Exhibit 10 (v)
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ASSET PURCHASE AGREEMENT
Among
COLLABORATIVE CLINICAL RESEARCH, INC.,
GFI PHARMACEUTICAL SERVICES, INC., and
COLLABORATIVE HOLDINGS, INC.
and
THE WEST COMPANY, INCORPORATED
DATED: December 21, 1998
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TABLE OF CONTENTS
Page No.
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS; GENERAL PROVISIONS. . . . . . . . . . . . . 1
1.2 General Provisions; Incorporation of Recitals. . . 10
2. PURCHASE AND SALE OF ASSETS; CLOSING . . . . . . . . . . 11
2.1 Acquired Assets . . . . . . . . . . . . . . . . . 11
2.2 Assumption of Liabilities; Excluded Liabilities . 11
2.3 Purchase Price Amount; Estimated Purchase Price . 11
2.4 Final Closing Date Balance Sheet . . . . . . . . . 12
2.5 Purchase Price Adjustment for
Uncollected Receivables . . . . . . . . . . . . . 14
2.6 Closing Deliveries . . . . . . . . . . . . . . . . 15
2.7 Closing . . . . . . . . . . . . . . . . . . . . . 16
2.8 Allocation of the Purchase Price . . . . . . . . . 16
3. REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . 17
3.1 Organization and Good Standing . . . . . . . . . . 17
3.2 Authority; No Conflict . . . . . . . . . . . . . . 17
3.3 Financial Statements; Accounts Receivable . . . . 18
3.4 Books and Records . . . . . . . . . . . . . . . . 19
3.5 Title To Assets; Encumbrances . . . . . . . . . . 19
3.6 Condition and Sufficiency of Assets . . . . . . . 20
3.7 No Undisclosed Liabilities . . . . . . . . . . . . 21
3.8 Taxes . . . . . . . . . . . . . . . . . . . . . . 21
3.9 No Material Adverse Change . . . . . . . . . . . . 22
3.10 Employee Benefits . . . . . . . . . . . . . . . . 22
3.11 Compliance With Legal Requirements; Governmental
Authorizations . .. . . . . . . . . . . . . . . . 22
3.12 Legal Proceedings; Orders . . . . . . . . . . . . 23
3.13 Absence of Certain Changes and Events . . . . . . 24
3.14 Contracts; No Defaults . . . . . . . . . . . . . . 25
3.15 Insurance . . . . . . . . . . . . . . . . . . . . 27
3.16 Environmental Matters . . . . . . . . . . . . . . 28
3.17 Employees . . . . . . . . . . . . . . . . . . . . 30
3.18 Labor Disputes; Compliance . . . . . . . . . . . . 30
3.19 Intellectual Property . . . . . . . . . . . . . . 30
3.20 Relationships With Related Persons . . . . . . . . 31
3.21 Brokers or Finders . . . . . . . . . . . . . . . . 31
3.22 Disclosure . . . . . . . . . . . . . . . . . . . . 32
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . 32
4.1 Organization and Good Standing . . . . . . . . . . 32
4.2 Authority; No Conflict . . . . . . . . . . . . . . 32
4.3 Certain Proceedings . . . . . . . . . . . . . . . 33
4.4 Brokers or Finders . . . . . . . . . . . . . . . . 33
5. COVENANTS OF SELLERS PRIOR TO AND FOLLOWING CLOSING DATE 33
5.1 Access and Investigation . . . . . . . . . . . . . 33
5.2 Operation of the Clinical Business of Sellers. . 33
5.3 Negative Covenant . . . . . . . . . . . . . . . . 34
5.4 Required Approvals . . . . . . . . . . . . . . . . 34
5.5 Notification . . . . . . . . . . . . . . . . . . . 34
5.6 No Negotiation . . . . . . . . . . . . . . . . . . 35
5.7 Best Efforts . . . . . . . . . . . . . . . . . . . 36
5.8 HSR Act Filing . . . . . . . . . . . . . . . . . . 36
5.9 Labor Matters . . . . . . . . . . . . . . . . . . 36
5.10 Subsequent Financial Statements . . . . . . . . . 37
5.11 Excluded Liabilities . . . . . . . . . . . . . . . 37
5.12 Voting of Shares . . . . . . . . . . . . . . . . . 38
5.13 Collaborative Shareholder Approvals . . . . . . . 38
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE . . . . . . . . 38
6.1 Approvals of Governmental Bodies . . . . . . . . . 38
6.2 Best Efforts . . . . . . . . . . . . . . . . . . . 38
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE . . 38
7.1 Accuracy of Representations . . . . . . . . . . . 39
7.2 Sellers' Performance . . . . . . . . . . . . . . . 39
7.3 Consents . . . . . . . . . . . . . . . . . . . . . 39
7.4 Additional Documents . . . . . . . . . . . . . . . 39
7.5 No Proceedings . . . . . . . . . . . . . . . . . . 39
7.6 No Prohibition . . . . . . . . . . . . . . . . . . 40
7.7 HSR Act . . . . . . . . . . . . . . . . . . . . . 40
7.8 Bulk Sales . . . . . . . . . . . . . . . . . . . . 40
7.9 No Material Adverse Change . . . . . . . . . . . . 40
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE . . 40
8.1 Accuracy of Representations . . . . . . . . . . . 41
8.2 Buyer's Performance . . . . . . . . . . . . . . . 41
8.3 Consents . . . . . . . . . . . . . . . . . . . . . 41
8.4 Additional Documents . . . . . . . . . . . . . . . 41
8.5 Shareholder Approval . . . . . . . . . . . . . . . 41
8.6 No Injunction . . . . . . . . . . . . . . . . . . 42
9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . 42
9.1 Termination Events . . . . . . . . . . . . . . . . 42
9.2 Effect of Termination . . . . . . . . . . . . . . 43
9.3 Termination Fee; Expense Fee . . . . . . . . . . . 43
10. INDEMNIFICATION; REMEDIES . . . . . . . . . . . . . . . 43
10.1 Survival . . . . . . . . . . . . . . . . . . . . . 43
10.2 Indemnification and Reimbursement by Sellers . . . 43
10.3 Indemnification and Reimbursement by Buyer . . . . 44
10.4 Procedure for Indemnification - Third Party Claims 45
10.5 Limitation of Claims . . . . . . . . . . . . . . . 46
11. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . 47
11.1 Expenses . . . . . . . . . . . . . . . . . . . . . 47
11.2 Public Announcements . . . . . . . . . . . . . . . 47
11.3 Confidentiality . . . . . . . . . . . . . . . . . 47
11.4 Notices . . . . . . . . . . . . . . . . . . . . . 47
11.5 Jurisdiction; Service of Process . . . . . . . . . 48
11.6 Further Assurances . . . . . . . . . . . . . . . . 49
11.7 Waiver . . . . . . . . . . . . . . . . . . . . . . 49
11.8 Entire Agreement and Modification . . . . . . . . 49
11.9 Schedules . . . . . . . . . . . . . . . . . . . . 49
11.10 Assignments, Successors, and No Third-Party Rights 49
11.11 Severability . . . . . . . . . . . . . . . . . . . 50
11.12 Section Headings . . . . . . . . . . . . . . . . . 50
11.13 Time of Essence . . . . . . . . . . . . . . . . . 50
11.14 Governing Law . . . . . . . . . . . . . . . . . . 50
11.15 Counterparts . . . . . . . . . . . . . . . . . . . 50
11.16 Use of Name . . . . . . . . . . . . . . . . . . . 50
11.17 Records Retention . . . . . . . . . . . . . . . . 50
11.18 Joinder by DataTRAK . . . . . . . . . . . . . . . 51
EXHIBITS
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A - Acquired Assets
B - Assumed Liabilities
C - Escrow Agreement
D - Intentionally Omitted
E - Excluded Assets
F - Non-Competition Agreement
G - Seller Agreement
H - Sellers' Certificate
I - Assumption Agreement
J - Buyer's Certificate
K - Allocation of Purchase Price
L - Management Letter
M - Opinion of Xxxxxx, Halter & Xxxxxxxx LLP
N - Opinion of Buyer's Counsel
SCHEDULES
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A - Sellers' Management Personnel (for purposes of
Knowledge definition)
2.6(a)(ix) - Terms of Sublease Agreement
3.1 - Jurisdictions of Incorporation
3.2(b) - Conflicts; Consents
3.3 - Financial Statements
3.5(b) - Facilities
3.6 - Condition of Certain Assets
3.7 - Undisclosed Liabilities
3.8 - Contested Taxes; Assessments
3.10 - Employee Benefit Plans
3.11(a) - Compliance with Legal Requirements, etc.
3.11(b) _ Governmental Authorizations
3.12 - Proceedings; Orders
3.13 - Absence of Certain Changes
3.14 - Contracts
3.15 - Insurance
3.16 - Environmental Matters
3.17 - Employees
3.18 - Labor Disputes, etc.
3.19 - Intellectual Property Assets
3.20 - Relationships with Related Persons
3.22 - Material Adverse Changes
5.9(d) - Employee Severance Obligations
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement") is
made this 21st day of December, 1998, by and among THE WEST
COMPANY, INCORPORATED, a Pennsylvania corporation (the "Buyer"),
and COLLABORATIVE CLINICAL RESEARCH, INC., an Ohio corporation,
("Collaborative"), GFI PHARMACEUTICAL SERVICES, INC., an Indiana
corporation and a wholly-owned subsidiary of Collaborative
("GFI"), and COLLABORATIVE HOLDINGS, INC., an Ohio corporation
and a wholly-owned subsidiary of Collaborative ("CHI")
(Collaborative, GFI, and CHI being each sometimes individually
referred to herein as a "Seller" and being collectively referred
to as the "Sellers"; GFI and CHI are sometimes collectively
referred to herein as the "Selling Subsidiaries").
RECITALS
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A. The Sellers are engaged in various businesses,
including the business of providing clinical research and "over-
the-counter" drug testing and related services (such business, as
heretofore conducted by Collaborative and the Selling
Subsidiaries, being collectively referred to herein as the
"Clinical Business"). The Sellers also engage in activities
other than the Clinical Business.
B. The Sellers desire to sell, and Buyer desires to
purchase, substantially all of the assets of the Sellers relating
to or used in the Clinical Business for the consideration and on
the terms set forth in this Agreement.
C. Buyer is not assuming any liabilities or obligations of
or relating to any Seller or the Business except as expressly
provided in this Agreement, and the parties do not intend in any
way to effectuate a merger or consolidation.
AGREEMENT
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For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
each intending to be legally bound, hereby agree as follows:
1. DEFINITIONS; GENERAL PROVISIONS.
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1.1 For purposes of this Agreement and the Exhibits
and Schedules attached hereto, the following terms shall have the
meanings specified or referred to below in this Section 1:
"ACQUIRED ASSETS" - As defined in Exhibit A.
"ACQUISITION PROPOSAL" - As defined in Section 5.6(a).
"ASSIGNED CONTRACT" - Any Contract which is designated
as an "Assigned Contract" in Exhibit A and assigned to Buyer by
Seller.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" - As defined in
Section 2.6(b)(ii)
"ASSUMED LIABILITIES" - As defined in Exhibit B.
"BASE AMOUNT" - As defined in Section 2.3(a).
"BREACH" - A "BREACH" of a representation, warranty,
covenant, obligation or other provision of this Agreement or any
Related Agreement will be deemed to have occurred if there is or
has been (a) any inaccuracy in or breach of, or any failure to
perform or comply with, such representation, warranty, covenant,
obligation or other provision, or (b) any claim or other
occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation or other
provision, and the term "Breach" means any such inaccuracy,
breach, failure, claim, occurrence, or circumstance.
"BUYER" - As defined in the heading of this Agreement.
"CHI" - As defined in the heading of this Agreement.
"CHI FACILITY" - The laboratory and related facilities
leased by and operated by the WCE division of CHI and situate at
0000 Xxxxxxxxx Xxxxx, Xxxxxxxx 00000, Xxxxxxxxxxxx, Xxxxxxx
00000.
"CLINICAL BUSINESS" - As defined in Paragraph A of the
Recitals.
"CLOSING" - As defined in Section 2.7.
"CLOSING CASH PAYMENT" - As defined as
Section 2.3(d)(i).
"CLOSING DATE" - The date and time as of which the
Closing actually takes place.
"CLOSING DATE NET WORKING CAPITAL" - The Net Working
Capital as of the Closing Date, as determined by reference to the
Final Closing Date Balance Sheet.
"CODE" - The Internal Revenue Code of 1986, as amended,
or any successor law, and any regulations issued by the IRS
pursuant to the Internal Revenue Code of 1986, as amended, or any
successor law.
"COLLABORATIVE" - As defined in the heading of this
Agreement.
"COLLABORATIVE BOARD" - The Board of Directors of
Collaborative.
"COLLABORATIVE PREMISES" - Collectively the office
space leased by Collaborative and situate in the Tower Building,
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000.
"CONFIDENTIALLY AGREEMENT" - The confidentiality
agreement dated as of July 31, 1998, among the Buyer and the
Sellers.
"CONSENT" - Any approval, consent, ratification,
waiver, or other authorization (including any Governmental
Authorization).
"CONTEMPLATED TRANSACTIONS" - All of the transactions
described in this Agreement and each of the Related Agreements.
"CONTRACT" - Any agreement, contract, obligation,
promise, undertaking, letter of intent, or memorandum of
understanding (whether written or oral and whether express or
implied) that is legally binding.
"CURRENT ASSETS" - At any applicable time, all assets
included in the Acquired Assets which, in accordance with GAAP,
should be classified as current assets of Sellers (after
eliminating inter-company items).
"CURRENT LIABILITIES" - At any applicable time, all
liabilities included in the Assumed Liabilities which, in
accordance with GAAP, should be classified as current liabilities
of Sellers.
"DAMAGES" - As defined in Section 10.2.
"DATATRAK" - DataTRAK, Inc., an Ohio corporation and
wholly-owned subsidiary of Collaborative.
"EMPLOYEE BENEFIT PLANS" - All "Plans" (as defined in
ERISA 3(3)) of which Seller is or was a "Plan Sponsor" or to
which Seller otherwise contributes or has contributed or in which
Seller otherwise participates or has participated.
"ENCUMBRANCE" - Any charge, claim, community property
interest, condition, equitable interest, lien, option, pledge,
security interest, right of first refusal or restriction of any
kind.
