have been duly authorized by
all necessary corporate action and will not violate any provision of law or of
Premier's Certificate of Incorporation or By-Laws or other constituent document,
or result in the breach of, or constitute a default under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of
Premier pursuant to, any indenture, agreement or instrument to which Premier is
a party or by which Premier or any of its property may be bound or affected. The
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Acquisition Documents have been or at Closing will be duly executed and
delivered by Premier and constitute or will constitute the legal, valid and
binding obligations of Premier, enforceable in accordance with their respective
terms.
3.3 Financial and Other Data. Premier has delivered to Buyer copies of
the following financial statements (the "Financial Statements") of the Division:
(i) A schedule of assets and liabilities as of July 31, 1995
("Schedule"); and
(ii) Statements of income for the fiscal years ended December 31,
1992, 1993 and 1994 and for the six month period ended June 30, 1995.
Except as noted therein, the Financial Statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated. The above-referenced
Schedule presents fairly in all material respects the assets and liabilities of
the Division as of its date, and the above-referenced statements of income
present fairly in all material respects the results of operations of the
Division for the periods covered thereby. Premier has disclosed and discussed
with RDW the incorrect matching of revenues and expenses which occurred at the
1993 fiscal year end cut-off which overstated operating profit for 1993, and the
operating loss for 1994, by approximately $800,000.
3.4 Litigation, Etc. Except as set forth on Schedule 3.4, there is no
litigation, proceeding or governmental investigation pending or, to the best
knowledge of Premier, threatened against or relating to the Division, its
properties or business, or the transactions contemplated by this Agreement. The
consummation of the transactions contemplated by this Agreement will not require
the consent, approval, authorization or order of any court or governmental
authority and will not result in a violation of any Assumed Agreement. There are
no decrees, injunctions or orders of any court or governmental department or
agency regarding the Division, its properties or business of which Premier has
written notice or actual knowledge.
3.5 Compliance with Laws. To the best of Premier's knowledge: Premier
has complied in all material respects with all federal, state, county, and local
laws, statutes, ordinances, rules, regulations, and orders (collectively, the
"Laws") relating to the Division or the Assets; the operation of Division's
business at its current locations is in conformity in all material respects with
all applicable zoning ordinances and regulations; and Premier has all licenses,
franchises, permits, certificates, authorizations, consents, licenses and
approvals required by law or any governmental authority or agency for (i) the
conduct of the Division's business as presently conducted, and (ii) the
execution, delivery or performance of this Agreement or any instrument
hereunder. Premier has not received notice and has no knowledge that it is in
default or noncompliance in any material respect under any of such permits,
certificates, consents, approvals, authorizations, orders, licenses, franchises
and/or other similar authority. To the best of Premier's knowledge, the
consummation of the transactions herein contemplated including, but not limited
to, the execution, delivery, and consummation of the Acquisition Documents, do
not, and will not, constitute a violation of or default under, conflict with, or
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result in a breach of any judgment, order, award, decree, of any court,
administrative agency or governmental body or Law.
3.6 Assets. Premier has and at Closing will convey, good and marketable
title to all of the Assets, free and clear of all claims, liens, security
interests and encumbrances of any nature whatsoever. The Assets include all
assets used to conduct the Division's business as presently conducted. The
machinery, computers and equipment described in Schedule 1.2(b) (ii) will be
conveyed in "AS IS" condition without representation or warranty of any kind
except as to title.
3.7 Assumed Agreements. Except as indicated on Schedule 3.7, no consent
or other action is necessary in order to assign the Assumed Agreements to the
Company. Except as indicated on said Schedule, each of the Assumed Agreement is
in full force and effect, there is no default or event which with notice or
lapse of time or both would constitute a default under any Assumed Agreement,
all sums owing or to be owing thereunder by Premier with respect to the period
prior to the Closing have been or prior to Closing shall be paid and satisfied
in full, there have been no prepayments by the other party thereto, and, to the
best of Premier's knowledge, there is no obligation of Premier giving rise to
any right of set-off under any Assumed Agreement.
3.8 Liabilities. Other than trade payables incurred by the Division in
the ordinary course of business after the date of the Balance Sheet, the
Division has no liabilities or obligations (whether accrued, absolute,
contingent or otherwise) of any nature whatsoever which are not reflected on the
Balance Sheet.
3.9 No Adverse Change. Since June 30, 1995 there has been no material
adverse change in the business, assets, liabilities or financial condition of
the Division, nor has there been any conducting of the Division's business other
than in the ordinary course.