"ENVIRONMENTAL, HEALTH AND SAFETY LIABILITIES" - Any
Damages, Liabilities, or other responsibility arising from or
under any Environmental Law or Occupational Safety and Health
Law.
"ENVIRONMENTAL LAWS" - All Legal Requirements
(including rules, regulations, codes, plans, injunctions,
judgments, Orders, policies, decrees, rulings and charges
thereunder) concerning pollution or protection of the
environment, including laws relating to emissions, discharges,
Releases, or threatened Releases of pollutants, contaminants, or
Hazardous Materials into ambient air, surface water, groundwater,
or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling of Hazardous Materials, including, but not limited to,
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. '' 9601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
'' 1001 et seq., the Resource Conservation and Recovery Act of
1976, 42 C.S.C. '' 6901 et seq., each as amended from time to
time.
"ERISA" - The Employee Retirement Income Security Act
of 1974 or any successor law, and regulations and rules issued
pursuant thereto or to any successor law.
"ESCROW AGREEMENT" - The Escrow Agreement among Buyer,
Sellers, and Escrow Holder, the form of which is attached hereto
as Exhibit C.
"ESCROW DEPOSIT" - As defined in Section 2.3(d)(ii).
"ESCROW HOLDER" - An independent third party jointly
selected by the Buyer and the Sellers prior to the Closing Date
to serve as the escrow holder pursuant to the Escrow Agreement.
"ESTIMATED CLOSING DATE NET WORKING CAPITAL" - As
defined in Section 2.3(b).
"ESTIMATED PURCHASE PRICE" - As defined in
Section 2.3(a).
"EXCLUDED ASSETS" - As defined in Exhibit D.
"EXCLUDED LIABILITIES" - As defined in Section 2.2.
"EXPENSE FEE" - As defined in Section 9.3.
"FACILITIES" - Any real property, leaseholds, or other
interests currently owned or operated by any Seller and used in
connection with the Clinical Business, and any buildings, plants,
structures or equipment currently owned, leased or operated by
any Sellers and used in connection with the Clinical Business or
which otherwise comprise a part of the Clinical Business
(including, but not limited to, the Leased Properties).
"FDA" - The United States Food and Drug Administration,
together with any department thereof.
"FINAL CLOSING DATE STATEMENT" - As defined in
Section 2.4(a).
"FINANCIAL STATEMENTS" - Collectively, the Prior
Financial Statements and the Interim Financial Statements.
"GAAP" - At any particular time, generally accepted
accounting principles as in effect in the United States at such
time.
"GFI" - As defined in the heading of this Agreement.
"GFI FACILITY" - Collectively, the clinical and
laboratory testing facility leased by GFI and situate in the
Saint Mary's Medical Center, 000 Xxxxx Xxxx'x Xxxxx, Xxxxxxxxxx,
Xxxxxxx 00000.
"GOVERNMENTAL AUTHORIZATION" - Any Consent, license or
permit issued, granted or given by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"GOVERNMENTAL BODY" - Any federal, state, local,
municipal, foreign or other governmental or quasi-governmental
entity or authority of any nature (including, without limitation,
the FDA).
"HAZARDOUS MATERIALS" - Any pollutants, contaminants,
toxic or hazardous or extremely hazardous substances, materials,
wastes, constituents, compounds, chemicals, natural or man-made
elements or forces (including, but not limited to, petroleum or
any byproducts or fractions thereof, any form of natural gas,
Xxxxxx Amendment materials, lead, asbestos, and asbestos-
containing materials, building construction materials and debris,
polychlorinated biphenyls ("PCBs") and PCB-containing equipment,
radon and other radioactive elements, ionizing radiation,
electromagnetic field radiation and other non-ionizing radiation,
sonic forces and other natural forces, infectious, carcinogenic,
mutagenic, or etiologic agents, pesticides, defoliants,
explosives, flammables, corrosives, and urea formaldehyde foam
insulation) that is now or has heretofore been regulated by or
may now form the basis for Liabilities under, any Environmental
Laws, whether or not listed or classified in any Environmental
Laws.
"HSR ACT" - The Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"INDEMNIFIED PERSONS" - As defined in Section 10.2.
"INTELLECTUAL PROPERTY ASSETS" - As defined in
Section 3.19.
"INTERIM BALANCE SHEET" - As defined in Section 3.5(a).
"INTERIM FINANCIAL STATEMENTS" - As defined in
Section 3.3(a)(ii).
"IRS" - The Internal Revenue Service.
"KNOWLEDGE" - An individual will be deemed to have
"Knowledge" of a particular fact or matter if:
(a) such individual is aware of such fact or
other matter; or
(b) a prudent individual could be expected to
discover or otherwise become aware of such fact or other
matter in the course of conducting a reasonably
comprehensive investigation concerning the existence of such
fact or other matter.
A Seller will be deemed to have "Knowledge" of a particular fact
or other matter if any of the following Persons has, or at any
time had, Knowledge of such fact or other matter: (1) any
individual who, as of the date hereof and during any period
hereafter through and including the Closing Date, is serving as a
director or officer of any Seller; or (2) any member of Sellers'
management identified on Schedule A hereto.
"LAB SERVICE CONTRACT" - Any Contract to which any
Seller is a party relating to laboratory and related services
utilized in connection with clinical research studies conducted.
"LEASED PROPERTIES" and "LEASED PROPERTY" -
Collectively or individually, as appropriate, the Collaborative
Premises, the GFI Facility, and the CHI Facility.
"LEASES" and "LEASE" - Collectively or individually, as
appropriate, the leases relating to the Leased Properties and
more particularly described in EXHIBIT A.
"LEGAL REQUIREMENT" - Any federal, state, local,
municipal, foreign, international, multi-national, or other law,
ordinance, regulation, statute or treaty (including, without
limitation, rules and regulations promulgated by the FDA).
"LIABILITIES" - Any debts, obligations, or liabilities
of any nature (including, but not limited to, any unknown,
undisclosed, unaccrued, unasserted, contingent, or conditional
debt, obligation, or liability), regardless of whether such
debts, obligations, or liabilities would be required to be
disclosed on a balance sheet prepared in accordance with GAAP.
"MARKS" - As defined in Section 3.19(a).
"MATERIAL ADVERSE EFFECT" - A material adverse effect
upon the financial condition of any Seller or the Clinical
Business.
"NET WORKING CAPITAL" - As at any applicable time,
(i) Current Assets minus (ii) Current Liabilities.
"NON-COMPETITION AGREEMENT" - As defined in
Section 2.6(a)(i).
"OCCUPATIONAL SAFETY AND HEALTH LAW" - Any Legal
Requirement designed to provide safe and healthful working
conditions, and to reduce occupational safety and health hazards,
and any program, whether governmental or private, designed to
provide safe and healthful working conditions.
"ORDER" - Any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made, or
rendered by any court, administrative agency, or other
Governmental Body or by any arbitrator.
"ORDINARY COURSE OF CLINICAL BUSINESS" - An action
taken by a Person will be deemed to have been taken in the
"Ordinary Course of Clinical Business" only if:
(a) such action is consistent with the past
practices of such Person and is taken in the ordinary course
of the normal operations of such Person;
(b) such action is not required to be authorized
by the board of directors of such Person (or by any Person
or group of Persons exercising similar authority), and does
not require any other separate or special authorization; and
(c) such action is similar in nature and
magnitude to actions customarily taken, without any separate
or special authorization, in the ordinary course of the
operations of other Persons that are engaged in the same
type or line of business as such Person.
"PATENTS" - As defined in Section 3.19(a)(ii).
"PERSON" - Any individual, corporation, general or
limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or other entity or
Governmental Body.
"PRIOR FINANCIAL STATEMENTS" - As defined in
Section 3.3(a)(i).
"PROCEEDING" - Any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
"PURCHASE PRICE" - As defined in Section 2.3(a).
"RELATED AGREEMENTS" - All agreements, documents,
certificates and instruments to be delivered pursuant to this
Agreement or the Contemplated Transactions, including, without
limitation, the Assignment and Assumption Agreement, the Escrow
Agreement, the Non-Competition Agreement, the Sublease Agreement,
and the Seller Agreements.
"RELATED PERSON" - With respect to a particular
individual shall mean:
(a) each other member of such individual's
family;
(b) any Person that is directly or indirectly
controlled by any one or more members of such individual's
family;
(c) any Person in which members of such
individual's family hold (individually or in the aggregate)
a material interest; and
(d) any Person with respect to which one or more
members of such individual's family serves as a director,
officer, partner, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual shall
mean:
(a) any Person that directly or indirectly
controls, is directly or indirectly controlled by, or is
directly or indirectly under common control with such
specified Person;
(b) each Person that serves as a director,
officer, partner, or trustee of such specified Person (or in
a similar capacity); and
(c) any Person in which specified Person holds a
material interest.
"RELEASE" - Any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, ejecting, escaping, dumping or
other dissemination.
"REPRESENTATIVE" - With respect to a particular Person,
any director, officer, employee, agent, consultant, advisor, or
other representative of such Person, including legal counsel,
accountants and financial advisors.
"SEC" - The Securities Exchange Commission, or any
successor agency.
"SELLERS" and "SELLER" - As defined in the heading of
this Agreement.
"SELLER AGREEMENTS" - As defined in Section 2.6(a)(ii).
"SELLING SUBSIDIARIES" - As defined in the heading of
this Agreement.
"SITE CONTRACTS" - Collectively, any Contract to which
any Seller is a party with hospitals, physicians, clinics, and
other sites, pursuant to which such sites conduct clinical
studies for and on behalf of such Seller.
"SPONSOR" - Collectively, each pharmaceutical company,
biotechnology company, and contract research organization which
is a party to the Sponsor Contracts.
"SPONSOR CONTRACTS" - Collectively, any Contract to
which any Seller is a party with a pharmaceutical company,
biotechnology company, and contract research organization,
pursuant to which such Seller has agreed to provide, or cause to
be provided, clinical studies for and on behalf of such company
or organization.
"SUBLEASE AGREEMENT" - As defined in Section
2.6(a)(ix).
"SUPERIOR PROPOSAL" - As defined in Section 5.6(b).
"SUPPLEMENTAL CLOSING" - As defined in Section 2.4(c).
"TAX" - Any tax, levy, assessment, tariff, duty,
deficiency or other fee, and any related charge or amount
imposed, assessed or collected by or under the authority of any
Governmental Body.
"TAX ALLOCATION" - The manner in which the Purchase
Price is allocated among the Acquired Assets pursuant to
Section 2.7.
"TAX RETURN" - Any return, report, form or other
document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection, or
payment of any Tax.
"TERMINATION FEE" - As defined in Section 9.3.
"THREATENED" - A Proceeding, claim, dispute or other
matter will be deemed to have been "Threatened" if any demand or
statement has been made (orally or in writing) or any notice has
been given (orally or in writing), or if any other event has
occurred or any other circumstances exist, which could reasonably
be expected to result in such a Proceeding, claim, dispute or
other matter.
"34 ACT" - The Securities Exchange Act of 1934, as
amended, and all rules and regulations promulgated thereunder.
"THRESHOLD AMOUNT" - As defined in Section 10.5(b).
"UNCOLLECTED RECEIVABLES" - As defined in Section 2.5.
"WARN" - The Worker Adjustment and Retraining
Notification Act (29 U.S.C. '' 2101 et seq.) and the regulations
adopted pursuant thereto.
1.2 General Provisions; Incorporation of Recitals.
(a) Unless expressly provided otherwise in this
Agreement or the Related Agreements, or unless the context
requires otherwise:
(i) all capitalized terms used in the
Related Agreements that are defined in this Agreement shall
have the respective meanings assigned to them herein;
(ii) all accounting terms used in this
Agreement and in the Related Agreements shall have the
meanings given to them in accordance with GAAP;
(iii) the singular shall mean the plural,
the plural shall mean the singular, and the use of any
gender shall include all genders; and all references to any
particular party defined herein shall be deemed to refer to
each and every Person defined herein as such party
individually, and to all of them, collectively, jointly and
severally, as though each were named wherever the applicable
defined term is used;
(iv) all references to "Sections" shall be
deemed to refer to the provision of this Agreement and all
references to "Schedules" and "Exhibits" shall be deemed to
refer to the schedules and exhibits annexed to this
Agreement, as appropriate;
(v) all references to time herein shall
mean Eastern Standard Time or Eastern Daylight Time, as then
in effect; and
(vi) all references to sections,
subsections, paragraphs or other provisions of any Legal
Requirement that consists of a law, ordinance, regulation,
statute or treaty, shall be deemed to include successor,
amended, renumbered and replacement provisions thereof.
(vii) the word "including" shall not limit
the preceding words or terms.
(b) The recitals set forth above (including,
without limitation, the defined terms set forth therein) are
hereby incorporated by reference into this Agreement and made a
part hereof as if set forth in their entirety in this
Section 1.2(b).
2. PURCHASE AND SALE OF ASSETS; CLOSING
2.1 Acquired Assets. On and subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from
Sellers, and Sellers agree to sell, transfer, convey and deliver
to Buyer, all of the Acquired Assets at the Closing for the
consideration specified in Section 2.3 and also in consideration
of the covenants of Buyer set forth herein. Sellers shall
specifically retain, and the Acquired Assets shall not include,
any of the Excluded Assets.
2.2 Assumption of Liabilities; Excluded Liabilities.
On and subject to the terms and conditions of this Agreement,
Buyer agrees to assume and become responsible for all of the
Assumed Liabilities at the Closing. Notwithstanding anything in
this Agreement or any of the Exhibits or Schedules attached
hereto to the contrary, Buyer will not assume or have any
responsibility for or with respect to, or purchase the Acquired
Assets subject to, any Liabilities of any nature whatsoever
(collectively, the "Excluded Liabilities") which are not
expressly included within the definition of "Assumed
Liabilities."
2.3 Purchase Price Amount; Estimated Purchase Price.
(a) Subject to adjustment as provided in
Section 2.5 and the other provisions of this Section 2.3, the
purchase price for the Acquired Assets shall be an amount equal
to (i) Fifteen Million Dollars ($15,000,000) (the "Base Amount")
PLUS (ii) the Closing Date Net Working Capital (if positive)
MINUS (iii) the Closing Date Net Working Capital (if negative)
(the amount calculated pursuant to the foregoing being referred
to herein as the "Purchase Price").