3.10 Schedules. The following Schedules which are attached hereto
contain accurate lists and summary descriptions of the following:
SCHEDULE 1.2(b) (ii) : All machinery, equipment, computers and
furniture used in the Division's business as presently conducted, including
serial number (if applicable) and location.
SCHEDULE 1.2(b) (iii): All privately developed software used in
the Division's business as presently conducted.
SCHEDULE 1.2(b) (vi): All of the Division's contracts for research
studies, setting forth the amount of prepayments under each such contract to the
extent pertaining to unperformed portions of the contract.
SCHEDULE 1.2(b) (vii): All of the Division's other leases,
licenses and agreements.
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SCHEDULE 3.10(i): All of Premier's employee profit-sharing,
incentive, deferred compensation, welfare, pension, retirement, group insurance
and other employee benefit plans, arrangements and practices (including all
trust agreements and the most recent determination letters of the United States
Internal Revenue Service relating to such plans), relating to the Division or
its employees, if any ("Employee Benefit Plans").
SCHEDULE 3.10(ii): The names and current annual rates of
compensation of all the employees and agents of the Division, together with a
summary (containing estimates to the extent necessary) of (i) existing bonuses,
additional compensation (whether current or deferred) and other like benefits,
if any paid to such persons in the two prior fiscal years or subsequent thereto,
and (ii) any other payments made by or on behalf of the Division to any labor
organization or representative, employee, or agent of any labor organization in
the prior fiscal year or subsequent thereto.
Accurate and complete copies of the leases, agreements, contracts,
commitments, plans, arrangements and other documents referred to in the
foregoing Schedules have been delivered by Premier to RDW.
3.11 Labor Contracts. Premier is not and has never been a party to or
bound by a labor contract or collective bargaining agreement.
3.12 Tax Matters. Premier has duly and timely filed with the
appropriate governmental agencies (federal, state and local) all tax and other
returns required to be filed by it, all of which, to the best of Premier's
knowledge, have been accurately prepared. To the best of Premier's knowledge,
all federal, state, local and foreign taxes, assessments, interest, and
penalties, and all other sums owed to any other governmental authority or
agency, whether federal, foreign, state or local (collectively, "Taxes"), due,
owing and payable, or which may be due, owing and payable, have been fully paid
or duly provided for in the Financial Statements. No claim for Taxes due is
being contested by Premier. Premier has received no notice from the Internal
Revenue Service ("IRS"), the Illinois Department of Revenue or any other taxing
authority of any deficiency or other adjustment which has not been satisfied,
and Premier has no knowledge that such a notice may be sent. In no event shall
the Company have any liability or obligation with respect to the Taxes owed or
to be owing by Premier, including Taxes related to the Division or its
operations or properties.
3.13 Employee Agreements. (i) Except as indicated in Schedule 3.13,
Premier has no employment agreements, arrangements, contracts, or
understandings, whether written or oral, with any employee, labor organization,
representative of any labor organization relating to the Division's employees.
To the best of Premier's knowledge, Premier has not violated any laws,
regulations, orders or contract terms, affecting the collective bargaining
rights of employees, equal opportunity in employment, or employee's health,
safety, wages and hours.
(ii) There are no labor disputes existing, or to the best of
Premier's knowledge, threatened, involving strikes, slowdowns, work stoppages,
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job actions or lockouts of any employees of the Division. There are no unfair
labor practices or petitions for election pending before the National Labor
Relations Board or any other federal or state labor commission relating to the
employees of the Division. No demand for recognition heretofore made by any
labor organization is pending with respect to the Division.
3.14 Employee Benefit Plans. Premier is not and has not been a party to
any multi-employer retirement plan. No Employee Benefit Plan is in material
violation of any of the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and no prohibited transaction within the
meaning of Title I or Title II of ERISA has occurred and is continuing with
respect to any such plan. With respect to each Employee Benefit Plan: (i) the
minimum funding standards have been met for each year in which Section 302 of
ERISA or Section 412 of the Internal Revenue Code of 1986, as amended (the
"Code"), were applicable, and no waiver of the minimum funding standards has
been requested for any such year, (ii) no events have occurred which are
required to be reported to the Pension Benefit Guaranty Corporation ("PBGC")
under Section 4043(b) of ERISA, (iii) all premiums required to be paid to the
PBGC have been paid, (iv) there is no unfunded liability, (v) such plans as are
intended to be qualified under Section 401(a) of the Code have received
favorable determination letters from the Internal Revenue Service with respect
to such qualified status and at all times have been operated in a manner
consistent therewith, and (vi) all report forms or other information required to
be filed with any government agency or to be delivered to any plan participant
or beneficiary have been filed, distributed or made available.
3.15 Intellectual Property. (i) Premier owns or has the right to use
all the trademarks, trade names, and proprietary rights utilized in the
operations of the Division, without any obligation or liability for royalties,
fees, or other compensation to any owner, licensor, or other claim to any of the
foregoing, and, to the best of Premier's knowledge, without conflict with or
infringement upon any right or claimed right of any other person.
(ii) There have been no claims made against Premier or the Division
for assertion of the invalidity, abuse, misuse or unenforceability of any of its
or any third party's patents, trademarks, trade names, copyrights or other
proprietary rights.
(iii) Premier owns and has the unrestricted right to use all of the
Division's proprietary rights free and clear of any right, lien, encumbrance,
charge, or claim of any other person or entity.
(iv) No patents, copyrights, trade secrets, or other proprietary
information are used in the Division's business as presently conducted.
3.16 Environmental Laws and Hazardous Substances; Etc. The operation
and use of the Assets conform in all material respects to all applicable laws,
ordinances, regulations, permits, licenses and certificates relating to
environmental protection or employee health and safety. Premier has not received
any request for information, notice of claim, demand or other notification that
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it is or may be potentially responsible with respect to any investigation or
clean-up of any threatened or actual release of any hazardous substance in
connection with the conduct of the Division's business. Premier has not stored,
deposited, disposed, treated, recycled or transported any hazardous substance
arising from the conduct of the Division's business or, to its knowledge,
arranged for the transportation of such substances to any location which is
listed or proposed for listing under the Resource Conservation and Recovery Act,
as amended ("CERCLA") or the United States Resource Conservation and Recovery
Act, as amended ("RCRA") or on any similar state list, or which is the subject
of federal, state or local enforcement action or other investigations which may
lead to claims against Premier, the Division or the Company for clean-up costs,
remedial work, damages to natural resources or for personal injury claims
including, but not limited to, claims under CERCLA. For the purpose of this
paragraph, a "hazardous substance" shall mean the term as defined in RCRA or
CERCLA, and the regulations pursuant thereto, and dangerous, toxic or hazardous
substances or similar terms under any other state, federal or local law, and any
other applicable environmental, land use or similar act, statute, ordinance or
regulation or as alleged or determined at common law.
3.17 Disclosure. No representation or warranty of Premier made in this
Agreement or as provided herein contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading.
ARTICLE IV
Representations and Warranties ▇▇ ▇▇▇
-------------------------------------
▇▇▇ hereby represents and warrants to Premier as of the date hereof and
the time of the Closing as follows:
4.1 Organization. RDW is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, is duly qualified
as a foreign corporation in all jurisdictions wherein the character of the
property owned or leased or the nature of the business transacted by it makes
qualification as a foreign corporation necessary, except for such failures to be
so qualified which do not, individually or in the aggregate, have a material
adverse effect upon RDW or its assets or financial condition, and has the
corporate power to own its properties and carry on its business.
(b) Corporate Authority, Etc. All requisite corporate action has
been taken to authorize the execution, delivery and performance of this
Agreement and the Operating Agreement by RDW. Such documents have been or at
Closing will be duly executed and delivered by RDW and constitute or will
constitute the legal, valid and binding obligations of RDW, enforceable in
accordance with their respective terms.
(c) Consents, Etc. The consummation of the transactions
contemplated by this Agreement will not (i) require the consent, approval,
authorization or order of any court or governmental authority, or (ii)
constitute a violation of or default under, conflict with, or result in a breach
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of (A) any judgment, order, award, decree, of any court, administrative agency
or governmental body or laws to which RDW is subject, or (B) any agreement or
instrument to which RDW is a party or by which it is bound. There are no
decrees, injunctions or orders of any court or governmental department or agency
affecting RDW's ability to consummate the transactions contemplated hereunder.
(d) Organization of the Company; Etc. The Company is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware which will be, upon the execution and delivery of
the Operating Agreement as contemplated hereby, duly organized. Upon the
execution and delivery of the Assumption Agreement by the Company as
contemplated hereby, such document will constitute the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms. The Company
is newly-formed, has not conducted business, and has no debts, liabilities or
obligations, except for non-material amounts arising in the organizational
process.