(b) The parties hereto recognize and acknowledge
that they will be unable to calculate the Closing Date Net
Working Capital until after the Closing in accordance with the
provisions of Section 2.4. Accordingly, the parties hereto have
agreed to calculate the Purchase Price on the Closing Date based
upon an estimate of the Closing Date Net Working Capital (the
"Estimated Closing Date Net Working Capital"). The parties
hereto shall mutually agree upon the Estimated Closing Date Net
Working Capital within fifteen (15) days prior to the Closing
Date based upon and determined by reference to the financial
statements of the Sellers as of the date on which the Estimated
Closing Date Net Working Capital is determined, and such other
information which Buyer may require in connection therewith. The
parties hereto shall set forth their agreement with respect to
the Estimated Closing Date Net Working Capital in a written
instrument signed by them and which shall be attached to and
become a part of this Agreement.
(c) At the Closing and for purposes thereof, the
Purchase Price shall be estimated in an amount equal to (i) the
Base Amount PLUS (ii) the Estimated Closing Date Net Working
Capital (if positive) MINUS (iii) the Estimated Closing Date Net
Working Capital (if negative) (the amount calculated pursuant to
the foregoing being referred to herein as the "Estimated Purchase
Price").
(d) The Estimated Purchase Price shall be
payable as follows:
(i) an amount equal to the Estimated
Purchase Price LESS the Escrow Deposit (the "Closing Cash
Payment") shall be paid by the Buyer to the Sellers at the
Closing by means of wire transfer of immediately available
funds to an account or accounts designated by the Sellers,
in writing, at least three (3) business days prior to the
Closing Date.
(ii) the sum of One Million Dollars
($1,000,000) (the "Escrow Deposit") shall be paid by the
Buyer to the Escrow Holder at the Closing by means of wire
transfer of immediately available funds to an account
designed by the Escrow Agent, in writing, at least three (3)
business days prior to the Closing Date, to be held in
escrow by the Escrow Holder pursuant to the Escrow Agreement
for (A) the payment of any sums due to the Buyer under
Sections 2.4(c)(ii) and 2.5 hereof, and (B) the payment and
satisfaction of indemnity claims of the Buyer hereunder
after the Closing, all in accordance with and subject to the
provisions of the Escrow Agreement.
2.4 Final Closing Date Balance Sheet; Calculation of
Closing Date Net Working Capital.
(a) As soon as practicable, but in no event
later than sixty (60) days after the Closing Date, Buyer will
prepare and deliver to Sellers a statement of Acquired Assets and
Assumed Liabilities as of the Closing Date setting forth Buyer's
calculation of the Closing Date Net Working Capital by reference
thereto (such statement of Acquired Assets and Assumed
Liabilities, including Buyer's calculation of Closing Date Net
Working Capital, being referred to as the "Final Closing Date
Statement"). The Final Closing Date Statement shall be prepared
in a manner consistent with the preparation of the Financial
Statement (provided that the Financial Statements have been
prepared in accordance with GAAP consistently applied).
(b) Upon the completion of the Final Closing
Date Statement, a copy thereof shall be delivered to Sellers.
Sellers shall have the right, for a period of fifteen (15) days
following their receipt thereof, to review the Final Closing Date
Statement to determine whether the Final Closing Date Statement
was prepared in accordance with the provisions hereof. If,
following such review, Sellers determine that the Final Closing
Date Statement was not prepared in accordance with the provisions
hereof and that Buyer's calculation of Closing Date Net Working
Capital is in error as a result thereof, Sellers shall so notify
Buyer. For a period of fifteen (15) days following the receipt
of such notice, Buyer and Sellers shall attempt to resolve any
such dispute with respect to the Final Closing Date Statement.
If, at the expiration of such fifteen (15) day period, Buyer and
Sellers are not able to resolve such dispute, within the three
(3) day period immediately following the expiration of such
fifteen (15) day period, the Buyer and Sellers shall promptly
submit to the Pittsburgh, Pennsylvania office of any "big five"
firm of independent, certified public accountants recommended by
the Pennsylvania Institute of Certified Public Accountants
(provided that such accountants do not then serve as accountants
to Buyer or Seller), which firm shall resolve all matters in
dispute with respect to the Final Closing Date Balance Sheet
within the fifteen (15) day period immediately following such
submission and whose determination shall be final, binding and
conclusive upon Buyer and Sellers. The fees of any such
independent, certified public accounting firm shall be borne
equally by Buyer and Sellers.
(c) At a supplemental closing to be held within
the later of ninety (90) days after the Closing Date or ten (10)
days after the final determination of the Final Closing Date
Statement and calculation of the Closing Date Net Working Capital
pursuant to Section 2.4(b) (the "Supplemental Closing"), payment
shall be made from Buyer to Sellers or Sellers to Buyer, as
appropriate, to take into account any difference between the
Estimated Purchase Price (based upon the Estimated Closing Date
Net Working Capital) and the Purchase Price (based upon the
actual Closing Date Net Working Capital). Such difference, if
any, will be paid as follows:
(i) If the Purchase Price EXCEEDS the
Estimated Purchase Price, at the Supplemental Closing,
Sellers will be entitled to receive from Buyer an amount
equal to such excess, which shall be paid by Buyer by means
of wire transfer of immediately available funds to an
account or accounts designated by Seller in writing.
(ii) If the Estimated Purchase Price
EXCEEDS the Purchase Price, Buyer will be entitled to
receive from the Escrow Holder funds from the Escrow Deposit
in an amount equal to such excess, which amount shall be
paid by Escrow Holder pursuant to the terms of the Escrow
Agreement at the Supplemental Closing by means of wire
transfer of immediately available funds to an account or
accounts designated by Buyer in writing. If the amount by
which the Estimated Purchase Price EXCEEDS the Purchase
Price is greater than the Escrow Deposit, Sellers will pay
to Buyer an amount equal to such excess which shall be paid
by Sellers at the Supplemental Closing by means of wire
transfer of immediately available funds to an account or
accounts designated by Buyer in writing.
2.5 Purchase Price Adjustment for Uncollected
Receivables. Notwithstanding anything contained herein to the
contrary, to the extent that all or any portion of the accounts
receivable of Sellers included in the Acquired Assets (net of any
reserve therefor reflected in the Final Closing Date Balance
Sheet), including both billed and unbilled accounts receivable,
are not collected in full and in cash by the Buyer in the
ordinary course of its business and using the Buyer's customary
collection practices (without resort to legal proceedings),
within one hundred eighty (180) days after the Closing Date
(collectively, the "Uncollected Receivables") there shall be a
dollar-for-dollar reduction in the Purchase Price in an amount
equal to the aggregate amount of the Uncollected Receivables.
Any adjustment to the Purchase Price pursuant to this Section 2.5
shall be paid in the manner provided by Section 2.4(c)(ii).
Following the satisfaction by the Sellers of all of their
obligations under this Section 2.5, the Buyer shall, if requested
by the Sellers, assign and transfer (without recourse,
representation, or warranty) to Sellers all of Buyer's right,
title, and interest in, to, and under the Uncollected
Receivables, pursuant to a written instrument of assignment
reasonably satisfactory to Buyer and Sellers; PROVIDED, HOWEVER,
Sellers shall not disrupt the Clinical Business conducted by
Buyer in connection with any effort by Sellers to collect the
Uncollected Receivables following such assignment and transfer
thereof. The parties further agree that if the Buyer collects in
cash an aggregate amount in respect of billed and unbilled
accounts receivable of the Sellers included in the Acquired
Assets (net of any reserve therefor reflected in the Final
Closing Date Balance Sheet) which is in excess of such billed and
unbilled accounts receivable reflected in the Final Closing Date
Balance Sheet (net of the aforesaid reserve) as of the date which
is one hundred eighty (180) days after the Closing Date, the
Purchase Price shall be increased, dollar-for-dollar, by an
amount equal to such excess (such Purchase Price increase to be
paid in the manner provided by the provisions of Section
2.4(c)(i)).
2.6 Closing Deliveries. At the Closing:
(a) Sellers will deliver, or cause to be
delivered, to Buyer:
(i) a non-competition agreement(s) in the
form of EXHIBIT F executed by each Seller, DataTRAK and
Xx. Xxxxxxx X. Xxxxx (the "Non-Competition Agreement");
(ii) The agreements in the form of
EXHIBITS G1 and G2 executed by Collaborative and DataTRAK,
respectively (the "Seller Agreements");
(iii) any other Related Agreements to which
any Seller is a party;
(iv) a xxxx of sale and such assignments
and other instruments of sale, transfer, conveyance and
assignment (including certificates of title and an
assignment to Buyer of all of Seller's rights in, to and
under the Lease) regarding the Acquired Assets as Buyer and
its counsel may request;
(v) a certificate executed by Sellers to
the effect that each of Sellers' representations and
warranties in this Agreement and in each Related Agreement
to which Sellers (or any of them) are parties was accurate
in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made
on the Closing Date, which certificate shall be in the form
of EXHIBIT H hereto;
(vi) estoppel certificates from the
landlord under each Lease, in form and substance
satisfactory to Buyer;
(vii) for each Leased Property subject to
Encumbrance against any of the Landlord's interest therein,
satisfactory evidence that the Lease pertaining thereto is
subject to a non-disturbance and attornment agreement in
favor of the applicable Seller thereunder (and any assignee
of such Seller), which non-disturbance and attornment
agreement shall be satisfactory, in form and substance, to
Buyer;
(viii) the Assignment and Assumption
executed by Sellers;
(ix) a sublease agreement (the "Sublease
Agreement") executed by Collaborative, pursuant to which
Collaborative shall sublease that portion of the
Collaborative Premises which Collaborative and the Buyer
deem reasonably necessary in order for the Buyer to conduct
the Clinical Business thereat, which Sublease Agreement
shall be satisfactory, in form and substance, to
Collaborative and the Buyer and shall incorporate those
terms set forth on SCHEDULE 2.6(a)(ix); and
(x) all other certificates, instruments and
documents to be delivered by Sellers (or any of them)
pursuant to this Agreement or any of the Related Agreements.
(b) Buyer will deliver, or cause to be
delivered, to Sellers:
(i) the Closing Cash Payment;
(ii) an assignment, delegation and
assumption agreement (the "Assumption Agreement") in the
form of EXHIBIT I hereto;
(iii) the Non-Competition Agreement
executed on behalf of Buyer;
(iv) the Services Agreement executed on
behalf of Buyer;
(v) the Sublease Agreement; and
(vi) a certificate executed by Buyer to the
effect that each of Buyer's representations and warranties
in this Agreement and in each Related Agreement to which
Buyer is a party was accurate in all respects as of the date
of this Agreement and is accurate in all respects as of the
Closing Date as if made on the Closing Date, which
certificate shall be in the form of EXHIBIT J hereto.
2.7 Closing. The purchase and sale (the "Closing")
provided for in this Agreement will take place at the offices of
Xxxxxxx & Xxx, One Glenhardie Corporate Center, 0000 Xxxxxxxx
Xxxx, Xxxxx, Xxxxxxxxxxxx 00000, at 10:00 A.M., within five (5)
business days after the conditions set forth in Sections 7.7 and
8.5 have been satisfied, on or at such other earlier time and
place as the parties may mutually agree upon in writing.
2.8 Allocation of the Purchase Price. The Purchase
Price shall be allocated among the Acquired Assets and the
Assumed Liabilities in accordance with EXHIBIT K attached hereto.
As soon as practicable after the Supplemental Closing, but in any
event not later than thirty (30) days after the Supplemental
Closing, the Sellers and Buyer shall make any and all appropriate
adjustments to the Tax Allocation by reason of any adjustment to
the Purchase Price under Section 2.4(c). It is understood and
agreed that the Tax Allocation shall be prepared pursuant to and
an in accordance with the provisions of Section 1060 of the Code
and Buyer shall prepare Form 8594 under Section 1060 of the Code
relating to the Contemplated Transactions based upon the final
Tax Allocation prepared pursuant hereto. The Tax Allocation
shall, for tax purposes, be binding on Sellers and Buyer, and
Sellers and Buyer shall file their respective Tax Returns in
accordance with such Tax Allocation and shall not take any
position inconsistent with the Tax Allocation.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and
warrant to Buyer as follows:
3.1 Organization and Good Standing. Each Seller is a
corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation (as
set forth on SCHEDULE 3.1), with full corporate power and
authority to conduct the Clinical Business as it is now being
conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under
all Assigned Contracts. Each Seller is duly qualified to do
business as a foreign corporation and is in good standing under
the laws of each state or other jurisdiction in which the failure
to be so qualified and in good standing could reasonably be
expected to have a Material Adverse Effect.
3.2 Authority; No Conflict.
(a) Subject to approval by the shareholders of
Collaborative contemplated by Section 8.5, this Agreement
constitutes the legal, valid, and binding obligation of Sellers,
enforceable against Sellers in accordance with its terms.
Subject to approval by the shareholders of Collaborative
contemplated by Section 8.5, upon the execution and delivery by
Sellers of the Related Agreements to which Sellers (or any of
them) are parties, the Related Agreements will constitute the
legal, valid, and binding obligations of Sellers, enforceable
against Sellers in accordance with their respective terms.
Sellers have the requisite right, power, authority, and capacity
to execute and deliver this Agreement and such Related Agreements
and to perform their obligations under this Agreement and such
Related Agreements.
(b) Except for those Consents set forth in
SCHEDULE 3.2(b), neither the execution and delivery of this
Agreement or the Related Agreements to which Sellers (or any of
them) are parties nor the consummation or performance of any of
the Contemplated Transactions will, directly or indirectly (with
or without notice or lapse of time):
(i) contravene, conflict with, or result in
a violation of any provision of the articles of
incorporation, code of regulations, or other organizational
documents of Sellers;
(ii) contravene, conflict with, or result
in a violation of, or give any Governmental Body or other
Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which Sellers
or any of the Acquired Assets may be subject;
(iii) contravene, conflict with, or result
in a violation of any of the terms or requirements of, or
give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by any Seller or that otherwise
relates to the Clinical Business or any of the Acquired
Assets or the Leased Property;
(iv) cause any of the Acquired Assets to be
reassessed or revalued by any taxing authority or other
Governmental Body;
(v) contravene, conflict with, or result in
a violation or breach of any provision of, or give any
Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Assigned Contract; or
(vi) except pursuant to any Contract to
which the Buyer is a party, result in the imposition or
creation of any Encumbrance upon or with respect to any of
the Acquired Assets.
Except for those Consents set forth in SCHEDULE 3.2(b), Seller is
not, and will not be, required to give any notice to or obtain
any Consent from any Person (including parties to the Assigned
Contracts) in connection with the execution and delivery of this
Agreement or any of the Related Agreements or the consummation or
performance of any of the Contemplated Transactions.
3.3 Financial Statements; Accounts Receivable.
(a) SCHEDULE 3.3 includes the following:
(i) Audited consolidated and consolidating
balance sheets of Collaborative and its subsidiaries
(including the Selling Subsidiaries) as at the close of each
of the years December 31, 1995, December 31, 1996, and
December 31, 1997, inclusive, and the related consolidated
and consolidating statements of income, changes in
stockholders' equity, and cash flow of collaborative and its
subsidiaries (including the Selling Subsidiaries) for each
of the fiscal years then ended, all on a comparative basis,
together with the notes thereto and the report thereon of
Seller's Accountant (the "Prior Financial Statements"); and
(ii) a consolidated and consolidating
balance sheet of Collaborative and its subsidiaries as at
September 30, 1998, and the related internally prepared
consolidated and consolidating statements of income, changes
in stockholders' equity and cash flow for the nine (9) month
period then ended (which, together with any financial
statements delivered pursuant to Section 5.11, shall be
collectively referred to as the "Interim Financial
Statements").
(b) The Financial Statements fairly present, in
all material respects, the financial condition and the results of
operations, changes in stockholders' equity, and cash flow of
Collaborative and its subsidiaries as at the respective dates of
and for the periods referred to in such Financial Statements, all
in accordance with GAAP, subject, in the case of interim
financial statements, to normal year-end adjustments (the effect
of which will not, individually or in the aggregate, be
materially adverse), and the Financial Statements reflect the
consistent application of such accounting principles throughout
the periods involved. Except to the extent provided otherwise in
such Financial Statements, (i) adequate provision was made in the
Financial Statements for doubtful accounts or other receivables;
(ii) sales were stated in the Financial Statements net of
discounts, returns and allowances; and (iii) all Taxes due or
paid were timely reflected in the Financial Statements and all
Taxes not yet due and payable were accrued or otherwise provided
for therein. At the respective dates of each of the Financial
Statements, Sellers had no Liability required to be reflected or
disclosed in the Financial Statements under GAAP which was not so
reflected or disclosed. No provision in the Financial Statements
as of and for the periods covered by such Financial Statements
was necessary, under GAAP, for Liability on account of warranties
or with respect to the Clinical Business. Any significant items
of income or expense which were unusual or of a nonrecurring
nature were separately disclosed in the Financial Statements.
(c) All of the Accounts Receivable of Sellers
included in the Acquired Assets represent amounts receivable for
services actually provided, have arisen from bona-fide
transactions in the Ordinary Course of Business, are not subject
to any counterclaims or offsets, and have been billed or are
billable, as appropriate, in accordance with the terms of the
Assigned Contract applicable thereto.
3.4 Books and Records. The books of account, minute
books, stock record books, and other records of each Seller, all
of which have been made available to Buyer, are complete and
correct in all material respects.
3.5 Title To Assets; Encumbrances.
(a) Sellers have or will have and convey to
Buyer at the Closing, good and merchantable title to, or a valid
leasehold interest in, all of the properties and assets (other
than the Excluded Assets) used or usable by Sellers in the
Clinical Business or shown on the balance sheet of Sellers dated
as of September 30, 1998, which comprises a portion of the
Interim Financial Statements (the "INTERIM BALANCE SHEET"), or
acquired after the date thereof, free and clear of all
Encumbrances, except for (i) the Assumed Liabilities, and (ii)
properties and assets disposed of in the Ordinary Course of
Clinical Business since the date of the Interim Balance Sheet.
Without limiting the generality of the foregoing, Sellers have,
and will convey to Buyer at the Closing, good and merchantable
title to all of the Acquired Assets, free and clear of any
Encumbrance or restriction on transfer of any nature, other than
the Assumed Liabilities.
(b) SCHEDULE 3.5(b) contains a complete and
accurate list of all Facilities at which any Seller currently
conducts the Clinical Business. To the best of the Sellers'
Knowledge, all Facilities currently used by Sellers lie wholly
within the boundaries of the real property owned or leased by
Seller and do not encroach upon the property of, or otherwise
conflict with the property rights of, any other Person. The use
and operation of such Facilities are in compliance with all
applicable Legal Requirements, Orders, Consents and Governmental
Authorizations. To the best of the Sellers' Knowledge, there are
no existing, pending, or Threatened (i) requests, applications or
proceedings to alter or restrict the zoning or other use
restrictions applicable to any such Facilities, (ii) condemnation
proceedings that would affect any of such Facilities in any way,
or (iii) public improvements that would result in any charge or
Taxes being levied or assessed against, or would result in the
creation of any Encumbrance upon, any of such Facilities.
(c) DataTRAK has no right, title or interest in
any of the Acquired Assets.
3.6 Condition and Sufficiency of Assets.
(a) Except as set forth in SCHEDULE 3.6, (i) the
machinery, equipment, tools, supplies and other tangible personal
property included in the Acquired Assets are in good operating
condition and repair, ordinary wear and tear excepted and (ii)
none of such machinery, equipment, tools, supplies and other
tangible personal property included in the Acquired Assets is in
need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost.
(b) To the best of the Sellers' Knowledge, all
buildings, structures and other improvements and fixtures which
comprise the Facilities (i) are free of any structural or
engineering defects, (ii) are in good repair and condition,
ordinary wear and tear excepted, and (iii) are free from any
latent defects and (iv) suitable for their intended use.
3.7 No Undisclosed Liabilities. Except as set forth
in SCHEDULE 3.7 or any other SCHEDULE hereto, Sellers have no
Liabilities of any nature with respect to the Clinical Business
except for Liabilities reflected or reserved against in the
Interim Balance Sheet and current Liabilities incurred in the
Ordinary Course of Business since the date thereof; provided,
however, notwithstanding the foregoing or the meaning ascribed to
the term Liability herein, Liabilities of the Sellers which are
expressly described in or expressly covered by the provisions of
any other representation and warranty contained in this Section 3
or as otherwise disclosed in the applicable Schedule thereto, or
which are not required to be disclosed in such other
representation or warranty (or the applicable Schedule thereto)
by reason of materiality qualifiers therein, need not be
disclosed in SCHEDULE 3.7 solely by reason of the representation
and warranty in this Section 3.7.
3.8 Taxes.
(a) Sellers have filed or caused to be filed on
a timely basis all Tax Returns that are or were required to be
filed by or with respect to Sellers, either separately or as a
member of a group of corporations, pursuant to applicable Legal
Requirements for all periods prior to the Closing Date. Sellers
have paid, or made provision for the payment of, all Taxes that
have or may have become due pursuant to those Tax Returns or
otherwise, or pursuant to any assessment received by Sellers,
except such Taxes, if any, as are listed in SCHEDULE 3.8 and are
being contested in good faith and as to which adequate reserves
(determined in accordance with GAAP) have been provided in the
Interim Balance Sheet.
(b) The charges, accruals, and reserves with
respect to Taxes on the books of Sellers are adequate (determined
in accordance with GAAP) and are at least equal to Sellers
liability for Taxes. There exists no proposed tax assessment
against Seller to Seller Knowledge except as disclosed in
SCHEDULE 3.8. All Taxes that Seller is or was required by Legal
Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the
proper Governmental Body or other Person.
(c) All Tax Returns filed by Sellers (or that
include Sellers on a consolidated basis) are true, correct, and
complete in all material respects.
(d) No audit or examination by any Tax authority
is pending with respect to or relating to any Taxes and no Seller
has received any notice from any Tax authority of (i) any pending
or Threatened claim for any Tax deficiency, (ii) intention to
examine or audit any Tax Return for any period, or
(iii) intention to reassess any of the Acquired Assets for Tax
purposes.
3.9 No Material Adverse Change. Since the date of
the Interim Balance Sheet, there has not been any material
adverse change in the operations, properties, assets,
Liabilities, or financial condition of Sellers relating to the
Clinical Business or any material adverse change in the Clinical
Business taken as a whole, and no event, condition or
circumstance exists that could reasonably be expected to result
in such a material adverse change.
3.10 Employee Benefits.
(a) SCHEDULE 3.10 lists each Employee Benefit
Plan that any Seller maintains or to which any Seller contributes
with respect to any employee of the Clinical Business. All
contributions (including all employer contributions and employee
salary reduction contributions) which are due have been paid to
each such Employee Benefit Plan and all contributions for any
period ending on or before the Closing Date which are not yet due
have been paid to each such Employee Benefit Plan or accrued in
accordance with the past custom and practice of Seller.
(b) Sellers do not contribute to, never have
contributed to, and never has been required to contribute to any
Multiemployer Plan (as defined in ERISA ' 3(37)(A)) or have any
Liability (including withdrawal Liability) under any
Multiemployer Plan.
(c) Except as set forth on SCHEDULE 3.10, no
Seller maintains or contributes to any bonus, deferred
compensation, incentive, severance, termination, or other
compensation plan or arrangement, for the benefit of any employee
of Seller.
3.11 Compliance With Legal Requirements; Governmental
Authorizations.
(a) Except as set forth in SCHEDULE 3.11(a):
(i) Each Seller is, and at all times since
December 31, 1995 has been, in full compliance with each
Legal Requirement that is or was applicable to it or to the
conduct or operation of its Clinical Business or the
ownership or use of any of the Acquired Assets or the
Facilities;
(ii) no event has occurred or circumstance
exists that (with or without notice or lapse of time)
(A) may constitute or result in a violation by Seller of, or
a failure on the part of any Seller to comply with, any
Legal Requirement, or (B) may give rise to any obligation on
the part of Seller to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature;
(iii) Sellers have not received, at any
time since December 31, 1995, any notice or other
communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any
actual, alleged, or potential violation of, or failure to
comply with, any Legal Requirement, or (B) any actual,
alleged, or potential obligation on the part of Seller to
undertake, or to bear all or any portion of the cost of, any
remedial action of any nature; and
(iv) Sellers have timely filed any and all
reports, forms, and documents required to be filed by them
under and pursuant to the 34 Act.
(b) SCHEDULE 3.11(b) contains a complete and
accurate list of each Governmental Authorization that is held by
any Seller or that otherwise relates to the Clinical Business, or
to any of the Acquired Assets or the Facilities. Each
Governmental Authorization listed or required to be listed in
Schedule 3.12 is valid and in full force and effect. Except as
set forth in SCHEDULE 3.11(b):
(i) each Seller is, and at all times has
been, in full compliance with all of the terms and
requirements of each Governmental Authorization identified
or required to be identified in SCHEDULE 3.11(b); and
(ii) no event has occurred or circumstance
exists that may (with or without notice or lapse of time)
(A) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or
requirement of any Governmental Authorizations listed or
required to be listed in SCHEDULE 3.11(b), or (B) result
directly or indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or
required to be listed in SCHEDULE 3.11(b).
The Governmental Authorizations listed in SCHEDULE 3.11(b)
collectively constitute all of the Governmental Authorizations
necessary to permit Sellers to lawfully conduct and operate the
Clinical Business in the manner it currently conducts and
operates such Clinical Business and to permit Sellers to own and
use the Acquired Assets and to use the Facilities in the manner
in which they currently own and use such assets.
3.12 Legal Proceedings; Orders.
(a) Except as set forth in SCHEDULE 3.12, there
is no pending Proceeding:
(i) that has been commenced by or against
Seller or that otherwise relates to or may affect the
Clinical Business or any of the Acquired Assets or the
Facilities; or
(ii) that challenges, or that may have the
effect of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions or
the Related Transactions.
To the Knowledge of Sellers, (1) no such Proceeding has been
Threatened, and (2) no event has occurred or circumstance exists
that could reasonably be expected to give rise to or serve as a
basis for the commencement of any such Proceeding. The
Proceedings listed in SCHEDULE 3.12 will not have a material
adverse effect on the Clinical Business of any Seller or the
Acquired Assets or the Facilities.
(b) Except as set forth in SCHEDULE 3.12:
(i) there is no Order to which any of the
Sellers, or any of the Acquired Assets or the Facilities is
subject; and
(ii) each Seller is in full compliance with
all of the terms and requirements of each Order set forth in
SCHEDULE 3.12.
(c) SCHEDULE 3.12 sets forth a complete and
accurate summary and current status of all pending and Threatened
workers' compensation claims by any current or former employees
of Seller.
3.13 Absence of Certain Changes and Events. Since the
date of the Interim Balance Sheet, each Seller has conducted the
Clinical Business only in the Ordinary Course of Business.
Without limiting the generality of the foregoing sentence, since
the date of the Interim Balance Sheet, there has not been, with
respect to the Clinical Business, any of the following except as
set forth on Schedule 3.13 (or any supplement thereto delivered
pursuant to Section 7.10):
(i) amendment to the certificate of
incorporation, bylaws or other organizational documents of
Seller;
(ii) payment or increase by any Seller of
any bonuses, salaries, or other compensation to any
director, officer, or (except in the Ordinary Course of
Clinical Business) employee or entry into any employment,
severance, or similar Contract with any director, officer,
or employee;
(iii) payment by Seller of the personal
expenses of any shareholder, director, officer or employee;
(iv) adoption of, or increase in the
payments to or benefits under, any Employee Benefit Plan for
or with any employees of any Seller;
(v) damage to or destruction or loss of any
asset or property of any Seller, whether or not covered by
insurance, materially and adversely affecting the
properties, assets, Clinical Business or financial condition
of Seller, taken as a whole;
(vi) ^ termination of, or receipt of notice
of termination of (i) any license, distributorship, sales
representative, joint venture, credit, or similar agreement,
or (ii) any Contract or transaction which are individually
or in the aggregate material to the Clinical Business;
(vii) sale, lease, or other disposition of
any asset or property of Seller or mortgage, pledge, or
imposition of any Encumbrance on any of the Acquired Assets,
including the sale, lease, or other disposition of any of
the Intellectual Property Assets;
(viii) cancellation or waiver of any claims
or rights material to the conduct of the Clinical Business
or any cancellation or waiver of any debts or claims
affecting the Clinical Business;
(ix) material change in the accounting
methods used by any Seller; or
(x) agreement, whether oral or written, by
Seller to do any of the foregoing.