4.2 Litigation. There is no litigation, proceeding or governmental
investigation pending or, to the best knowledge of RDW, threatened against RDW
which could have a material adverse effect on RDW.
4.3 Compliance with Laws. To the best of RDW's knowledge: RDW has
complied in all material respects with all laws relating to its business, and
the consummation of the transactions herein contemplated including, but not
limited to, the execution, delivery and consummation of the Acquisition
Documents, do not, and will not, constitute a violation of or default under,
conflict with, or result in a breach of any judgment, order, award, decree, of
any court, administrative agency or governmental body or Law.
4.4 Tax Matters. RDW has duly and timely filed with the appropriate
governmental agencies (federal, state and local) all tax and other returns
required to be filed by it, all of which, to the best of RDW's knowledge, have
been accurately prepared. To the best of RDW's knowledge, all Taxes due, owing
and payable, have been fully paid or duly provided for. No claim for Taxes due
is being contested by RDW. RDW has received no notice from the IRS or any other
taxing authority of any deficiency or other adjustment which has not been
satisfied, and RDW has no knowledge that such a notice may be sent.
4.5. Disclosure. No representation or warranty of RDW made in this
Agreement or as provided herein contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading.
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ARTICLE V
Conditions Precedent to Premier's Obligation
--------------------------------------------
The obligations of Premier at the Closing shall be subject to the
satisfaction of the following conditions precedent at Closing (each of which may
be waived by Premier):
5.1 Representations. All representations and warranties of RDW
contained herein shall be true and correct on the Closing Date as if made on
such date; all agreements of RDW contained herein shall have been complied with;
and Premier shall have received a certification of RDW, dated the Closing Date
and executed by RDW's President or Vice President, to each such effect.
5.2 Operating Agreement. The Operating Agreement shall have been
executed and delivered by Premier and RDW.
5.3 Assumption Agreement. The Company shall execute and deliver to
Premier the Assumption Agreement.
5.4 Opinion of Counsel. RDW shall have delivered to Premier an opinion,
dated the Closing Date, of its counsel, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, to the effect that:
(i) RDW is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the corporate
power to carry on its business as it is then being conducted.
(ii) The execution, delivery and performance by RDW of this
Agreement and the Operating Agreement have been duly authorized and approved by
all requisite action and such documents have been duly executed and delivered by
RDW and each constitutes the valid and binding obligation of RDW enforceable in
accordance with its terms.
(iii) The Company is a limited liability company duly organized,
validly existing and in goodstanding under the laws of the State of Delaware,
and has the power to carry on its contemplated business.
(iv) The execution, delivery and performance by the Company of the
Assumption Agreement has been duly authorized and approved by all requisite
action and such document has been duly executed and delivered by the Company and
constitutes the valid and binding obligation of the Company enforceable in
accordance with its terms.
ARTICLE VI
Conditions Precedent to RDW's and the Company's Obligations
-----------------------------------------------------------
The obligations of RDW and the Company at the Closing shall be subject
to the satisfaction of the following conditions precedent at Closing (each of
which may be waived by RDW):
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6.1 Representations. All representations and warranties of Premier
contained herein shall be true and correct on the Closing Date as if made on
such date; all agreements of Premier contained herein shall have been complied
with; and RDW shall receive a certification, dated the Closing Date, of Premier,
executed by Premier's President or Vice President, to each such effect.
6.2 Operating Agreement. The Operating Agreement shall have been
executed and delivered by RDW and Premier.
6.3 Instruments of Conveyance and Transfer. The Company shall receive
from Premier such deeds, bills of sale, endorsements, assignments, and other
good and sufficient instruments of conveyance and transfer as are effective to
transfer to the Company Premier's title to the Assets as provided in this
Agreement and, simultaneously with such delivery, Premier shall take or cause to
be taken all such other steps as are requisite to put in actual possession and
operating control of the Assets.
6.4 UCC Searches. Premier shall have delivered to RDW certified copies
of Requests for Information (Form UCC-11) or equivalent reports from all
appropriate offices, listing all effective financing statements which name
Premier (under its present name, any trade names of Premier (including the
Division's name) and any previous names) as debtor, together with copies of such
financing statements, none of which shall cover any of the Assets to be
transferred hereunder.
6.5 Payment. The Company shall have received from Premier, by wire
transfer, an amount of cash equal to the sum of (a) the amount to be paid
pursuant to paragraph 1.2(b)(i), plus (b) the sum of all prepayments under the
Division's contracts for research studies to the extent pertaining to
unperformed portions of the contract.