3.14 Contracts; No Defaults.
(a) SCHEDULE 3.14 contains (except as provided
in clause (iii) below) a complete and accurate list, and Sellers
have made available to Buyer true and complete copies, of all
Contracts in effect as of the date hereof with respect to the
Clinical Business or the Acquired Assets including the following:
(i) each Lab Service Contract;
(ii) each Sponsor Contract;
(iii) a list of all Site Contracts (to be
delivered no later than five (5) business days before
Closing);
(iv) to the extent not included under
clauses (i) through (iii) above, each Contract that involves
performance of services or delivery of goods or materials by
Seller relating to the Clinical Business;
(v) to the extent not included under
clauses (i) through (iii) above, each Contract that involves
performance of services or delivery of goods or materials to
Seller relating to the Clinical Business;
(vi) each Contract relating to the Clinical
Business that was not entered into in the Ordinary Course of
Business and that involves expenditures or receipts of
Seller;
(vii) each lease, rental or occupancy
agreement, license, installment and conditional sale
agreement, and other Contract affecting the ownership of,
leasing of, title to, use of, or any leasehold or other
interest in, any real or personal property (including the
Leases);
(viii) each joint venture, partnership, and
other Contract (however named) involving a sharing of
profits, losses, costs, or liabilities by Seller with any
other Person;
(ix) each Contract containing covenants
that in any way purport to restrict Seller's business
activity or limit the freedom of Seller to engage in any
line of business or to compete with any Person;
(x) each Contract entered into other than
in the Ordinary Course of Business that contains or provides
for an express undertaking by Seller to be responsible for
consequential damages;
(xi) each Contract for capital expenditures
in excess of Five Thousand Dollars ($5,000);
(xii) each written warranty, guaranty, and
or other similar undertaking extended by Seller other than
in the Ordinary Course of Business; and
(xiii) each amendment, supplement, and
modification (whether oral or written) in respect of any of
the foregoing.
SCHEDULE 3.14 also sets forth the details concerning such
Contracts which are specified in such SCHEDULE 3.14, including
the parties to the Contracts and the amount of the remaining
commitment of Seller under the Contracts.
(b) Except as set forth in SCHEDULE 3.14:
(i) Sellers do not have and cannot acquire
any rights under, and Sellers do not have and cannot become
subject to any Liability under, any Contract that relates to
the Clinical Business or any of the Acquired Assets;
(ii) each Contract identified or required
to be identified in SCHEDULE 3.14 is in full force and
effect and is valid and enforceable against such Seller in
accordance with its terms;
(iii) to the best of the Sellers'
Knowledge, each Contract identified or required to be
identified in SCHEDULE 3.14 is enforceable against the other
party thereto in accordance with its terms;
(iv) each Seller is and at all times has
been in full compliance with all applicable terms and
requirements of each Contract under which Seller has or had
any Liability or by which Seller or any of the Acquired
Assets is or was bound;
(v) each other Person that has or had any
Liability under any Contract under which any Seller has or
had any rights is, and at all times has been, in full
compliance with all applicable terms and requirements of
such Contract; and
(vi) no event has occurred or circumstance
exists that (with or without notice or lapse of time) may
contravene, conflict with, or result in a violation or
breach of, or give any Seller or other Person the right to
declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Contract involving any Seller or
the Clinical Business or any of the Acquired Assets.
3.15 Insurance.
(a) Sellers have made available to Buyer:
(i) true and complete copies of all current
policies of insurance to which Seller is a party or under
which any Seller is or has been covered at any time within
the three (3) years preceding the date of this Agreement
relating to the Clinical Business or the Acquired Assets;
and
(ii) true and complete copies of all
pending applications for policies of insurance relating to
the Clinical Business or the Acquired Assets.
(b) SCHEDULE 3.15 describes:
(i) any self-insurance arrangement by or
affecting any Seller, including any reserves established
thereunder;
(ii) any Contract or arrangement, other
than a policy of insurance, for the transfer or sharing of
any risk by any Seller; and
(iii) all obligations of any Seller to
provide coverage to third parties (for example, under leases
or service agreements).
(c) Except as set forth in SCHEDULE 3.15:
(i) All policies to which any Seller is a
party or that provide coverage to any Seller:
(A) are valid, outstanding,
enforceable, and are in full force and effort;
(B) taken together, to the best of the
Sellers' Knowledge, provide adequate insurance coverage
for the assets and the operations of any Seller for all
risks normally insured against by a Person carrying on
the same business or businesses as the Sellers; and
(C) are sufficient for compliance with
all Legal Requirements and Contracts to which any
Sellers are a party or by which any Seller is bound.
3.16 Environmental Matters. Except as set forth in
SCHEDULE 3.16:
(a) Each Seller is, and at all times prior to
the date hereof has been, in compliance in all material aspects
with, and has not been and is not in violation of or liable
under, any applicable Environmental Law. No Seller has any
reasonable basis to expect, nor has any Seller received, any
actual or Threatened order, notice, or other communication from
(i) any Governmental Body or other Person, or (ii) the current or
prior owner or operator of any Facilities, of any actual or
potential violation or failure to comply with in any material
respect any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental,
Health, and Safety Liabilities with respect to any of the
Facilities or any Acquired Assets, or with respect to any
property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used, or
processed by any Seller, or any other Person for whose conduct
any Seller is or may be held responsible, or from which Hazardous
Materials have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of
Sellers, Threatened claims or Encumbrances resulting from any
Environmental, Health, and Safety Liabilities or arising under or
pursuant to any Environmental Law, with respect to or affecting
any of the Facilities or any Acquired Asset.
(c) No Seller has Knowledge of any basis to
expect, nor has any of them received, any Order, notice,
communication, inquiry, warning, citation, summons, directive, or
any other indication that relates to any alleged, actual, or
potential violation or failure by any Seller to comply in any
material respect with any Environmental Law, or of any alleged,
actual, or potential obligation of any Seller to undertake or
bear the cost of any Environmental, Health, and Safety
Liabilities with respect to any of the Facilities or any of the
Acquired Assets, or with respect to any property or facility to
which Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by any Seller, or any
other Person for whose conduct any Seller is or may be held
responsible, have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(d) To the best of the Sellers' Knowledge, no
Seller nor any other Person for whose conduct any Seller is or
may be held responsible, has any Environmental, Health, and
Safety Liabilities with respect to the Facilities or any of the
Acquired Assets, at any property geologically or hydrologically
adjoining the Facilities.
(e) There are no Hazardous Materials present on
or in the Facilities in violation of any applicable Environmental
Law, including any Hazardous Materials contained in barrels,
above or underground storage tanks, landfills, land deposits,
dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land,
water, swamps, or any other part of the Facilities or such
adjoining property, or incorporated into any structure therein or
thereon. No Seller, nor any other Person for whose conduct any
Seller is or may be held responsible, or to the Knowledge of any
Seller, any other Person, has permitted or conducted, or is aware
of, any hazardous activity conducted with respect to Hazardous
Materials at the Facilities or any of the Acquired Assets, except
in full compliance with all applicable Environmental Laws.
(f) There has been no Release or, to the
Knowledge of any Seller, threat of Release, of any Hazardous
Materials at or from the Facilities or, to the best of Sellers'
Knowledge at any other locations where any Hazardous Materials
were generated, manufactured, refined, transferred, produced,
imported, used, or processed from or by the Facilities, or from
or by any of the Acquired Assets, or to the Knowledge of Sellers
any geologically or hydrologically adjoining property, whether by
any Seller or any other Person.
(g) Each Seller has made available to Buyer true
and complete copies and results of any reports, studies,
analyses, tests, or monitoring possessed or initiated by such
Seller pertaining to Hazardous Materials or hazardous activities
in, on, or under the Facilities, or concerning compliance by such
Seller or any other Person for whose conduct such Seller is or
may be held responsible with Environmental Laws.
3.17 Employees.
(a) SCHEDULE 3.17 contains a complete and
accurate list of the following information for each employee of
Sellers engaged in the Clinical Business, including each employee
on leave of absence or layoff status: employer; name; job title;
current compensation paid or payable and any change in
compensation since the date of the Interim Balance Sheet;
vacation accrued; and service credited for purposes of vesting
and eligibility to participate under any Employee Benefit Plan.
(b) To the best of the Sellers' Knowledge, no
Seller has received any verbal or written indication that any
director, officer, or other employee of any Seller engaged in the
Clinical Business will terminate his or her employment with such
Seller prior to the Closing (whether as a result of the
Contemplated Transactions or otherwise).
3.18 Labor Disputes; Compliance. Except as disclosed
in SCHEDULE 3.18, none of the Sellers is a party to any
collective bargaining or other labor Contract, and there has not
been, there is not presently pending or existing, and to Sellers'
Knowledge there is not Threatened any strike, slowdown,
picketing, work stoppage, labor arbitration or proceeding in
respect of the grievance of any employee, application or
complaint filed by an employee or union with the National Labor
Relations Board or any comparable Governmental Body,
organizational activity, or other labor dispute against or
affecting any Seller with respect to the Clinical Business, and
no application for certification of a collective bargaining agent
is pending or to any Sellers' Knowledge is Threatened; to any
Sellers' Knowledge, no event has occurred or circumstance exist
that could provide the basis for any work stoppage or other labor
dispute. Except as disclosed in SCHEDULE 3.18, each Seller has
complied in all respects with all Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining, the
payment of social security and similar taxes, occupational safety
and health, and plant closing (including WARN). No Seller is
liable for the payment of any Taxes, fines, penalties, or other
amounts, however designated, for failure to comply with any of
the foregoing Legal Requirements.
3.19 Intellectual Property.
(a) Intellectual Property Assets - The term
"Intellectual Property Assets" includes:
(i) corporate names (and any derivation
thereof), fictitious business names, trade names, registered
and unregistered trademarks, service marks, and applications
(collectively, "Marks");
(ii) all patents and patent applications
(collectively, "Patents"); and
(iii) all know-how, trade secrets,
confidential information, software, technical information,
processes, technology, plans, drawings, and blue prints
(collectively, "Trade Secrets");
owned or used by any Seller, or licensed by any Seller as
licensee or licensor, and, in any case, used in the Clinical
Business.
(b) AGREEMENTS - SCHEDULE 3.19 contains a
complete and accurate list and summary description of all
Intellectual Property Assets pertaining to the Clinical Business
and any Contracts relating to such Intellectual Property Assets
to which any Seller is a party or by which any Seller is bound.
There are no outstanding and, to Sellers' Knowledge, no
Threatened disputes or disagreements with respect to any such
Contract.
(c) Know-How Necessary for the Clinical Business
- The Intellectual Property Assets described in SCHEDULE 3.19 are
all Intellectual Property Assets necessary for the operation of
the Clinical Business as currently conducted. Sellers are the
owner of all right, title, and interest in and to each of the
Intellectual Property Assets, free and clear of all Encumbrances,
and has the right to use without payment to a third party all of
the Intellectual Property Assets.
3.20 Relationships With Related Persons. No Related
Person of Seller has any interest in the Clinical Business or any
of the Assigned Contracts or any of the other Acquired Assets.
Except as described in SCHEDULE 3.20, to the best of the Sellers'
Knowledge, no Related Person of Seller owns of record or as a
beneficial owner, an equity interest or any other financial or
profit interest in any Person that has (a) business dealings or a
material financial interest in any transaction with any Seller,
or (b) engages in competition with Sellers with respect to the
Clinical Business in any market presently served by Seller.
Except as set forth in SCHEDULE 3.20, no Related Person of any
Seller is a party to any Contract with, or has any claim or right
against, Seller.
3.21 Brokers or Finders. Sellers and their agents
have incurred no obligation or Liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement or the
Contemplated Transactions for which Buyer will have any
Liability.
3.22 Disclosure.
(a) No representation or warranty of Sellers in
this Agreement or any Related Agreement and no statement in any
of the Schedules omits to state a material fact necessary to make
the statements herein or therein, in light of the circumstances
in which they were made, not misleading.
(b) Except as described on SCHEDULE 3.22, there
is no fact known to Sellers that has specific application to
Sellers (other than general economic or industry conditions) and
that materially adversely affects or, as far as Sellers can
reasonably foresee, materially threatens, the Clinical Business
or the Acquired Assets, or the financial condition, or results of
operations or prospects relating to the Clinical Business or the
Acquired Assets that has not been set forth in this Agreement or
the Schedules to this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows:
4.1 Organization and Good Standing. Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of the Commonwealth of Pennsylvania.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid,
and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms. Upon the execution and delivery by
Buyer of the Related Agreements to which Buyer is a party, the
Related Agreements to which Buyer is a party will constitute the
legal, valid, and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms. Buyer
has the absolute and unrestricted right, power, and authority to
execute and deliver this Agreement and the Related Agreements to
which Buyer is a party and to perform its obligations under this
Agreement and the Related Agreements to which Buyer is a party.
(b) Neither the execution and delivery by Buyer
of this Agreement or the Related Agreements to which Buyer is a
party nor the consummation or performance of any of the
Contemplated Transactions by Buyer will give any Person the right
to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to:
(i) any provision of Buyer's certificate of
incorporation, bylaws or other organizational documents;
(ii) any Legal Requirement or order to
which Buyer may be subject; or
(iii) any Contract to which Buyer is a
party or by which Buyer may be bound.
Except for the Consents identified in Section 7, Buyer is not and
will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or
the Related Agreements to which Buyer is a party or the
consummation or performance of any of the Contemplated
Transactions.
4.3 Certain Proceedings. There is no pending
Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such
Proceeding has been Threatened.
4.4 Brokers or Finders. Buyer and its officers and
agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement or any
of the Contemplated Transactions for which Sellers will have any
Liability.
5. COVENANTS OF SELLERS PRIOR TO AND FOLLOWING CLOSING
DATE
5.1 Access and Investigation. Between the date of
this Agreement and the Closing Date, Sellers will, and will cause
their Representatives to, (a) afford to Buyer and its
Representatives full and free access (subject to reasonable
advance notice from Buyer to authorized personnel designated by
the Sellers from time to time, which may be verbal) to
Collaborative's senior executive management, Seller's Accountant
and counsel, as well as access to Sellers' properties, Contracts,
books and records, and other documents and data, (b) furnish
Buyer and Buyer's Representatives with copies of all such
Contracts (other than Site Contracts), books and records, and
other existing documents and data as Buyer may reasonably
request, (c) provide the Buyer and Buyer's Representatives with
access to all Site Contracts, and (d) furnish Buyer and Buyer's
Representatives with such additional financial, operating, and
other data and information as Buyer may reasonably request;
provided, however, that Buyer and its Representative will, in
connection with the performance of such investigation, use
commercially reasonable efforts to avoid materially interfering
with the day-to-day operations of the Clinical Business. Any and
all information furnished by the Sellers to or otherwise obtained
by the Buyer pursuant to this Section 5.1 shall, pending the
closing, remain subject to the provisions of the Confidentiality
Agreement and the provisions of Section 11.3.
5.2 Operation of the Clinical Business of Sellers.
Between the date of this Agreement and the Closing Date, unless
otherwise agreed in writing by Buyer, Sellers will:
(i) conduct the Clinical Business only in
the Ordinary Course of Business;
(ii) use commercially reasonable efforts to
preserve intact the current business organization of Sellers
with respect to the Clinical Business, keep available the
services of the current officers, employees, and agents of
Sellers, and maintain the relations and good will with
suppliers, customers, landlords, creditors, employees,
agents, and others having business relationships with
Sellers;
(iii) cooperate with Buyer on all
transitional matters, and in communications and dealings
with third parties be supportive of Buyer and the
Contemplated Transactions;
(iv) confer with Buyer from time to time as
reasonably requested by the Buyer concerning operational
matters of a material nature; and
(v) as and when reasonably requested by the
Buyer from time to time, otherwise report periodically to
Buyer concerning the status and operation of the Clinical
Business.
5.3 Negative Covenant. Except as otherwise expressly
permitted by this Agreement, between the date of this Agreement
and the Closing Date, Sellers will not, without the prior written
consent of Buyer, take any affirmative action, or fail to take
any reasonable action within their control, as a result of which
any of the changes or events listed in Section 3.13 is likely to
occur.
5.4 Required Approvals. As promptly as practicable
after the date of this Agreement, Sellers will make all filings
required by Legal Requirements to be made by them in order to
consummate the Contemplated Transactions. Between the date of
this Agreement and the Closing Date, Sellers will reasonably
(a) cooperate with Buyer with respect to all filings that Buyer
elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions (including any
filing under the HSR Act), and (b) cooperate with Buyer in
obtaining all Consents that may be required to complete the
Contemplated Transactions.
5.5 Notification. Between the date of this Agreement
and the Closing Date, Sellers will promptly notify Buyer in
writing if Sellers become aware of any fact or condition that
causes or constitutes a Breach of any of Sellers' representations
and warranties in any material respect as of the date of this
Agreement, or if Sellers become aware of the occurrence after the
date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or
constitute a Breach of any such representation or warranty in any
material respect had such representation or warranty been made as
of the time of occurrence or discovery of such fact or condition.
Should any fact or condition require any change in the Schedules
to this Agreement if the Schedules were dated the date of the
occurrence or discovery of any such fact or condition, Sellers
will promptly deliver to Buyer a supplement to the appropriate
Schedule specifying such change. During the same period, Sellers
will promptly notify Buyer of the occurrence of any Breach of any
covenants of Sellers in this Agreement or of the occurrence of
any event that may reasonably make the satisfaction of the
conditions in Section 7 impossible or unlikely. Delivery of such
notification or supplement will be for information purposes only
and will not modify in any respect any representation, warranty,
covenant, obligation or condition or other provision contained in
this Agreement or in any Related Agreement.
5.6 No Negotiation.
(a) From the date hereof until the Closing Date
or the earlier termination of this Agreement pursuant to
Section 9, Sellers will not, nor will they cause or permit any of
their respective Representatives to, directly or indirectly
solicit, initiate, or encourage any inquiries or proposals from,
discuss or negotiate with, provide any nonpublic information to,
or consider the merits of any inquiries or proposals from, any
Person (other than Buyer) relating to any transaction involving
the sale of the Clinical Business or the Acquired Assets (an
"Acquisition Proposal"); provided, however, that nothing
contained in this Section 5.6 or any other provision hereof shall
prohibit Collaborative or the Collaborative Board from engaging
in negotiations or soliciting proposals concerning a possible
transaction involving DataTRAK or the Excluded Assets, including
a possible sale, merger or other transaction not involving the
Clinical Business or the Acquired Assets; provided further that
nothing contained in this Section 5.6 or any other provision
hereof shall prohibit Collaborative or the Collaborative Board
from (i) taking and disclosing to Collaborative's shareholders a
position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the 34
Act, or (ii) making such disclosure to Collaborative's
shareholders as, in the good faith judgment of the Collaborative
Board, after receiving advice from outside counsel, is required
under applicable law, provided that Collaborative may not, except
as permitted by Section 5.6(b), withdraw or modify, or propose to
withdraw or modify, its position with respect to the Contemplated
Transactions or approve or recommend, or propose to approve or
recommend any Acquisition Proposal, or enter into any agreement
with respect to any Acquisition Proposal. Collaborative will
immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect
to any Acquisition Proposal.
(b) Notwithstanding the foregoing, prior to the
Closing Date, Collaborative may respond to an unsolicited request
for information concerning Collaborative from any corporation,
partnership, person or other entity or group pursuant to
appropriate confidentiality agreements, and may negotiate and
participate in discussions and negotiations with such entity or
group concerning an Acquisition Proposal if such entity or group
has submitted a bona fide written proposal to Collaborative
relating to any such transaction which the Collaborative Board
determines in good faith, after receiving advice from its legal
counsel and consulting with its financial advisors, represents a
superior transaction to the Contemplated Transaction (a "Superior
Proposal"). Collaborative will promptly notify Buyer of the
existence of any proposal or inquiry received by Collaborative,
the identity of the party making such proposal or inquiry, and
the terms (both initial and modified) of any such proposal or
inquiry (an will disclose any written materials delivered in
connection therewith) and Collaborative will keep Buyer
reasonably informed of the status (including amendments or
proposed amendments) of any such proposal or inquiry.
Collaborative will promptly provide to Buyer any material non-
public information regarding Collaborative provided to any other
party which was not previously provided to Buyer. At any time
following notification to Buyer of Collaborative's intent to do
so (which notification shall include the identity of the bidder
and the material terms and conditions of the proposal) and if
Collaborative has otherwise complied with the terms of this
Section 5.6(b), the Collaborative Board may withdraw or modify
its approval or recommendation of the Contemplated Transactions
and may enter into an agreement with respect to a Superior
Proposal, provided it shall concurrently with entering into such
agreement pay or cause to be paid to Buyer the Termination Fee
and the Expense Fee. If Collaborative shall have notified Buyer
of its intent to enter into an agreement with respect to a
Superior Proposal in compliance with the preceding sentence and
has otherwise complied with such sentence, Collaborative may
enter into an agreement with respect to such Superior Proposal.
5.7 Best Efforts. Between the date of this Agreement
and the Closing Date, Sellers will use their reasonable best
efforts to cause the conditions in Sections 7 and 8 to be
satisfied.
5.8 HSR Act Filing. Seller agrees to pay one-half
(1/2) of the filing fees associated with any filings made by
Buyer under the HSR Act in connection with the Contemplated
Transactions.
5.9 Labor Matters.
(a) Sellers shall terminate all of their
employees (other than employees who are parties to employment
agreements included in the Assigned Contracts) as of the Closing
Date and shall take all actions which are necessary or
appropriate in connection therewith. Without limiting the
generality of the foregoing, Sellers shall provide appropriate
and compliant advance notices of termination pursuant to and in
accordance with all provisions of (i) WARN and all other state
and local plant closing laws (if and to the extent applicable),
and (ii) all other Legal Requirements. In this regard, Sellers
will identify all such notification requirements to Buyer and
coordinate the content and timing of such notices with Buyer.
(b) Except as otherwise provided in Section
5.9(d), Sellers shall liquidate and pay or make adequate
provision for all Liabilities accrued through the Closing Date
for compensation, including salary, wages, bonuses, overtime
premiums, and vacation benefits, with respect to employees of
Sellers, provided that payments to such employees for accrued
vacation benefits shall be paid directly to such employees at or
prior to Closing.
(c) Sellers shall make available to the Buyer
all personnel information to allow Buyer to evaluate Sellers'
employees engaged in the Clinical Business in connection with
Buyer's decision of which employees of Sellers are to be hired as
Buyer's employees following the Closing.
(d) Subject to Buyer's satisfactory review of
the employees identified on SCHEDULE 5.9(d), pursuant to and in
accordance with the Buyer's standard and customary pre-employment
review and screening practices, the Buyer covenants and agrees to
(i) offer employment to those employees of Sellers identified on
SCHEDULE 5.9(d) immediately after the Closing and (ii) assume (as
part of the Assumed Liabilities) those severance obligations of
such employees described on Schedule 5.9(d) in connection
therewith. The Sellers shall provide the Buyer with reasonable
assurances prior to the Closing that such employees will accept
Buyer's offer of employment herein described.
5.10 Subsequent Financial Statements. As soon as
practicable after the end of each month during the period from
the date of this Agreement until the Closing Date, and in no
event later than twenty-five (25) days after the end of each such
month, Sellers will prepare and promptly deliver to Buyer copies
of an unaudited balance sheet and related unaudited income and
cash flow statements for Sellers relating to the Clinical
Business, the Acquired Assets, and the Assumed Liabilities for
the month then ended. All financial statements delivered
pursuant to this Section 5.10 will, when delivered, comply in all
respects with, and otherwise be subject to, the representations
and warranties set forth herein including those set forth in
Section 3.3.
5.11 Excluded Liabilities. Sellers shall pay, perform
or discharge, or cause to be paid, performed or discharged, when
due all Excluded Liabilities in the Ordinary Course of Business.
5.12 Voting of Shares. Concurrently with the
execution and delivery of this Agreement, the Sellers shall cause
all members of the Collaborative Board and Collaborative's
executive management who own shares of Collaborative common stock
to deliver a letter to the Buyer in the form of EXHIBIT L
attached hereto.
5.13 Collaborative Shareholder Approvals.
Collaborative agrees to take, in accordance with applicable law,
applicable stock exchange rules, its Articles of Incorporation
and its Code of Regulations, all action necessary to convene, and
shall hold, an appropriate meeting of shareholders of
Collaborative to consider and vote upon the approval of the
Contemplated Transactions and any other matters required to be
approved by Collaborative's shareholders for consummation of the
Contemplated Transactions as promptly as practicable after this
Agreement is executed. Unless the Collaborative Board, after
having consulted with and considered the written advice of
outside counsel, has determined in good faith that it is
otherwise required in order to discharge properly the directors'
fiduciary duties in accordance with the Ohio General Corporation
law, the Collaborative Board shall recommend such approval, and
Collaborative shall take all reasonable lawful action to solicit
such approval by its shareholders.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 Approvals of Governmental Bodies. As promptly as
practicable after the date of this Agreement, Buyer will, and
will cause each of its Related Persons to, make all filings
required by Legal Requirements to be made by them to consummate
the Contemplated Transactions. Between the date of this
Agreement and the Closing Date, Buyer will, and will cause each
Related Person of Buyer to, (a) cooperate with Sellers with
respect to all filings that Sellers are required by Legal
Requirements to make in connection with the Contemplated
Transactions, and (b) cooperate with Sellers in obtaining all
Consents identified in SCHEDULE 3.2(b); provided that Buyer shall
in no event be required to dispose of or make any change in any
portion of its business or to incur any other significant burden
to obtain a Governmental Authorization.
6.2 Best Efforts. Except as set forth in the proviso
to Section 6.1, between the date of this Agreement and the
Closing Date, Buyer shall use its best efforts to cause the
conditions in Sections 8.1, 8.2, 8.4 and 8.5 to be satisfied.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Acquired Assets and
assume the Assumed Liabilities and to take the other actions
required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyer, in
whole or in part):
7.1 Accuracy of Representations. All of Sellers'
representations and warranties in this Agreement and any Related
Agreement (considered collectively), and each of these
representations and warranties (considered individually), must
have been accurate in all material respects as of the date of
this Agreement, and must be accurate in all material respects as
of the Closing Date as if made on the Closing Date, without
giving effect to any supplement to any Schedule made after the
date of this Agreement.
7.2 Sellers' Performance.
(a) All of the covenants and obligations that
Sellers are required to perform or to comply with pursuant to
this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with in all material respects.
(b) Sellers must have delivered, or caused to be
delivered, each of the documents required to be delivered
pursuant to Section 2.6 and each of the other covenants and
obligations in Sections 5.4, 5.6 and 5.7 must have been performed
and complied with in all respects.
7.3 Consents. Each of the Consents identified in
SCHEDULE 3.2(b) must have been obtained and must be in full
force and effect (including the consents of the lessors to
Sellers' assignment of the Leases to Buyer hereunder).
7.4 ADDITIONAL DOCUMENTS. Sellers shall have caused
the following documents to be delivered to Buyer:
(a) an opinion of Xxxxxx, Halter $Xxxxxxxx LLP,
addressed to Buyer and dated the Closing Date, in the form of
EXHIBIT M hereto; and
(b) such other documents as Buyer may reasonably
request for the purpose of (i) enabling its counsel to provide
the opinion referred to in Section 8.4(a), (ii) evidencing the
accuracy of any of Sellers' representations and warranties, (iii)
evidencing the performance by Sellers of, or the compliance by
Sellers with, any covenant or obligation required to be performed
or complied with by Sellers, (iv) evidencing the satisfaction of
any condition referred to in this Section 7, or (v) otherwise
facilitating the consummation or performance of any of the
Contemplated Transactions.
7.5 No Proceedings. Since the date of this
Agreement, there must not have been commenced or Threatened
against Buyer, or against any Person affiliated with Buyer, any
Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of
the Contemplated Transactions.
7.6 No Prohibition. Neither the consummation nor the
performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time),
contravene, or conflict with, or result in a violation of, or
cause Buyer or any Person affiliated with Buyer to suffer any
adverse consequence under, any applicable Legal Requirement or
Order.