6.6 Due Diligence Investigations. The results of the due diligence
investigations referred to in paragraph 9.7 below shall have been satisfactory
to RDW in its reasonable discretion.
6.7 Opinion of Counsel. Premier shall have delivered to RDW an opinion,
dated the Closing Date, of its counsel, Green, Stewart & ▇▇▇▇▇▇, P.C., to the
effect that:
(i) Premier is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the corporate
power to carry on its business as it is then being conducted.
(ii) The execution, delivery and performance by Premier of the
Acquisition Documents have been duly authorized and approved by all requisite
action, and such Acquisition Documents have been duly executed and delivered by
Premier and each constitutes the valid and binding obligation of Premier
enforceable in accordance with its terms.
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(iii) The execution, delivery and performance by Premier of each of
the Acquisition Documents will not (a) result in a breach of any provision of
the Certificate of Incorporation or by-laws of Premier, (b) conflict with or
result in a breach of any order of any court or governmental agency, or (c) to
such counsel's knowledge, without independent investigation, result in a breach
of or constitute a default under any contract, instrument or agreement to which
Premier is a party (including without limitation the Assumed Agreements) or by
which any of its properties or assets are bound.
(iv) To such counsel's knowledge, Premier is not engaged in or
involved with any pending or threatened litigation, or administrative proceeding
(a) which relates to the execution, delivery or performance of the Acquisition
Documents, or (b) which would, if adversely determined, cause any material
adverse change in the property, financial condition or business operations of
the Division.
ARTICLE VII
Mandatory Conversion of Membership Interest
-------------------------------------------
7.1 Anything in this Agreement or the Certificate of Formation or
Operating Agreement of the Company to the contrary notwithstanding, the
membership interest in the Company issued to Premier at the Closing (whether
then owned by Premier or some other party) shall automatically, and without any
further action, be converted into the right to receive shares of the common
stock of RDW, in the amount specified in paragraph 7.2 below, upon and at the
time of an IPO or a Sale of RDW, as defined in paragraph 7.3 below. Such
conversion shall be effective simultaneously with the closing of the IPO or
Sale, as applicable. Upon such conversion, the entire interest of Premier, or
its successors-in-interest, in the Company, including their respective
membership interests therein, shall terminate and be converted solely into the
right to receive the common stock of RDW, as specified herein.
7.2 Upon a mandatory conversion as described in paragraph 7.1, Premier
and/or its successors-in-interest shall receive a number of shares (rounded to
the nearest whole number) equal to the percentage, as indicated in the next
sentence, of the number of issued and outstanding shares of the common stock of
RDW immediately preceding the closing of the IPO or Sale, as applicable. The
percentage referred to in the preceding sentence shall equal 7.5%, plus
one-tenth of one percent (0.1%) per every $100,000 of contracts, or letter of
intent for contracts, obtained by the Company on or before December 31, 1995
from the businesses listed on Schedule 7.2, up to but not exceeding 10% in the
aggregate.
7.3 The following terms, when utilized herein, have the indicated
meanings:
"IPO" means the first sale by RDW of shares of its common stock in
an underwritten, registered public offering.
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"Sale" means any of the following events: (i) a sale of
substantially all the assets of RDW, other than to any corporation or limited
liability company (a "related corporation") the majority of whose voting capital
stock is owned by one or more of UM Holdings, Ltd. or its subsidiaries
(collectively, "UM"), ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, or any corporation or limited
liability company controlled by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and/or ▇▇▇▇ ▇▇▇▇▇▇ and/or the
estate of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇; or (ii) a sale or transfer of the
capital stock of the Company (other than in the IPO) resulting in a majority of
the voting capital stock of RDW being owned by other than one or more of UM,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, the estate of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇ or a
related corporation; or (iii) a merger or consolidation involving RDW having the
same effect as a sale or transfer of stock as described in clause (ii).
ARTICLE VIII
Covenants with Respect to the Operations of the Company, Etc.
-------------------------------------------------------------
The parties covenant and agree with each other as follows with respect
to the on-going operations and affairs of the Company:
8.1 Financial Statements. Etc. RDW covenants that (i) it will provide
to Premier (x) within 120 days after the end of each fiscal year, annual
financial statements for the Company and (y) within 30 days after each month,
monthly financial statements for the Company; and (ii) it will invite Premier to
attend all management meetings of the Company, which will be held not less
frequently than quarterly.
8.2 Investigator Sites. RDW agrees that the Company will provide to
Premier advance notice with respect to its studies, which notice shall set forth
a deadline for response consistent with the requirements for such study and the
material terms of such study. In the event that a Premier affiliated hospital is
qualified and meets the needs of such study, can work within the budget for such
study, and can respond within the time frame for such study, such Premier
affiliated hospital shall be utilized as the investigation site in connection
therewith.
8.3 Access to Certain Information. The Company will be provided access
to existing information concerning Premier's pharmaceutical contacts and
information from Premier's databases with respect to Premier's affiliated
hospitals' patients and physicians for use in connection with its studies. The
Company will enter into any customary form of confidentiality agreement in
connection therewith as may be reasonably specified by Premier.
8.4 Working Capital Requirements. RDW agrees to fund the working
capital requirements of the Company during the three year period following the
Closing, as reasonably determined by RDW. Such funding may be by means of
capital contributions to the Company, by loans which will be upon commercially
reasonable terms, or a combination of both, in the discretion of RDW. This
funding by RDW shall not affect the number of limited liability units of the
Company held by Premier and RDW.
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8.5 Sublease of Space. From and after the Closing until January 1,
1996, the Company shall have the right to utilize, without payment of rent or
other charge, the Division's existing space located at Three ▇▇▇▇▇▇▇▇▇ Corporate
Center, Westchester, IL and the equipment and systems located thereat. The
Company will utilize such space, systems and equipment in such a manner so as
not to cause undue confusion or burden upon the other activities of Premier
presently conducted at this facility. The Company shall utilize the same care in
the use of such space, systems and equipment as it utilizes with respect to its
own space, systems and equipment. The Company shall be responsible for any harm
or damage done during such period solely to the extent that the same is (i)
caused as a result of its negligence or willful misconduct and (ii) is not
covered by insurance. Included within such sublease, at no cost to the Company,
shall be utilities, repair and maintenance, depreciation and insurance. Company
will be responsible for direct costs of telephone, postage and office supplies;
however, the Company shall not be responsible for any general allocation for
such items. If the Company does not utilize or vacates such space, the Company
shall have the right to leave at the space any or all of the fixed assets
described in Schedule 1.2(b) (ii) at no cost to the Company.
8.6 Cash Management System. The Company shall be permitted to
participate in the cash management program of RDW's parent, without charge. All
cash placed through this system, until returned to the Company, will constitute
a receivable to the Company, unless designated a cash flow distribution, in
which case Premier shall receive a pro rata (based upon its relative interest in
the Company) cash flow distribution.
8.7 UM Corporate Allocation Fee. Notwithstanding any contrary provision
contained herein or in the Operating Agreement, RDW's parent, UM Holdings, Ltd.,
shall have the right to receive a management fee, which shall be equal to 10% of
the Company's earnings before interest, taxes, depreciation and amortization, as
indicated on its annual financial statements.
8.8 Certain Services. Premier agrees to provide services to the Company
in the area of publicity and communications consulting, preparation of data base
reports, and set-up services for the computer networks and telecommunications
networks at the Company's offices. These services, together with ongoing access
to Premier's staff and resources, will be available to the Company on a no-cost
basis, as mutually agreed from time to time by the parties.
ARTICLE IX
Further Agreements
------------------
The parties further agree as follows:
9.1 Further Assurances. Premier, the Company and RDW each agree that it
will, upon request of the other at any time after the Closing Date and without
further consideration, execute and deliver such other documents and instruments
14
and take such other action as may reasonably be requested to carry out more
effectively the purpose and intent of this Agreement. Premier agrees that it
will provide any consents requested by the Company and/or RDW for the Company
and/or RDW to use, or register as a trademark/service ▇▇▇▇, the name "Premier
Research" in the pharmaceutical and medical device fields.
9.2 Waiver of Bulk Sales Law. The parties hereto hereby waive
compliance with the Bulk Sales Law of any state in connection with the sale and
purchase hereunder.
9.3 Conduct of Division's Business. Pending the Closing, Premier shall
not permit:
(i) any conduct of the Division's business other than in the
ordinary course;
(ii) any increase in the compensation payable or to become payable
to any of the Division's employees or agents or any bonus, incentive
compensation, service award or other like benefit, granted, made or accrued,
contingently or otherwise, to or to the credit of any thereof, or any employee
welfare, pension, retirement, profit-sharing or similar payment or arrangement
or union or collective bargaining agreement made or agreed to by Premier
pertaining to the Division's employees;
(iii) any borrowing or lending of money by Premier relating to the
Assets or the Division;
(iv) any capital expenditure, or incurring of liability therefor,
by the Division, other than in the ordinary course; or
(v) any material failure on the part of the Division to use its
best efforts to preserve its business organization intact, to keep available the
services of its present officers and employees, and to preserve for the Company
the business and the goodwill of its suppliers, customers, referring sources and
others having business relations with it.
9.4 Transition. Premier agrees to take any reasonable action requested
by RDW in order to promote the smooth transition of the Division's business to
the Company, including without limitation the transfer to the Company of the
Division's business and operating procedures, and know-how used in the
Division's business as presently conducted.
9.5 Books and Records. Premier acknowledges that included within the
Assets are all the books, records and files (including records stored in
computers) relating to the Division and its business, other than tax returns and
filings and portions of records that do not relate to the Division and its
business. All thereof shall be delivered to the Company at Closing. At
reasonable times and upon reasonable notice (i) the Company will make available
for inspection by Premier all books and records of the Division transferred to
it hereunder and (ii) Premier shall make available for inspection by RDW or the
Company all other books and records of Premier relating to the business to be
transferred hereunder and reasonably required by RDW or the Company.
15
9.6 Employees. The Company shall have the right, but not the
obligation, to offer to employ any and all of the Division's employees. Premier
acknowledges that, while no definitive decision has been made at the date of
this Agreement, RDW reserves the right to move the Company's operations from
Chicago.
9.7 Investigations by RDW. RDW may prior to the Closing Date, through
its employees, agents and representatives, make or cause to be made such
investigations during normal and reasonable business hours as it deems necessary
or advisable of the properties, assets, businesses, books and records of the
Division. In such regard, Premier shall permit RDW and its employees, agents and
representatives to have full access to the premises of the Division and all
books and records of the Division, and Premier shall furnish to RDW such
financial, operating and technical data and other information as RDW shall from
time to time reasonably request.
9.8 Investigations by Premier. Premier may, prior to the Closing Date,
through its employees, agents and representatives, make or cause to be made such
investigations during normal and reasonable business hours as it deems necessary
or advisable of the properties, assets, businesses, books and records of RDW, to
the extent relevant to this transaction.
9.9 Right of Offset. The right of Premier to receive payments or
distributions as a member of the Company or otherwise under this Agreement or
the Operating Agreement is subject to any and all defenses of RDW or the Company
based upon, or arising out of, breach of any representation, warranty, covenant
or indemnity obligation for which Premier shall be liable to RDW or the Company,
and RDW or the Company or both may, after giving Premier written notice and a
ten (10) day opportunity to cure, elect to offset against the payment (or, to
the extent necessary, payments) next due hereunder or thereunder amounts for
which Premier is so liable. Acceptance by Premier of any payments so reduced by
offset shall not be deemed an accord, compromise or waiver of rights, including
a waiver of right to dispute the offset, and failure by RDW or the Company to
utilize the offset mechanism shall not be deemed a relinquishment, forgiveness,
waiver, bar or defense in respect of any claim or right (including the
continuing right to offset) of RDW and the Company. In the event of any suit or
other legal proceeding arising out of a contest to an offset under this Section,
the prevailing party shall be entitled to recover from the other party upon a
final judgment on the merits (i) reasonable attorneys' fees, expenses, and costs
incurred in such suit or other legal proceeding and (ii) if Premier is the
prevailing party, interest on the offset as determined by the Court.
ARTICLE X
Indemnification
---------------
10.1 Premier agrees to indemnify, defend and hold harmless RDW and the
Company from and against any loss, costs, damages, or expense (including
reasonable attorneys' fees) arising from or relating to:
16
(i) Any and all liabilities or obligations of Premier, including
without limitation, liabilities, obligations and claims arising from any matter
related to the Division occurring before the Closing Date (including claims
relating to acts or omissions of the Division or its employees or agent prior to
the Closing, whether such claims are made prior to or after the Closing Date and
including without limitation any claim(s) by Medco), unless such liability or
obligation is specifically assumed by the Company pursuant to the terms of the
Assumption Agreement;
(ii) Any and all damage or deficiency resulting from any
misrepresentation, omission, breach of warranty or non-fulfillment of any
covenant or agreement on the part of Premier under this Agreement or any
certificate, schedule, exhibit, ▇▇▇▇ of sale, assignment, agreement not to
compete, lease or other agreement furnished or to be furnished by Premier under
this Agreement or any document executed in connection herewith; and
(iii) Any and all actions, suits, proceedings, demands,
assessments, judgments, costs and expense, including reasonable attorneys' fees,
incident to any of the foregoing.
10.2 RDW agrees to indemnify, defend and hold harmless Premier and the
Company from and against any loss, cost, damage or expense (including reasonable
attorney's fees) arising from or relating to any misrepresentation, omission,
breach of warranty or non-fulfillment of any covenant or agreement made by RDW
herein or any document delivered hereunder. RDW also agrees to indemnify, defend
and hold harmless Premier from and against any loss, cost, damage or expense
(including reasonable attorneys' fees) arising from or relating to any liability
or obligation expressly assumed by the Company under the Assumption Agreement.
10.3 The Company agrees to indemnify, defend and hold harmless Premier
from and against any loss, cost, damage or expense (including reasonable
attorneys' fees) arising from or relating to any liability or obligation
expressly assumed by the Company under the Assumption Agreement.
10.4 Any claim for indemnity under this Article X shall be made by
written notice to the indemnifying party specifying in reasonable detail the
basis of the claim. The indemnified party agrees to give prompt written notice
to the indemnifying party of any claim by a third party against the indemnified
party which might give rise to a claim against the indemnifying party under this
Article X, stating the nature and basis of such claim and, if ascertainable, the
amount thereof. In connection with any such third party claim, the indemnifying
party may, at its election and expense, assume the defense of such third party
claim, provided that the indemnifying party shall have acknowledged in writing
its obligation to indemnify in respect of such third party claim. If the
indemnifying party shall not have elected to so assume the defense of such third
party claim, it shall have the right to participate in the defense of such third
party claim and no such third party claim shall be settled without the consent
of the indemnifying party, provided that the indemnifying party shall have
acknowledged in writing its obligation to indemnify in respect of such third
party claim.
17
ARTICLE XI
Miscellaneous
-------------
11.1 Expenses. RDW, Premier and the Company each agrees to pay its own
costs and expenses in connection with the transactions contemplated by this
Agreement, including without limitation legal and accounting expenses. Premier
will be responsible for any sales, transfer or similar taxes which may arise due
to the transfer of the Assets as contemplated hereby. Premier has an obligation
under a separate agreement to pay a broker in connection with this transaction.
Premier will pay such broker and will indemnify, defend and hold RDW and the
Company harmless for any loss, cost, damage, or expense (including reasonable
attorneys' fees) arising from any claim by such broker. RDW and Premier each
represents and warrants to the other that it has not dealt with any third party
in such manner as to cause the other party or the Company to be liable in any
respect of any broker's or finder's commissions.
11.2 Survival. Notwithstanding any presumption to the contrary, all
representations, covenants, warranties and agreements contained in this
Agreement shall survive the Closing.
11.3 Law; Benefit. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Pennsylvania. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
11.4 Notices. Any notice, request, demand, consent, approval, or other
communication required or permitted under this Agreement will be written and
will be deemed to have been given (i) when personally delivered or sent by
telecopy, or (ii) on the next day after delivery to a nationally-recognized
express delivery service with instructions for overnight delivery; or (iii) on
the third day after it is deposited in any depository regularly maintained by
the United States postal service, postage prepaid, certified or registered mail,
return receipt requested, addressed to the following address or to such other
address as the party to be notified shall have specified to the other party in
accordance with this paragraph:
If to RDW or the Company:
Research Data Worldwide
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
With required copies to:
UM Holdings, Ltd.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Vice President
Chief Financial Officer
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
18
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
A Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
If to Premier:
Premier Health Alliance, Inc.
Three ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
With a required copy to:
Green, Stewart & ▇▇▇▇▇▇, P.C.
Three ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇.
11.5 Entire Agreement; Etc. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements or understandings of the parties with respect
thereto. This Agreement may be amended or supplemented solely by a writing
executed by the parties hereto.
11.6 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement.
11.7 Headings. The headings preceding the text of this Agreement are
inserted solely for convenience of reference and shall not constitute a part of
this Agreement nor affect its meaning, construction or effect.
11.8 The Company to be Bound: Upon the organization of the Company, the
Company shall automatically become bound by the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
RESEARCH DATA WORLDWIDE, LTD.
By: ________________________________
PREMIER HEALTH ALLIANCE, INC.
By: ________________________________
CONTRACT RESEARCH WORLDWIDE, L.L.C.
By: Research Data Worldwide, Ltd.,
Manager
By: ______________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President
20