7.7 HSR Act. Any waiting period applicable to the
Contemplated Transactions under the HSR Act shall have been
terminated or shall have expired.
7.8 Bulk Sales. Sellers shall have furnished to
Buyer satisfactory evidence that Sellers have complied with all
bulk sales, bulk clearance, and related Legal Requirements in
connection with the sale of the Acquired Assets.
7.9 No Material Adverse Change. Since the date of
this Agreement, there shall have been no material adverse change
in the operations, properties, assets, Liabilities, or financial
condition of the Sellers relating to the Clinical Business or any
material adverse change in the Clinical Business taken as a
whole, and no event, condition or circumstance shall exist that
could reasonably be expected to result in such a material adverse
change.
7.10 Supplement to Schedule 3.13. Because the parties
anticipate changes will be necessary to SCHEDULE 3.13 by reason
of clause (vi) of Section 3.13 and the operation of the Clinical
Business pending the Closing, the Sellers shall have delivered to
the Buyer prior to the Closing a supplement to SCHEDULE 3.13 to
reflect matters required to be disclosed to the Buyer under
clause (vi) of Section 3.13 by reason of the Sellers' operation
of the Clinical Business pending the Closing, as aforesaid.
7.11 Delivery of Site Contracts. Not less than five
(5) business days prior to the Closing Date, the Sellers shall
have delivered to the Buyer true, correct and complete copies of
all Site Contract then in effect, which shall be subject to the
review and approval of the Buyer.
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
Sellers' obligation to sell the Acquired Assets and to
take the other actions required to be taken by Sellers at the
Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be
waived by Sellers, in whole or in part):
8.1 Accuracy of Representations. All of Buyer's
representations and warranties in this Agreement (considered
collectively), and each of those representations and warranties
(considered individually), must have been accurate in all
material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if
made on the Closing Date.
8.2 Buyer's Performance.
(a) All of the covenants and obligations that
Buyer is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered collectively),
and each of these covenants and obligations (considered
individually), must have been performed and complied with in all
material respects.
(b) Buyer must have delivered each of the
documents required to be delivered by Buyer pursuant to Section
2.6 and must have made, or caused to have been made, the Closing
Cash Payments.
8.3 Consents. Each of the Consents identified in
SCHEDULE 3.2(b) must have been obtained and must be in full force
and effect.
8.4 Additional Documents. Buyer must have caused the
following documents to be delivered to Sellers:
(a) an opinion of in-house counsel to Buyer,
dated the Closing Date, in the form of EXHIBIT M; and
(b) such other documents as Sellers may
reasonably request for the purpose of (i) enabling their counsel
to provide the opinion referred to in Section 7.4(a), (ii)
evidencing the accuracy of any representation or warranty of
Buyer, (iii) evidencing the performance by Buyer of, or the
compliance by Buyer with, any covenant or obligation required to
be performed or complied with by Buyer, (iv) evidencing the
satisfaction of any condition referred to in this Section 8, or
(v) otherwise facilitating the consummation of any of the
Contemplated Transactions.
8.5 Shareholder Approval. This Agreement and the
Contemplated Transactions shall have been approved by the
affirmative vote of the shareholders of Collaborative in
accordance with applicable law. The Sellers may terminate and
cancel this Agreement without liability to the Buyer if such
shareholder approval is not obtained and the Sellers have not
otherwise breached any provision of this Agreement by providing
written notice thereof to the Buyer by no later than April 30,
1999. Failure by the Sellers to furnish any such written notice
to the Buyer pursuant to this Section 8.5 shall constitute a
waiver by the Sellers of the condition contained herein.
8.6 No Injunction. There must not be in effect any
Legal Requirement or any injunction or other Order that prohibits
the sale of the Acquired Assets by Sellers to Buyer.
9. TERMINATION
9.1 Termination Events. This Agreement may, by
notice given prior to or at the Closing, be terminated:
(a) by either Buyer or Sellers if a material
Breach of any provision of this Agreement has been committed by
the other party and such Breach has not been waived or cured to
the reasonable satisfaction of the non-breaching party within
fifteen (15) days following the breaching party's receipt of
written notice of such Breach from the non-breaching party;
(b) by Buyer if any of the conditions in
Section 7 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other
than through the failure of Buyer to comply with its obligations
under this Agreement) and Buyer has not waived such condition on
or before the Closing Date;
(c) by Sellers, if any of the conditions in
Section 8 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other
than through the failure of Sellers to comply with their
obligations under this Agreement) and Sellers have not waived
such condition on or before the Closing Date;
(d) by mutual consent of Buyer and Sellers;
(e) by the Sellers if a Superior Proposal is
accepted in accordance with Section 5.6(b); provided that, the
Sellers shall not be permitted to terminate this Agreement
pursuant to this Section 9.1(e) unless the Sellers have provided
the Buyer with written notification thereof that includes the
identity of the Person making such Acquisition Proposal and a
description of the material terms of such Acquisition Proposal in
accordance with Section 5.6 and the Sellers' intent to so
terminate this Agreement; provided, further, such right of
termination shall be expressly conditioned upon payment by the
Sellers to the Buyer of the Termination Fee and Expense Fee in
the manner provided by Section 9.3; or
(f) by either Buyer or Sellers if the Closing
has not occurred (other than through the failure of any party
seeking to terminate this Agreement to comply fully with its
obligations under this Agreement) on or before April 30, 1999, or
such later date as the parties may agree upon.
9.2 Effect of Termination. Each party's right of
termination under Section 9.1 is in addition to any other rights
it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies or
relieve any party hereto of liability for any Breach of this
Agreement. Subject to the provisions of the immediately
preceding sentence, if this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this
Agreement will terminate, except that the obligations in Sections
9.3, 11.1 and 11.3 will survive.
9.3 Termination Fee; Expense Fee. Notwithstanding
anything contained herein to the contrary, if this Agreement is
terminated by the Sellers pursuant to the provisions of Section
9.1(e), the Sellers shall promptly, but in no event later than
one (1) business day after the date on which such right to
terminate is exercised, pay to Buyer a fee of One Million Dollars
($1,000,000) (the "Termination Fee") and shall also reimburse
Buyer for all reasonable out-of-pocket expenses and fees payable
by it or its affiliates up to the maximum aggregate amount of Two
Hundred Thousand Dollars ($200,000) (collectively, the
"Expenses") (including, without limitation, fees and expenses of
all counsel, printers, banks, accountants, and investment banking
firms, and their respective agents) (the "Expense Fee") related
to the Contemplated Transactions, such amount to be paid in cash
in the immediately available funds by wire transfer to an account
designated by Buyer.
10. INDEMNIFICATION; REMEDIES
10.1 Survival. Subject to the limitations set forth
in Section 10.5, all representations, warranties, covenants, and
obligations in this Agreement, the Schedules to this Agreement,
and the Related Agreement will survive the Closing. The right to
indemnification, reimbursement, or other remedy based on such
representations, warranties, covenants, and obligations will not
be affected by any investigation conducted with respect to, or
any Knowledge acquired (or capable of being acquired) about the
accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of
any condition based on the accuracy of any representation or
warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to
indemnification, reimbursement, or other remedy based on such
representations, warranties, covenants, and obligations.
10.2 Indemnification and Reimbursement by Sellers.
Sellers, jointly and severally, shall indemnify and hold harmless
Buyer and its Representatives, stockholders, controlling persons,
and affiliates (collectively, the "Indemnified Persons"), and
will reimburse the Indemnified Persons, for any loss, Liability,
claim, damage and expense (including costs of investigation and
defense and reasonable attorneys' fees), whether or not involving
a third-party claim (collectively, "Damages"), arising from or in
connection with any of the following:
(a) any Breach of any representation or warranty
made by Sellers in this Agreement, the Schedules to this
Agreement, the certificate delivered pursuant to
Section 2.6(a)(v), or any other Related Agreements delivered by
Sellers pursuant to or in connection with this Agreement;
(b) any Breach by any Seller of any covenant or
obligation of any Seller in this Agreement or any Related
Agreement;
(c) the Excluded Liabilities;
(d) any Environmental, Health and Safety
Liabilities arising out of or relating to (i) the ownership,
operation or condition at any time on or prior to the Closing
Date of any of the Facilities or any other properties or assets
in which any Seller has or had an interest; (ii) any Hazardous
Materials or other contaminants that were present at such
Facilities or such other properties or assets at any time on or
prior to the Closing Date; (iii) any Hazardous Materials or other
contaminants, wherever located, that were, or were allegedly,
generated, transported, stored, treated, Released or otherwise
handled or any hazardous activities that were, or were allegedly,
conducted by any Seller or by any other Person for whose conduct
they are or may be held responsible; and (iv) any bodily injury
(including illness, disability and death), personal injury, and
property damage or other damage of or to any Person, in any way
arising from or allegedly arising from any hazardous activity
conducted or allegedly conducted with respect to such Facilities
or the operations of any Seller prior to the Closing Date or from
Hazardous Material that was present on or before the Closing Date
on or at such Facilities or that was Released or allegedly
Released at any time on or prior to the Closing Date by any
Seller or its predecessors;
(e) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by any such
Person with any Seller (or any Person acting on such Seller's
behalf) in connection with any of the Contemplated Transactions;
or
(f) without limiting the generality of
Section 10.2(c), any failure by the Sellers to comply with all
bulk sales, bulk clearance, and related legal requirements in
connection with the sale of the Acquired Assets or the
Contemplated Transactions.
10.3 Indemnification and Reimbursement by Buyer.
Buyer shall indemnify and hold harmless Sellers, and will
reimburse Sellers, for any Damages arising from or in connection
with any of the following:
(a) any Breach of any representation or warranty
made by Buyer in this Agreement or in any Related Agreement
delivered by Buyer pursuant to or in connection with this
Agreement;
(b) any Breach by Buyer of any covenant or
obligation of Buyer in this Agreement or any Related Agreement;
or
(c) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in
connection with any of the Contemplated Transactions.
10.4 Procedure for Indemnification - Third Party
Claims.
(a) Promptly after receipt by an indemnified
party under Section 10.2 or 10.3 of notice of the commencement of
any Proceeding against it, such indemnified party shall, if a
claim is to be made against an indemnifying party under such
Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the
indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party, except to
the extent that the indemnifying party demonstrates that the
defense of such action is materially prejudiced by the
indemnifying party's failure to give such notice.
(b) If any Proceeding referred to in
Section 10.4(a) is brought against an indemnified party and it
gives notice to the indemnifying party of the commencement of
such Proceeding, the indemnifying party shall be entitled to
participate in such Proceeding and, if (i) the indemnifying party
acknowledges in writing to the indemnified party, without
qualification or limitation, its obligation to indemnify the
indemnified party for all Damages arising from such Proceeding
and (ii) provides the indemnified party with satisfactory
assurances that it has the financial ability to fully indemnify
the indemnified party for such Damages, the indemnifying party
shall assume the defense of such Proceeding with counsel
reasonably satisfactory to the indemnified party. If notice is
given to an indemnifying party of the commencement of any
Proceeding and the indemnifying party does not, within ten days
after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by any
determination made in such Proceeding or any compromise or
settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an
indemnified party determines in good faith that there is a
reasonable probability that a Proceeding may adversely affect it
or its Related Persons other than as a result of monetary damages
for which it would be entitled to indemnification under this
Agreement, or if an indemnified party reasonably believes that it
may not receive the indemnification to which it may be entitled
from the indemnifying party, the indemnified party may, by notice
to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party
will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
10.5 Limitation of Claims.
(a) Except as set forth below, there shall be no
liability under or with respect to any of the warranties or
representations of Sellers or Buyer in or under this Agreement or
in any Schedule hereto, unless a claim for indemnity is given by
the party seeking indemnification within the six (6) month period
immediately following the Closing Date, except for Damages
arising as a result of, or in connection with, or with respect to
the following, with respect to which there shall be no limitation
as to the time period within which an indemnity claim must be
made by Buyer hereunder: (i) the Excluded Liabilities; or (ii)
the Breach of any agreements or covenants of any Seller
hereunder.
(b) The maximum aggregate amount recoverable by
Buyer from Sellers pursuant to this Section 10 arising by reason
or Breach of a representation or warranty of Sellers hereunder
shall be limited to the sum of One Million Dollars ($1,000,000);
provided, however, (i) the Buyer shall be entitled to
indemnification hereunder only when the aggregate of all such
claims exceeds One Hundred Thousand Dollars ($100,000) (the
"Threshold Amount"), and (ii) all such claims shall be
recoverable by the Buyer after the Threshold Amount of claims has
been reached.
(c) The maximum amount recoverable by Sellers
from Buyer pursuant to this Section 10 arising by reason or
Breach of a representation or warranty of Buyer hereunder shall
be limited to the sum of One Million Dollars ($1,000,000);
provided, however, (i) the Sellers shall be entitled to
indemnification hereunder only when the aggregate of all such
claims exceed the Threshold Amount, and (ii) all such claims
shall be recoverable by the Sellers after the Threshold Amount
has been reached.
(d) Anything to the contrary set forth in this
Section 10 notwithstanding, the provisions of this Section 10
shall not apply to any Damages relating to, or arising out of, or
in connection with, the fraud of any party hereto.
11. GENERAL PROVISIONS
11.1 Expenses. Except as otherwise expressly provided
in this Agreement, each party to this Agreement will bear its
respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants.
11.2 Public Announcements. Any public announcement or
similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, at such time
and in such manner as Buyer and Sellers mutually determine.
Unless consented to by Buyer in advance or required by Legal
Requirements, prior to the Closing the Sellers shall keep this
Agreement strictly confidential and may not make any disclosure
of this Agreement to any Person. Sellers and Buyer will consult
with each other concerning the means by which Seller's employees,
customers, and suppliers and others having dealings with Seller
will be informed of the Contemplated Transactions, and both the
Sellers and the Buyer will have the right to be present for any
such communication. The Buyer acknowledges that the Sellers
intend to issue a press release with respect to the Contemplated
Transactions following the execution of this Agreement and that
the form of such press release will be subject to the prior
approval of the Buyer.
11.3 Confidentiality. Between the date of this
Agreement and the Closing Date, Buyer and Sellers will maintain
in confidence, and will cause the Related Persons and
Representatives of Buyer and Sellers to maintain in confidence
any confidential or proprietary written, oral, or other
information obtained from the other party or such parties'
Related Persons or Representatives in connection with this
Agreement or the Contemplated Transactions, unless (a) such
information is already known to such party or to others not bound
by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation
of the Contemplated Transactions, or (c) the furnishing or use of
such information is required by or necessary or appropriate in
connection with a Legal Requirement or Proceeding. Without
limiting the generality of the foregoing, if the Contemplated
Transactions are not completed, the Buyer agrees to make no use
whatsoever of any of the confidential information made available
to it by the Sellers including, without limitation, customer
lists, Sponsor Contracts, or Site Contracts and each party will
return or destroy as much of such written information as the
other party may reasonably request.
11.4 Notices. All notices, consents, waivers, and
other communications under this Agreement must be in writing and
will be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is
also mailed to such party, or (c) when received by the addressee,
if sent by a nationally recognized overnight delivery service
(receipt requested) or by mailing, certified mail (return receipt
requested), in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses
and telecopier numbers as a party may designate by notice to the
other parties):
Sellers: Collaborative Clinical Research, Inc.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxx, Chief
Executive Officer
Telecopy No.: (000) 000-0000
with a copy to: Xxxxxx, Halter & Xxxxxxxx LLP
1400 XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxx X. XxXxx, Esquire
Telecopy No.: (000) 000-0000
Buyer: The West Company, Incorporated
000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xx. Xxxxxxx X. Xxxxxxxx, Vice
President, Strategic Planning &
New Clinical Business
Development
Telecopy No.: (000) 000-0000
with a copy to: The West Company, Incorporated
000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxx, III, Esquire
Telecopy No.: (000) 000-0000
11.5 Jurisdiction; Service of Process. Any action or
proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any
of the parties in the courts of the Commonwealth of Pennsylvania,
County of Philadelphia, or, if it has or can acquire
jurisdiction, in the United States District Court for the Eastern
District of Pennsylvania, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection
to venue laid therein.
11.6 Further Assurances. The parties agree (a) to
furnish upon request to each other such further information, (b)
to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of
this Agreement and the Related Agreements and the documents
referred to in this Agreement and the Related Agreements.
Without limiting the foregoing, Sellers shall assist Buyer in
obtaining all permits, licenses, approvals and other Governmental
Authorizations which may be necessary or appropriate in
connection with the Contemplated Transactions.
11.7 Waiver. The rights and remedies of the parties
to this Agreement are cumulative and not alternative. Neither
the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege.
11.8 Entire Agreement and Modification. Except as
otherwise provided by the last sentence of Section 5.1, this
Agreement supersedes all prior agreements between the parties
with respect to its subject matter and constitutes (along with
the Related Agreements) a complete and exclusive statement of the
terms of the agreement between the parties with respect to its
and their subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged
with the amendment.
11.9 Schedules.
(a) The disclosures in the Schedules to this
Agreement, and those in any supplements thereto, relate only to
the representations and warranties in the Section of the
Agreement to which they expressly relate and not to any other
representation or warranty in this Agreement.
(b) In the event of any inconsistency between
the statements in the body of this Agreement and those in the
Schedules (other than an exception expressly set forth in a
Schedule with respect to a specifically identified representation
or warranty), the statements in the body of this Agreement will
control.
11.10 Assignments, Successors, and No Third-Party
Rights. Neither party may assign any of its rights under this
Agreement without the prior consent of the other parties, except
that Buyer (a) may assign any of its rights under this Agreement
to any affiliate of Buyer (but such assignment will not relieve
Buyer of any of its obligations under this Agreement), (b) shall
have the right to require Sellers to transfer and convey at the
Closing any of the Acquired Assets specified by Buyer to one or
more affiliates of Buyer, and (c) assign or pledge all of its
rights hereunder to the financial institutions providing
financing to Buyer, as security for Buyer's obligations to such
institutions. Subject to the preceding sentence, this Agreement
will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or
with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
11.11 Severability. If any provision of this Agreement
is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain
in full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or
unenforceable.
11.12 Section Headings. The headings of Sections in
this Agreement are provided for convenience only and will not
affect its construction or interpretation.
11.13 Time of Essence. With regard to all dates and
time periods set forth or referred to in this Agreement, time is
of the essence.
11.14 Governing Law. This Agreement will be governed
by and construed under the laws of the Commonwealth of
Pennsylvania without regard to conflicts of laws principles.
11.15 Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same
agreement.
11.16 Use of Name. Buyer will acquire all rights to
each corporate name and tradename of each Seller, and any
variations and derivations thereof. Accordingly, each Seller
will change its name and cause all of their Related Persons, if
any, which are not individuals to change their names immediately
after the Closing to names that are not similar to such Seller's
corporate name, tradename, or any derivation thereof.
11.17 Records Retention. For a period of two (2) years
after the Closing Date or until the sale, merger, or liquidation
(at least forty-five (45) days' advance written notice of which
shall have been furnished by the Sellers to the Buyer), whichever
first occurs, Sellers shall afford Buyer access to, and Sellers
shall retain and shall not destroy, all of its books, records,
Government Authorizations, reports, data, materials, and
documents which are not included in the Acquired Assets but which
relate to the Clinical Business as conducted prior to the Closing
Date.
11.18 Joinder by DataTRAK. Except as otherwise
expressly permitted under and pursuant to the Non-Competition
Agreement to which DataTRAK is a party, DataTRAK has also
executed and delivered this Agreement at the request of
Collaborative for the purpose of joining in the provisions of
this Agreement to evidence its agreement to transfer and convey
to the Buyer, at the Closing, any right, title or interest that
DataTRAK may have in or to any of the Acquired Assets and to
execute and deliver any and all agreements, documents and
instruments reasonably requested by the Buyer in connection
therewith.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
COLLABORATIVE CLINICAL RESEARCH,
INC., an Ohio corporation
By________________________________
Name:
Title:
Attest:___________________________
Name:
Title:
GFI PHARMACEUTICAL SERVICES, INC.,
an Indiana corporation
By________________________________
Name:
Title:
Attest:___________________________
Name:
Title:
(SIGNATURE LINES CONTINUED ON NEXT PAGE)
CHI COLLABORATIVE HOLDINGS, an
Ohio corporation
By________________________________
Name:
Title:
Attest:___________________________
Name:
Title:
DATATRAK, INC., an Ohio
corporation
By________________________________
Name:
Title:
Attest:___________________________
Name:
Title:
("Sellers")
THE WEST COMPANY, INCORPORATED, a
Pennsylvania corporation
By________________________________
Name:
Title:
Attest:___________________________
Name:
Title:
("Buyer")
EXHIBIT A
THE ACQUIRED ASSETS
The "ACQUIRED ASSETS" to be purchased by Buyer and
sold, conveyed, assigned, transferred and delivered on the
Closing Date to Buyer by Sellers shall include all right, title
and interest in and to all of the assets, rights, privileges, and
interests of Sellers used by the Sellers in connection with the
Clinical Business, of whatever nature and wherever located, other
than the "EXCLUDED ASSETS", including without limitation all of
the following:
1. Account Receivable. All accounts receivable and
other amounts owed or otherwise payable to any Seller that exist
as of the Closing Date.
2. Tangible Personal Property. All items of
machinery, equipment, trade fixtures, furnishings, motor
vehicles, furniture, and other tangible personal property,
including such items as are referred to on EXHIBIT A-2 (but with
such additions thereto and deletions therefrom in the Ordinary
Course of Clinical Business as may be contemplated or permitted
by this Agreement).
3. Assigned Contracts. All of Sellers' rights and
interests as of the Closing Date under or relating to the
"ASSIGNED CONTRACTS" (as defined below).
4. Claims, Prepayments, Deposits, Etc. All claims,
deposits, prepayments, prepaid expenses, refunds, causes of
action, chooses in action, rights of recovery, rights of setoff
and rights of recoupment.
5. Books and Records. All books, records, ledgers,
files, documents, correspondence, lists (including, without
limitation, sponsor lists, provider lists, site lists, and
prospect lists), plats, architectural plans, drawings,
specifications, studies, reports, computer software, systems,
procedures manuals, and related materials used in the Acquired
Assets.
6. Advertising. All advertising and promotional
materials, market research, business plans and projections,
artwork, masters, tapes, mats and other similar items pertaining
to the Acquired Assets.
7. Permits and Licenses. All transferable
approvals, permits, licenses, orders, registrations,
certificates, variances and other Governmental Authorizations.
8. Intellectual Property Assets. Intellectual
Property Assets pertaining to the Clinical Business (including,
without limitation, the names "Collaborative Clinical Research,"
GFI Pharmaceutical Services," and "[CHI/WCE] Clinical
Evaluations" and any derivations thereof).
The "Assigned Contracts" shall be comprised of the
agreements and other instruments identified on SCHEDULE A
attached to this EXHIBIT A; PROVIDED, HOWEVER, that if the
Consent of any Person is required in order to permit the
assignment to Buyer of any such agreement or other instrument,
and if such Consent is not obtained on or before the Closing
Date, then Buyer may elect, on the Closing Date, either (i) to
include such agreement or other instrument among the "Assigned
Contracts," or (ii) to exclude such agreement or other instrument
from the "Assigned Contracts."
SCHEDULE A
[This SCHEDULE A shall be prepared by Sellers and
include, among other things, Employment Agreements being assigned
to Buyer (Xxxxxxx X. Xxxxxx, Xxxxxxx Xxxxxxxxx, Xxxx Xxxxx,
Xxxxxxx X. Xxxx, Xxxxxxx X. Xxxxxx, and Xxxxx Xxxxxx), the
Leases, the Lab Testing Contracts, the Site Contracts, and the
Sponsor Contracts.]
EXHIBIT B
ASSUMED LIABILITIES
The liabilities to be assumed by Buyer pursuant to the
Agreement or otherwise in connection with the transactions
described therein shall consist only of the following Liabilities
(the "Assumed Liabilities") in connection with the operation of
the Clinical Business:
1. Assigned Contracts. All obligations of Seller
under the Assigned Contracts which are to be performed after, and
relate to the period after, the Closing Date (to the extent that
the existence of such obligations is ascertainable solely by
reference to the written provisions of the Assigned Contracts as
disclosed to Buyer before the Closing Date or the descriptions of
any oral Assigned Contracts set forth in SCHEDULE 3.14), but
specifically excluding any obligations to be performed prior to
the Closing and any obligations relating to breaches, defaults or
non-performance under any of the Assigned Contracts occurring or
commencing prior to the Closing Date.
2. Accrued Expenses; Trade Payables. All accrued
expenses and accounts payable of Sellers as of the Closing Date
that were incurred in the Ordinary Course of Clinical Business, a
list and description (including amounts) of which is attached as
EXHIBIT B-2 hereof.
3. Scheduled Severance Obligations. Those severance
obligations described on SCHEDULE 5.9(d) for and with respect to
those employees of Sellers hired by the Buyer pursuant to
Section 5.9(d).
EXHIBIT E
EXCLUDED ASSETS
The Acquired Assets shall not include, and Sellers
shall specifically retain, all of the following (the "Excluded
Assets"):
1. Cash; Cash Equivalents. All cash and cash
equivalents (including marketable equity services and short-term
investments) of Sellers as of the Closing Date.
2. Corporate Charters, Etc. The corporate charter,
qualifications to conduct business as foreign corporations,
arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals,
minute books, stock transfer books and other documents relating
to the organization, maintenance and existence of Seller as a
corporation.
3. Rights Under This Agreement. All of the rights
of the Sellers under this Agreement or under any Related
Agreement between Sellers on the one hand and the Buyer on the
other hand entered into on or after the date of this Agreement.
4. Non-Clinical Business Assets. All of the assets,
rights, privileges, and interests of Sellers not used in
connection with the Clinical Business.
5. DataTRAK. The capital stock of DataTRAK owned by
Collaborative.
6. Tax Records. The Sellers' tax returns and
related corporate records.
7. Privileged Information. All information
protected by the Sellers' attorney-client or attorney work
product privilege.
8. Third-Party Claims. Claims and similar rights of
any Seller against third parties which are not related to the
Clinical Business.
9. Shared Assets. [TO BE COVERED IN SELLER
AGREEMENTS].
EXHIBIT G-1
The Sellers and the Buyer shall in good faith use their
joint best efforts to negotiate a mutually satisfactory Services
Agreement prior to the Closing, pursuant to which the parties
shall share with one another certain assets and/or services which
relate to both the Clinical Business and other businesses of the
Sellers and DataTRAK (including, by way of example but not
limitation, accounting, payroll and telephone systems). The
execution and delivery of the Services Agreement shall be a
condition precedent to the parties' obligation to complete the
Contemplated Transactions.
Exhibit G-2
Seller Agreement required by EXHIBIT G-2 shall be in
substantially the following form.
December 21, 1998
The West Company, Incorporated
000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Mr. Xxxxxxx Xxxxxxxx
Dear Xx. Xxxxxxxx:
On December 21, 1998, The West Company, Incorporated
("Buyer"), Collaborative Clinical Research, Inc.
("Collaborative"), GFI Pharmaceutical Services, Inc. ("GFI"), and
Collaborative Holdings, Inc. ("CHI") (Collaborative, GFI and CHI
being collectively referred to herein as the "Sellers") entered
into an Asset Purchase Agreement (the "Purchase Agreement").
Pursuant to the terms of the Purchase Agreement, the Sellers
agreed to sell and the Buyer agreed to purchase substantially all
of the assets of the Sellers relating to the Clinical Business
(as defined in the Purchase Agreement). DataTRAK, Inc.
("DataTRAK") is engaged in, among other things, the business of
developing and providing software, technology and related
electronic data handling services (as more fully described on
Exhibit "A" on the Non-Competition Agreement to be executed by
the Sellers and DataTRAK pursuant to the Purchase Agreement).
In connection with the transactions described in the
Purchase Agreement and as a material inducement for the Buyer to
complete such transactions, DataTRAK covenants and agrees to make
the services and the products of DataTRAK's electronic data
capture business available to the Buyer on royalty, fee and other
material terms which are no less favorable than those terms
offered to other non-affiliated customers (excluding, however,
arrangements made by DataTRAK with any members of any Consortium
described in Section 1(c) of the above mentioned Non-Competition
Agreement.
DataTRAK has executed this letter intending to be legally
bound.
DATATRAK, INC.
By_________________________________
Name:
Title:
